<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
ACM MANAGED DOLLAR INCOME FUND, INC.
(NAME OF ISSUER)
ACM MANAGED DOLLAR INCOME FUND, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
000949107
(CUSIP NUMBER OF CLASS OF SECURITIES)
EDMUND P. BERGAN, JR.
ALLIANCE CAPITAL MANAGEMENT L.P.
1345 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10105
(212) 969-1000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF THE
PERSON(S) FILING STATEMENT)
----------------
WITH A COPY TO:
BRUCE D. SENZEL
SEWARD & KISSEL
ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
MAY 8, 1997
(DATE TENDER OFFER FIRST PUBLISHED, SENT
OR GIVEN TO SECURITY HOLDERS)
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TRANSACTION VALUATION AMOUNT OF FILING FEE
- ---------------------------------------------------------------------------------------------------
<S> <C>
$98,995,916.94(a).......................................................... $19,800(b)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) Calculated as the aggregate maximum purchase price to be paid for 7,081,253
shares in the offer, based upon the net asset value per share $13.98 at May
2, 1997.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
[_]Check box if any part of the fee is offset as provided by Rule O-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
This Schedule 13E-4,
Amount Previously Paid: ______________________ including exhibits,
consists of [ ]
Form or Registration No.: ____________________ pages. Exhibit index
appears on page [ ].
Filing Party: ________________________________
Date Filed: __________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is ACM Managed Dollar Income Fund, Inc., a non-
diversified, closed-end management investment company incorporated in Maryland
(the "Fund"). The address of the principal executive office of the Fund is
1345 Avenue of the Americas, New York, New York 10105.
(b) The Fund is seeking tenders for 7,081,253 of its issued and outstanding
shares of common stock, par value $.01 per share ("Shares"), for cash at a
price equal to the net asset value ("NAV") per Share determined as of the
close of the regular trading session of the New York Stock Exchange ("NYSE")
on June 6, 1997, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated May 8, 1997 (the "Offer to Purchase") and the related
Letter of Transmittal (which together constitute the "Offer"). The Offer
expires at 12:00 Midnight Eastern Time on June 5, 1997, unless extended (The
"Expiration Date"). If the Offer is extended beyond June 5, 1997, the purchase
price for shares will be equal to their NAV determined as of the close of the
regular trading session of the NYSE on the date after the new Expiration Date.
A copy of the Offer to Purchase and the Letter of Transmittal are filed as
Exhibits (a)(1)(ii) and (a)(2)(i) to this statement, respectively.
Reference is hereby made to the Cover Page, Section 1--"Price, Number of
Shares"--and Section 10--"Interest of Certain Related Persons"--of the Offer
to Purchase, which are incorporated herein by reference.
(c) The principal market in which the Shares are traded is the NYSE.
Reference is hereby made to the Cover Page and Section 8--"Price Range of
Shares; Dividends"--of the Offer to Purchase, which are incorporated herein by
reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) Reference is hereby made to Section 7--"Source and Amount of
Funds"--of the Offer to Purchase, which is incorporated herein by reference.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
Reference is hereby made to Section 2--"Purpose of the Offer, Plans or
Proposals of the Fund"--, Section 7--"Source and Amount of Funds"--, Section
8--"Price Range of Shares; Dividends"--, and Section 11--"Certain Effects of
the Offer"--of the Offer to Purchase, which are incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
Reference is hereby made to Section 10--"Interest of Certain Related
Persons"--of the Offer to Purchase, which is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
Reference is hereby made to Section 2--"Purpose of the Offer; Plans or
Proposals of the Fund"--, Section 7--"Source and Amount of Funds"--, Section
10--"Interest of Certain Related Persons"--, and Section 11--"Certain Effects
of the Offer"--of the Offer to Purchase, which are incorporated herein by
reference. Except as set forth therein, the Fund does not know of any
contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer between the (A) Fund, any
executive officer or director of the Fund, or any person controlling the Fund
or any executive officer or director of any corporation ultimately in control
of the Fund, and (B) any other person, with respect to any securities of the
Fund (including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or the voting of any such securities,
joint ventures, loan or option arrangements, puts or calls, guaranties of
loans, guaranties against loss, or the giving or withholding of proxies,
consents or authorizations).
2
<PAGE>
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The Fund has entered into a Depositary Agreement, dated as of May 8, 1997,
with State Street Bank and Trust Company (the "Depositary") to provide certain
depositary services in connection with the Offer. For its services, the
Depositary will receive a fee of $7,500, $7.50 for each Letter of Transmittal
processed, plus reimbursement of its expenses. The Depositary Agreement is
filed as Exhibit (c)(2) to this statement, which is incorporated herein by
reference.
No persons have been employed or retained or are to be compensated by or on
behalf of the Fund to make solicitations or recommendations in connection with
the Offer.
ITEM 7. FINANCIAL INFORMATION.
(a)(1) The Fund's audited financial statements for the fiscal years ended
September 30, 1996 and September 30, 1995 (the "Audited Financial
Statements"), together with the consent of Ernst & Young LLP, the independent
auditors of the Fund, are included as part of Exhibit (a)(1)(ii) to this
statement, which is incorporated herein by reference in its entirety. For a
summary of selected financial information for these fiscal years, and for the
six month periods ended March 31, 1997 and March 31, 1996, see Section 9--
"Selected Financial Information"--of the Offer to Purchase, which is
incorporated herein by reference.
(2) Not applicable.
(3) Certain ratios applicable to the Fund for the fiscal years ended
September 30, 1996 and September 30, 1995 are contained in the Audited
Financial Statements. Certain ratios applicable to the Fund for these fiscal
years and for the six month periods ended March 31, 1997 and March 31, 1996
are set forth in Section 9--"Selected Financial Information"--of the Offer to
Purchase, which is incorporated herein by reference.
(4) The Fund's NAV per Share as of September 30, 1996 is set forth in the
Audited Financial Statements for the fiscal year ended September 30, 1996.
Such information is also set forth in Section 9--"Selected Financial
Information"--of the Offer to Purchase, which is incorporated herein by
reference.
(b) It is not possible for the Fund to predict the number of Shares that
will be tendered pursuant to the Offer; accordingly, it is not possible for
the Fund to provide pro forma information disclosing the effect of the Offer.
ITEM 8. ADDITIONAL INFORMATION.
(a) Reference is hereby made to Section 10--"Interest of Certain Related
Persons"--of the Offer to Purchase, which is incorporated herein by reference.
(b)-(d) Not applicable.
(e) The Offer to Purchase, which is filed as Exhibit (a)(1)(ii) to this
statement, is incorporated herein by reference in its entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1)(i) Advertisement printed in The Wall Street Journal.
(a)(1)(ii) Offer to Purchase.
(a)(2)(i) Form of Letter of Transmittal.
(a)(2)(ii) Form W-8.
(a)(2)(iii) Form of Notice of Guaranteed Delivery.
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
3
<PAGE>
(a)(3)(iii) Questions and Answers, to be Used Only by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees and by the
Depositary.
(a)(3)(iv) Form of Letter to Stockholders Who Have Requested Information.
(a)(4) Text of Press Release dated May 8, 1997.
(b) Not applicable.
(c)(1) Advisory Agreement between ACM Managed Dollar Income Fund, Inc. and
Alliance Capital Management L.P. dated October 22, 1993.
(c)(2) Depositary Agreement between ACM Managed Dollar Income Fund, Inc.
and State Street Bank and Trust Company dated as of May 8, 1997.
(d)-(f) Not applicable.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, I CERTIFY THAT
THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE, COMPLETE AND CORRECT.
ACM Managed Dollar Income Fund, Inc.
Name: /s/ Edmund P. Bergan, Jr.
---------------------------
Title: Secretary
--------------------------
Dated: May 8, 1997
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
PAGES IN
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER EXHIBIT ORIGINAL
------- ------- ------------
<C> <S> <C>
(a)(1)(i) Advertisement printed in The Wall Street Journal.....
(a)(1)(ii) Offer to Purchase....................................
(a)(2)(i) Form of Letter of Transmittal........................
(a)(2)(ii) Form W-8.............................................
(a)(2)(iii) Form of Notice of Guaranteed Delivery................
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees..................
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees............................................
(a)(3)(iii) Questions and Answers, to be Used Only by Brokers,
Dealers, Commercial Banks, Trust Companies and Other
Nominees and by the Depositary......................
(a)(3)(iv) Form of Letter to Stockholders Who Have Requested
Information.........................................
(a)(4) Text of Press Release dated May 8, 1997..............
(c)(1) Advisory Agreement between ACM Managed Dollar Income
Fund, Inc. and Alliance Capital Management L.P.
dated October 22, 1993..............................
(c)(2) Depositary Agreement between ACM Managed Dollar
Income Fund, Inc. and State Street Bank and Trust
Fund dated as of May 8, 1997........................
</TABLE>
<PAGE>
EXHIBIT (a)(1)(i)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated May 8, 1997 and the related Letter of Transmittal
and is not being made to (nor will tenders be accepted from or on behalf of)
holders of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall be
deemed to be made on behalf of the Fund (as defined below) by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
ACM MANAGED DOLLAR INCOME FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
NOTICE OF OFFER TO PURCHASE FOR CASH 7,081,253 OF ITS
ISSUED AND OUTSTANDING SHARES OF COMMON STOCK AT NET ASSET VALUE PER SHARE
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT
EASTERN TIME ON JUNE 5,1997, UNLESS THE OFFER IS EXTENDED.
ACM Managed Dollar Income Fund, Inc. (the "Fund") is offering to purchase,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated May 8, 1997 and the related Letter of Transmittal (which together
constitute the "Offer"), 7,081,253 outstanding shares of its issued and
outstanding Common Stock, par value $0.01 per share ("Shares"), at a price equal
to their net asset value ("NAV") per Share determined as of the close of the
regular trading session of the New York Stock Exchange (the "NYSE") on June 6,
1997. The Offer will expire at 12:00 Midnight Eastern Time on June 5, 1997,
subject to the right of the Board of Directors of the Fund to extend the Offer.
The NAV as of the close of the regular trading session on the NYSE on May 2,
1997 was $13.98 per Share. The purpose of the Offer is to fulfill an
undertaking made by the Fund in connection with the initial public offering of
Shares. The Offer is not conditioned upon Stockholders tendering in the
aggregate any minimum number of Shares.
If more than 7,081,253 Shares are duly tendered prior to the expiration of
the Offer, including any extensions, (and not timely withdrawn), unless the Fund
determines not to purchase any Shares, the Fund will purchase 7,081,253 Shares
on a pro rata basis.
Shares tendered pursuant to the Offer may be withdrawn by written notice to
the Depositary at the Depositary's mailing address set forth below at any time
prior to 5:00 p.m. Eastern Time on June 10, 1997 (or, if the Offer is extended,
prior to that time on the third day on which the NYSE is open for trading after
the new expiration date), and, if the Shares tendered have not by then been
accepted for payment by the Fund, the Shares may also be withdrawn at any time
after July 2, 1997.
The information required to be disclosed by paragraph (d)(1) of Rule 13e-4
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Each Stockholder tendering Shares is required to submit a check in the
amount of $25.00 payable to State Street Bank and Trust Company (the
"Depositary") which will help defray the costs associated with effecting the
Offer.
Questions and requests for assistance, for current NAV quotations and for
copies of the Offer to Purchase, the Letter of Transmittal, and any other tender
offer documents, may be directed to the Depositary at the Depositary's mailing
address and at the telephone number set forth below between the hours of 9:00
a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except holidays).
Copies of the Offer to Purchase, the Letter of Transmittal and any other tender
offer documents will be furnished promptly to Stockholders upon request at no
expense to them. Stockholders who do not own Shares directly may also obtain
such information from their broker, dealer, commercial bank, trust company or
other nominee and are required to tender their Shares through that firm.
Depositary:
STATE STREET BANK AND TRUST COMPANY
Corporate Reorganization
P.O. Box 9061
Boston, Massachusetts 02205
Telephone Number: (800) 219-4218
May 8, 1997
<PAGE>
Exhibit (a)(1)(ii)
ACM MANAGED DOLLAR INCOME FUND, INC.
OFFER TO PURCHASE FOR CASH
7,081,253 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME ON
JUNE 5, 1997, UNLESS THE OFFER IS EXTENDED.
To the Stockholders of ACM Managed Dollar Income Fund, Inc.:
ACM Managed Dollar Income Fund, Inc., a non-diversified, closed-end
management investment company incorporated in Maryland (the "Fund"), is
offering to purchase 7,081,253 of its issued and outstanding shares of common
stock, par value $.01 per share (the "Shares"), to fulfill an undertaking made
in connection with the initial public offering of the Shares. See Section 2.
The offer is for cash at a price equal to the net asset value ("NAV") per
Share determined as of the close of the regular trading session of the New
York Stock Exchange (the "NYSE") on the date after the date the offer expires,
and is upon the terms and subject to the conditions set forth in this Offer to
Purchase and the related Letter of Transmittal (which together constitute the
"Offer"). The Offer will expire at 12:00 Midnight Eastern Time on June 5,
1997, unless extended. The Shares are traded on the NYSE under the symbol
"ADF." The NAV as of the close of the regular trading session of the NYSE on
May 2, 1997 was $13.98 per Share. Information regarding the undertaking
pursuant to which the Offer is being made, as well as information regarding
possible future tender offers by the Fund, is set forth in Section 2. During
the pendency of the Offer, current NAV quotations can be obtained from State
Street Bank and Trust Company (the "Depositary"), by calling (800) 219-4218
between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time, Monday through
Friday (except holidays).
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 3.
IMPORTANT
Stockholders who desire to tender their Shares should either: (1) properly
complete and sign the Letter of Transmittal (or a copy or facsimile thereof),
provide thereon the original of any required signature guarantee(s) and mail
or deliver it together with the Shares (in proper certificated or
uncertificated form), any other documents required by the Letter of
Transmittal, and a check in the amount of $25.00 payable to State Street Bank
and Trust Company (the "Processing Fee"), to the Depositary; or (2) request
their broker, dealer, commercial bank, trust company or other nominee to
effect the transaction on their behalf. Stockholders who desire to tender
Shares registered in the name of such a firm must contact that firm to effect
a tender on their behalf. Tendering Stockholders will not be obligated to pay
brokerage commissions in connection with their tender of Shares, but they may
be charged a fee by such a firm for processing the tender(s). The Fund
reserves the absolute right to reject tenders determined not to be in
appropriate form or not accompanied by the required $25.00 check.
If you do not wish to tender your Shares, you need not take any action.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS NOR ALLIANCE CAPITAL MANAGEMENT
L.P. (THE "INVESTMENT ADVISER" TO THE FUND) MAKES ANY RECOMMENDATION TO ANY
STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. NO
PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE FUND,
ITS BOARD OF DIRECTORS OR THE INVESTMENT ADVISER AS TO WHETHER STOCKHOLDERS
SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER. IF MADE,
ANY SUCH RECOMMENDATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
THE FUND, ITS BOARD OF DIRECTORS OR THE INVESTMENT ADVISER. STOCKHOLDERS ARE
URGED TO EVALUATE CAREFULLY ALL
<PAGE>
INFORMATION IN THE OFFER, CONSULT THEIR OWN INVESTMENT AND TAX ADVISERS AND
MAKE THEIR OWN DECISIONS WHETHER TO TENDER OR REFRAIN FROM TENDERING THEIR
SHARES.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN AS CONTAINED HEREIN OR
IN THE LETTER OF TRANSMITTAL. IF GIVEN OR MADE, ANY SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND,
ITS BOARD OF DIRECTORS OR THE INVESTMENT ADVISER.
Questions and requests for assistance may be directed to the Depositary at
the Depositary's mailing address and at the telephone number set forth below.
Requests for additional copies of this Offer to Purchase, the Letter of
Transmittal and any other tender offer documents may also be directed to the
Depositary at that address or telephone number. Stockholders who do not own
Shares directly may also obtain such information and copies from their broker,
dealer, commercial bank, trust company or other nominee and are required to
tender their Shares through that firm.
May 8, 1997
ACM Managed Dollar Income Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
STATE STREET BANK AND TRUST COMPANY, DEPOSITARY
TELEPHONE NUMBER: (800) 219-4218
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
State Street Bank and State Street Bank and Securities Transfer
Trust Company Trust Company and
Corporate Corporate Reorganization Reporting Services
Reorganization 70 Campanelli Drive Inc.
P.O. Box 9061 Braintree, MA 02184 Boston EquiServe L.P.
Boston, MA 02205 Corporate
Reorganization
55 Broadway, Third
Floor
New York, NY 10006
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
1.Price; Number of Shares................................................. 4
2.Purpose of the Offer; Plans or Proposals of the Fund.................... 4
3.Certain Conditions of the Offer......................................... 5
4.Procedures for Tendering Shares......................................... 6
a.Proper Tender of Shares............................................... 6
b.Signature Guarantees and Method of Delivery........................... 6
c.Dividend Reinvestment Plan............................................ 7
d.Book-Entry Delivery................................................... 7
e.Guaranteed Delivery................................................... 8
f.Determinations of Validity............................................ 8
g.United States Federal Income Tax Withholding.......................... 9
5.Withdrawal Rights....................................................... 9
6.Payment for Shares...................................................... 10
7.Source and Amount of Funds.............................................. 10
8.Price Range of Shares; Dividends........................................ 11
9.Selected Financial Information.......................................... 12
10.Interest of Certain Related Persons..................................... 14
11.Certain Effects of the Offer............................................ 14
12.Certain Information about the Fund...................................... 14
13.Additional Information.................................................. 15
14.Certain United States Federal Income Tax Consequences................... 15
15.Amendments; Extension of Tender Period; Termination..................... 16
16.Miscellaneous........................................................... 17
</TABLE>
<TABLE>
<S> <C>
Exhibit A: Audited Financial Statements of the Fund for the Fiscal Years ended
September 30, 1996 and September 30, 1995, together with the consent of
Ernst & Young, LLP, the independent auditors of the Fund.
</TABLE>
3
<PAGE>
1. Price; Number of Shares. Upon the terms and subject to the conditions of
the Offer, the Fund will accept for payment and purchase up to 7,081,253 of
its issued and outstanding Shares that are properly tendered prior to 12:00
Midnight Eastern Time on June 5, 1997 (and not withdrawn in accordance with
Section 5). The Fund reserves the right to amend, extend or terminate the
Offer. See Sections 3 and 15. The Fund will not be obligated to purchase
Shares pursuant to the Offer under certain circumstances. See Section 3. The
later of June 5, 1997 or the latest date to which the Offer is extended is
hereinafter called the "Expiration Date." The purchase price of the Shares
will be their NAV per Share determined as of the close of the regular trading
session of the NYSE on the date after the Expiration Date. The Fund will not
pay interest on the purchase price under any circumstances. The NAV as of the
close of the regular trading session of the NYSE on May 2, 1997 was $13.98 per
Share. During the pendency of the Offer, current NAV quotations can be
obtained from the Depositary by calling (800) 219-4218 between the hours of
9:00 a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except holidays).
The Offer is being made to all Stockholders and is not conditioned upon
Stockholders tendering in the aggregate any minimum number of Shares. Pursuant
to the Fund's Prospectus dated October 22, 1993 (the "Prospectus"), however, a
Stockholder wishing to accept the Offer must tender, or cause the tender of
all Shares actually owned by the Stockholder and all Shares constructively
owned by the Stockholder as determined under Section 318 of the Internal
Revenue Code of 1986, as amended (the "Code"), as of the date of purchase of
Shares by the Fund pursuant to the Offer. See Section 14 concerning the tax
consequences of tendering Shares.
If more than 7,081,253 Shares are duly tendered pursuant to the Offer (and
not withdrawn as provided in Section 5), the Fund will purchase Shares from
tendering Stockholders, in accordance with the terms and conditions specified
in the Offer, pro rata in accordance with the number of Shares duly tendered
by each Stockholder (and not so withdrawn), unless the Fund determines not to
purchase any Shares. See Section 3. If Shares duly tendered by or on behalf of
a Stockholder include Shares held pursuant to the Fund's Dividend Reinvestment
Plan, the proration will be applied first with respect to other Shares
tendered and only thereafter, if and as necessary, with respect to Shares held
pursuant to that Plan.
On May 2, 1997, there were 28,325,009 Shares issued and outstanding, and
there were approximately 24,400 holders of record of Shares. Certain of these
holders of record were brokers, dealers, commercial banks, trust companies and
other institutions that held Shares in nominee name on behalf of multiple
beneficial owners.
2. Purpose of the Offer; Plans or Proposals of the Fund. The purpose of the
Offer is to fulfill an undertaking made in connection with the initial public
offering of the Shares, as set forth in the Fund's Prospectus. In the
Prospectus, the Fund indicated that, in recognition of the possibility that
the Shares might trade at a discount to NAV, the Board of Directors (the
"Board of Directors" or the "Board") had determined that it would be in the
best interests of Stockholders to take action to attempt to reduce or
eliminate a market value discount from NAV.
To that end, in the Prospectus, the Fund undertook to conduct an annual
tender offer for Shares during the second calendar quarter of 1997 and
subsequent calendar years that the average of the closing prices of the Shares
on the NYSE on the last trading day in each week (a "weekly valuation day")
during a specified 12-week period (the "Measurement Period") reflects a
discount of 3% or more from the average NAV per Share of the Fund as
determined on the same days during the same Measurement Period. The
Measurement Period is required to commence on a date designated by the Board
no later than the end of the first calendar quarter of each year. On February
4, 1996, the Board fixed the Measurement Period for the Offer as the period
beginning on February 10, 1997 and ending on May 2, 1997. The average trading
price of the Shares on the weekly valuation days during the Measurement Period
was $12.93 per Share, and the average NAV per Share on the same days was
$13.85, reflecting an average discount of 6.6%. Accordingly, the Fund is
conducting the Offer. Pursuant to the Prospectus, undertakings with respect to
tender offers by the Fund in 1995 and 1996 were also in effect, but the
conditions requiring such offers were not satisfied.
4
<PAGE>
In addition to tender offers pursuant to the undertaking, the Board
considers from time to time more frequent tender offers for Shares and may
consider other steps to reduce or eliminate the Fund's market value discount
from NAV such as open market repurchases of Shares. There can be no assurance
that the Board will authorize any such action. There can also be no assurance
that the Offer, other Share tender offers, Share repurchases or other steps
will result in the Shares trading at a price that approximates or is equal to
their NAV. The market price of the Shares will, among other things, be
determined by the relative demand for and supply of Shares in the market, the
Fund's investment performance, the Fund's dividends and yield and investor
perception of the Fund's overall attractiveness as an investment as compared
with other investment alternatives. Nevertheless, the fact that the Shares are
subject to the Offer or future tender offers may reduce the spread between
market price and NAV that might otherwise exist.
Except as set forth above, as referred to in Section 7, or in connection
with the operation of the Fund's Dividend Reinvestment Plan, the Fund does not
have any present plans or proposals that relate to or would result in (a) the
acquisition by any person of additional securities of the Fund or the
disposition of securities of the Fund; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Fund; (c) other than in connection with liquidating assets in the ordinary
course of the Fund's operations and for purposes of funding the Offer, a sale
or transfer of a material amount of assets of the Fund; (d) any change in the
composition of the Board or in the management of the Fund, including, but not
limited to, any plans or proposals to change the number or the term of members
of the Board, to fill any existing vacancy on the Board or to change any
material term of the employment contract of any executive officer; (e) any
material change in the Fund's present dividend rate or policy, or indebtedness
or capitalization of the Fund; (f) any other material change in the Fund's
corporate structure or business, including any plans or proposals to make any
changes in the Fund's investment policy for which a vote would be required by
Section 13 of the Investment Company Act of 1940, as amended (the "1940 Act");
(g) changes in the Fund's articles of incorporation, bylaws or instruments
corresponding thereto or other actions which may impede the acquisition of
control of the Fund by any person; (h) causing a class of equity security of
the Fund to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (i) a class of equity security of the Fund
becoming eligible for termination of registration pursuant to Section 12(g)(4)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"); or
(j) the suspension of the Fund's obligation to file reports pursuant to
Section 15(d) of the Exchange Act.
3. Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer or the Prospectus, the announced policy of the Board, which may be
changed by the Board, is that the Fund cannot accept tenders if (a) such
tenders if consummated, would (i) result in the delisting of the Shares from
the NYSE (the NYSE having advised the Fund that it would consider delisting if
the aggregate market value of the outstanding Shares is less than $5,000,000,
the number of publicly held Shares falls below 600,000 or the number of
holders of 100 Shares or more falls below 1,200), (ii) impair the Fund's
status as a regulated investment company under the Code (which would make the
Fund a taxable entity, causing the Fund's income to be taxed at the Fund level
in addition to the taxation of Stockholders who receive dividends from the
Fund), or (iii) result in a failure to comply with applicable asset coverage
requirements in the event any senior securities (i.e., short-term debt
securities or preferred stock) are issued and outstanding (there being such
debt at the date hereof); (b) the amount of Shares tendered would require
liquidation of such a substantial portion of the Fund's portfolio securities
that the Fund would not be able to liquidate portfolio securities in an
orderly manner in light of the existing market conditions and such liquidation
would have an adverse effect on the NAV of the Fund to the detriment of non-
tendering Stockholders; (c) there is any (i) in the Board's judgment, material
legal action or proceeding instituted or threatened challenging such tenders
or otherwise materially adversely affecting the Fund, (ii) suspension of or
limitation on prices for trading securities generally on the NYSE or other
national securities exchange(s), or the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") National Market System or any
foreign exchange on which portfolio securities of the Fund are traded, (iii)
declaration of a banking moratorium by federal, state or foreign authorities
or any suspension of payment by banks in the United States, New York State or
in a foreign country that is material to the Fund, (iv) limitation affecting
the Fund or the
5
<PAGE>
issuers of its portfolio securities imposed by federal, state or foreign
authorities on the extension of credit by lending institutions, (v)
commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States or any foreign
country that is material to the Fund, or (vi) in the Board's judgment, other
event or condition which would have a material adverse effect on the Fund or
its Stockholders if Shares were repurchased; or (d) the Board determines that
effecting any tenders would constitute a breach of its fiduciary duty owed the
Fund or its Stockholders.
The foregoing conditions are for the Fund's sole benefit and may be asserted
by the Fund regardless of the circumstances giving rise to any such condition
(including any action or inaction of the Fund), and any such condition may be
waived by the Fund, in whole or in part, at any time and from time to time in
its reasonable judgment. The Fund's failure at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right; the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts or circumstances; and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time. Any determination by the Fund concerning the events
described in this Section 3 shall be final and binding.
The Fund reserves the right, at any time during the pendency of the Offer,
to amend, extend or terminate the Offer in any respect. See Section 15.
4. Procedures for Tendering Shares.
a. Proper Tender of Shares. For Shares to be properly tendered pursuant to
the Offer, a properly completed and duly executed Letter of Transmittal (or a
copy or facsimile thereof) bearing original signature(s) and the original of
any required signature guarantee(s)), all Shares actually or, as determined
under Section 318 of the Code, constructively owned by the tendering
Stockholder (see Sections 1 and 14) (in proper certificated or uncertificated
form), any other documents required by the Letter of Transmittal and the
Processing Fee must be received by the Depositary at the appropriate address
set forth on page 2 of this Offer before 12:00 Midnight Eastern Time on the
Expiration Date. Letters of Transmittal and certificates representing tendered
Shares should not be sent or delivered to the Fund. Stockholders who desire to
tender Shares registered in the name of a broker, dealer, commercial bank,
trust company or other nominee must contact that firm to effect a tender on
their behalf.
Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder make
it unlawful for any person, acting alone or in concert with others, to tender
Shares in a partial tender offer for such person's own account unless at the
time of tender, and at the time the Shares are accepted for payment, the
person tendering has a net long position equal to or greater than the amount
tendered in (a) Shares, and will deliver or cause to be delivered such Shares
for the purpose of tender to the person making the Offer within the period
specified in the Offer, or (b) an equivalent security and, upon acceptance of
his or her tender, will acquire Shares by conversion, exchange, or exercise of
such equivalent security to the extent required by the terms of the Offer, and
will deliver or cause to be delivered the Shares so acquired for the purpose
of tender to the Fund prior to or on the Expiration Date. Section 14(e) and
Rule 14e-4 provide a similar restriction applicable to the tender or guarantee
of a tender on behalf of another person.
The acceptance of Shares by the Fund for payment will constitute a binding
agreement between the tendering Stockholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering Stockholder's
representation that the Stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 and that the tender of such
Shares complies with Rule 14e-4.
b. Signature Guarantees and Method of Delivery. No signature guarantee is
required if (a) the Letter of Transmittal is signed by the registered
holder(s) (including, for purposes of this document, any participant in The
Depository Trust Company ("DTC") book-entry transfer facility whose name
appears on DTC's security position listing as the owner of Shares) of the
Shares tendered thereby, unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special Delivery
Instructions" in the Letter
6
<PAGE>
of Transmittal or (b) the Shares tendered are tendered for the account of a
firm (an "Eligible Institution") which is a broker, dealer, commercial bank,
credit union, savings association or other entity and which is a member in
good standing of a stock transfer association's approved medallion program
(such as STAMP, SEMP or MSP). In all other cases, all signatures on the Letter
of Transmittal must be guaranteed by an Eligible Institution. See Instruction
5 of the Letter of Transmittal.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered thereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) for the Shares tendered without
alteration, enlargement or any change whatsoever.
If any of the Shares tendered thereby are owned of record by two or more
joint owners, all such owners must sign the Letter of Transmittal.
If any of the tendered Shares are registered in different names (including
Shares constructively owned by the tendering Stockholder as determined under
Section 318 of the Code which must also be tendered--see Sections 1 and 14),
it is necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
If the Letter of Transmittal or any certificates for Shares tendered or
stock powers relating to Shares tendered are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and proper evidence satisfactory to the Fund of
their authority so to act must be submitted.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares transmitted therewith, no endorsements of certificates or separate
stock powers with respect to such Shares are required unless payment is to be
made to, or certificates for Shares not purchased are to be issued in the name
of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder(s) of the certificate(s) listed thereon, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s) for the Shares involved. Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution. See Section 6.
c. Dividend Reinvestment Plan. State Street Bank and Trust Company, the
Fund's Transfer Agent, holds Shares in uncertificated form for certain
Stockholders pursuant to the Fund's Dividend Reinvestment Plan. In addition to
tendering all of their other Shares, Stockholders wishing to accept the Offer
must tender all such uncertificated Shares. See Section 1 concerning the
manner in which any necessary proration will be made.
d. Book-Entry Delivery. The Depositary has established an account with
respect to the Shares at DTC for purposes of the Offer. Any financial
institution that is a participant in the DTC system may make book-entry
delivery of tendered Shares by causing DTC to transfer such Shares into the
Depositary's account at DTC in accordance with DTC's procedures for such
transfers. However, although delivery of Shares may be effected through book-
entry transfer into the Depositary's account at DTC, a Letter of Transmittal
(or a copy or facsimile thereof) properly completed and bearing original
signature(s) and the original of any required signature guarantee(s), or an
Agent's Message (as defined below) in connection with a book-entry transfer,
any other documents required by the Letter of Transmittal and the Processing
Fee, must in any case be received by the Depositary prior to 12:00 Midnight
Eastern Time on the Expiration Date at one of its addresses set forth on page
2 of this Offer, or the tendering Stockholder must comply with the guaranteed
delivery procedures described below.
The term "Agent's Message" means a message from DTC transmitted to, and
received by, the Depositary forming a part of a timely confirmation of a book-
entry transfer of Shares (a "Book-Entry Confirmation") which states that (a)
DTC has received an express acknowledgment from the DTC participant tendering
the Shares that
7
<PAGE>
are the subject of the Book-Entry Confirmation, (b) the DTC participant has
received and agrees to be bound by the terms of the Letter of Transmittal, and
(c) the Fund may enforce such agreement against the DTC participant.
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the Depositary.
e. Guaranteed Delivery. Notwithstanding the foregoing, if a Stockholder
desires to tender Shares pursuant to the Offer and the certificates for the
Shares to be tendered are not immediately available, or time will not permit
the Letter of Transmittal and all documents required by the Letter of
Transmittal to reach the Depositary prior to 12:00 Midnight Eastern Time on
the Expiration Date, or a Stockholder cannot complete the procedures for
delivery by book-entry transfer on a timely basis, then such Stockholder's
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(i) the tender is made by or through an Eligible Institution; and
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, in the form provided by the Fund is received by the Depositary
prior to 12:00 Midnight Eastern Time on the Expiration Date; and
(iii) the certificates for all such tendered Shares, in proper form for
transfer, or a Book-Entry Confirmation with respect to such Shares, as the
case may be, together with a Letter of Transmittal (or a copy or facsimile
thereof) properly completed and bearing original signature(s) and the
original of any required signature guarantee(s) (or, in the case of a book-
entry transfer, an Agent's Message), any documents required by the Letter
of Transmittal and the Processing Fee, are received by the Depositary prior
to 5:00 P.M. Eastern Time on the third NYSE trading day after the date of
execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary and must include a guarantee
by an Eligible Institution and a representation that the Stockholder owns the
Shares tendered within the meaning of, and that the tender of the Shares
effected thereby complies with, Rule 14e-4 under the Exchange Act, each in the
form set forth in the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND
SOLE RISK OF THE TENDERING STOCKHOLDER. IF DOCUMENTS ARE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. Stockholders have the responsibility to cause their Shares
tendered (in proper certificated or uncertificated form), the Letter of
Transmittal (or a copy or facsimile thereof) properly completed and bearing
original signature(s) and the original of any required signature guarantee(s),
any other documents required by the Letter of Transmittal and the Processing
Fee to be timely delivered. Timely delivery is a condition precedent to
acceptance of Shares for purchase pursuant to the Offer and to payment of the
purchase amount.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), a
Letter of Transmittal (or a copy or facsimile thereof) properly completed and
bearing original signature(s) and the original of any required signature
guarantee(s) or, in the case of a book-entry transfer, an Agent's Message, any
other documents required by the Letter of Transmittal and the Processing Fee.
f. Determinations of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or not accompanied by the
Processing Fee or to refuse to accept for payment, purchase, or pay for, any
Shares if, in the opinion of the Fund's counsel, accepting, purchasing or
paying for such Shares would be unlawful. The Fund also reserves the absolute
right to waive any of the conditions of the Offer or any defect
8
<PAGE>
in any tender, whether generally or with respect to any particular Share(s) or
Stockholder(s). The Fund's interpretations of the terms and conditions of the
Offer shall be final and binding.
NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE INVESTMENT ADVISER, THE
DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF
ANY DEFECT OR IRREGULARITY IN ANY TENDER, AND NONE OF THEM WILL INCUR ANY
LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE.
g. United States Federal Income Tax Withholding. To prevent the imposition
of U.S. federal backup withholding tax equal to 31% of the gross payments made
pursuant to the Offer, prior to such payments each Stockholder accepting the
Offer who has not previously submitted to the Fund a correct, completed and
signed Form W-9 (for U.S. Stockholders) or Form W-8 (for non-U.S.
Stockholders) or otherwise established an exemption from such withholding must
submit the appropriate form to the Depositary. See Section 14.
Under certain circumstances (see Section 14), the Depositary will withhold a
tax equal to 30% of the gross payments payable to a non-U.S. Stockholder
unless the Depositary determines that a reduced rate of withholding or an
exemption from withholding is applicable. (Exemption from backup withholding
tax does not exempt a non-U.S. Stockholder from the 30% withholding tax.) For
this purpose, a non-U.S. Stockholder, is, in general, a Stockholder that is
not (i) a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of the source of such income (a "Non-U.S. Stockholder"). The
Depositary will determine a Stockholder's status as a Non-U.S. Stockholder and
eligibility for a reduced rate of, or an exemption from, withholding by
reference to any outstanding certificates or statements concerning eligibility
for a reduced rate of, or exemption from, withholding, unless facts and
circumstances indicate that such reliance is not warranted. A Non-U.S.
Stockholder that has not previously submitted the appropriate certificates or
statements with respect to a reduced rate of, or exemption from, withholding
for which such Stockholder may be eligible should consider doing so in order
to avoid over-withholding. See Section 14.
5. Withdrawal Rights. At any time prior to 5:00 P.M. Eastern Time on the
third day on which the NYSE is open for trading after the Expiration Date,
and, if the Shares have not by then been accepted for payment by the Fund, at
any time after July 2, 1997, any Stockholder may withdraw all, but not less
than all, of the Shares that the Stockholder has tendered.
To be effective, a written notice of withdrawal of Shares tendered must be
timely received by the Depositary at the appropriate address set forth on page
2 of this Offer. Stockholders may also send a facsimile transmission notice of
withdrawal, which must be timely received by the Depositary at (617) 575-2232,
and the original notice of withdrawal must be delivered to the Depositary by
overnight courier or by hand the next day. Any notice of withdrawal must
specify the name(s) of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn (which may not be less than all of the
Shares tendered by the Stockholder--see Sections 1 and 14) and, if one or more
certificates representing such Shares have been delivered or otherwise
identified to the Depositary, the name(s) of the registered owner(s) of such
Shares as set forth in such certificate(s) if different from the name(s) of
the person tendering the Shares. If one or more certificates have been
delivered to the Depositary, then, prior to the release of such
certificate(s), the certificate number(s) shown on the particular
certificate(s) evidencing such Shares must also be submitted and the signature
on the notice of withdrawal must be guaranteed by an Eligible Institution.
All questions as to the validity, form and eligibility (including time of
receipt) of notices of withdrawal will be determined by the Fund in its sole
discretion, which determination shall be final and binding. Shares properly
withdrawn will not thereafter be deemed to be tendered for purposes of the
Offer. Withdrawn Shares, however, may be retendered by following the
procedures described in Section 4 prior to 12:00 Midnight Eastern Time on the
Expiration Date. Except as otherwise provided in this Section 5, tenders of
Shares made pursuant to the Offer will be irrevocable.
9
<PAGE>
NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE INVESTMENT ADVISER, THE
DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF
ANY DEFECT OR IRREGULARITY IN ANY NOTICE OF WITHDRAWAL, NOR SHALL ANY OF THEM
INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH NOTICE.
6. Payment for Shares. For purposes of the Offer, the Fund will be deemed to
have accepted for payment and purchased Shares that are tendered (and not
withdrawn in accordance with Section 5 pursuant to the Offer) when, as and if
it gives oral or written notice to the Depositary of its acceptance of such
Shares for payment pursuant to the Offer. Under the Exchange Act, the Fund is
obligated to pay for or return tendered Shares promptly after the termination,
expiration or withdrawal of the Offer. Upon the terms and subject to the
conditions of the Offer, the Fund will pay for Shares properly tendered as
soon as practicable after the Expiration Date. The Fund will make payment for
Shares purchased pursuant to the Offer by depositing the aggregate purchase
price therefor with the Depositary, which will make payment to Stockholders
promptly as directed by the Fund. The Fund will not pay interest on the
purchase price under any circumstances.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of: (a) a Letter of
Transmittal (or a copy thereof) properly completed and bearing original
signature(s) and any required signature guarantee(s), (b) such Shares (in
proper certificated or uncertificated form), (c) any other documents required
by the Letter of Transmittal and (d) the Processing Fee. Stockholders may be
charged a fee by a broker, dealer or other institution for processing the
tender requested. Certificates representing Shares tendered but not purchased
will be returned promptly following the termination, expiration or withdrawal
of the Offer, without further expense to the tendering Stockholder.
The Fund will pay any transfer taxes payable on the transfer to it of Shares
purchased pursuant to the Offer. If, however, tendered Shares are registered
in the name of any person other than the person signing the Letter of
Transmittal, the amount of any such transfer taxes (whether imposed on the
registered owner or such other person) payable on account of the transfer to
such person of such Shares will be deducted from the purchase price unless
satisfactory evidence of the payment of such taxes, or exemption therefrom, is
submitted. The Fund may not be obligated to purchase Shares pursuant to the
Offer under certain conditions. See Section 3.
Any tendering Stockholder or other payee who has not previously submitted a
correct, completed and signed Form W-8 or Form W-9, as necessary, and who
fails to complete fully and sign either the Form W-8 or Substitute Form W-9 in
the Letter of Transmittal and provide that form to the Depositary, may be
subject to federal backup withholding tax of 31% of the gross proceeds paid to
such Stockholder or other payee pursuant to the Offer. See Section 14
regarding this tax as well as possible withholding at the rate of 30% (or
lower applicable treaty rate) on the gross proceeds payable to tendering Non-
U.S. Stockholders.
7. Source and Amount of Funds. The total cost to the Fund of purchasing
7,081,253 of its issued and outstanding Shares pursuant to the Offer would be
approximately $98,995,917 (based on a price per Share of $13.98, the NAV as of
the close of the regular trading session of the NYSE on May 2, 1997). On May
2, 1997, the aggregate value of the Fund's net assets was approximately $396
million.
To pay the aggregate purchase price of Shares accepted for payment pursuant
to the Offer, the Fund anticipates that funds will first be derived from any
cash on hand and then from the proceeds from the sale of portfolio securities
held by the Fund. The selection of which portfolio securities to sell, if any,
will be made by the Investment Adviser, taking into account investment merit,
relative liquidity and applicable investment restrictions and legal
requirements. Although the Fund is authorized to borrow money to finance the
repurchase of Shares, the Board believes that the Fund will have sufficient
resources through disposition of assets to repurchase Shares in the Offer
without utilizing such borrowing. However, the Fund reserves the right to
finance a portion of the Offer through temporary borrowing. The Fund has an
existing $100 million bank credit facility with a syndicate of banks which the
Fund has used for leveraging purposes. The Fund does not expect to use any
portion of the credit facility to repurchase Shares in the Offer. Certain
provisions of that credit facility may restrict the ability of the Fund to
borrow to repurchase Shares in the Offer.
10
<PAGE>
The repurchase of Shares by the Fund will decrease the net assets of the
Fund and, therefore, have the effect of increasing the Fund's expense ratio.
Any repurchases of Shares by the Fund pursuant to the Offer will tend to
reduce its asset coverage for purposes of the 1940 Act as described in the
Prospectus. In addition, the repurchases may have an adverse effect on the
Fund's investment performance.
Because the Fund may sell portfolio securities to raise cash for the
purchase of Shares, during the pendency of the Offer, and possibly for a short
time thereafter, the Fund may hold a greater than normal percentage of its
assets in cash and cash equivalents, which would tend to decrease the Fund's
net income. As of May 2, 1997, cash and cash equivalents constituted a
negligible amount of the Fund's total assets. In addition, if the Fund
liquidates portfolio securities, it may realize gains on securities held for
less than three months. The Fund must limit such gains in order to continue to
qualify as a regulated investment company under the Code. Accordingly,
realizing such gains would reduce the Fund's ability to sell other portfolio
securities held for less than three months that the Fund might otherwise wish
to sell in the ordinary course of its portfolio management, which may
adversely affect the Fund's performance.
Under some market circumstances, it may be necessary for the Fund to raise
cash by liquidating portfolio securities in a manner that could tend to reduce
the market value of such securities and, thus, reduce both the NAV of the
Shares and the proceeds from the sale of such securities. Liquidating
portfolio securities, if necessary, may also lend to the premature disposition
of portfolio investments and additional transaction costs. Depending upon the
timing of such sales, any such decline in NAV may adversely affect any
tendering Stockholders whose Shares are accepted for purchase by the Fund, as
well as those Stockholders who do not sell Shares pursuant to the Offer.
Stockholders who retain their Shares may be subject to certain other effects
of the Offer. See Section 11.
8. Price Range of Shares; Dividends. The following table sets forth, for the
periods indicated, the high and low NAVs per Share and the high and low
closing sale prices per Share as reported on the NYSE Composite Tape, and the
amounts of cash dividends per Share declared during such periods.
<TABLE>
<CAPTION>
NET ASSET VALUE MARKET PRICE
--------------- ---------------
FISCAL YEAR (ENDING SEPTEMBER 30) HIGH LOW HIGH LOW DIVIDENDS
- --------------------------------- --------------- ------- ------- ---------
<S> <C> <C> <C> <C> <C>
1995
1st Quarter.......................... $ 11.08 $ 9.71 $11.125 $ 9.500 $0.3657
2nd Quarter.......................... 9.39 7.86 10.500 7.625 0.4538
3rd Quarter.......................... 10.18 8.73 10.125 8.250 0.3150
4th Quarter.......................... 10.42 9.84 10.000 9.250 0.2100*
1996
1st Quarter.......................... 11.01 10.16 10.000 9.625 0.3150
2nd Quarter.......................... 11.92 10.66 11.500 9.875 0.3150
3rd Quarter.......................... 11.72 11.08 11.125 10.500 0.3150
4th Quarter.......................... 13.08 11.62 11.750 10.750 0.3150
1997
1st Quarter.......................... 13.77 13.18 12.500 11.500 0.4000
2nd Quarter.......................... 14.71 13.64 13.375 12.250 0.2375
3rd Quarter (through May 2, 1997).... 13.98 13.09 13.125 12.250 0.1125
</TABLE>
- --------
* Includes a tax return of capital distribution of $0.02.
Since trading of the Shares commenced on the NYSE, the Shares have traded at
both a premium and a discount to NAV. As of the close of business on May 2,
1997, the Fund's NAV was $13.98 per Share, and the high, low and closing
prices per Share on the NYSE on that date were $13.125, $13.00 and $13.125,
respectively. During the pendency of the Offer, current NAV quotations can be
obtained by contacting the Depositary in the manner indicated in Section 1.
11
<PAGE>
The Board of Directors has declared a dividend as of April 29, 1997, payable
May 23, 1997 to Stockholders of record on May 9, 1997, in the amount of
$0.1125 per Share, and it is expected that the Board of Directors will declare
a dividend as of May 27, 1997, payable June 20, 1997 to Stockholders of record
on June 6, 1997. The tendering of Shares will not affect the record ownership
of the tendered Shares for purposes of entitlement to either of these
dividends.
9. Selected Financial Information. Set forth below is a summary of selected
financial information for the Fund as of and for the fiscal years ended
September 30, 1996 and September 30, 1995, and for the six-month periods ended
March 31, 1997 and March 31, 1996. The information with respect to the two
fiscal years has been excerpted from the Fund's audited financial statements
contained in its Annual Reports to Stockholders for such years, and the
information with respect to the two six-month periods has been excerpted from
the Fund's unaudited financial statements for those periods. A copy of the two
audited statements is included as Exhibit A to this Offer to Purchase. The
summary of selected financial information set forth below is qualified in its
entirety by reference to such statements and the financial information, the
notes thereto and related matter contained therein.
12
<PAGE>
SUMMARY OF SELECTED FINANCIAL INFORMATION
FOR THE PERIODS INDICATED BELOW
($ IN 000'S EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED OCTOBER 1, 1996- OCTOBER 1, 1995-
SEPTEMBER 30, 1996 SEPTEMBER 30, 1995 MARCH 31, 1997 MARCH 31, 1996
------------------ ------------------ ---------------- ----------------
(AUDITED) (AUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Investment income..... $ 46,874 $ 47,376 $25,322 $22,276
Expenses.............. 10,644 10,028 5,437 5,329
---------- ---------- ---------- ----------
Net investment
income............... 36,230 37,348 19,885 16,947
---------- ---------- ---------- ----------
Realized and
unrealized gain
(loss) on investments
and options.......... 74,992 (23,328) 7,703 18,969
---------- ---------- ---------- ----------
Net increase in net
assets from
operations........... $111,222 $ 14,020 $27,588 $35,916
========== ========== ========== ==========
STATEMENT OF ASSETS AND
LIABILITIES (AT END OF
PERIOD)
Total assets.......... $471,805 $406,207 $545,468 $418,150
Total liabilities..... 101,259 111,194 165,391 105,065
---------- ---------- ---------- ----------
Net assets............ $370,546 $295,013 $380,077 $313,085
========== ========== ========== ==========
Net asset value per
Share................ $13.08 $10.42 $13.42 $11.05
Shares outstanding.... 28,325,009 28,325,009 28,325,009 28,325,009
SELECTED DATA PER SHARE
OUTSTANDING THROUGHOUT
EACH PERIOD
Net investment
income............... $ 1.27 $ 1.32 $ .71 $ .59
Net realized and
unrealized gain
(loss) on investments
and options.......... 2.65 (.85) .27 .67
Net increase in net
assets from
operations........... $ 3.92 $ .47 $ .98 $1.26
Dividends from net
investment income.... $(1.26) $(1.32) $(.64) (.63)
$
Tax return of capital
distribution......... 0 (.02) 0 0
---------- ---------- ---------- ----------
Total dividends and
distributions........ $(1.26) $(1.34) $(.64) (.63)
$
========== ========== ========== ==========
RATIOS
Expenses to average
net assets........... 2.59% 2.83% 2.23%* 2.69%*
Expenses to average
net assets excluding
interest expense..... 1.07% 1.17% 1.08%* 1.03%*
Net investment income
to average net
assets............... 8.79% 10.56% 8.16%* 8.58%*
TOTAL INVESTMENT
RETURN**
Total investment
return based on:
Market value.......... 33.53% 0.92% 15.26% 18.25%
Net asset value....... 40.86% 6.11% 7.92% 12.58%
</TABLE>
- --------
* Annualized
** Total investment return is calculated assuming a purchase of Shares on
the opening of the first day and a sale on the closing of the last day of
the 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 Plan. Generally, total investment return
based on net asset value will be higher than the 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 periods. Conversely,
total investment return based on net asset value will be lower than total
investment return based on market value in periods 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
periods. Total investment return calculated for a period of less than one
full year is not annualized.
13
<PAGE>
10. Interest of Certain Related Persons. Pursuant to an Advisory Agreement
dated as of October 22, 1993 with the Investment Adviser (a copy of which has
been filed as an exhibit to Schedule 13E-4 as defined in Section 13), the Fund
employs the Investment Adviser to manage the investment and reinvestment of
the assets of the Fund. The Investment Adviser has been the Fund's investment
adviser since the Fund's commencement of operations. The Investment Adviser is
also responsible for the overall management of the business affairs of the
Fund. For services provided by the Investment Adviser under the Advisory
Agreement, the Fund pays the Investment Adviser a fee computed and paid
monthly in arrears on the last day of each calendar month at an annualized
rate of .75% of the Fund's average weekly net assets. For purposes of the
calculation of this fee, average weekly net assets are determined on the basis
of the average net assets of the Fund for each weekly period (ending on
Friday) ending during the month. Average weekly net assets are the average
weekly value of the Fund's total assets minus the sum of the Fund's
liabilities (which liabilities exclude the principal amount of any money
borrowed by the Fund or any debt issued by the Fund). The net assets for each
weekly period are determined by averaging the adjusted net assets on the
Friday of such weekly period with the net assets on the Friday of the
immediately preceding weekly period. When a Friday is not a Fund business day,
the calculation is to be based on the net assets of the Fund on the Fund
business day immediately preceding such Friday. During the fiscal year ended
September 30, 1996, the Fund paid the Investment Adviser a fee totalling
$3,083,166 pursuant to the Advisory Agreement.
There have not been any transactions involving Shares that were effected
during the past forty business days by the Fund. Based upon information
provided to the Fund, except for the acquisition in an open market transaction
on April 25, 1997 of 600 Shares at a price per Share of $12.625 by an
individual retirement account of Donald J. Robinson, a member of the Board,
there have not been any transactions in Shares that were effected during the
past forty business days by any member of the Board, any executive officer of
the Fund, any director or executive officer of the general partner of the
Investment Adviser, any person controlling the Fund, any director or executive
officer of any corporation ultimately in control of the Fund, or any associate
or subsidiary of any of the foregoing, including any executive officer or
director of any such subsidiary. Based upon information provided to the Fund,
no director or officer of the Fund intends to tender Shares pursuant to the
Offer.
11. Certain Effects of the Offer. The purchase of Shares pursuant to the
Offer will have the effect of increasing the proportionate interest in the
Fund of Stockholders who do not tender Shares. All Stockholders remaining
after the Offer will be subject to any increased risks associated with the
reduction in the Fund's assets resulting from payment for the tendered Shares,
such as any greater volatility due to decreased portfolio diversification and
proportionately higher expenses. Under certain circumstances, the need to
raise cash in connection with the purchase of Shares pursuant to the Offer may
have an adverse effect on the Fund's NAV and/or income per Share. See Section
7. In addition, the purchase of Shares from tendering Stockholders may have
tax consequences to the Fund in certain circumstances. See Section 14. All
Shares purchased by the Fund pursuant to the Offer will constitute authorized
but unissued shares.
12. Certain Information about the Fund. The Fund was incorporated in
Maryland on August 10, 1993 and is registered as a non-diversified, closed-end
management investment company under the 1940 Act. The Fund's primary
investment objective is to seek high current income. Its secondary investment
objective is capital appreciation. In seeking to achieve these objectives, the
Fund invests at least 35% of its total assets in U.S. corporate fixed income
securities. The balance of the Fund's investment portfolio is invested in (a)
fixed income securities issued or guaranteed by foreign governments, including
participations in loans between foreign governments and financial
institutions, and interests in entities organized and operated for the purpose
of restructuring the investment characteristics of instruments issued or
guaranteed by foreign governments and (b) non-U.S. corporate fixed income
securities. Substantially all of the Fund's assets are to be invested in high
yield, high risk securities that are low-rated (i.e., below investment grade),
or of comparable quality and unrated, and that are considered to be
predominately speculative as regards the issuer's capacity to pay interest and
repay principal. The Fund is permitted to invest up to 50% of its total assets
in securities that are not readily marketable.
Reference is made to Sections 8 and 9 and to the financial statements
referred to in Section 9.
14
<PAGE>
The principal executive office of the Fund is located at 1345 Avenue of the
Americas, New York, New York 10105.
13. Additional Information. An Issuer Tender Offer Statement on Schedule
13E-4 (the "Schedule 13E-4") including the exhibits thereto, filed with the
Securities and Exchange Commission (the "SEC"), provides certain additional
information relating to the Offer, and may be inspected and copied at the
prescribed rates at the SEC's public reference facilities at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 W. Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of the Schedule 13E-4 and the exhibits
may also be obtained by mail at the prescribed rates from the Public Reference
Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
14. Certain United States Federal Income Tax Consequences. The following
discussion is a general summary of the U.S. federal income tax consequences of
a sale of Shares pursuant to the Offer, based on current U.S. federal income
tax law, including applicable Treasury regulations and Internal Revenue
Service rulings. Each Stockholder should consult the Stockholder's tax advisor
for a full understanding of the tax consequences of such a sale, including
potential state, local and foreign taxation by jurisdictions of which the
Stockholder is a citizen, resident or domiciliary. In view of the requirement
of the Offer that a tendering Stockholder must tender, or cause the tender of,
both all of the Shares actually owned by the Stockholder and all of the Shares
constructively owned by the Stockholder as determined under Section 318 of the
Code as of the date of purchase of Shares by the Fund pursuant to the Offer,
tax advisors should also be consulted regarding the application of the
constructive ownership rules of Section 318. In general, Section 318 provides
that Shares owned by certain family members of a tendering Stockholder, and by
certain entities in which the Stockholder has a direct or indirect interest,
are treated as owned by the Stockholder.
U.S. Stockholders. It is anticipated that Stockholders who are citizens
and/or residents of the U.S., corporations, partnerships or other entities
created or organized in or under the laws of the U.S. or any political
subdivision thereof, and estates and trusts the income of which is subject to
U.S. federal income taxation regardless of the source of such income ("U.S.
Stockholders") and who sell Shares pursuant to the Offer will recognize gain
or loss for U.S. federal income tax purposes equal to the difference between
the amount of cash they receive pursuant to the Offer and their adjusted tax
basis in the Shares sold. This gain or loss will be capital gain or loss if
the Shares sold are held by the tendering U.S. Stockholder at the time of sale
as a capital asset and will be treated as either long-term or short-term if
the Shares have been held at that time for more than one year or one year or
less, respectively. This U.S. federal income tax treatment, however, is based
on the expectation that not all Stockholders will tender their Shares pursuant
to the Offer and that the continuing ownership interest in the Fund of
tendering Stockholders will be sufficiently reduced. While not anticipated, it
is therefore possible that the cash received for the Shares purchased would be
taxable as a distribution by the Fund, rather than as a gain from the sale of
the Shares. In that event, the cash received by a U.S. Stockholder will be
taxable as a dividend, i.e., as ordinary income, to the extent of the U.S.
Stockholder's allocable share of the Fund's current or accumulated earnings
and profits, with the excess of the cash received over the portion so taxable
constituting a non-taxable return of capital to the extent of the U.S.
Stockholder's tax basis in the Shares sold and with any remaining excess of
such cash being treated as either long-term or short-term capital gain from
the sale of the Shares depending on how long they were held by the U.S.
Stockholder. In the case of a tendering U.S. Stockholder that is a corporation
treated as receiving a distribution from the Fund pursuant to the Offer,
special basis adjustments may be applicable with respect to any Shares of such
a U.S. Stockholder not purchased pursuant to the Offer.
Under the "wash sale" rules under the Code, recognition of a loss on Shares
sold pursuant to the Offer will ordinarily be disallowed to the extent a U.S.
Stockholder acquires Shares within 30 days before or after the date the Shares
are purchased pursuant to the Offer and, in that event, the basis and holding
period of the Shares acquired will be adjusted to reflect the disallowed loss.
The Depositary may be required to withhold 31% of the gross proceeds paid to
a U.S. Stockholder or other payee pursuant to the Offer unless either: (a) the
U.S. Stockholder has completed and submitted to the Depositary
15
<PAGE>
an IRS Form W-9 (or Substitute Form W-9), providing the U.S. Stockholder's
employer identification number or social security number as applicable, and
certifying under penalties of perjury: (a) that such number is correct, and
(b) either that (i) the U.S. Stockholder is exempt from backup withholding,
(ii) the U.S. Stockholder has not been notified by the Internal Revenue
Service that the U.S. Stockholder is subject to backup withholding as a result
of an underreporting of interest or dividends, or (iii) the Internal Revenue
Service has notified the U.S. Stockholder that the U.S. Stockholder is no
longer subject to backup withholding; or (c) an exception applies under
applicable law. A Substitute Form W-9 is included as part of the Letter of
Transmittal for U.S. Stockholders.
Non-U.S. Stockholders. The U.S. federal income taxation of a Non-U.S.
Stockholder on a sale of Shares pursuant to the Offer depends on whether this
transaction is "effectively connected" with a trade or business carried on in
the U.S. by the Non-U.S. Stockholder as well as the tax characterization of
the transaction as either a sale of the Shares or a distribution by the Fund,
as discussed above for U.S. Stockholders. If the sale of Shares pursuant to
the Offer is not so effectively connected and if, as anticipated for U.S.
Stockholders, it gives rise to gain or loss, any gain realized by a Non-U.S.
Stockholder upon the tender of Shares pursuant to the Offer will not be
subject to U.S. federal income tax or to any U.S. tax withholding, provided,
however, that such a gain will be subject to U.S. federal income tax at the
rate of 30% (or such lower rate as may be applicable under a tax treaty) if
the Non-U.S. Stockholder is a non-resident alien individual who is physically
present in the United States for more than 182 days during the taxable year of
the sale. If, however, U.S. Stockholders are deemed to receive a distribution
from the Fund with respect to Shares they tender, the cash received by a
tendering Non-U.S. Stockholder will also be treated for U.S. tax purposes as a
distribution by the Fund, with the cash then being characterized in the same
manner as described above for U.S. Stockholders. In such an event, the portion
of the distribution treated as a dividend to the Non-U.S. Stockholder would be
subject to a U.S. withholding tax at the rate of 30% (or such lower rate as
may be applicable under a tax treaty) if the dividend does not constitute
effectively connected income. If the amount realized on the tender of Shares
by a Non-U.S. Stockholder is effectively connected income, regardless of
whether the tender is characterized as a sale or as giving rise to a
distribution from the Fund for U.S. federal income tax purposes, the
transaction will be treated and taxed in the same manner as if the Shares
involved were tendered by a U.S. Stockholder.
Non-U.S. Stockholders should provide the Depositary with a completed Form W-
8 in order to avoid 31% backup withholding on the cash they receive from the
Fund regardless of how they are taxed with respect to their tender of the
Shares involved. A copy of Form W-8 is provided with the Letter of Transmittal
for Non-U.S. Stockholders.
Capital Loss Carryforwards of the Fund. If, as a result of the purchase of
Shares from tendering Stockholders pursuant to the Offer, the Fund's remaining
Stockholders increase their proportionate ownership in the Fund by more than
50 percentage points over the lowest percentage of their ownership at any time
during the three-year period ending on the termination of the Offer, an
"ownership change" with respect to the Fund may occur under the relevant
provisions of the Code. In the event of such an "ownership change", the amount
of the Fund's capital loss carryforwards as of the date of the "ownership
change" that could be used to offset its capital gains following the
"ownership change" would be limited, on an annual basis, to a percentage of
the NAV of the Fund calculated immediately after completion of the Offer in
accordance with a specified formula. The amount of the carryforwards as of the
date hereof is approximately $36 million.
15. Amendments; Extension of Tender Period; Termination. The Fund reserves
the right, at any time during the pendency of the Offer, to amend, extend or
terminate the Offer in any respect. Without limiting the manner in which the
Fund may choose to make a public announcement of such an amendment, extension
or termination, the Fund shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, except as provided by
applicable law (including Rule 14e-1(d) promulgated under the Exchange Act)
and by the requirements of the NYSE (including the listing agreement with
respect to the Shares).
Except to the extent required by applicable law (including Rule 13e-4(f)(1)
promulgated under the Exchange Act), the Fund will have no obligation to
extend the Offer. In the event that the Fund is obligated to, or elects to,
16
<PAGE>
extend the Offer, the purchase price for Shares purchased pursuant to the
Offer will be their NAV determined as of the close of the regular trading
session of the NYSE on the date after the Expiration Date as extended. No
Shares will be accepted for payment until on or after the new Expiration Date.
16. Miscellaneous. The Offer is not being made to, nor will the Fund accept
tenders from, or on behalf of, owners of Shares in any jurisdiction in which
the making of the Offer or its acceptance would not comply with the securities
or "blue sky" laws of that jurisdiction. The Fund is not aware of any
jurisdiction in which the making of the Offer or the acceptance of tenders of,
purchase of, or payment for, Shares in accordance with the Offer would not be
in compliance with the laws of such jurisdiction. The Fund, however, reserves
the right to exclude Stockholders in any jurisdiction in which it is asserted
that the Offer cannot lawfully be made or tendered Shares cannot lawfully be
accepted, purchased or paid for. So long as the Fund makes a good-faith effort
to comply with any state law deemed applicable to the Offer, the Fund believes
that the exclusion of holders residing in any such jurisdiction is permitted
under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on the Fund's
behalf by one or more brokers or dealers licensed under the laws of such
jurisdiction.
May 8, 1997 ACM Managed Dollar Income Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
17
<PAGE>
EXHIBIT A
Portfolio Of Investments
September 30, 1996 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
- ------------------------------------------------------
<S> <C> <C>
SOVEREIGN DEBT
OBLIGATIONS--72.2%
COLLATERALIZED
BRADY BONDS*--35.7%
BRAZIL--2.1%
Republic of Brazil
Par Bonds Series Z-L
5.00%, 4/15/24 (a)......... $13,000 $ 7,739,063
------------
BULGARIA--7.7%
Republic of Bulgaria
Discount Bonds FRN
6.6875%, 7/28/24........... 55,800 28,405,688
------------
ECUADOR--2.9%
Republic of Ecuador
Discount Bonds FRN
6.688%, 2/28/25............ 17,000 10,582,500
------------
MEXICO--10.1%
United Mexican States
Euro Par Bonds
Series B
6.25%, 12/31/19 (b)........ 36,000 24,952,500
Discount Notes FRN
Series D
6.453%, 12/31/19 (b)....... 15,000 12,651,563
------------
Total Mexican Securities.... 37,604,063
------------
NIGERIA--6.5%
Central Bank of Nigeria
Par Bonds
6.25%, 11/15/20 (c)........ 40,500 24,236,719
------------
VENEZUELA--6.4%
Republic of Venezuela DCB
Par Bonds Series A
6.75%, 3/31/20 (d)......... 34,000 23,630,000
------------
Total Collateralized
Brady Bonds
(cost $124,177,246)........ 132,198,033
------------
LOAN PARTICIPATIONS
& ASSIGNMENTS--6.3%
ALGERIA--2.5%
Algeria Refinanced Trust
Tranche B
Loan Assignment FRN
7.187%, 9/05/05............ $15,000 $ 9,450,000
RUSSIA--3.8%
Vneshekonombank
Loan Assignment (e)........ 20,000 13,962,500
------------
Total Loan Participations &
Assignments
(cost $20,737,255)......... 23,412,500
------------
OTHER SOVEREIGN DEBT
OBLIGATIONS--29.3%
ARGENTINA--6.6%
Republic of Argentina
FRB
6.625%, 3/31/05............ 29,400 24,613,312
------------
BRAZIL--11.0%
Republic of Brazil C Bonds
8.00%, 4/15/14 (f)......... 57,639 40,599,751
------------
BULGARIA--2.5%
Republic of Bulgaria
IAB FRN
6.6875%, 7/28/11........... 20,000 9,175,000
------------
ECUADOR--2.6%
Republic of Ecuador
PDI Bonds FRN
6.50%, 2/27/15 (g)......... 19,029 9,729,016
------------
VENEZUELA--6.6%
Republic of Venezuela
DCB FRN
6.625%, 12/18/07........... 29,500 24,438,906
------------
Total Other Sovereign
Debt Obligations
(cost $100,879,670)........ 108,555,985
------------
</TABLE>
A-1
<PAGE>
Portfolio Of Investments (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
- ---------------------------------------------------------
<S> <C> <C>
SOVEREIGN DEBT RELATED--0.9%
Morgan Guaranty Trust Co.
Spread Note
U.S. Treasury Bond
5.875%, 11/15/05 vs.
Poland PDI Bonds
3.75%, 10/27/14
8.00%, 1/24/97 (h)
(cost $3,500,000)...... $ 3,500 $ 3,509,100
------------
Total Sovereign
Debt Obligations
(cost $249,294,169).... 267,675,618
------------
U.S. CORPORATE FIXED
INCOME OBLIGATIONS--47.7%
AGRICULTURE--1.4%
Trans-Resources, Inc.
11.875%, 7/01/02 (i)... 5,000 5,125,000
------------
AUTOMOBILE--1.5%
APS, Inc.
11.875%, 1/15/06....... 5,000 5,450,000
------------
BASIC INDUSTRIES--8.6%
Alpine Group, Inc.
12.25%, 7/15/03........ 4,000 4,300,000
Crain Industries, Inc.
13.50%, 8/15/05........ 5,000 5,550,000
Haynes International, Inc.
11.625%, 9/01/04....... 5,500 5,692,500
IMO Industries, Inc.
11.75%, 5/01/06........ 5,000 5,200,000
Unisys Corp.
12.00%, 4/15/03........ 10,750 11,126,250
------------
Total Basic Industries.. 31,868,750
BROADCASTING--1.3%
Albritton Communications Co.
9.75%, 11/30/07 (i).... 5,000 4,831,250
------------
BROADCASTING
& CABLE--3.6%
Charter Communications L.P.
11.25%, 3/15/06........ 7,000 7,227,500
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount
(000) U.S. $ Value
- ---------------------------------------------------------
<S> <C> <C>
Intermedia Capital Partners
11.25%, 8/01/06 (i).... $ 6,000 $ 6,255,000
------------
Total Broadcasting & Cable 13,482,500
------------
BROADCASTING &
MEDIA--5.8%
Park Broadcasting, Inc.
11.75%, 5/01/04........ 7,000 7,980,000
Park Newspapers, Inc.
11.875%, 5/15/04 (i)... 3,000 3,420,000
Sullivan Graphics, Inc
12.75%, 8/01/05........ 4,000 3,870,000
Telemundo Group, Inc.
7.00%, 2/15/06......... 6,400 6,112,000
------------
Total Broadcasting
& Media................. 21,382,000
------------
CHEMICALS--0.8%
Uniroyal Technology Corp.
11.75%, 6/01/03........ 3,000 2,827,500
warrants, expiring
6/1/03 (j)(k)........... 30 30,000
------------
Total Chemicals......... 2,857,500
------------
ENERGY--2.4%
TransTexas Gas Corp.
11.50%, 6/15/02........ 8,500 9,052,500
------------
FOOD DISTRIBUTION--1.5%
Specialty Foods Corp.
11.125%, 10/01/02...... 6,000 5,610,000
------------
GAMING--1.7%
Casino America, Inc.
12.50%, 8/01/03........ 5,800 6,079,125
------------
GROCERIES--3.1%
Jitney-Jungle Stores of.America
12.00%, 3/01/06........ 6,000 6,397,500
Ralph's Grocery Co.
11.00%, 6/15/05........ 5,000 5,056,250
------------
Total Groceries......... 11,453,750
</TABLE> ------------
A-2
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION>
Principal
Amount
(000) U.S. $ Value
- ---------------------------------------------------------------
<S> <C> <C>
LEISURE--4.6%
Alamo Rent-A-Car
11.75%, 01/31/06............ $ 5,250 $ 5,722,500
Alliance Gaming Corp.
12.875%, 6/30/03............ 6,000 6,255,000
American Skiing Co.
12.00%, 7/15/06 (i)......... 5,000 5,000,000
-----------
Total Leisure................ 16,977,500
-----------
NATURAL RESOURCES--1.8%
Royal Oak Mines, Inc.
11.00%, 8/15/06............. 6,500 6,727,500
-----------
PAPER--0.5%
Crown Paper Co.
11.00%, 9/01/05............. 2,000 1,995,000
-----------
STEEL--1.3%
Weirton Steel Corp.
11.375%, 7/01/04............ 5,000 4,850,000
-----------
TELECOMMUNICATIONS--4.3%
CAI Wireless Systems, Inc.
12.25%, 9/15/02............. 5,000 5,200,000
Dictaphone Corp.
11.25%, 8/01/05............. 6,000 5,550,000
IXC Communications Inc.
12.50%, 10/01/05 (l)........ 5,000 5,293,750
-----------
Total Telecommunications..... 16,043,750
-----------
TRANSPORTATION--2.7%
Johnstown America Industries, Inc.
11.75%, 8/15/05............. 5,000 4,525,000
</TABLE>
<TABLE>
<CAPTION>
Shares/
Contract or
Principal
Amount
(000) U.S. $ Value
- ---------------------------------------------------------------
<S> <C> <C>
Terex Corp.
13.25%, 5/01/02 (i)......... $ 5,150 $ 5,420,375
------------
Total Transportation......... 9,945,375
------------
UTILITIES--0.8%
Calpine Corp.
10.50%, 5/15/06 (i)......... 3,000 3,075,000
------------
Total U.S. Corporate Fixed
Income Obligations
(cost $169,724,525)......... 176,806,500
------------
NON-U.S. FIXED
INCOME SECURITIES--1.9%
MEXICO--1.8%
Grupo Mexicano
De Desarrollo SA
8.25%, 2/17/01 (i)
(cost $6,103,884)........... 10,000 6,500,000
------------
WARRANTS--0.1%
Renaissance Cosmetics
Warrants, expiring 8/15/01 (m)
(cost $108,950)............. 8,000 400,000
------------
OPTIONS PURCHASED--0.0%
United Mexico States
expiring October '96
@ $70.3125
(cost $360,000)............. 1 110,000
------------
TOTAL INVESTMENTS--121.8%
(cost $425,591,530)......... 451,492,118
Other assets less liabilities--(21.8%) (80,946,074)
------------
NET ASSETS--100%............. $370,546,044
============
</TABLE>
A-3
<PAGE>
Portfolio Of Investments (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
- --------------------------------------------------------------------------------
* Sovereign debt obligations issued as part of debt restructuring that are
collateralized in full as to principal due at maturity by U.S. Treasury
zero coupon obligations which have the same maturity as the Brady Bond.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at September 30, 1996.
(b) Security trades with recovery rights expiring June 30, 2003.
(c) Security trades with oil warrants expiring November 15, 2020.
(d) Security trades with oil warrants expiring April 15, 2020.
(e) Security is in default and is non-income producing.
(f) Coupon consists of 4.50% cash payment and 3.50% paid-in-kind.
(g) Coupon consists of 3.50% cash payment and 3.00% paid-in-kind.
(h) Principal amount represents par value at purchase date. The redemption
value of these securities is indexed to the spread between the referenced
treasury yield and the referenced emerging market debt yield.
(i) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1996, these securities amounted to $39,626,625 or 10.7% of net assets.
(j) Non-income producing security.
(k) Each warrant entitles the holder to purchase one share at an exercise price
of $4.375 per share. The warrants are exercisable until June 1, 2003.
(l) Security will have an increased interest rate of 0.50% until registration
under Rule 144A of the Securities Act of 1933 becomes effective. At that
time interest will accrue at the rate shown.
(m) Each warrant entitles the holder to purchase one share at an exercise price
of $0.01 per share. The warrants are exerciseable until August 15, 2001.
Glossary of terms:
DCB - Debt Conversion Bond.
FRN - Floating Rate Note. Coupon will fluctuate based upon an interest
rate index.
Stated interest rate in effect at September 30, 1996.
FRB - Floating Rate Bond. Coupon will fluctuate based upon an interest rate
index.
Stated interest rate in effect at September 30, 1996.
IAB - Interest Arrears Bond.
PDI - Past Due Interest Bond.
See notes to financial statements.
A-4
<PAGE>
Statement Of Assets And Liabilities
September 30, 1996 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $425,591,530).............. $451,492,118
Cash................................................................. 4,123,389
Interest receivable.................................................. 13,607,794
Receivable for investment securities sold............................ 2,557,015
Deferred organization expenses and other assets...................... 24,553
------------
Total assets......................................................... 471,804,869
------------
LIABILITIES
Loan payable......................................................... 96,500,000
Net unrealized depreciation of swap contract......................... 2,637,850
Interest payable..................................................... 809,936
Advisory fee payable................................................. 283,178
Administrative fee payable........................................... 56,636
Accrued expenses and other liabilities............................... 971,225
------------
Total liabilities.................................................... 101,258,825
------------
NET ASSETS............................................................ $370,546,044
============
COMPOSITION OF NET ASSETS
Common stock, at par................................................. $ 283,250
Additional paid-in capital........................................... 391,817,637
Undistributed net investment income.................................. 1,253,406
Accumulated net realized loss........................................ (46,070,987)
Net unrealized appreciation of investments and swap contract......... 23,262,738
------------
$370,546,044
============
NET ASSET VALUE PER SHARE (based on 28,325,009 shares outstanding).... $13.08
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-5
<PAGE>
Statement Of Operations
Year Ended September 30, 1996 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest........................................................................................ $ 46,873,669
------------
EXPENSES
Advisory fee.................................................................................... $ 3,083,166
Administrative fee.............................................................................. 616,633
Custodian....................................................................................... 210,904
Loan origination fee and loan expenses.......................................................... 164,840
Transfer agency................................................................................. 120,773
Audit and legal................................................................................. 97,058
Reports and notices to shareholders............................................................. 27,468
Directors' fees................................................................................. 25,072
Amortization of organization expenses........................................................... 8,019
Miscellaneous................................................................................... 58,616
------------
Total expenses before interest expense.......................................................... 4,412,549
Interest expense................................................................................ 6,231,187
------------
Total expenses.................................................................................. 10,643,736
------------
Net investment income........................................................................... 36,229,933
------------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND OPTIONS
Net realized gain on investment transactions................................................... 32,509,148
Net realized gain on options written........................................................... 8,020,229
Net realized gain on swap contracts............................................................ 1,549,500
Net change in unrealized depreciation of investments, options written and swap contracts....... 32,913,344
------------
Net gain on investments........................................................................ 74,992,221
------------
NET INCREASE IN NET ASSETS FROM OPERATIONS...................................................... $111,222,154
============
</TABLE>
Statement Of Changes In Net Assets
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income............................................................ $ 36,229,933 $ 37,347,975
Net realized gain (loss) on investment transactions, options written and swap
contract....................................................................... 42,078,877 (48,890,891)
Net change in unrealized depreciation of investments, options written
and swap contract.............................................................. 32,913,344 25,563,387
------------ ------------
Net increase in net assets from operations....................................... 111,222,154 14,020,471
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income............................................. (35,689,077) (37,303,113)
Tax return of capital distribution............................................... -0- (465,363)
COMMON STOCK TRANSACTIONS
Reinvestment of dividends resulting in the issuance of Common Stock.............. -0- 4,941,844
------------ ------------
Total increase (decrease)......................................................... 75,533,077 (18,806,161)
NET ASSETS
Beginning of year................................................................ 295,012,967 313,819,128
------------ ------------
End of year (including undistributed net investment income of $1,253,406
at September 30, 1996)......................................................... $370,546,044 $295,012,967
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-6
<PAGE>
Statement Of Cash Flows
Year Ended September 30, 1996 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C> <C>
INCREASE (DECREASE) IN CASH FROM OPERATING ACTIVITIES:
Interest and dividends received......................... $ 40,836,446
Interest expense paid................................... (5,961,285)
Operating expenses paid................................. (4,356,108)
---------------
Net increase in cash from operating activities.......... $ 30,519,053
INVESTING ACTIVITIES:
Purchases of long-term investments...................... (1,779,400,599)
Proceeds from disposition of long-term investments...... 1,741,223,386
Proceeds from disposition of short-term investments, net 30,853,170
---------------
Net decrease in cash from investing activities.......... (7,324,043)
FINANCING ACTIVITIES*:
Cash dividends and distributions paid................... (35,689,077)
Proceeds from borrowings................................ 18,500,000
Repayment of borrowings................................. (2,500,000)
---------------
Net decrease in cash from financing activities.......... (19,689,077)
-------------
Net increase in cash.................................... 3,505,933
Cash at beginning of year............................... 617,456
-------------
Cash at end of year..................................... $ 4,123,389
=============
- -----------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM
OPERATIONS TO NET INCREASE IN CASH FROM OPERATING
ACTIVITIES:
Net increase in net assets from operations.............. $ 111,222,154
ADJUSTMENTS:
Increase in interest receivable......................... $ (3,374,375)
Accretion of bond discount.............................. (3,489,098)
Increase in accrued expenses............................ 882,691
Increase in interest payable............................ 269,902
Net gain on investments................................. (74,992,221)
---------------
Total adjustments....................................... (80,703,101)
-------------
NET INCREASE IN CASH FROM OPERATING ACTIVITIES........... $ 30,519,053
=============
</TABLE>
- --------------------------------------------------------------------------------
* Non-cash financing activities not included herein consist of reinvestment of
dividends and distributions.
See notes to financial statements.
A-7
<PAGE>
Notes To Financial Statements
September 30, 1996 ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE A: Significant Accounting Policies
ACM Managed Dollar Income Fund, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on August 10, 1993 and 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
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recent quoted bid and asked prices provided
by the principal market makers. Publicly traded sovereign debt obligations are
typically traded internationally on the over-the-counter market. Due to the
nature of the markets for sovereign debt obligations, quotations from several
sources are obtained so that the Fund's portfolio investments are not generally
priced by a single source. Readily marketable sovereign debt obligations and
fixed income securities may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Adviser to reflect the fair
value of such securities. Options are valued at market value or fair value using
methods determined by the Board of Directors. Securities for which market
quotations are not readily available are valued in good faith at fair value
using methods determined by the Board of Directors. 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. Organization Expenses
Organization expenses of approximately $40,000 were deferred and are being
amortized on a straight-line basis through October 1998.
3. Taxes
It is the Fund's policy to meet the requirements of the 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.
4. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date the investments 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
During the year the Fund reclassified certain components of net assets. The
reclassification resulted in a net increase to undistributed net investment
income and a corresponding decrease to accumulated net realized loss on
investments of $712,550. This reclassification was the result of permanent book
to tax differences in the classification of short term capital gains as ordinary
income. Net assets were not affected by the reclassification.
- --------------------------------------------------------------------------------
NOTE B: Advisory and Administrative Fees
Under the terms of the Investment Advisory Agreement, the Fund pays Alliance
Capital Management, L.P. (the "Adviser") an advisory fee equal to an annualized
rate of .75 of 1% of the average adjusted weekly net assets of the Fund during
the month.
A-8
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
On November 28, 1995, the Fund entered into a Shareholder Inquiry Agency
Agreement with Alliance Fund Services, Inc. ("AFS"), an affiliate of the
Investment Adviser, whereby the Fund reimburses AFS for costs relating to
servicing phone inquiries for the Fund. During the year ended September 30, 1996
there was no reimbursement paid to AFS.
Under the terms of the Administration Agreement, the Fund pays Princeton
Administrators, L.P. (the "Administrator") a monthly fee equal to the annualized
rate of .15 of 1% of the Fund's average adjusted weekly net assets. The
Administrator prepares financial and regulatory reports for the Fund and
provides clerical and other services.
- --------------------------------------------------------------------------------
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments,
options and U.S. Government Securities) aggregated $1,753,713,212 and
$1,770,927,373, respectively, for the year ended September 30, 1996. At
September 30, 1996 the cost of securities, for federal income tax purposes was
$426,282,872. Accordingly, gross unrealized appreciation of investments was
$27,317,697 and gross unrealized depreciation of investments was $2,108,451,
resulting in net unrealized appreciation of $25,209,246.
For federal income tax purposes, the Fund had a capital loss carryforward at
September 30, 1996 of approximately $36,026,439 which will expire in
2003.
Options Transactions
For investment and hedging purposes, the Fund purchases and writes (sells) put
and call options on U.S. and foreign government securities that are traded on
U.S. and foreign securities exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the premium
paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from options
written. The difference between the premium and the amount paid on effecting a
closing purchase transaction, including brokerage commissions, is also treated
as a realized gain, or if the premium is less than the amount paid for the
closing purchase transaction, as a realized loss. If a call option is exercised,
the premium is added to the proceeds from the sale of the underlying security in
determining whether the Fund has realized a gain or loss. If a put option is
exercised, the premium reduces the cost basis of the security purchased by the
Fund. In writing an option, the Fund bears the market risk of an unfavorable
change in the price of the security underlying the written option. Exercise of
an option written by the Fund could result in the Fund selling or buying a
security at a price different from the current market value.
Transactions in options written for the year ended September 30, 1996 were as
follows:
<TABLE>
<CAPTION>
Number of
Options Written Contracts Premium
----------- ---------
<S> <C> <C>
Options outstanding at
beginning of year 165 $ 1,441,276
Options written 165 379,500
Options terminated in
closing transactions (330) (1,820,776)
---- -----------
Options outstanding at
September 30, 1996 0 $ 0
==== ===========
</TABLE>
A-9
<PAGE>
Notes To Financial Statements (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE D: Interest Rate Swap Agreements
The Fund enters into interest rate swaps on sovereign debt obligations to
protect itself from interest rate fluctuations on the underlying floating rate
debt instruments. A swap is an agreement that obligates two parties to exchange
a series of cash flows at specified intervals based upon or calculated by
reference to changes in specified prices or rates for a specified amount of an
underlying asset. The payment flows are usually netted against each other, with
the difference being paid by one party to the other.
Risks may arise as a result of the failure of another party to the swap contract
to comply with the terms of the swap contract. The loss incurred by the failure
of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore the Fund considers the creditworthiness of each counterparty to a swap
contract in evaluating potential credit risk. Additionally, risks may arise from
unanticipated movements in interest rates or in the value of the underlying
securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation on interest rate swap contracts.
At September 30, 1996 the Fund had outstanding an interest rate swap contract as
follows:
<TABLE>
<CAPTION>
Payments Made Payments Received
by the Fund by the Fund
----------------------------- ------------------------
Unrealized
Swap Termination Notional Notional Appreciation
Counterparty Date Amount Rate Amount Rate (Depreciation)
- ------------ ----------- ----------- --------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Morgan 01/01/09 $25,000,000 Floating-LIBOR+ $25,000,000 Fixed-6.61% $(2,637,850)
Guaranty plus .8125%
</TABLE>
+ LIBOR - London Interbank Offered Rate.
- --------------------------------------------------------------------------------
NOTE E: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized. Of the
28,325,009 shares of Common Stock outstanding at September 30, 1996, the Adviser
owned 7,100 shares.
During the year ended September 30, 1996, the Fund did not issue shares in
connection with the dividend reinvestment plan. During the year ended September
30, 1995, the Fund issued 530,592 shares in connection with the Fund's dividend
reinvestment plan.
- --------------------------------------------------------------------------------
NOTE F: Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Citibank, N.A. which was
reviewed on March 29, 1996. The maximum credit available is $100,000,000 and the
amount outstanding as of September 30, 1996 was $96,500,000 with an average
interest rate of 6.14%. Interest payments on current borrowings are based on the
London Interbank Offered Rate plus a premium. The average daily amount of the
loan outstanding during the year ended September 30, 1996 was approximately
$90,043,716 with a related weighted average annualized interest rate of 6.92%.
The Fund is also obligated to pay Citibank, N.A. a facility fee computed at the
rate of .15 of 1% per annum on the full $100,000,000 available.
A-10
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE G: Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include revaluation of currencies and future adverse
political and economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of comparable U.S. companies and the United
States Government. The Fund invests in the sovereign debt obligations of
countries that are considered emerging market countries at the time of purchase.
Therefore, the Fund is susceptible to governmental factors and economic and debt
restructuring developments adversely affecting the economies of these emerging
market countries. In addition, these debt obligations may be less liquid and
subject to greater volatility than debt obligations of more developed countries.
A-11
<PAGE>
Financial Highlights ACM Managed Dollar Income Fund, Inc.
================================================================================
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Year Ended
September 30, October 22, 1993*
----------------- to
1996 1995 September 30, 1994
------ ------ ------------------
<S> <C> <C> <C>
Net asset value, beginning of period......................... $10.42 $11.29 $14.04(a)
------ ------ ------
Income From Investment Operations
- ---------------------------------
Net investment income........................................ 1.27 1.32 1.13
Net realized and unrealized gain (loss) on
investments and options written............................. 2.65 (.85) (2.66)
------ ------ ------
Net increase (decrease) in net asset value from operations... 3.92 .47 (1.53)
------ ------ ------
Less: Dividends and Distributions
- ---------------------------------
Dividends from net investment income......................... (1.26) (1.32) (1.13)
Distributions in excess of net investment income............. -0- -0- (.02)
Tax return of capital distribution........................... -0- (.02) (.07)
------ ------ ------
Total distributions.......................................... (1.26) (1.34) (1.22)
------ ------ ------
Net asset value, end of period............................... $13.08 $10.42 $11.29
------ ------ ------
Market value, end of period.................................. $11.75 $9.875 $11.25
====== ====== ======
Total Return (b)
- ----------------
Total investment return based on:
Market value................................................. 33.53% 0.92% (11.94)%
Net asset value.............................................. 40.86% 6.11% (11.62)%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (000's omitted)...................... $370,546 $295,013 $313,819
Ratio of expenses to average net assets...................... 2.59% 2.83% 1.78%(c)
Ratio of expenses to average net assets excluding interest
expense..................................................... 1.07% 1.17% 1.07%(c)
Ratio of net investment income to average net assets......... 8.79% 10.56% 8.54%(c)
Portfolio turnover rate...................................... 443% 344% 225%
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of operations.
(a) Net of offering costs of $.06.
(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
the 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 plan. Generally, total investment return based
on net asset value will be higher than the 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 periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods 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 periods. Total investment return calculated for
a period of less than year is not annualized.
(c) Annualized.
A-12
<PAGE>
Report Of Ernst & Young LLP
Independent Auditors ACM Managed Dollar Income Fund, Inc.
================================================================================
To the Shareholders and Board of Directors
ACM Managed Dollar Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of ACM
Managed Dollar Income Fund, Inc., including the portfolio of investments, as of
September 30, 1996, and the related statements of operations and cash flows for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Dollar Income Fund, Inc. at September 30, 1996, the results of its
operations and its cash flows for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the financial
highlights for each of the indicated periods, in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
November 8, 1996
A-13
<PAGE>
Portfolio Of Investments
September 30, 1995 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION> Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
SOVEREIGN DEBT
OBLIGATIONS--66.2%
COLLATERALIZED
BRADY BONDS*--38.6%
BRAZIL--9.6%
Republic of Brazil
Par Bonds (a)
YL3, 4.25%, 4/15/24........ $11,000 $ 5,355,625
YL4, 4.25%, 4/15/24........ 47,300 23,029,188
------------
Total Brazilian Securities
(cost $27,552,655)......... 28,384,813
------------
MEXICO--6.2%
United Mexican States
Euro Par Bonds
6.25%, 12/31/19
Series A................... 15,000 9,140,625
Series B................... 15,000 9,140,625
------------
Total Mexican Securities
(cost $18,078,489)......... 18,281,250
------------
JORDAN--6.0%
The Kingdom of Jordan
Par Bonds
4.00%, 12/23/23 (a)
(cost $21,369,821)......... 39,670 17,752,325
------------
ECUADOR--4.8%
Republic of Ecuador
Discount Bonds FRN
6.8125%, 2/28/25 (b)
(cost $14,754,341)......... 28,850 14,244,688
------------
VENEZUELA--4.4%
Republic of Venezuela
Par Bonds
6.75%, 3/31/20
Series A................... 15,000 7,696,875
Series B................... 10,500 5,387,813
------------
Total Venezuelan Securities
(cost $13,081,805)......... 13,084,688
------------
NIGERIA--3.4%
Central Bank of Nigeria
Par Bonds VRN
6.25%, 11/15/20 (b)
(cost $9,578,289).......... 22,000 9,872,500
------------
PHILIPPINES--2.8%
Central Bank of Philippines
Par Bonds
5.75%, 12/01/17 (a)
(cost $8,105,544).......... 10,900 8,089,844
------------
ARGENTINA--1.4%
Republic of Argentina
Euro Par Bonds
5.00%, 3/31/23 (a)
(cost $3,981,548).......... 8,300 4,033,260
------------
Total Collateralized
Brady Bonds
(cost $116,502,492)........ 113,743,368
------------
LOAN PARTICIPATIONS &
ASSIGNMENTS--4.4%
ALGERIA--1.9%
Algeria Refinanced Trust
Tranche B
Loan Assignment FRN
3/04/97 (b)
8.1875%.................... 12,000 4,440,000
7.3125%.................... 3,000 1,110,000
------------
Total Algerian Securities
(cost $13,272,173)......... 5,550,000
------------
RUSSIA--1.1%
Vneshekonombank
Loan Assignment (c)
(cost $3,193,750).......... 10,000 3,281,250
------------
MOROCCO--1.0%
Republic of Morocco
Loan Participation FRN
6.6875%, 1/01/09 (b)
(cost $3,254,571).......... 5,000 3,126,550
------------
NICARAGUA--0.4%
Republic of Nicaragua
Loan Assignment (c)
(cost $1,740,000).......... 13,000 1,056,250
------------
Total Loan Participations &
Assignments
(cost $21,460,494)......... 13,014,050
------------
</TABLE>
A-14
<PAGE>
Portfolio Of Investments (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION> Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER SOVEREIGN
DEBT OBLIGATIONS--23.2%
BULGARIA--9.1%
Republic of Bulgaria
IAB FRN
6.75%, 7/28/11 (b)
(cost $24,329,693)......... $59,384 $ 26,778,447
-------------
POLAND--6.2%
Republic of Poland
PDI Bonds (a)
3.25%, 10/27/14
(cost $18,181,346)......... 29,000 18,369,615
-------------
VENEZUELA--3.1%
Republic of Venezuela
DCB FRN
6.8125%, 12/18/07 (b)
(cost $9,138,883).......... 18,000 9,106,875
-------------
BRAZIL--3.0%
Republic of Brazil C Bonds
8.00%, 4/15/14 (d)......... 10,300 5,487,973
Republic of Brazil
DCB FRN
7.3125%, 4/15/12 (b)....... 6,000 3,472,470
-------------
Total Brazilian Securities
(cost $8,552,124).......... 8,960,443
-------------
ECUADOR--1.8%
Republic of Ecuador
PDI Bonds
6.8125%, 2/27/15 (e)....... 13,785 4,273,336
Republic of Ecuador
IEB FRN
6.75%, 12/21/04 (b)........ 1,720 1,014,741
-------------
Total Ecuadorian Securities
(cost $4,850,060).......... 5,288,077
-------------
Total Other Sovereign Debt
Obligations (cost $65,052,106) 68,503,457
-------------
Total Sovereign
Debt Obligations
(cost $203,015,092)........ 195,260,875
-------------
U.S. CORPORATE FIXED
INCOME OBLIGATIONS--51.6%
Acetex Corp.
9.75%, 10/01/03 (f)........ 2,840 2,864,850
Algoma Steel, Inc.
12.375%, 7/15/05........... 7,000 6,440,000
Bruno's, Inc.
10.50%, 8/01/05............ 4,000 3,920,000
CAI Wireless Systems, Inc.
12.25%, 9/15/02............ 5,000 5,212,500
Calmar, Inc.
11.50%, 8/15/05 (f)........ 5,000 5,075,000
Crain Industries, Inc.
13.50%, 8/15/05 (f)........ 5,000 5,175,000
Crown Paper Co.
11.00%, 9/01/05............ 6,000 5,970,000
Dictaphone Corp.
11.75%, 8/01/05............ 5,000 5,025,000
GNF Corp.
10.625%, 4/01/03........... 5,000 4,375,000
Galaxy Telecom L.P.
12.375%, 10/01/05.......... 4,540 4,534,325
Gearbulk Holding, Ltd.
11.25%, 12/01/04........... 7,000 7,455,000
Graphic Controls Corp.
12.00%, 9/15/05 (f)........ 4,000 4,060,000
Harvard Industries, Inc.
11.125%, 8/01/05 (f)....... 5,000 5,112,500
International Wire Group, Inc.
11.75%, 6/01/05 (f)........ 6,000 6,090,000
Johnstown America Industries, Inc.
11.75%, 8/15/05............ 5,000 4,987,500
Mohegan Tribal
Gaming Authority
13.50%, 11/15/02 (f)....... 3,000 3,112,500
Peoples Telephone
Company, Inc.
12.25%, 7/15/02 (f)........ 5,000 5,175,000
Premier Parks, Inc.
12.00%, 8/15/03 (f)........ 5,000 5,100,000
Primeco, Inc.
12.75%, 3/01/05............ 8,000 8,280,000
Ralphs Grocery Co.
10.45%, 6/15/04............ 5,000 4,912,500
</TABLE>
A-15
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE> Shares or
<CAPTION> Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Renaissance Cosmetics, Inc.
13.75%, 8/15/01.............. $ 4,000 $ 3,980,000
warrants (c)(g).............. 8 140,000
SC International Services, Inc.
13.00%, 10/01/05............. 2,000 2,020,000
Sullivan Graphics, Inc.
12.75%, 8/01/05 (f).......... 5,000 4,981,250
Tembec Finance Corp.
9.875%, 9/30/05.............. 4,000 3,980,000
Terex Corp.
13.75%, 5/15/02 (f).......... 4,300 3,547,500
Terra Industries, Inc.
10.50%, 6/15/05.............. 7,000 7,385,000
Trans-Resources, Inc.
11.875%, 7/01/02 (f)......... 5,000 4,725,000
TransTexas Gas Corp.
11.50%, 6/15/02.............. 6,000 6,300,000
Trump Plaza Funding, Inc.
10.875%, 6/15/01............. 6,000 5,565,000
Tultex Corp.
10.625%, 3/15/05............. 6,500 6,816,875
------------
Total U.S. Corporate Fixed
Income Obligations
(cost $150,500,021).......... 152,317,300
------------
NON-U.S. FIXED
INCOME SECURITIES--3.1%
ARGENTINA--2.6%
Acindar Industries FRN
11.875%, 11/12/98 (b)........ 7,000 5,005,000
MetroGas, S.A.
12.00%, 8/15/00 (f).......... 2,750 2,701,875
------------
Total Argentinian Securities
(cost $9,087,857)............ 7,706,875
------------
MEXICO--0.5%
Tribasa Toll Road
Euro-Dollar Trust 1
10.50%, 12/01/11 (f)
(cost $1,961,317)............ 2,000 1,530,000
------------
Total Non-U.S. Fixed
Income Securities
(cost $11,049,174)........... 9,236,875
------------
</TABLE>
================================================================================
<TABLE>
<CAPTION>
Contracts or
Principal
Amount
(000) U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER SOVEREIGN
DEBT RELATED--4.9%
Bayerische Landesbank
Spread Notes--U.S.
Treasury Bonds 7.625%,
2/15/25 versus Brazil
Par Bonds 4.00%, 4/15/24
9.125%, 3/28/96 (h).......... $ 3,000 $ 2,806,800
Morgan Guaranty Trust Co. (i)
Linked to U.S. $
Restructured Ivory Coast
9.00%, 12/19/95............. 1,699 1,789,709
Linked to U.S. $
Unrestructured Ivory Coast
9.00%, 12/19/95............. 1,773 1,754,765
Linked to Vneshekonombank
10.00%, 1/23/96............. 7,520 8,189,503
------------
Total Other Sovereign Debt
Related (cost $13,991,696)... 14,540,777
------------
TIME DEPOSIT--4.1%
State Street Bank & Trust Co.,
5.50%, 10/02/95
(cost $12,000,000)........... 12,000 12,000,000
------------
CALL OPTIONS
PURCHASED--0.2%
Vneshekonombank
Loan Assignment
expiring October '95
@ $31.25..................... 200 469,200
Republic of Argentina
Euro Par Bonds
5.00%, 3/31/23
expiring December '95
@ $72.50..................... 165 38,527
------------
Total Call Options Purchased
(cost $361,650).............. 507,727
------------
TOTAL INVESTMENTS--130.1%
(cost $390,917,633).......... $383,863,554
------------
</TABLE>
A-16
<PAGE>
Portfolio Of Investments (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<CAPTION> Contracts U.S. $ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
OUTSTANDING PUT
OPTION WRITTEN--(0.4%)
Republic of Argentina
Euro Par Bonds
5.00%, 3/31/23
expiring December '95
@ $68.50 (premium
received $1,441,276)...... 165 $ (1,240,553)
------------
TOTAL INVESTMENTS, NET
OF OUTSTANDING OPTION
WRITTEN--129.7% 382,623,001
Other assets less liabilities--(29.7%) (87,610,034)
------------
NET ASSETS--100% $295,012,967
============
- --------------------------------------------------------------------------------
</TABLE>
* Sovereign debt obligations issued as part of debt restructurings that are
collateralized in full as to principal due at maturity by U.S. Treasury zero
coupon obligations which have the same maturity as the Brady Bond.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at September 30, 1995.
(b) Coupon will fluctuate based upon an interest rate index. Stated interest
rate in effect at September 30, 1995.
(c) Non-income producing security.
(d) Coupon consists of 4.00% cash payment and 4.00% paid-in-kind.
(e) Coupon consists of 3.00% cash payment and 3.8125% paid-in-kind.
(f) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1995, these securities amounted to $59,250,475 or 20.1% of net assets.
(g) Each warrant entitles the holder to purchase a share of common stock at an
exercise price of $0.01 per share. The warrants are exerciseable until
August 15, 2001.
(h) The redemption value of this security is indexed to the spread between the
referenced treasury yield and the referenced emerging market debt yield.
(i) The redemption value of these securities is linked to the change in the bid
price of the referenced emerging market debt.
Glossary of terms:
DCB - Debt Conversion Bonds.
FRN - Floating Rate Note.
IAB - Interest Arrears Bonds.
IEB - Interest Equalization Bonds.
PDI - Past Due Interest.
VRN - Variable Rate Note.
See notes to financial statements.
A-17
<PAGE>
Statement Of Assets And Liabilities
September 30, 1995 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $390,917,633).................................. $383,863,554
Cash..................................................................................... 617,456
Receivable for investment securities sold................................................ 11,459,537
Interest receivable...................................................................... 10,233,419
Deferred organization expenses and other assets.......................................... 32,573
------------
Total assets............................................................................. 406,206,539
------------
LIABILITIES
Outstanding option written, at value (premium received $1,441,276)....................... 1,240,553
Loan payable............................................................................. 80,500,000
Payable for investment securities purchased.............................................. 25,687,387
Net unrealized depreciation of swap contracts............................................ 2,797,250
Interest payable......................................................................... 540,034
Advisory fee payable..................................................................... 238,814
Administrative fee payable............................................................... 47,762
Accrued expenses and other liabilities................................................... 141,772
------------
Total liabilities........................................................................ 111,193,572
------------
NET ASSETS (equivalent to $10.42 per share, based on 28,325,009 shares outstanding)....... $295,012,967
============
COMPOSITION OF NET ASSETS
Common stock, at par..................................................................... $ 283,250
Additional paid-in capital............................................................... 391,817,637
Accumulated net realized loss............................................................ (87,437,314)
Net unrealized depreciation of investments, options and swap contracts................... (9,650,606)
------------
$295,012,967
============
NET ASSET VALUE PER SHARE................................................................. $10.42
======
- -----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
A-18
<PAGE>
Statement Of Operations
Year Ended September 30, 1995 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest..................................................................................... $46,896,994
Dividends.................................................................................... 478,515 $ 47,375,509
-----------
EXPENSES
Advisory fee................................................................................. 2,662,568
Administrative fee........................................................................... 532,520
Loan origination fee and loan expenses....................................................... 348,792
Audit and legal.............................................................................. 174,332
Custodian.................................................................................... 170,643
Transfer agency.............................................................................. 104,407
Reports and notices to shareholders.......................................................... 66,222
Directors' fees.............................................................................. 27,376
Amortization of organization expenses........................................................ 7,997
Miscellaneous................................................................................ 61,178
-----------
Total expenses before interest............................................................... 4,156,035
Interest expense............................................................................. 5,871,499
-----------
Total expenses............................................................................... 10,027,534
-------------
Net investment income........................................................................ 37,347,975
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OPTIONS
Net realized loss on investment transactions................................................. (46,041,439)
Net realized loss on option transactions..................................................... (2,849,452)
Net change in unrealized depreciation of investments, options and swap contracts............. 25,563,387
-------------
Net loss on investments...................................................................... (23,327,504)
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................................................... $ 14,020,471
=============
</TABLE>
Statement Of Changes In Net Assets
================================================================================
<TABLE>
<CAPTION>
For The October 22, 1993*
Year Ended to
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income........................................................... $ 37,347,975 $ 31,168,079
Net realized loss on investment and option transactions......................... (48,890,891) (38,165,107)
Net change in unrealized depreciation of investments, options and swap contracts 25,563,387 (35,213,993)
------------ ------------
Net increase (decrease) in net assets from operations........................... 14,020,471 (42,211,021)
DIVIDENDS TO SHAREHOLDERS
Dividends from net investment income............................................ (37,303,113) (31,168,079)
Distributions in excess of net investment income................................ -0- (448,110)
Tax return of capital distribution.............................................. (465,363) (1,884,838)
COMMON STOCK TRANSACTIONS
Net proceeds from sale of common stock.......................................... -0- 383,097,000
Offering costs charged to additional paid-in capital............................ -0- (1,390,000)
Reinvestment of dividends resulting in the issuance of Common Stock............. 4,941,844 7,724,066
------------ ------------
Total increase (decrease)....................................................... (18,806,161) 313,719,018
NET ASSETS
Beginning of period............................................................. 313,819,128 100,110
------------ ------------
End of period................................................................... $295,012,967 $313,819,128
============ ============
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
See notes to financial statements.
A-19
<PAGE>
Statement Of Cash Flows
Year Ended September 30, 1995 ACM Managed Dollar Income Fund, Inc.
================================================================================
<TABLE>
<S> <C> <C>
INCREASE (DECREASE) IN CASH FROM OPERATING ACTIVITIES:
Interest and dividends received.......................................... $ 43,699,992
Interest expense paid.................................................... (6,438,582)
Operating expenses paid.................................................. (5,488,128)
---------------
Net increase in cash from operating activities........................... $ 31,773,282
INVESTING ACTIVITIES:
Purchases of long-term portfolio investments............................. (1,233,426,261)
Proceeds from disposition of long-term portfolio investments............. 1,274,321,487
Purchases of short-term portfolio investments, net....................... (28,467,052)
---------------
Net increase in cash from investing activities........................... 12,428,174
FINANCING ACTIVITIES*:
Cash dividends and distributions paid.................................... (33,084,000)
Proceeds from borrowings................................................. 15,000,000
Repayment of borrowings.................................................. (25,500,000)
---------------
Net decrease in cash from financing activities........................... (43,584,000)
------------
Net increase in cash..................................................... 617,456
Cash at beginning of year................................................ -0-
------------
Cash at end of year...................................................... $ 617,456
============
- ----------------------------------------------------------------------------------------------------------------
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM
OPERATIONS TO NET INCREASE IN CASH FROM OPERATING
ACTIVITIES:
Net increase in net assets from operations............................... $14,020,471
ADJUSTMENTS:
Decrease in interest receivable.......................................... $ 108,294
Accretion of bond discount............................................... (3,783,811)
Decrease in accrued expenses............................................. (1,332,093)
Decrease in interest payable............................................. (567,083)
Net loss on investments.................................................. 23,327,504
-----------
Total adjustments........................................................ 17,752,811
-----------
NET INCREASE IN CASH FROM OPERATING ACTIVITIES............................ $31,773,282
===========
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-cash financing activities not included herein consist of reinvestment
of dividends and distributions.
See notes to financial statements.
A-20
<PAGE>
Notes To Financial Statements
September 30, 1995 ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE A: Significant Accounting Policies
ACM Managed Dollar Income Fund, Inc. (the "Fund") was incorporated under the
laws of the State of Maryland on August 10, 1993 and is registered under the
Investment Company Act of 1940 as a non-diversified, closed-end management
investment company. On October 19, 1993, the Fund sold 7,100 shares of common
stock for $100,110 to Alliance Capital Management, L.P. (the "Adviser"). The
Fund commenced operations on October 22, 1993. The following is a summary of
significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange are valued at the
last sale price on such exchange on the day of valuation or, if there was no
sale on such day, the last bid price quoted on such day. Listed securities not
traded and securities traded in the over-the-counter market, including listed
debt securities whose primary market is believed to be over-the-counter, are
valued at the mean between the most recent quoted bid and asked prices provided
by the principal market makers. Publicly traded sovereign debt obligations are
typically traded internationally on the over-the-counter market. Due to the
nature of the markets for sovereign debt obligations, quotations from several
sources are obtained so that the Fund's portfolio investments are not generally
priced by a single source. Readily marketable sovereign debt obligations and
fixed income securities may be valued on the basis of prices provided by a
pricing service when such prices are believed by the Adviser to reflect the fair
value of such securities. Options are valued at market value or fair value using
methods determined by the Board of Directors. Securities for which market
quotations are not readily available are valued in good faith at fair value
using methods determined by the Board of Directors. 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. Organization Expenses
Organization expenses of approximately $40,000 were deferred and are being
amortized on a straight-line basis through October 1998.
3. Taxes
It is the Fund's policy to meet the requirements of the 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.
4. Investment Income and Investment Transactions
Interest income is accrued daily. Dividend income is recorded on the ex-dividend
date. Investment transactions are accounted for on the date the investments 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
During the year, the Fund reclassified certain components of net assets. The
reclassifications were the result of permanent book to tax differences as well
as a reclassification of the tax return of capital. The reclassifications
resulted in a net decrease to distributions in excess of net investment income
and a corresponding decrease to additional paid-in capital of $465,363. Net
assets were not affected by the reclassifications.
A-21
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE B: Advisory and Administrative Fees
Under the terms of an Investment Advisory Agreement, the Fund pays the Adviser
an advisory fee equal to an annualized rate of .75 of 1% of the average adjusted
weekly net assets of the Fund during the month. Under the terms of an
Administration Agreement, the Fund pays Middlesex Administrators L.P (the
"Administrator") a monthly fee equal to the annualized rate of .15 of 1% of the
Fund's average adjusted weekly net assets. The Administrator prepares financial
and regulatory reports for the Fund and provides clerical and other services.
- --------------------------------------------------------------------------------
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and options) aggregated $1,241,439,273 and $1,293,778,077, respectively, for the
year ended September 30, 1995. At September 30, 1995, the cost of securities for
federal income tax purposes was $394,441,636. Accordingly, gross unrealized
appreciation of investments was $8,783,582 and gross unrealized depreciation of
investments was $19,361,664, resulting in net unrealized depreciation of
$10,578,082.
For federal income tax purposes, the Fund had a capital loss carryforward at
September 30, 1995 of approximately $48,700,000 which will expire in 2003.
Options Transactions
For hedging purposes, the Fund purchases and writes (sells) put and call options
on U.S. and foreign government securities that are traded on U.S. and foreign
securities exchanges and over-the-counter markets.
The risk associated with purchasing an option is that the Fund pays a premium
whether or not the option is exercised. Additionally, the Fund bears the risk of
loss of premium and change in market value should the counterparty not perform
under the contract. Put and call options purchased are accounted for in the same
manner as portfolio securities. The cost of securities acquired through the
exercise of call options is increased by premiums paid. The proceeds from
securities sold through the exercise of put options are decreased by the premium
paid.
When the Fund writes an option, the premium received by the Fund is recorded as
a liability and is subsequently adjusted to the current market value of the
option written. Premiums received from writing options which expire unexercised
are recorded by the Fund on the expiration date as realized gains from option
transactions. The difference between the premium received and the amount paid on
effecting a closing purchase transaction, including brokerage commissions, is
also treated as a realized gain, or if the premium is less than the amount paid
for the closing purchase transaction, as a realized loss. If a call option is
exercised, the premium is added to the proceeds from the sale of the underlying
security in determining whether the Fund has realized a gain or loss. If a put
option is exercised, the premium reduces the cost basis of the security
purchased by the Fund. In writing an option, the Fund bears the market risk of
an unfavorable change in the price of the security underlying the written
option. Exercise of an option written by the Fund could result in the Fund
selling or buying a security at a price different from the current market value.
Transactions in options written for the year ended September 30, 1995 were as
follows:
<TABLE>
<CAPTION>
Number of Premiums
Options Written Contracts Received
--------- -----------
<S> <C> <C>
Options outstanding at
beginning of year............. 950 $ 2,495,000
Options written................. 2,237 11,438,564
Options expired................. (1,050) (1,492,500)
Options exercised............... (655) (5,541,750)
Options terminated in
closing transactions.......... (1,317) (5,458,038)
------ -----------
Options outstanding at
September 30, 1995............ 165 $ 1,441,276
====== ===========
</TABLE>
A-22
<PAGE>
Notes To Financial Statements (continued) ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE D: Interest Rate Swap Agreements
The Fund enters into interest rate swaps on sovereign debt obligations to
protect itself from interest rate fluctuations on the underlying floating rate
debt instruments. An interest rate swap is an agreement that obligates two
parties to exchange a series of cash flows at specified intervals based upon or
calculated by reference to changes in specified prices or rates for a specified
amount of an underlying asset. The payment flows are usually netted against each
other, with the difference being paid by one party to the other.
Risks may arise as a result of the failure of another party to the swap contract
to comply with the terms of the swap contract. The loss incurred by the failure
of a counterparty is generally limited to the net interest payment to be
received by the Fund, and/or the termination value at the end of the contract.
Therefore the Fund considers the creditworthiness of each counterparty to a swap
contract in evaluating potential credit risk. Additionally, risks may arise from
unanticipated movements in interest rates or in the value of the underlying
securities.
The Fund records a net receivable or payable on a daily basis for the net
interest income or expense expected to be received or paid in the interest
period. Net interest received or paid on these contracts is recorded as interest
income (or as an offset to interest income). Fluctuations in the value of swap
contracts are recorded for financial statement purposes as unrealized
appreciation or depreciation on interest rate swap contracts.
The Fund has entered into Interest Rate Swap Agreements with Morgan Guaranty
Trust Company of New York ("Morgan").
At September 30, 1995, the Fund had outstanding interest rate swaps as follows:
<TABLE>
<CAPTION>
Rate Type
-----------------------------------
Unrealized
Swap Notional Termination Payments Made Payments Received Appreciation
Counterparty Amount Date by the Fund by the Fund (Depreciation)
------------ ------------ ----------- --------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
Morgan $25,000,000* 2/09/96 Floating-LIBOR+ Floating-LIBOR
plus 1.000% plus .8125% $ 132,750
Morgan 50,000,000 1/01/09 Floating-LIBOR
plus .8125% Fixed-6.6100% (2,930,000)
-----------
$(2,797,250)
===========
</TABLE>
* The payments made by the Fund are based on a
notional amount of $15,653,255.
+ LIBOR--London Interbank Offered Rate.
- --------------------------------------------------------------------------------
NOTE E: Capital Stock
There are 300,000,000 shares of $.01 par value capital stock authorized. Of the
28,325,009 shares of Common Stock outstanding at September 30, 1995, the Adviser
owned 7,100 shares. In addition to the shares issued to the Adviser, an initial
public offering of the Fund's shares resulted in the issuance of 27,170,000
shares of the Fund's common stock, for net proceeds of $383,097,000 after
deducting underwriting discounts and commissions. Offering costs of $1,390,000
relating to the initial public offering have been charged to additional paid-in
capital. During the year ended September 30, 1995, and for the period from
October 22, 1993 to September 30, 1994, the Fund issued 530,592 and 617,317
shares, respectively, in connection with the Fund's Dividend Reinvestment Plan.
A-23
<PAGE>
ACM Managed Dollar Income Fund, Inc.
================================================================================
NOTE F: Bank Borrowing
The Fund entered into a Revolving Credit Agreement with Citibank, N.A. on March
31, 1994. The maximum credit available is $100,000,000 and the amount
outstanding as of September 30, 1995 was $80,500,000 with an average interest
rate of 7.30%. Interest payments on current borrowings are based on the London
Interbank Offered Rate plus a premium. The average daily amount of the loan
outstanding during the year ended September 30, 1995 was approximately
$81,200,000 with a related weighted average annualized interest rate of 7.13%.
The Fund is also obligated to pay Citibank, N.A. a commitment fee computed at
the rate of .25 of 1% per annum on the average daily unused portion of the
revolving credit.
- --------------------------------------------------------------------------------
NOTE G: Concentration of Risk
Investing in securities of foreign companies and foreign governments involves
special risks which include revaluation of currencies and future adverse
political and economic developments. Moreover, securities of many foreign
companies and foreign governments and their markets may be less liquid and their
prices more volatile than those of comparable U.S. companies and the United
States Government. The Fund invests in the sovereign debt obligations of
countries that are considered emerging market countries at the time of purchase.
Therefore, the Fund is susceptible to governmental factors and economic and debt
restructuring developments adversely affecting the economies of these emerging
market countries. In addition, these debt obligations may be less liquid and
subject to greater volatility than debt obligations of more developed countries.
- --------------------------------------------------------------------------------
NOTE H: Quarterly Results of Operations (unaudited)
<TABLE>
<CAPTION>
Net Change
Net Realized and In Net Assets
Net Investment Unrealized Gain (Loss) Resulting from Market Price
Income on Investments Operations on NYSE
----------------- ---------------------- ---------------- --------------
Total Per Total Per Total Per
Quarter Ended (000) Share (000) Share (000) Share High Low
- ------------- ------- ------ -------- --------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
September 30, 1995..... $ 9,199 $ .32 $ 13,397 $ .47 $ 22,596 $ .79 $ 10.000 $ 9.250
June 30, 1995.......... 9,489 .34 42,762 1.52 52,251 1.86 $ 10.125 $ 8.250
March 31, 1995......... 9,697 .34 (36,750) (1.31) (27,053) (.97) $ 10.500 $ 7.625
December 30, 1994...... 8,963 .32 (42,737) (1.53) (33,774) (1.21) $ 11.125 $ 9.500
------- ----- -------- ------ -------- ------
$37,348 $1.32 $(23,328) $ (.85) $ 14,020 $ .47
======= ===== ======== ====== ======== ======
September 30, 1994..... $ 8,633 $ .31 $ 13,422 $ .48 $ 22,055 $ .79 $ 12.125 $10.500
June 30, 1994.......... 8,550 .31 (11,729) (.42) (3,179) (.11) $ 13.250 $11.000
March 31, 1994......... 7,855 .29 (85,763) (3.12) (77,908) (2.83) $ 15.125 $12.125
December 31, 1993*..... 6,130 .22 10,691 .40 16,821 .62 $ 15.125 $14.000
------- ----- -------- ------ -------- ------
$31,168 $1.13 $(73,379) $(2.66) $(42,211) $(1.53)
======= ===== ======== ====== ======== ======
</TABLE>
* From October 22, 1993 (commencement of operations).
A-24
<PAGE>
Financial Highlights ACM Managed Dollar Income Fund, Inc.
================================================================================
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
October 22, 1993*
Year Ended to
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
Net asset value, beginning of period................................. $11.29 $14.04(a)
------ ------
Income From Investment Operations
- ---------------------------------
Net investment income................................................ 1.32 1.13
Net realized and unrealized loss on investment and option
transactions........................................................ (.85) (2.66)
------ ------
Net increase (decrease) in net asset value from operations........... .47 (1.53)
------ ------
Less: Distributions
- -------------------
Dividends from net investment income................................. (1.32) (1.13)
Distributions in excess of net investment income..................... -0- (.02)
Tax return of capital distribution................................... (.02) (.07)
------ ------
Total distributions.................................................. (1.34) (1.22)
------ ------
Net asset value, end of period....................................... $10.42 $11.29
====== ======
Market value, end of period.......................................... $9.875 $11.25
====== ======
Total Return (b)
- ----------------
Total investment return based on:
Market value........................................................ 0.92% (11.94)%
Net asset value..................................................... 6.11% (11.62)%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period (000's omitted)............................ $295,013 $313,819
Ratio of expenses to average net assets.............................. 2.83% 1.78%(c)
Ratio of expenses to average net assets excluding interest expense... 1.17% 1.07%(c)
Ratio of net investment income to average net assets................. 10.56% 8.54%(c)
Portfolio turnover rate.............................................. 344% 225%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
(a) Net of offering costs of $.06.
(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
the 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 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 periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods 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 periods. Total investment return calculated for
a period of less than one year is not annualized.
(c) Annualized.
A-25
<PAGE>
Report Of Ernst & Young LLP
Independent Auditors ACM Managed Dollar Income Fund, Inc.
================================================================================
To the Shareholders and Board of Directors
ACM Managed Dollar Income Fund, Inc.
We have audited the accompanying statement of assets and liabilities of ACM
Managed Dollar Income Fund, Inc., including the portfolio of investments, as of
September 30, 1995, and the related statement of operations and cash flows for
the year then ended and the statement of changes in net assets and financial
highlights for the year ended September 30, 1995 and for the period from October
22, 1993 (commencement of operations) to September 30, 1994. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of ACM
Managed Dollar Income Fund, Inc. at September 30, 1995, the results of its
operations and its cash flows for the year then ended, and the changes in its
net assets and the financial highlights for the year ended September 30, 1995,
and for the period from October 22, 1993 to September 30, 1994, in conformity
with generally accepted accounting principles.
/s/ Ernst & Young LLP
New York, New York
November 3, 1995
A-26
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Financial
Information" and to the use of our reports dated November 8, 1996 and November
3, 1995 included in this Issuer Tender Offer Statement (Schedule 13E-4)
of ACM Managed Dollar Income Fund, Inc.
/s/ Ernst & Young LLP
---------------------
ERNST & YOUNG LLP
New York, New York
May 5, 1997
<PAGE>
Exhibit (a)(2)(i)
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF COMMON STOCK, $0.01 PAR VALUE
OF
ACM MANAGED DOLLAR INCOME FUND, INC.
TENDERED PURSUANT TO THE OFFER TO PURCHASE DATED MAY 8, 1997
THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME
ON JUNE 5, 1997, UNLESS THE OFFER IS EXTENDED
DEPOSITARY TELEPHONE NUMBER: (800) 219-4218
DEPOSITARY ADDRESSES:
By Mail: By Overnight Courier: By Hand:
State Street Bank and State Street Bank and Securities Transfer and
Trust Company Trust Company Reporting Services Inc.
Corporate Reorganization Corporate Reorganization Boston EquiServe L.P.
P.O. Box 9061 70 Campanelli Drive Corporate Reorganization
Boston, MA 02205 Braintree, MA 02184 55 Broadway, Third Floor
New York, NY 10006
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used (a) if you desire to effect the
tender transaction yourself, (b) if you intend to request your broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
you and the Shares are not registered in the name of such broker, dealer,
commercial bank, trust company or other nominee, and (c) by a broker, dealer,
commercial bank, trust company or other nominee effecting the transaction as a
registered owner or on behalf of a registered owner. To accept the Offer in
accordance with its terms, a Letter of Transmittal (or a copy or facsimile
thereof) properly completed and bearing original signature(s) and the original
of any required signature guarantee(s), any certificates representing Shares
tendered, any other documents required by this Letter of Transmittal and a
check payable to State Street Bank and Trust Company (the "Depositary") in the
amount of $25.00 (the "Processing Fee") must be mailed or delivered to the
Depositary at an appropriate address set forth above and must be received by
the Depositary prior to 12:00 Midnight Eastern Time on June 5, 1997, or such
later time and date to which the Offer is extended, unless the tendering party
has satisfied the conditions for guaranteed delivery described in Section 4(e)
of the Offer to Purchase. Delivery of documents to a book-entry transfer
facility does not constitute delivery to the Depositary.
<PAGE>
DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES)
OF
REGISTERED
OWNER(S)
(PLEASE
FILL IN, IF
BLANK,
EXACTLY THE
NAME(S) IN
WHICH
SHARES ARE
REGISTERED)
(ATTACH
ADDITIONAL
SIGNED
LIST, IF
NECESSARY) SHARES TENDERED*
- ----------------------------------------------------
TOTAL NUMBER OF
SHARES
REPRESENTED
SHARE CERTIFICATE BY
NUMBER(S)** CERTIFICATE(S)*
<S> <C> <C> <C>
TOTAL SHARES..
</TABLE>
- -------------------------------------------------------------------------------
* If the Shares tendered hereby are in certificate form, the certificates
representing such Shares MUST be returned together with this Letter of
Transmittal.
** Need not be completed for Book-Entry Shares.
THE UNDERSIGNED ALSO TENDERS ALL UNCERTIFICATED SHARES HELD IN THE NAME(S) OF
THE UNDERSIGNED BY THE FUND'S TRANSFER AGENT PURSUANT TO THE FUND'S DIVIDEND
REINVESTMENT PLAN, IF ANY. CHECK THIS BOX [_] IF THERE ARE ANY SUCH SHARES.
[_]THIS BOX SHOULD BE CHECKED IF, IN ADDITION TO SHARES TENDERED HEREBY,
SHARES ARE ALSO CONSTRUCTIVELY OWNED BY THE UNDERSIGNED AS DETERMINED UNDER
SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
A SEPARATE LETTER OF TRANSMITTAL MUST BE SUBMITTED BY EACH REGISTERED OWNER OF
SHARES WHICH ARE CONSIDERED TO BE CONSTRUCTIVELY OWNED BY THE UNDERSIGNED.
THE BOXES BELOW ARE TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST
COMPANY ("DTC") AND COMPLETE THE FOLLOWING:
NAME OF TENDERING INSTITUTION: _____________________________________________
DTC PARTICIPANT NUMBER: ____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
NAME(S) OF REGISTERED HOLDER(S): ___________________________________________
WINDOW TICKET NUMBER (IF ANY): _____________________________________________
DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY: ________________________
NAME OF ELIGIBLE INSTITUTION WHICH GUARANTEED DELIVERY: ____________________
DTC PARTICIPANT NUMBER (IF DELIVERED BY BOOK-ENTRY TRANSFER): ______________
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Ladies and Gentlemen:
The person(s) signing this Letter of Transmittal (the "Signor") hereby
tender(s) to ACM Managed Dollar Income Fund, Inc., a non-diversified, closed-
end management investment company incorporated in Maryland (the "Fund"), the
above-described shares of common stock, par value $0.01 per share (the
"Shares"), of the Fund, for purchase by the Fund at a price (the "Purchase
Price") equal to the net asset value ("NAV") per Share determined as of the
close of the regular trading session of the New York Stock Exchange on June 6,
1997 (or, if the Offer as defined below is extended, on the date after the
Expiration Date as defined in the Offer to Purchase) in cash, upon the terms
and subject to the conditions set forth in the Offer to Purchase dated May 8,
1997, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which Offer to Purchase and Letter of Transmittal together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the Signor hereby
sells, assigns and transfers to, or upon the order of, the Fund all right,
title and interest in and to all of the Shares that are being tendered hereby
that are purchased pursuant to the Offer and hereby irrevocably constitutes
and appoints State Street Bank and Trust Company (the "Depositary") as
attorney-in-fact of the Signor with respect to such Shares, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) present certificate(s) for such Shares, if
any, for cancellation and transfer on the Fund's books and (b) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares, subject to the next paragraph, all in accordance with the terms and
subject to the conditions set forth in the Offer.
The Signor hereby represents and warrants that (a) the Signor, if a broker,
dealer, commercial bank, trust company or other nominee, has obtained the
tendering Stockholder's instructions to tender pursuant to the terms and
conditions of this Offer in accordance with the letter from the Fund to
brokers, dealers, commercial banks, trust companies and other nominees; (b)
when and to the extent the Fund accepts the Shares for purchase, the Fund will
acquire good, marketable and unencumbered title thereto, free and clear of all
security interests, liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to their sale or transfer, and
not subject to any adverse claim; (c) on request, the Signor will execute and
deliver any additional documents that the Depositary or the Fund deems
necessary or desirable to complete the assignment, transfer and purchase of
the Shares tendered hereby; and (d) the Signor has read and agrees to all of
the terms and conditions of the Offer.
The name(s) and address(es) of the registered owner(s) should be printed as
on the registration of the Shares. If the Shares tendered hereby are in
certificate form, the certificate(s) representing such Shares must be returned
together with this Letter of Transmittal.
The Signor recognizes that, under certain circumstances as set forth in the
Offer to Purchase, the Fund may amend, extend or terminate the Offer or may
not be required to purchase any of the Shares tendered hereby. In any such
event, the Signor understands that certificate(s) for the Shares not
purchased, if any, will be returned to the Signor at its registered address
unless otherwise indicated under the Special Delivery Instructions below. The
Signor recognizes that the Fund has no obligation, pursuant to the Special
Payment Instructions set forth below, to transfer any Shares from the name of
the registered owner thereof if the Fund purchases none of such Shares.
The Signor understands that acceptance of Shares by the Fund for payment
will constitute a binding agreement between the Signor and the Fund upon the
terms and subject to the conditions of the Offer.
The check for the Purchase Price of the tendered Shares purchased will be
issued to the order of the Signor and mailed to the address indicated, unless
otherwise indicated below in the box titled Special Payment Instructions or
the box titled Special Delivery Instructions. The Fund will not pay interest
on the Purchase Price under any circumstances.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Signor and all obligations of the Signor hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the Signor. Except as stated in the Offer, this tender is
irrevocable.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price and/or return any Share
certificates not accepted for payment in the name(s) of the registered
holder(s) appearing above under "Description of Shares Tendered." Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the Purchase Price for any Shares purchased and/or return any
Share certificates not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Payment
Instructions and the Special Delivery Instructions are completed, please issue
the check for the Purchase Price and/or return any Share certificates not
accepted for payment in the name of, and deliver such check and/or return any
such Share certificates to, the person(s) so indicated. The undersigned
recognizes that the Fund has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder
thereof if the Fund does not accept for payment any of the Shares tendered
hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6 AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if any cer- To be completed ONLY if any cer-
tificate for Shares not pur- tificate for Shares not pur-
chased, and/or a check for the chased, and/or a check for the
purchase price of Shares accepted purchase price of Shares accepted
for payment, is to be issued in for payment and issued in the
the name of someone other than name of the registered owner(s),
the undersigned. is to be sent to someone other
than the registered owner(s) or
to the registered owner(s) at an
address other than that shown
above.
Issue:[_] Check to:
[_] Certificate(s) to:
Name(s) __________________________
(PLEASE PRINT) Mail:[_] Check to:
Address(es) ______________________ [_] Certificate(s) to:
__________________________________ Name(s)___________________________
__________________________________ (PLEASE PRINT)
(INCLUDE ZIP CODE) Address(es) ______________________
__________________________________ __________________________________
(TAX IDENTIFICATION OR SOCIAL __________________________________
SECURITY NUMBER(S)) (INCLUDE ZIP CODE)
__________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER(S))
STOCKHOLDER(S) SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE SEE SUBSTITUTE FORM W-9)
(PLEASE PRINT EXCEPT FOR SIGNATURE)
Must be signed by registered owner(s) exactly as Shares are registered.
If signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or another acting in a fiduciary or
representative capacity, please set forth the full title. See Instruction
5. Signature guarantees are required in certain circumstances. See
Instruction 1. By signing this Letter of Transmittal, you represent that
you have read the entire Letter of Transmittal.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(SIGNATURE(S) EXACTLY AS SHARES ARE REGISTERED)
Dated , 1997
Name(s) ____________________________________________________________________
----------------------------------------------------------------------------
(PLEASE PRINT NAME(S) OF OWNER(S) EXACTLY AS SHARES ARE REGISTERED)
----------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S))
Daytime Telephone Number, including Area Code ______________________________
<PAGE>
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE PRINT EXCEPT FOR SIGNATURE)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
----------------------------------------------------------------------------
(INCLUDE ZIP CODE)
----------------------------------------------------------------------------
Telephone Number, including Area Code ______________________________________
Dated , 1997
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal if (a) this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered hereby (including, for purposes of
this document, any participant in the book-entry transfer facility of The
Depository Trust Company ("DTC") whose name appears on DTC's security position
listing as the owner of Shares), unless such holder(s) has completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" included in this Letter of Transmittal, or (b) the
Shares are tendered for the account of a firm (an "Eligible Institution")
which is a broker, dealer, commercial bank, credit union, savings association
or other entity which is a member in good standing of a stock transfer
association's approved medallion program (such as STAMP, SEMP or MSP). In all
other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be used (a) if Shares are to be forwarded herewith, (b) if
uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's
Dividend Reinvestment Plan are to be tendered, or (c) if tenders are to be
made by book-entry transfer to the account maintained by the Depositary
pursuant to the procedure set forth in Section 4 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THIS
LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, AND THE PROCESSING FEE IS AT THE
OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Delivery will be deemed made
only when actually received by the Depositary. If delivery is by mail,
registered mail with return receipt requested, properly insured, is
recommended. Stockholders have the responsibility to cause their Shares (in
proper certificated or uncertificated form), this Letter of Transmittal (or a
copy or facsimile hereof) properly completed and bearing original signature(s)
and the original of any required signature guarantee(s), any other documents
required by this Letter of Transmittal and the Processing Fee to be timely
delivered in accordance with the Offer.
The Fund will not accept any alternative, conditional or contingent tenders.
All tendering Stockholders, brokers, dealers, commercial banks, trust
companies and other nominees, by execution of this Letter of Transmittal (or a
copy or facsimile hereof), waive any right to receive any notice of the
acceptance of their tender.
3. INADEQUATE SPACE. If the space provided in any of the boxes to be
completed is inadequate, the necessary information should be listed on a
separate schedule signed by all of the required signatories and attached
hereto.
4. TENDER OF ALL SHARES HELD BY THE STOCKHOLDER. A Stockholder wishing to
accept the Offer must tender, or cause the tender of, all Shares actually
owned by the Stockholder and all Shares constructively owned by the
Stockholder as determined under Section 318 of the Internal Revenue Code of
1986, as amended, as of the date of purchase of Shares pursuant to the Offer.
Stockholders should consult their tax advisors as to the application of the
constructive ownership rules of Section 318. If more than 7,081,253 Shares are
duly tendered prior to the expiration of the Offer (and not timely withdrawn),
the Fund will purchase Shares from tendering Stockholders, in accordance with
the terms and subject to the conditions specified in the Offer to Purchase,
pro rata in accordance with the number of Shares duly tendered by each
Stockholder during the period the Offer remains open (and not timely
withdrawn) unless the Fund determines not to purchase any Shares. Certificates
representing Shares tendered but not purchased will be returned promptly
following the termination, expiration or withdrawal of the Offer, without
further expense to the tendering Stockholder.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS AND ENDORSEMENTS.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificate(s) for the Shares tendered without
alteration, enlargement or any change whatsoever.
<PAGE>
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names (including
Shares constructively owned by the tendering Stockholder as determined under
Section 318 of the Code) on several certificates, it is necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations.
If this Letter of Transmittal or any certificate for Shares tendered or
stock powers relating to Shares tendered are signed by trustees, executors,
administrators, guardians, attorneys-in- fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and proper evidence satisfactory to the Fund of
their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares transmitted hereby, no endorsements of certificates or separate stock
powers are required unless payment is to be made to, or certificates for
Shares not purchased are to be issued in the name of, a person other than the
registered holder(s). Signatures on such certificates or stock powers must be
guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed thereon, the certificate(s)
must be endorsed or accompanied by appropriate stock powers, in either case
signed exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s) for the Shares involved. Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
6. TRANSFER TAXES. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer, provided, however,
that if (a) payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) unpurchased Shares are to be registered
in the name(s) of, any person(s) other than the registered owner(s), or (b) if
any tendered certificate(s) are registered, or the Shares tendered are
otherwise held, in the name(s) of any person(s) other than the registered
owner, the amount of any transfer taxes (whether imposed on the registered
owner(s) or such other person(s)) payable on account of the transfer to such
person(s) will be deducted from the Purchase Price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted
herewith.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If certificate(s) for
unpurchased Shares and/or check(s) are to be issued in the name of a person
other than the registered owner(s) or if such certificate(s) and/or check(s)
are to be sent to someone other than the registered owner(s) or to the
registered owner(s) at a different address, the captioned boxes "Special
Payment Instructions" and/or "Special Delivery Instructions" in this Letter of
Transmittal must be completed.
8. DETERMINATIONS OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or not accompanied by the
Processing Fee or to refuse to accept for payment, purchase or pay for, any
Shares if, in the opinion of the Fund's counsel, accepting, purchasing or
paying for such Shares would be unlawful. The Fund also reserves the absolute
right to waive any of the conditions of the Offer or any defect in any tender,
whether generally or with respect to any particular Share(s) or
Stockholder(s). The Fund's interpretations of the terms and conditions of the
Offer (including these instructions) shall be final and binding.
NEITHER THE FUND, ITS BOARD OF DIRECTORS, ALLIANCE CAPITAL MANAGEMENT L.P.
(THE FUND'S INVESTMENT ADVISER), THE DEPOSITARY NOR ANY OTHER PERSON IS OR
WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR IRREGULARITY IN ANY
TENDER, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR FAILURE TO GIVE ANY SUCH
NOTICE.
9. QUESTIONS AND REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions
and requests for assistance may be directed to the Depositary at the mailing
address provided above or by telephoning (800) 219-4218. In addition, requests
for additional copies of the Offer to Purchase and this Letter of Transmittal
may also be directed to the Depositary. Stockholders who do not own Shares
directly may also obtain such information and copies from their broker,
dealer, commercial bank,
<PAGE>
trust company or other nominee. Stockholders who do not own Shares directly
are required to tender their Shares through their broker, dealer, commercial
bank, trust company or other nominee and should NOT submit this Letter of
Transmittal to the Depositary.
10. RESTRICTION ON SHORT SALES. Section 14(e) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 14e-4 promulgated
thereunder, make it unlawful for any person, acting alone or in concert with
others, to tender Shares in a partial tender offer for such person's own
account unless at the time of tender, and at the time the Shares are accepted
for payment, the person tendering has a net long position equal to or greater
than the amount tendered in (a) Shares, and will deliver or cause to be
delivered such Shares for the purpose of tender to the person making the Offer
within the period specified in the Offer, or (b) an equivalent security and,
upon acceptance of his or her tender, will acquire Shares by conversion,
exchange, or exercise of such equivalent security to the extent required by
the terms of the Offer, and will deliver or cause to be delivered the Shares
so acquired for the purpose of tender to the Fund prior to or on the
Expiration Date. Section 14(e) and Rule 14e-4 provide a similar restriction
applicable to the tender or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Fund for payment will constitute a binding
agreement between the tendering Stockholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering Stockholder's
representation that the Stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 and that the tender of such
Shares complies with Rule 14e-4.
11. BACKUP WITHHOLDING TAX. Under the U.S. federal income tax laws, the
Depositary may be required to withhold 31% of the amount of any payment made
to certain holders pursuant to the Offer. In order to avoid such backup
withholding tax, each tendering U.S. Stockholder who has not already submitted
a correct, completed and signed Form W-9 or Substitute Form W-9 to the Fund
should provide the Depositary with the Stockholder's correct taxpayer
identification number ("TIN") by completing a Substitute Form W-9, a copy of
which is included in this Letter of Transmittal. In general, if a U.S.
Stockholder is an individual, the TIN is the individual's Social Security
number. If the Depositary is not provided with the correct TIN, the U.S.
Stockholder may be subject to a penalty imposed by the Internal Revenue
Service. The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering Stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 2 is checked
and payment of the purchase price of Shares is made within 60 days of the
receipt by the Depositary of the Substitute Form W-9, the Depositary is not
required to withhold any backup withholding tax from the payment. Certain U.S.
Stockholders (including, among others, all U.S. corporations) are not subject
to these backup withholding and reporting requirements, but should nonetheless
complete a Substitute Form W-9 to avoid the possible erroneous imposition of a
backup withholding tax.
In order for a non-U.S. Stockholder to avoid the 31% backup withholding tax,
the non-U.S. Stockholder must submit a statement to the Depositary signed
under penalties of perjury attesting as to its non-U.S. status. A copy of Form
W-8 and instructions for completing that form are enclosed for such
Stockholders.
Backup withholding tax is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding tax
will be reduced by the amount of tax withheld. If backup withholding results
in an overpayment of taxes, the Stockholder may claim a refund from the
Internal Revenue Service. All Stockholders are urged to consult their own tax
advisors as to the specific tax consequences to them of the Offer.
The tax information set forth above is included for general information only
and may not be applicable to the situations of certain taxpayers.
* * *
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A COPY OR FACSIMILE HEREOF)
PROPERLY COMPLETED AND BEARING ORIGINAL SIGNATURE(S) AND THE ORIGINAL OF ANY
REQUIRED SIGNATURE GUARANTEE(S), SHARES (IN PROPER CERTIFICATED OR
UNCERTIFICATED FORM), OTHER REQUIRED DOCUMENTS AND THE PROCESSING FEE MUST BE
RECEIVED BY THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION OF THE OFFER.
<PAGE>
PAYER'S NAME: STATE STREET BANK AND TRUST COMPANY, DEPOSITARY
PART 1--PLEASE PROVIDE YOUR Social Security Number
SUBSTITUTE TIN IN THE BOX AT THE RIGHT or
FORM W-9 AND CERTIFY BY SIGNING AND Employer Identification
DATING BELOW Number
CERTIFICATION--UNDER PENALTIES OF
PERJURY, I CERTIFY THAT: (1) THE IN-
FORMATION PROVIDED ON THIS FORM IS
TRUE, CORRECT AND COMPLETE, AND (2) I
AM NOT SUBJECT TO BACKUP WITHHOLDING
EITHER BECAUSE I AM EXEMPT FROM
BACKUP WITHHOLDING OR I HAVE NOT NOT
BEEN NOTIFIED BY THE INTERNAL REVENUE
SERVICE (THE "IRS") THAT I AM SUBJECT
TO BACKUP WITHHOLDING AS A RESULT OF
UNDER- REPORTING INTEREST OR DIVI-
DENDS OR THE IRS HAS NOTIFIED ME THAT
I AM NO LONGER SUBJECT TO BACKUP
WITHHOLDING. (YOU MUST CROSS OUT ITEM
(2) IN THE IMMEDIATELY PRECEDING SEN-
TENCE IF YOU HAVE BEEN NOTIFIED BY
THE IRS THAT YOU ARE CURRENTLY SUB-
JECT TO BACKUP WITHHOLDING BECAUSE
YOU FAILED TO REPORT ALL INTEREST AND
DIVIDENDS ON YOUR RETURN.)
DEPARTMENT OF
THE TREASURY ----------------------
INTERNAL --------------------------------------------------------
REVENUE
SERVICE
PART 2
Awaiting
TIN [_]
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) Please see
below.
Signature: _____________ Date: ______
Name: ________________________________
(PLEASE PRINT)
Address: _____________________________
______________________________________
(INCLUDE ZIP CODE)
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECK THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
I certify, under penalties of perjury, that a Taxpayer Identification
Number has not been issued to me, and that I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office
(or I intend to mail or deliver an application in the near future). I
understand that if I do not provide a Taxpayer Identification Number to the
payer within 60 days, the Depositary is required to withhold 31% of all
payments due to me pursuant to the Offer.
_________________________________________________________ _________________
SIGNATURE DATE
<PAGE>
Exhibit (a)(2)(ii)
Form W-8 CERTIFICATE OF FOREIGN STATUS
(Rev. November 1992)
Department of the Treasury
Internal Revenue Service
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPE
Name of owner (if joint account, also give joint owner's name.) (See
Specific Instructions.)
U.S. taxpayer
identification
number (if any)
----------------------------------------------------------------------------
Permanent address (See Specific Instructions.) (Include apt. or suite no.)
----------------------------------------------------------------------------
City, province or state, postal code, and country
----------------------------------------------------------------------------
Current mailing address, if different from permanent address (Include apt.
or suite no., or P.O. box if mail is not delivered to street address.)
----------------------------------------------------------------------------
City, town or post office, state, and ZIP code (If foreign address, enter
city, province or state, postal code, and country.)
- --------------------------------------------------------------------------------
Account number Account type Account number Account type
List account information here (Optional, see Specific Instructions.)
- --------------------------------------------------------------------------------
NOTICE OF CHANGE IN STATUS.--To notify the payer, mortgage interest recipient,
broker, or barter exchange that you no longer qualify for exemption, check
here...................................................................... [_]
IF YOU CHECK THIS BOX, REPORTING WILL BEGIN ON THE ACCOUNT(S) LISTED.
- --------------------------------------------------------------------------------
PLEASE SIGN HERE
CERTIFICATION.--(Check applicable box(es)). Under penalties of perjury,
I certify that:
[_]For INTEREST PAYMENTS, I am not a U.S. citizen or resident (or I am
filing for a foreign corporation, partnership, estate, or trust).
[_]For DIVIDENDS, I am not a U.S. citizen or resident (or I am filing
for a foreign corporation, partnership, estate, or trust).
[_]For BROKER TRANSACTIONS OR BARTER EXCHANGES, I am an exempt foreign
person as defined in the instructions below.
---------------------------------------------------------------------
Signature Date
- --------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
(Section references are to the Internal Revenue Code, unless otherwise stated.)
PURPOSE
Use Form W-8 or a substitute form containing a substantially similar statement
to tell the payer, mortgage interest recipient, middleman, broker, or barter
exchange that you are a nonresident alien individual, foreign entity, or exempt
foreign person not subject to certain U.S. information return reporting or
backup withholding rules.
CAUTION: Form W-8 does not exempt the payee from the 30% (or lower treaty)
nonresident withholding rates.
NONRESIDENT ALIEN INDIVIDUAL
For income tax purposes, "nonresident alien individual" means an individual who
is neither a U.S. citizen nor resident. Generally, an alien is considered to be
a U.S. resident if:
. The individual was a lawful permanent resident of the United States at any
time during the calendar year, that is, the alien held an immigrant visa (a
"green card"), or
. The individual was physically present in the United States on:
(1) at least 31 days during the calendar year, and
(2) 183 days or more during the current year and the 2 preceding calendar
years (counting all the days of physical presence in the current year, one-
third the number of days of presence in the first preceding year, and only one-
sixth of the number of days in the second preceding year).
See Pub. 519, U.S. Tax Guide for Aliens, for more information on resident and
nonresident alien status.
NOTE: If you are a nonresident alien individual married to a U.S. citizen or
resident and have made an election under section 6013(g) or (h), you are
treated as a U.S. resident and may not use Form W-8.
EXEMPT FOREIGN PERSON
For purposes of this form, you are an "exempt foreign person" for a calendar
year in which:
1. You are a nonresident alien individual or a foreign corporation,
partnership, estate or trust,
2. You are an individual who has not been, and plans not to be, present in the
United States for a total of 183 days or more during the calendar year, and
3. You are neither engaged, nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected gains from transactions with a
broker or barter exchange.
If you do not meet the requirements of 2 or 3 above, you may instead certify
on FORM 1001, Ownership, Exemption, or Reduced Rate Certificate, that your
country has a tax treaty with the United States that exempts your transactions
from U.S. tax.
FILING INSTRUCTIONS
WHEN TO FILE.--File Form W-8 or substitute form before a payment is made.
Otherwise, the payer may have to withhold and send part of the payment to the
Internal Revenue Service (see Backup Withholding below). This certificate
generally remains in effect for three calendar years. However, the payer may
require you to file a new certificate each time a payment is made to you.
WHERE TO FILE.--File this form with the payer of the qualifying income who is
the withholding agent (see WITHHOLDING AGENT on page 2). Keep a copy for your
own records.
BACKUP WITHHOLDING
A U.S. taxpayer identification number or Form W-8 or substitute form must be
given to the payers of certain income. If a taxpayer identification number or
Form W-8 or substitute form is not provided or the wrong taxpayer
identification number is provided, these payers may have to withhold 20% of
each payment or transaction. This is called backup withholding.
NOTE: On January 1, 1993, the backup withholding rate increases from 20% to
31%.
Reportable payments subject to backup withholding rules are:
. Interest payments under section 6049(a).
. Dividend payments under sections 6042(a) and 6044.
. Other payments (i.e., royalties and payments from brokers and barter
exchanges) under sections 6041, 6041A(a), 6045, 6050A, and 6050N.
If backup withholding occurs, an exempt foreign person who is a nonresident
alien individual may get a refund by filing Form 1040NR, U.S. Nonresident Alien
Income Tax Return, with the Internal Revenue Service Center, Philadelphia, PA
19255, even if filing the return is not otherwise required.
(Continued on back.)
- --------------------------------------------------------------------------------
Form W-8 (Rev. 11-92)
Cat. No. 10230M
<PAGE>
Form W-8 (Rev. 11-92) Page 2
- --------------------------------------------------------------------------------
U.S. TAXPAYER IDENTIFICATION NUMBER
The Internal Revenue law requires that certain income be reported to the
Internal Revenue Service using a U.S. taxpayer Identification number (TIN).
This number can be a social security number assigned to individuals by the
Social Security Administration or an employer identification number assigned to
businesses and other entities by the Internal Revenue Service.
Payments to account holders who are foreign persons (nonresident alien
individuals, foreign corporations, partnerships, estates, or trusts) generally
are not subject to U.S. reporting requirements. Also, foreign persons are not
generally required to have a TIN, nor are they subject to any backup
withholding because they do not furnish a TIN to a payer or broker.
However, foreign persons with income effectively connected with a trade or
business in the United States (income subject to regular (graduated) income
tax), must have a TIN. To apply for a TIN, use Form SS-4, Application for
Employer Identification Number, available from local Internal Revenue Service
offices, or Form SS-5, Application for a Social Security Card, available from
local Social Security Administration offices.
SPECIAL RULES
MORTGAGE INTEREST.--For purposes of the reporting rules, mortgage interest is
interest paid on a mortgage to a person engaged in a trade or business
originating mortgages in the course of that trade or business. A mortgage
interest recipient is one who receives interest on a mortgage that was acquired
in the course of a trade or business.
Mortgage interest is not subject to backup withholding rules, but is subject
to reporting requirements under section 6050H. Generally, however, the
reporting requirements do not apply if the payer of record is a nonresident
alien individual who pays interest on a mortgage not secured by real property
in the United States. Use Form W-8 or substitute form to notify the mortgage
interest recipient that the payer is a nonresident alien individual.
PORTFOLIO INTEREST.--Generally, portfolio interest paid to a nonresident alien
individual or foreign partnership, estate, or trust is not subject to backup
withholding rules. However, if interest is paid on portfolio investments to a
beneficial owner that is neither a financial institution nor a member of a
clearing organization, Form W-8 or substitute form is required.
Registered obligations not targeted to foreign markets qualify as portfolio
interest not subject to 30% withholding, but require the filing of Form W-8 or
substitute form. See instructions to Withholding Agents on this page for
reporting rules.
See PUB. 515, Withholding of Tax on Nonresident Aliens and Foreign
Corporations, for registered obligations targeted to foreign markets and when
Form W-8 or substitute form is not required on these payments.
BEARER OBLIGATIONS.--The interest from bearer obligations targeted to foreign
markets is treated as portfolio interest and is not subject to 30% withholding.
Form W-8 or substitute form is not required.
DIVIDENDS.--Any distribution or payment of dividends by a U.S. corporation sent
to a foreign address is subject to the 30% (or lower treaty) withholding rate,
but is not subject to backup withholding. Also, there is no backup withholding
on dividend payments made to a foreign person by a foreign corporation.
However, the 30% withholding (or lower treaty) rate applies to dividend
payments made to a foreign person by a foreign corporation if:
. 25% or more of the foreign corporation's gross income for the three preceding
taxable years was effectively connected with a U.S. trade or business, and
. The corporation was not subject to the branch profits tax because of an
income tax treaty (see section 884(e)).
If a foreign corporation makes payments to another foreign corporation, the
recipient must be a qualified resident of its country of residence to benefit
from that country's tax treaty.
BROKER OR BARTER EXCHANGES.--Income from transactions with a broker or barter
exchanges is subject to reporting rules and backup withholding unless Form W-8
or substitute form is filed to notify the broker or barter exchange that you
are an exempt foreign person as defined on page 1.
SPECIFIC INSTRUCTIONS
NAME OF OWNER.--If Form W-8 is being filed for portfolio interest, enter the
name of the beneficial owner.
U.S. TAXPAYER IDENTIFICATION NUMBER.-- If you have a U.S. taxpayer
identification number, enter your number in this space (see the discussion
earlier).
PERMANENT ADDRESS.--Enter your complete address in the country where you reside
permanently for income tax purposes.
<TABLE>
<CAPTION>
IF YOU ARE: SHOW THE
ADDRESS OF:
<S> <C>
An individual Your permanent
residence
A partnership Principal office
or corporation
An estate or Permanent residence
trust or principal office of
any fiduciary
</TABLE>
Also show your current mailing address if it differs from your permanent
address.
ACCOUNT INFORMATION (OPTIONAL).--If you have more than one account (savings,
certificate of deposit, pension, IRA, etc.) with the same payer, list all
account numbers and types on one Form W-8 or substitute form unless your payer
requires you to file a separate certificate for each account.
If you have more than one payer, file a separate Form W-8 with each payer.
SIGNATURE.--If only one foreign person owns the account(s) listed on this form,
that foreign person should sign the Form W-8.
If each owner of a joint account is a foreign person, each should sign a
separate Form W-8.
NOTICE OF CHANGE IN STATUS.--If you become a U.S. citizen or resident after you
have filed Form W-8 or substitute form, or you cease to be an exempt foreign
person, you must notify the payer in writing within 30 days of your change in
status.
To notify the payer, you may check the box in the space provided on this form
or use the method prescribed by the payer.
Reporting will then begin on the account(s) listed and backup withholding may
also begin unless you certify to the payer that:
(1) The U.S. taxpayer identification number you have given is correct, and
(2) The Internal Revenue Service has not notified you that you are subject to
backup withholding because you failed to report certain income.
You may use Form W-9, Request for Taxpayer Identification Number and
Certification, to make these certifications.
If an account is no longer active, you do not have to notify a payer of your
change in status unless you also have another account with the same payer that
is still active.
FALSE CERTIFICATE.--If you file a false certificate when you are not entitled
to the exemption from withholding or reporting, you may be subject to fines
and/or imprisonment under U.S. perjury laws.
INSTRUCTIONS TO WITHHOLDING AGENTS
WITHHOLDING AGENT.--Generally, the person responsible for payment of the items
discussed above to a nonresident alien individual or foreign entity is the
withholding agent (see Pub. 515).
RETENTION OF STATEMENT.--Keep Form W-8 or substitute form in your records for
at least four years following the end of the last calendar year during which
the payment is paid or collected.
PORTFOLIO INTEREST.--Although registered obligations not targeted to foreign
markets are not subject to 30% withholding, you must file Form 1042S, Foreign
Person's U.S. Source Income Subject to Withholding, to report the interest
payment. Both Form 1042S and a copy of Form W-8 or substitute form must be
attached to Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
<PAGE>
Exhibit (a)(2)(iii)
NOTICE OF GUARANTEED DELIVERY
REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
This form must be used to accept the Offer (as defined below) if a
Stockholder's certificates for Shares are not immediately available or if time
will not permit the Letter of Transmittal and other required documents to
reach the Depositary on or before the Expiration Date. Each term used in this
form that is not otherwise defined herein shall have the meaning specified in
the Offer to Purchase dated May 8, 1997. This form may be delivered by hand,
overnight courier or mail to the Depositary at the appropriate address set
forth below AND MUST BEAR ORIGINAL SIGNATURES (NOT PHOTOCOPIES OR FACSIMILES).
Tenders using this form may be made only by or through an Eligible Institution
as defined in Section 4(b) of the Offer to Purchase.
Depositary Addresses:
By Mail: By Overnight Courier: By Hand:
State Street Bank and Securities Transfer and
State Street Bank and Trust Company Reporting Services Inc.
Trust Company Corporate Reorganization Boston EquiServe L.P.
Corporate Reorganization 70 Campanelli Drive Corporate Reorganization
P.O. Box 9061 Braintree, MA 02184 55 Broadway, Third Floor
Boston, MA 02205 New York, NY 10006
Depositary Telephone Number: (800) 219-4218
Depositary Telephone Number to Confirm Receipt of Notices: (617) 794-6388
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to ACM Managed Dollar Income Fund, Inc. (the
"Fund"), upon the terms and subject to the conditions set forth in its Offer
to Purchase dated May 8, 1997 and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which are hereby acknowledged,
(i) the number of Shares specified below pursuant to the guaranteed delivery
procedures set forth in Section 4(e) of the Offer to Purchase and (ii) all
Shares held in the name(s) of the registered holder(s) by the Fund's transfer
agent pursuant to the Fund's Dividend Reinvestment Plan.
(PLEASE PRINT EXCEPT FOR SIGNATURE(S))
Number of Shares Tendered: __________
Certificate Nos. (if available): ____ Name(s) of Record Holder(s): ________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
If Shares will be tendered by book- Address: ____________________________
entry transfer to The Depository
Trust Company, please check
box: [_]
_____________________________________
_____________________________________
DTC Participant Number: _____________ Telephone Number, including Area
Code:
_____________________________________
If the undersigned is the beneficial owner of the Shares being tendered, the
undersigned hereby represents and warrants that all Shares actually owned by
the undersigned as of the date of purchase of Shares pursuant to the Offer,
and all Shares constructively owned by the undersigned as of such date as
determined under Section 318 of the Internal Revenue Code of 1986, as amended,
have been or will be tendered pursuant to the Offer.
Dated: ________________________, 1997
INDIVIDUAL(S) ENTITY
_____________________________________ _____________________________________
Name of Firm
_____________________________________
Signature(s) _____________________________________
Authorized Signature
Name: _______________________________
Title: ______________________________
2
<PAGE>
GUARANTEE
The undersigned, an Eligible Institution as defined in Section 4(b) of the
Offer to Purchase, hereby, with respect to the Shares tendered hereby pursuant
to the guaranteed delivery procedures set forth in Section 4(e) of the Offer
to Purchase: (a) represents that the person(s) named on the previous page
"own(s)" such Shares within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended; (b) represents that the tender of such
Shares complies with Rule 14e-4; and (c) guarantees to deliver to the
Depositary certificates representing such Shares, in proper form for transfer
(or to tender Shares pursuant to the procedure for book-entry transfer into
the Depositary's account at The Depository Trust Company if so specified on
the foregoing page), together with a properly completed and duly executed
Letter of Transmittal with any required signature guarantees, any other
required documents, and the $25.00 Processing Fee payable to State Street Bank
and Trust Company, prior to 5:00 P.M. Eastern Time on the third New York Stock
Exchange trading day after the date of execution of this Guarantee.
(PLEASE PRINT EXCEPT FOR SIGNATURE)
Name of Firm: _________________________________________________________________
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Title: ________________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
Telephone Number, including Area Code: ________________________________________
Dated: ________________________, 1997
3
<PAGE>
Exhibit (a)(3)(i)
FORM OF LETTER TO BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Pursuant to your request, we are enclosing the material listed below
relating to the offer by ACM Managed Dollar Income Fund, Inc. (the "Fund") to
purchase 7,081,253 of its issued and outstanding shares of common stock, par
value $0.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session
of the New York Stock Exchange ("NYSE") on June 6, 1997 upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 8, 1997
and the related Letter of Transmittal (which together constitute the "Offer").
THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 5, 1997, UNLESS
EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended beyond June 5,
1997, the purchase price for Shares will be their NAV determined as of the
close of the regular trading session of the NYSE on the date after the new
Expiration Date.
The following documents are enclosed:
(1) Offer to Purchase dated May 8, 1997;
(2) Letter of Transmittal to be used to tender all Shares;
(3) Guidelines for Certification of Taxpayer Identification Number;
(4) Notice of Guaranteed Delivery;
(5) Form of Letter to Clients, which may be sent upon request for
information by your clients for whose account you hold shares registered in
your name (or in the name of your nominee); and
(6) Questions and Answers regarding the Offer (for internal use only, not
for distribution to your clients or others).
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Fund will pay all
transfer taxes on its purchase of Shares, subject to Instruction 6 of the
Letter of Transmittal. Backup withholding tax at a 31% rate may be required
unless an exemption is proved or unless the required taxpayer identification
information is or has previously been provided to the Fund or the Depositary.
Certain withholdings may also apply with respect to payments to non-U.S.
Stockholders. See Instruction 11 of the Letter of Transmittal.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Stockholders in any jurisdiction in which the making of the Offer
or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer shall
be deemed to be made on behalf of the Fund by one or more registered brokers
or dealers licensed under the laws of that jurisdiction.
If a client instructs you by telephone to tender Shares, please record the
telephone conversation (in accordance with applicable law) and ask the client
to affirm that all Shares actually owned by such client as of the date of
purchase of Shares pursuant to the Offer and all Shares constructively owned
by such client as of such date as determined under Section 318 of the Internal
Revenue Code of 1986, as amended, have been or will be tendered pursuant to
the Offer.
Additional copies of the enclosed material may be obtained from State Street
Bank and Trust Company, the Depositary, in the manner indicated in the Offer
to Purchase. Any questions you have with respect to the Offer should be
directed to the Depositary at 1-800-219-4218.
Very truly yours,
ACM Managed Dollar Income Fund, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS THE AGENT OF EITHER THE FUND OR THE DEPOSITARY OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS WITH RESPECT TO
THE OFFER, OTHER THAN THE STATEMENTS SPECIFICALLY SET FORTH IN THE OFFER
TO PURCHASE AND THE LETTER OF TRANSMITTAL, OR TO DISTRIBUTE ANY MATERIAL
WITH RESPECT TO THE OFFER OTHER THAN AS SPECIFICALLY AUTHORIZED HEREIN.
<PAGE>
Exhibit (a)(3)(ii)
FORM OF LETTER TO CLIENTS OF BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES
REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
To Our Clients:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated May 8, 1997 of ACM Managed Dollar Income Fund, Inc. (the
"Fund") and the related Letter of Transmittal pursuant to which the Fund is
offering to purchase 7,081,253 shares of its issued and outstanding common
stock, par value $0.01 per share (the "Shares"), for cash at a price equal to
their net asset value ("NAV") determined as of the close of the regular
trading session of the New York Stock Exchange ("NYSE") on June 6, 1997, upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated May 8, 1997 and the related Letter of Transmittal (which together
constitute the "Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON
JUNE 5, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is
extended beyond June 5, 1997, the purchase price for Shares will be their NAV
determined as of the close of the regular trading session of the NYSE on the
date after the new Expiration Date, as extended.
The Offer is being made to fulfill an undertaking made in connection with
the initial public offering of the Shares. Information regarding this
undertaking, as well as information regarding possible future tender offers by
the Fund, is set forth in the Offer to Purchase.
The Offer to Purchase and the Letter of Transmittal are being forwarded to
you as the beneficial owner of Shares held by us for your account but not
registered in your name. We are sending you the Letter of Transmittal for your
information only; you cannot use it to tender Shares we hold for your account.
A tender of such Shares can be made only by us as the holder of record and
only pursuant to your instructions.
Your attention is called to the following:
1. Unless extended, the Offer expires at 12:00 Midnight Eastern Time on
June 5, 1997 and withdrawal rights expire at 5:00 P.M. Eastern Time on June
10, 1997.
2. The Offer is subject to certain conditions set forth in the Offer to
Purchase. Under certain circumstances, the Fund will not be required to
accept for payment, purchase or pay for any shares tendered, and the Fund
may also amend, extend or terminate the Offer.
3. A Stockholder wishing to accept the Offer must tender, or cause the
tender of, all Shares actually owned by the Stockholder and all Shares
constructively owned by the Stockholder as determined under Section 318 of
the Internal Revenue Code of 1986, as amended, as of the date of purchase
of Shares pursuant to the Offer. Stockholders should consult their tax
advisors as to the application of the constructive ownership rules of
Section 318.
4. If more than 7,081,253 Shares are duly tendered (and not withdrawn),
the Fund will purchase Shares from tendering Stockholders in accordance
with the terms and subject to the conditions specified in the Offer to
Purchase, pro rata in accordance with the number of Shares tendered (and
not withdrawn) by each Stockholder, unless the Fund determines not to
purchase any Shares.
5. Each tendering Stockholder is required to submit a check in the amount
of $25.00 payable to State Street Bank and Trust Company as a processing
fee to help defray the cost associated with effecting the Offer. A broker,
dealer, commercial bank, trust company or other nominee may also charge a
fee for processing transactions on behalf of a Stockholder. Tendering
Stockholders are not obligated to pay brokerage commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase
of Shares by the Fund pursuant to the Offer.
IF YOU WISH TO HAVE US TENDER YOUR SHARES, PLEASE SO INSTRUCT US BY
COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM ON THE REVERSE
SIDE HEREOF. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE
OFFER. THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 5, 1997,
UNLESS EXTENDED.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
the Fund by one or more registered brokers or dealers licensed under the laws
of that jurisdiction.
Very truly yours,
ACM Managed Dollar Income Fund, Inc.
<PAGE>
INSTRUCTIONS REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
THIS FORM IS NOT TO BE USED TO TENDER SHARES DIRECTLY TO THE DEPOSITARY. IT
SHOULD BE SENT TO YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE ONLY IF THAT FIRM IS THE HOLDER OF RECORD OF YOUR SHARES AND WILL BE
EFFECTING THE TENDER ON YOUR BEHALF.
DO NOT COMPLETE THIS FORM IF YOU HAVE DECIDED NOT TO TENDER YOUR SHARES.
The undersigned acknowledge(s) receipt of your letter and the accompanying
Offer to Purchase dated May 8, 1997 and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by ACM
Managed Dollar Income Fund, Inc. (the "Fund") to purchase 7,081,253 shares of
its issued and outstanding common stock, par value $0.01 per share (the
"Shares"), at the net asset value per Share as of the close of the regular
trading session of the New York Stock Exchange on the date following the
Expiration Date (as defined in the Offer to Purchase), on the terms and
subject to the conditions of the Offer.
The undersigned hereby instructs you to tender to the Fund all Shares that
are held by you for the account of the undersigned, including all
uncertificated Shares that may be held for the account of the undersigned by
the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan,
upon the terms and subject to the conditions of the Offer.
The undersigned hereby represents and warrants that: (i) all Shares actually
owned by the undersigned as of the date of purchase of Shares pursuant to the
Offer and all Shares constructively owned by the undersigned as of such date
as determined under Section 318 of the Internal Revenue Code of 1986, as
amended, have been or will be tendered pursuant to the Offer; (ii) the
undersigned has a net long position in such Shares within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended; and
(iii) the tender of such Shares complies with Rule 14e-4.
(PLEASE PRINT EXCEPT FOR SIGNATURE(S))
Account Number: _____________________
Name(s) and Tax Identification or Social Security Number(s) of Beneficial
Owner(s): _____________________________________________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Address: ______________________________________________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Telephone Number(s) including Area Code(s): ___________________________________
- ------------------------------------- -------------------------------------
(SIGNATURE OF BENEFICIAL OWNER) (SIGNATURE OF ADDITIONAL BENEFICIAL
OWNER, IF ANY)
Dated: , 1997
<PAGE>
Exhibit (a)(3)(iii)
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
QUESTIONS AND ANSWERS
REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
AND TO THE DEPOSITARY:
The following is a set of questions your clients might ask and possible
answers you might give in response concerning the Offer by ACM Managed Dollar
Income Fund, Inc. (the "Fund") to purchase 7,081,253 of its issued and
outstanding shares of common stock, par value $0.01 per share, for cash at a
price equal to their net asset value per share determined as of the close of
the regular trading session of the New York Stock Exchange on June 6, 1997,
the date after the date the offer expires (or, if the Offer is extended, on
the date following the new expiration date), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 8, 1997 and the
related Letter of Transmittal (which together constitute the "Offer"). THESE
QUESTIONS AND ANSWERS ARE INTENDED ONLY FOR INTERNAL USE BY BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES AND OTHER NOMINEES AND BY THE DEPOSITARY,
AND ARE NOT TO BE TRANSMITTED TO OTHERS. Also, these questions and answers are
not intended as a substitute for a thorough reading and understanding of the
terms and conditions of the Offer. To the extent, if any, that these questions
and answers may differ from the terms and conditions of the Offer, the terms
and conditions of the Offer will prevail.
Any question you have with respect to the Offer should be directed to the
Depositary at(800) 219-4218.
Very truly yours,
ACM Managed Dollar Income Fund, Inc.
NOTHING CONTAINED HEREIN SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS THE
AGENT OF EITHER THE FUND OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER
PERSON (A) TO MAKE ANY STATEMENTS WITH RESPECT TO THE OFFER, OTHER THAN
THE STATEMENTS SPECIFICALLY SET FORTH IN THE OFFER TO PURCHASE AND THE
LETTER OF TRANSMITTAL, OR (B) TO DISTRIBUTE ANY MATERIAL WITH RESPECT TO
THE OFFER (INCLUDING, WITHOUT LIMITATION, THESE QUESTIONS AND ANSWERS)
OTHER THAN AS SPECIFICALLY AUTHORIZED BY THE FUND.
<PAGE>
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
1. Q. What is the tender offer?
A. ACM Managed Dollar Income Fund, Inc. (the "Fund") has commenced an offer
to purchase 7,081,253 of its shares of common stock for cash at a price
per share equal to the per share net asset value as of the close of the
regular trading session of the New York Stock Exchange on June 6, 1997,
unless extended, upon specified terms and subject to conditions as set
forth in the tender offer documents.
2. Q. When does the tender offer expire?
A. The tender offer is to expire at 12:00 Midnight Eastern Time on June 5,
1997, unless extended by the Fund.
3. Q. Why is the Fund making this tender offer?
A. The tender offer is being made to fulfill an undertaking made by the
Fund in connection with the initial public offering of shares of the
Fund's common stock in 1993.
4. Q. How do I tender my shares?
A. If your shares are registered in your name, you should obtain a package
of the tender offer materials, including the Offer to Purchase dated May
8, 1997 and the related Letter of Transmittal, read them, and if you
should decide to tender, complete a Letter of Transmittal and submit any
other documents required by the Letter of Transmittal. These materials
must be received by State Street Bank and Trust Company, the Depositary,
in proper form before 12:00 Midnight Eastern Time on June 5, 1997,
unless the tender offer is extended by the Fund. However, if your shares
are held by a broker, dealer, commercial bank, trust company or other
nominee (e.g., in "street name"), you should contact that firm to obtain
the package of information necessary to make your decision and you can
only tender your shares by directing that firm to complete, compile and
deliver the necessary documents for submission to the Depositary.
5. Q. Is there any cost to me to tender?
A. There is a $25.00 processing fee (the "Processing Fee") per tendering
stockholder. Your tender will not be a proper one if a check payable to
State Street Bank and Trust Company for this fee does not accompany the
documents submitted to State Street Bank and Trust Company. The
Processing Fee will be refunded only if no shares tendered are purchased
pursuant to the offer. Your broker, dealer, commercial bank, trust
company or other nominee may charge you additional fees according to its
individual policies.
6. Q. Is the Fund required to complete the tender and purchase all shares
tendered?
A. Under most circumstances, yes. There are certain circumstances, however,
in which the Fund will not be required to accept for payment, purchase
or pay for any shares tendered as described in Section 3 of the Offer to
Purchase.
7. Q. Will this be my last opportunity to tender shares to the Fund?
A. Under the terms of the Fund's original undertaking, the Fund is required
to conduct an annual tender offer if shares of the Fund trade on the
NYSE during a measurement period to be fixed each year by the Fund's
Board of Directors at an average price which reflects a discount or 3%
or more from the average net asset value per share during the
measurement period. See Section 2 of the Offer to Purchase for details.
8. Q. How can I obtain copies of the tender offer documents?
A. Copies of the tender offer documents, including the Offer to Purchase
and the related Letter of Transmittal, may be obtained from your broker
or bank (if your broker or bank holds your shares in its nominee (or
"street name") or from State Street Bank and Trust Company, the
Depositary, by calling (800) 219-4218.
2
<PAGE>
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
9. Q. Should I tender my shares?
A. Neither the Fund nor its Board of Directors nor Alliance Capital
Management L.P. (the investment adviser to the Fund) is making any
recommendation as to whether stockholders should tender or refrain from
tendering shares, and no one has been authorized to make any such
recommendation on their behalf. You should read the tender offer
materials thoroughly, and you may wish to consult your investment and
tax advisors.
10. Q. What price will I get for the shares that are tendered?
A. If shares are purchased by the Fund, you will receive the net asset
value per share as of the close of the regular trading session of the
New York Stock Exchange on the date after the expiration date of the
tender offer. The expiration date is June 5, 1997, unless the offer is
extended.
11. Q. What is the net asset value per share now?
A. On May 2, 1997, the net asset value per share was $13.98. During the
pendency of the offer, current net asset value quotations can be
obtained from State Street Bank and Trust Company by calling (800) 219-
4218 between 9:00 a.m. and 5:00 p.m. Eastern Time, Monday through
Friday (except holidays).
12. Q. Will the net asset value be higher or lower on the date that the price
to be paid for tendered shares is to be determined?
A. No one can accurately predict the net asset value at a future date.
13. Q. Will the Fund pay interest on the purchase price of the tendered
shares?
A. No.
14. Q. When will the tender offer expire?
A. The tender offer will expire at 12:00 Midnight Eastern Time on June 5,
1997, unless it is extended. The Fund may extend the period of time the
offer is open by making a public announcement.
15. Q. May I withdraw my shares after I have tendered them?
A. Yes, you may withdraw your shares at any time prior to 5:00 P.M.
Eastern Time on June 10, 1997 (or, if the offer is extended, prior to
5:00 P.M. Eastern Time on the third day on which the NYSE is open for
trading after the new expiration date).
16. Q. Is there any reason shares tendered would not be accepted?
A. The Fund has reserved the right to reject any and all tenders
determined by it not to be in appropriate form. Tenders will be
rejected if all shares actually and constructively (as determined under
the Internal Revenue Code) are not tendered and if the tender does not
include the Processing Fee, original signature(s) or the original of
any required signature guarantee(s). Also, the Fund may determine not
to purchase any shares under the circumstances referred to in Section 2
of the Offer to Purchase for reasons set forth in the tender offer
documents.
17. Q. If shares I tender are accepted by the Fund, when will payment be made?
A. It is contemplated, subject to change, that payment for tendered
shares, if accepted, will be made on or about June 13, 1997.
3
<PAGE>
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
18. Q. What if more than 7,081,253 shares are tendered?
A. In that event, the Fund will purchase duly tendered shares from
tendering Stockholders pursuant to the terms and conditions of the
tender offer pro rata in accordance with the number of shares tendered
by them, unless the Fund determines not to purchase any shares.
19. Q. If all of the shares I tender are not purchased by the Fund, for any
reason, how will I get those shares back?
A. These shares will be returned to you or your broker, dealer, commercial
bank, trust company or other nominee promptly after the expiration
date, subject to any extension thereof, in accordance with the
instructions in the Letter of Transmittal.
20. Q. Can the tender offer materials be sent to me by overnight delivery
service?
A. The Depositary can send the tender offer materials to you by overnight
delivery service if you make advance arrangements to pay the delivery
charges. If your shares are held in nominee (e.g., in "street name"),
you should contact your broker, dealer, commercial bank, trust company
or other nominee for a copy of the tender offer documents.
4
<PAGE>
Exhibit (a)(3)(iv)
FORM OF LETTER TO STOCKHOLDERS WHO HAVE
REQUESTED INFORMATION REGARDING THE OFFER BY
ACM MANAGED DOLLAR INCOME FUND, INC.
TO PURCHASE FOR CASH 7,081,253 OF ITS ISSUED AND OUTSTANDING
SHARES AT NET ASSET VALUE PER SHARE
Dear Stockholder:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated May 8, 1997 of ACM Managed Dollar Income Fund, Inc. (the
"Fund") and the related Letter of Transmittal pursuant to which the Fund is
offering to purchase 7,081,253 shares of its issued and outstanding common
stock, par value $0.01 per share (the "Shares"), for cash at a price equal to
their net asset value ("NAV") determined as of the close of the regular
trading session of the New York Stock Exchange ("NYSE") on June 6, 1997, upon
the terms and subject to the conditions set forth in the Offer to Purchase
dated May 8, 1997 and the related Letter of Transmittal (which together
constitute the "Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON
JUNE 5, 1997, UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is
extended beyond June 5, 1997, the purchase price for Shares will be their NAV
determined as of the close of the regular trading session of the NYSE on the
date after the new Expiration Date, as extended.
Neither the Fund nor its Board of Directors nor Alliance Capital Management
L.P. (the Fund's investment adviser) (the "Adviser") is making any
recommendation to any holder of Shares as to whether to tender Shares. Each
Stockholder is urged to consult the Stockholder's own investment and tax
advisors before deciding whether to tender Shares. If, after considering the
Offer to Purchase and Letter of Transmittal, you wish to tender your Shares
pursuant to the Offer, if you are the record owner of Shares, you should
follow the instructions contained in the Offer to Purchase and Letter of
Transmittal, and, if the Shares are held of record in the name of a broker,
dealer, commercial bank, trust company or other nominee, you should contact
that firm to effect the tender for you.
Your attention is called to the following:
1. Unless extended, the Offer expires at 12:00 Midnight Eastern Time on
June 5, 1997 and withdrawal rights expire at 5:00 P.M. Eastern Time on June
10, 1997.
2. The Offer is subject to certain conditions set forth in the Offer to
Purchase. Under certain circumstances, the Fund will not be required to
accept for payment, purchase or pay for any shares tendered, and the Fund
may also amend, extend or terminate the Offer.
3. A Stockholder wishing to accept the Offer must tender, or cause the
tender of, all Shares actually owned by the Stockholder and all Shares
constructively owned by the Stockholder as determined under Section 318 of
the Internal Revenue Code of 1986, as amended, as of the date of purchase
of Shares pursuant to the Offer. Stockholders should consult their tax
advisors as to the application of the constructive ownership rules of
Section 318.
4. If more than 7,081,253 Shares are duly tendered (and not withdrawn),
the Fund will purchase Shares from tendering Stockholders in accordance
with the terms and subject to the conditions specified in the Offer to
Purchase, pro rata in accordance with the number of Shares tendered (and
not withdrawn) by each Stockholder, unless the Fund determines not to
purchase any Shares.
5. Each tendering Stockholder is required to submit a check in the amount
of $25.00 payable to State Street Bank and Trust Company (the "Depositary")
as a processing fee to help defray the cost associated with effecting the
Offer. A broker, dealer, commercial bank, trust company or other nominee
may also charge a fee for processing transactions on behalf of a
Stockholder. Tendering Stockholders are not obligated to pay brokerage
commissions or, subject to Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Shares by the Fund pursuant to the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
the Fund by one or more registered brokers or dealers licensed under the laws
of that jurisdiction.
Should you have any other questions concerning the enclosed material, please
contact your broker, dealer, commercial bank, trust company or other nominee,
or call the Depositary at the number indicated in the Offer to Purchase.
Very truly yours,
ACM Managed Dollar Income Fund, Inc.
<PAGE>
EXHIBIT (a)(4)
FOR IMMEDIATE RELEASE
Shareholder Contact:
1-800-219-4218
Media Contact Only:
Duff Ferguson
212-969-1056
ACM MANAGED DOLLAR INCOME FUND, INC.
ANNOUNCES COMMENCEMENT OF TENDER OFFER
--------------------------------------
NEW YORK, NY May 7, 1997 -- ACM Managed Dollar Income Fund, Inc.
(NYSE:ADF) (the "Fund") announced today that the Fund will commence a tender
offer on May 8 for 7,081,253 shares of its common stock representing
approximately 25% of the Fund's outstanding shares. The offer is for cash at a
price equal to the net asset value per share determined as of the close of the
regular trading session of the New York Stock Exchange on the date after the
date the offer expires. On May 2, 1997, the net asset value of a share of the
Fund was $13.98 per share and the per share market price on the NYSE was $13.125
representing a 6.16% discount from net asset value. The offer will expire at
12:00 Midnight Eastern Time on June 5, 1997, unless extended. The offer is in
fulfillment of an undertaking regarding the possibility of a tender offer in
1995 and each subsequent year disclosed in the prospectus for the Fund's initial
public offering in October 1993.
The terms and conditions of the offer are set forth in the Fund's Offer
to Purchase dated May 8, 1997 and the related Letter of Transmittal. A copy of
these documents may be obtained from, and questions and requests for assistance
should be directed to, the Depositary, State Street Bank and Trust Company,
Corporate Reorganization, P.O. Box 9061, Boston, Massachusetts 02205, or by
calling (800) 219-4218.
The Fund is a non-diversified, closed-end U.S. registered management
investment company whose investment adviser is Alliance Capital Management L.P.
The Fund has current net assets of approximately $396 million and invests
substantially all of the assets in U.S. and non-U.S. fixed income securities
denominated in U.S. dollars with the primary investment objective of high
current income and a secondary investment objective of capital appreciation.
This announcement is not an offer to purchase or solicitation of an
offer to sell shares of the Fund. The offer is made only by the Offer to
Purchase and the related Letter of Transmittal. The offer is not being made to,
nor will tenders be accepted from or on behalf of, holders of shares in any
jurisdiction in which making or accepting the offer would violate that
jurisdiction's laws.
S:\DEPT550\WIT-MIT\TEND-CM8.DOC
<PAGE>
EXHIBIT (c)(1)
ADVISORY AGREEMENT
ACM Managed Dollar Income Fund, Inc.
1345 Avenue Of The Americas
New York, New York 10105
October 22, 1993
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
We, the undersigned ACM Managed Dollar Income Fund, Inc., herewith
confirm our agreement with you as follows:
1. We are a closed-end, non-diversified management investment
company registered under the Investment Company Act of 1940 (the "Act"). We
propose to engage in the business of investing and reinvesting our assets in
securities ("the portfolio assets") of the type and in accordance with the
limitations specified in our Articles of Incorporation, Bylaws, Registration
Statement filed with the Securities and Exchange Commission under the Securities
Act of 1933 and the Act, and any representations made in our prospectus, 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
<PAGE>
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 the prior report, and will also keep
us in touch with important developments affecting the portfolio assets and on
your own initiative will furnish us from time to time with such information as
you may believe appropriate for this purpose, whether concerning the individual
issuers whose securities are included in our portfolio, the industries in which
they engage, or the conditions prevailing in the economy generally. You will
2
<PAGE>
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 Articles of Incorporation and in our
Registration Statement under the Act and the Securities Act of 1933, and the
limitations in the Act and of the Internal Revenue Code of 1986, as amended, in
respect of regulated investment companies.
(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 at our
request you will provide us persons satisfactory to our Board of Directors to
serve as our officers. Such personnel may be employees of you or your
affiliates. 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 (other than us) shall furnish us
without charge with such management supervision and assistance and such office
facilities as you may believe
3
<PAGE>
appropriate or as we may reasonably request subject to the requirements of any
regulatory authority to which you may be subject.
3. We hereby confirm that, subject to the foregoing, we shall be
responsible and hereby assume the obligation for payment of all our other
expenses, including: (a) payment of the fee payable to you under paragraph 5
hereof; (b) brokerage and commission expenses; (c) federal, state, local and
foreign taxes, including issue and transfer taxes, incurred by or levied on us;
(d) interest charges on borrowings; (e) our organizational and offering
expenses, whether or not advanced by you; (f) fees and expenses of registering
our shares under the appropriate federal securities laws and of qualifying our
shares under applicable state securities laws; (g) fees and expenses of listing
and maintaining the listing of our shares on any securities exchange; (h)
expenses of printing and distributing reports to shareholders; (i) costs of
proxy solicitation; (j) charges and expenses of our administrator, custodians
and registrar, and our transfer and dividend paying agent; (k) compensation of
our Directors, officers and employees who do not devote any part of their time
to your affairs or the affairs of your affiliates other than us; (l) legal and
auditing expenses; (m) the cost of stock certificates representing shares of our
common stock; and (n) costs of stationery and supplies.
4
<PAGE>
4. We shall expect of you, and you will give us the benefit of, your
best judgment and efforts in rendering these services to us, and we agree as an
inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to us or to our security holders
to which you would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties hereunder.
5. In consideration of the foregoing we will pay you a monthly fee
at an annualized rate of .75% of our average weekly net assets. For purposes of
the calculation of such fee, average weekly net assets shall be determined on
the basis of our average net assets for each weekly period (ending on Friday)
ending during the month. The net assets for each weekly period are determined
by averaging the net assets on the Friday of such weekly period with the net
assets on the Friday of the immediately preceding weekly period. When a Friday
is not a business day for us, then the calculation will be based on our net
assets on the business day immediately preceding such Friday. In addition, for
purposes of the calculation such fee, our average weekly net assets will be
deemed to be the average
5
<PAGE>
weekly value of our total assets minus the sum of our liabilities (which
liabilities exclude (a) the principal amount of any money borrowed by us or any
debt issued by us and (b) the aggregate liquidation preference of any of our
outstanding preferred stock). Such fee shall be payable in arrears on the last
day of each calendar month for services performed hereunder during such month.
If our initial Registration Statement is declared effective by the Securities
and Exchange Commission after the beginning of a month or this agreement
terminates prior to the end of a month, such fee shall be prorated according to
the proportion which such portion of the month bears to the full month.
6. This agreement shall become effective on the date on which our
pending Registration Statement on Form N-2 relating to our shares becomes
effective and shall continue in effect until September 30, 1995 and may be
continued for successive twelve-month periods (computed from each October 1)
provided that such continuance is specifically approved at least annually by our
Board of Directors or by majority vote of the holders of our outstanding voting
securities (as defined in the Act), and in either case, by a majority of our
Board of Directors who are not 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
6
<PAGE>
agreement is not approved, you may continue to render 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 at any time, without the payment of any
penalty, by vote of a majority of our outstanding voting securities (as so
defined), or by a vote of our Board of Directors on 60 days written notice to
you, or by you on 60 days written notice to us.
7. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The term "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed hereto by governing law and any
interpretation thereof contained in rules or regulations promulgated by the
Securities and Exchange Commission thereunder.
8. (a) Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your employees, or any of the officers or directors of
Alliance Capital Management Corporation, your general partner, who may also be a
Director, officer or employee of ours, or
7
<PAGE>
persons otherwise affiliated with us (within the meaning of the Act) to engage
in any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render service of any kind to any other trust, corporation, firm, individual or
association.
(b) You will notify us of any change in the general partner 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 "ACM". 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 "ACM" 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,
ACM MANAGED DOLLAR INCOME
FUND, INC.
By /s/ Wayne D. Lyski
--------------------------
Name: Wayne D. Lyski
Title: President
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 /s/ Edmund P. Bergan, Jr.
-------------------------------
Name: Edmund P. Bergan, Jr.
Title: Vice President
9
<PAGE>
Exhibit (c)(2)
DEPOSITARY AGREEMENT
May 8, 1997
State Street Bank and Trust Company
C/O Boston EquiServe
150 Royall Street
Mail Stop: 45-02-53
Canton, Massachusetts 02021
Gentlemen:
ACM Managed Dollar Income Fund, Inc. a Maryland corporation (the "Fund"),
is making a tender offer (hereinafter referred to, together with any amendment
or extensions thereof, as the "Tender Offer") to purchase for cash 7,081,253
outstanding shares of its Common Stock, par value of $0.01 per share (the
"Shares"), upon the terms and subject to the conditions set forth in the Offer
to Purchase, dated May 8, 1997 (the "Offer to Purchase"), and in the related
Letter of Transmittal ("Letter of Transmittal"), including the instructions set
forth therein. Definitive copies of each document being distributed by the Fund
to its stockholders in connection with the Tender Offer have been or will be
delivered to you.
The Tender Offer is being made on May 8, 1997, and will expire at
midnight, New York City time, on June 5, 1997, unless extended by the Fund as
provided in the Tender Offer (the last date to which the Tender Offer is
extended and on which it expires is herein referred to as the "Expiration
Date").
This will confirm our agreement with you to act as the Depositary in
connection with the Tender Offer. In such capacity you will receive and make
payment for, on behalf of the Fund, Shares tendered pursuant to the terms of the
Tender Offer. In carrying out your duties as the Depositary in connection with
the Tender Offer, you are to act in accordance with the following instructions:
1. You shall examine the Letters of Transmittal, the certificates for
Shares and the other documents delivered or mailed to you in connection with
tenders of Shares to ascertain whether they are completed and executed in
accordance with the
<PAGE>
instructions set forth in the Letters of Transmittal. In the event any Letter of
Transmittal has been improperly completed or executed, or the certificates for
Shares accompanying such Letter of Transmittal are not in proper form for
transfer (as required by the aforesaid instructions), or if some other
irregularity in connection with any tender of Shares exists, you shall endeavor
to cause such action to be taken as is necessary to correct such irregularity,
but only as the Fund may direct. Determination of all questions as to the
validity, form, eligibility (including timeliness of receipt) and acceptance of
any Shares tendered or delivered shall be determined by you on behalf of the
Fund in the first instance, but final decisions on all such matters shall be
made by the Fund. The Fund will reserve in the Tender Offer the absolute right
to reject any or all tenders of any particular Shares not in appropriate form or
the acceptance of which would, in the opinion of the Fund's counsel, be unlawful
and to waive any of the conditions of the Tender Offer or any defect or
irregularity in the tender of any Shares, and the Fund's interpretation of the
terms and conditions of the Tender Offer will be final.
2. All Shares must be tendered in accordance with the terms and conditions
set forth in the Tender Offer. Payment for Shares tendered and purchased
pursuant to the Tender Offer shall be made only after deposit with you of the
certificates therefor, the Letter of Transmittal and any other required
documents.
3. A tendering stockholder may withdraw Shares tendered as set forth in
Section 5 of the Offer to Purchase, in which event you shall, as promptly as
possible after notification of such withdrawal, return such Shares to, or in
accordance with the instruction of, such stockholder and such Shares shall no
longer be considered properly tendered. All questions as to the form and
validity of notices of withdrawal, including timeliness of receipt, shall be
determined by the Fund, whose determination shall be final and binding.
4. On each business day up to and including the Expiration Date (as
defined in Section 1 of the Offer to Purchase), you shall advise by facsimile
transmission, not later than 5:00 p.m., Boston time, Mark Gersten, Edmund Bergan
and such other persons as either of them may direct, of the number of Shares
which have been duly tendered on such day, stating separately the number of
Shares tendered by Guarantees of Delivery pursuant to Section 4 (a) of the Offer
to Purchase, the
<PAGE>
number of Shares tendered about which you have questions concerning validity
and the cumulative number of Shares tendered through time of such facsimile
transmission. You shall also inform the aforementioned persons, and such other
persons as may be designated by either of them, upon request made from time to
time, of such other information as either of them may request, including,
without limitation, the names and addresses of registered holders of tendered
Shares.
5. Letters of Transmittal pursuant to Section 4 (a) of the Offer to
Purchase shall be stamped by you as of the date and time of receipt thereof and
preserved by you as permanent records until you are otherwise instructed by the
Fund. You are to match Guarantees of Delivery submitted pursuant to Section 3 of
the Offer to Purchase with the Share(s) tendered pursuant thereto. If so
instructed by the Fund, you shall telephone Eligible Institutions (as defined in
Section 4 (b) of the Offer to Purchase) which have tendered a significant number
of shares by means of the aforementioned procedures to ascertain information in
connection therewith.
6. The Fund will notify you of, and confirm in writing, any extension
or amendment of the Tender Offer.
7. You shall follow and act upon any amendments, modifications or
supplements to these instructions, and upon any further instructions in
connection with the Tender Offer, any of which may be given to you by the Fund
or such other persons as it may authorize.
8. The Fund will from time to time deposit or cause to be deposited with
you, as Depositary and as agent for tendering holders of Shares, within a
reasonable time after the Fund's acceptance for purchase of tendered Shares, an
amount equal to the aggregate purchase price of all Shares to be purchased which
you then hold. The Fund will deposit with you or cause to be deposited with you
an amount equal to the total stock transfer taxes, if any, payable by the Fund
pursuant to the provisions of Instruction 6 of the Letter of Transmittal in
respect of the transfer of all the Shares to be purchased which you hold. You
shall thereupon, as promptly as possible, (a) purchase and affix appropriate
stock transfer tax stamps, (b) cause the tendered Shares which have been thus
paid for to be transferred and delivered to the Fund by you, and (c) send a
check for the purchase price (less the amount, if any, of any stock transfer
taxes which under Instruction 6 of the Letter of Transmittal are to be
<PAGE>
deducted from the purchase price and, if applicable, adjusted in accordance with
the provisions of the Tender Offer) of the Shares purchased to, or in accordance
with the instruction of, each of the stockholders who has tendered Shares
deposited with you.
9. If, pursuant to the Tender Offer, the Fund does not accept the receipt
of instructions from a tendering stockholder, you shall return the certificates
for such shares to, or in accordance with the instructions of, the persons who
deposited the same, together with a letter of notice, in form satisfactory to
the Fund, explaining why the deposited Shares are being returned, and return to
the Fund any surplus funds deposited by the Fund with you.
10. In addition to the services you are to perform as provided for herein,
you shall perform as Depositary such other services as are required or
contemplated to be performed by the Depositary in the Offer to Purchase and
Letter of Transmittal, including, but not limited to, making pro-ration
computations, returning to stockholders Shares tendered but not accepted for
purchase and responding to requests for information and documents.
11. As Depositary you:
(a) shall have no obligation to make payment for any tendered Shares
unless the Fund shall have provided the necessary funds to pay in full all
amounts due and payable with respect thereto;
(b) shall have no duties or obligations other than those specifically
set forth herein or as may subsequently be requested of you by the Fund
with respect to the Tender Offer;
(c) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of
any stock certificates or the Shares represented thereby deposited with
you pursuant to the Tender Offer and will not be required and will make no
representations as to the validity, value or genuineness of the Tender
Offer;
(d) shall not initiate any legal action hereunder without written
approval of the Fund and then only upon such reasonable indemnity as you
may request;
(e) may rely on and shall be protected in acting upon any
certificate, instrument, opinion, notice, letter, facsimile transmission,
telegram or other
<PAGE>
document, or any security delivered to you, and reasonably believed by
you to be genuine and to have been signed by the proper party or parties;
(f) may rely on and shall be protected in acting upon written or oral
instructions with respect to any matter relating to your acting as
Depositary specifically covered by this Depositary Agreement, or
supplementing or qualifying any such action, of Edmund Bergan or Andrew
Gangolf;
(g) may consult with counsel satisfactory to you (including counsel
for the Fund) and the written advice or opinion of such counsel shall be
full and complete authorization and protection in respect of any action
taken, suffered or omitted by you hereunder in good faith and in
accordance with such advice or opinion of such counsel;
(h) shall arrange for insurance protecting the Fund and yourself
against any liability arising out of the loss, destruction or non-delivery
of checks or certificates for any cause; and
(i) shall not at any time advise any person as to the wisdom of
making any tender pursuant to the Tender Offer, the value of the Shares or
as to any other financial or legal aspect of the Tender Offer or any
transaction related thereto.
12. It is understood and agreed that the securities, money, assets or
property (the "Property") to be deposited with or received by you as Depositary
from the Fund constitute a special, segregated account, held solely for the
benefit of the Fund and stockholders tendering Shares, as their interests may
appear, and the Property shall not be commingled with the securities, money,
assets or properties of you or any other person, firm or corporation. You hereby
waive any and all rights of lien, attachment or set-off whatsoever, if any,
against the Property so to be deposited, whether such rights arise by reason of
statutory or common law, by contract or otherwise.
13. For services rendered as Depositary hereunder, you shall be entitled
to payment as set forth on Exhibit A hereto.
14. The Fund covenants and agrees to indemnify and to hold you harmless
against any costs, expenses (including reasonable fees of your legal counsel),
losses or damages, which may be paid, incurred or suffered by or to which you
may become
<PAGE>
subject, arising from or out of, directly or indirectly, any claims or liability
resulting from your actions as Depositary pursuant hereto; provided, that such
covenant and agreement does not extend to, and you shall not be indemnified with
respect to, such costs, expenses, losses and damages incurred or suffered by you
as a result of, or arising out of, your negligence, bad faith, or willful
failure to perform any of your obligations hereunder. In no case will the Fund
be liable under this indemnity with respect to any claim against you unless,
promptly after you have received any written assertion of a claim or have been
served with summons or other first legal process giving information as to the
nature and basis of the claim, you notify the Fund, by letter or by cable or
telex confirmed by letter, of the written assertion of such claim against you or
of any action commenced against you or of the service of any summons on you, or
other first legal process giving information as to nature and basis of the
claim. The Fund will be entitled to participate at its own expense in the
defense of any such claim. If the Fund so elects at any time after receipt of
such notices and agrees in writing that such claim is a claim for which you are
entitled to be indemnified and held harmless hereunder or if you in such notice
request and the Fund agrees, the Fund will assume the defense of any suit
brought to enforce any such claim. In the event the Fund assumes the defense of
any such suit, the Fund may select counsel of its own choosing for such purpose
and the Fund will not be liable for the fees and expenses of any additional
counsel thereafter retained by you.
15. This Depositary Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts and shall inure to
the benefit of and the obligations created hereby shall be binding upon the
successors and assigns of the parties hereto.
16. This Depositary Agreement may be executed in separate counterparts,
each of which when executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
If the foregoing is acceptable to you, please acknowledge receipt of this
letter and confirm the arrangements herein provided by signing and returning the
enclosed copy.
Very truly yours,
By: /s/ Edmund P. Bergan, Jr.
-------------------------
Secretary
ACCEPTED AS OF THE DATE HEREOF:
By: /s/ Barbara S. Cummings
-----------------------
Administration Manager
<PAGE>
ALLIANCE MANAGED DOLLAR INCOME FUND, INC.
EXHIBIT A
FEE SCHEDULE
Administrative Fee $5,000.00
Midnight Expiration Fee $2,500.00
Letter of Transmittal Processed $7.50 per Letter of transmittal
All out of pocket expenses (i.e. envelopes, postage, etc.) will be
billed as incurred.
