<PAGE>
As filed with the Securities and Exchange
Commission on March 17, 1995
File Nos. 33-85850
811-8838
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1
Post-Effective Amendment No.
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940
Amendment No. 1
ALLIANCE MONEY MARKET FUND (f/k/a Alliance Omnibus Reserves)
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code:(800) 221-5672
EDMUND P. BERGAN, JR.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Copies of communications to:
Thomas G. MacDonald
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
It is proposed that this filing will become effective (Check
appropriate line)
immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
<PAGE>
60 days after filing pursuant to paragraph (a)
on (date) pursuant to paragraph (a) of rule 485.
Registrant has registered an indefinite number of shares of
beneficial interest pursuant to Rule 24f-2 under the Investment
Company Act of 1940. Registrant's Rule 24f-2 notice for its
fiscal year ending November 30, 1995 will be filed on January 31,
1996.
The registrant hereby amends this Registration Statement
under the Securities Act of 1933 on such date or dates as may be
necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this
registration Statement shall thereafter become effective in
accordance with the provisions of Section 8(a) of the Securities
Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to
Section 8(a), may determine.
<PAGE>
CROSS REFERENCE SHEET
(as required by Rule 404(c))
N-1A Item No. Location in Prospectuses
- ------------- ------------------------
(Caption)
PART A
- ------
Item 1. Cover Page Cover Page
Item 2. Synopsis Expense Information
Item 3. Financial Highlights Not Applicable
Item 4. General Description of
Registrant Investment Objectives
and Policies
Item 5. Management of the Fund Additional
Information
Item 5a Management's Discussion of Fund
Performance Not Applicable
Item 6. Capital Stock and Other
Securities Additional
Information
Item 7. Purchase of Securities Being
Offered Purchase and
Redemption of Shares;
Additional
Information
Item 8. Redemption or Repurchase Purchase and
Redemption of Shares
Item 9. Pending Legal Proceedings Inapplicable
PART B
- ------
Location in Statement
Of Additional Information
-------------------------
(Caption)
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
<PAGE>
Item 12. General Information and History Management; General
Information
Item 13. Investment Objectives and Investment Objectives
Policies and Policies;
Investment
Restrictions
Item 14. Management of the Fund Management
Item 15. Control Persons and Principal
Holders of Securities Management
Item 16. Investment Advisory and Other Services
Management
Item 17. Brokerage Allocation and Other
Practices General Information
Item 18. Capital Stock and Other
Securities Daily Dividends -
Determination of Net
Asset Value; General
Information
Item 19. Purchase, Redemption and Pricing
of Securities Being Offered Purchase and
Redemption of Shares;
Daily Dividends -
Determination of Net
Asset Value
Item 20. Tax Status Taxes
Item 21. Underwriters General Information
Item 22. Calculation of Performance Data General Information
Item 23. Financial Statements Balance Sheet
<PAGE>
Alliance Money Market Fund (the "Fund") is an open-end management
investment company comprised of seven portfolios (the "Portfo-
lios") each with investment objectives of safety, liquidity and
maximum current income (in the case of the General Municipal
Portfolio, exempt from Federal income taxes and, in the case of
the New Jersey, New York, California and Connecticut Municipal
Portfolios, exempt from Federal and state income taxes of the
respective states) to the extent consistent with the first two
objectives. The Prime, Government and General Municipal Portfo-
lios are diversified. The New Jersey, New York, California and
Connecticut Municipal Portfolios are non-diversified, and are
offered only to residents of such states, respectively. This
Prospectus sets forth the information about each Portfolio that a
prospective investor should know before investing. Please retain
it for future reference. You will receive semi-annual and annual
reports of your particular Portfolio.
An investment in a Portfolio is (i) neither insured nor
guaranteed by the U.S. Government; (ii) not a deposit or
obligation of, or guaranteed or endorsed by, any bank; and (iii)
not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other agency. There
can be no assurance that a Portfolio will be able to maintain a
stable net asset value of $1.00 per share.
A "Statement of Additional Information" for the Fund dated
____________, 1995, which provides a further discussion of
certain areas in this Prospectus and other matters which may be
of interest to some investors, has been filed with the Securities
and Exchange Commission and is incorporated herein by reference.
For a free copy, write the respective Portfolio at the address
shown on page .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
ADP FINANCIAL
INFORMATION SERVICES, INC.
and
ALLIANCE CAPITAL
MANAGEMENT L.P.
Present:
Alliance Money Market Fund
Prime Portfolio
Government Portfolio
General Municipal Portfolio
New Jersey Municipal Portfolio
New York Municipal Portfolio
California Municipal Portfolio
Connecticut Municipal Portfolio
PROSPECTUS
____________, 1995
<PAGE>
EXPENSE INFORMATION
SHAREHOLDER TRANSACTION EXPENSES
The Portfolios have no sales load on purchases or reinvested
dividends, deferred sales load, redemption fee or exchange fee.
ESTIMATED ANNUAL PORTFOLIO OPERATING EXPENSES
(as a percentage of average net assets, after voluntary expense
reimbursement)
Prime Gov't Gen NJ NY CA CT
----- ----- --- -- -- -- --
Management Fees .50% .50% .50% - - - -
12b-1 Fees .45 .45 .45
Other Expenses .05 .05 .05
--- --- ---
Total Portfolio
Operating Expenses 1.00% 1.00% 1.00%
EXAMPLE
You would pay the following expenses on a $1,000 investment,
assuming a 5% annual return (cumulatively through the end of each
time period):
1 YEAR 3 YEAR
Prime $10 $32
Goverment 10 32
General Municipal 10 32
New Jersey Municipal - -
New York Municipal - -
California Municipal - -
Connecticut Municipal - -
The purpose of the foregoing table is to assist the investor
in understanding the various costs and expenses that an investor
in a Portfolio will bear directly or indirectly. The expenses
listed in the table for the Prime, Government and General
Municipal Portfolios are net of voluntary expense reimbursements.
The expenses of such Portfolios before expense reimbursements
would be: Prime Portfolio: Management Fees-.50%, 12b-1 fees-.45%,
Other Expenses-.12% and Total Operating Expenses-1.07%;
Government Portfolio: Management Fees- .50%, 12b-1 fees-.45%,
Other Expenses-.20% and Total Operating Expenses-1.15%; General
Municipal Portfolio: Management Fees- .50%, 12b-1 fees-.45%,
Other Expenses-.19% and Total Operating Expenses-1.14%. The
<PAGE>
category "Other Expenses" is based on the estimated amounts
expected to be incurred during each Portfolio's first fiscal
year. The example should not be considered a representation of
past or future expenses; actual expenses may be greater or less
than those shown.
INVESTMENT OBJECTIVES AND POLICIES
The investment objectives of each Portfolio are-in the
following order of priority-safety of principal, excellent
liquidity and, to the extent consistent with the first two
objectives, maximum current income (exempt from income taxes to
the extent described below in the case of the General, New
Jersey, New York, California and Connecticut Municipal
Portfolios). As a matter of fundamental policy, each Portfolio
pursues its objectives by maintaining a portfolio of high-quality
money market securities. While no Portfolio may change this
policy or the "other fundamental investment policies" described
below without shareholder approval, it may, upon notice to
shareholders, but without such approval, change non-fundamental
investment policies or create additional series or classes of
shares in order to establish portfolios which may have different
investment objectives. There can be no assurance that any
Portfolio's objectives will be achieved.
The Portfolios will comply with Rule 2a-7 under the
Investment Company Act of 1940 (the "1940 Act"), as amended from
time to time, including the diversity, quality and maturity
limitations imposed by the Rule. Accordingly, each Portfolio will
invest in securities which, at the time of investment, have
remaining maturities not exceeding 397 days, and the average
maturity of each Portfolio's investment portfolio will not exceed
90 days. A more detailed description of Rule 2a-7 is set forth
in the Fund's Statement of Additional Information.
PRIME PORTFOLIO
The money market securities in which the Prime Portfolio
invests include: (1) marketable obligations of, or guaranteed by,
the United States Government, its agencies or instrumentalities
(collectively, the "U.S. Government"); (2) certificates of
deposit, bankers' acceptances and interest-bearing savings
deposits issued or guaranteed by banks or savings and loan
associations having total assets of more than $1 billion and
which are members of the Federal Deposit Insurance Corporation
and certificates of deposit and bankers' acceptances denominated
in U.S. dollars and issued by U.S. branches of foreign banks
having total assets of at least $1 billion that are believed by
the Adviser to be of quality equivalent to that of other such
instruments in which the Portfolio may invest; (3) commercial
paper of prime quality [i.e., rated A-1+ or A-1 by Standard &
2
<PAGE>
Poor's Corporation ("Standard & Poor's") or Prime-1 by Moody's
Investors Service, Inc. ("Moody's") or, if not rated, issued by
companies having outstanding debt securities rated AAA or AA by
Standard & Poor's, or Aaa or Aa by Moody's] and participation
interests in loans extended by banks to such companies; and (4)
repurchase agreements that are collateralized in full each day by
liquid securities of the types listed above. These agreements
are entered into with "primary dealers" (as designated by the
Federal Reserve Bank of New York) in U.S. Government securities
or The Bank of New York, the Fund's Custodian, and would create a
loss to the Prime Portfolio if, in the event of a dealer default,
the proceeds from the sale of the collateral were less than the
repurchase price. The Prime Portfolio may also invest in
certificates of deposit issued by, and time deposits maintained
at, foreign branches of domestic banks described in (2) above and
prime quality dollar-denominated commercial paper issued by
foreign companies meeting the criteria specified in (3) above.
The Prime Portfolio also may invest in asset-backed
securities that meet its existing diversification, quality and
maturity criteria. Asset-backed securities are securities issued
by special purpose entities whose primary assets consist of a
pool of loans or accounts receivable. The securities may be in
the form of a beneficial interest in a special purpose trust,
limited partnership interest, or commercial paper or other debt
securities issued by a special purpose corporation. Although the
securities may have some form of credit or liquidity enhancement,
payments on the securities depend predominately upon collection
of the loans and receivables held by the issuer.
Certain Fundamental Investment Policies. To maintain
portfolio diversification and reduce investment risk, the Prime
Portfolio may not: (1) invest more than 25% of its assets in the
securities of issuers conducting their principal business
activities in any one industry although there is no such
limitation with respect to U.S. Government securities or
certificates of deposit, bankers' acceptances and interest
bearing savings deposits; (2) invest more than 5% of its assets
in securities of any one issuer (except the U.S. Government)
although with respect to one-quarter of its total assets it may
invest without regard to such limitation; (3) invest more than 5%
of its assets in the securities of any issuer (except the U.S.
Government) having less than three years of continuous operation
or purchase more than 10% of any class of the outstanding
securities of any issuer (except the U.S. Government); (4) borrow
money except from banks on a temporary basis or by entering into
reverse repurchase agreements in aggregate amounts not exceeding
15% of its assets and to facilitate the orderly maturation and
sale of portfolio securities during any periods of abnormally
3
<PAGE>
heavy redemption requests; or (5) mortgage, pledge or hypothecate
its assets except to secure such borrowings.
As a matter of operating policy, fundamental policy number
(2) would give the Prime Portfolio the ability to invest, with
respect to 25% of its assets, more than 5% of its assets in any
one issuer only in the event Rule 2a-7 is amended in the future.
GOVERNMENT PORTFOLIO
The securities in which the Government Portfolio invests are:
(1) marketable obligations of, or guaranteed by, the United
States Government, its agencies or instrumentalities
(collectively, the "U.S. Government"), including issues of the
United States Treasury, such as bills, certificates of
indebtedness, notes and bonds, and issues of agencies and
instrumentalities established under the authority of an act of
Congress; and (2) repurchase agreements that are collateralized
in full each day by the types of securities listed above. These
agreements are entered into with "primary dealers" (as designated
by the Federal Reserve Bank of New York) in U.S. Government
securities or the Fund's Custodian and would create a loss to the
Government Portfolio if, in the event of a dealer default, the
proceeds from the sale of the collateral were less than the
repurchase price. The Government Portfolio may commit up to 15%
of its net assets to the purchase of when-issued U.S. Government
securities, whose value may fluctuate prior to their settlement,
thereby creating an unrealized gain or loss to the Government
Portfolio.
Certain Fundamental Investment Policies. To maintain
portfolio diversification and reduce investment risk, the
Government Portfolio may not: (1) borrow money except from banks
on a temporary basis or by entering into reverse repurchase
agreements in aggregate amounts not exceeding 10% of its assets
and to be used exclusively to facilitate the orderly maturation
and sale of portfolio securities during any periods of abnormally
heavy redemption requests, if they should occur; such borrowings
may not be used to purchase investments and it will not purchase
any investment while any such borrowings exist; or (2) pledge,
hypothecate or in any manner transfer, as security for
indebtedness, its assets except to secure such borrowings.
MUNICIPAL PORTFOLIOS
As a matter of fundamental policy, each Municipal Portfolio,
except when assuming a temporary defensive position, must
maintain at least 80% of its total assets in high-quality
municipal securities (as opposed to the taxable investments
4
<PAGE>
described below). Normally, substantially all of each Municipal
Portfolio's income will be tax-exempt as described below.
Each Municipal Portfolio seeks maximum current income that is
exempt from income taxes, to the extent described below, by
investing principally in a portfolio of high-quality municipal
securities.
GENERAL MUNICIPAL PORTFOLIO. The General Municipal Portfolio
seeks maximum current income that is exempt from Federal income
taxes by investing principally in a diversified portfolio of
high-quality municipal securities. Such income may be subject to
state or local income taxes.
NEW JERSEY MUNICIPAL PORTFOLIO. The New Jersey Municipal
Portfolio seeks maximum current income that is exempt from
Federal and State of New Jersey personal income taxes by
investing, except when assuming a temporary defensive position,
as a matter of fundamental policy, not less than 65% of its total
assets in a portfolio of high quality municipal securities issued
by the State of New Jersey or its political subdivisions. The
New Jersey Municipal Portfolio will invest not less than 80% of
its net assets in securities the interest on which is exempt from
New Jersey personal income taxes [i.e., New Jersey municipal
securities and obligations of the U.S. Government, its agencies
and instrumentalities ("U.S. Government Securities")]. In
addition, during periods when the Portfolio's Adviser believes
that New Jersey municipal securities that meet the Portfolio's
standards are not available, the Portfolio may invest a portion
of its assets in securities whose interest payments are only
federally tax-exempt.
NEW YORK MUNICIPAL PORTFOLIO. The New York Municipal
Portfolio seeks maximum current income that is exempt from
Federal, New York State and New York City personal income taxes
by investing, except when assuming a temporary defensive
position, as a matter of fundamental policy, not less than 65% of
its total assets in a portfolio of high-quality municipal
securities issued by New York State and its political
subdivisions.
CALIFORNIA MUNICIPAL PORTFOLIO. The California Municipal
Portfolio seeks maximum current income that is exempt from
Federal and California State personal income taxes by investing,
except when assuming a temporary defensive position, as a matter
of fundamental policy, not less than 65% of its total assets in a
portfolio of high-quality municipal securities issued by the
State of California or its political subdivisions.
5
<PAGE>
CONNECTICUT MUNICIPAL PORTFOLIO. The Connecticut Municipal
Portfolio seeks maximum current income that is exempt from
Federal and Connecticut personal income taxes by investing,
except when assuming a temporary defensive position, as a matter
of fundamental policy, not less than 65% of its total assets in a
portfolio of high-quality municipal securities issued by the
State of Connecticut or its political subdivisions.
ALTERNATIVE MINIMUM TAX. Each Municipal Portfolio of the
Fund may invest without limitation in tax-exempt municipal
securities subject to the Federal alternative minimum tax (the
"AMT").
Under current Federal income tax law, (1) interest on tax-
exempt municipal securities issued after August 7, 1986 which are
"specified private activity bonds," and the proportionate share
of any exempt-interest dividends paid by a regulated investment
company which receives interest from such specified private
activity bonds, will be treated as an item of tax preference for
purposes of the AMT imposed on individuals and corporations,
though for regular Federal income tax purposes such interest will
remain fully tax-exempt, and (2) interest on all tax-exempt
obligations will be included in "adjusted current earnings" of
corporations for AMT purposes. Such bonds have provided, and may
continue to provide, somewhat higher yields than other comparable
municipal securities. See below, "Daily Dividends and Other
Distributions" and "Taxes."
Potential investors in the New Jersey, New York, California
and Connecticut Municipal Portfolios should consider the greater
risk of the concentration of such Portfolios versus the safety
that comes with less concentrated investments and should compare
yields available on portfolios of the relevant state's issues
with those of more diversified portfolios, including other
states' issues, before making an investment decision. The
Adviser believes that by maintaining each Municipal Portfolio's
investments in liquid, short-term, high-quality investments, each
Municipal Portfolio is largely insulated from the credit risks
that exist on long-term municipal securities of the relevant
state. See the Statement of Additional Information for a more
detailed discussion of the financial condition of New Jersey, New
York, California and Connecticut.
MUNICIPAL SECURITIES. The municipal securities in which each
Municipal Portfolio invests include municipal notes and short-
term municipal bonds. Municipal notes are generally used to
provide for short-term capital needs and generally have
maturities of one year or less. Examples include tax anticipation
and revenue anticipation notes which are generally issued in
6
<PAGE>
anticipation of various seasonal revenues, bond anticipation
notes, and tax-exempt commercial paper. Short-term municipal
bonds may include general obligation bonds, which are secured by
the issuer's pledge of its faith, credit and taxing power for
payment of principal and interest, and revenue bonds, which are
generally paid from the revenues of a particular facility or a
specific excise or other source.
Each Municipal Portfolio may invest in variable rate
obligations whose interest rates are adjusted either at
predesignated periodic intervals or whenever there is a change in
the market rate to which the security's interest rate is tied.
Such adjustments tend to minimize changes in the market value of
the obligation and, accordingly, enhance the ability of each
Municipal Portfolio to maintain a stable net asset value.
Variable rate securities purchased may include participation
interests in industrial development bonds backed by letters of
credit of Federal Deposit Insurance Corporation member banks
having total assets of more than $1 billion. The letters of
credit of any single bank in respect of all variable rate
obligations will not cover more than 10% of a Municipal
Portfolio's total assets.
Each of the Municipal Portfolio's municipal securities at the
time of purchase are rated within the two highest quality ratings
of Moody's (Aaa and Aa, MIG 1 and MIG 2 or VMIG 1 and VMIG 2) or
Standard & Poor's (AAA and AA or SP-1 and SP-2), or judged by the
Adviser to be of comparable quality. Securities must also meet
credit standards applied by the Adviser.
Each Municipal Portfolio also may invest in stand-by
commitments, which may involve certain expenses and risks, but
such commitments are not expected to comprise more than 5% of any
Portfolio's net assets. A Municipal Portfolio may commit up to
15% of its net assets to the purchase of when-issued securities.
The Fund's Custodian will maintain, in a separate account of the
respective Municipal Portfolio, liquid high-grade debt securities
having value equal to, or greater than, such commitments. The
price of when-issued securities, which is generally expressed in
yield terms, is fixed at the time the commitment to purchase is
made, but delivery and payment for such securities takes place at
a later time. Normally the settlement date occurs from within ten
days to one month after the purchase of the issue. The value of
when-issued securities may fluctuate prior to their settlement,
thereby creating an unrealized gain or loss to a Municipal
Portfolio.
TAXABLE INVESTMENTS. The taxable investments in which each
Municipal Portfolio may invest include obligations of the U.S.
Government and its agencies, high-quality certificates of deposit
7
<PAGE>
and bankers' acceptances, prime commercial paper and repurchase
agreements.
CERTAIN FUNDAMENTAL INVESTMENT POLICIES. To reduce
investment risk, the General Municipal Portfolio may not invest
more than 25% of its total assets in municipal securities whose
issuers are located in the same state, and no Municipal Portfolio
may: (1) invest more than 25% of its total assets in municipal
securities the interest upon which is paid from revenues of
similar-type projects; (2) invest more than 5% of its total
assets in the securities of any one issuer except the U.S.
Government, although with respect to 25% of its total assets the
General Municipal Portfolio may invest up to 10% per issuer; and
each of the New Jersey, New York, California and Connecticut
Municipal Portfolios may invest 50% of their respective total
assets in as few as four issuers (but no more than 25% of total
assets in any one issuer); or (3) purchase more than 10% of any
class of the voting securities of any one issuer except those of
the U.S. Government.
POLICIES APPLICABLE TO EACH PORTFOLIO
No Portfolio will maintain more than 10% of its net assets in
illiquid securities which include "restricted securities" subject
to legal restrictions on resale arising from an issuer's reliance
upon certain exemptions from registration under the Securities
Act of 1933, as amended (the "Securities Act"). Each Portfolio
may purchase restricted securities determined by the Adviser to
be liquid in accordance with procedures adopted by the Trustees
of the Fund, including securities eligible for resale under Rule
144A under the Securities Act and commercial paper issued in
reliance upon the exemption from registration in Section 4(2) of
the Securities Act.
PURCHASE AND REDEMPTION OF SHARES
OPENING ACCOUNTS
Instruct your broker to use one or more of Alliance Money
Market Fund's Portfolios Prime, Government, or the General, New
Jersey, New York, California or Connecticut Municipal Portfolios
in conjunction with your brokerage account. There is no minimum
for initial investment or subsequent investments.
SUBSEQUENT INVESTMENTS
BY CHECK. Mail or deliver your check or negotiable draft,
payable to your broker dealer, who will deposit it into the
Portfolio(s). Please designate the appropriate Portfolio and
indicate your brokerage account number on the check or draft.
8
<PAGE>
BY SWEEP. Alliance Fund Distributors, Inc. ("AFD") in
conjunction with Alliance Fund Services, Inc. ("AFS" or the
"Transfer Agent") has available a sweep arrangement for the
brokerage accounts of customers of ADP Financial Information
Services, Inc. ("ADP"). All cash balances in your brokerage
account in excess of $100 but less than $1,000 will be "swept"
into the Portfolio(s) of your choice on a weekly basis. However,
when the daily balance in your brokerage account exceeds $1,000,
all of the funds in your brokerage account will be "swept" daily
into the Portfolio(s) of your choice.
REDEMPTIONS
BY CONTACTING YOUR BROKER. Instruct your Broker to order a
withdrawal from your Portfolio account.
BY SWEEP. The sweep arrangement moves money from your money
market account to cover security purchases in your brokerage
account.
BY CHECK-WRITING. With this service, you may write checks
made payable to any payee in any amount of $100 or more. Checks
cannot be written for more than the principal balance (not
including any accrued dividends) in your account. First you must
fill out the signature card which you can obtain from your
Account Executive. There is no separate charge for the check-
writing service. The check-writing service enables you to
receive the daily dividends declared on the shares to be redeemed
until the day that your check is presented for payment.
ADDITIONAL INFORMATION
SHARE PRICE
Shares are sold and redeemed on a continuous basis without
sales or redemption charges at their net asset value which is
expected to be constant at $1.00 per share, although this price
is not guaranteed. The net asset value of each Portfolio's
shares is determined each business day (i.e., any weekday
exclusive of days on which the New York Stock Exchange or The
Bank of New York is closed) at 12:00 Noon and 4:00 p.m. (New York
time). The net asset value per share of a Portfolio is
calculated by taking the sum of the value of that Portfolio's
investments (amortized cost value is used for this purpose) and
any cash or other assets, subtracting liabilities, and dividing
by the total number of shares of that Portfolio outstanding. All
expenses, including the fees payable to the Adviser, are accrued
daily.
9
<PAGE>
TIMING OF INVESTMENTS AND REDEMPTIONS
The Portfolios have two transaction times each business day,
12:00 Noon and 4:00 p.m. (New York time). New investments
represented by Federal funds or bank wire monies received by The
Bank of New York at any time during a day prior to 4:00 p.m. are
entitled to the full dividend to be paid to shareholders for that
day. Shares do not earn dividends on the day a redemption is
effected regardless of whether the redemption order is received
before or after 12:00 Noon.
Redemption proceeds are normally wired or mailed either the
same or the next business day, but in no event later than seven
days, unless redemptions have been suspended or postponed due to
the determination of an "emergency" by the Securities and
Exchange Commission or to certain other unusual conditions.
DAILY DIVIDENDS AND OTHER DISTRIBUTIONS
All net income of each Portfolio is determined each business
day at 4:00 p.m. and is paid immediately thereafter pro rata to
shareholders of record of that Portfolio via automatic investment
in additional full and fractional shares of that Portfolio in
each shareholder's account. As such additional shares are
entitled to dividends on following days, a compounding growth of
income occurs.
Net income consists of all accrued interest income on a
Portfolio's assets less the Portfolio's expenses applicable to
that dividend period. Realized gains and losses of each Portfolio
are reflected in its net asset value and are not included in its
net income.
TAXES
A prospective investor should review the more detailed
discussion of federal income tax considerations relevant to each
Portfolio that is contained in the Statement of Additional
Information. In addition, each prospective investor should
consult with his/her own tax advisers as to the tax consequences
of an investment in the Portfolios, including the status of
distributions from a Portfolio in his/her own state and locality
and the possible applicability of the federal alternative minimum
tax to a portion of the distributions of the New Jersey, New
York, Connecticut, California and General Municipal Portfolios
(the "Municipal Portfolios").
The Fund intends to qualify each Portfolio each year as a
separate "regulated investment company" and as such, each
Portfolio will not be subject to Federal income and excise taxes
10
<PAGE>
on the investment company taxable income and net capital gains,
if any, distributed to shareholders.
PRIME PORTFOLIO AND GOVERNMENT PORTFOLIO. Shareholders of
the Prime Portfolio and Government Portfolio (other than tax-
exempt shareholders) will be subject to federal income tax on the
ordinary income dividends and any capital gains dividends from
these Portfolios and may also be subject to state and local
taxes. The laws of some states and localities, however, may
exempt from some taxes dividends paid on shares of the Prime
Portfolio and Government Portfolio, which are dividends
attributable to interest from obligations of the U.S. Government
and certain of its agencies and instrumentalities.
DISTRIBUTIONS FROM THE MUNICIPAL PORTFOLIOS. Distributions
to you out of tax-exempt interest income earned by each Municipal
Portfolio are not subject to Federal income tax (other than the
AMT), but, in the case of the General Portfolio, may be subject
to state or local income taxes. Any exempt-interest dividends
derived from interest on municipal securities subject to the AMT
will be a specific preference item for purposes of the federal
individual and corporate AMT. Distributions to residents of New
Jersey out of income earned by the New Jersey Portfolio from New
Jersey municipal securities or U.S. Government Securities are
exempt from New Jersey state personal income taxes. Distributions
to residents of New York out of income earned by the New York
Portfolio from New York municipal securities are exempt from and
New York state and New York City personal income taxes.
Distributions to residents of California out of income earned by
the California Portfolio from California municipal securities are
exempt from California personal income taxes. Distributions to
individuals who are residents of Connecticut out of income earned
by the Connecticut Portfolio from Connecticut municipal
securities are exempt from Connecticut personal income taxes.
Distributions from each Portfolio to a corporate shareholder are
not exempt from the corporate taxes imposed by the respective
jurisdictions. Distributions out of taxable interest income,
other investment income and short-term capital gains are taxable
to you as ordinary income and distributions of long-term capital
gains, if any, are taxable as long-term taxable gains
irrespective of the length of time you may have held your shares.
Distributions of short and long-term capital gains, if any, are
normally made near year-end. Each year shortly after December
31, the Fund will send to you tax information stating the amount
and type of all its distributions for the year just ended.
GENERAL. Distributions to shareholders will be treated in
the same manner for federal income tax purposes whether received
11
<PAGE>
in cash or reinvested in additional shares of a Portfolio. In
general, distributions by a Portfolio are taken into account by
shareholders in the year in which they are made. However,
certain distributions made during January will be treated as
having been paid by a Portfolio and received by the shareholders
on December 31 of the preceding year. A statement setting forth
the federal income tax status of all distributions made (or
deemed made) during the calendar year, including any portions
which constitute ordinary income dividends, capital gains
dividends and exempt-interest dividends and U.S. Government
interest dividends will be sent to each shareholder of a
Portfolio promptly after the end of each calendar year.
MANAGEMENT OF THE FUND
ADVISER
Alliance Capital Management L.P. (the "Adviser"), a New York
Stock Exchange listed company with principal offices at 1345
Avenue of the Americas, New York, New York 10105, has been
retained by the Fund, on behalf of each Portfolio, under an
investment advisory agreement (the "Advisory Agreement") to
provide investment advice and, in general, to conduct the
management and investment program of the Fund under the
supervision and control of the Fund's Trustees.
Alliance Capital Management Corporation, the sole general
partner of, and the owner of a 1% general partnership interest
in, the Adviser is an indirect wholly-owned subsidiary of The
Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated, a holding company controlled by AXA, a
French insurance holding company. Certain information concerning
the ownership and control of Equitable by AXA is set forth in the
Statement of Additional Information under "Management of the
Fund."
Under its Advisory Agreement with the Fund, the Adviser
provides investment advisory services and order placement
facilities for the Fund. Under the Advisory Agreement, each
Portfolio pays the Adviser a fee at the annual rate of .50% of a
Portfolio's average daily net assets. The Adviser may, from time
to time, voluntarily waive a portion of its advisory fees payable
from one or more of the Portfolios.
In addition to the payments to the Adviser under the Advisory
Agreement described above, the Fund pays certain other costs,
12
<PAGE>
including (i) custody, transfer and dividend disbursing expenses,
(ii) fees of the Trustees who are not affiliated persons, (iii)
legal and auditing expenses, (iv) clerical, accounting,
administrative and other office costs, (v) costs of personnel
providing services to the Fund, as applicable, (vi) costs of
printing prospectuses and shareholder reports, (vii) expenses and
fees related to registration and filing with the Securities and
Exchange Commission and with state regulatory authorities and
(viii) such promotional expenses as may be contemplated by an
effective plan pursuant to Rule 12b-1 under the 1940 Act.
Under a Distribution Services Agreement (the "Agreement"),
each Portfolio pays the Adviser at a maximum annual rate of .45
of 1% of the Portfolio's aggregate average daily net assets.
Substantially all such monies (together with significant amounts
from the Adviser's own resources) are paid by the Adviser to
broker-dealers and other financial intermediaries for their
distribution assistance and to banks and other depository
institutions for administrative and accounting services provided
to the Portfolios, with any remaining amounts being used to
partially defray other expenses incurred by the Adviser in
distributing the Portfolios' shares. The Fund believes that the
administrative services provided by depository institutions are
permissible activities under present banking laws and regulations
and will take appropriate actions (which should not adversely
affect the Portfolios or their shareholders) in the future to
maintain such legal conformity should any changes in, or
interpretations of, such laws or regulations occur.
ADMINISTRATOR
Pursuant to an Administration Agreement, ADP Financial
Information Services, Inc., a wholly-owned subsidiary of
Automatic Data Processing, Inc., serves as administrator of the
Fund, on behalf of the Portfolios. The Administrator performs or
arranges for the performance of the administrative and
shareholder services (i.e., services other than investment
advice and related portfolio activities) necessary for the
operation of the Fund, including arranging for the maintenance of
certain of the books and records of the Fund, arranging for the
preparation of certain reports and other documents required by
the Federal securities laws and regulations and providing the
Fund with administrative office facilities. ADP is entitled to
receive from each Portfolio a fee computed daily and paid monthly
at a maximum annual rate equal to .05% of such Portfolio's
average daily net assets. ADP may, from time to time,
voluntarily waive all or a portion of its fees payable to it
under the Administration Agreement. ADP shall not have any
responsibility or authority for any Portfolio's investments, the
13
<PAGE>
determination of investment policy, or for any matter pertaining
to the distribution of Portfolio shares.
TRANSFER AGENT AND DISTRIBUTOR
Alliance Fund Services, Inc., P.O. Box 1520, Secaucus, NJ
07096-1520 and Alliance Fund Distributors, Inc., 1345 Avenue of
the Americas, New York, NY 10105, are the Fund's Transfer Agent
and Distributor, respectively.
ORGANIZATION
Each of the Portfolios is a series of Alliance Money Market
Fund, an open-end management investment company registered under
the 1940 Act and organized as a Massachusetts business trust on
October 26, 1994. The New Jersey, New York, California and
Connecticut Municipal Portfolios are non-diversified series of
the Fund. Each Portfolio's activities are supervised by the
Trustees of the Fund. Normally, shares of each series are
entitled to one vote per share, and vote as a single series, on
matters that affect each series in substantially the same manner.
Massachusetts law does not require annual meetings of
shareholders and it is anticipated that shareholder meetings will
be held only when required by Federal law. Shareholders have
available certain procedures for the removal of Trustees.
14
00250217.AE6
<PAGE>
ALLIANCE MONEY MARKET FUND
- -----------------------------------------------------------------
P.O. Box 1520, Secaucus, New Jersey 07096
Toll Free (800) 221-5672
- -----------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
___________, 1995
- -----------------------------------------------------------------
This Statement of Additional Information is not a prospectus but
supplements and should be read in conjunction with the Fund's
current Prospectus dated ___________, 1995. A copy of the
Prospectus may be obtained by contacting the Fund at the address
or telephone number shown above.
TABLE OF CONTENTS
PAGE
INVESTMENT OBJECTIVES AND POLICIES 2
INVESTMENT RESTRICTIONS 15
MANAGEMENT OF THE FUND 17
PURCHASE AND REDEMPTION OF SHARES 28
DAILY DIVIDENDS - DETERMINATION OF NET ASSET VALUE 29
TAXES 31
GENERAL INFORMATION 33
SPECIAL RISK FACTORS IN CONCENTRATION IN A SINGLE STATE 37
APPENDIX A - DESCRIPTION OF MUNICIPAL SECURITIES A-1
APPENDIX B - DESCRIPTION OF SECURITIES RATINGS B-1
FINANCIAL STATEMENTS F-1
<PAGE>
- -----------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- -----------------------------------------------------------------
Alliance Money Market Fund (the "Fund") is an open-end
management investment company. The Fund consists of seven
distinct portfolios, the Prime Portfolio, the Government
Portfolio, the New Jersey Municipal Portfolio, the New York
Municipal Portfolio, the Connecticut Municipal Portfolio, the
California Municipal Portfolio and the General Municipal
Portfolio (hereinafter sometimes referred to as a "Portfolio" or
the "Portfolios"), each of which is, in effect, a separate series
issuing a separate class of shares. (Each of the New Jersey, New
York, Connecticut, California and General Municipal Portfolios
are hereinafter sometimes referred to as a "Municipal Portfolio",
or collectively as or the "Municipal Portfolios").
The investment objectives of each Portfolio are - in the
following order of priority - safety of principal, excellent
liquidity, and, to the extent consistent with the first two
objectives, maximum current income (exempt from income taxes to
the extent described below in the case of the New Jersey, New
York, Connecticut, California and the General Municipal
Portfolios). As a matter of fundamental policy, each Portfolio
pursues its objectives by maintaining a portfolio of high-quality
money market securities. Each Municipal Portfolio, except when
assuming a temporary defensive position, must maintain at least
80% of its total assets in high-quality municipal securities (as
opposed to taxable investments described below). While no
Portfolio may change this policy or the "other fundamental
investment policies" described below without shareholder
approval, it may, upon notice to shareholders, but without such
approval, change non-fundamental investment policies or create
additional series or classes of shares in order to establish
portfolios which may have different investment objectives.
Normally, substantially all of each Municipal Portfolio's income
will be tax-exempt as described below. There can be no assurance
that any Portfolio's objectives will be achieved.
Each Portfolio will comply with Rule 2a-7 under the
Investment Company Act of 1940 (the "1940 Act"), as amended from
time to time, including the diversity, quality and maturity
limitations imposed by the Rule. Accordingly, each Portfolio
will invest in securities which, at the time of investment, have
remaining maturities not exceeding 397 days and the average
maturity of each Portfolio's investment portfolio will not exceed
90 days. A more detailed description of Rule 2a-7 is set forth
on page 4.
2
<PAGE>
PRIME AND GOVERNMENT PORTFOLIOS. The investment
objectives of each of the Prime Portfolio and the Government
Portfolio are - in the following order of priority - safety of
principal, excellent liquidity, and maximum current income to the
extent consistent with the first two objectives.
MUNICIPAL PORTFOLIOS
GENERAL MUNICIPAL PORTFOLIO. The General Municipal
Portfolio (the "General Portfolio") seeks maximum current income
that is exempt from Federal income taxes by investing principally
in a diversified portfolio of high-quality municipal securities.
Such income may be subject to state or local income taxes.
NEW JERSEY MUNICIPAL PORTFOLIO. The New Jersey
Municipal Portfolio (the "New Jersey Portfolio") seeks maximum
current income that is exempt from Federal and State of New
Jersey personal income taxes by investing, as a matter of
fundamental policy, except when assuming a temporary defensive
position, not less than 65% of its total assets in a portfolio of
high quality municipal securities issued by the State of New
Jersey or its political subdivisions. The New Jersey Portfolio
will invest not less than 80% of its net assets in securities the
interest on which is exempt from New Jersey personal income taxes
[i.e., New Jersey municipal securities and obligations of the
U.S. Government, its agencies and instrumentalities ("U.S.
Government Securities")]. In addition, during periods when the
Portfolio's Adviser believes that New Jersey municipal securities
that meet the Portfolio's standards are not available, the
Portfolio may invest a portion of its assets in securities whose
interest payments are only federally tax-exempt. Shares of the
New Jersey Portfolio are offered only to New Jersey residents.
NEW YORK MUNICIPAL PORTFOLIO. The New York Municipal
Portfolio (the "New York Portfolio") seeks maximum current income
that is exempt from Federal, New York State and New York City
personal income taxes by investing principally in a non-
diversified portfolio of high-quality municipal securities issued
by New York State or its political subdivisions. Except when the
New York Portfolio assumes a temporary defensive position, not
less than 65% of its total assets will, as a matter of
fundamental policy, be so invested. Shares of the New York
Portfolio are offered only to New York State residents.
CONNECTICUT MUNICIPAL PORTFOLIO. The Connecticut
Municipal Portfolio (the "Connecticut Portfolio") seeks maximum
current income that is exempt from Federal and Connecticut
3
<PAGE>
personal income taxes by investing principally in a non-
diversified portfolio of high-quality municipal securities issued
by Connecticut or its political subdivisions. Except when the
Connecticut Portfolio assumes a temporary defensive position, not
less than 65% of its total assets will, as a matter of
fundamental policy, be so invested. Shares of the Connecticut
Portfolio are offered only to Connecticut residents.
CALIFORNIA MUNICIPAL PORTFOLIO. The California
Municipal Portfolio (the "California Portfolio") seeks maximum
current income that is exempt from both Federal income taxes and
California personal income tax by investing principally in a non-
diversified portfolio of high-quality municipal securities issued
by the State of California or its political subdivisions. Except
when the California Portfolio assumes a temporary defensive
position, not less than 65% of its total assets will, as a matter
of fundamental policy, be so invested. Shares of the California
Portfolio are available only to California residents.
POLICIES APPLICABLE TO EACH PORTFOLIO
RULE 2A-7 OF THE 1940 ACT. The Fund will comply with
Rule 2a-7 under the 1940 Act, as amended from time to time,
including the diversity, quality and maturity limitations imposed
by the Rule. Currently, pursuant to Rule 2a-7, a Portfolio may
invest only in "eligible securities," as that term is defined in
the Rule. Generally, an eligible security is a security that (i)
is denominated in U.S. Dollars and has a remaining maturity of
397 days or less; (ii) is rated, or is issued by an issuer with
short-term debt outstanding that is rated, in one of the two
highest rating categories by two nationally recognized
statistical rating organizations ("NRSROs") or, if only one NRSRO
has issued a rating, by that NRSRO; and (iii) has been determined
by the Adviser to present minimal credit risks pursuant to
procedures approved by the Trustees. A security that originally
had a maturity of greater than 397 days is an eligible security
if its remaining maturity at the time of purchase is 397 calendar
days or less and the issuer has outstanding short-term debt that
would be an eligible security. Unrated securities may also be
eligible securities if the Adviser determines that they are of
comparable quality to a rated eligible security pursuant to
guidelines approved by the Trustees. A description of the
ratings of some NRSROs appears in the Appendix attached hereto.
Under Rule 2a-7 the Prime Portfolio and the Government
Portfolio may not invest more than five percent of their
respective assets in the securities of any one issuer other than
the United States Government, its agencies and instrumentalities.
4
<PAGE>
In addition, the Prime Portfolio and the Government Portfolio may
not invest in a security that has received, or is deemed
comparable in quality to a security that has received, the second
highest rating by the requisite number of NRSROs (a "second tier
security") if immediately after the acquisition thereof either
the Prime Portfolio or the Government Portfolio would have
invested more than (A) the greater of one percent of its total
assets or one million dollars in securities issued by that issuer
which are second tier securities, or (B) five percent of its
total assets in second tier securities.
ILLIQUID SECURITIES. The Fund has adopted the following
investment policy which may be changed by the vote of the
Trustees: Each Portfolio will not maintain more than 10% of a
Portfolio's net assets (taken at market value) in illiquid
securities. For this purpose, illiquid securities include, among
others, (a) securities that are illiquid by virtue of the absence
of a readily available market or legal or contractual restriction
on resale and (b) repurchase agreements not terminable within
seven days.
RESTRICTED SECURITIES. A Portfolio may purchase
restricted securities determined by the Adviser to be liquid in
accordance with procedures adopted by the Trustees, including
securities eligible for resale under Rule 144A of the Securities
Act of 1933 (the "Securities Act"). Restricted securities are
securities subject to contractual or legal restrictions on
resale, such as those arising from an issuer's reliance upon
certain exemptions from registration under the Securities Act.
In recent years, a large institutional market has
developed for certain types of restricted securities including,
among others, private placements, repurchase agreements,
commercial paper, foreign securities and corporate bonds and
notes. These instruments are often restricted securities because
they are sold in transactions not requiring registration. For
example, commercial paper issues in which a Portfolio may invest
include, among others, securities issued by major corporations
without registration under the Securities Act in reliance on the
exemption from registration afforded by Section 3(a)(3) of such
Act and commercial paper issued in reliance on the private
placement exemption from registration which is afforded by
Section 4(2) of the Securities Act ("Section 4(2) paper").
Section 4(2) paper is restricted as to disposition under the
Federal securities laws in that any resale must also be made in
an exempt transaction. Section 4(2) paper is normally resold to
other institutional investors through or with the assistance of
investment dealers who make a market in Section 4(2) paper, thus
providing liquidity. Institutional investors, rather than
5
<PAGE>
selling these instruments to the general public, often depend on
an efficient institutional market in which such restricted
securities can be readily resold in transactions not involving a
public offering. In many instances, therefore, the existence of
contractual or legal restrictions on resale to the general public
does not, in practice, impair the liquidity of such investments
from the perspective of institutional holders. In recognition of
this fact, the Staff of the Securities and Exchange Commission
has stated that Section 4(2) paper may be determined to be liquid
by the Trustees, so long as certain conditions, which are
described below, are met.
In 1990, in part to enhance the liquidity in the
institutional markets for restricted securities, the Securities
and Exchange Commission (the "Commission") adopted Rule 144A
under the Securities Act to establish a safe harbor from the
Securities Act's registration requirements for resale of certain
restricted securities to qualified institutional buyers.
Pursuant to Rule 144A, the institutional restricted securities
markets may provide both readily ascertainable values for
restricted securities and the ability to liquidate an investment
in order to satisfy share redemption orders on a timely basis.
An insufficient number of qualified institutional buyers
interested in purchasing certain restricted securities held by
each Portfolio, however, could affect adversely the marketability
of such portfolio securities and a Portfolio might be unable to
dispose of such securities promptly or at reasonable prices.
Rule 144A has already produced enhanced liquidity for many
restricted securities, and market liquidity for such securities
may continue to expand as a result of Rule 144A and the
consequent inception of the PORTAL System sponsored by the
National Association of Securities Dealers, Inc., an automated
system for the trading, clearance and settlement of unregistered
securities.
The Trustees have the ultimate responsibility for
determining whether specific securities are liquid or illiquid.
The Trustees have delegated the function of making day-to-day
determinations of liquidity to the Adviser, pursuant to
guidelines approved by the Trustees.
Alliance takes into account a number of factors in
determining whether a restricted security being considered for
purchase is liquid, including at least the following:
(i) the frequency of trades and quotations for the
security;
(ii) the number of dealers making quotations to purchase
or sell the security;
6
<PAGE>
(iii) the number of other potential purchasers of the
security;
(iv) the number of dealers undertaking to make a market
in the security;
(v) the nature of the security (including its
unregistered nature) and the nature of the
marketplace for the security (e.g., the time needed
to dispose of the security, the method of
soliciting offers and the mechanics of transfer);
and
(vi) any applicable Commission interpretation or
position with respect to such types of securities.
To make the determination that an issue of Section 4(2)
paper is liquid, Alliance must conclude that the following
conditions have been met:
(i) the Section 4(2) paper must not be traded flat or
in default as to principal or interest; and
(ii) the Section 4(2) paper must be rated in one of the
two highest rating categories by at least two
NRSROs, or if only one NRSRO rates the security, by
that NRSRO; if the security is unrated, Alliance
must determine that the security is of equivalent
quality.
Alliance must also consider the trading market for the
specific security, taking into account all relevant factors.
Following the purchase of a restricted security by a
Portfolio, Alliance monitors continuously the liquidity of such
security and reports to the Trustees regarding purchases of
liquid restricted securities.
INVESTMENTS ISSUED BY FOREIGN BRANCHES OF BANKS.
Subject to its policy of not investing 25% or more of its total
assets in instruments issued by foreign branches of foreign banks
and other foreign entities, each Portfolio may make investments
in dollar-denominated certificates of deposit and bankers'
acceptances issued or guaranteed by, or dollar-denominated time
deposits maintained at, foreign branches of U.S. banks and U.S.
and foreign branches of foreign banks, and prime quality dollar-
denominated commercial paper issued by foreign companies. To the
extent that a Portfolio makes such investments, consideration is
given to their domestic marketability, the lower reserve
requirements generally mandated for overseas banking operations,
the possible impact of interruptions in the flow of international
7
<PAGE>
currency transactions, potential political and social instability
or expropriation, imposition of foreign taxes, the lower level of
government supervision of issuers, the difficulty in enforcing
contractual obligations and the lack of uniform accounting and
financial reporting standards. There can be no assurance, as is
true with all investment companies, that a Portfolio's objective
will be achieved.
FUNDAMENTAL POLICIES. Each Portfolio's investment
objective may not be changed without the affirmative vote of a
majority of the Portfolio's outstanding shares as defined below.
Except as otherwise provided, each Portfolio's investment
policies are not designated "fundamental policies" within the
meaning of the Act and may, therefore, be changed by the Trustees
of the Portfolio without a shareholder vote. However, a
Portfolio will not change its investment policies without
contemporaneous written notice to shareholders.
SPECIAL CONSIDERATIONS OF MUNICIPAL PORTFOLIOS
NEW JERSEY, NEW YORK, CONNECTICUT AND CALIFORNIA
MUNICIPAL PORTFOLIOS. Apart from the risks associated with
investment in any money market fund seeking tax-exempt income,
such as default by municipal issuers and fluctuation in short-
term interest rates, investors in the New Jersey, New York,
California and Connecticut Municipal Portfolios should consider
the greater risks of each Municipal Portfolio's concentration
versus the safety that comes with a less concentrated investment
portfolio and should compare yields available on portfolios of
New Jersey, New York, California and Connecticut issues,
respectively, with those of more diversified portfolios,
including other states' issues, before making an investment
decision. Each of such Municipal Portfolios is a non-diversified
investment company and, accordingly, the permitted concentration
of investments may present greater risks than in the case of a
diversified company. (See below "Special Risk Factors in
Concentration in a Single State.")
To the extent that suitable New Jersey, New York,
Connecticut and California municipal securities, as applicable,
are not available for investment by the respective Municipal
Portfolio, the respective Municipal Portfolio also may purchase
municipal securities issued by other states and political
subdivisions. The dividends designated as derived from interest
income on such municipal securities generally will be exempt from
Federal income taxes but, with respect to: (i) non-New Jersey
municipal securities earned by the New Jersey Portfolio, such
dividends will be subject to New Jersey personal income taxes;
(ii) non-New York municipal securities owned by the New York
Portfolio, such dividends will be subject to New York state and
8
<PAGE>
New York City personal income taxes; (iii) non-Connecticut
municipal securities owned by the Connecticut Portfolio, such
dividends will be subject to Connecticut personal income taxes;
and (iv) non-California municipal securities owned by the
California Portfolio, such dividends will be subject to
California personal income taxes.
MUNICIPAL SECURITIES. The term "municipal securities,"
as used in reference to the Municipal Portfolios in the
Prospectus and this Statement of Additional Information, means
obligations issued by or on behalf of states, territories, and
possessions of the United States or their political subdivisions,
agencies and instrumentalities, the interest from which is exempt
(subject to the alternative minimum tax) from Federal income
taxes. The municipal securities in which each Portfolio invests
are limited to those obligations which at the time of purchase:
1. are backed by the full faith and credit of the United
States Government; or
2. are municipal notes rated MIG-1/VMIG-1 or MIG-2/VMIG-2
by Moody's Investors Service, Inc. ("Moody's") or SP-1
or SP-2 by Standard and Poor's Corporation ("S&P"), or,
if not rated, are of equivalent investment quality as
determined by the Adviser and ultimately reviewed by the
Trustees; or
3. are municipal bonds rated Aa or higher by Moody's, AA or
higher by S&P or, if not rated, are of equivalent
investment quality as determined by the Adviser and
ultimately reviewed by the Trustees; or
4. are other types of municipal securities, provided that
such obligations are rated Prime-1 by Moody's, A-1 or
higher by S&P or, if not rated, are of equivalent
investment quality as determined by the Adviser and
ultimately reviewed by the Trustees. (See Appendix A
for a description of municipal securities and Appendix B
for a description of these ratings.)
No Municipal Portfolio will invest 25% or more of its
total assets in the securities of non-governmental issuers
conducting their principal business activities in any one
industry.
ALTERNATIVE MINIMUM TAX. Each Municipal Portfolio of
the Fund may invest without limitation in tax-exempt municipal
securities subject to the alternative minimum tax (the "AMT").
Under current Federal income tax law, (1) interest on tax-exempt
municipal securities issued after August 7, 1986 which are
"specified private activity bonds," and the proportionate share
9
<PAGE>
of any exempt-interest dividend paid by a regulated investment
company which receives interest from such specified private
activity bonds, will be treated as an item of tax preference for
purposes of the AMT imposed on individuals and corporations,
though for regular Federal income tax purposes such interest will
remain fully tax-exempt, and (2) interest on all tax-exempt
obligations will be included in "adjusted current earnings" of
corporations for AMT purposes. Such private activity bonds
("AMT-Subject Bonds") have provided, and may continue to provide,
somewhat higher yields than other comparable municipal
securities.
Investors should consider that, in most instances, no
state, municipality or other governmental unit with taxing power
will be obligated with respect to AMT-Subject Bonds. AMT-Subject
Bonds are in most cases revenue bonds and do not generally have
the pledge of the credit or the taxing power, if any, of the
issuer of such bonds. AMT-Subject Bonds are generally limited
obligations of the issuer supported by payments from private
business entities and not by the full faith and credit of a state
or any governmental subdivision. Typically the obligation of the
issuer of an AMT-Subject Bond is to make payments to bond holders
only out of and to the extent of, payments made by the private
business entity for whose benefit the AMT-Subject Bonds were
issued. Payment of the principal and interest on such revenue
bonds depends solely on the ability of the user of the facilities
financed by the bonds to meet its financial obligations and the
pledge, if any, of real and personal property so financed as
security for such payment. It is not possible to provide
specific detail on each of these obligations in which Fund assets
may be invested.
TAXABLE SECURITIES. Although each Municipal Portfolio
of the Fund is, and expects to be, largely invested in municipal
securities, each such Municipal Portfolio may elect to invest up
to 20% of its total assets in taxable money market securities
when such action is deemed to be in the best interests of
shareholders. Such taxable money market securities also are
limited to remaining maturities not exceeding 397 days at the
time of a Municipal Portfolio's investment, and such Municipal
Portfolio's municipal and taxable securities are maintained at a
dollar-weighted average of 90 days or less. Taxable money market
securities purchased by a Municipal Portfolio are limited to
those described below:
1. marketable obligations of, or guaranteed by, the
United States Government, its agencies or instrumentalities; or
2. certificates of deposit, bankers' acceptances and
interest-bearing savings deposits of banks having total assets of
10
<PAGE>
more than $1 billion and which are members of the Federal Deposit
Insurance Corporation; or
3. commercial paper of prime quality rated A-1 or
higher by S&P or Prime-1 by Moody's or, if not rated, issued by
companies which have an outstanding debt issue rated AA or higher
by S&P, or Aa or higher by Moody's. (See Appendix B for a
description of these ratings.)
MUNICIPAL SECURITIES GENERALLY. Municipal securities
historically have not been subject to registration with the
Commission. Obligations of issuers of municipal securities are
subject to the provisions of bankruptcy, insolvency, and other
laws affecting the rights and remedies of creditors, such as the
Bankruptcy Code. In addition, the obligations of such issuers
may become subject to laws enacted in the future by Congress,
state legislatures, or referenda extending the time for payment
of principal and/or interest, or imposing other constraints upon
enforcement of such obligations or upon the ability of
municipalities to levy taxes. There is also the possibility
that, as a result of litigation or other conditions, the ability
of any issuer to pay, when due, the principal of, and interest
on, its municipal securities may be materially affected.
OTHER INVESTMENT PRACTICES
ASSET-BACKED SECURITIES. The Prime and Government
Portfolios may invest in asset-backed securities that meet its
existing diversification, quality and maturity criteria. Asset-
backed securities are securities issued by special purpose
entities whose primary assets consist of a pool of loans or
accounts receivable. The securities may be in the form of a
beneficial interest in a special purpose trust, limited
partnership interest, or commercial paper or other debt
securities issued by a special purpose corporation. Although the
securities may have some form of credit or liquidity enhancement,
payments on the securities depend predominately upon collection
of the loans and receivables held by the issuer.
VARIABLE RATE OBLIGATIONS. The interest rate payable on
certain securities in which a Portfolio may invest, called
"variable rate" obligations, is not fixed and may fluctuate based
upon changes in market rates. The interest rate payable on a
variable rate security is adjusted either at pre-designated
periodic intervals or whenever there is a change in the market
rate to which the security's interest rate is tied. Other
features may include the right of a Portfolio to demand
prepayment of the principal amount of the obligation prior to its
stated maturity and the right of the issuer to prepay the
principal amount prior to maturity. The main benefit of a
variable rate security is that the interest rate adjustment
11
<PAGE>
minimizes changes in the market value of the obligation. As a
result, the purchase of variable rate securities enhances the
ability of a Portfolio to maintain a stable net asset value per
share and to sell an obligation prior to maturity at a price
approximately equal to the full principal amount. The payment of
principal and interest by issuers of certain securities purchased
by a Portfolio may be guaranteed by letters of credit or other
credit facilities offered by banks or other financial
institutions. Such guarantees will be considered in determining
whether a security meets a Portfolio's investment quality
requirements.
Variable rate obligations purchased by a Portfolio may
include participation interests in variable rate industrial
development bonds that are backed by irrevocable letters of
credit or guarantees of banks that meet the criteria for banks
described above in "Taxable Securities." Purchase of a
participation interest gives a Portfolio an undivided interest in
certain such bonds. A Portfolio can exercise the right, on not
more than 30 days' notice, to sell such an instrument back to the
bank from which it purchased the instrument and draw on the
letter of credit for all or any part of the principal amount of
such Portfolio's participation interest in the instrument, plus
accrued interest, but will do so only (i) as required to provide
liquidity to such Portfolio, (ii) to maintain a high quality
investment portfolio or (iii) upon a default under the terms of
the demand instrument. Banks retain portions of the interest
paid on such variable rate industrial development bonds as their
fees for servicing such instruments and the issuance of related
letters of credit and repurchase commitments. No single bank
will issue its letters of credit with respect to variable rate
obligations or participation interests therein covering more than
10% of the total assets of a Portfolio. Such Portfolio will not
purchase participation interests in variable rate industrial
development bonds unless it receives an opinion of counsel or a
ruling of the Internal Revenue Service that interest earned by
such Portfolio from the bonds in which it holds participation
interests is exempt from Federal income taxes. Alliance will
monitor the pricing, quality and liquidity of variable rate
demand obligations and participation interests therein held by
such Portfolio on the basis of published financial information,
rating agency reports and other research services to which
Alliance may subscribe.
STANDBY COMMITMENTS. A Portfolio may purchase
securities together with the right to resell them to the seller
at an agreed-upon price or yield within specified periods prior
to their maturity dates. Such a right to resell is commonly
known as a "standby commitment," and the aggregate price which
such Portfolio pays for securities with a standby commitment may
12
<PAGE>
be higher than the price which otherwise would be paid. The
primary purpose of this practice is to permit a Portfolio to be
as fully invested as practicable in securities while preserving
the necessary flexibility and liquidity to meet unanticipated
redemptions. In this regard, a Portfolio acquires standby
commitments solely to facilitate portfolio liquidity and does not
exercise its rights thereunder for trading purposes. Since the
value of a standby commitment is dependent on the ability of the
standby commitment writer to meet its obligation to repurchase,
each Portfolio's policy is to enter into standby commitment
transactions only with securities dealers which are determined to
present minimal credit risks.
The acquisition of a standby commitment does not affect
the valuation or maturity of the underlying securities which
continue to be valued in accordance with the amortized cost
method. Standby commitments acquired by a Portfolio are valued
at zero in determining net asset value. Where a Portfolio pays
directly or indirectly for a standby commitment, its cost is
reflected as unrealized depreciation for the period during which
the commitment is held. Standby commitments do not affect the
average weighted maturity of a Portfolio's portfolio of
securities. Stand-by commitments are not expected to comprise
more than 5% of any Portfolio's net assets.
WHEN-ISSUED SECURITIES. Securities are frequently
offered on a "when-issued" basis. When so offered, the price,
which is generally expressed in yield terms, is fixed at the time
the commitment to purchase is made, but delivery and payment for
the when-issued securities take place at a later date. Normally,
the settlement date occurs within one month after the purchase of
bonds and notes. During the period between purchase and
settlement, no payment is made by a Portfolio to the issuer and,
thus, no interest accrues to such Portfolio from the transaction.
When-issued securities may be sold prior to the settlement date,
but a Portfolio makes when-issued commitments only with the
intention of actually acquiring the securities. To facilitate
such acquisitions, the Fund's Custodian will maintain, in a
separate account of each Portfolio, cash, U.S. Government or
other liquid high-grade debt securities, having value equal to,
or greater than, such commitments. Similarly, a separate account
will be maintained to meet obligations in respect of reverse
repurchase agreements. On delivery dates for such transactions,
a Portfolio will meet its obligations from maturities or sales of
the securities held in the separate account and/or from the
available cash flow. If a Portfolio, however, chooses to dispose
of the right to acquire a when-issued security prior to its
acquisition, it can incur a gain or loss. At the time a
Portfolio makes the commitment to purchase a security on a when-
13
<PAGE>
issued basis, it records the transaction and reflects the value
of the security in determining its net asset value. No when-
issued commitments will be made if, as a result, more than 15% of
a Portfolio's net assets would be so committed.
GENERAL. Yields on debt securities are dependent on a
variety of factors, including the general condition of the money
market and of the municipal bond and municipal note market, the
size of a particular offering, the maturity of the obligation and
the rating of the issue. Securities with longer maturities tend
to produce higher yields and are generally subject to greater
price movements than obligations with shorter maturities. (An
increase in interest rates will generally reduce the market value
of portfolio investments, and a decline in interest rates will
generally increase the value of portfolio investments. There can
be no assurance, as is true with all investment companies, that a
Portfolio's objectives will be achieved. The achievement of a
Portfolio's investment objectives is dependent in part on the
continuing ability of the issuers of securities in which a
Portfolio invests to meet their obligations for the payment of
principal and interest when due. Each Portfolio generally will
hold securities to maturity rather than follow a practice of
trading. However, a Portfolio may seek to improve portfolio
income by selling certain portfolio securities prior to maturity
in order to take advantage of yield disparities that occur in
securities markets.)
REPURCHASE AGREEMENTS. Each Portfolio may also enter
into repurchase agreements pertaining to the types of securities
in which it may invest. A repurchase agreement arises when a
buyer purchases a security and simultaneously agrees to resell it
to the vendor at an agreed-upon future date, normally one day or
a few days later. The resale price is greater than the purchase
price, reflecting an agreed-upon market rate which is effective
for the period of time the buyer's money is invested in the
security and which is not related to the coupon rate on the
purchased security. Each Portfolio requires continuous
maintenance of collateral in an amount equal to, or in excess of,
the market value of the securities which are the subject of the
agreement. In the event that a vendor defaulted on its
repurchase obligation, a Portfolio might suffer a loss to the
extent that the proceeds from the sale of the collateral were
less than the repurchase price. If the vendor became bankrupt,
the Portfolio might be delayed in selling the collateral.
Repurchase agreements may be entered into with member banks of
the Federal Reserve System (including the Fund's Custodian) or
"primary dealers" (as designated by the Federal Reserve Bank of
New York) in U.S. Government securities. It is each Portfolio's
current practice to enter into repurchase agreements only with
such primary dealers and its Custodian, and the Fund has adopted
14
<PAGE>
procedures for monitoring the creditworthiness of such
organizations.
REVERSE REPURCHASE AGREEMENTS. Each Portfolio may enter
into reverse repurchase agreements, which involve the sale of
securities held by such Portfolio with an agreement to repurchase
the securities at an agreed upon price, date and interest
payment, although no Portfolio currently intends to enter into
such agreements.
- -----------------------------------------------------------------
INVESTMENT RESTRICTIONS
- -----------------------------------------------------------------
Unless specified to the contrary, the following
restrictions apply to each Portfolio and are fundamental policies
which may not be changed with respect to each Portfolio without
the affirmative vote of the holders of a majority of such
Portfolio's outstanding voting securities, which means with
respect to any Portfolio (1) 67% or more of the shares
represented at a meeting at which more than 50% of the
outstanding shares are present in person or by proxy or (2) more
than 50% of the outstanding shares, whichever is less. If a
percentage restriction is adhered to at the time of an
investment, a later increase or decrease in percentage resulting
from a change in values of portfolio securities or in the amount
of a Portfolio's assets will not constitute a violation of that
restriction.
Each Portfolio:
1. May not, in the case of the Prime Portfolio, invest more
than 25% of its total assets in the securities of
issuers conducting their principal business activities
in any one industry, provided that for purposes of this
policy (a) there is no limitation with respect to
investments in municipal securities (including
industrial development bonds), securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities, certificates of deposit, bankers'
acceptances and interest-bearing savings deposits, and
(b) consumer finance companies, industrial finance
companies and gas, electric, water and telephone utility
companies are each considered to be separate industries.
For purposes of this restriction and those set forth in
restrictions 2 and 3 below, a Portfolio will regard the
entity which has the primary responsibility for the
payment of interest and principal as the issuer;
15
<PAGE>
2. May not invest more than 5% of its total assets in the
securities of any one issuer (other than securities
issued or guaranteed by the U.S. Government, its
agencies or instrumentalities) except that with respect
to 25% of its total assets (50% in the case of the New
Jersey Municipal Portfolio, the New York Municipal
Portfolio, the Connecticut Municipal Portfolio and the
California Municipal Portfolio), (i) the General
Municipal Portfolio may invest not more than 10% of such
total assets in the securities of any one issuer and
(ii) each of the New Jersey, New York, Connecticut and
California Municipal Portfolios may invest in the
securities of as few as four issuers (provided that no
more than 25% of the respective Municipal Portfolio's
total assets are invested in the securities of any one
issuer). For purposes of such 5% and 10% limitations,
the issuer of the letter of credit or other guarantee
backing a participation interest in a variable rate
industrial development bond is deemed to be the issuer
of such participation interest;
3. May not purchase more than 10% of any class of the
voting securities of any one issuer except securities
issued or guaranteed by the U.S. Government, its
agencies or instrumentalities;
4. May not, in the cases of the Prime Portfolio and the
Government Portfolio, borrow money except from banks on
a temporary basis or via entering into reverse
repurchase agreements for extraordinary or emergency
purposes in an aggregate amount not to exceed 15% (10%
in the case of the Government Portfolio) of the
Portfolio's total assets. Such borrowings may be used,
for example, to facilitate the orderly maturation and
sale of portfolio securities during periods of
abnormally heavy redemption requests, if they should
occur, such borrowings may not be used to purchase
investments and such Portfolio will not purchase any
investment while any such borrowings exist;
5. May not, in the cases of the Prime Portfolio and the
Government Portfolio, pledge, hypothecate, mortgage or
otherwise encumber its assets except to secure
borrowings, including reverse repurchase agreements,
effected within the limitations set forth in restriction
4. To meet the requirements of regulations in certain
states, a Portfolio, as a matter of operating policy,
will limit any such pledging, hypothecating or
mortgaging to 15% of its total assets, valued at market,
so long as shares of such Portfolio are being sold in
those states;
16
<PAGE>
6. May not make loans of money or securities except by the
purchase of debt obligations in which a Portfolio may
invest consistent with its investment objectives and
policies and by investment in repurchase agreements;
7. May not enter into repurchase agreements (i) not
terminable within seven days if, as a result thereof,
more than 10% of a Portfolio's total assets would be
committed to such repurchase agreements (whether or not
illiquid) or other illiquid investments, or (ii) with a
particular issuer if immediately thereafter more than 5%
of such Portfolio's assets would be committed to
repurchase agreements entered into with such issuer; or
8. May not (a) make investments for the purpose of
exercising control; (b) purchase securities of other
investment companies, except in connection with a
merger, consolidation, acquisition or reorganization;
(c) invest in real estate (other than securities secured
by real estate or interests therein or securities issued
by companies which invest in real estate or interests
therein), commodities or commodity contracts; (d)
purchase securities on margin, or maintain more than 10%
of its net assets in illiquid securities (which include
"restricted securities" subject to legal restrictions on
resale arising from an issuer's reliance upon certain
exemptions from registration under the Securities Act),
however, a Portfolio may purchase restricted securities
determined by the Adviser to be liquid in accordance
with procedures adopted by the Trustees of the Fund; (e)
make short sales of securities or maintain a short
position or write, purchase or sell puts (except for
standby commitments as described in the Prospectus and
above), calls, straddles, spreads or combinations
thereof; (f) purchase or retain securities of any issuer
if those officers and Trustees of the Fund and officers
and directors of the Adviser who own individually more
than 1/2 of 1% of the outstanding securities of such
issuer together own more than 5% of the securities of
such issuer; or (g) act as an underwriter of securities.
In addition, each Municipal Portfolio may not invest
more than 25% of its total assets in municipal securities (a)
whose issuers are located in the same state, or (b) the interest
upon which is paid from revenues of similar-type projects, except
that subsection (a) of this restriction applies only to the
General Municipal Portfolio.
17
<PAGE>
- -----------------------------------------------------------------
MANAGEMENT OF THE FUND
- -----------------------------------------------------------------
TRUSTEES AND OFFICERS
The Trustees and principal officers of the Fund and
their primary occupations during the past five years are set
forth below. Certain of the Trustees and officers also may be a
trustee, director or officer of other registered investment
companies sponsored by the Adviser. An asterisk follows the
names of those Trustees who are considered "interested persons"
as defined in the 1940 Act. Unless otherwise specified, the
address of each such person is 1345 Avenue of the Americas, New
York, NY 10105.
TRUSTEES
JOHN D. CARIFA*, 49, Chairman of the Board, is the
President, Chief Operating Officer and a Director of Alliance
Capital Management Corporation ("ACMC")** with which he has been
associated since prior to 1990.
JAMES P. SYRETT*, 65, is a Senior Vice President of ACMC
and Former President and Chief Executive Officer of Alliance Cash
Management Services with which he has been associated since prior
to 1990.
RICHARD S. BORISOFF,* 49, is a member of the law firm of
Paul, Weiss, Rifkind, Wharton & Garrison with which he has been
associated with since 1990. He is a Director of Stanley and
Elsie Roth Foundation (charitable foundation) and BAR Assurance
and Reinsurance Limited (insurance company). His address is 1285
Avenue of the Americas, New York, NY 10019.
* "Interested person" of the Fund as defined in the Act.
** For purposes of this Statement of Additional Information,
ACMC refers to Alliance Capital Management Corporation, the sole
general partner of the Investment Adviser, and to the predecessor
general partner of the Investment Adviser of the same name.
18
<PAGE>
ROBERT J. CASALE, 56, is Group President of Automatic
Data Processing/Brokerage Information Service Group with which he
has been associated since prior to 1990. He is a Director of
Provident Mutual Life Insurance, Quantum Corporation, Tricord
Systems and Compression Labs. His address is 2 Journal Square
Plaza, Jersey City, New Jersey 07306.
JEFFREY M. COLE, 49, is a member of the law firm of Baer
Marks & Upham with which he has been associated since prior to
1990. He is a Director of Rigel Communications, Inc. (cable
systems) and Vice President/Director of 25 East 86 Street Corp.
(residential co-op board). His address is 805 Third Avenue, New
York, New York 10022.
WILLIAM H. FOULK, JR., 62, is an investment adviser and
independent consultant. He was formerly Senior Manager of
Barrett Associates, Inc., a registered investment adviser, with
which he had been associated since prior to 1990. His address is
2 Hekma Road, Greenwich, CT 06831.
CARL D. INGRASSIA, 49, is Senior Vice President of
Automatic Data Processing/Brokerage Information Service Group
with which he has been associated since prior to 1990. His
address is 2 Journal Square Plaza, Jersey City, New Jersey 07306.
ARTHUR S. KRANSELER, 60, was previously Corporate Vice-
President of Corporate Development for Automatic Data Processing,
Inc. (information services data processing) with which he had
been associated since prior to 1990. His address is 3407 South
Ocean Boulevard, Suite 5-C, Highland Beach, Florida 33487.
ROBERT A. LEWIS, 41, is a member of the law firm
McCutchen, Doyle, Brown & Enersen with which he has been
associated since prior to 1990. His address is Three Embarcadero
Center, Suite 2800, San Francisco, California 94111.
CLIFFORD L. MICHEL, 55, is a member of the law firm of
Cahill Gordon & Reindel with which he has been associated since
prior to 1990. He is President Chief Executive Officer of
Wenonah Development Company (investments) and a Director of
Placer Dome, Inc. (mining) and Teapo Technology Corporation
(manufacturer of abrasives). His address is St. Bernard's Road,
Gladstone, New Jersey 07934.
19
<PAGE>
WILLIAM L, RHOADS III, 56, is a financial consultant.
Previously, he was Chairman of Trust and Investment Committees
(banking), President and Chief Executive Officer of C.F.
Kettering, Incorporated (holding company), President and Director
of the following holding companies: TRP Finance, Inc., Church
Street Holdings, Inc. and New Century Holdings, Inc., Director of
the following holding companies: ADP Delaware and Affiliates,
W.W. Venture Corporation, Turner Investment Corporation, Caribe
Investment Corporation and Director of the following insurance
companies: New Castle Mutual Insurance Company and ADP Insurance
Company, Ltd. His address is 282 Vista Royal Circle, Palm
Desert, California 92211.
OFFICERS
RONALD M. WHITEHILL*, 56, President, is President and
Chief Executive Officer of Alliance Cash Management Services with
which he has been associated since 1993. Previously, he was
Senior Vice President and Managing Director of Reserve Fund since
prior to 1990.
JOHN R. BONCZEK, 35, Senior Vice President, is a Vice
President of ACMC with which he has been associated since prior
to 1990.
KATHLEEN A. CORBET, 35, Senior Vice President, has been
a Senior Vice President of ACMC since July 1993. Previously, she
held various responsibilities as head of Equitable Capital
Management Corporation's Fixed Income Management Department,
Private Placement Secondary Trading and Fund Management since
prior to 1990.
ROBERT I. KURZWEIL, 44, Senior Vice President, has been
a Vice President of ACMC since May 1994. Previously, he was Vice
President of Sales and Business Development for Automatic Data
Processing with which he had been associated since prior to 1990.
PATRICIA NETTER, 43, Senior Vice President, is a Vice
President of ACMC with which she has been associated since prior
to 1990.
RONALD R. VALEGGIA, 47, Senior Vice President, is a
Senior Vice President of ACMC with which he has been associated
since prior to 1990.
20
<PAGE>
JOHN F. CHIODI, 28, Vice President, is a Vice President
of ACMC with which he has been associated since prior to 1990.
DORIS T. CILIBERTI, 31, Vice President, is an Assistant
Vice President of ACMC with which she has been associated since
prior to 1990.
LINDA D. NEIL, 34, Vice President, is an Assistant Vice
President of ACMC with which she has been associated since August
1993. Previously, she was as Associate Director of The Reserve
Fund since prior to 1990.
RAYMOND J. PAPERA, 38, Vice President, is a Vice
President of ACMC with which he has been associated since 1990.
Previously, he was Assistant Treasurer and Portfolio Manager for
the Scudder International Funds, Inc.
PAMELA F. RICHARDSON, 42, Vice President, is a Vice
President of ACMC with which she has been associated since June
1990. Previously, she was a Vice President of Mitchell Hutchins
Asset Management with which she had been associated since prior
to 1990.
EDMUND P. BERGAN, JR., 44, Secretary, is a Senior Vice
President and General Counsel of Alliance Fund Distributors,
Inc. with which he has been associated since prior to 1990.
MARK D. GERSTEN, 44, Treasurer and Chief Financial
Officer, is a Senior Vice President of Alliance Fund Services,
Inc. with which he has been associated since prior to 1990.
JOSEPH J. MANTINEO, 35, Controller, is a Vice President
of Alliance Fund Services, Inc. with which he has been associated
since prior to 1990.
The Fund does not pay any fees to, or reimburse expenses
of, its Trustees who are considered "interested persons" of the
Fund. The aggregate compensation to be paid by the Fund to each
of the Trustees during its current fiscal year ending ,
1995 (estimating future payments based upon existing
arrangements), and the aggregate compensation paid to each of the
Trustees during calendar year 1994 by all of the registered
21
<PAGE>
investment companies to which Alliance provides investment
advisory services (collectively, the "Alliance Fund Complex"),
are set forth below. Each of [ ] is a director or trustee
of one or more other registered investment companies in the
Alliance Fund Complex.
Pension or
Retirement Estimated Total
Name of Aggregate Benefits Annual Compensation
Trustee Compensation Accrued As Benefits From the Alliance
of the from Part of Fund upon Fund Complex
Fund Fund* Expenses Retirement Including the Fund**
- ------ ------------ ------------ ---------- --------------------
$ $ -0- $ -0- $
- ----------------
* The information in this column represents an estimate of amounts to be
paid during the Fund's current fiscal year.
** The information in this column represents amounts actually paid during
calendar year 1994.
As of [ ], the Trustees and officers of the Fund as a
group owned less than 1% of the shares of the Fund.
ADVISER
Alliance Capital Management L.P., a New York Stock
Exchange listed company with principal offices at 1345 Avenue of
the Americas, New York, New York 10105, has been retained under
an investment advisory agreement (the "Advisory Agreement") to
provide investment advice and, in general, to conduct the
management and investment program of the Fund under the
supervision and control of the Fund's Trustees.
Alliance is a leading international investment manager
supervising client accounts with assets as of September 30, 1994
of more than $123 billion (of which approximately $40 billion
represented the assets of investment companies). Alliance's
clients are primarily major corporate employee benefit funds,
public employee retirement systems, investment companies,
foundations and endowment funds. Alliance and its subsidiaries
employ approximately 1,450 employees who operate out of domestic
offices and the overseas offices of subsidiaries in Bombay,
Istanbul, London, Sydney, Tokyo, Toronto, Bahrain, Luxembourg and
22
<PAGE>
Singapore. The 50 registered investment companies comprising 102
separate investment portfolios managed by Alliance currently have
more than one million shareholders. As of September 30, 1994,
Alliance was retained as an investment manager by 28 of the
FORTUNE 100 Companies.
Alliance Capital Management Corporation, the sole
general partner of, and the owner of a 1% general partnership
interest in, Alliance, is an indirect wholly-owned subsidiary of
The Equitable Life Assurance Society of the United States
("Equitable"), one of the largest life insurance companies in the
United States and a wholly-owned subsidiary of The Equitable
Companies Incorporated ("ECI"), a holding company controlled by
AXA, a French insurance holding company. As of June 30, 1994,
ACMC, Inc. and Equitable Capital Management Corporation, each a
wholly-owned direct or indirect subsidiary of Equitable, owned in
the aggregate approximately 62% of the issued and outstanding
units representing assignments of beneficial ownership of limited
partnership interests in Alliance ("Units"). As of June 30,
1994, approximately 28% and 10% of the Units were owned by the
public and employees of Alliance and its subsidiaries,
respectively, including employees of Alliance who serve as
Trustees of the Fund, calculated including as outstanding Units
subject to options exercisable by employees within 60 days of
June 30, 1994.
AXA owns approximately 60% of the outstanding voting
shares of common stock of ECI. AXA is part of a group of
companies (the "AXA Group") that is the second largest insurance
group in France (measured by gross premiums written worldwide)
and one of the largest insurance groups in Europe. Principally
engaged in property and casualty insurance and life insurance in
Europe and elsewhere in the world, the AXA group is also involved
in real estate operations and certain other financial services,
including mutual fund management, lease financing services and
brokerage services. Based on information provided by AXA, as of
June 30, 1994, 42.7% of the voting shares (representing 54.7% of
the voting power) of AXA were owned by Midi Participations, a
French corporation that is a holding company. The voting shares
of Midi Participations are in turn owned 60% by Finaxa, a French
corporation that is a holding company, and 40% by subsidiaries of
Assicurazioni Generali S.p.A., an Italian corporation
("Generali") (one of which, Belgica Insurance Holding S.A., a
Belgian corporation, owned 34.2%). As of June 30, 1994, 61.5% of
the voting shares (representing 70.4% of the voting power) of
Finaxa were owned by five French mutual insurance companies (the
"Mutuelles AXA") (one of which, AXA Assurances I.A.R.D. Mutuelle,
owned 31.1% of the voting shares (representing 44.7% of the
voting power)), and 26.3% of the voting shares (representing
23
<PAGE>
19.1% of the voting power) of Finaxa were owned by Compagnie
Financiere de Paribas, a French financial institution engaged in
banking and related activities. Including the shares owned by
Midi Participations, as of June 30, 1994, the Mutuelles AXA
directly or indirectly owned 51.7% of the voting shares
(representing 65.4% of the voting power) of AXA. Acting as a
group, the Mutuelles AXA control AXA, Midi Participations and
Finaxa. The Mutuelles AXA have approximately 1.5 million
policyholders.
Under the Advisory Agreement, the Adviser provides
investment advisory services and order placement facilities for
each Portfolio of the Fund and pays all compensation of Trustees
of the Fund who are affiliated persons of the Adviser. The
Adviser or its affiliates also furnish the Fund, without charge,
with management supervision and assistance and office facilities.
Under the Advisory Agreement, each of the Portfolios pays an
advisory fee at the annual rate of .50 of 1% of the average daily
net assets of each Portfolio. The fee is accrued daily and paid
monthly. The Adviser may, from time to time, voluntarily waive a
portion of its advisory fees payable from one or more of the
Portfolios. In accordance with the Distribution Services
Agreement described below, each Portfolio of the Fund may pay a
portion of advertising and promotional expenses in connection
with the sale of shares of the Portfolio. Each Portfolio also
pays for printing of prospectuses and other reports to
shareholders and all expenses and fees related to registration
and filing with the Securities and Exchange Commission and with
state regulatory authorities. Each Portfolio pays all other
expenses incurred in its operations, including the Adviser's
fees; the Administration fees (as described below); custody,
transfer and dividend disbursing expenses; legal and auditing
costs; clerical, accounting and other office costs; fees and
expenses of Trustees who are not affiliated persons; and interest
charges, taxes, brokerage fees, and commissions. As to the
obtaining of clerical and accounting services not required to be
provided to each Portfolio by the Adviser under the Advisory
Agreement, each Portfolio may employ its own personnel. For such
services, it also may utilize personnel employed by the Adviser
or its affiliates; if so done, the services may be provided to
each Portfolio at cost, as applicable, and the payments therefore
must be specifically approved in advance by the Fund's Trustees.
The Advisory Agreement became effective on March 16,
1995. The Advisory Agreement shall remain in effect until
February 28, 1997 and thereafter from year to year provided that
such continuance is specifically approved at least annually by a
vote of a majority of the outstanding shares of each Portfolio or
by the Fund's Trustees, including in either case approval by a
24
<PAGE>
majority of the Trustees who are not parties to the Agreement, or
interested persons as defined in the Act. The Advisory Agreement
may be terminated without penalty on 60 days' written notice at
the option of either party or by a vote of the outstanding voting
securities of each Portfolio; and it will automatically terminate
in the event of assignment. The Adviser is not liable for any
action or inaction with regard to its obligations under the
Advisory Agreement as long as it does not exhibit willful
misfeasance, bad faith, gross negligence, or reckless disregard
of its obligations.
THE ADMINISTRATOR
Pursuant to an Administration Agreement, dated as of
March 16, 1995 (the "Administration Agreement"), ADP Financial
Information Services, Inc., a wholly-owned subsidiary of
Automatic Data Processing, Inc., serves as administrator of the
Fund, on behalf of the Portfolios. The Administrator provides
certain administrative and shareholder accounting services,
including, among other responsibilities, coordinating the
negotiation of contracts and fees with, and the monitoring of
performance and billing of, the Fund's independent contractors
and agents; arranging for the preparation for signature by an
officer of the Portfolios of all documents required to be filed
for compliance by the Portfolios with applicable laws and
regulations excluding those of the securities laws of various
states; arranging for the computation of performance data,
including net asset value and yield; arranging for the
preparation of financial statements; responding to shareholder
inquiries; and arranging for the maintenance of books and records
of the Portfolios and providing, at its own expense, office
facilities, equipment and personnel necessary to carry out its
duties. ADP does not have any responsibility or authority for
the management of the Portfolios, the determination of investment
policy, or for any matter pertaining to the distribution of the
Fund's shares.
Under the Administration Agreement, ADP may render
similar administrative services to others. The Administration
Agreement is terminable without penalty by the Fund on behalf of
each Portfolio on 60 days' written notice to ADP (which notice
may be waived by ADP) or by ADP on 60 days' written notice to the
Fund (which notice may be waived by the Fund). The
Administration Agreement also provides that ADP shall not be
liable for any error of judgment or mistake of law, except for
wilful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of
its duties under the Administration Agreement.
25
<PAGE>
In addition, the Administration Agreement provides that,
in the event the operating expenses of any Fund or Portfolio,
including all investment advisory and administration fees, but
excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, for any fiscal year
exceed the most restrictive expense limitation applicable to a
Portfolio imposed by the securities laws or regulations
thereunder of any state in which the shares of each Portfolio are
qualified for sale, as such limitations may be raised or lowered
from time to time, ADP shall reduce its administration fee (which
fee is described below). The amount of any such reduction to be
borne by ADP shall be deducted from the monthly administration
fee otherwise payable to ADP during such fiscal year; and if such
amounts should exceed the monthly fee, shall pay to each
Portfolio its share of such excess expenses no later than the
last day of the first month of the next succeeding fiscal year.
In consideration of the services provided by ADP
pursuant to the Administration Agreement, ADP receives from each
Fund a fee computed daily and paid monthly at a maximum annual
rate equal to .05% of each of the Portfolio's average daily net
assets. ADP may voluntarily waive a portion of the fees payable
to it with respect to each Portfolio under the Administration
Agreement. ADP shall pay the fees and expenses of the Trustees
who are affiliated with ADP.
DISTRIBUTION SERVICES AGREEMENT
Rule 12b-1 adopted by the Commission under the 1940 Act
permits an investment company to directly or indirectly pay
expenses associated with the distribution of its shares in
accordance with a duly adopted and approved plan. The Fund, on
behalf of the Portfolios, has entered into a Distribution
Services Agreement (the "Agreement") which includes a plan
adopted pursuant to Rule 12b-1 (the "Plan"). Pursuant to the
Plan, each Portfolio pays to the Adviser a Rule 12b-1
distribution services fee, which may not exceed an annual rate of
.45% of each Portfolio's aggregate average daily net assets. In
addition, under the Agreement the Adviser may make payments for
distribution assistance and for administrative and accounting
services from its own resources which may include the management
fee paid by each Portfolio. The Agreement became effective on
March 16, 1995.
Payments under the Agreement are used in their entirety
for (i) payments to broker-dealers and other financial
intermediaries, including Donaldson, Lufkin & Jenrette Securities
Corporation, an affiliate of the Adviser, for distribution
assistance and to banks and other depository institutions for
administrative and accounting services, and (ii) otherwise
26
<PAGE>
promoting the sale of shares of the Fund such as by paying for
the preparation, printing and distribution of prospectuses and
other promotional materials sent to existing and prospective
shareholders and by directly or indirectly purchasing radio,
television, newspaper and other advertising. In approving the
Agreement, the Trustees determined that there was a reasonable
likelihood that the Agreement would benefit each Portfolio and
its shareholders.
The administrative and accounting services provided by
broker-dealers, depository institutions and other financial
institutions may include, but are not limited to, establishing
and maintaining shareholder accounts, sub-accounting, processing
of purchase and redemption orders, sending confirmations of
transactions, forwarding financial reports and other
communications to shareholders and responding to shareholder
inquiries regarding each Portfolio. The State of Texas requires
that shares of a Portfolio may be sold in that state only by
dealers or other financial institutions that are registered there
as broker-dealers. As interpreted by courts and administrative
agencies, certain laws and regulations limit the ability of a
bank or other depository institution to become an underwriter or
distributor of securities. However, in the opinion of the Fund's
management based on the advice of counsel, these laws and
regulations do not prohibit such depository institutions from
providing other services for investment companies such as the
administrative and accounting services described above. The
Trustees will consider appropriate modifications to the Fund's
operations, including discontinuance of payments under the
Agreement to banks and other depository institutions, in the
event of any future change in such laws or regulations which may
affect the ability of such institutions to provide the above-
mentioned services.
The Treasurer of the Fund reports the amounts expended
under the Agreement and the purposes for which such expenditures
were made to the Trustees on a quarterly basis. Also, the
Agreement provides that the selection and nomination of
disinterested Trustees (as defined in the 1940 Act) are committed
to the discretion of the disinterested Trustees then in office.
The Agreement may be continued annually if approved by a
majority vote of the Trustees who neither are interested persons
of the Fund or a Portfolio nor have any direct or indirect
financial interest in the Agreement or in any related agreement,
cast in person at a meeting called for that purpose.
All material amendments to the Agreement must be
approved by a vote of the Trustees, including a majority of the
disinterested Trustees, cast in person at a meeting called for
that purpose, and the Agreement may not be amended in order to
27
<PAGE>
increase materially the costs which a Portfolio may bear pursuant
to the Agreement without the approval of a majority of the
outstanding shares of the Portfolio. The Agreement may also be
terminated at any time by a majority vote of the disinterested
Trustees, or by a majority of the outstanding shares of a
Portfolio or by the Adviser. Any agreement with a qualifying
broker-dealer or other financial intermediary may be terminated
without penalty on not more than 60 days' written notice by a
vote of the majority of non-party Trustees, by a vote of a
majority of the outstanding shares of a Portfolio, or by the
Adviser and will terminate automatically in the event of its
assignment.
The Agreement is in compliance with rules of the
National Association of Securities Dealers, Inc. (the "NASD")
which became effective July 7, 1993 and which limit the annual
asset-based sales charges and service fees that a mutual fund may
impose to .75% and .25%, respectively, of average annual net
assets.
- -----------------------------------------------------------------
PURCHASE AND REDEMPTION OF SHARES
- -----------------------------------------------------------------
The Fund, on behalf of each Portfolio, may refuse any
order for the purchase of shares. The Fund reserves the right to
suspend the sale of its shares to the public in response to
conditions in the securities markets or for other reasons.
Shareholders maintaining Portfolio accounts through
brokerage firms and other institutions should be aware that such
institutions necessarily set deadlines for receipt of transaction
orders from their clients that are earlier than the transaction
times of the Portfolio itself so that the institutions may
properly process such orders prior to their transmittal to The
Bank of New York ("BONY"). Should an investor place a
transaction order with such an institution after its deadline,
the institution may not effect the order with the Portfolio until
the next business day. Accordingly, an investor should
familiarize himself or herself with the deadlines set by his or
her institution. For example, the Portfolio's distributor
accepts purchase orders from its customers up to 2:15 p.m. (New
York time) for issuance at the 4:00 p.m. transaction time and
price. A brokerage firm acting on behalf of a customer in
connection with transactions in Portfolio shares is subject to
the same legal obligations imposed on it generally in connection
with transactions in securities for a customer, including the
obligation to act promptly and accurately.
28
<PAGE>
Orders for the purchase of Portfolio shares become
effective at the next transaction time after Federal funds or
bank wire monies become available to BONY for a shareholder's
investment. Federal funds are a bank's deposits in a Federal
Reserve Bank. These funds can be transferred by Federal Reserve
wire from the account of one member bank to that of another
member bank on the same day and are considered to be immediately
available funds; similar immediate availability is accorded
monies received at BONY by bank wire. Money transmitted by a
check drawn on a member of the Federal Reserve System is
converted to Federal funds in one business day following receipt.
Checks drawn on banks which are not members of the Federal
Reserve System may take longer. All payments (including checks
from individual investors) must be in United States dollars.
All shares purchased are confirmed to each shareholder
and are credited to his or her account at the net asset value.
To avoid unnecessary expense to a Portfolio and to facilitate the
immediate redemption of shares, share certificates, for which no
charge is made, are not issued except upon the written request of
a shareholder. Certificates are not issued for fractional
shares. Shares for which certificates have been issued are not
eligible for any of the optional methods of withdrawal; namely,
the telephone, telegraph, check-writing or periodic redemption
procedures. The Fund, on behalf of each Portfolio, reserves the
right to reject any purchase order.
A "business day," during which purchases and redemptions
of Portfolio shares can become effective and the transmittal of
redemption proceeds can occur, is considered for Fund purposes as
any weekday exclusive of national holidays on which the New York
Stock Exchange is closed and Good Friday; if one of these
holidays falls on a Saturday or Sunday, purchases and redemptions
will likewise not be processed on the preceding Friday or the
following Monday, respectively. The right of redemption may be
suspended or the date of a redemption payment postponed for any
period during which the New York Stock Exchange is closed (other
than customary weekend and holiday closings), when trading on the
New York Stock Exchange is restricted, or an emergency (as
determined by the Commission) exists, or the Commission has
ordered such a suspension for the protection of shareholders.
The value of a shareholder's investment at the time of redemption
may be more or less than his or her cost, depending on the market
value of the securities held by each Portfolio at such time and
the income earned.
29
<PAGE>
- -----------------------------------------------------------------
DAILY DIVIDENDS - DETERMINATION OF NET ASSET VALUE
- -----------------------------------------------------------------
All net income of each Portfolio is determined after the
close of each business day, currently 4:00 p.m. New York time
(and at such other times as the Trustees may determine) and is
paid immediately thereafter pro rata to shareholders of record of
that Portfolio via automatic investment in additional full and
fractional shares in each shareholder's account at the rate of
one share for each dollar distributed. As such additional shares
are entitled to dividends on following days, a compounding growth
of income occurs.
A Portfolio's net income consists of all accrued
interest income on Portfolio assets less expenses allocable to
that Portfolio (including accrued expenses and fees payable to
the Adviser) applicable to that dividend period. Realized gains
and losses are reflected in a Portfolio's net asset value and are
not included in net income. Net asset value per share of each
Portfolio is expected to remain constant at $1.00 since all net
income of each Portfolio is declared as a dividend each time net
income is determined and net realized gains and losses are
expected to be relatively small.
The valuation of each Portfolio's securities is based
upon their amortized cost which does not take into account
unrealized securities gains or losses as measured by market
valuations. The amortized cost method involves valuing an
instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless
of the impact of fluctuating interest rates on the market value
of the instrument. During periods of declining interest rates,
the daily yield on shares of a Portfolio may be higher than that
of a fund with identical investments utilizing a method of
valuation based upon market prices for its portfolio instruments;
the converse would apply in a period of rising interest rates.
Each Portfolio utilizes the amortized cost method of
valuation of its securities in accordance with the provisions of
Rule 2a-7 under the Act. Pursuant to such Rule, each Portfolio
maintains a dollar-weighted average portfolio maturity of 90 days
or less, purchases instruments which, at the time of investment,
have remaining maturities of no more than 397 days, and invests
only in securities of high quality. Under Rule 2a-7, the Fund
treats a municipal security which has a variable or floating rate
of interest as having a maturity equal to the longer of either
the period, if any, remaining until the interest rate is next
scheduled to be readjusted or the period remaining until the
principal amount can be recovered by exercising the security's
30
<PAGE>
demand feature. The Fund maintains procedures designed to
stabilize, to the extent reasonably possible, the price per share
of each Portfolio as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of each
Portfolio's holdings by the Trustees at such intervals as they
deem appropriate to determine whether and to what extent the net
asset value of each Portfolio calculated by using available
market quotations or market equivalents deviates from net asset
value based on amortized cost. If such deviation as to any
Portfolio exceeds 1/2 of 1%, the Trustees will promptly consider
what action, if any, should be initiated. In the event the
Trustees determine that such a deviation may result in material
dilution or other unfair results to new investors or existing
shareholders, they will consider corrective action which might
include (1) selling instruments held by the affected Portfolio
prior to maturity to realize capital gains or losses or to
shorten average portfolio maturity; (2) withholding dividends of
net income on shares of that Portfolio; or (3) establishing a net
asset value per share of that Portfolio by using available market
quotations or equivalents.
The net asset value of the shares of each Portfolio is
determined each business day (and on such other days as the
Trustees deem necessary) at 12:00 Noon and 4:00 p.m. New York
time. The net asset value per share of a Portfolio is calculated
by taking the sum of the value of that Portfolio's investments
and any cash or other assets, subtracting liabilities, and
dividing by the total number of shares of that Portfolio
outstanding. All expenses, including the fees payable to the
Adviser, are accrued daily.
- -----------------------------------------------------------------
TAXES
- -----------------------------------------------------------------
FEDERAL INCOME TAX CONSIDERATIONS
Each of the Fund's Portfolios has qualified for each
fiscal year to date and intends to qualify in each future year to
be taxed as a regulated investment company under the Internal
Revenue Code of 1986, as amended (the "Code") and, as such, will
not be liable for Federal income and excise taxes on the net
income and capital gains distributed to its shareholders. Since
each Portfolio of the Fund distributes all of its net income and
capital gains, each Portfolio should thereby avoid all Federal
income and excise taxes.
Shareholders generally are not subject to Federal income
tax with respect to distributions out of tax-exempt interest
31
<PAGE>
income earned by each Municipal Portfolio of the Fund. See,
however, "Alternative Minimum Tax" above.
Distributions out of taxable interest income, other
investment income, and short-term capital gains are taxable to
shareholders as ordinary income. Since each Portfolio's
investment income is derived from interest rather than dividends,
no portion of such distributions is eligible for the dividends-
received deduction available to corporations. Long-term capital
gains, if any, distributed by the Fund to a shareholder are
taxable to the shareholder as long-term capital gain,
irrespective of the length of time he may have held his shares.
Distributions of short and long-term capital gains, if any, are
normally made once each year near calendar year-end, although
such distributions may be made more frequently if necessary in
order to maintain the Fund's net asset value at $1.00 per share.
Interest on indebtedness incurred by shareholders to
purchase or carry shares of the Fund is not deductible for
Federal income tax purposes. Under rules of the Internal Revenue
Service for determining when borrowed funds are used for
purchasing or carrying particular assets, shares may be
considered to have been purchased or carried with borrowed funds
even though those funds are not directly linked to the shares.
Further, persons who are "substantial users" (or related persons)
of facilities financed by private activity bonds (within the
meaning of Sections 147(a) of the Code) should consult their tax
advisers before purchasing shares of a Municipal Portfolio.
Substantially all of the dividends paid by each
Municipal Portfolio are anticipated to be exempt from Federal
income taxes. Shortly after the close of each calendar year, a
notice is sent to each shareholder advising him of the total
dividends paid into his account for the year and the portion of
such total that is exempt from Federal income taxes. This
portion is determined by the ratio of the tax-exempt income to
total income for the entire year and, thus, is an annual average
rather than a day-by-day determination for each shareholder.
Each Portfolio generally will be required to withhold
tax at the rate of 31% with respect to dividends of net ordinary
income and net realized capital gains payable to a noncorporate
shareholder unless the shareholder certifies on his subscription
application that the social security or taxpayer identification
number provided is correct and that the shareholder has not been
notified by the Internal Revenue Service that he is subject to
backup withholdings.
32
<PAGE>
STATE INCOME TAX CONSIDERATIONS
PRIME PORTFOLIO AND GOVERNMENT PORTFOLIO. Shareholders
of the Prime Portfolio and the Government Portfolio may be
subject to state and local taxes on distributions from the Prime
Portfolio and Government Portfolio. The laws of some states may
exempt from some taxes dividends from the Prime Portfolio or the
Government Portfolio to the extent such dividends are
attributable to interest from obligations of the U.S. Government
and certain of its agencies and instrumentalities.
GENERAL PORTFOLIO. Shareholders of the General
Portfolio may be subject to state and local taxes on
distributions from the General Portfolio, including distributions
which are exempt from Federal income taxes. Each investor should
consult his own tax adviser to determine the tax status of
distributions from the General Portfolio in his particular state
and locality.
NEW YORK PORTFOLIO. Shareholders of the New York
Portfolio who are individual residents of New York are not
subject to the New York State or New York City personal income
taxes on distributions from the New York Portfolio which are
designated as derived from municipal securities issued by the
State of New York or is political subdivisions. Distributions
from the New York Portfolio are, however, subject to the New York
Corporate Franchise Tax payable by corporate shareholders.
CALIFORNIA PORTFOLIO. Shareholders of the California
Portfolio who are individual residents of California are not
subject to the California personal income tax on distributions
from the California Portfolio which are designated as derived
from municipal securities issued by the State of California or
its political subdivisions. Distributions from the California
Portfolio are, however, subject to the California Corporate
Franchise Tax payable by corporate shareholders.
CONNECTICUT PORTFOLIO. Shareholders of the Connecticut
Portfolio who are individual residents of Connecticut are not
subject to Connecticut personal income taxes on distributions
from the Connecticut Portfolio which are designated as derived
from municipal securities issued by the State of Connecticut or
its political subdivisions.
33
<PAGE>
NEW JERSEY PORTFOLIO. Shareholders of the Portfolio who
are individual residents of New Jersey are not subject to the New
Jersey personal income tax on distributions from the Portfolio
which are designated as derived from municipal securities issued
by the State of New Jersey or its political subdivisions or U.S.
Government Securities as defined in the Prospectus.
Distributions from the Portfolio are, however, subject to the New
Jersey Corporation Business (Franchise) Tax and the New Jersey
Corporation Income Tax payable by corporate shareholders.
- -----------------------------------------------------------------
GENERAL INFORMATION
- -----------------------------------------------------------------
PORTFOLIO TRANSACTIONS. Subject to the general
supervision of the Trustees of the Fund, the Adviser is
responsible for the investment decisions and the placing of the
orders for securities transactions for each Portfolio. Because
the Portfolios invest in securities with short maturities, there
is a relatively high portfolio turnover rate. However, the
turnover rate does not have an adverse effect upon the net yield
and net asset value of the Portfolio's shares since the
Portfolio's transactions occur primarily with issuers,
underwriters or major dealers in money market instruments acting
as principals. Such transactions are normally on a net basis
which do not involve payment of brokerage commissions. The cost
of securities purchased from an underwriter usually includes a
commission paid by the issuer to the underwriters; transactions
with dealers normally reflect the spread between bid and asked
prices.
The Fund has no obligations to enter into transactions
in portfolio securities with any dealer, issuer, underwriter or
other entity. In placing orders, it is the policy of the Fund to
obtain the best price and execution for its transactions. Where
best price and execution may be obtained from more than one
dealer, the Adviser may, in its discretion, purchase and sell
securities through dealers who provide research, statistical and
other information to the Adviser. Such services may be used by
the Adviser for all of its investment advisory accounts and,
accordingly, not all such services may be used by the Adviser in
connection with each Portfolio. The supplemental information
received from a dealer is in addition to the services required to
be performed by the Adviser under the Advisory Agreement, and the
expenses of the Adviser will not necessarily be reduced as a
result of the receipt of such information. Portfolio securities
will not be purchased from or sold to the Adviser's affiliate,
Donaldson, Lufkin & Jenrette, Inc., or any subsidiary or
affiliate of the parent.
34
<PAGE>
CAPITALIZATION. All shares of each Portfolio, when
issued, are fully paid and non-assessable. The Trustees are
authorized to reclassify and issue any unissued shares to any
number of additional classes or series without shareholder
approval. Accordingly, the Trustees in the future, for reasons
such as the desire to establish one or more additional portfolios
with different investment objectives, policies or restrictions,
may create additional classes or series of shares. Any issuance
of shares of another class would be governed by the 1940 Act and
the law of the Commonwealth of Massachusetts. Shares of each
Portfolio are normally entitled to one vote for all purposes.
Generally, shares of all Portfolios vote as a single series for
the election of Trustees and on any other matter affecting all
Portfolios in substantially the same manner. As to matters
affecting each Portfolio differently, such as approval of the
Advisory Agreement and changes in investment policy, shares of
each Portfolio vote as separate classes. Certain procedures for
the removal by shareholders of trustees of investment trusts,
such as the Fund, are set forth in Section 16(c) of the 1940 Act.
SHAREHOLDER LIABILITY. Under Massachusetts law,
shareholders could, under certain circumstances, be held
personally liable for the obligations of each Portfolio.
However, the Agreement and Declaration of Trust disclaims
shareholder liability for acts or obligations of the Fund and
requires that the Trustees use their best efforts to ensure that
notice of such disclaimer be given in each note, bond, contract,
instrument, certificate or undertaking made or issued by the
trustees or officers of the Fund. The Agreement and Declaration
of Trust provides for indemnification out of the property of the
Portfolios for all loss and expense of any shareholder of a
Portfolio held personally liable for the obligations of the
Portfolio. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to
circumstances in which a Portfolio would be unable to meet its
obligations. In the view of the Adviser, such risk is not
material.
LEGAL MATTERS. The legality of the shares offered
hereby has been passed upon by Seward & Kissel, One Battery Park
Plaza, New York, New York, 10004, counsel for the Fund. Seward &
Kissel has relied upon the opinion of Sullivan & Worcester, One
Post Office Square, Boston, Massachusetts, 02109, for matters
relating to Massachusetts law.
ACCOUNTANTS. An opinion relating to each Portfolio's
financial statements is given herein by McGladrey & Pullen LLP,
New York, New York, independent auditors for the Fund.
YIELD QUOTATIONS. Advertisements containing yield
quotations for one or more Portfolios for the Fund may from time
35
<PAGE>
to time be sent to investors or placed in newspapers, magazines
or other media on behalf of the Portfolios. Such yield
quotations are calculated in accordance with the standardized
method referred to in Rule 482 under the Securities Act.
Yield quotations for a Portfolio are thus determined by
(i) computing the net change over a seven-day period, exclusive
of the capital changes, in the value of a hypothetical pre-
existing account having a balance of one share of such Portfolio
at the beginning of such period, (ii) dividing the net change in
account value by the value of the account at the beginning of the
base period to obtain the base period return, and (iii)
multiplying the base period return by (365/7) with the resulting
yield figure carried to the nearest hundredth of one percent. A
Portfolio's effective annual yield represents a compounding of
the annualized yield according to the formula:
effective yield = [(base period return + 1) 365/7] - 1.
Depending on an investor's tax bracket, an individual
investor may earn a substantially higher after-tax return from a
Portfolio than from comparable investments whose income is
taxable. For example, a 5% tax-exempt yield of the New Jersey
Portfolio for an investor in the top 1994 Federal (39.6%) and New
Jersey (6.65%) personal income tax brackets would be equivalent
to a taxable yield of 8.87%. A 5% tax-exempt yield of the New
York Portfolio for an investor in the top 1994 Federal, New York
state (7.875%), and New York City (4.46%) personal income tax
brackets would be equivalent to a taxable yield of 9.44%. A 5%
tax-exempt yield of the Connecticut Portfolio for an investor in
the top 1994 Federal and Connecticut (4.54%) personal income tax
brackets would be equivalent to a taxable yield of 8.67%. A 5%
tax-exempt yield of the California Portfolio for an investor in
the top 1994 Federal and California (11%) personal income tax
brackets would be equivalent to a taxable yield of 9.30%. A 5%
tax-exempt yield of the General Portfolio received by an investor
subject to the top 1994 Federal personal income tax rate would be
equivalent to a taxable yield of 8.28%.
In each of these examples it is assumed that an investor
can fully deduct the state and local income taxes for federal
income tax purposes and that the investor is not subject to
federal or state alternative minimum taxes. Taxable equivalent
yield is computed by dividing that portion of the yield of a
Municipal Portfolio that is tax exempt (assumed for purposes of
these examples to be the entire yield of 5%) by one minus the
applicable marginal income tax rate (39.6% in the case of the
General Municipal Portfolio; the combined effective federal and
state marginal income tax rates in the case of a State Municipal
Portfolio) and adding the quotient to that portion, if any, of
the yield of the Municipal Portfolio that is not tax-exempt.
36
<PAGE>
From time to time the Municipal Portfolios may advertise
hypothetical tax equivalent yields in advertising. These will be
used for illustrative purposes only and not as representative of
a Municipal Portfolio's past or future performance.
PERIODIC DISTRIBUTION PLANS. Without affecting
shareholders' right of using any of the methods of redemption
described above, by checking the appropriate boxes on the
Application Form shareholders may elect to participate
additionally in the following plans without any separate charge.
Under the Income Distribution Plan shareholders receive monthly
payments of all the income earned in his or her Portfolio
account, with payments forwarded shortly after the close of the
month. Under the Systematic Withdrawal Plan, shareholders may
request checks in any specified amount of $50 or more each month
or in any intermittent pattern of months. If desired,
shareholders can order, via signature-guaranteed letter to the
Portfolio, such periodic payments to be sent to another person.
REPORTS. You will receive semi-annual and annual
reports of the Portfolio(s) in which you are a shareholder as
well as a monthly summary of your account. You can arrange for a
copy of each of your account statements to be sent to other
parties.
- -----------------------------------------------------------------
SPECIAL RISK FACTORS IN CONCENTRATION IN A SINGLE STATE
- -----------------------------------------------------------------
The primary purpose of investing in a portfolio of a
single state's municipal securities is the special tax treatment
accorded that state's resident individual investors. However,
payment of interest and preservation of principal is dependent
upon the continuing ability of the state's issuers and/or
obligors of its state, municipal and public authority debt
obligations to meet their obligations thereunder. Investors
should consider the greater risk of the concentration of the New
Jersey, New York, Connecticut or California Municipal Portfolio
(individually, a "State Portfolio") versus the safety that comes
with a less concentrated investment portfolio and should compare
yields available on portfolios of the relevant state's issues
with those of more diversified portfolios, including other
states' issues, before making an investment decision. The
Adviser believes that by maintaining each State Portfolio's
investment portfolio in liquid, short-term, high-quality
investments, including the participation interests and other
variable rate obligations that have credit support such as
letters of credit from major financial institutions, the State
37
<PAGE>
Portfolio is largely insulated from the credit risks that exist
on long-term municipal securities of the relevant state.
The following summaries are included for the purpose of
providing a general description of credit and financial
conditions of New Jersey, New York, Connecticut, and California
and are based on information from official statements made
available during 1993 in connection with the issuance of certain
securities and does not purport to be complete. While the Fund
has not undertaken to independently verify such information, it
has no reason to believe that such information is not correct in
all material aspects. These summaries do not provide specific
information regarding all securities in which each Portfolio is
permitted to invest and in particular do not provide specific
information on the private business entities whose obligations
support the payments on AMT-Subject Bonds.
NEW JERSEY PORTFOLIO
ECONOMIC CLIMATE. New Jersey is the ninth largest state
in population and the fifth smallest in land area. With an
average of 1,062 persons per square mile, it is the most densely
populated of all the states. New Jersey's .59% rate of annual
population growth between 1990 and 1993, while comparing
favorably with other Middle Atlantic States, was less than the
national ratio of increase.
The State's economic base is diversified, consisting of
a variety of manufacturing, construction and service industries,
supplemented by commercial agriculture. In 1976, voters approved
casino gambling for Atlantic City, and that city has again become
an important State tourist attraction.
Total personal income in New Jersey stood at $187.2
billion for 1990 and increased to $210.6 billion for 1993.
Personal income increased 3.2% between 1992 and 1993 but was
below the national rate at 4.4%. Historically, New Jersey's
average per capita income has been well above the national
average. The differential narrowed during the 1970s but widened
in the 1980s. In 1993, the State ranked second among all states
in per capita personal income ($26,732).
After experiencing a boom during the mid-1980s, New
Jersey as well as the rest of the Northeast United States slipped
into a slowdown well before the onset of the national recession
which officially began in July 1990 (according to the National
Bureau of Economic Research). Initially, this slowdown was an
expected response to the State's tight labor market and the fewer
number of persons entering the labor force. By the beginning of
the national recession, there had already been a decline in
construction activity and the growth in the service sectors and
38
<PAGE>
the long-term downtrend of factory employment had accelerated,
partly because of a leveling off of industrial demand nationally.
The onset of recession caused an acceleration of New Jersey's job
losses in construction and manufacturing as well as an employment
downturn in such previously growing sectors as wholesale trade,
retail trade, finance, utilities and trucking and warehousing.
Reflecting the downturn, the rate of unemployment in New
Jersey rose from 3.6% during the first quarter of 1989 to an
estimated 6.6% in 1991. In 1992, the State's unemployment rate
moved ahead of the nation's for the first time in a decade to an
annual average of 8.4% versus 7.4% nationally. In 1993,
unemployment fell to 7.4% in New Jersey and 6.8% in the United
States.
In the first nine months of 1994, relative to the same
period a year ago, job growth took place in services (3.5%) and
construction (5.7%), more moderate growth took place in trade
(1.9%), transportation and utilities (1.2%) and
finance/insurance/real estate (1.4%), while manufacturing and
government declined (by 1.5% and 0.1%, respectively). The net
result was a 1.6% increase in average employment during the first
nine months of 1994 compared to the first nine months of 1993.
Just as New Jersey was hurt by the national recession,
the State should benefit by national recovery a rising consumer
and business spending generate increased factory orders, building
activity and a flow of commerce without regard to State lines.
Total construction contracts awarded in New Jersey
increased by 8.6% in 1993 period compared with the same time
period in 1992. Nonbuilding construction awards have been at
high levels since 1991 due to substantial outlays for roads,
bridges and other infrastructure projects, although as compared
with 1992, 1993 figures show a decline in awards. In addition,
new car and light truck registrations increased 12.7% in the
State during the first five months in 1993.
FINANCIAL CONDITION. The State Constitution provides,
in part, that no money may be drawn from the State Treasury
except for appropriations made by law and that no law
appropriating money for any State purpose shall be enacted if the
amount of money appropriated therein, together with all other
prior appropriations made for the same fiscal year, exceeds the
total amount of revenue on hand and anticipated to be available
for such fiscal year, as certified by the Governor. Should it
appear that revenues will be less than the amount anticipated in
the budget for a fiscal year, the Governor may take steps to
reduce State expenditures. In addition, no supplemental
appropriation may be enacted after adoption of an appropriations
act except where there are sufficient revenues on hand or
39
<PAGE>
anticipated, as certified by the Governor, to meet such
appropriation.
For the fiscal year ended June 30, 1993, the
undesignated fund balances in the General Fund in which the
largest part of the financial operations of the State is
accounted for, were $937.4 million. Such balance was $688
million (unaudited) for the 1994 fiscal year and is estimated to
be $148 million for the 1995 fiscal year. There have been
positive undesignated Fund Balances in the General Fund at the
end of each year since the State Constitution was adopted in
1947.
There are 567 municipalities and 21 counties in New
Jersey. During 1990, 1991 and 1992 no county exceeded its
statutory debt limitations or incurred a cash deficit in excess
of 4% of its tax levy. The number of municipalities which
exceeded statutory debt limits was five as of December 31, 1992.
No municipality incurred a cash deficit greater than 4% of its
tax levy for 1992. No New Jersey municipality or county has
defaulted on the payment of interest or principal on any
outstanding debt obligation since the 1930's.
State supervision of school finance and of the fiscal
operations and debt issuance practices of local financing
authorities, autonomous public bodies created by counties or
municipalities empowered to issue bonds, impose facility or
service charges, or levy taxes in their districts (sewerage,
municipal utilities, parking, pollution control, improvement,
etc.) and special taxing districts (fire, water, etc.), is
similar to that of local governments. As of June 30, 1992, there
were 202 locally created authorities with a total outstanding
capital debt of $6.3 billion (figures do not include housing
authorities and redevelopment agencies). This amount reflects
outstanding bonds, notes, loans and mortgages payable by the
authorities as of their respective fiscal years ended nearest to
June 30, 1992.
On July 12, 1994, the New Jersey Supreme Court ruled
that the State's 1991 School funding law was unconstitutional.
the Court gave the Legislature a deadline of 1997-1998 for the
State to close the spending gap between school districts. It is
not clear at this time what effect this judgment will have on
State finances or school district budgets. It is expected that
the Legislative will consider this issue in the 1995 session.
For the fiscal year ended June 30, 1993, the
undesignated fund balances in the General Fund in which the
largest part of the financial operations of the State is
accounted for, were $937.4 million. Such balance was $688
million (unaudited) for the 1994 fiscal year and is estimated to
40
<PAGE>
be $148 million for the 1995 fiscal year. There have been
positive undesignated Fund Balances in the General Fund at the
end of each year since the State Constitution was adopted in
1947.
There are 567 municipalities and 21 counties in New
Jersey. During 1990, 1991 and 1992 no county exceeded its
statutory debt limitations or incurred a cash deficit in excess
of 4% of its tax levy. The number of municipalities which
exceeded statutory debt limits was five as of December 31, 1992.
No municipality incurred a cash deficit greater than 4% of its
tax levy for 1992. No New Jersey municipality or county has
defaulted on the payment of interest or principal on any
outstanding debt obligation since the 1930's.
State supervision of school finance and of the fiscal
operations and debt issuance practices of local financing
authorities, autonomous public bodies created by counties or
municipalities empowered to issue bonds, impose facility or
service charges, or levy taxes in their districts (sewerage,
municipal utilities, parking, pollution control, improvement,
etc.) and special taxing districts (fire, water, etc.), is
similar to that of local governments. As of June 30, 1992, there
were 202 locally created authorities with a total outstanding
capital debt of $6.3 billion (figures do not include housing
authorities and redevelopment agencies). This amount reflects
outstanding bonds, notes, loans and mortgages payable by the
authorities as of their respective fiscal years ended nearest to
June 30, 1992.
LITIGATION. On July 12, 1994, the New Jersey Supreme
Court ruled that the State's 1991 School funding law was
unconstitutional. The Court gave the Legislature a deadline of
1997-1998 for the State to close the spending gap between school
districts. It is not clear at this time what effect this
decision will have on State finances or school district budgets.
It is expected that the Legislature will consider alternative
financing mechanisms, including increases in the sales tax or
income tax, a statewide property tax, or a combination of all
three taxes in the 1995 Session. There are also a number of
suits making monetary claims against the State, its agencies and
employees that together if decided in favor of the complainants
would significantly increase State expenditures above those
anticipated. There are also individual suits that could have
that effect. Among them are suit challenging (a) the method by
which the State Department of Human Services shares with county
governments costs and costs recoveries for residents in State
psychiatric hospitals and residential facilities for the
developmentally disabled; (b) the allegedly low level of Medicaid
payment rates set by the State for long-term care facilities in
New Jersey; (c) the right of the State to retain certain amounts
41
<PAGE>
paid to the Spill Compensation Fund for uses that were
subsequently pre-empted by federal law; (d) the automobile
insurance reform act impact on various insurance firms; (e) the
revaluation of public employee pension funds that has resulted in
smaller contributions by public employers; (f) the deregulation
of hospital rates in the State; and (g) the hospital rate-setting
system and its application for meeting the cost of uncompensated
care, for shifting Medicaid costs and for granting discounts to
payors.
NEW YORK PORTFOLIO
ECONOMIC OVERVIEW. The State is the third most populous
state in the nation with over 18 million residents and has a per
capita personal income of $24,623 which is 18.3% above the
national average. The State's economy is diverse with a
comparatively large share of the nation's finance, insurance,
transportation, communications and services employment, and a
comparatively small share of the nation's farming and mining
activity. The State's location and its excellent air transport
facilities and natural harbors have made it an important link in
international commerce. The State has a declining proportion of
its workforce engaged in manufacturing, and an increasing
proportion engaged in service industries. This transition
reflects a national trend.
The State has historically been one of the wealthiest
states in the nation. For decades, however, the State has grown
more slowly than the nation as a whole, gradually eroding its
relative economic affluence. Statewide, urban centers have
experienced significant changes involving migration of the more
affluent to the suburbs and an influx of generally less affluent
residents. Regionally, the older Northeast cities have suffered
because of the relative success that the South and the West have
had in attracting people and business. During most of the 1980's
the State's economic position improved in a manner consistent
with that for the Northeast as a whole.
During the recession of 1982-1983 the State's economy in
most respects performed better than that of the nation. However,
in the calendar years 1984 through 1991, the State's rate of
economic expansion was somewhat slower than that of the nation.
The unemployment rate in the State dipped below the national rate
in the second half of 1981 and generally remained lower until
1991. In 1993, the state unemployment rate was 7.7%. During the
past 10 years, total personal income in the State has risen
slightly faster than the national average only in 1986 through
1989. Overall economic activity declined less than that of the
nation as a whole during the 1982-83 recession. In the recent
recession, however, the State, and the rest of the Northeast, has
been more heavily impacted than the nation as a whole and has
42
<PAGE>
been slower in recovering. The national recession has been
exacerbated in the State by a significant retrenchment in the
financial services industry, cutbacks in defense spending and an
overbuilt real estate market.
The State has the second highest per capita state and
local tax burden in the United States. The State and its
localities have used these taxes to develop and maintain their
transportation networks, public schools and colleges, public
health systems, other social services and recreational
facilities. Despite these benefits, the burden of the State and
local taxation, in combination with the many other causes of
regional economic dislocation, may have contributed to the
decisions of some businesses and individuals to relocate outside,
or not locate within, the State.
To stimulate the State's economic growth, the State has
developed programs, including the provision of direct financial
assistance by State-related sources, designed to assist
businesses to expand existing operations located within the State
and to attract new businesses to the State. Local industrial
development agencies raised an aggregate of approximately $7.8
billion in separate tax-exempt bond issues through December 31,
1993. There are currently more than 100 county, city, town and
village agencies. In addition, the New York State Urban
Development Corporation ("UDC") is empowered to issue, subject to
approval by the Public Authorities Control Board, bonds and notes
on behalf of private corporations for economic development
projects.
NEW YORK LOCAL GOVERNMENT ASSISTANCE CORPORATION. In
the past the State's financial practices have required it to
issue tax and revenue anticipation notes, with maturities of one
year or less, each spring in amounts which, in recent years
ranged from approximately $2.6 billion to approximately $4.1
billion. Such notes were issued primarily because the State of
New York makes nearly one-half of its local assistance payments
during the first quarter of its fiscal year but receives taxes
and revenues at a more even rate throughout its fiscal year. In
June 1990, legislation was enacted creating the "New York Local
Government Assistance Corporation" (the "Corporation"), a public
benefit corporation empowered to issue long-term obligations to
fund certain payments to local governments traditionally funded
through the State's annual seasonal borrowing. Over a period of
the next several years, the issuance of those long-term
obligations, which will be amortized over no more than 30 years,
is expected to result in eliminating the need for continuing
short-term seasonal borrowing for those purposes, because the
timing of local assistance payments in future years will
correspond more closely with the State's available cash flow.
The legislation also imposed a cap on the annual seasonal
43
<PAGE>
borrowing of the State at $4.7 billion, less net proceeds of
bonds issued by the Corporation, except in cases where the
Governor and the legislative leaders have certified both the need
for additional borrowing and a schedule for reducing it to the
cap. If borrowing above the cap is thus permitted in any fiscal
year, it is required by law to be reduced to the cap by the
fourth fiscal year after the limit was first exceeded. Through
December 1994, the Corporation has issued its bonds to provide
net proceeds of $3.856 billion. The Corporation has been
authorized to issue its bonds to provide net proceeds of up to an
additional $315 million during the State's 1994-95 fiscal year.
STATE FINANCIAL PRACTICES: GAAP BASIS. Historically,
the State has accounted for, reported and budgeted its operations
on a cash basis. The State currently formulates a financial plan
which includes all funds required by generally accepted
accounting principles ("GAAP"). The State, as required by law,
continues to prepare its financial plan and financial reports on
the cash basis of accounting as well.
1994-95 FISCAL YEAR. The major uncertainties in the
1994-95 State Financial Plan continue to be those related to the
economy and tax collections, and could produce either favorable
or unfavorable variances during the balance of the year. While
adjustments to the forecast have been made to reflect emerging
relative weakness in the financial services industry, due in
large part to currency and credit market volatility, it is
possible that the weakness in that sector could precipitate
further deterioration in State receipts. On the other hand,
recent evidence suggests that the national economy may perform
better than projected, with potentially short-term results on
State receipts.
The State issued its second quarterly update to the
cash-basis 1994-95 State Financial Plan on October 28, 1994.
Revisions have been made to estimates of both receipts and
disbursements, based on: updated economic forecasts for both the
nation and the State, an analysis of actual receipts and
disbursements through the first six months of the fiscal year,
and an assessment of changing program requirements and cost
savings initiatives. The update projects a year-end surplus of
$14 million in the General Fund, with estimated receipts reduced
by $267 million and estimated disbursements reduced by $281
million, compared to the State Financial Plan as initially
formulated.
The State has updated its forecast of national and State
economic activity through the end of calendar year 1995. This
national economic forecast is basically unchanged from that on
which the initial formulation of the State Financial Plan was
based. The State economic forecast is marginally weaker than
44
<PAGE>
that on which the initial formulation of the State Financial Plan
was based. The forecast calls for employment to increase in 1994
and 1995. Employment growth will moderate in 1995 when the pace
of national economic growth is projected to slacken and entire
industries adjust to changing markets and the State's economy
absorbs the full impact of these developments. Personal income
is estimated to increase by 5.3% in 1994, and at a more moderate
rate in 1995.
Receipts through the first two quarters of the 1994-95
fiscal year fell short of expectations by $132 million. These
shortfalls were concentrated in the personal and business income
taxes, where quarterly personal income, bank and insurance tax
payments were lower than expected. Based on the revised economic
outlook and actual receipts for the first six months of the 1994-
95 fiscal year, projected General Fund receipts for the 1994-95
fiscal year have been reduced by $267 million. Estimates of the
yield of the personal income tax were lowered by $334 million,
primarily reflecting weak estimated tax collections through
September and lower withholding collections due to reduced
expectations for wage and salary growth - particularly securities
industry bonuses - during the balance of the year. It has been
estimated that, due to lower than expected tax revenues in the
final months of 1994, the State of New York will finish its 1994-
1995 fiscal year with a budget deficit of at least $300 million.
The Governor has stated that tax revenues for the final period of
1994 were $430 million lower than projected in October, while
spending was $110 million lower than expected.
The State issued its first update to the GAAP-basis
Financial Plan for the State's 1994-95 fiscal year on September
1, 1994. The GAAP-basis update is based on the first quarterly
cash-basis update to the 1994-95 State Financial Plan completed
in July. In the February 1994 projection, General Fund operation
results over the 1993-94 and 1994-95 fiscal year projection
period were anticipated to reduce the accumulated deficit by $256
million. The impact of the reported results for the State's
1993-94 fiscal year and the revised projection on the accumulated
deficit is substantially the same. Combining the $914 million
operating surplus for the State's 1993-94 fiscal year with the
projected $690 million operating deficit for the 1994-95 fiscal
year results in an anticipated $224 million reduction in the
accumulated deficit.
1993-94 FISCAL YEAR. The State's financial operations
have improved during recent fiscal years. During the period
1989-90 through 1991-92, the state incurred General Fund
operating deficits that were closed with receipts from the
issuance of tax and revenue anticipation notes. First, the
national recession and then the lingering economic slowdown in
the New York and regional economy, resulted in repeated
45
<PAGE>
shortfalls in receipts and three budget deficits. For its 1992-
93 and 1993-94 fiscal years, the state recorded balanced budgets
on a cash basis.
The State ended its 1993-94 fiscal year on a cash basis
with a balance of $1.140 billion in the tax refund reserve
account, $265 million in its Contingency Reserve Fund ("CRF") and
$134 million in its Tax Stabilization Reserve Fund. These fund
balances were primarily the result of an improving national
economy, State employment growth, tax collections that exceeded
earlier projections and disbursements that were below
expectations. Before the deposit of $1.140 billion in the tax
refund reserve account, General Fund receipts in 1993-94 exceeded
those originally projected when the State Financial Plan for that
year was formulated by $1.002 billion. Greater-than-expected
receipts in the personal income tax, the bank tax, the
corporation franchise tax and the estate tax accounted for most
of this variance, and more than offset weaker-than-projected
collections from the sales and use tax and miscellaneous
receipts.
The higher receipts resulted, in part, because the New
York economy performed better than forecasted. Employment growth
started in the first quarter of the State's 1993-94 fiscal year,
and, although this lagged behind the national economic recovery,
the growth in New York began earlier than forecasted. The New
York economy exhibited signs of strength in the service sector,
in construction, and in trade. The State Division of the Budget
believes that approximately 100,000 jobs were added during the
1993-94 fiscal year.
During the 1993-94 fiscal year, the State also
established and funded a Contingency Reserve Fund ("CRF") as a
way to assist the State in financing the cost of litigation
affecting the State. A year-end transfer of $36 million was made
to the CRF, which, after a disbursement for authorized fund
purposes, brought the CRF balance at the end of 1993-94 to $265
million. This amount was $165 million higher than the amount
originally targeted for this reserve fund. The State completed
its 1993-94 fiscal year on a GAAP basis with an accumulated
surplus in its combined governmental funds of $370 million.
STATE AUTHORITIES. The fiscal stability of the State is
related to the fiscal stability of its public authorities
("Authorities"), which generally have responsibility for
financing, constructing and operating revenue-producing public
benefit facilities. Authorities are not subject to the
constitutional restrictions on the incurrence of debt which apply
to the State itself and may issue bonds and notes within the
amounts of, and as otherwise restricted by, their legislative
authorization. As of September 30, 1993 there were 18
46
<PAGE>
Authorities that had outstanding debt of $100 million or more.
The aggregate outstanding debt, including refunding bonds, of
these 18 Authorities was $63.5 billion as of September 30, 1993.
As of March 31, 1994, aggregate public authority debt outstanding
as State-supported debt was $21.1 billion and as State-related
debt was $29.4 billion.
Several Authorities have, in the past experienced
financial difficulties. Certain authorities including, without
limitation, the Metropolitan Transportation Authority (the "MTA")
continue to experience financial difficulties, requiring
financial assistance from the State. The MTA oversees the New
York City's subway and bus lines by its affiliates, the New York
City Transit Authority and the Manhattan and Bronx Surface
Transit Operating Authority (collectively, the "TA"). Because
fare revenues are not sufficient to finance the mass transit
portion of these operations, the MTA has depended and will
continue to depend for operating support upon a system of State,
local government and TBTA support and, to the extent available,
Federal operating assistance, including loans, grants and
operating subsidies.
Over the past several years the State has enacted
several taxes-including a surcharge on the profits of banks,
insurance corporations and general business corporations doing
business in the 12-county Metropolitan Transportation Region
served by the MTA and a special one-quarter of 1% regional sales
and use tax-that provide revenues for mass transit purposes,
including assistance to the MTA. In addition, since 1987 State
law has required that the proceeds of a one-quarter of 1%
mortgage recording tax paid on certain mortgages in the
Metropolitan Transportation Region be deposited in a special MTA
fund for operating or capital expenses. Further in 1993, the
State dedicated a portion of the State petroleum business tax to
fund operating or capital assistance to the MTA. For the 1994-95
State fiscal year, total State assistance to the MTA is estimated
at approximately $1.3 billion.
In 1993, State legislation authorized the funding of a
five-year $9.56 billion MTA capital plan for the five-year
period, 1992 through 1996 (the "1992-96 Capital Program"). The
MTA has received approval of the 1992-96 Capital Program based on
this legislation from the 1992-96 Capital Program Review Board,
as State law requires. This is the third five-year plan since
the Legislature authorized procedures for the adoption, approval
and amendment of a five-year plan in 1981 for a capital program
designed to upgrade the performance of the MTA's transportation
systems and to supplement, replace and rehabilitate facilities
and equipment. The MTA, the Triborough Bridge and Tunnel
Authority and the TA are collectively authorized to issue an
aggregate of $3.1 billion of bonds (net of certain statutory
47
<PAGE>
exclusions) to finance a portion of the 1992-96 Capital Program.
The 1992-96 Capital Program is expected to be financed in
significant part through dedication of State petroleum business
taxes referred to above.
There can be no assurance that all the necessary
governmental actions for the Capital Program will be taken, that
funding sources currently identified will not be decreased or
eliminated, or that the 1992-96 Capital Programs or parts
thereof, will not be delayed or reduced. Furthermore, the power
of the MTA to issue certain bonds expected to be supported by the
appropriation of State petroleum business taxes is currently the
subject of a court challenge. If the Capital Program is delayed
or reduced, ridership and fare revenues may decline, which could,
among other things, impair the MTA's ability to meet its
operating expenses without additional State assistance.
NEW YORK CITY. The fiscal health of the State is also
closely related to the fiscal health of its localities,
particularly the City, which has required and continues to
require significant financial assistance from the State. The
City's independently audited operating results for each of its
1981 through 1993 fiscal years show a General Fund surplus
reported in accordance with GAAP. In addition, the City's
financial statements for the 1993 fiscal year received an
unqualified opinion from the City's independent auditors, the
eleventh consecutive year the City has received such an opinion.
The Office of the State Deputy Comptroller for the City
of New York ("OSDC"), and the New York State Financial Control
Board (the "Control Board") issue periodic reports on the City's
financial plans, as modified, analyzing forecasts of revenues and
expenditures, cash flow, and debt service requirements, as well
as compliance with the City's financial plan. OSDC staff reports
issued during the mid-1980's noted that the City's budgets
benefited from a rapid rise in the City's economy, which boosted
the City's collection of property, business and income taxes.
These resources were used to increase the City's workforce and
the scope of discretionary and mandated City services.
Subsequent OSDC staff reports examined the 1987 stock market
crash and the 1989-92 recession, which affected the New York City
region more severely than the nation, and attributed an erosion
of City revenues and increasing strain on City expenditures to
that recession. According to a recent OSDC staff report, the
City's economy is now slowly recovering, but the scope of that
recovery is uncertain and unlikely, in the foreseeable future, to
match the expansion of the mid- 1980's. Also, staff reports of
OSDC and the Control Board have indicated that the City's recent
balanced budgets have been accomplished, in part, through the use
of non-recurring resources, tax increases and additional State
assistance; that the City has not yet brought its long-term
48
<PAGE>
expenditures in line with recurring revenues; and that the City
is therefore likely to continue to face future projected budget
gaps requiring the City to increase revenues and/or reduce
expenditures.
The City prepares and operates under a four-year
financial plan which is submitted annually to the Control Board
for approval and is periodically updated. On October 25, 1994,
the City published the Financial Plan for the 1995-1998 fiscal
years, which is a proposed modification to a financial plan
submitted to the Control Board on July 8,1994 (the "July
Financial Plan") and which relates to the City, the Board of
Education ("BOE") and the City University of New York ("CUNY").
The City's July Financial Plan set forth proposed actions for the
1995 fiscal year to close a previously projected gap of
approximately $2.3 billion for the 1995 fiscal year, which
included City actions aggregating $1.9 billion, a $288 million
increase in State actions over the 1994 and 1995 fiscal years,
and a $200 million increase in Federal assistance. The 1995-1998
Financial Plan published on October 25, 1994 reflects actual
receipts and expenditures and changes in forecast revenues and
expenditures since the July Financial Plan and projects revenues
and expenditures for the 1995 fiscal year balanced in accordance
with GAAP. For the 1995 fiscal year, the Financial Plan includes
actions to offset an additional potential $1.1 billion budget
gap.
The gap closing measures for the 1995 fiscal year
include additional proposed agency actions, additional
expenditure reductions and greater than forecast miscellaneous
revenues. The $851 million of agency actions proposed in the
Financial Plan for the 1995 fiscal year, together with the $1.1
billion of agency actions proposed in the July Financial Plan,
are substantial and may be difficult to implement. Agency
actions proposed in the Financial Plan for the 1995 fiscal year
include reduced expenditures for the Police Department, a
reduction in the City's subsidy to the New York City Health and
Hospitals Corporation, reduced allocations to BOE, expenditure
reductions for the Human Resources Administration, expenditure
reductions for the Department of Corrections, and a reduction in
the City's subsidy to the MTA. The Financial Plan is subject to
the ability of the City to implement proposed reductions in City
personnel and other cost reduction initiatives. In addition,
legislation has been adopted by the State Legislature that would
impose a maintenance of effort requirement on the level of
funding required of the City for the BOE.
There is currently much debate over the exact amount of
the City's budget deficit. In the past few months, the official
figure has been set at $1.1 billion (approximately 3% of the
City's $31.6 billion budget). In response to the deficit, Mayor
49
<PAGE>
Guiliani in December 1994 imposed $800 million in spending cuts
and has proposed to cut another 3% from the budgets of city
agencies. Even taking these measures into account, however, it
has been estimated that the City will still be left with a
deficit of up to $700 million for the current fiscal year. In
order to compensate for significantly lower than forecasted tax
revenues, the City has announced its intention to refinance
certain existing debt obligations. As a result of this
announcement, Standard & Poor's has placed the general obligation
bonds of the City on credit watch.
The Financial Plan also sets forth projections for the
1996 through 1998 fiscal years and outlines a proposed gap-
closing program to close projected gaps of $1.0 billion, $1.5
billion and $2.0 billion for the 1996 through 1998 fiscal years,
respectively, after successful implementation of the $1.1 billion
gap-closing program for the 1995 fiscal year. The City's
financial plans have been the subject of extensive public comment
and criticism. On October 14, 1994, the City Comptroller issued
a report concluding that the budget gap for the 1995 fiscal year
had increased to $1.4 billion, due, in part, to continuing
shortfalls in tax revenues. There can be no assurance that the
gap closing actions proposed in the Financial Plan can be
successfully implemented or that the City will maintain a
balanced budget in future years without additional state aid,
revenue increases or expenditure reductions. Additional tax
increases and reductions in essential city services could
adversely affect the City's economic base.
The City since 1981 has fully satisfied its seasonal
financing needs in the public credit markets, repaying all short-
term obligations within their first year of issuance. The City
has issued $2.2 billion of short-term obligations in fiscal year
1995 to finance the City's current estimate of seasonal cash flow
needs for the 1995 fiscal year. Seasonal financing requirements
for the 1994 fiscal year increased to $1.75 billion from $1.4
billion in the 1993 fiscal year.
OTHER LOCALITIES. Certain localities in addition to the
City could have financial problems leading to requests for
additional State assistance during the State's 1994-95 fiscal
year and thereafter. The potential impact on the State of such
actions by localities is not included in projections of State
receipts and disbursements in the State's 1994-95 fiscal year.
CONNECTICUT PORTFOLIO
1993-1994 AND 1994-1995 ADOPTED BUDGETS. The adopted
budget was prepared in compliance with Public Act 91-3 of the
June 1991 Special Session which required a biennial budget
beginning in fiscal 1993-94. The biennial budget is a separate
50
<PAGE>
budget for each of the two fiscal years. The budget adopted by
the General Assembly for fiscal year 1993-94 had actual General
Fund expenditures of $7,894.5 million and General Fund revenues
of $7,914.2 million. For fiscal 1994-95, the adopted budget
anticipates General Fund expenditures of $8,569.7 million and
General Fund revenues of $8,590.4 million.
On November 3, 1992, Connecticut voters approved a
constitutional amendment which requires a balanced budget for
each year and imposes a cap on the growth of expenditures. The
General Assembly is required by the constitutional amendment to
adopt by three-fifths vote certain spending cap definitions,
which has not yet occurred. Accordingly, the adopted budget
complies with the current statutory spending cap definitions
enacted in 1991. The statutory spending cap limits the growth of
expenditures to either (1) the average of the annual increase in
personal income in the State for each of the preceding five
years, or (2) the increase in the consumer price index for urban
consumers during the preceding twelve-month period, whichever is
greater. Expenditures for the payment of bonds, notes and other
evidences of indebtedness are excluded from the constitutional
and statutory definitions of general budget expenditures. To
preclude shifting expenditures out of the General Fund to other
funds, the spending cap applies to all appropriated funds
combined. For fiscal 1993-94 and for fiscal 1994-95, permitted
growth in capped expenditures is 5.82% and 4.49% respectively.
The adopted budget is approximately $53.4 million below the cap
in fiscal 1994-95.
In order to promote economic stability and provide a
positive business climate, several tax changes were adopted
during the 1993 legislative session. Among the most significant
changes were the changes to the Corporation Business Tax based on
income--a four year gradual rate reduction was adopted reducing
the tax to 11.25% beginning January 1, 1995; 11% beginning
January 1, 1996; 10.5% beginning January 1, 1997 and 10%
beginning January 1, 1998. Additionally, the Corporation
Business Tax based on capital was eliminated for regulated
investment companies and real estate investment trusts.
1993-94 and 1994-1995 GENERAL FUND OPERATIONS. The
budget adopted by the General Assembly for fiscal year 1993-94
had actual General Fund expenditures of $7,894.5 million and
General Fund revenues of $7,914.2 million.
Pursuant to Section 3-115 of the Connecticut General
Statutes, the State's fiscal position is reported monthly by the
Comptroller. This report compares revenues already received and
expenditures already made with estimated revenues to be collected
and estimated expenditures to be made during the balance of the
51
<PAGE>
year. The Comptroller's final report for fiscal year 1994,
issued September 1, 1994, reflected a surplus of $19.7 million.*
__________________________________
* The Comptroller's monthly report of November 1, 1994 (for the
three months ended September 30, 1994) reflected a surplus of
$20.7 million.
52
<PAGE>
BUDGET ADJUSTMENT 1994-95. During the 1994 legislative
session, the General Assembly made several modifications to the
budget originally adopted for fiscal year 1994-95. The
adjustments to the budget now anticipate expenditures of $8,571.2
million and revenues of $8,571.2 million and the budget is $53.4
million below the expenditure cap.
The primary change from the originally adopted budget
has been the incorporation into the General Fund of the formerly
separate Uncompensated Care Pool which provides payments to
hospitals for their unreimbursed client expenditures. Most other
changes are the result of modifications made to the 1993-94
budget which roll-out into the ensuing fiscal year. The 1994-95
budget adjustment also anticipates the carry-forward of a $149.6
million surplus from the 1993-94 fiscal year to be used for debt
service payments in the Economic Recovery Fund.
ECONOMIC OVERVIEW. Connecticut is a mature and highly
developed state located in proximity to significant centers of
consumer and industrial activity. Connecticut's economy is
diverse, with manufacturing, services and trade accounting for
approximately 70% of total non-agricultural employment. Non-
manufacturing employment has risen significantly. The rapid
relative growth in the non-manufacturing sector as compared to
the manufacturing sector is a trend that is in evidence
nationwide and reflects the increased importance of the service
industry. From 1970 to 1993, manufacturing employment in the
State declined 33.5%, while non-manufacturing employment rose
63.3%, particularly in the service, trade and finance categories,
resulting in an increase of 27.6% in total growth in non-
agricultural establishment sectors.
Manufacturing has traditionally been of prime economic
importance to Connecticut. Manufacturing is diversified, with
transportation equipment (primarily aircraft engines, helicopters
and submarines) the dominant industry, followed by non-electrical
machinery, fabricated metal products and electrical machinery.
Defense-related business plays an important role in the
Connecticut economy. In the past 10 years, Connecticut has
ranked from sixth to twelfth among all states in total defense
contract awards, receiving 2.5% of all such contracts in 1993.
However, the Federal government has reduced the amount of
defense-related spending and the future effect of such reductions
cannot be predicted.
The State derives approximately 70% of its revenues from
taxes imposed by the State. Miscellaneous fees, receipts and
transfers and Federal grants account for most of the other State
revenues. The State finances its operations primarily through
the General Fund which receives most tax and non-tax revenues of
53
<PAGE>
the State, with the exception of certain transportation-related
taxes, fees and revenues.
STATE INDEBTEDNESS. There can be no assurance that
general economic difficulties or the financial circumstances of
Connecticut or its towns and cities will not adversely affect the
market value of its obligations or the ability of Connecticut
issuers or obligors of state, municipal and public authority debt
obligations to meet their obligations thereunder.
The State has established various statewide authorities
and two regional water authorities, one of which has since become
independent, to finance revenue-producing projects. Five of
these authorities have the power to incur, under certain
circumstances, indebtedness for which the State has contingent
or, in limited cases, direct liability. In addition, recent
State statutes have been enacted and implemented with respect to
certain bonds issued by the City of Bridgeport for which the
State has contingent liability and by the City of West Haven for
which the State has direct guarantee liability.
The General Assembly has power to authorize the issuance
of bonds of the State or to impose limited or contingent
liabilities upon the State in such manner as it may deem
appropriate and as may serve a public purpose.
LITIGATION. The State, its officers and employees, are
defendants in numerous lawsuits. The Attorney General's Office
has reviewed the status of pending lawsuits and reports that an
adverse decision in certain cases could materially affect the
State's financial position.
CALIFORNIA PORTFOLIO
RECENT TRENDS IN STATE ECONOMIC CONDITIONS.
California's economy is the largest among the 50 states and one
of the largest in the world. The State's July 1, 1993 population
of approximately 31 million represented more than 12.0% of the
total United States population and total personal income in the
State, at $683 million in 1993, accounted for 12.7% of all
personal income in the nation. Total employment is approximately
14 million, the majority of which is in the service, trade and
manufacturing sectors.
Since the start of the 1990-91 fiscal year, the state
has faced the worst economic, fiscal and budget conditions since
the 1930's. Construction, manufacturing (especially aerospace),
exports and financial services, among others, have all been
severely affected. Job losses have been the worst of any post-
war recession and continued through the end of 1993. The State's
Department of Finance has projected slow recovery from the
54
<PAGE>
recession beginning in 1994, although prerecession job levels are
not expected to be reached until 1997.
There is growing evidence, however, that California is
showing signs of an economic upturn. Sectors which are
contributing to the upturn include construction and related
manufacturing, wholesale and retail trade, transportation and
several service industries such as amusements and recreation,
business services and management consulting. Electronics is
showing modest growth and the rate of decline in aerospace
manufacturing is diminishing. These trends are expected to
continue, and by next year, much of the restructuring in the
finance and utilities industries should be nearly completed. It
is expected that California's economic upturn should gain
momentum during the next two years.
Retail sales through the first eight months of 1994
increased 5.1% from the same period a year earlier. Employment
growth continues to be tenuous with small monthly increases
followed by small monthly decreases in the early month of 1994.
Despite the Northridge earthquake, the housing forecast remains
unchanged with building permits increasing slightly from
recession lows. The expected rise in interest rates will likely
offset any increase in housing.
CONSTITUTIONAL LIMITS ON SENDING AND TAXES. Certain
California constitutional amendments, legislative measures,
executive orders, civil actions and voter initiatives could
adversely affect the ability of issuers of California municipal
securities to pay interest and principal on municipal securities.
ARTICLE XIII B. On November 6, 1979, California voters
approved Proposition 4, which added Article XIII B to the
California Constitution. Pursuant to Article XIII B, the State is
subject to an annual appropriations limit (the "Appropriations
Limit").
Article XIII B was modified substantially by
Propositions 98 and 111 in 1988 and 1990, respectively. (See
"Proposition 98" below.) "Appropriations subject to limitation,"
with respect to the State, are authorizations to spend "proceeds
of taxes" which consist of tax revenues, and certain other funds,
including proceeds from regulatory licenses, user charges or
other fees to the extent that such proceeds exceed "the cost
reasonably borne by the entity in providing the regulation,
product or service," but "proceeds of taxes" exclude most state
subsidies to local governments, tax refunds and some benefit
payments such as unemployment insurance. No limit is imposed on
appropriations of funds which are not "proceeds of taxes," such
as reasonable user charges or fees, and certain other non-tax
funds.
55
<PAGE>
Debt service costs for certain bonds, and revenues
derived from new taxes such as increased cigarette and tobacco
taxes are expressly exempted from the Appropriations Limit. In
addition, the Appropriations Limit may be exceeded in certain
emergency situations.
The State's yearly Appropriations Limit is based on the
limit for the prior year with annual adjustments for changes in
California per capita personal income and population and any
transfers of financial responsibility of providing services
between units of government.
As originally enacted in 1979, the State's
Appropriations Limit was based on 1978-79 fiscal year
authorizations to expend proceeds of taxes and was adjusted
annually to reflect changes in the cost of living and population.
Starting in the 1990-91 Fiscal Year, the State's Appropriations
Limit was recalculated by taking the actual 1986-87 limit, and
applying the annual adjustments as if Proposition 111 had been in
effect. This recalculation resulted in an increase of $1 billion
to the State's Appropriations Limit in 1990-91.
PROPOSITION 98. On November 8, 1988, voters approved
Proposition 98, a combined initiative constitutional amendment
and statute called the "Classroom Instructional Improvement and
Accountability Act". Proposition 98 changed State funding of
public education below the university level, and the operation of
the State Appropriations Limit, primarily by guaranteeing local
schools and community colleges ("K-14") a minimum share of
General Fund revenues. Under Proposition 98 (as modified by
"Proposition 111"), K-14 schools are guaranteed the greater of
(a) 34% (this amount is subject to a legal challenge) of General
Fund revenues (the "first test"), (b) the amount appropriated to
K-14 schools in the prior year, adjusted for changes in the cost
of living (measured as in Article XIII B by reference to
California per capita personal income) and enrollment (the
"second test"), or (c) the amount appropriated in the prior year
adjusted by changes in enrollment and per capita General Fund
revenues, plus an additional small adjustment factor (the "third
test"). If the third test is used in any year, the difference
between the third test and the second test would become a
"credit" to schools which would be the basis of payments in
future years when per capita General Fund revenue growth exceeds
per capita personal income growth. Proposition 98 permits the
Legislature by two-thirds vote of both houses, with the
Governor's concurrence, to suspend the K-14 schools' minimum
funding for a one-year period.
AUTOMATIC BUDGET REDUCTION. Legislation was enacted in
July 1990 providing for an automatic mechanism to control State
expenditures. The Legislature may suspend the operation of this
56
<PAGE>
mechanism for any fiscal year; the mechanism was so suspended in
the 1992-93 Budget Act, the 1993-94 Budget Act and the 1994-95
Budget Act.
SEASONAL BORROWINGS OF THE STATE. As part of its cash
management program, California regularly issues short-term
obligations such as Revenue Anticipation Notes to meet cash flow
needs during the course of a fiscal year. The accumulated budget
deficits over the past several years, together with expenditures
for school funding which have not been reflected in the budget
and reduction of available internal borrowable funds, have
combined to significantly deplete the state's cash resources to
pay its ongoing expenses. Since spring 1992, the state has
depended upon repeated external borrowings, including borrowings
extending into the subsequent fiscal year to meet its cash needs,
including repayment of maturing Revenue Anticipation Notes and
Revenue Anticipation Warrants. To meet its cash flow needs in
the 1994-95 fiscal year, in July and August 1994 the state issued
$4.0 billion of Revenue Anticipation Warrants which mature on
April 25, 1996 and $3.0 billion of Revenue Anticipation Notes
maturing on June 28, 1995.
1993-94 FISCAL YEAR. The Governor's Budget introduced
on January 8, 1993 disclosed that the continuing recession made
further budget cuts necessary. To balance the budget in the face
of declining revenues, the Governor proposed a series of revenue
shifts from local government, reliance on increased federal aid,
and reductions in State spending. The May revision of the
Governor's Budget projected the State would have an accumulated
deficit of about $2.75 billion by June 30, 1993, essentially
unchanged from the prior year. The Governor proposed to
eliminate this deficit over an 18-month period. Unlike previous
years, the Governor's Budget and May revision did not calculate a
"gap" to be closed, but rather set forth revenue and expenditure
forecasts and proposals designed to produce a balanced budget.
The 1993-94 Budget Act was predicated on General Fund
revenues and transfers estimated at $40.6 billion, about $400
million below 1992-93 (and the second consecutive year of actual
decline). The principal reasons for declining revenue were the
continued weak economy and the expiration or repeal of three
fiscal steps taken in 1991. Administration reports during the
course of the 1993-94 fiscal year indicated that while economic
recovery appeared to have started in the second half of the
fiscal year, recessionary conditions continued longer than had
been anticipated when the 1993-94 Budget Act was adopted.
Overall, revenues for the 1993-94 fiscal year were about $800
million lower than original projections, and expenditures were
about $780 million higher.
57
<PAGE>
During the 1993-94 fiscal year, the State implemented
the Deficit Retirement Plan as part of the Budget Act in order to
retire the existing deficit of $2.8 billion over two fiscal
years. Under the Deficit Retirement Plan, the State issued $1.2
billion of Revenue Anticipation warrants in February 1994 that
matured on December 21, 1994. This borrowing reduced the cash
deficit at the end of the 1993-94 fiscal year. Nevertheless,
because of the $1.5 billion variance from the original 1993-94
Budget Act assumptions, the General Fund ended the fiscal year at
June 30, 1994 carrying forward an accumulated deficit of
approximately $2 billion. Because of the revenue shortfall and
the State's reduced internal borrowable cash resources, in
addition to the $1.2 billion of Revenue Anticipation Warrants
issued as part of the Deficit Retirement Plan, the State issued
an additional $2.0 billion of Revenue Anticipation Warrants,
maturing July 26, 1994, which were needed to fund the State's
obligations and expenses through the end of the 1993-94 fiscal
year.
On January 17, 1994, a major earthquake measuring an
estimated 6.8 on the Richter Scale struck the Los Angeles
metropolitan area, centered in the Northridge area of the City of
Los Angeles. Significant property damage to private and public
facilities occurred in a four-county area including northern Los
Angeles County, Ventura County, and parts of Orange and San
Bernardino Counties, which were declared as State and federal
disaster areas by January 18. Current estimates of total
property damage (private and public) are in the range of $20
billion, but these estimates are still subject to change. The
State in conjunction with the federal government is committed to
providing assistance to local governments, individuals and
businesses suffering damage as a result of the earthquake, as
well as to providing for the repair and replacement of State-
owned facilities. The federal government will provide
substantial earthquake assistance.
1994-95 FISCAL YEAR. The 1994-95 fiscal year represents
the fourth consecutive year the Governor and Legislature were
faced with a very difficult budget environment to produce a
balanced budget. The State has experienced recurring budget
deficits and many program cuts and budgetary adjustments have
already been made in the last three years. The Governor's Budget
Proposal, as updated in May and June, 1994, recognized that the
accumulated deficit could not be repaid in one year, and proposed
a two-year solution. The budget proposal sets forth revenue and
expenditure forecasts and proposals which result in operating
surpluses for the budget for both 1994-95 and 1995-96, and lead
to the elimination of the accumulated budget deficit, estimated
at about $2.0 billion at June 30, 1994, by June 30, 1996. The
1994-95 Budget Act projects General Fund expenditures of $40.9
billion, an increase of $1.6 billion over the 1993-94 fiscal
58
<PAGE>
year. The 1994-95 Budget Act assumes that the State will use a
cash flow borrowing program in 1994-95 which combines one-year
notes and two-year warrants, which have been issued. Issuance of
the warrants allows the State to defer repayment of approximately
$1.0 billion of its accumulated budget deficit into the 1995-96
fiscal year. The Budget Adjustment Law enacted along with the
1994-95 Budget Act is designed to ensure that the warrants will
be repaid in the 1995-96 fiscal year.
Administration reports during the course of the fiscal
year indicate that revenues for the first four months of the
fiscal year were 3.2% above the forecast. Pursuant to the Budget
Adjustment Law, the State Controller issued a report on November
15, 1994 on the projected cash resources for the General Fund as
of June 30, 1995 that indicated that the cash position of the
General Fund would be $581 million better than was estimated in
the July 1994 cash flow projections and therefore, no budget
adjustment procedures will be invoked for the 1994-95 fiscal
year.
On December 6, 1994, after announcing that it had
unrealized losses totaling $1.5 billion in its pooled investment
fund, Orange County filed for protection under Chapter 9 of the
United States Bankruptcy Code. Various cities and other
municipalities as well as school districts, sewer agencies and
other public entities within Orange County were invested in the
pooled investment fund, along with Orange County itself. County
officials currently estimate that the investment fund's total
losses will be approximately $2.0 billion. Investment fund
participants are currently experiencing difficulties meeting
their operating and debt service requirements due, in part, to
their limited access to funds. In addition, rating agencies have
downgraded or placed on credit watch certain debt obligations of
Orange County and of other participants in its investment fund.
There can be no assurance that Orange County and the other
investment fund participants will be able to meet scheduled
payments of interest and principal on their respective short-term
and long-term debt obligations.
The foregoing summaries do not provide information
regarding most securities in which the Portfolios are permitted
to invest and in particular do not provide specific information
on the issuers or types of municipal securities in which the
Portfolios invest or the private business entities whose
obligations support the payments on AMT-Subject Bonds in which
the Portfolios will invest.
LITIGATION. While at any given time, including the
present, there are numerous civil actions pending against
California which could, if determined adversely to California,
affect California's expenditures and, in some cases, its
59
<PAGE>
revenues, the Attorney General of the State of California is
currently of the opinion that no pending actions are likely to
have a material adverse effect on California's ability to pay
debt service on general obligation intermediate- and long-term
debt as they become due.
ADDITIONAL INFORMATION. THIS STATEMENT OF ADDITIONAL
INFORMATION DOES NOT CONTAIN ALL THE INFORMATION SET FORTH IN THE
REGISTRATION STATEMENT FILED BY THE FUND WITH THE SECURITIES AND
EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933. COPIES OF
THE REGISTRATION STATEMENT MAY BE OBTAINED AT A REASONABLE CHARGE
FROM THE COMMISSION OR MAY BE EXAMINED, WITHOUT CHARGE, AT THE
COMMISSION'S OFFICES IN WASHINGTON, D.C.
60
<PAGE>
- -----------------------------------------------------------------
FINANCIAL STATEMENTS
- -----------------------------------------------------------------
INDEPENDENT AUDITOR'S REPORT
To the Board of Trustees
Alliance Money Market Fund
We have audited the accompanying statements of assets
and liabilities of Alliance Money Market Fund Prime Portfolio,
Government Portfolio, and General Municipal Portfolio as of
February 8, 1995. These financial statements are the
responsibility of the Fund's management. Our responsibility is
to express an opinion on these financial statements based on our
audit.
We conducted our audit 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 are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. 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 audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of Alliance Money Market Fund Prime Portfolio,
Government Portfolio, and General Municipal Portfolio as of
February 8, 1995, in conformity with generally accepted
accounting principles.
/s/ MCGLADRY & PULLEN, LLP
New York, New York
March 14, 1995
00250217.AE6
<PAGE>
ALLIANCE MONEY MARKET FUND
STATEMENTS OF ASSETS AND LIABILITIES
FEBRUARY 8, 1995
PRIME GOVERNMENT MUNICIPAL
PORTFOLIO PORTFOLIO PORTFOLIO
ASSETS
CASH $33,334 $33,333 $33,333
DEFERRRED ORGANIATION
EXPENSES (NOTE A) $58,150 $58,150 $58,150
_______ _______ _______
TOTAL ASSETS $91,484 $91,483 $91,483
_______ _______ _______
LIABILITIES
DEFERRED ORGANIZATION
EXPENSES PAYABLE (NOTE A) $58,150 $58,150 $58,150
_______ _______ _______
NET ASSETS $33,334 $33,333 $33,333
======= ======= =======
SHARES OF BENEFICIAL INTEREST
ISSUED AND OUTSTANDING
(UNLIMITED NUMBER OF SHARES
OF BENEFICIAL INTEREST
AUTHORIZED) $33,334 $33,333 $33,333
======= ======= =======
NET ASSET VALUE
REDEMPTION AND OFFERING PRICE
PER SHARE $1.00 $1.00 $1.00
======= ======= =======
SEE NOTES TO STATEMENT OF ASSETS AND LIABILITIES
00250217.AE6
<PAGE>
ALLIANCE MONEY MARKET FUND
Notes to Statements of Assets and Liabilities
February 8, 1995
Note A-Organization
Alliance Money Market Fund (the "Fund") was organized as a
Massachusetts Business Trust on October 26, 1994, and is
registered under the Investment Company Act of 1940 as an open-
end, management investment company. The Fund operates as a
series company currently comprised of three portfolios: General
Municipal Portfolio, Government Portfolio and Prime Portfolio
(the "Portfolios"). Each series is considered to be a separate
entity for financial reporting and tax purposes. The Fund has
had no operations other than the sale to Alliance Capital
Management L.P. (the "Adviser") of 33,334 shares of Prime
Portfolio and 33,333 shares of Government Portfolio and General
Municipal Portfolio, respectively, of shares of beneficial
interest for the aggregate amount of $100,000 on February 6,
1995. Costs incurred and to be incurred in connection with the
organization and initial registration of the Fund will be paid
initially by the Adviser. The Fund will reimburse the Adviser
for such costs, which will be deferred and amortized by the Fund
over the period of benefit, not to exceed 60 months from the date
the Fund commences investment operations. During the
amortization period, the proceeds of any redemption of the
original shares by any holder thereof will be reduced by a pro
rata portion of any then unamortized organization costs based on
the ratio of the shares redeemed to total initial shares
outstanding immediately prior to the redemption.
Note B-Investment Advisory, Distribution Services and
Administration Agreements
Under the terms of an Investment Advisory Agreement, the Fund
will pay its Adviser an advisory fee at an annual rate of .50 of
1% of each of the Portfolio's average daily net assets. Such fee
will be accrued daily and paid monthly.
The Adviser has agreed to reimburse the Fund to the extent that
the aggregate expenses (exclusive of interest, taxes, brokerage,
distribution services fees and extraordinary expenses, all to the
extent permitted by applicable state law and regulation) exceed
the limits prescribed by any state in which the Fund's shares are
qualified for sale. The Fund believes that the most restrictive
expense ratio limitation imposed by any state is 2.5% of the
first $30 million of its average net assets, 2% of the next $70
million of its average net assets and 1.5% of its average net
assets in excess of $100 million. Expense reimbursements, if
any, will be accrued daily and paid monthly.
<PAGE>
The Fund has entered into a Distribution Services Agreement (the
"Agreement") pursuant to Rule 12b-1 under the Investment Company
Act of 1940 with Alliance Fund Distributors, Inc., (the
"Principal Underwriter"). The agreement provides that the Fund
will pay a distribution services fee to the Principal Underwriter
at an annual rate of up to .45 of 1% of each of the Portfolio's
average daily net assets. Such fee will be accrued daily and
paid monthly. The Agreement provides that the Principal
Underwriter will use amounts payable under the Agreement in their
entirety for distribution assistance and promotional activities.
The Agreement also provides that the Adviser may use its own
resources to finance the distribution of the Fund's shares. The
Principal Underwriter is a wholly-owned subsidiary of Alliance
Capital Management L.P.
Under the terms of the Administration Agreement, ADP Financial
Information Services, Inc. a wholly owned subsidiary of Automatic
Data Processing, Inc., serves as the administrator of the Fund,
on behalf of the Portfolios. The Administrator provides certain
administrative and shareholder accounting services. In
consideration of the services provided by the Administrator, the
Administrator receives from each Portfolio an administrative fee
at an annual rate of .05 of 1% of each of the Portfolio's average
daily net assets. Such fee will be accrued daily and paid
monthly.
00250217.AE6
<PAGE>
- -----------------------------------------------------------------
APPENDIX A
DESCRIPTION OF MUNICIPAL SECURITIES
- -----------------------------------------------------------------
MUNICIPAL NOTES generally are used to provide for short-
term capital needs and usually have maturities of one year or
less. They include the following:
1. PROJECT NOTES, which carry a U.S. Government
guarantee, are issued by public bodies (called "local issuing
agencies") created under the laws of a state, territory, or U.S.
possession. They have maturities that range up to one year from
the date of issuance. Project Notes are backed by an agreement
between the local issuing agency and the Federal Department of
Housing and Urban Development. These Notes provide financing for
a wide range of financial assistance programs for housing,
redevelopment, and related needs (such as low-income housing
programs and renewal programs).
2. TAX ANTICIPATION NOTES are issued to finance
working capital needs of municipalities. Generally, they are
issued in anticipation of various seasonal tax revenues, such as
income, sales, use and business taxes, and are payable from these
specific future taxes.
3. REVENUE ANTICIPATION NOTES are issued in
expectation of receipt of other types of revenues, such as
Federal revenues available under the Federal Revenue Sharing
Programs.
4. BOND ANTICIPATION NOTES are issued to provide
interim financing until long-term financing can be arranged. In
most cases, the long-term bonds then provide the money for the
repayment of the Notes.
5. CONSTRUCTION LOAN NOTES are sold to provide
construction financing. After successful completion and
acceptance, many projects receive permanent financing through the
Federal Housing Administration under the Federal National
Mortgage Association or the Government National Mortgage
Association.
6. TAX-EXEMPT COMMERCIAL PAPER is a short-term
obligation with a stated maturity of 365 days or less. It is
issued by agencies of state and local governments to finance
seasonal working capital needs or as short-term financing in
anticipation of longer term financing.
A-1
<PAGE>
MUNICIPAL BONDS, which meet longer term capital needs
and generally have maturities of more than one year when issued,
have three principal classifications:
1. GENERAL OBLIGATION BONDS are issued by such
entities as states, counties, cities, towns, and regional
districts. The proceeds of these obligations are used to fund a
wide range of public projects, including construction or
improvement of schools, highways and roads, and water and sewer
systems. The basic security behind General Obligation Bonds is
the issuer's pledge of its full faith and credit and taxing power
for the payment of principal and interest. The taxes that can be
levied for the payment of debt service may be limited or
unlimited as to the rate or amount of special assessments.
2. REVENUE BONDS generally are secured by the net
revenues derived from a particular facility, group of facilities,
or, in some cases, the proceeds of a special excise or other
specific revenue source. Revenue Bonds are issued to finance a
wide variety of capital projects including electric, gas, water
and sewer systems; highways, bridges, and tunnels; port and
airport facilities; colleges and universities; and hospitals.
Many of these Bonds provide additional security in the form of a
debt service reserve fund to be used to make principal and
interest payments. Housing authorities have a wide range of
security, including partially or fully insured mortgages, rent
subsidized and/or collateralized mortgages, and/or the net
revenues from housing or other public projects. Some authorities
provide further security in the form of a state's ability
(without obligation) to make up deficiencies in the debt service
reserve fund.
3. INDUSTRIAL DEVELOPMENT BONDS are considered
municipal bonds if the interest paid thereon is exempt from
Federal income tax and are issued by or on behalf of public
authorities to raise money to finance various privately operated
facilities for business and manufacturing, housing, sports, and
pollution control. These Bonds are also used to finance public
facilities such as airports, mass transit systems, ports, and
parking. The payment of the principal and interest on such Bonds
is dependent solely on the ability of the facility's user to meet
its financial obligations and the pledge, if any, of real and
personal property as security for such payment.
A-2
<PAGE>
- -----------------------------------------------------------------
APPENDIX B
DESCRIPTION OF SECURITIES RATINGS
- -----------------------------------------------------------------
Municipal and Corporate
BONDS AND MUNICIPAL LOANS
The two highest ratings of Moody's Investors Service,
Inc. ("Moody's") for municipal and corporate bonds are Aaa and
Aa. Bonds rated Aaa are judged by Moody's to be of the best
quality. Bonds rated Aa are judged to be of high quality by all
standards. Together with the Aaa group, they comprise what are
generally known as high-grade bonds. Moody's states that Aa
bonds are rated lower than the best bonds because margins of
protection or other elements make long-term risks appear somewhat
larger than Aaa securities. The generic rating Aa may be
modified by the addition of the numerals 1, 2 or 3. The modifier
1 indicates that the security ranks in the higher end of the Aa
rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower
end of such rating category.
The two highest ratings of Standard & Poor's Corporation
("Standard & Poor's") for municipal and corporate bonds are AAA
and AA. Bonds rated AAA have the highest rating assigned by
Standard & Poor's to a debt obligation. Capacity to pay interest
and repay principal is extremely strong. Bonds rated AA have a
very strong capacity to pay interest and repay principal and
differ from the highest rated issues only in a small degree. The
AA rating may be modified by the addition of a plus (+) or minus
(-) sign to show relative standing within that rating category.
SHORT-TERM MUNICIPAL LOANS
Moody's highest rating for short-term municipal loans is
MIG-1/VMIG-1. Moody's states that short-term municipal
securities rated MIG-1/VMIG-1 are of the best quality, enjoying
strong protection from established cash flows of funds for their
servicing or from established and broad-based access to the
market for refinancing, or both. Loans bearing the MIG-2/VMIG-2
designation are of high quality, with margins of protection ample
although not so large as in the MIG-1/VMIG-1 group.
Standard & Poor's highest rating for short-term
municipal loans is SP-1. Standard & Poor's states that short-
term municipal securities bearing the SP-1 designation have very
strong or strong capacity to pay principal and interest. Those
issues rated SP-1 which are determined to possess overwhelming
B-1
<PAGE>
safety characteristics will be given a plus (+) designation.
Issues rated SP-2 have satisfactory capacity to pay principal and
interest.
OTHER MUNICIPAL SECURITIES AND COMMERCIAL PAPER
"Prime-1" is the highest rating assigned by Moody's for
other short-term municipal securities and commercial paper, and
"A-1+" and "A-1" are the two highest ratings for commercial paper
assigned by Standard & Poor's (Standard & Poor's does not rate
short-term tax-free obligations). Moody's uses the numbers 1, 2
and 3 to denote relative strength within its highest
classification of "Prime", while Standard & Poor's uses the
number 1+, 1, 2 and 3 to denote relative strength within its
highest classification of "A". Issuers rated "Prime" by Moody's
have the following characteristics: their short-term debt
obligations carry the smallest degree of investment risk, margins
of support for current indebtedness are large or stable with cash
flow and asset protection well assured, current liquidity
provides ample coverage of near-term liabilities and unused
alternative financing arrangements are generally available.
While protective elements may change over the intermediate or
longer term, such changes are most unlikely to impair the
fundamentally strong position of short-term obligations.
Commercial paper issuers rated "A" by Standard & Poor's have the
following characteristics: liquidity ratios are better than
industry average, long-term debt rating is A or better, the
issuer has access to at least two additional channels of
borrowing, and basic earnings and cash flow are in an upward
trend. Typically, the issuer is a strong company in a well-
established industry and has superior management.
B-2
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits for the Fund
(a) FINANCIAL HIGHLIGHTS
Included in the Registrant's Statement of Additional
Information
Statement of Assets and Liabilities - March 1995
Notes to Financial Statement - March 1995
Report of Independent Auditors - March 1995
Included in Part C of the Registration Statement
All other schedules are omitted as the required
information is inapplicable
(b) EXHIBITS
(1) Copy of Declaration of Trust of the Registrant - Filed
herewith.
(2) Copy of By-Laws of the Registrant - Filed herewith.
(3) Not applicable.
(4)(a-g) Form of Specimen Share Certificates for the Prime,
Government, General Municipal, New York Municipal,
California Municipal, Connecticut Municipal and New
Jersey Municipal Portfolios - Filed herewith.
(5) Copy of Advisory Agreement between the Registrant and
Alliance Capital Management L.P. - Filed herewith.
(6) Copy of Distribution Services Agreement between the
Registrant and Alliance Fund Distributors, Inc. - Filed
herewith.
(7) Not applicable.
(8) Copy of Custodian Contract between the Registrant and
The Bank of New York - Filed herewith.
(9)(a) Copy of Transfer Agency Agreement between the
Registrant and Alliance Fund Services, Inc. -
Incorporated by reference from Registrant's
Registration Statement on Form N-1A (File Nos. 33-85850
and 811-8838) as filed with the Securities and Exchange
Commission on October 31, 1994.
C-1
<PAGE>
(b) Copy of Administration Agreement between the Registrant
and ADP Financial Information Services, Inc. - Filed
herewith.
(c) Copy of Fund Accounting Agreement between the
Registrant and The Bank of New York - Filed herewith.
(10)(a) Opinion and Consent of Seward & Kissel - Filed
herewith.
(b) Opinion and Consent of Sullivan & Worcester - Filed
herewith.
(11) Consent of Independent Auditors - Filed herewith.
(12) Not applicable.
(13) Investment Representation Letter of Alliance Capital
Management L.P.
(14) Not applicable.
(15) Rule 12b-1 Plan - See Exhibit 6 hereto.
(16) Schedule of Computation of Performance Quotation.*
Other Exhibits: Powers of Attorney of Richard S. Borisoff, John
D. Carifa, Robert J. Casale, Jeffrey M. Cole, William H. Foulk,
Jr., Carl D. Ingrassia, Arthur S. Kranseler, Robert A. Lewis,
Clifford L. Michel, William Rhoads III and James P. Syrett -
Filed herewith.
ITEM 25. Persons Controlled by or Under Common Control with
Registrant.
None.
ITEM 26. Number of Holders of Securities.
None.
__________________________
* To be filed by Post-Effective Amendment.
C-2
<PAGE>
ITEM 27. Indemnification
Reference is hereby made to Article V of the Registrant's
Declaration of Trust.
The Trustees and officers of the Registrant and the personnel
of the Registrant's investment adviser, administrator and
distributor are insured under an errors and omissions
liability insurance policy. The Registrant and its officers
are also insured under the fidelity bond required by Rule
17g-1 under the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee,
officer or employee of the Registrant to the maximum extent
permitted by law; provided, however, that any such
indemnification (unless ordered by a court) shall be made by
the Registrant only as authorized in the specific case upon a
determination that indemnification of such persons is proper
in the circumstances. Such determination shall be made (i)
by the Trustees, by a majority vote of a quorum which
consists of Trustees who are neither in Section 2(a)(19) of
the Investment Company Act of 1940, nor parties to the
proceeding, or (ii) if the required quorum is not obtainable
or, if a quorum of such Trustees so directs, by independent
legal counsel in a written opinion. No indemnification will
be provided by the Registrant to any Trustee or officer of
the Registrant for any liability to the Registrant or
shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification
monies for actions based upon the Investment Company Act of
1940 may be concerned, such payments will be made only on
the following conditions: (i) the advances must be limited
to amounts used, or to be used, for the preparation or
presentation of a defense to the action, including costs
connected with the preparation of a settlement; (ii) advances
may be made only upon receipt of a written promise by, or on
behalf of, the recipient to repay that amount of the advance
which exceeds that amount to which it is ultimately
determined that he is entitled to receive from the Registrant
by reason of indemnification; and (iii) (a) such promise must
be secured by a surety bond, other suitable insurance or an
equivalent from of security which assures that any repayments
may be obtained by the Registrant without delay or
litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a
majority of a quorum of the Registrant's disinterested, non-
party Trustees, or an independent legal counsel in a written
C-3
<PAGE>
opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately
will be found entitled to indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therfore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of
expenses incurred or paid by a trustee, officer or
controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection
with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
ITEM 28. Business and Other Connections of Investment Adviser.
The descriptions of Alliance Capital Management L.P. under
the caption "The Adviser" in the Prospectus and "Management
of the Fund" in the Prospectus and in the Statement of
Additional Information constituting Parts A and B,
respectively, of this Registration Statement are incorporated
by reference herein.
The information as to the directors and executive officers of
Alliance Capital Management Corporation, the general partner
of Alliance Capital Management L.P., set forth in Alliance
Capital Management L.P.'s Form ADV filed with the Securities
and Exchange Commission on April 21, 1988 (File No. 801-
32361) and amended through the date hereof, is incorporated
by reference.
ITEM 29. Principal Underwriters
(a) Alliance Fund Distributors, Inc., the Registrant's
Principal Underwriter in connection with the sale of
shares of the Registrant, also acts as Principal
Underwriter for the following registered investment
companies:
ACM Institutional Reserves, Inc.
C-4
<PAGE>
AFD Exchange Reserves
Alliance All-Asia Investment Fund, Inc.
Alliance Balanced Shares, Inc.
Alliance Bond Fund, Inc.
Alliance Capital Reserves
Alliance Counterpoint Fund
Alliance Developing Markets Fund, Inc.
Alliance Global Dollar Government Fund, Inc.
Alliance Global Small Cap Fund, Inc.
Alliance Government Reserves
Alliance Growth and Income Fund, Inc.
Alliance Income Builder Fund, Inc.
Alliance International Fund
Alliance Mortgage Securities Income Fund, Inc.
Alliance Mortgage Strategy Trust, Inc.
Alliance Multi-Market Strategy Trust, Inc.
Alliance Municipal Income Fund II
Alliance Municipal Income Fund, Inc.
Alliance Municipal Trust
Alliance New Europe Fund, Inc.
Alliance North American Government Income Trust, Inc.
Alliance Premier Growth Fund, Inc.
Alliance Quasar Fund, Inc.
Alliance Short-Term Multi-Market Trust, Inc.
Alliance Technology Fund, Inc.
Alliance Utility Income Fund, Inc.
Alliance Variable Products Series Fund, Inc.
Alliance World Income Trust, Inc.
Alliance Worldwide Privatization Fund, Inc.
Fiduciary Management Associates
The Alliance Fund, Inc.
The Alliance Portfolios
The Hudson River Trust
(b) The following are the Directors and Officers of
Alliance Fund Distributors, Inc., the principal place
of business of which is 1345 Avenue of the Americas,
New York, New York, 10105.
Name Positions and Positions and
- ---- Offices Offices
With Underwriter With Registrants
---------------- ---------------
Michael J. Laughlin Chairman
Robert L. Errico President
Kimberly A. Baumgardner Senior Vice President
Daniel J. Dart Senior Vice President
C-5
<PAGE>
Byron M. Davis Senior Vice President
Mark D. Gersten Senior Vice President Treasurer and
Chief Financial
Officer
Geoffrey L. Hyde Senior Vice President
Robert H. Joseph Senior Vice President
and Treasurer
Barbara J. Krumseik Senior Vice President
William F. O'Grady Senior Vice President
Dusty W. Paschall Senior Vice President
Antonios G. Poleonadkis Senior Vice President
Gregory K. Shannahan Senior Vice President
James P. Syrett Senior Vice President
Peter J. Szabo Senior Vice President
Richard A. Winge Senior Vice President
Jim A. Yockey Senior Vice President
Edmund P. Bergan, Jr. Senior Vice President,
Secretary and
General Counsel
Michael T. Anderson Vice President
Kenneth F. Barkoff Vice President
Kevin T. Cannon Vice President
Mark J. Dunbar Vice President
Linda A. Finnerty Vice President
Robert M. Frank Vice President
Gerard J. Friscia Vice President
Troy L. Glawe Vice President
James E. Gunter Vice President
C-6
<PAGE>
Alan Halfenger Vice President
Steven P. Hecht Vice President
George R. Hrabovsky Vice President
Valerie J. Hugo Vice President
Mark H. Huston Vice President
Marek E. Lakotko Vice President
Sheila M. Lamb Vice President
Stephen R. Laut Vice President
Thomas Leavitt, III Vice President
Christopher J. MacDonald Vice President
George O. Martinez Vice President and
Associate General
Counsel
John A. McClain Vice President
Gregory T. McCombs Vice President
Daniel D. McGinley Vice President
Matthew P. Mintzer Vice President
Nicole M. Nolan Vice President
Robert T. Pigozzi Vice President
Bruce W. Reitz Vice President
Dennis A. Sanford Vice President
Joseph F. Sumanski Vice President
Richard E. Tambourine Vice President
Nicholas K. Willett Vice President
Warren W. Babcock III Assistant Vice President
Benji A. Baer Assistant Vice President
Angela F. Bisagna Assistant Vice President
C-7
<PAGE>
Casimir F. Bolanowski Assistant Vice President
Maria L. Carreras Assistant Vice President
Leo H. Cook Assistant Vice President
John W. Cronin Assistant Vice President
Richard W. Dabney Assistant Vice President
Gerard P. DiSalvo Assistant Vice President
Sohaila S. Farsheed Assistant Vice President
Leon M. Fern Assistant Vice President
William C. Fisher Assistant Vice President
Joseph W. Gibson Assistant Vice President
William B. Hanigan Assistant Vice President
Vicky M. Hayes Assistant Vice President
Daniel M. Hazard Assistant Vice President
John C. Hershock Assistant Vice President
James J. Hill Assistant Vice President
Kenneth R. Hill Assistant Vice President
Thomas K. Intoccia Assistant Vice President
Edward W. Kelly Assistant Vice President
Donna M. Lamback Assistant Vice President
David P. Lambert Assistant Vice President
Nicholas J. Lapi Assistant Vice President
Michael F. Mahoney Assistant Vice President
Renate S. Mars Assistant Vice President
Daniel G. McCabe Assistant Vice President
Shawn P. McClain Assistant Vice President
Maura A. McGrath Assistant Vice President
C-8
<PAGE>
Paul J. McIntyre Assistant Vice President
Charles R. Mechler Assistant Vice President
Thomas F. Monnerat Assistant Vice President
Joanna D. Murray Assistant Vice President
Jeanette M. Nardella Assistant Vice President
William E. Noe Assistant Vice President
Marilyn I. Noonan Assistant Vice President
Camilo R. Pedraza Assistant Vice President
Robert E. Powers Assistant Vice President
Patrick J. Pung Assistant Vice President
Carol H. Rappa Assistant Vice President
Karen C. Satterberg Assistant Vice President
Raymond S. Scalfani Assistant Vice President
Rodney J. Shull Assistant Vice President
Robert M. Smith Assistant Vice President
William J. Strott Assistant Vice President
Joseph T. Tocyloski Assistant Vice President
Neil B. Wood Assistant Vice President
Mark R. Manley Assistant Secretary
(c) Not applicable.
ITEM 30. Location of Accounts and Records.
The majority of the accounts, books and other documents
required to be maintained by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder
are maintained as follows: journals, ledgers, securities
records and other original records are maintained
principally at the offices of Alliance Fund Services,
Inc. 500 Plaza Drive, Secaucus, New Jersey 07094-1520
and at the offices of The Bank of New York, 48 Wall
Street, New York, New York 10286. All other records so
C-9
<PAGE>
required to be maintained are maintained at the offices
of Alliance Capital Management L.P., 1345 Avenue of the
Americas, New York, New York 10105.
ITEM 31. Management Services.
Not applicable.
ITEM 32. Undertakings.
Registrant undertakes to file a Post-Effective
Amendment, using financial statements which need not be
certified, within four to six months from the effective
date of its Securities Act of 1933 Registration
Statement.
Registrant undertakes to furnish each person to whom a
prospectus is delivered with a copy of Registrant's
latest report to shareholders, upon request and without
charge.
The Registrant undertakes to provide assistance to
shareholders in communications concerning the removal of
any Trustee of the Fund in accordance with Section 16 of
the Investment Company Act of 1940.
C-10
<PAGE>
SIGNATURE
---------
Pursuant to the requirements of the Securities Act of 1933,
as amended, and the Investment Company Act of 1940, as amended,
the Registrant has duly caused this Amendment to its Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of New York and State of
New York on the 16th day of March 1995.
ALLIANCE MONEY MARKET FUND
by Ronald M. Whitehill
-------------------
Ronald M. Whitehill
President
Pursuant to the requirements of the Securities Act of 1933,
as amended, this Amendment to the Registration Statement has been
signed below by the following persons in the capacities and on
the dates indicated:
Signature Title Date
--------- ----- ----
1) Principal
Executive Officer
Ronald M. Whitehill President March 16, 1995
-------------------
Ronald M. Whitehill
2) Principal Financial and
Accounting Officer
Mark D. Gersten Treasurer March 16, 1995
--------------- and Chief
Mark D. Gersten Financial
Officer
3) All of the Trustees
-------------------
Richard S. Borisoff Arthur S. Kranseler
John D. Carifa Robert A. Lewis
Robert J. Casale Clifford L. Michel
Jeffrey M. Cole William L. Rhoads III
C-11
<PAGE>
William H. Foulk, Jr. James P. Syrett
Carl D. Ingrassia
by Edmund P. Bergan, Jr. March 16, 1995
(Attorney-in-fact)
----------------------
Edmund P. Bergan, Jr.
C-12
<PAGE>
Index to Exhibits
Page
(1) Declaration of Trust
(2) By-Laws
(4)(a) Specimen Share Certificate - Prime Portfolio
(4)(b) Specimen Share Certificate - Government Portfolio
(4)(c) Specimen Share Certificate - General Municipal Portfolio
(4)(d) Specimen Share Certificate - New York Municipal Portfolio
(4)(e) Specimen Share Certificate - Connecticut Municipal
Portfolio
(4)(f) Specimen Share Certificate - California Municipal
Portfolio
(4)(g) Specimen Share Certificate - New Jersey Municipal
Portfolio
(5) Advisory Agreement
(6) Distribution Services Agreement
(8) Custodian Contract
(9)(b) Administration Agreement
(9)(c) Fund Accounting Agreement
(10)(a) Opinion of Seward & Kissel
(10)(b) Opinion of Sullivan & Worcester
(11) Consent of Independent Auditors
(13) Investment Representation Letter
Other Exhibits
Power of Attorney for:
Richard S. Borisoff
Arthur S. Kranseler
John D. Carifa Robert A. Lewis
Robert J. Casale Clifford L. Michel
Jeffrey M. Cole William L. Rhoads III
William H. Foulk, Jr. James P. Syrett
Carl D. Ingrassia
C-13
00250217.AE6
ALLIANCE MONEY MARKET FUND
-----------------------------
RESTATED AND AMENDED DECLARATION OF TRUST
Dated February 22, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
----
PREAMBLE 1
ARTICLE I NAME AND DEFINITIONS 2
Section 1.1. Name 2
Section 1.2. Definitions 2
ARTICLE II TRUSTEES 5
Section 2.1. Number of Trustees 5
Section 2.2. Term of Office of Trustees 5
Section 2.3. Resignation and Appointment of Trustees. 5
Section 2.4. Vacancies 6
Section 2.5. Delegation of Power to Other Trustees 6
ARTICLE III POWERS OF TRUSTEES 6
SECTION 3.1. General 6
SECTION 3.2. Investments 7
SECTION 3.3. Legal Title 8
SECTION 3.4. Issuance and Repurchase of Securities 8
SECTION 3.5. Borrowing Money; Lending Trust Property 8
SECTION 3.6. Delegation; Committees 9
SECTION 3.7. Collection and Payment 9
SECTION 3.8. Expenses 9
SECTION 3.9. Manner of Acting; By-Laws 9
SECTION 3.10. Miscellaneous Powers 9
SECTION 3.11. Principal Transactions 10
SECTION 3.12. Trustees and Officers as Shareholders 10
ARTICLE IV INVESTMENT ADVISER, DISTRIBUTOR, ADMINI-
STRATOR, TRANSFER AGENT AND SHAREHOLDER
SERVICING AGENTS 11
SECTION 4.1. Investment Adviser 11
SECTION 4.2. Distributor 12
SECTION 4.3. Administrator 12
SECTION 4.4. Transfer Agent and Shareholder
Servicing Agents 12
SECTION 4.5. Parties to Contract 12
ARTICLE V LIMITATIONS OF LIABILITY OF
SHAREHOLDERS, TRUSTEES AND OTHERS 13
SECTION 5.1. No Personal Liability of Shareholders,
<PAGE>
Trustees, Etc. 13
SECTION 5.2. Non-Liability of Trustees, Etc. 14
SECTION 5.3. Mandatory Indemnification 14
SECTION 5.4. No Bond Required of Trustees 16
SECTION 5.5. No Duty of Investigation: Notice in
Trust Instruments, Etc. 16
SECTION 5.6. Reliance on Experts, Etc. 16
ARTICLE VI SHARES OF BENEFICIAL INTEREST 17
SECTION 6.1. Beneficial Interest; Description of
Portfolios and Shares 17
SECTION 6.2. Rights of Shareholders 19
SECTION 6.3. Trust Only 20
SECTION 6.4. Issuance of Shares 20
SECTION 6.5. Register of Shares 20
SECTION 6.6. Transfer of Shares 21
SECTION 6.7. Notices 21
SECTION 6.8. Voting Powers 21
SECTION 6.9. General Provisions for All Portfolios
and Series of Shares 22
ARTICLE VII REDEMPTIONS 27
SECTION 7.1. Redemptions 27
SECTION 7.2. Suspension of Right of Redemption 27
SECTION 7.3. Redemption of Shares; Disclosure of Holding 28
SECTION 7.4. Redemptions of Accounts of Less than $500 28
ARTICLE VIII DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS 29
ARTICLE IX DURATION; TERMINATION OF TRUST;
AMENDMENT; MERGERS, ETC. 29
SECTION 9.1. Duration 29
SECTION 9.2. Termination of Trust 29
SECTION 9.3. Amendment Procedure 30
SECTION 9.4. Merger, Consolidation and Sale of Assets 31
SECTION 9.5. Incorporation, Reorganization 32
SECTION 9.6. Incorporation or Reorganization of Series 32
ARTICLE X REPORTS TO SHAREHOLDERS AND
SHAREHOLDER COMMUNICATIONS 33
ARTICLE XI MISCELLANEOUS 33
SECTION 11.1. Filing 33
SECTION 11.2. Governing Law 34
SECTION 11.3. Counterparts 34
SECTION 11.4. Reliance by Third Parties 34
<PAGE>
SECTION 11.5. Provisions in Conflict with Law or
Regulations 34
SIGNATURE
<PAGE>
RESTATED AND AMENDED DECLARATION OF TRUST
OF THE
ALLIANCE MONEY MARKET FUND
Dated February 22, 1995
WHEREAS, Section 9.3(e) of the Declaration of Trust,
dated October 26, 1994, of Alliance Omnibus Reserves, a trust
with transferable shares under Massachusetts law (the "TRUST"),
provides that, prior to the effectiveness of a Registration
Statement under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), covering the first public offering of
securities of the Trust, this Declaration may be amended in any
respect by the affirmative vote of a Majority of the Trustees or
by an instrument signed by a Majority of the Trustees; and
WHEREAS, the Trust's Registration Statement under the
Securities Act relating to the first public offering of
securities of the Trust has not yet become effective; and
WHEREAS, this instrument has been signed by Emilie D.
Wrapp, the sole trustee of the Trust now in office (the
"TRUSTEE"),
NOW, THEREFORE, the name of the said Trust is hereby
changed to "Alliance Money Market Fund," and the Declaration of
Trust is hereby restated in its entirety to read as follows:
This Declaration of Trust WITNESSETH THAT:
WHEREAS, this Trust has been formed for the investment
and reinvestment of funds contributed thereto; and
WHEREAS, the assets of the Trust shall be divided into
separate funds, each with its own separate portfolio of
securities, investment objectives, policies and purposes, that
each such fund shall be designated and managed as a separate
Portfolio of the Trust, and that the beneficial interest in each
such Portfolio shall be divided into transferable shares of
beneficial interest, without par value ("Shares"), a separate
series of Shares (each, a "series") for each such Portfolio, all
in accordance with the provisions hereinafter set forth,
NOW, THEREFORE, the Trustee, for herself and her
successors as Trustees, hereby declares, for the benefit of all
<PAGE>
Persons who shall hereafter become holders of Shares of
Beneficial Interest of the Trust, of any series, that the
Trustees will hold the sum delivered to them upon the execution
hereof, and all other and further cash, securities and other
property of every type and description which they may in any way
acquire in their capacity as such Trustees, together with the
income therefrom and the proceeds thereof, IN TRUST NEVERTHELESS,
to manage and dispose of the same for the benefit of the holders
from time to time of the Shares of the several series being
issued and to be issued hereunder, and in the manner and subject
to the provisions hereof, to wit:
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1 NAME. The name of the trust created hereby
is
"Alliance Money Market Trust",
and so far as may be practicable the Trustees shall conduct the
Trust's activities, execute all documents and sue or be sued
under that name, which name (and the word "TRUST" wherever used
in this Agreement and Declaration of Trust, except where the
context otherwise requires) shall refer to the Trustees in their
capacity as Trustees, and not individually or personally, and
shall not refer to the officers, agents or employees of the Trust
or of such Trustees, or to the holders of the Shares of
Beneficial Interest of the Trust, of any series. If the Trustees
determine that the use of such name is not practicable, legal or
convenient at any time or in any jurisdiction, or if the Trust is
required to discontinue the use of such name pursuant to
agreement with any Person having rights therein, the Trustees may
use such other designation, or they may adopt such other name for
the Trust as they deem proper, and the Trust may hold property
and conduct its activities under such designation or name.
SECTION 1.2. DEFINITIONS. Wherever they are used
herein, the following terms have the following respective
meanings:
(a) "Administrator" means a party furnishing services
to the Trust pursuant to any contract described in Section 4.3
hereof.
(b) "BY-LAWS" Means the By-laws referred to in Section
3.9 hereof, as from time to time amended.
2
<PAGE>
(c) "CERTIFICATE OF DESIGNATION" has the meaning given
that term in Section 6.1(b) hereof.
(d) "CODE" has the meaning given that term in Section
7.3 hereof.
(e) "COMMISSION" has the meaning given that term in the
1940 Act.
(f) "CUSTODIAN" means a party employed by the Trust to
furnish services as described in Article X of the By-laws.
(g) "DECLARATION" means this Declaration of Trust as
amended from time to time. Reference in this Declaration of
Trust to "Declaration", "hereof", "herein", and "hereunder" shall
be deemed to refer to this Declaration rather than the article or
section in which such words appear.
(h) "DISTRIBUTOR" means a party furnishing services to
the Trust pursuant to any contract described in Section 4.2
hereof.
(i) "INITIAL SERIES" has the meaning given that term in
Section 6.1(a).
(j) "INITIAL TRUSTEE" has the meaning given that term
in the Preamble hereto.
(k) "INTERESTED PERSON" has the meaning given that term
in the 1940 Act.
(l) "INVESTMENT ADVISER" means a party furnishing
services to the Trust pursuant to any contract described in
Section 4.1 hereof.
(m) "MAJORITY OF THE TRUSTEES" shall mean a majority of
the Trustees in office at the time in question. At any time at
which there shall be only one Trustee in office, such term shall
mean such Trustee.
(n) "MAJORITY SHAREHOLDER VOTE" has the same meaning as
the phrase "vote of a majority of the outstanding voting
securities" as defined in the 1940 Act, except that such term may
be used herein with respect to the Shares of the Trust as a whole
or the Shares of any particular series or class, as the context
may require.
(o) "1940 ACT" means the Investment Company Act of 1940
and the Rules and Regulations thereunder, as amended from time to
time.
3
<PAGE>
(p) "PERSON" means and includes individuals,
corporations, partnerships, trusts, associations, joint ventures
and other entities, whether or not legal entities, and
governments and agencies and political subdivisions thereof,
whether domestic or foreign.
(q) "PORTFOLIO" has the meaning given that term in
Section 6.1(a).
(r) "SHAREHOLDER" means a record owner of outstanding
Shares.
(s) "SHARES" means the Shares of Beneficial Interest
into which the beneficial interest in the Trust shall be divided
from time to time or, when used in relation to any particular
series or class of Shares established by the Trustees pursuant to
Section 6.9 hereof, the equal proportionate units into which such
series or classes of Shares shall be divided from time to time.
The term "Shares" includes fractions of Shares as well as whole
Shares.
(t) "SHAREHOLDER SERVICING AGENT" means a party
furnishing services to the Trust pursuant to any shareholder
servicing contract described in Section 4.4 hereof.
(u) "TRANSFER AGENT" means a party furnishing services
to the Trust pursuant to any transfer agency contract described
in Section 4.4 hereof.
(v) "TRUST" means the trust created hereby.
(w) "TRUST Property" means any and all property, real
or personal, tangible or intangible, which is owned or held by or
for the account of the Trust or the Trustees, including, without
limitation, any and all property allocated or belonging to any
series or class of Shares pursuant to Section 6.9 hereof.
(x) "TRUSTEES" means the Initial Trustee who has signed
the Declaration, so long as he shall continue in office in
accordance with the terms hereof, and all other persons who may
from time to time be duly elected or appointed, qualified and
serving as Trustees in accordance with the provisions hereof, and
"TRUSTee" shall mean any of such Persons. Reference herein to a
Trustee or the Trustees shall refer to such Person or Persons in
their capacity as trustees hereunder unless the context otherwise
requires.
4
<PAGE>
ARTICLE II
TRUSTEES
SECTION 2.1 NUMBER OF TRUSTEES. The number of Trustees
shall initially be one, but may thereafter be such number, not
greater than fifteen (15), as shall be fixed from time to time by
vote of, or a written instrument signed by, a Majority of the
Trustees.
Section 2.2 TERM OF OFFICE OF TRUSTEES. Subject to the
provisions of Section 16(a) of the 1940 Act, the Trustees shall
hold office during the lifetime of this Trust and until its
termination as hereinafter provided; except (a) that any Trustee
may resign his trust (without need for prior or subsequent
accounting) by an instrument in writing signed by him and
delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is specified therein;
(b) that any Trustee may be removed with cause, at any time by
written instrument, signed by at least two-thirds of the
remaining Trustees, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in writing to
be retired or who has become incapacitated by illness or injury
may be retired by written instrument signed by a majority of the
other Trustees, specifying the date of his retirement; and (d) a
Trustee may be removed at any meeting of Shareholders by a vote
of two-thirds of the outstanding Shares of each series. Upon the
resignation or removal of a Trustee, or his otherwise ceasing to
be a Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purposes of conveying to
the Trust or the remaining Trustees any Trust Property held in
the name of the resigning or removed Trustee. Upon the
incapacity or death of any Trustee, his legal representative
shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding
sentence.
SECTION 2.3. RESIGNATION AND APPOINTMENT OF TRUSTEES.
In case of the declination, death, resignation, retirement,
removal or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other
reason, exist, the remaining Trustees shall fill such vacancy by
appointing such other individual as they in their discretion
shall see fit. Such appointment shall be evidenced by a written
instrument signed by a Majority of the Trustees in office. Any
such appointment shall not become effective, however, until the
Person named in the written instrument of appointment shall have
accepted in writing such appointment and agreed in writing to be
bound by the terms of the Declaration. Within twelve months of
such appointment, the Trustees shall cause notice of such
appointment to be mailed to each Shareholder at his address as
5
<PAGE>
recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice
thereof mailed to Shareholders as aforesaid in anticipation of a
vacancy to occur by reason of retirement, resignation or increase
in number of Trustees effective at a later date, provided that
said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in
number of Trustees. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act.
SECTION 2.4. VACANCIES. The death, declination,
resignation, retirement, removal or incapacity of the Trustees,
or any one of them, shall not operate to annul the Trust or to
revoke any existing agency created pursuant to the terms of this
Declaration. Whenever a vacancy in the number of Trustees shall
occur, until such vacancy is filled as provided in Section 2.3,
the Trustees in office, regardless of their number, shall have
all the powers granted to the Trustees and shall discharge all
the duties imposed upon the Trustees by the Declaration. A
written instrument certifying the existence of such vacancy
signed by a Majority of the Trustees shall be conclusive evidence
of the existence of such vacancy.
SECTION 2.5. DELEGATION OF POWER TO OTHER TRUSTEES.
Any Trustee may, by power of attorney, delegate his power for a
period not exceeding six months at any one time to any other
Trustee or Trustees; provided that in no case shall fewer than
two Trustees personally exercise the powers granted to the
Trustees under the Declaration except as herein otherwise
expressly provided.
ARTICLE III
POWERS OF TRUSTEES
SECTION 3.1. GENERAL. The Trustees shall have
exclusive and absolute control over the Trust Property and over
the business of the Trust to the same extent as if the Trustees
were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted
by the Declaration. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all
of its branches and maintain offices both within and without the
Commonwealth of Massachusetts, in any and all states of the
United States, in the District of Columbia, and in any and all
commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States and of foreign
governments, and to do all such other things and execute all such
instruments as the Trustees deem necessary, proper or desirable
in order to promote the interests of the Trust although such
6
<PAGE>
things are not herein specifically mentioned. Any determination
as to what is in the interests of the Trust made by the Trustees
in good faith shall be conclusive. In construing the provisions
of the Declaration, the presumption shall be in favor of a grant
of power to the Trustees.
The enumeration of any specific power herein shall not
be construed as limiting the aforesaid power. Such powers of the
Trustees may be exercised without order of or resort to any
court.
SECTION 3.2. INVESTMENTS. (a) The Trustees shall have
power:
(i) to conduct, operate and carry on the business of an
investment company;
(ii) to subscribe for, invest in, reinvest in, purchase
or otherwise acquire, own, hold, pledge, sell, assign, transfer,
exchange, distribute, lend or otherwise deal in or dispose of
U.S. and foreign currencies, any form of gold or other precious
metal, commodity contracts, any form of option contract,
contracts for the future acquisition or delivery of fixed income
or other securities, and securities of every nature and kind,
including, without limitation, all types of bonds, debentures,
stocks, negotiable or non-negotiable instruments, obligations,
evidences of indebtedness, certificates of deposit or
indebtedness, commercial paper, repurchase agreements, bankers'
acceptances, and other securities of any kind, issued, created,
guaranteed or sponsored by any and all Persons, including,
without limitation,
(A) states, territories and possessions of the United
States and the District of Columbia and any political
subdivision, agency or instrumentality of any such Person,
(B) the U.S. Government, any foreign government, any
political subdivision or any agency or instrumentality of the
U.S. Government, any foreign government or any political
subdivision of the U.S. Government or any foreign government,
(C) any international instrumentality,
(D) any bank or savings institution, or
(E) any corporation or organization organized under the
laws of the United States or of any state, territory or
possession thereof, or under any foreign law;
or in "when issued" contracts for any such securities, to retain
Trust assets in cash and from time to time change the securities
7
<PAGE>
or obligations in which the assets of the Trust are invested; and
to exercise any and all rights, powers and privileges of
ownership or interest in respect of any and all such investments
of every kind and description, including, without limitation, the
right to consent and otherwise act with respect thereto, with
power to designate one or more Persons to exercise any of said
rights, powers and privileges in respect of any of said
investments; and
(iii) to carry on any other business in connection with
or incidental to any of the foregoing powers, to do everything
necessary, proper or desirable for the accomplishment of any
purpose or the attainment of any object or the furtherance of any
power hereinbefore set forth, and to do every other act or thing
incidental or appurtenant to or connected with the aforesaid
purposes, objects or powers.
(b) The Trustees shall not be limited to investing in
securities or obligations maturing before the possible
termination of the Trust, nor shall the Trustees be limited by
any law limiting the investments which may be made by
fiduciaries.
SECTION 3.3. LEGAL TITLE. Legal title to all Trust
Property shall be vested in the Trustees as joint tenants except
that the Trustees shall have power to cause legal title to any
Trust Property to be held by or in the name of one or more of the
Trustees, or in the name of the Trust, or in the name of any
other Person or nominee, on such terms as the Trustees may
determine. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may
hereafter become a Trustee. Upon the resignation, removal or
death of a Trustee, such Trustee shall automatically cease to
have any right, title or interest in any of the Trust Property,
and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees.
Such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered.
SECTION 3.4. ISSUANCE AND REPURCHASE OF SECURITIES.
The Trustees shall have the power to issue, sell, repurchase,
redeem, retire, cancel, acquire, hold, resell, reissue, dispose
of, transfer, and otherwise deal in Shares and, subject to the
provisions set forth in Articles VII, VIII and IX and Section 6.9
hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds of the Trust or
other Trust Property whether capital or surplus or otherwise.
SECTION 3.5. BORROWING MONEY; LENDING TRUST PROPERTY.
The Trustees shall have power to borrow money or otherwise obtain
credit and to secure the same by mortgaging, pledging or
8
<PAGE>
otherwise subjecting as security the Trust Property, to endorse,
guarantee, or undertake the performance of any obligation,
contract or engagement of any other Person and to lend Trust
Property.
SECTION 3.6. DELEGATION; COMMITTEES. The Trustees
shall have power to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing
of such things and the execution of such instruments either in
the name of the Trust or the names of the Trustees or otherwise
as the Trustees may deem expedient.
SECTION 3.7. COLLECTION AND PAYMENT. Subject to
Section 6.9 hereof, the Trustees shall have power to collect all
property due to the Trust; to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or
abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligations, by virtue of
which any property is owed to the Trust; and to enter into
releases, agreements and other instruments.
SECTION 3.8. EXPENSES. Subject to Section 6.9 hereof,
the Trustees shall have the power to incur and pay any expenses
which in the opinion of the Trustees are necessary or incidental
to carry out any of the purposes of the Declaration, and to pay
reasonable compensation from the funds of the Trust to themselves
as Trustees. The Trustees shall fix the compensation of all
officers, employees and Trustees.
SECTION 3.9 MANNER OF ACTING; BY-LAWS. Except as
otherwise provided herein or in the By-Laws, any action to be
taken by the Trustees may be taken by a Majority of the Trustees
present at a meeting of Trustees at which a quorum is present,
including any meeting held by means of a conference telephone
circuit or similar communications equipment by means of which all
persons participating in the meeting can hear each other, or by
written consents of all the Trustees. The Trustees may adopt By-
Laws not inconsistent with this Declaration to provide for the
conduct of the business of the Trust and may amend or repeal such
By-Laws to the extent such power is not reserved to the
Shareholders.
SECTION 3.10. MISCELLANEOUS POWERS. The Trustees shall
have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the
business of the Trust; (b) enter into joint ventures,
partnerships and any other combinations or associations;
(c) remove Trustees or fill vacancies in or add to their number,
elect and remove such officers and appoint and terminate such
agents or employees as they consider appropriate, and appoint
from their own number, and terminate, any one or more committees
9
<PAGE>
which may exercise some or all of the power and authority of the
Trustees as the Trustees may determine; (d) purchase, and pay for
out of Trust Property, insurance policies insuring the
Shareholders, the Administrator, Trustees, officers, employees,
agents, the Investment Adviser, the Distributor, selected dealers
or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of
any action taken or omitted by any such Person in such capacity,
whether or not constituting negligence, or whether or not the
Trust would have the power to indemnify such Person against such
liability; (e) establish pension, profit-sharing, Share purchase,
and other retirement, incentive and benefit plans for any
Trustees, officers, employees or agents of the Trust; (f) to the
extent permitted by law, indemnify any person with whom the Trust
has dealings, including any Investment Adviser, Administrator,
Custodian, Distributor, Transfer Agent, Shareholder Servicing
Agent and any dealer, to such extent as the Trustees shall
determine; (g) guarantee indebtedness or contractual obligations
of others; (h) determine and change the fiscal year of the Trust
and the method by which its accounts shall be kept; and (i) adopt
a seal for the Trust, provided, that the absence of such seal
shall not impair the validity of any instrument executed on
behalf of the Trust.
SECTION 3.11. PRINCIPAL TRANSACTIONS. Except in
transactions permitted by the 1940 Act, or any order of exemption
issued by the Commission, the Trustees shall not, on behalf of
the Trust, buy any securities (other than Shares) from or sell
any securities (other than Shares) to, or lend any assets of the
Trust to, any Trustee or officer of the Trust or any firm of
which any such Trustee or officer is a member acting as
principal, or have any such dealings with any Distributor or
Transfer Agent or with any Interested Person of such Person; but
the Trust may, upon customary terms, employ any such Person, or
firm or company in which such Person is an Interested Person, as
broker, legal counsel, registrar, transfer agent, dividend
disbursing agent or custodian.
SECTION 3.12. TRUSTEES AND OFFICERS AS SHAREHOLDERS.
Except as hereinafter provided, no officer, Trustee or Member of
the Advisory Board of the Trust, and no member, partner, officer,
director or trustee of the Investment Adviser, Administrator or
of the Distributor, and no Investment Adviser, Administrator or
Distributor of the Trust, shall take long or short positions in
the securities issued by the Trust. The foregoing provision
shall not prevent:
(a) The Distributor from purchasing Shares from the
Trust if such purchases are limited (except for reasonable
allowances for clerical errors, delays and errors of transmission
and cancellation of orders) to purchases for the purpose of
10
<PAGE>
filling orders for Shares received by the Distributor and
provided that orders to purchase from the Trust are entered with
the Trust or the Custodian promptly upon receipt by the
Distributor of purchase orders for Shares, unless the Distributor
is otherwise instructed by its customer;
(b) The Distributor from purchasing Shares as agent for
the account of the Trust;
(c) The purchase from the Trust or from the Distributor
of Shares by any officer, Trustee or member of the Advisory Board
of the Trust or by any member, partner, officer, director or
trustee of the Investment Adviser or of the Distributor at a
price not lower than the net asset value of the Shares as
determined for the day of such purchase, provided that any such
sales are only to be made pursuant to an offer described in the
Trust's current prospectus or statement of additional
information; or
(d) The Investment Adviser, the Distributor, or any of
their officers, partners, directors or trustees from purchasing
Shares prior to the effective date of the Trust's Registration
Statement under the Securities Act of 1933, as amended, relating
to the Shares.
ARTICLE IV
INVESTMENT ADVISER, DISTRIBUTOR, ADMINISTRATOR,
TRANSFER AGENT AND SHAREHOLDER SERVICING AGENTS
SECTION 4.1. INVESTMENT ADVISER. Subject to a Majority
Shareholder Vote of the Shares of each series or class affected
thereby (except to the extent such Majority Shareholder Vote is
not required by the 1940 Act), the Trustees may in their
discretion from time to time enter into one or more investment
advisory or management contracts whereby the other party to each
such contract shall undertake to furnish the Trust such
management, investment advisory, statistical and research
facilities and services, promotional activities, and such other
facilities and services, if any, with respect to one or more
series or classes of Shares, as the Trustees shall from time to
time consider desirable and all upon such terms and conditions as
the Trustees may in their discretion determine. Notwithstanding
any provision of the Declaration, the Trustees may delegate to
the Investment Adviser authority (subject to such general or
specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales, loans or exchanges of assets
of the Trust on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales,
loans or exchanges pursuant to recommendations of the Investment
11
<PAGE>
Adviser (and all without further action by the Trustees). Any of
such purchases, sales, loans or exchanges shall be deemed to have
been authorized by all the Trustees. Such services may be
provided by one or more Persons.
SECTION 4.2 DISTRIBUTOR. The Trustees may in their
discretion from time to time enter into one or more distribution
contracts providing for the sale of Shares whereby the Trust may
either agree to sell the Shares to the other party to any such
contract or appoint any such other party its sales agent for such
Shares. In either case, any such contract shall be on such terms
and conditions as the Trustees may in their discretion determine,
provided that such terms and conditions are not inconsistent with
the provisions of this Declaration or the By-Laws; and such
contract may also provide for the repurchase or sale of Shares by
such other party as principal or as agent of the Trust and may
provide that such other party may enter into selected dealer
agreements with registered securities dealers to further the
purpose of the distribution or repurchase of the Shares. Such
services may be provided by one or more Persons.
SECTION 4.3. ADMINISTRATOR. The Trustees may in their
discretion from time to time enter into one or more
administrative services contracts whereby the other party to each
such contract shall undertake to furnish such administrative
services to the Trust as the Trustees shall from time to time
consider desirable and all upon such terms and conditions as the
Trustees may in their discretion determine, provided that such
terms and conditions are not inconsistent with the provisions of
this Declaration or the By-Laws. Such services may be provided
by one or more persons.
SECTION 4.4. TRANSFER AGENT AND SHAREHOLDER SERVICING
AGENTS. The Trustees may in their discretion from time to time
enter into one or more transfer agency and shareholder servicing
contracts whereby the other party to each such contract shall
undertake to furnish such transfer agency and/or shareholder
services to the Trust or to shareholders of the Trust as the
Trustees shall from time to time consider desirable and all upon
such terms and conditions as the Trustees may in their discretion
determine, provided that such terms and conditions are not
inconsistent with the provisions of this Declaration or the By-
Laws. Such services may be provided by one or more Persons.
Except as otherwise provided in the applicable shareholder
servicing contract, a Shareholder Servicing Agent shall be deemed
to be the record owner of outstanding Shares beneficially owned
by customers of such Shareholder Servicing Agent for whom it is
acting pursuant to such shareholder servicing contract.
SECTION 4.5 PARTIES TO CONTRACT. Any contract of the
character described in Section 4.1, 4.2, 4.3 or 4.4 of this
12
<PAGE>
Article IV or any Custodian contract may be entered into with any
Person, although one or more of the Trustees or officers of the
Trust may be an officer, partner, director, trustee, shareholder,
or member of such other party to the contract, and no such
contract shall be invalidated or rendered voidable by reason of
the existence of any such relationship; nor shall any Person
holding such relationship be liable merely by reason of such
relationship for any loss or expense to the Trust under or by
reason of any such contract or accountable for any profit
realized directly or indirectly therefrom, provided that the
contract when entered into was not inconsistent with the
provisions of the Article IV or the By-Laws. The same Person may
be the other party to contracts entered into pursuant to Sections
4.1, 4.2, 4.3 and 4.4 above or any Custodian contract, and any
individual may be financially interested or otherwise affiliated
with Persons who are parties to any or all of the contracts
mentioned in this Section 4.5.
ARTICLE V
LIMITATIONS OF LIABILITY OF
SHAREHOLDERS, TRUSTEES AND OTHERS
SECTION 5.1. NO PERSONAL LIABILITY OF SHAREHOLDERS,
TRUSTEES, ETC. No Shareholder shall be subject to any personal
liability whatsoever to any Person in connection with Trust
Property or the acts, obligations or affairs of the Trust. No
Trustee, officer, employee or agent of the Trust shall be subject
to any personal liability whatsoever to any Person, other than
the Trust or its Shareholders, in connection with Trust Property
or the Affairs of the Trust, save only that arising from bad
faith, wilful misfeasance, gross negligence or reckless disregard
for his duty to such Person; and all such Persons shall look
solely to the Trust Property for satisfaction of claims of any
nature arising in connection with the affairs of the Trust. If
any Shareholder, Trustees, officer, employee, or agent, as such,
of the Trust, is made a party to any suit or proceeding to
enforce any such liability, he shall not, on account thereof, be
held to any personal liability. The Trust shall indemnify and
hold each Shareholder harmless from and against all claims and
liabilities to which such Shareholder may become subject by
reason of his being or having been a Shareholder, and shall
reimburse such Shareholder for all legal and other expenses
reasonably incurred by him in connection with any such claim or
liability. The rights accruing to a Shareholder under this
Section 5.1 shall not exclude any other right to which such
Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust to indemnify or
reimburse a Shareholder in any appropriate situation even though
not specifically provided herein. Notwithstanding any other
13
<PAGE>
provision of this Declaration to the contrary, no Trust Property
shall be used to indemnify or reimburse any Shareholder of any
Shares of any series other than Trust Property allocated or
belonging to such series.
SECTION 5.2. NON-LIABILITY OF TRUSTEES, ETC. No
Trustee, officer, employee or agent of the Trust shall be liable
to the Trust, its Shareholders, or to any Shareholder, Trustees,
officer, employee, or agent thereof for any action or failure to
act (including without limitation the failure to compel in any
way any former or acting Trustee to redress any breach of trust)
except for his own bad faith, wilful misfeasance, gross
negligence or reckless disregard of his duties.
SECTION 5.3. MANDATORY INDEMNIFICATION. (a) Subject
to the exceptions and limitations contained in paragraph (b)
below:
(i) every Person who is or has been a Trustee or
officer of the Trust shall be indemnified by the Trust against
all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or
proceeding in which he becomes involved as a party or otherwise
by virtue of his being or having been a Trustees or officer and
against amounts paid or incurred by him in the settlement
thereof;
(ii) the words "claim", "action", "suit", or
"proceeding" shall apply to all claims, actions, suits or
proceedings (civil, criminal, administrative or other, including
appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees,
costs, judgments, amounts paid in settlement, fines, penalties
and other liabilities.
(b) No indemnification shall be provided hereunder to a
Trustee or officer:
(i) against any liability to the Trust or the
Shareholders by reason of a final adjudication by the court or
other body before which the proceeding was brought that he
engaged in wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office;
(ii) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good faith in
the reasonable belief that his action was in the best interests
of the Trust; or
14
<PAGE>
(iii) in the event of a settlement involving a payment by
a Trustee or officer or other disposition not involving a final
adjudication as provided in paragraph (b)(i) or (b)(ii) above
resulting in a payment by a Trustee or officer, unless there has
been either a determination that such Trustee or officer did not
engage in wilful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his
office by the court or other body approving the settlement or
other disposition or by a reasonable determination, based upon a
review of readily available facts (as opposed to a full trial-
type inquiry) that he did not engage in such conduct:
(A) by vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority
of the Disinterested Trustees then in office act on the
matter); or
(B) by written opinion of independent legal
counsel.
(c) The rights of indemnification herein provided may
be insured against by policies maintained by the Trust, shall be
severable, shall not affect any other rights to which any Trustee
or officer may now or hereafter be entitled, shall continue as to
a Person who has ceased to be such Trustee or officer and shall
inure to the benefit of the heirs, executors and administrators
of such Person. Nothing contained herein shall affect any rights
to indemnification to which personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a
defense to any claim, action, suit, or proceeding of the
character described in paragraph (a) of this Section 5.3 shall be
advanced by the Trust prior to final disposition thereof upon
receipt of an undertaking by or on behalf of the recipient to
repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 5.3, provided that
either:
(i) such undertaking is secured by a surety bond or
some other appropriate security or the Trust shall be insured
against losses arising out of any such advances; or
(ii) a majority of the Disinterested Trustees acting on
the matter (provided that a majority of the Disinterested
Trustees then in office act on the matter) or an independent
legal counsel in a written opinion, shall determine, based upon a
review of readily available facts (as opposed to a full trial-
type inquiry), that there is reason to believe that the recipient
ultimately will be found entitled to indemnification.
15
<PAGE>
As used in this Section 5.3, a "Disinterested Trustee"
is one (i) who is not an "Interested Person" of the Trust
(including anyone who has been exempted from being an "Interested
Person" by any rule, regulation or order of the Commission), and
(ii) against whom none of such actions, suits or other
proceedings or another action, suit or other proceeding on the
same or similar grounds is then or had been pending.
SECTION 5.4. NO BOND REQUIRED OF TRUSTEES. No Trustee
shall be obligated to give any bond or other security for the
performance of any of his duties hereunder.
SECTION 5.5. NO DUTY OF INVESTIGATION: NOTICE IN TRUST
INSTRUMENTS, ETC. No purchaser, lender, Shareholder Servicing
Agent, Transfer Agent or other Person dealing with the Trustees
or any officer, employee or agent of the Trust shall be bound to
make any inquiry concerning the validity of any transaction
purported to be made by the Trustees or by said officer, employee
or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or
of said officer, employee or agent. Every obligation, contract,
instrument, certificate, Share, other security of the Trust or
undertaking, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively presumed to have
been executed or done by the executors thereof only in their
capacity as Trustees under the Declaration or in their capacity
as officers, employees or agents of the Trust, as the case may
be. Every written obligation, contract, instrument, certificate,
Share, other security of the Trust or undertaking made or issued
by the Trustees shall recite that the same is executed or made by
them not individually, but as Trustees under the Declaration, and
that the obligations of any such instrument are not binding upon
any of the Trustees or Shareholders individually, but bind only
the Trust Property, and may contain any further recital which
they or he may deem appropriate, but the omission of such recital
shall not operate to bind any of the Trustees or Shareholders
individually. The Trustees shall at all times maintain insurance
for the protection of the Trust Property, the Trust's
Shareholders, Trustees, officers, employees and agents in such
amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
SECTION 5.6. RELIANCE ON EXPERTS, ETC. Each Trustee
and officer or employee of the Trust shall, in the performance of
his duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance
in good faith upon the books of account or other records of the
Trust, upon an opinion of counsel, or upon reports made to the
Trust by any of its officers or employees or by any of the
Investment Adviser, the Administrator, the Distributor, the
16
<PAGE>
Transfer Agent, the Custodian, any Shareholder Servicing Agent,
selected dealers, accountants, appraisers or other experts or
consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such
counsel or expert may also be a Trustee.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST; RIGHTS OF SHAREHOLDERS
SECTION 6.1. BENEFICIAL INTEREST; DESCRIPTION OF
PORTFOLIOS AND SHARES. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of Beneficial
Interest, without par value, which shall be divided into series,
and may be further subdivided into classes, as provided in
Section 6.2(c) hereof. The number of Shares authorized hereunder
is unlimited. All Shares issued hereunder, including, without
limitation, Shares issued in connection with a dividend in Shares
or a split of Shares, shall be fully paid and non-assessable.
(a) SHARES; PORTFOLIOS; SERIES OF SHARES. There are
hereby established and designated (i) seven separate, distinct
and independent Portfolios, designated as the Prime Portfolio,
the Government Portfolio, the General Municipal Portfolio, the
New Jersey Municipal Portfolio, the New York Municipal Portfolio,
the California Municipal Portfolio, and the Connecticut Municipal
Portfolio, into which the assets of the Trust shall be divided
(the "INITIAL PORTFOLIOS"), and (ii) seven separate and distinct
series of Shares, designated as the Prime Series, the Government
Series, the General Municipal Series, the New Jersey Municipal
Series, the New York Municipal Series, the California Municipal
Series, and the Connecticut Municipal Series, respectively, each
representing the beneficial interests in the Portfolio of the
same name (the "INITIAL SERIES" of Shares). The Trustees shall
have the power and authority, in their discretion and without any
requirement of Shareholder approval, (i) in the manner provided
in paragraph (b) of this Section 6.1, from time to time to
establish and designate one or more additional Portfolios, and a
separate and distinct series of Shares for each such additional
Portfolio (each of which series shall represent interests only in
the Portfolio for which such series was so authorized), and (ii)
in the manner provided in paragraph (c) of this 6.1, to authorize
two or more separate classes of Shares of any series (including
any of the Initial Series) having characteristics as contemplated
by paragraph (c) of this Section 6.1. The Trustees shall also
have the power, in their discretion and without approval of the
Shareholders, to classify or reclassify any unissued Shares of
any series, or any Shares of any series previously issued and
reacquired by the Trust, into any number of additional classes of
such series by from time to time setting or changing in one or
17
<PAGE>
more respects the provisions applicable to such class or classes.
Except as otherwise provided herein or in any other controlling
document as to a particular Portfolio and the Shares thereof, the
Trustees shall have all the rights and powers, and be subject to
all the duties and obligations, with respect to each such
Portfolio, the Shares representing the interests therein, and the
assets and affairs thereof as they have under this Declaration
with respect to the Trust and the Trust Property in general.
(b) ESTABLISHMENT, ETC., OF ADDITIONAL PORTFOLIOS;
AUTHORIZATION OF SHARES. The establishment and designation of
any Portfolio, in addition to the Initial Portfolios, and the
series of Shares representing the beneficial interests therein,
shall be effective upon the execution by a Majority of the
Trustees (or by an officer of the Trust pursuant to the vote of a
Majority of the Trustees) of an instrument setting forth such
establishment and designation, any special or relative rights and
preferences of the series of Shares representing the beneficial
interests therein and the manner in which the same may be amended
(a "CERTIFICATE OF DESIGNATION"), which may provide that the
number of Shares of such series, which may be issued is
unlimited, or may limit the number issuable. Each Certificate of
Designation and any instrument amending a Certificate of
Designation shall have the status of an amendment to this
Declaration of Trust, and shall be filed and become effective as
provided in Section 9.4 hereof.
(c) ESTABLISHMENT OF CLASSES WITHIN A SERIES. Until
otherwise provided by the Trustees pursuant to this paragraph
(c), the Shares of each Initial Series shall consist of a single
class. The Trustees shall have the power to provide, from time
to time, by resolution duly adopted by a Majority of the
Trustees, that the Shares of any series, including any of the
Initial Series, shall be divided into two or more classes, that
the number of shares of such classes which may be issued shall be
unlimited, or limited to such number as the Trustees may provide,
and that the Shares of such classes shall have rights and
obligations different from those of the other classes, or the
pre-existing classes, of such series, which differential rights
and obligations may include (but without limitation) differences
as to sales loads (or no loads), sales charges, deferred sales
charges, Shareholder servicing fees, distribution services fees
and other fees charges and expenses to which the Shares of such
class shall be subject, rights of redemption and the prices,
terms and manners of redemption, special or relative rights as to
dividends and other distributions and on liquidation, any sinking
or purchase fund provisions, differing conversion or exchange
rights, and (subject to Article 7 hereof) the conditions under
which the holders of Shares of such class shall have separate
voting rights or no voting rights. The resolution establishing
any such class shall be set forth in a certificate signed by a
18
<PAGE>
Majority of the Trustees (or by an officer of the Trust pursuant
to authority designated by a Majority of the Trustees), which
shall be kept among the records of the Trust, but such action
shall not be considered an amendment of this Declaration, and it
shall not be necessary to file any such certificate with the
Secretary of the Commonwealth of Massachusetts. The Trustees may
not change the different rights and obligations of a class in a
manner adverse to the holders of outstanding Shares of such
class, or grant any preferences over such class to the holders of
Shares of any other class without the affirmative vote or consent
of the holders of "a majority of the outstanding voting
securities" of such class, as the quoted phrase is used in the
1940 Act. At any time that there are outstanding no Shares of
any particular class previously established and designated, and
of which there are outstanding no Shares of any other class which
are convertible into Shares of the particular class, the Trustees
may by an instrument executed by a Majority of the Trustees (or
by an officer of the Trust pursuant to the vote of a Majority of
the Trustees) terminate such series and the establishment and
designation thereof and the authorization of its Shares; a copy
of such instrument shall be kept in the records of the Trust, but
such action shall not be considered an amendment of this
Declaration, and it shall not be necessary to file such
instrument with the Secretary of the Commonwealth of
Massachusetts.
(d) CHARACTER OF SEPARATE PORTFOLIOS AND SERIES OF
SHARES. Each Portfolio established hereunder shall be a separate
component of the assets of the Trust, and the holders of Shares
of the series pertaining thereto shall be considered Shareholders
of such Portfolio, but also as Shareholders of the Trust for
purposes of receiving reports and notices and, except as
otherwise provided as to a particular Portfolio herein or in the
Certificate of Designation therefor, or as required by the 1940
Act or other applicable law, the right to vote, all without
distinction by series.
SECTION 6.2. RIGHTS OF SHAREHOLDERS. The ownership of
the Trust Property of every description and the right to conduct
any business hereinbefore described are vested exclusively in the
Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and
they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can
they be called upon to assume any losses of the Trust or suffer
an assessment of any kind by virtue of their ownership of Shares.
The Shares shall be personal property giving only the rights
specifically set forth in this Declaration. The Shares shall not
entitle the holder to preference, pre-emptive, appraisal,
conversion or exchange rights, except as the Trustees may
determine with respect to any series or class of Shares.
19
<PAGE>
SECTION 6.3. TRUST ONLY. It is the intention of the
Trustees to create only the relationship of Trustees and
beneficiary between the Trustees and each Shareholder from time
to time. It is not the intention of the Trustees to create a
general partnership, limited partnership, joint stock
association, corporation, bailment or any form of legal
relationship other than a trust. Nothing in the Declaration
shall be construed to make the Shareholders, either by themselves
or with the Trustees, partners or members of a joint stock
association.
SECTION 6.4. ISSUANCE OF SHARES. The Trustees, in
their discretion may, from time to time without vote of the
Shareholders, issue Shares, in addition to the then-issued and
outstanding Shares and Shares held in the treasury, to such party
or parties and for such amount and type of consideration,
including cash or property, at such time or times, and on such
terms as the Trustees may deem best, and may in such manner
acquire other assets (including the acquisition of assets subject
to, and in connection with, the assumption of liabilities) and
businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares. The Trustees may from time
to time divide or combine the Shares of any series or class into
a greater or lesser number without thereby changing their
proportionate beneficial interests in Trust Property allocated or
belonging to such series or class. Contributions to the Trust
may be accepted for, and Shares shall be redeemed as, whole
Shares and/or thousandths (1/1,000ths) of one Share or integral
multiples thereof.
SECTION 6.5. REGISTER OF SHARES. A register or
registers shall be kept at the principal office of the Trust or
at an office of the Transfer Agent or any one or more Shareholder
Servicing Agents, which register or registers, taken together,
shall contain the names and addresses of the Shareholders and the
number of Shares held by them respectively and a record of all
transfers thereof. Such register or registers shall be
conclusive as to who are the holders of the Shares and who shall
be entitled to receive dividends or distributions or otherwise to
exercise or enjoy the rights of Shareholders. No Shareholder
shall be entitled to receive payment of any dividend or
distribution, nor to have notice given to him as herein or in the
By-Laws provided, until he has given his address to the Transfer
Agent, the Shareholder Servicing Agent which is the agent of
record for such Shareholder, or such other officer or agent of
the Trustees as shall keep the said register for entry thereon.
It is not contemplated that certificates will be issued for the
Shares; however, the Trustees, in their discretion, may authorize
the issuance of Share certificates and promulgate appropriate
rules and regulations as to their use.
20
<PAGE>
SECTION 6.6. TRANSFER OF SHARES. (a) Shares shall be
transferable on the records of the Trust only by the record
holder thereof or by his agent thereunto duly authorized in
writing, upon delivery to the Trustees, the Transfer Agent or the
Shareholder Servicing Agent which is the agent of record for such
Shareholder, of a duly executed instrument of transfer, together
with any certificate or certificates (if issued) for such Shares
and such evidence of the genuineness of each such execution and
authorization and of other matters as may reasonably be required.
Upon such delivery the transfer shall be recorded on the register
of the Trust. Until such record is made, the Shareholder of
record shall be deemed to be the holder of such Shares for all
purposes hereunder and neither the Trustees nor any Transfer
agent, Shareholder Servicing Agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of
the proposed transfer.
(b) Any Person becoming entitled to any Shares in
consequence of the death, bankruptcy, or incompetence of any
Shareholder, or otherwise by operation of law, shall be recorded
on the register of Shares as the holder of such Shares upon
production of the proper evidence thereof to the Trustees, the
Transfer Agent or the Shareholder Servicing Agent which is the
agent of record for such Shareholder; but until such record is
made, the Shareholder of record shall be deemed to be the holder
of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent, Shareholder Servicing Agent or
registrar nor any officer or agent of the Trust shall be affected
by any notice of such death, bankruptcy or incompetence, or other
operation of law.
SECTION 6.7. NOTICES. Any and all notices to which any
Shareholder may be entitled and any and all communications shall
be deemed duly served or given if mailed, postage prepaid,
addressed to any Shareholder of record at his last known address
as recorded on the register of the Trust.
SECTION 6.8. VOTING POWERS. The Shareholders shall
have power to vote only (i) for the removal of Trustees as
provided in Section 2.2 hereof, (ii) with respect to any
investment advisory or management contract as provided in Section
4.1 hereof, (iii) with respect to termination of the Trust, or of
any series or class of the Trust, as provided in Section 9.2
hereof, (iv) with respect to any amendment of this Declaration to
the extent and as provided in Section 9.3 hereof, (v) with
respect to any merger, consolidation or sale of assets as
provided in Sections 9.4 and 9.6 hereof, (vi) with respect to
incorporation of the Trust or any series or class to the extent
and as provided in Sections 9.5 and 9.6 hereof, (vii) to the same
extent as the stockholders of a Massachusetts business
corporation as to whether or not a court action, proceeding or
21
<PAGE>
claim should or should not be brought or maintained derivatively
or as a class action on behalf of the Trust or the Shareholders,
and (viii) with respect to such additional matters relating to
the Trust as may be required by this Declaration, the By-Laws or
any registration of the Trust with the Commission (or any
successor agency) or any state, or as the Trustees may consider
necessary or desirable. Each whole Share shall be entitled to
one vote as to any matter on which it is entitled to vote and
each fractional Share shall be entitled to a proportionate
fractional vote, except that Shares held in the treasury of the
Trust shall not be voted. Shares shall not be voted by
individual series or classes on any matter submitted to a vote of
the Shareholders of the Trust except as provided in Section
6.9(h) hereof. There shall be no cumulative voting in the
election of Trustees. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required by law, this Declaration or the By-Laws to be taken by
Shareholders. At any meeting of Shareholders of the Trust or of
any series of class of the Trust, without limiting any right or
power which it may otherwise have by virtue of being the record
owner of Shares, (a) a Shareholder Servicing Agent may vote any
Shares as to which such Shareholder Servicing Agent is the
Shareholder of record and which are not otherwise represented in
person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all Shares otherwise
represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the Shareholder of record and (b)
any Shares so voted by a Shareholder Servicing Agent will be
deemed represented at the meeting for quorum purposes. The By-
Laws may include further provisions for Shareholder votes and
meetings and related matters.
SECTION 6.9. GENERAL PROVISIONS FOR ALL PORTFOLIOS AND
ALL SERIES OF SHARES. Subject to the power of the Trustees to
classify or reclassify any unissued Shares of a series pursuant
to Section 6.1 above, the Shares of each Initial Series, and the
Shares of any further Series that may from time to time be
established and designated by the Trustees, shall (unless, in the
case of a further series, the Trustees otherwise determine at the
time of establishing and designating the same) be subject to the
following provisions:
(a) ASSETS BELONGING TO PORTFOLIOS. Any portion of the
Trust Property allocated to a particular Portfolio, and all
consideration received by the Trust for the issue or sale of
Shares of the series representing the beneficial interest
therein, together with all assets in which such consideration is
invested or reinvested, all interest, dividends, income,
earnings, profits and gains therefrom, and proceeds thereof,
including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived
22
<PAGE>
from any reinvestment of such proceeds in whatever form the same
may be, shall be held by the Trustees in trust for the benefit of
the holders of Shares of that series and shall irrevocably belong
to that Portfolio for all purposes, and shall be so recorded upon
the books of account of the Trust, and the holders of the Shares
of such series shall not have, and shall be conclusively deemed
to have waived, any claims to the assets of any other Portfolio
of which they are not Shareholders. Such consideration, assets,
interest, dividends, income, earnings, profits, gains and
proceeds, together with any General Items allocated to that
Portfolio as provided in the following sentence, are herein
referred to collectively as "PORTFOLIO ASSETS" of such Portfolio,
and as assets "BELONGING TO" that Portfolio. If the Trust shall
have or realize any assets, interest, dividends, income,
earnings, profits, gains or proceeds which are not readily
identifiable as belonging to any particular Portfolio
(collectively, "GENERAL ITEMS"), the Trustees shall allocate such
General Items to and among any one or more of the Portfolios of
the Trust in such manner and on such basis as they, in their sole
discretion, deem fair and equitable; and any General Items so
allocated to a particular Portfolio shall belong to and be part
of the Portfolio Assets of that Portfolio. Each such allocation
by the Trustees shall be conclusive and binding upon the
Shareholders of all Portfolios for all purposes. The power of
the Trustees to invest and reinvest the Trust Property allocated
or belonging to any particular Portfolio class shall be governed
by Section 3.2 hereof unless otherwise provided in the instrument
of the Trustees establishing such Portfolio.
(b) LIABILITIES OF PORTFOLIOS. The assets belonging to
each Portfolio shall be charged with the liabilities incurred by
or arising in respect of that Portfolio, and all expenses, costs,
charges and reserves attributable to that Portfolio, and any
general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as pertaining to any
particular Portfolio shall be allocated and charged by the
Trustees to and among any one or more of the Portfolios of the
Trust in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. The liabilities,
expenses, costs, charges and reserves so allocated and so charged
to a particular Portfolio are herein referred to as "LIABILITIES
OF" that Portfolio. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive
and binding upon the Shareholders of all Portfolios for all
purposes. The Trustees shall have full discretion, to the extent
not inconsistent with the 1940 Act, to determine which items
shall be treated as income and which items as capital; and each
such determination shall be conclusive and binding on the
Shareholders. Under no circumstances shall the assets allocated
or belonging to any particular Portfolio be charged with
liabilities attributable to any other Portfolio. The creditors
23
<PAGE>
of a particular Portfolio may look only to the assets of that
Portfolio to satisfy their claims, and the creditors of a
particular class of a Portfolio may look only to the share of
that class in the assets of the Portfolio to which it pertains to
satisfy their claims.
(c) DIVIDENDS. Dividends and distributions on Shares
of a particular series may be paid with such frequency as the
Trustees may determine, which may be daily or otherwise pursuant
to a standing resolution or resolutions adopted only once or with
such frequency as the Trustees may determine, to the holders of
Shares of that series, from such of the income, accrued or
realized, and capital gains, realized or unrealized, of the
Portfolio to which such series pertains and out of the assets
belonging to such Portfolio, as the Trustees may determine, after
providing for actual and accrued liabilities of that Portfolio.
Dividends and distributions on Shares of a series without classes
shall be distributed PRO RATA to the holders of Shares thereof in
proportion to the number of such Shares held at the date and time
of record established for the payment of such dividends or
distributions. Dividends and distributions on the Shares of a
series divided into classes shall be paid in such amount as may
be declared from time to time by the Trustees, and such dividends
and distributions may vary among such classes to reflect
differing allocations of the liabilities, expenses, costs,
charges and reserves of the Portfolio to which such series
pertains, and any resultant differences between the net asset
value of such several classes, to such extent and for such
purposes as the Trustees may deem appropriate, as provided in the
Prospectus for such classes, but dividends and distributions on
the Shares of a particular class shall be distributed PRO RATA to
the holders of Shares of that class in proportion to the number
of such Shares held at the date and time of record established
for the payment of such dividends and distributions.
Notwithstanding the last two preceding sentences, the Trustees
may determine, in connection with any dividend or distribution
program or procedure, that no dividend or distribution shall be
payable on newly-purchased Shares as to which the purchase order
and/or payment have not been received by the time or times
established by the Trustees under such program or procedure, or
that dividends or distributions shall be payable on Shares which
have been tendered by the holder thereof for redemption or
repurchase, but the redemption or repurchase proceeds of which
have not yet been paid to such Shareholder. Dividends and
distributions on the Shares of a series may be made in cash or
Shares of any class of that series or a combination thereof as
determined by the Trustees, or pursuant to any program that the
Trustees may have in effect at the time for the election by each
Shareholder of the mode of the making of such dividend or
distribution to that Shareholder. Any such dividend or
distribution paid in Shares will be paid at the net asset value
24
<PAGE>
thereof as determined in accordance with SUBSECTION (e) of this
Section 6.9.
(d) LIQUIDATION. In the event of the liquidation or
dissolution of the Trust, the holders of outstanding Shares of
each series shall be entitled to receive, when and as declared by
the Trustees, the excess of the Portfolio Assets of the Portfolio
to which such series pertains over the liabilities of such
Portfolio. The assets so distributable to the Shareholders of
any series not divided into classes shall be distributed among
such Shareholders in proportion to the number of Shares held by
them and recorded on the books of the Trust. The assets so
distributable to the Shareholders of any series divided into
classes shall be allocated among such classes in proportion to
the respective aggregate net asset value of the outstanding
Shares thereof, and shall be distributed to the Shareholders of
each such class in proportion to the number of Shares of that
class held by them and recorded on the books of the Trust. The
liquidation of any Portfolio may be authorized by vote of a
Majority of the Trustees, subject to the affirmative vote of "a
majority of the outstanding voting securities" of the series
pertaining to that Portfolio, as the quoted phrase is defined in
the 1940 Act, determined in accordance with CLAUSE (III) of the
definition of "MAJORITY SHAREHOLDER VOTE" in Section 1.2 hereof.
(e) NET ASSET VALUE. Subject to the provisions of the
two sentences immediately following, the net asset value per
Share of any series without classes, or of any class of a series
divided into classes, at any time shall be the quotient obtained
by dividing the value of the net assets of the Portfolio to which
such series pertains, or the share of such class in such assets,
as the case may be, at such time (being the current value of the
assets belonging to such Portfolio, or the share of such class
therein, less the then existing liabilities of such Portfolio, or
the share of such class in such liabilities) by the total number
of Shares of that series or class then outstanding, all
determined in accordance with the methods and procedures,
including without limitation those with respect to rounding,
established by the Trustees from time to time. The aggregate net
asset value of the several classes of a series divided into
classes shall be separately computed, and may vary from one
another. The Trustees shall establish procedures for the
allocation of investment income or capital gains and expenses and
liabilities of a Portfolio with classes of Shares among such
classes in order to reflect the varying net asset values thereof,
and the liabilities and expenses attributable thereto. The
Trustees may determine to maintain the net asset value per Share
of any series at a designated constant dollar amount and in
connection therewith may adopt procedures not inconsistent with
the 1940 Act for the continuing declaration of income
attributable to that series as dividends payable in additional
25
<PAGE>
Shares of that series at the designated constant dollar amount
and for the handling of any losses attributable to that series.
Such procedures may provide that in the event of any loss each
Shareholder shall be deemed to have contributed to the shares of
beneficial interest account of the Portfolio to which such series
pertains, such Shareholder's pro rata portion of the total number
of Shares required to be canceled in order to permit the net
asset value per Share of that series to be maintained, after
reflecting such loss, at the designated constant dollar amount.
Each Shareholder of the Trust shall be deemed to have expressly
agreed, by investing in any Portfolio with respect to which the
Trustees shall have adopted any such procedure, to make the
contribution referred to in the preceding sentence in the event
of any such loss.
(f) EQUALITY. All Shares of each series without
classes shall represent an equal proportionate interest in the
assets belonging to the Portfolio to which such series pertains,
subject to the liabilities of that Portfolio, and each Share of
any such series shall be equal to each other Share thereof. All
Shares of each class of Shares of any series divided into classes
shall represent an equal proportionate interest in the share of
such class in the assets belonging to the Portfolio to which such
class relates, subject to a like share of the liabilities of such
Portfolio, adjusted for any liabilities specifically allocable to
that class, and each Share of any such class shall be equal to
each other Share thereof; but the interests represented by the
Shares of the different classes of a series divided into classes
shall reflect any distinctions among the several classes of such
series existing under this Section 6.2 or Section 7.1 hereof, or
under the Certificate of Designation providing for such series,
if applicable. The Trustees may from time to time divide or
combine the Shares of any series, or any class of any series,
into a greater or lesser number of Shares of that series or class
without thereby changing the proportionate beneficial interest in
the assets belonging to the Portfolio to which such Shares
pertain or in any way affecting the rights of the holders of
Shares of any other series or class.
(g) RIGHTS OF HOLDERS OF FRACTIONAL SHARES. Any
fractional Share of any series or class shall carry
proportionately all the rights and obligations of a whole Share
of that series or class, including rights and obligations with
respect to voting, receipt of dividends and distributions,
redemption of Shares, and liquidation of the Trust or of the
Portfolio to which such Shares pertain.
(h) VOTING BY SERIES OR CLASSES. Notwithstanding any
provision hereof to the contrary, on any matter submitted to a
vote of the Shareholders of the Trust, all Shares then entitled
to vote shall be voted by individual series, except that (i) when
26
<PAGE>
required by the 1940 Act to be voted in the aggregate, Shares
shall not be voted by individual series, and (ii) when the
Trustees have determined that the matter affects only the
interests of Shareholders of one or more series, only
Shareholders of such series shall be entitled to vote thereon.
ARTICLE VII
REDEMPTIONS
SECTION 7.1. REDEMPTIONS. In case any Shareholder at
any time desires to dispose of his Shares, he may deposit his
certificate or certificates therefor, duly endorsed in blank or
accompanied by an instrument of transfer executed in blank, or if
the Shares are not represented by any certificates, a written
request or other such form of request as the Trustees may from
time to time authorize, at the office of the Transfer Agent, the
Shareholder Servicing Agent, which is the agent of record for
such Shareholder, or at the office of any bank or trust company,
either in or outside of Massachusetts, which is a member of the
Federal Reserve System and which the said Transfer Agent or the
said Shareholder Servicing Agent has designated in writing for
that purpose, together with an irrevocable offer in writing in a
form acceptable to the Trustees to sell the Shares represented
thereby to the Trust at the net asset value thereof per Share,
determined as provided in Section 8.1 hereof, next after such
deposit. Payment for said Shares shall be made to the
Shareholder within seven days after the date on which the deposit
is made, unless (i) the date of payment is postponed pursuant to
Section 7.2 hereof, or (ii) the receipt, or verification of
receipt, of the purchase price for the Shares to be redeemed is
delayed, in either of which events payment may be delayed beyond
seven days.
SECTION 7.2. SUSPENSION OF RIGHT OF REDEMPTION. The
Trust may declare a suspension of the right of redemption or
postpone the date of payment of the redemption proceeds for the
whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary week-end and
holiday closings, (ii) during which trading on the New York Stock
Exchange is restricted, (iii) during which an emergency exists as
a result of which disposal by the Trust of securities owned by it
is not reasonably practicable or it is not reasonably practicable
for the Trust fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the
protection of security holders of the Trust by order permit
suspension of the right of redemption or postponement of the date
of payment of the redemption proceeds; provided that applicable
rules and regulations of the Commission shall govern as to
whether the conditions prescribed in (ii), (iii) or (iv) exist.
27
<PAGE>
Such suspension shall take effect at such time as the Trust shall
specify but not later than the close of business on the business
day next following the declaration of suspension, and thereafter
there shall be no right of redemption or payment of the
redemption proceeds until the Trust shall declare the suspension
at an end, except that the suspension shall terminate in any
event on the first day on which said Stock Exchange shall have
reopened or the period specified in (ii) or (iii) shall have
expired (as to which, in the absence of an official ruling by the
Commission, the determination of the Trust shall be conclusive).
In the case of a suspension of the right of redemption, a
Shareholder may either withdraw his request for redemption or
receive payment based on the net asset value existing after the
termination of the suspension.
SECTION 7.3. REDEMPTION OF SHARES; DISCLOSURE OF
HOLDING. (a) REDEMPTIONS AT THE OPTION OF THE TRUST. If the
Trustees shall, at any time and in good faith, be of the opinion
that direct or indirect ownership of Shares or other securities
of the Trust has or may become concentrated in any Person to an
extent which would disqualify the Trust as a regulated investment
company under the Internal Revenue Code of 1986, as amended (the
"Code"), then the Trustees shall have the power by lot or other
means deemed equitable by them (i) to call for redemption by any
such Person a number, or principal amount, of Shares or other
securities of the Trust sufficient to maintain or bring the
direct or indirect ownership of Shares or other securities of the
Trust into conformity with the requirements for such
qualification, and (ii) to refuse to transfer or issue Shares or
other securities of the Trust to any Person whose acquisition of
the Shares or other securities of the Trust in question would
result in such disqualification. The redemption shall be
effected at the redemption price and in the manner provided in
Section 7.1 hereof.
(b) DISCLOSURE OF HOLDINGS. The holders of Shares or
other securities of the Trust shall upon demand disclose to the
Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as
the Trustees deem necessary to comply with the provisions of the
Code, or to comply with the requirements of any other authority.
Upon the failure of a Shareholder to disclose such information
and to comply with such demand of the Trustees, the Trust shall
have the power to redeem such Shares at a redemption price
determined in accordance with Section 7.1 hereof.
SECTION 7.4. REDEMPTIONS OF ACCOUNTS OF LESS THAN $500.
The Trustees shall have the power at any time to redeem Shares of
any Shareholder at a redemption price determined in accordance
with Section 7.1 hereof if at such time the aggregate net asset
value of the Shares in such Shareholder's account is less than
28
<PAGE>
$500. A Shareholder shall be notified that the value of his
account is less than $500 and allowed 60 days to make an
additional investment before the redemption is effected.
ARTICLE VIII
DETERMINATION OF NET ASSET
VALUE, NET INCOME AND DISTRIBUTIONS
The Trustees, in their absolute discretion, may
prescribe and shall set forth in the By-Laws or in a duly adopted
vote or votes of the Trustees such bases and times for
determining the per Share net asset value of the Shares or net
income, or the declaration and payment of dividends and
distributions, as they may deem necessary or desirable.
ARTICLE IX
DURATION; TERMINATION
OF TRUST; AMENDMENT; MERGERS, ETC.
SECTION 9.1. DURATION. The Trust shall continue
without limitation of time but subject to the provisions of this
Article IX.
SECTION 9.2. TERMINATION OF TRUST. (a) The Trust may
be terminated (i) by a Majority Shareholder Vote of the holders
of each series and class of its Shares, or (ii) by the Trustees
by written notice to the Shareholders. Any series or class of
the Trust may be terminated (i) by a Majority Shareholder Vote of
the holders of Shares of that series or class, or (ii) by the
Trustees by written notice to the Shareholders of that series or
class. Upon the termination of the Trust or any series or class
of the Trust:
(i) The Trust or such series or class shall carry on no
business except for the purpose of winding up its affairs;
(ii) The Trustees shall proceed to wind up the affairs
of the Trust or such series or class and all the powers of the
Trustees under this Declaration shall continue until the affairs
of the Trust or such series or class shall have been wound up,
including the power to fulfill or discharge the contracts of the
Trust or such series or class collect its assets, sell, convey,
assign, exchange, transfer or otherwise dispose of all or any
part of the remaining Trust Property, or the Trust Property of
such series or class, to one or more Persons at public or private
sale for consideration which may consist in whole or in part of
cash, securities or other property of any kind, discharge or pay
29
<PAGE>
its liabilities, and to do all other acts appropriate to
liquidate its business; provided, that any sale, conveyance,
assignment, exchange, transfer or other disposition of all or
substantially all of the Trust Property in connection with any
such termination shall require Shareholder approval in accordance
with Section 9.4 hereof, and any sale, conveyance, assignment,
exchange, transfer or other disposition of all or substantially
all of the Trust Property allocated or belonging to any series or
class in connection with the termination thereof shall require
the approval of the Shareholders of such series or class as
provided in Section 9.6 hereof; and
(iii) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for
their protection, the Trustees may distribute the remaining Trust
Property, or the Trust Property of the series or class, in cash
or in kind or partly in cash and partly in kind, among the
Shareholders of the Trust or the series or classes according to
their respective rights.
(b) After termination of the Trust, or of such series
or class, and distribution to the Shareholders of the Trust, or
of such series or class, as herein provided, a Majority of the
Trustees shall execute and lodge among the records of the Trust
an instrument in writing setting forth the fact of such
termination, and the Trustees shall thereupon be discharged from
all further liabilities and duties hereunder with respect to the
Trust or such series or class, and the rights and interests of
all Shareholders of the Trust, series or class shall thereupon
cease.
SECTION 9.3. AMENDMENT PROCEDURE. (a) This
Declaration may be amended by a Majority Shareholder Vote of the
Shareholders of the Trust or by any instrument in writing,
without a meeting, signed by a Majority of the Trustees and
consented to by the holders of not less than a majority of the
Shares of the Trust. The Trustees may also amend this
Declaration without the vote or consent of Shareholders to
designate series or classes in accordance with Section 6.9 hereof
(or to modify any provision of this Declaration to the extent
deemed necessary or appropriate by the Trustees to reflect such
designation), to change the name of the Trust, to supply any
omission, to cure, correct or supplement any ambiguous, defective
or inconsistent provision hereof, or if they deem it necessary or
advisable to conform this Declaration to the requirements of
applicable federal laws or regulations or the requirements of the
regulated investment company provisions of the Internal Revenue
Code of 1986, as amended, but the Trustees shall not be liable
for failing to do so.
30
<PAGE>
(b) No amendment which the Trustees shall have
determined shall adversely affect the rights, privileges or
interests of holders of a particular series or class of Shares,
and which would otherwise require a Majority Shareholder Vote
under paragraph (a) of this Section 9.3, but not the rights,
privileges or interests of holders of Shares of the Trust
generally, may be made except with the vote or consent by a
Majority Shareholder Vote of such series or class.
(c) Notwithstanding any other provision hereof, no
amendment may be made under this Section 9.3 which would change
any rights with respect to the Shares, or any series or class of
Shares, by reducing the amount payable thereon upon liquidation
of the Trust or by diminishing or eliminating any voting rights
pertaining thereto, except with the Majority Shareholder Vote of
the Shares, or of that series or class of Shares, as the case may
be. Nothing contained in this Declaration shall permit the
amendment of this Declaration to impair the exemption from
personal liability of the Shareholders, Trustees, officers,
employees and agents of the Trust or to permit assessments upon
Shareholders.
(d) A certificate signed by a Majority of the Trustees
setting forth an amendment and reciting that it was duly adopted
by the Shareholders or by the Trustees as aforesaid or a copy of
the Declaration, as amended, executed by a Majority of the
Trustees, and filed as required by Section 11.1 hereof shall be
conclusive evidence of such amendment when lodged among the
records of the Trust.
(e) Notwithstanding any other provision hereof, until
such time as a Registration Statement under the Securities Act of
1933, as amended, covering the first public offering of
securities of the Trust shall have become effective, this
Declaration may be amended in any respect by the affirmative vote
of a Majority of the Trustees or by an instrument signed by a
Majority of the Trustees.
SECTION 9.4. MERGER, CONSOLIDATION AND SALE OF ASSETS.
The Trust may merge or consolidate with any other corporation,
association, trust or other organization, to the extent permitted
by the law applicable to such corporation, association, trust or
other organization, or may sell, lease or exchange all or
substantially all of the Trust Property (or all or substantially
all of the Trust Property allocated or belonging to a particular
series or class of the Trust) including its good will, upon such
terms and conditions and for such consideration when and as
authorized at any meeting of Shareholders called for such purpose
by the vote of the holders of two-thirds of the outstanding
shares of each affected series or class of the Trust or by an
instrument or instruments in writing without a meeting, consented
31
<PAGE>
to by the vote of the holders of two-thirds of the outstanding
Shares of each affected series or class of the Trust; provided,
however, that if such merger, consolidation, sale, lease or
exchange is recommended by the Trustees, the vote or written
consent by Majority Shareholder Vote shall be sufficient
authorization. Nothing contained in this Section 9.4 shall be
construed as requiring approval of Shareholders for any sale of
assets in the ordinary course of the business of the Trust.
SECTION 9.5. INCORPORATION, REORGANIZATION. Subject to
a Majority Shareholder Vote, the Trustees may cause to be
organized or assist in organizing a corporation or corporations
under the laws of any jurisdiction, or any other trust, unit
investment trust, partnership, association or other organization
to take over all of the Trust Property or to carry on any
business in which the Trust shall directly or indirectly have any
interest, and to sell, convey and transfer the Trust Property to
any such corporation, trust, partnership, association or
organization in exchange for the shares or securities thereof or
otherwise, and to lend money to, subscribe for the shares or
securities of, and enter into any contracts with any such
corporation, trust, partnership, association or organization in
which the Trust holds or is about to acquire shares or any other
interest. Subject to Section 9.4 hereof, the Trustees may also
cause a merger or consolidation between the Trust or any
successor thereto and any such corporation, trust, partnership,
association or other organization if and to the extent permitted
by law. Nothing contained in this Section 9.5 shall be construed
as requiring approval of Shareholders for the Trustees to
organize or assist in organizing one or more corporations,
trusts, partnerships, associations or other organizations and
selling, conveying or transferring a portion of the Trust
Property to such organization or entities.
SECTION 9.6. INCORPORATION OR REORGANIZATION OF SERIES
OR CLASSES. With the approval of a Majority Shareholder Vote of
any series or class, the Trustees may sell, lease or exchange all
of the Trust Property allocated or belonging to that series or
class, or cause to be organized or assist in organizing a
corporation or corporations under the laws of any other
jurisdiction, or any other trust, unit investment trust,
partnership, association or other organization, to take over all
of the Trust Property allocated or belonging to that series or
class and to sell, convey and transfer such Trust Property to any
such corporation, trust, unit investment trust, partnership,
association, or other organization in exchange for the shares or
securities thereof or otherwise.
32
<PAGE>
ARTICLE X
REPORTS TO SHAREHOLDERS AND SHAREHOLDER COMMUNICATIONS
The Trustees shall at least semi-annually submit to the
Shareholders a written financial report of the transactions of
the Trust, including financial statements which shall at least
annually be certified by independent public accountants.
Whenever ten or more Shareholders of record who have
been such for at least six months preceding the date of
application, and who hold in the aggregate either Shares having a
net asset value of at least $25,000 or at least 1% of the Shares
outstanding, whichever is less, shall apply to the Trustees in
writing, stating that they wish to communicate with other
Shareholders with a view to obtaining signatures to a request for
a meeting of Shareholders for the purpose of removing one or more
Trustees pursuant to Section 2.2 hereof and accompany such
application with a form of communication and request which they
wish to transmit, the Trustees shall within five business days
after receipt of such application either (a) afford to such
applicants access to a list of the names and addresses of all
Shareholders as recorded on the books of the Trust; or (b) inform
such applicants as to the approximate number of Shareholders of
record, and the approximate cost of mailing to them the proposed
communication and form of request. If the Trustees elect to
follow the course specified in (b) above, the Trustees, upon the
written request of such applicants, accompanied by a tender of
the material to be mailed and of the reasonable expenses of
mailing, shall, with reasonable promptness, mail such material to
all Shareholders of record, unless within five business days
after such tender the Trustees mail to such applicants and file
with the Commission, together with a copy of the material to be
mailed, a written statement signed by at least a Majority of the
Trustees to the effect that in their opinion either such material
contains untrue statements of fact or omits to state facts
necessary to make the statements contained therein not
misleading, or would be in violation of applicable law, and
specifying the basis of such opinion.
ARTICLE XI
MISCELLANEOUS
SECTION 11. FILING. This Declaration, as amended, and
any subsequent amendment hereto shall be filed in the office of
the Secretary of the Commonwealth of Massachusetts and in such
other place or places as may be required under the laws of the
Commonwealth of Massachusetts and may also be filed or recorded
in such other places as the Trustees deem appropriate. Each
33
<PAGE>
amendment so filed shall be accompanied by a certificate signed
and acknowledged by a Trustee stating that such action was duly
taken in a manner provided herein, and unless such amendment or
such certificate sets forth some later time for the effectiveness
of such amendment, such amendment shall be effective upon its
filing. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are
then in effect and operative, may be executed from time to time
by a Majority of the Trustees and shall, upon filing with the
Secretary of the Commonwealth of Massachusetts, be conclusive
evidence of all amendments contained therein and may thereafter
be referred to in lieu of this original Declaration and the
various amendments thereto.
SECTION 11.2 GOVERNING LAW. This Declaration is
executed by the Trustees and delivered in the Commonwealth of
Massachusetts and with reference to the laws thereof, and the
rights of all parties and the validity and construction of every
provision hereof shall be subject to and construed according to
the laws of said Commonwealth.
SECTION 11.3. COUNTERPARTS. This Declaration may be
simultaneously executed in several counterparts, each of which
shall be deemed to be an original, and such counterparts,
together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
SECTION 11.4. RELIANCE BY THIRD PARTIES. Any
certificate executed by an individual who, according to the
records of the Trust appears to be a Trustee hereunder,
certifying to: (i) the number or identity of Trustees or
Shareholders, (ii) the due authorization of the execution of any
instrument in writing, (iii) the form of any vote passed at a
meeting of Trustees or Shareholders, (iv) the fact that the
number of Trustees or Shareholders present at any meeting or
executing any written instrument satisfies the requirements of
this Declaration, (v) the form of any By-Laws adopted by or the
identity of any officers elected by the Trustees, or (vi) the
existence of any fact or facts which in amy manner relate to the
affairs of the Trust, shall be conclusive evidence as to the
matters so certified in favor of any Person dealing with the
Trustees and their successors.
SECTION 11.5. PROVISIONS IN CONFLICT WITH LAW OR
REGULATIONS. (a) The provisions of this Declaration are
severable, and if the Trustees shall determine, with the advice
of counsel, that any of such provisions is in conflict with the
1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986, as amended, or with other
applicable laws and regulations, the conflicting provision shall
be deemed never to have constituted a part of this Declaration;
34
<PAGE>
provided however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such
jurisdiction and shall not in any manner affect such provision in
any other jurisdiction or any other provision of the Declaration
in any jurisdiction.
IN WITNESS WHEREOF, the undersigned has executed this
instrument this 22nd day of February, 1995.
Emilie D. Wrapp
---------------------------
Emilie D. Wrapp, as Trustee
and not individually
35
00250217.AE9
<PAGE>
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the 22nd day of February, 1995, the above-named
Emilie D. Wrapp, to me known and known to me to be the person
named in and who signed the foregoing instrument, personally
appeared before me and acknowledged the foregoing instrument to
be her free act and deed.
Before me,
Mary Ann Milley
---------------------
Notary Public
Certificate filed in ----------
Commission expires:
January 6, 1996
---------------
[NOTARIAL SEAL]
<PAGE>
BY-LAWS
OF
ALLIANCE MONEY MARKET FUND
ARTICLE I
DEFINITIONS
The terms "COMMISSION", "DECLARATION", "DISTRIBUTOR",
"INVESTMENT ADVISER", "MAJORITY SHAREHOLDER VOTE", "1940 ACT",
"SHAREHOLDER", "SHARES", "TRANSFER AGENT", "TRUST", "TRUST
PROPERTY" and "TRUSTEES" have the respective meanings given them
in the Declaration of Trust of Alliance Money Market Fund, dated
October 26, 1994, as amended from time to time.
ARTICLE II
OFFICES
SECTION 1. PRINCIPAL OFFICE. Until changed by the
Trustees, the principal office of the trust in the Commonwealth
of Massachusetts shall be in the City of Boston, County of
Suffolk.
SECTION 2. OTHER OFFICES. The Trust may have offices in
such other places without as well as within the Commonwealth of
Massachusetts as the Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
SECTION 1. MEETINGS. Meetings of Shareholders may be
called at any time by a majority of the Trustees and shall be
called by any Trustee upon written request, which shall specify
the purpose or purposes for which such meeting is to be called,
of Shareholders holding in the aggregate not less than 10% of the
outstanding Shares entitled to vote on the matters specified in
such written request. Any such meeting shall be held within or
without the Commonwealth of Massachusetts on such day and at such
time as the Trustees shall designate. The holders of a majority
of outstanding Shares entitled to vote present in person or by
proxy shall constitute a quorum at any meeting of Shareholders,
except that where any provision of law, the Declaration or these
By-Laws permits or requires that holders of any series shall vote
as a series or class, then a majority of the aggregate number of
Shares of that series or class entitled to vote shall be
necessary to constitute a quorum for the transaction of business
by that series or class. In the absence of a quorum, a majority
<PAGE>
of outstanding Shares entitled to vote present in person or by
proxy may adjourn the meeting from time to time until a quorum
shall be present.
SECTION 2. NOTICE OF MEETINGS. Notice of all meetings
of Shareholders, stating the time, place and purposes of the
meeting, shall be given by the Trustees by mail to each
Shareholder entitled to vote at such meeting at his address as
recorded on the register of the Trust, mailed at least 10 days
and not more than 60 days before the meeting. Only the business
stated in the notice of the meeting shall be considered at such
meeting. Any adjourned meeting may be held as adjourned without
further notice. No notice need be given to any Shareholder who
shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the
meeting by the Shareholder or his attorney thereunto authorized,
is filed with the records of the meeting.
SECTION 3. RECORD DATE. For the purpose of determining
the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the
purpose of any other action, the Trustees may from time to time
close the transfer books for such period, not exceeding 30 days,
as the Trustees may determine; or without closing the transfer
books the Trustees may fix a date not more than 60 days prior to
the date of any meeting of Shareholders or distribution or other
action as a record date for the determination of the persons to
be treated as Shareholders of record for such purpose.
SECTION 4. PROXIES. At any meeting of Shareholders,
any holder of Shares entitled to vote thereat may vote by proxy,
provided that no proxy shall be voted at any meeting unless it
shall have been placed on file with the Secretary, or with such
other officer or agent of the Trust as the Secretary may direct,
for verification prior to the time at which such vote shall be
taken. Pursuant to a vote of a majority of the Trustees, proxies
may be solicited in the name of one or more Trustees or one or
more of the officers of the Trust. Only Shareholders of record
shall be entitled to vote. Each full Share shall be entitled to
one vote and fractional Shares shall be entitled to a vote of
such fraction. When any Share is held jointly by several
persons, any one of them may vote at any meeting in person or by
proxy in respect of such Share, but if more than one of them
shall be present at such meeting in person or by proxy, and such
joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such
Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest
on the challenger. If the holder of any such Share is a minor or
a person of unsound mind, and subject to guardianship or to the
2
<PAGE>
legal control of any other person as regards the charge or
management of such Share, such Share may be voted by such
guardian or such other person as regards the charge or management
of such Share, such Share may be voted by such guardian or such
other person appointed or having such control, and such vote may
be given in person or by proxy.
SECTION 5. INSPECTION OF RECORDS. The records of the
Trust shall be open to inspection by the Shareholders to the same
extent as is permitted shareholders of a Massachusetts business
corporation.
SECTION 6. ACTION WITHOUT MEETING. Any action which
may be taken by Shareholders may be taken without a meeting if a
majority of Shareholders entitled to vote on the matter (or such
larger proportion thereof as shall be required by law, the
Declaration or these By-Laws for approval of such matter) consent
to the action in writing and the written consents are filed with
the records of the meetings of Shareholders. Such consent shall
be treated for all purposes as a vote taken at a meeting of
Shareholders.
ARTICLE IV
TRUSTEES
SECTION 1. MEETINGS OF THE TRUSTEES. The Trustees may
in their discretion provide for regular or stated meetings of the
Trustees. Notice of regular or stated meetings need not be
given. Meetings of the Trustees other than regular or stated
meetings shall be held whenever called by the Chairman or by any
Trustee. Notice of the time and place of each meeting other than
regular or stated meetings shall be given by the Secretary or an
Assistant Secretary or by the officer or Trustee calling the
meeting and shall be mailed to each Trustee at least two days
before the meeting, or shall be telegraphed, cabled, or
wirelessed to each Trustee at his business address, or personally
delivered to him at least one day before the meeting. Such
notice may, however, be waived by any Trustee. Notice of a
meeting need not be given to any Trustee if a written waiver of
notice, executed by him before or after the meeting, is filed
with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of
notice need not specify the purpose of any meeting. The Trustees
may meet by means of a telephone conference circuit or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, which telephone
conference meeting shall be deemed to have been held at a place
designated by the Trustees at the meeting. Participation in a
telephone conference meeting shall constitute presence in person
3
<PAGE>
at such meeting. Any action required or permitted to be taken at
any meeting of the Trustees may be taken by the Trustees without
a meeting if all the Trustees consent to the action in writing
and the written consents are filed with the records of the
Trustees' meetings. Such consents shall be treated as a vote for
all purposes.
SECTION 2. QUORUM AND MANNER OF ACTING. A majority of
the Trustees present in person at any regular or special meeting
of the Trustees shall constitute a quorum for the transaction of
business at such meeting and (except as otherwise required by
law, the Declaration or these By-Laws) the act of a majority of
the Trustees present at any such meeting, at which a quorum is
present, shall be the act of the Trustees. In the absence of a
quorum, a majority of the Trustees present may adjourn the
meeting from time to time until a quorum shall be present. Notice
of an adjourned meeting need not be given.
ARTICLE V
COMMITTEES AND ADVISORY BOARD
SECTION 1. EXECUTIVE AND OTHER COMMITTEES. The
Trustees by vote of a majority of all the Trustees may elect from
their own number an Executive Committee to consist of not less
than three Trustees to hold office at the pleasure of the
Trustees. While the Trustees are not in session, the Executive
Committee shall have the power to conduct the current and
ordinary business of the Trust, including the purchase and sale
of securities and the designation of securities to be delivered
upon redemption of Shares of the Trust, and such other powers of
the Trustees as the Trustees may, from time to time, delegate to
the Executive Committee except those powers which by law, the
Declaration or these By-Laws the Trustees are prohibited from so
delegating. The Trustees may also elect from their own number
other Committees from time to time, the number composing such
Committees, the powers conferred upon the same (subject to the
same limitations as with respect to the Executive Committee) and
the term of membership on such Committees to be determined by the
Trustees. The Trustees may designate a chairman of any such
Committee. In the absence of such designation a Committee may
elect its own chairman.
SECTION 2. MEETING, QUORUM AND MANNER OF ACTING. The
Trustees may (i) provide for stated meetings of any Committee,
(ii) specify the manner of calling and notice required for
special meetings of any Committee, (iii) specify the number of
members of a Committee required to constitute a quorum and the
number of members of a Committee required to exercise specified
powers delegated to such Committee, (iv) authorize the making of
decisions to exercise specified powers by written assent of the
4
<PAGE>
requisite number of members of a Committee without a meeting, and
(v) authorize the members of a Committee to meet by means of a
telephone conference circuit.
Each Committee shall keep regular minutes of its
meetings and records of decisions taken without a meeting and
cause them to be recorded in a book designated for that purpose
and kept in the office of the Trust.
SECTION 3. ADVISORY BOARD. The Trustees may appoint an
Advisory Board to consist in the first instance of not less than
three members. Members of such Advisory Board shall not be
Trustees or officers and need not be Shareholders. A member of
such Advisory Board shall hold office for such period as the
Trustees may by vote provide and may resign therefrom by a
written instrument signed by him which shall take effect upon its
delivery to the Trustees. The Advisory Board shall have no legal
powers and shall not perform the functions of Trustees in any
manner, such Advisory Board being intended merely to act in an
advisory capacity. Such Advisory Board shall meet at such times
and upon such notice as the Trustees may provide.
ARTICLE VI
OFFICERS
SECTION 1. GENERAL PROVISIONS. The officers of the
Trust shall be a Chairman, a President, a Treasurer and a
Secretary, who shall be elected by the Trustees. The Trustees
may elect or appoint such other officers or agents as the
business of the Trust may require, including one or more Vice
Presidents, one or more Assistant Treasurers, and one or more
Assistant Secretaries. The Trustees may delegate to any officer
or committee the power to appoint any subordinate officers or
agents.
SECTION 2. TERM OF OFFICE AND QUALIFICATIONS. Except
as otherwise provided by law, the Declaration or these By-Laws,
the Chairman, the President, the Treasurer and the Secretary
shall hold office until his respective successor shall have been
duly elected and qualified, and all other officers shall hold
office at the pleasure of the Trustees. The Secretary and
Treasurer may be the same person. A Vice President and the
Treasurer or a Vice President and the Secretary may be the same
person, but the offices of Vice President, Secretary and
Treasurer shall not be held by the same person. Neither the
Chairman nor the President shall hold any other office. Except
as above provided, any two offices may be held by the same
person. Any officer may be, but none need be, a Trustee or
Shareholder.
5
<PAGE>
SECTION 3. REMOVAL. The Trustees, at any regular or
special meeting of the Trustees, may remove any officer with or
without cause by a vote of a majority of the Trustees. Any
officer or agent appointed by any officer or committee may be
removed with or without cause by such appointing officer or
committee.
SECTION 4. POWERS AND DUTIES OF THE CHAIRMAN. The
Chairman may call meetings of the Trustees and of any Committee
thereof when he deems it necessary and shall preside at all
meetings of the Shareholders. Subject to the control of the
Trustees and any Committee of the Trustees, the Chairman shall at
all times exercise a general supervision and direction over the
affairs of the Trust. The Chairman shall have the power to
employ attorneys and counsel for the Trust and to employ such
subordinate officers, agents, clerks and employees as he may find
necessary to transact the business of the Trust. The Chairman
shall also have the power to grant, issue, execute or sign such
powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the
Trust. The Chairman shall have such other powers and duties as,
from time to time, may be conferred upon or assigned to him by
the Trustees.
SECTION 5. POWERS AND DUTIES OF THE PRESIDENT. In the
absence or disability of the Chairman, the President shall
perform all the duties and may exercise any of the powers of the
Chairman, subject to the control of the Trustees. The President
shall perform such other duties as may be assigned to him from
time to time by the Trustees or the Chairman.
SECTION 6. POWERS AND DUTIES OF VICE PRESIDENTS. In
the absence or disability of the President, the Vice President
or, if there be more than one Vice President, any Vice President
designated by the Trustees shall perform all the duties and may
exercise any of the powers of the President, subject to the
control of the Trustees. Each Vice President shall perform such
other duties as may be assigned to him from time to time by the
Trustees or the President.
SECTION 7. POWERS AND DUTIES OF THE TREASURER. The
Treasurer shall be the principal financial and accounting officer
of the Trust. The Treasurer shall deliver all funds of the Trust
which may come into his hands to such custodian as the Trustees
may employ pursuant to Article X hereof. The Treasurer shall
render a statement of condition of the finances of the Trust to
the Trustees as often as they shall require the same and shall in
general perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to him by the Trustees. The Treasurer shall give a bond
to the faithful discharge of his duties, if required to do so by
6
<PAGE>
the Trustees, in such sum and with such surety or sureties as the
Trustees shall require.
SECTION 8. POWERS AND DUTIES OF THE SECRETARY. The
Secretary shall keep the minutes of all meetings of the
Shareholders in the proper books provided for that purpose; shall
keep the minutes of all meetings of the Trustees; shall have
custody of the seal of the Trust; and shall have charge of the
Share transfer books, lists and records unless the same are in
the charge of a Transfer Agent or Shareholder Servicing Agent of
the Trust (as such parties are defined in the Declaration). The
Secretary shall attend to the giving and serving of all notices
by the Trust in accordance with the provisions of these By-Laws
and as required by law; and subject to these By-Laws, shall in
general perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him
by the Trustees.
SECTION 9. POWERS AND DUTIES OF ASSISTANT TREASURERS.
In the absence or disability of the Treasurer, any Assistant
Treasurer designated by the Trustees shall perform all the
duties, and may exercise any of the powers, of the Treasurer.
Each Assistant Treasurer shall perform such other duties as from
time to time may be assigned to him by the Trustees. Each
Assistant Treasurer shall give a bond for the faithful discharge
of his duties, if required to do so by the Trustees, in such sum
and with such surety or sureties as the Trustees shall require.
SECTION 10. POWERS AND DUTIES OF ASSISTANT SECRETARIES.
In the absence or disability of the Secretary, any Assistant
Secretary designated by the Trustees shall perform all of the
duties, and may exercise any of the powers, of the Secretary.
Each Assistant Secretary shall perform such other duties as from
time to time may be assigned to him by the Trustees.
SECTION 11. COMPENSATION OF OFFICERS AND TRUSTEES AND
MEMBERS OF THE ADVISORY BOARD. Subject to any applicable law or
provision of the Declaration, the compensation of the officers
and Trustees and members of the Advisory Board shall be fixed
from time to time by the Trustees or, in the case of officers, by
any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such
compensation as such officer by reason of the fact that he is
also a Trustee.
7
<PAGE>
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall begin on the first
day of December 1st in each year and shall end on the last day of
November 30th in the succeeding year, provided, however, that the
Trustees may from time to time change the fiscal year.
ARTICLE VIII
SEAL
The Trustees shall adopt a seal which shall be in the
form and shall have such inscription thereon as the Trustees may
from time to time prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice is required to be given by law, the
Declaration or these By-Laws, a waiver thereof in writing, signed
by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed equivalent
thereto. A notice shall be deemed to have been telegraphed,
cabled or wirelessed for the purposes of these By-Laws when it
has been delivered to a representative of any telegraph, cable or
wireless company with instruction that it be telegraphed, cabled
or wirelessed. Any notice shall be deemed to be given at the
time when the same shall be mailed, telegraphed, cabled or
wirelessed.
ARTICLE X
CUSTODIAN
SECTION 1. APPOINTMENT AND DUTIES. The Trustees shall
at all times employ a bank or trust company having a capital,
surplus and undivided profits of at least $5,000,000 as custodian
with authority as its agent, but subject to such restrictions,
limitations and other requirements, if any, as may be contained
in the Declaration, these By-Laws and the 1940 Act:
(i) to hold the securities owned by the Trust and
deliver the same upon written order;
(ii) to receive and receipt for any monies due to the
Trust and deposit the same in its own banking department
or elsewhere as the Trustees may direct;
8
<PAGE>
(iii) to disburse such funds upon orders or vouchers;
(iv) if authorized by the Trustees, to keep the books
and accounts of the Trust and furnish clerical and
accounting services; and
(v) if authorized to do so by the Trustees, to
compute the net income of the Trust and the net asset
value of Shares;
all upon such basis of compensation as may be agreed upon between
the Trustees and the custodian.
The Trustees may also authorize the custodian to employ
one or more sub-custodians from time to time to perform such of
the acts and services of the custodian and upon such terms and
conditions as may be agreed upon between the custodian and such
sub-custodian and approved by the Trustees, provided that in
every case such sub-custodian shall be a bank or trust company
organized under the laws of the United States or one of the
states thereof and having capital, surplus and undivided profits
of at least $5,000,000.
SECTION 2. CENTRAL CERTIFICATE SYSTEM. Subject to such
rules, regulations and orders as the Commission may adopt, the
Trustees may direct the custodian to deposit all or any part of
the securities owned by the Trust in a system for the central
handling of securities established by a national securities
exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such
other person as may be permitted by the Commission, or otherwise
in accordance with the 1940 Act, pursuant to which system all
securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical
delivery of such securities, provided that all such deposits
shall be subject to withdrawal only upon the order of the Trust
or its custodian.
SECTION 3. ACCEPTANCE OF RECEIPTS IN LIEU OF
CERTIFICATES. Subject to such rules, regulations and orders as
the Commission may adopt, the Trustees may direct the custodian
to accept written receipts or other written evidences indicating
purchases of securities held in book-entry form in the Federal
Reserve System in accordance with regulations promulgated by the
Board of Governors of the Federal Reserve System and the local
Federal Reserve Banks in lieu of receipt of certificates
representing such securities.
SECTION 4. PROVISIONS OF CUSTODIAN CONTRACT. The
following provisions shall apply to the employment of a custodian
9
<PAGE>
pursuant to this Article X and to any contract entered into with
the custodian so employed:
(a) The Trustees shall cause to be delivered to the custodian
all securities owned by the Trust or to which it may become
entitled, and shall order the same to be delivered by the
custodian only upon completion of a sale, exchange,
transfer, pledge, or other disposition thereof, and upon
receipt by the custodian of the consideration therefor or a
certificate of deposit or a receipt of an issuer or of its
Transfer Agent, all as the Trustees may generally or from
time to time require or approve, or to a successor
custodian; and the Trustees shall cause all funds owned by
the Trust or to which it may become entitled to be paid to
the custodian, and shall order the same disbursed only for
investment against delivery of the securities acquired, or
in payment of expenses, including management compensation,
and liabilities of the Trust, including distributions to
Shareholders, or to a successor custodian; provided,
however, that nothing herein shall prevent delivery of
securities for examination to the broker purchasing the same
in accord with the "street delivery" custom whereby such
securities are delivered to such broker in exchange for a
delivery receipt exchanged on the same day for an
uncertified check of such broker to be presented on the same
day for certification.
(b) In case of the resignation, removal or inability to serve of
any such custodian, the Trust shall promptly appoint another
bank or trust company meeting the requirements of this
Article X as successor custodian. The agreement with the
custodian shall provide that the retiring custodian shall,
upon receipt of notice of such appointment, deliver all
Trust Property in its possession to such successor, and that
pending appointment of a successor custodian, or a vote of
the Shareholders to function without a custodian, the
custodian shall not deliver any Trust Property to the Trust,
but may deliver all or any part of the Trust Property to a
bank or trust company doing business in Boston,
Massachusetts, of its own selection, having an aggregate
capital, surplus and undivided profits (as shown in its last
published report) of at least $5,000,000; provided that
arrangements are made for the Trust Property to be held
under terms similar to those on which they were held by the
retiring custodian.
10
<PAGE>
ARTICLE XI
AMENDMENTS
These By-Laws, or any of them, may be altered, amended
or repealed, or new By-Laws may be adopted (a) by Majority
Shareholder Vote, or (b) by the Trustees, provided, however, that
no By-Law may be amended, adopted or repealed by the Trustees if
such amendment, adoption or repeal requires, pursuant to law, the
Declaration or these By-Laws, a vote of the Shareholders.
11
00250217.AA4
<PAGE>
ALLIANCE MONEY MARKET FUND
PRIME PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND PRIME
PORTFOLIO under, in accordance with, and subject to all the
provisions of, a Declaration of Trust dated October 26, 1994 as
from time to time amended and restated, a copy of which has been
filed with the Secretary of The Commonwealth of Massachusetts, to
all of which provisions, as the same may be in effect from time
to time, the holder and every transferee and assignee hereof
agrees by the acceptance of this share certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
PRIME PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND PRIME PORTFOLIO as provided by said Declaration of Trust,
which is incorporated by reference herein. In particular, the
shares represented by this certificate are transferable on the
records of the Trust (other than by operation of law) only by the
record holder thereof or by his agent thereunto duly authorized
in writing, upon surrender of the certificate thereof, properly
endorsed or accompanied by duly executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND PRIME PORTFOLIO is
the designation of the Trustees for the time being under a
Declaration of Trust dated October 26, 1994 as from time to time
amended and restated and the holder and every transferee and
assignee of the certificate shall be conclusively deemed to have
agreed to look solely to the property of the Prime Portfolio (a
Series of Alliance Money Market Fund) for the enforcement of any
claims as such holder, transferee or assignee, as neither the
Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of ALLIANCE
MONEY MARKET FUND PRIME PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND PRIME PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AF1
<PAGE>
ALLIANCE MONEY MARKET FUND
GOVERNMENT PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND
GOVERNMENT PORTFOLIO under, in accordance with, and subject to
all the provisions of, a Declaration of Trust dated October 26,
1994 as from time to time amended and restated, a copy of which
has been filed with the Secretary of The Commonwealth of
Massachusetts, to all of which provisions, as the same may be in
effect from time to time, the holder and every transferee and
assignee hereof agrees by the acceptance of this share
certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
GOVERNMENT PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND GOVERNMENT PORTFOLIO as provided by said Declaration of
Trust, which is incorporated by reference herein. In particular,
the shares represented by this certificate are transferable on
the records of the Trust (other than by operation of law) only by
the record holder thereof or by his agent thereunto duly
authorized in writing, upon surrender of the certificate thereof,
properly endorsed or accompanied by duly executed instruments of
transfer.
The name ALLIANCE MONEY MARKET FUND GOVERNMENT PORTFOLIO
is the designation of the Trustees for the time being under a
Declaration of Trust dated October 26, 1994 as from time to time
amended and restated and the holder and every transferee and
assignee of the certificate shall be conclusively deemed to have
agreed to look solely to the property of the Government Portfolio
(a Series of Alliance Money Market Fund) for the enforcement of
any claims as such holder, transferee or assignee, as neither the
Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of ALLIANCE
MONEY MARKET FUND GOVERNMENT PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND GOVERNMENT
PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AF2
<PAGE>
ALLIANCE MONEY MARKET FUND
GENERAL MUNICIPAL PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND
GENERAL MUNICIPAL PORTFOLIO under, in accordance with, and
subject to all the provisions of, a Declaration of Trust dated
October 26, 1994 as from time to time amended and restated, a
copy of which has been filed with the Secretary of The
Commonwealth of Massachusetts, to all of which provisions, as the
same may be in effect from time to time, the holder and every
transferee and assignee hereof agrees by the acceptance of this
share certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
GENERAL MUNICIPAL PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND GENERAL MUNICIPAL PORTFOLIO as provided by said Declaration
of Trust, which is incorporated by reference herein. In
particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND GENERAL MUNICIPAL
PORTFOLIO is the designation of the Trustees for the time being
under a Declaration of Trust dated October 26, 1994 as from time
to time amended and restated and the holder and every transferee
and assignee of the certificate shall be conclusively deemed to
have agreed to look solely to the property of the General
Municipal Portfolio (a Series of Alliance Money Market Fund) for
the enforcement of any claims as such holder, transferee or
assignee, as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MONEY MARKET FUND GENERAL
MUNICIPAL PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND GENERAL
MUNICIPAL PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AF3
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW YORK MUNICIPAL PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND NEW
YORK MUNICIPAL PORTFOLIO under, in accordance with, and subject
to all the provisions of, a Declaration of Trust dated October
26, 1994 as from time to time amended and restated, a copy of
which has been filed with the Secretary of The Commonwealth of
Massachusetts, to all of which provisions, as the same may be in
effect from time to time, the holder and every transferee and
assignee hereof agrees by the acceptance of this share
certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW YORK MUNICIPAL PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND NEW YORK MUNICIPAL PORTFOLIO as provided by said Declaration
of Trust, which is incorporated by reference herein. In
particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND NEW YORK MUNICIPAL
PORTFOLIO is the designation of the Trustees for the time being
under a Declaration of Trust dated October 26, 1994 as from time
to time amended and restated and the holder and every transferee
and assignee of the certificate shall be conclusively deemed to
have agreed to look solely to the property of the New York
Municipal Portfolio (a Series of Alliance Money Market Fund) for
the enforcement of any claims as such holder, transferee or
assignee, as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MONEY MARKET FUND NEW YORK
MUNICIPAL PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND NEW YORK
MUNICIPAL PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AG9
<PAGE>
ALLIANCE MONEY MARKET FUND
CONNECTICUT MUNICIPAL PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND
CONNECTICUT MUNICIPAL PORTFOLIO under, in accordance with, and
subject to all the provisions of, a Declaration of Trust dated
October 26, 1994 as from time to time amended and restated, a
copy of which has been filed with the Secretary of The
Commonwealth of Massachusetts, to all of which provisions, as the
same may be in effect from time to time, the holder and every
transferee and assignee hereof agrees by the acceptance of this
share certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
CONNECTICUT MUNICIPAL PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND CONNECTICUT MUNICIPAL PORTFOLIO as provided by said
Declaration of Trust, which is incorporated by reference herein.
In particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND CONNECTICUT
MUNICIPAL PORTFOLIO is the designation of the Trustees for the
time being under a Declaration of Trust dated October 26, 1994 as
from time to time amended and restated and the holder and every
transferee and assignee of the certificate shall be conclusively
deemed to have agreed to look solely to the property of the
Connecticut Municipal Portfolio (a Series of Alliance Money
Market Fund) for the enforcement of any claims as such holder,
transferee or assignee, as neither the Trustees, officers, agents
or shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MONEY MARKET FUND CONNECTICUT
MUNICIPAL PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND CONNECTICUT
MUNICIPAL PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AH1
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW JERSEY MUNICIPAL PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND NEW
JERSEY MUNICIPAL PORTFOLIO under, in accordance with, and subject
to all the provisions of, a Declaration of Trust dated October
26, 1994 as from time to time amended and restated, a copy of
which has been filed with the Secretary of The Commonwealth of
Massachusetts, to all of which provisions, as the same may be in
effect from time to time, the holder and every transferee and
assignee hereof agrees by the acceptance of this share
certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW JERSEY MUNICIPAL PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND NEW JERSEY MUNICIPAL PORTFOLIO as provided by said
Declaration of Trust, which is incorporated by reference herein.
In particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND NEW JERSEY MUNICIPAL
PORTFOLIO is the designation of the Trustees for the time being
under a Declaration of Trust dated October 26, 1994 as from time
to time amended and restated and the holder and every transferee
and assignee of the certificate shall be conclusively deemed to
have agreed to look solely to the property of the New Jersey
Municipal Portfolio (a Series of Alliance Money Market Fund) for
the enforcement of any claims as such holder, transferee or
assignee, as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MONEY MARKET FUND NEW JERSEY
MUNICIPAL PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND NEW JERSEY
MUNICIPAL PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AG8
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW JERSEY MUNICIPAL PORTFOLIO
CERTIFICATE FOR SHARES OF BENEFICIAL INTEREST,
(WITHOUT PAR VALUE)
NUMBER SHARES
ACCOUNT NO. CUSIP
SEE REVERSE FOR CERTAIN
DEFINITIONS
THIS IS TO CERTIFY THAT
is the registered holder of
FULLY PAID AND NON-ASSESSABLE SHARES OF BENEFICIAL
INTEREST, (without Par Value) in ALLIANCE MONEY MARKET FUND NEW
JERSEY MUNICIPAL PORTFOLIO under, in accordance with, and subject
to all the provisions of, a Declaration of Trust dated October
26, 1994 as from time to time amended and restated, a copy of
which has been filed with the Secretary of The Commonwealth of
Massachusetts, to all of which provisions, as the same may be in
effect from time to time, the holder and every transferee and
assignee hereof agrees by the acceptance of this share
certificate.
This certificate is not valid until countersigned by the
Transfer Agent.
IN WITNESS WHEREOF, the Trustees under said Declaration
of Trust, acting not individually, but as such Trustees, have
caused to be affixed to this certificate the facsimile Seal of
the Trust and the facsimile signature of two duly authorized
officers of the Trust, acting not individually, but as such
officers.
Dated:
(SEAL) / s/ /s/
Secretary President
COUNTERSIGNED
By ALLIANCE FUND SERVICES, INC.
Transfer Agent
Authorized Signature
<PAGE>
ALLIANCE MONEY MARKET FUND
NEW JERSEY MUNICIPAL PORTFOLIO
The registered holder of this certificate is entitled to
all the rights, interest and privileges of ALLIANCE MONEY MARKET
FUND NEW JERSEY MUNICIPAL PORTFOLIO as provided by said
Declaration of Trust, which is incorporated by reference herein.
In particular, the shares represented by this certificate are
transferable on the records of the Trust (other than by operation
of law) only by the record holder thereof or by his agent
thereunto duly authorized in writing, upon surrender of the
certificate thereof, properly endorsed or accompanied by duly
executed instruments of transfer.
The name ALLIANCE MONEY MARKET FUND NEW JERSEY MUNICIPAL
PORTFOLIO is the designation of the Trustees for the time being
under a Declaration of Trust dated October 26, 1994 as from time
to time amended and restated and the holder and every transferee
and assignee of the certificate shall be conclusively deemed to
have agreed to look solely to the property of the New Jersey
Municipal Portfolio (a Series of Alliance Money Market Fund) for
the enforcement of any claims as such holder, transferee or
assignee, as neither the Trustees, officers, agents or
shareholders assume any personal liability for obligations
entered into on behalf of ALLIANCE MONEY MARKET FUND NEW JERSEY
MUNICIPAL PORTFOLIO.
FOR VALUE RECEIVED, _______ hereby sell, assign and
transfer unto _________________________________ Shares of
beneficial interest in ALLIANCE MONEY MARKET FUND NEW JERSEY
MUNICIPAL PORTFOLIO
represented by the within Certificate and do hereby irrevocably
constitute and appoint _____________________________ Attorney, to
transfer the said Shares on the books of the said Trust with full
power of substitution in the premises.
Dated:__________________ _________________________________
(Sign here)
_________________________________
NOTE: The signature(s) above must
correspond in every
particular, without
alteration, with the name(s)
as printed on your
Certificates.
<PAGE>
NOTE:
Your signature must be
guaranteed
__________________________________
(Name of Bank or Firm)
Signature Guaranteed
By: __________________________________
(Signature of Officer & Title)
00250217.AG8
<PAGE>
ADVISORY AGREEMENT
ALLIANCE MONEY MARKET FUND
1345 Avenue of the Americas
New York, New York 10105
March 16, 1995
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
We herewith confirm our agreement with you as follows:
1. We are an open-end, diversified management
investment company registered under the Investment Company Act of
1940 (the "Act"). We are currently authorized to issue one class
of shares and our Trustees are authorized to reclassify and issue
any unissued shares to any number of additional classes or series
(Portfolios) each having its own investment objective, policies
and restrictions, all as more fully described in the Prospectus
and Statement of Additional Information constituting a part of
the Registration Statement filed on our behalf under the
Securities Act of 1933 and the Act. We are engaged in the
business of investing and reinvesting our assets in securities of
the type and in accordance with the limitations specified in our
Declaration of Trust, By-Laws, Registration Statements filed with
the Securities and Exchange Commission under the Securities Act
of 1933 and the Act, and any representations made in our
Prospectus and Statement of Additional Information, all in such
manner and to such extent as may from time to time be authorized
by our Trustees. 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 assets in each of our Portfolios as above
specified, and, without limiting the generality of the foregoing,
to provide management and other services specified below.
(b) You will make decisions with respect to all
purchases and sales of securities in each of our Portfolios. To
carry out such decisions, you are hereby authorized, as our agent
<PAGE>
and attorney in fact, for our account and at our risk and in our
name, to place orders for the investment and reinvestment of our
assets. In all purchases, sales and other transactions in
securities in each of our Portfolios 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 Trustees at each
meeting thereof all changes in each Portfolio since the prior
report, and will also keep us in touch with important
developments affecting any Portfolio 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 banks or other companies whose securities are included
in our Portfolios, the banking or other industries in which they
engage, or the conditions prevailing in the money market or the
economy generally. You will also furnish us with such statistical
and analytical information with respect to securities in each of
our Portfolios as you may believe appropriate or as we reasonably
may request. In making such purchases and sales of securities in
each of our Portfolios, you will bear in mind the policies set
from time to time by our Trustees as well as the limitations
imposed by our Declaration of Trust and in our Registration
Statements under the Act and the Securities Act of 1933, the
limitations in the Act and of the Internal Revenue Code in
respect of regulated investment companies and the investment
objective, policies and restrictions for each of our Portfolios.
(d) It is understood that you will from time to
time employ or associate with yourselves such persons as you
believe to be particularly fitted to assist you in the execution
of your duties hereunder, the cost of performance of such duties
to be borne and paid by you. No obligation may be incurred on our
behalf in any such respect. During the continuance of this
agreement at our request you will provide to us persons
satisfactory to our Trustees to serve as our officers. You or
your affiliates will also provide persons, who may be our
officers, to render such clerical, accounting, administrative and
other services to us as we may from time to time request of you.
Such personnel may be employees of you or your affiliates. We
may, if so requested by you, pay to you or your affiliates the
cost of such personnel for rendering such services to us at such
rates as shall from time to time be agreed upon between us,
provided that all time devoted to the investment or reinvestment
of securities in each of our Portfolios or to the promotion of
the sale of our shares shall be for your account. Nothing
contained herein shall be construed to restrict our right to hire
2
<PAGE>
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 administrative and
management supervision and assistance and such office facilities
as you may believe appropriate or as we may reasonably request
subject to the requirements of any regulatory authority to which
you may be subject. You or your affiliates (other than us) shall
also be responsible for the payment of any expenses incurred in
promoting the sale of our shares (other than the portion of the
promotional expenses to be borne by us in accordance with an
effective plan pursuant to Rule 12b-1 under the Act and the costs
of printing our prospectuses and other reports to shareholders
and fees related to registration with the Securities and Exchange
Commission and with state regulatory authorities).
3. We hereby confirm that, subject to the foregoing,
we shall be responsible and hereby assume the obligation for
payment of all our other expenses, including: (a) payment of the
fee payable to you under paragraph 5 hereof; (b) custody,
transfer, and dividend disbursing expenses; (c) fees of trustees
who are not your affiliated persons; (d) legal and auditing
expenses; (e) clerical, accounting, administrative, and other
office costs; (f) the cost of personnel providing services to us,
as provided in subparagraph (d) of paragraph 2 above, as
applicable; (g) costs of printing our prospectuses and
shareholder reports; (h) expenses and fees related to
registration and filing with the Securities and Exchange
Commission and with state regulatory authorities; and (i) such
promotional expenses as may be contemplated by an effective plan
pursuant to Rule 12b-1 under the Act; provided, however, that our
payment of such promotional expenses shall be in the amounts, and
in accordance with the procedures, set forth in such plan.
4. We shall expect of you, and you will give us the
benefit of, your best judgment and efforts in rendering these
services to us, and we agree as an inducement to your undertaking
these services that you shall not be liable hereunder for any
mistake of judgment or in any event whatsoever, except for lack
of good faith, provided that nothing herein shall be deemed to
protect, or purport to protect, you against any liability to us
or to our security holders to which you would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of your duties hereunder, or by
reason of your reckless disregard of your obligations and duties
hereunder.
5. In consideration of the foregoing we will pay you a
fee for each Portfolio at the annual rate of .50 of 1% of that
Portfolio's average daily net assets. Such fee shall be accrued
by us daily and shall be payable in arrears on the last day of
each calendar month for services performed hereunder during such
3
<PAGE>
month. Your reimbursement, if any, of our expenses, as provided
in paragraph 3 hereof, shall be estimated and paid to us monthly
in arrears, at the same time as our payment to you for such
month.
6. This agreement shall become effective on the date
hereof and shall remain in effect until February 28, 1997 and
thereafter for successive twelve-month periods (computed from
each March 1), with respect to each Portfolio provided that such
continuance is specifically approved at least annually by our
Trustees or by majority vote of the holders of the outstanding
voting securities (as defined in the Act) of such Portfolio, and,
in either case, by a majority of our trustees who are not parties
to this agreement or interested persons, as defined in the Act,
of any such party (other than as trustees of our Trust) provided
further, however, that if the continuation of this agreement is
not approved as to a Portfolio, you may continue to render to
such Portfolio the services described herein in the manner and to
the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it shall
supersede all previous agreements between us covering the subject
matter hereof. This agreement may be terminated with respect to
any Portfolio at any time, without the payment of any penalty, by
vote of a majority of the outstanding voting securities (as so
defined) of such Portfolio, or by a vote of a majority of our
Trustees on sixty days' written notice to you, or by you with
respect to any Portfolio on sixty days' written notice to us.
7. This agreement may not be transferred, assigned,
sold or in any manner hypothecated or pledged by you and this
agreement shall terminate automatically in the event of any such
transfer, assignment, sale, hypothecation or pledge by you. The
terms "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings ascribed thereto by governing
law and any interpretation thereof contained in rules or
regulations promulgated by the Securities and Exchange Commission
thereunder.
8. (a) Except to the extent necessary to perform your
obligations hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your employees,
officers, or any of the Directors of Alliance Capital Management
Corporation, general partner, or employees who may also be a
trustee, officer or employee of ours, or persons otherwise
affiliated with us (within the meaning of the Act) to engage in
any other business or to devote time and attention to the
management or other aspects of any other business, whether of a
similar or dissimilar nature, or to render services of any kind
to any other trust, corporation, firm, individual or association.
4
<PAGE>
(b) You will notify us of any change in general
partners or your partnership within a reasonable time after such
change.
9. Notice is hereby given that this agreement is
entered into on our behalf by an officer of our Trust in his
capacity as an officer and not individually and that the
obligations of or arising out of this agreement are not binding
upon any of our Trustees, officers, shareholders, employees or
agents individually but are binding only upon the assets and
property of our Trust.
10. If you cease to act as our investment adviser, or,
in any event, if you so request in writing, we agree to take all
necessary action to change our name to a name not including the
term "Alliance." You may from time to time make available
without charge to us for our use such marks or symbols owned by
you, including marks or symbols containing the term "Alliance" or
any variation thereof, as you may consider appropriate. Any such
marks or symbols so made available will remain your property and
you shall have the right, upon notice in writing, to require us
to cease the use of such mark or symbol at any time.
If the foregoing is in accordance with your
understanding, you will kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
ALLIANCE MONEY MARKET FUND
By
Ronald M. Whitehill
President
Accepted: As of March 16, 1995
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT CORPORATION,
general partner
By
John D. Carifa
President &
Chief Operating Officer
5
00250217.AE0
<PAGE>
DISTRIBUTION SERVICES AGREEMENT
ALLIANCE MONEY MARKET FUND
1345 Avenue of the Americas
New York, New York 10105
March 16, 1995
Alliance Fund Distributors, Inc.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
This is to confirm that, on the terms and conditions set
forth herein, we have agreed that you shall be, for the period of
this Distribution Services Agreement (the "Agreement"), a
distributor, as our agent, for the unsold portion of such number
of shares of beneficial interest of our Trust (without par value)
(the "Trust Shares") as may from time to time be effectively
registered under the Securities Act of 1933, as amended (the
"Act").
1. We hereby agree to offer through you as our agent,
and to solicit, through you as our agent, offers to subscribe to,
the unsold balance of the Trust Shares as shall then be
effectively registered under the Act, and you are appointed our
agent for such purpose. All subscriptions for Trust Shares
obtained by you shall be directed to us for acceptance and shall
not be binding on us until accepted by us. You shall have no
authority to make binding subscriptions on our behalf. We reserve
the right to sell Trust Shares through other distributors or
directly to investors through subscriptions received by us at our
principal office in New York, New York. The right given to you
under this agreement shall not apply to Trust Shares issued in
connection with (a) the merger or consolidation of any other
investment company with us, (b) our acquisition by purchase or
otherwise of all or substantially all of the assets or stock of
any other investment company or (c) the reinvestment in Trust
Shares by our shareholders of dividends or other distributions or
any other offering of shares to our shareholders.
2. You will use your best efforts to obtain
subscriptions to Trust Shares upon the terms and conditions
contained herein and in the then current Prospectus and Statement
of Additional Information, including the offering price. You will
send to us promptly all subscriptions placed with you. We shall
advise you of the approximate net asset value per share or net
<PAGE>
asset value per share (as used in the Prospectus and Statement of
Additional Information) on any date requested by you and at such
other times as it shall have been determined by us. We shall
furnish you from time to time, for use in connection with the
offering of Trust Shares, such other information with respect to
us and the Trust Shares as you may reasonably request. We shall
supply you with such copies of our current Prospectus and
Statement of Additional Information in effect from time to time
as you may request. You are not authorized to give any
information or to make any representations, other than those
contained in the Registration Statement, Prospectus and Statement
of Additional Information, as then in effect, filed under the Act
covering Trust Shares or which we may authorize in writing. You
may use employees and agents at your cost and expense to assist
you in carrying out your obligations hereunder but no such
employee or agent shall be deemed to be our agent or have any
rights under this agreement.
3. We reserve the right to suspend the offering of
Trust Shares at any time, in the absolute discretion of our Board
of Trustees, and upon notice of such suspension you shall cease
to offer Trust Shares hereunder.
4. Both of us will cooperate with each other in taking
such action as may be necessary to qualify Trust Shares for sale
under the securities laws of such states as we may designate.
Pursuant to our Advisory Agreement dated March 16, 1995 with
Alliance Capital Management L.P. (the "Adviser"), we will pay all
fees and expenses of registering Trust Shares under the Act and
of qualification of Trust Shares and our qualification under
applicable state securities laws. You shall pay all expenses
relating to your broker-dealer qualification.
5. It is understood that paragraphs 5, 10 and 13
hereof constitutes a plan of distribution (the "Plan") within the
meaning of Rule 12b-1 adopted by the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "1940
Act") and is a part of this Agreement. The material aspects of
the Plan are as follows:
(a) The Trust will pay to the Adviser each month a
distribution services fee which will not exceed, on an annualized
basis, .45 of 1% of the Trust's average daily net assets. The
Adviser will use the entire amount so received from the Trust (i)
to make payments to you to compensate broker-dealers or other
persons for providing distribution assistance, (ii) to make
payments to compensate banks and other institutions for providing
administrative and accounting services with respect to Trust
shareholders and (iii) to otherwise promote the sale of shares of
the Trust, including paying for the preparation, printing and
2
<PAGE>
distribution of prospectuses and sales literature or other
promotional activities.
(b) The Adviser will as long as the Plan is in
effect make similar payments to you for distribution services
performed by you and for distribution assistance provided by
broker-dealers or other persons as described above and to banks
or other institutions for administrative and accounting services.
These payments will be made by the Adviser from its own
resources, which may include the management fee it receives from
the Trust. The Adviser may in its sole discretion increase or
decrease the amount of distribution assistance payments.
(c) Payments for distribution assistance or
administrative and accounting services are subject to the terms
and conditions of the written agreements between each broker-
dealer or other person and you. Such agreements will be in a form
satisfactory to the Trustees of the Trust.
(d) The Treasurer of the Trust will prepare and
furnish to the Trustees of the Trust at least quarterly a written
report complying with the requirements to Rule 12b-1 setting
forth all amounts expended under the Plan and the purposes for
which such expenditures were made.
(e) The Trust is not obligated to pay any
distribution expense in excess of the distribution services fee
described in subparagraph (a) hereof and any expenses of
distribution of the Trust's shares accrued by the Adviser or you
in one fiscal year of the Trust may not be paid from distribution
services fees received from the Trust in subsequent fiscal years
of the Trust. Distribution services fees received from the Trust
also will not be used to pay any interest expense, carrying
charges or other financing costs, or allocation of overhead.
(f) All agreements with any persons relating to
the implementation of the Plan will be subject to termination,
without penalty, upon not more than sixty days' written notice,
pursuant to the provisions of paragraph 10 hereof.
(g) Neither the Adviser nor you are obligated by
the Plan to execute agreements with qualifying banks, broker-
dealers or other persons and any termination of an agreement with
a particular financial intermediary under the Plan will have no
effect on similar agreements between the Adviser or you and other
participating banks, broker-dealers or other persons pursuant to
the Plan.
6. We represent to you that our Registration
Statement, Prospectus and Statement of Additional Information (as
in effect from time to time) under the Act have been or will be,
3
<PAGE>
as the case may be, carefully prepared in conformity with the
requirements of the Act and the rules and regulations of the
Securities and Exchange Commission thereunder. We represent and
warrant to you that our Registration Statement, Prospectus and
Statement of Additional Information contain or will contain all
statements required to be stated therein in accordance with the
Act and the rules and regulations of said Commission, and that
all statements of fact contained or to be contained therein are
or will be true and correct at the time indicated or the
effective date as the case may be; that none of our Registration
Statement, our Prospectus or our Statement of Additional
Information, when it shall become effective or be authorized for
use, will include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading to a
purchaser of Trust Shares. We will from time to time file such
amendment or amendments to our Registration Statement, Prospectus
and Statement of Additional Information as, in the light of
future developments, shall, in the opinion of our counsel, be
necessary in order to have our Registration Statement, Prospectus
and Statement of Additional Information at all times contain all
material facts required to be stated therein or necessary to make
any statements therein not misleading to a purchaser of Trust
Shares, but, if we shall not file such amendment or amendments
within fifteen days after receipt by us of a written request from
you to do so, you may, at your option, terminate this Agreement
immediately. We shall not file any amendment to our Registration
Statement, Prospectus or Statement of Additional Information
without giving you reasonable notice thereof in advance;
provided, however, that nothing in this agreement contained shall
in any way limit our right to file at any such time such
amendments to our Registration Statement, Prospectus or Statement
of Additional Information, of whatever character, as we may deem
advisable, such right being in all respects absolute and
unconditional. We represent and warrant to you that any amendment
to our Registration Statement, Prospectus or Statement of
Additional Information hereafter filed by us will, when it
becomes effective, contain all statements required to be stated
therein in accordance with the Act and the rules and regulations
of said Commission, that all statements of fact contained therein
will, when the same shall become effective, be true and correct
and that no such amendment, when it becomes effective, will
include an untrue statement of a material fact or will omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading to a purchaser of
Trust Shares.
7. We agree to indemnify, defend and hold you, and any
person who controls you within the meaning of Section 15 of the
Act, free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of
4
<PAGE>
investigating or defending such claims, demands or liabilities
and any reasonable counsel fees incurred in connection therewith)
which you or any such controlling person may incur, under the
Act, or under common law or otherwise, arising out of or based
upon any alleged untrue statement of a material fact contained in
our Registration Statement, Prospectus or Statement of Additional
Information in effect from time to time under the Act or arising
out of or based upon any alleged omission to state a material
fact required to be stated in either thereof or necessary to make
the statements in either thereof not misleading; provided,
however, that in no event shall anything herein contained be so
construed as to protect you against any liability to us or 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, or by reason of your reckless
disregard of your obligations and duties under this agreement.
Our agreement to indemnify you and any such controlling person as
aforesaid is expressly conditioned upon our being notified of any
action brought against you or any such controlling person, such
notification to be given by letter or by telegram addressed to us
at our principal office in New York, New York, and sent to us by
the person against whom such action is brought within ten days
after the summons or other first legal process shall have been
served. The failure to so notify us of any such action shall not
relieve us from any liability which we may have to the person
against whom such action is brought by reason of any such alleged
untrue statement or omission otherwise than on account of our
indemnity agreement contained in this paragraph 7. We will be
entitled to assume the defense of any suit brought to enforce any
such claim, and to retain counsel of good standing chosen by us
and approved by you. In the event we do elect to assume the
defense of any suit and retain counsel of good standing approved
by you, the defendant or defendants in such suit shall bear the
fees and expenses of any additional counsel retained by any of
them; but in case we do not elect to assume the defense of any
such suit, or in case you do not approve of counsel chosen by us,
we will reimburse you or the controlling person or persons named
as defendant or defendants in such suit, for the fees and
expenses of any counsel retained by you or them. Our
indemnification agreement contained in this paragraph 7 and our
representations and warranties in this Agreement shall remain
operative and in full force and effect regardless of any
investigation made by or on behalf of you or any controlling
person and shall survive the sale of any of Trust Shares made
pursuant to subscriptions obtained by you. This agreement of
indemnity will inure exclusively to your benefit, to the benefit
of your successors and assigns, and to the benefit of any
controlling persons and their successors and assigns. We agree
promptly to notify you of the commencement of any litigation or
processing against us in connection with the issue and sale of
any Trust Shares.
5
<PAGE>
8. You agree to indemnify, defend and hold us, our
several officers and trustees, and any person who controls us
within the meaning of Section 15 of the Act, free and harmless
from and against any and all claims, demands, liabilities, and
expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees
incurred in connection therewith) which we, our officers or
trustees, or any such controlling person may incur under the Act
or under common law or otherwise, but only to the extent that
such liability, or expense incurred by us, our officers or
trustees or such controlling person resulting from such claims or
demands shall arise out of or be based upon any alleged untrue
statement of a material fact contained in information furnished
in writing by you to us for use in our Registration Statement or
Prospectus in effect from time to time under the Act, or shall
arise out of or be based upon any alleged omission to state a
material fact in connection with such information required to be
stated in the Registration Statement or Prospectus or necessary
to make such information not misleading. Your agreement to
indemnify us, our officers and trustees, and any such controlling
person as aforesaid is expressly conditioned upon you being
notified of any action brought against us, our officers or
trustees or any such controlling person, such notification to be
given by letter or telegram addressed to you at your principal
office in New York, New York, and sent to you by the person
against whom such action is brought, within ten days after the
summons or other first legal process shall have been served. You
shall have a right to control the defense of such action, with
counsel of your own choosing, satisfactory to us, if such action
is based solely upon such alleged misstatement or omission on
your part, and in any other event you and we, our officers or
trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any
such action. The failure to so notify you of any such action
shall not relieve you from any liability which you may have to
us, to our officers or trustees, or to such controlling person by
reason of any such untrue statement or omission on your part
otherwise than on account of your indemnity agreement contained
in this paragraph 8.
9. We agree to advise you immediately:
(a) of any request by the Securities and Exchange
Commission for amendments to our Registration Statement or
Prospectus or for additional information,
(b) In the event of the issuance by the Securities
and Exchange Commission of any stop order suspending the
effectiveness of our Registration Statement or Prospectus or the
initiation of any proceedings for that purpose,
6
<PAGE>
(c) of the happening of any material event which
makes untrue any statement made in our Registration Statement or
Prospectus or which requires the making of a change in either
thereof in order to make the statements therein not misleading,
and
(d) of all action of the Securities and Exchange
Commission with respect to any amendments to our Registration
Statement or Prospectus which may from time to time be filed with
the Securities and Exchange Commission under the Act.
10. (a) This agreement shall become effective on the
date hereof, shall remain in effect until February 28, 1995, and
shall continue in effect thereafter for successive twelve-month
periods (computed from each March 1); provided, however, that
such continuance is specifically approved at least annually by
the Trustees of the Trust or by majority vote of the holders of
the outstanding voting securities (as defined in the 1940 Act) of
the Trust, and, in either case, by a majority of the Trustees of
the Trust who are not parties to this Agreement or interested
persons (as defined in the 1940 Act) of any such party (other
than as Trustees of the Trust) and who have no direct or indirect
financial interest in the operation of the Plan or any agreement
related thereto. Upon the effectiveness of this Agreement, it
shall supersede all previous agreements between the parties
hereto covering the subject matter hereof. This Agreement may be
terminated (i) by the Trust at any time, without the payment of
any penalty, by the vote of a majority of the outstanding voting
securities (as so defined) of the Trust, or by a vote of a
majority of the Trustees of the Trust who are not interested
persons (as defined in the 1940 Act) of the Trust and have no
direct or indirect financial interest in the operation of the
Plan or any agreement related thereto, in either event on sixty
days written notice to you; provided, however, that no such
notice shall be required if such termination is stated by the
Trust to relate only to paragraphs 5 and 13 hereof (in which
event paragraphs 5 and 13 shall be deemed to have been severed
herefrom and all other provisions of this Agreement shall
continue in full force and effect), or (ii) by you on sixty days
written notice to the Trust.
(b) This Agreement may be amended at any time with
the approval of the Trustees of the Trust; provided, however,
that (i) any material amendments of the terms hereof will become
effective only upon approval as provided in the first proviso of
paragraph 10(a) hereof, and (ii) any amendment to increase
materially the amount to be expended for distribution assistance,
administrative and accounting services and other activities
designed to promote the sale of shares of the Trust hereunder
will be effective only upon the additional approval by a vote of
7
<PAGE>
a majority of the outstanding voting securities of the Trust as
defined in the 1940 Act.
11. 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. The terms
"transfer", "assignment", and "sale" as used in this paragraph
shall have the meanings ascribed thereto by governing law and any
interpretation thereof contained in rules or regulations
promulgated by the Securities and Exchange Commission thereunder.
12. Except to the extent necessary to perform your
obligation hereunder, nothing herein shall be deemed to limit or
restrict your right, or the right of any of your officers,
directors or employees who may also be a trustee, officer or
employee of ours, to engage in any other business or to devote
time and attention to the management or other aspects of any
other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm,
individual or association.
13. While the Plan is in effect, the selection and
nomination of the trustees who are not "interested persons" of
the Trust (as defined in the 1940 Act) will be committed to the
discretion of such disinterested trustees.
14. Notice is hereby given that this Agreement is
entered into on our behalf by an officer of our Trust in his
capacity as an officer and not individually and that the
obligations of or arising out of this Agreement are not binding
upon any of our Trustees, officers, shareholders, employees or
agents individually but are binding only upon the assets and
property of our Trust.
If the foregoing is in accordance with your
understanding, will you kindly so indicate by signing and
returning to us the enclosed copy hereof.
Very truly yours,
Alliance Money Market Fund
By
Ronald M. Whitehill
President
8
<PAGE>
Accepted: March 16, 1995
Alliance Fund Distributors, Inc.
By
Senior Vice President
ALLIANCE CAPITAL MANAGEMENT L.P.
By Alliance Capital Management
Corporation,
general partner
By
John D. Carifa
President &
Chief Operating Officer
9
00250217.AE5
<PAGE>
CUSTODY AGREEMENT
Agreement made as of this 16th day of March, 1995,
between ALLIANCE MONEY MARKET FUND, a Massachusetts business
trust organized and existing under the laws of the Commonwealth
of Massachusetts, having its principal office and place of
business at 1345 Avenue of the Americas, New York, New York 10105
(hereinafter called the "Fund"), and THE BANK OF NEW YORK, a New
York corporation authorized to do a banking business, having its
principal office and place of business at 48 Wall Street, New
York, New York 10286 (hereinafter called the "Custodian").
W I T N E S S E T H :
that for and in consideration of the mutual promises hereinafter
set forth, the Fund and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the
following meanings:
1. "Book-Entry System" shall mean the Federal
Reserve/Treasury book-entry system for United States and federal
agency securities, its successor or successors and its nominee or
nominees.
2. "Call Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and payment of the exercise price,
as specified therein, to purchase from the writer thereof the
specified underlying Securities.
3. "Certificate" shall mean any notice, instruction,
or other instrument in writing, authorized or required by this
Agreement to be given to the Custodian which is actually received
by the Custodian and signed on behalf of the Fund by any two
Officers, and the term Certificate shall also include
instructions by the Fund to the Custodian communicated by a
Terminal Link.
4. "Clearing Member" shall mean a registered broker-
dealer which is a clearing member under the rules of O.C.C. and a
member of a national securities exchange qualified to act as a
<PAGE>
custodian for an investment company, or any broker-dealer
reasonably believed by the Custodian to be such a clearing
member.
5. "Collateral Account" shall mean a segregated
account so denominated which is specifically allocated to a
Series and pledged to the Custodian as security for, and in
consideration of, the Custodian's issuance of (a) any Put Option
guarantee letter or similar document described in paragraph 8 of
Article V herein, or (b) any receipt described in Article V or
VIII herein.
6. "Covered Call Option" shall mean an exchange traded
option entitling the holder, upon timely exercise and payment of
the exercise price, as specified therein, to purchase from the
writer thereof the specified underlying Securities (excluding
Futures Contracts) which are owned by the writer thereof and
subject to appropriate restrictions.
7. "Depository" shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the Securities
and Exchange Commission, its successor or successors and its
nominee or nominees. The term "Depository" shall further mean
and include any other person authorized to act as a depository
under the Investment Company Act of 1940, its successor or
successors and its nominee or nominees, specifically identified
in a certified copy of a resolution of the Fund's Board of
Trustees specifically approving deposits therein by the
Custodian.
8. "Financial Futures Contract" shall mean the firm
commitment to buy or sell fixed income securities including,
without limitation, U.S. Treasury Bills, U.S. Treasury Notes,
U.S. Treasury Bonds, domestic bank certificates of deposit, and
Eurodollar certificates of deposit, during a specified month at
an agreed upon price.
9. "Futures Contract" shall mean a Financial Futures
Contract and/or Stock Index Futures Contracts.
10. "Futures Contract Option" shall mean an option with
respect to a Futures Contract.
11. "Margin Account" shall mean a segregated account in
the name of a broker, dealer, futures commission merchant, or a
Clearing Member, or in the name of the Fund for the benefit of a
broker, dealer, futures commission merchant, or Clearing Member,
or otherwise, in accordance with an agreement between the Fund,
the Custodian and a broker, dealer, futures commission merchant
or a Clearing Member (a "Margin Account Agreement"), separate and
distinct from the custody account, in which certain Securities
2
<PAGE>
and/or money of the Fund shall be deposited and withdrawn from
time to time in connection with such transactions as the Fund may
from time to time determine. Securities held in the Book-Entry
System or the Depository shall be deemed to have been deposited
in, or withdrawn from, a Margin Account upon the Custodian's
effecting an appropriate entry in its books and records.
12. "Money Market Security" shall be deemed to include,
without limitation, certain Reverse Repurchase Agreements, debt
obligations issued or guaranteed as to interest and principal by
the government of the United States or agencies or
instrumentalities thereof, any tax, bond or revenue anticipation
note issued by any state or municipal government or public
authority, commercial paper, certificates of deposit and bankers'
acceptances, repurchase agreements with respect to the same and
bank time deposits, where the purchase and sale of such
securities normally requires settlement in federal funds on the
same day as such purchase or sale.
13. "O.C.C." shall mean the Options Clearing
Corporation, a clearing agency registered under Section 17A of
the Securities Exchange Act of 1934, its successor or successors,
and its nominee or nominees.
14. "Officers" shall be deemed to include the
President, any Vice President, the Secretary, the Clerk, the
Treasurer, the Controller, any Assistant Secretary, any Assistant
Clerk, any Assistant Treasurer, and any other person or persons,
whether or not any such other person is an officer of the Fund,
duly authorized by the Board of Trustees of the Fund to execute
any Certificate, instruction, notice or other instrument on
behalf of the Fund and listed in the Certificate annexed hereto
as Appendix A or such other Certificate as may be received by the
Custodian from time to time.
15. "Option" shall mean a Call Option, Covered Call
Option, Stock Index Option and/or a Put Option.
16. "Oral Instructions" shall mean verbal instructions
actually received by the Custodian from an Officer or from a
person reasonably believed by the Custodian to be an Officer.
17. "Put Option" shall mean an exchange traded option
with respect to Securities other than Stock Index Options,
Futures Contracts, and Futures Contract Options entitling the
holder, upon timely exercise and tender of the specified
underlying Securities, to sell such Securities to the writer
thereof for the exercise price.
18. "Reverse Repurchase Agreement" shall mean an
agreement pursuant to which the Fund sells Securities and agrees
3
<PAGE>
to repurchase such Securities at a described or specified date
and price.
19. "Security" shall be deemed to include, without
limitation, Money Market Securities, Call Options, Put Options,
Stock Index Options, Stock Index Futures Contracts, Stock Index
Futures Contract Options, Financial Futures Contracts, Financial
Futures Contract Options, Reverse Repurchase Agreements, common
stocks and other securities having characteristics similar to
common stocks, preferred stocks, debt obligations issued by state
or municipal governments and by public authorities, (including,
without limitation, general obligation bonds, revenue bonds,
industrial bonds and industrial development bonds), bonds,
debentures, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments
representing rights to receive, purchase, sell or subscribe for
the same, or evidencing or representing any other rights or
interest therein, or any property or assets.
20. "Senior Security Account" shall mean an account
maintained and specifically allocated to a Series under the terms
of this Agreement as a segregated account, by recordation or
otherwise, within the custody account in which certain Securities
and/or other assets of the Fund specifically allocated to such
Series shall be deposited and withdrawn from time to time in
accordance with Certificates received by the Custodian in
connection with such transactions as the Fund may from time to
time determine.
21. "Series" shall mean the various portfolios, if any,
of the Fund as described from time to time in the current and
effective prospectus for the Fund and listed on Appendix B hereto
as amended from time to time.
22. "Shares" shall mean the shares of beneficial
interest of the Fund, each of which is, in the case of a Fund
having Series, allocated to a particular Series.
23. "Stock Index Futures Contract" shall mean a
bilateral agreement pursuant to which the parties agree to take
or make delivery of an amount of cash equal to a specified dollar
amount times the difference between the value of a particular
stock index at the close of the last business day of the contract
and the price at which the futures contract is originally struck.
24. "Stock Index Option" shall mean an exchange traded
option entitling the holder, upon timely exercise, to receive an
amount of cash determined by reference to the difference between
the exercise price and the value of the index on the date of
exercise.
4
<PAGE>
25. "Terminal Link" shall mean an electronic data
transmission link between the Fund and the Custodian requiring in
connection with each use of the Terminal Link by or on behalf of
the Fund use of an authorization code provided by the
Custodian and at least two access codes established by the Fund.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Fund hereby constitutes and appoints the
Custodian as custodian of the Securities and moneys at any time
owned by the Fund during the period of this Agreement.
2. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
1. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, the Fund will deliver or cause to be
delivered to the Custodian all Securities and all moneys owned by
it, at any time during the period of this Agreement, and shall
specify with respect to such Securities and money the Series to
which the same are specifically allocated. The Custodian shall
segregate, keep and maintain the assets of the Series separate
and apart. The Custodian will not be responsible for any
Securities and moneys not actually received by it. The Custodian
will be entitled to reverse any credits made on the Fund's behalf
where such credits have been previously made and moneys are not
finally collected. The Fund shall deliver to the Custodian a
certified resolution of the Board of Trustees of the Fund,
substantially in the form of Exhibit A hereto, approving,
authorizing and instructing the Custodian on a continuous and on-
going basis to deposit in the Book-Entry System all Securities
eligible for deposit therein, regardless of the Series to which
the same are specifically allocated and to utilize the Book-Entry
System to the extent possible in connection with its performance
hereunder, including, without limitation, in connection with
settlements of purchases and sales of Securities, loans of
Securities and deliveries and returns of Securities collateral.
Prior to a deposit of Securities specifically allocated to a
Series in the Depository, the Fund shall deliver to the Custodian
a certified resolution of the Board of Trustees of the Fund,
substantially in the form of Exhibit B hereto, approving,
authorizing and instructing the Custodian on a continuous and
ongoing basis until instructed to the contrary by a Certificate
actually received by the Custodian to deposit in the Depository
5
<PAGE>
all Securities specifically allocated to such Series eligible for
deposit therein, and to utilize the Depository to the extent
possible with respect to such Securities in connection with its
performance hereunder, including, without limitation, in
connection with settlements of purchases and sales of Securities,
loans of Securities, and deliveries and returns of Securities
collateral. Securities and moneys deposited in either the Book-
Entry System or the Depository will be represented in accounts
which include only assets held by the Custodian for customers,
including, but not limited to, accounts in which the Custodian
acts in a fiduciary or representative capacity and will be
specifically allocated on the Custodian's books to the separate
account for the applicable Series. Prior to the Custodian's
accepting, utilizing and acting with respect to Clearing Member
confirmations for Options and transactions in Options for a
Series as provided in this Agreement, the Custodian shall have
received a certified resolution of the Fund's Board of Trustees,
substantially in the form of Exhibit C hereto, approving,
authorizing and instructing the Custodian on a continuous and on-
going basis, until instructed to the contrary by a Certificate
actually received by the Custodian, to accept, utilize and act in
accordance with such confirmations as provided in this Agreement
with respect to such Series.
2. The Custodian shall establish and maintain separate
accounts, in the name of each Series, and shall credit to the
separate account for each Series all moneys received by it for
the account of the Fund with respect to such Series. Money
credited to a separate account for a Series shall be disbursed by
the Custodian only:
(a) As hereinafter provided;
(b) Pursuant to Certificates setting forth the
name and address of the person to whom the payment is to be made,
the Series account from which payment is to be made and the
purpose for which payment is to be made; or
(c) In payment of the fees and in reimbursement of
the expenses and liabilities of the Custodian attributable to
such Series.
3. Promptly after the close of business on each day,
the Custodian shall furnish the Fund with confirmations and a
summary, on a per Series basis, of all transfers to or from the
account of the Fund for a Series, either hereunder or with any
co-custodian or sub-custodian appointed in accordance with this
Agreement during said day. Where Securities are transferred to
the account of the Fund for a Series, the Custodian shall also by
book-entry or otherwise identify as belonging to such Series a
quantity of Securities in a fungible bulk of Securities
6
<PAGE>
registered in the name of the Custodian (or its nominee) or shown
on the Custodian's account on the books of the Book-Entry System
or the Depository. At least monthly and from time to time, the
Custodian shall furnish the Fund with a detailed statement, on a
per Series basis, of the Securities and moneys held by the
Custodian for the Fund.
4. Except as otherwise provided in paragraph 7 of this
Article and in Article VIII, all Securities held by the Custodian
hereunder, which are issued or issuable only in bearer form,
except such Securities as are held in the Book-Entry System,
shall be held by the Custodian in that form; all other Securities
held hereunder may be registered in the name of the Fund, in the
name of any duly appointed registered nominee of the Custodian as
the Custodian may from time to time determine, or in the name of
the Book-Entry System or the Depository or their successor or
successors, or their nominee or nominees. The Fund agrees to
furnish to the Custodian appropriate instruments to enable the
Custodian to hold or deliver in proper form for transfer, or to
register in the name of its registered nominee or in the name of
the Book-Entry System or the Depository any Securities which it
may hold hereunder and which may from time to time be registered
in the name of the Fund. The Custodian shall hold all such
Securities specifically allocated to a Series which are not held
in the Book-Entry System or in the Depository in a separate
account in the name of such Series physically segregated at all
times from those of any other person or persons.
5. Except as otherwise provided in this Agreement and
unless otherwise instructed to the contrary by a Certificate, the
Custodian by itself, or through the use of the Book-Entry System
or the Depository with respect to Securities held hereunder and
therein deposited, shall with respect to all Securities held for
the Fund hereunder in accordance with preceding paragraph 4:
(a) Collect all income due or payable;
(b) Present for payment and collect the amount
payable upon such Securities which are called, but only if either
(i) the Custodian receives a written notice of such call, or (ii)
notice of such call appears in one or more of the publications
listed in Appendix C annexed hereto, which may be amended at any
time by the Custodian without the prior notification or consent
of the Fund;
(c) Present for payment and collect the amount
payable upon all Securities which mature;
(d) Surrender Securities in temporary form for
definitive Securities;
7
<PAGE>
(e) Execute, as custodian, any necessary
declarations or certificates of ownership under the Federal
Income Tax Laws or the laws or regulations of any other taxing
authority now or hereafter in effect; and
(f) Hold directly, or through the Book-Entry
System or the Depository with respect to Securities therein
deposited, for the account of a Series, all rights and similar
securities issued with respect to any Securities held by the
Custodian for such Series hereunder.
6. Upon receipt of a Certificate and not otherwise,
the Custodian, directly or through the use of the Book-Entry
System or the Depository, shall:
(a) Execute and deliver to such persons as may be
designated in such Certificate proxies, consents, authorizations,
and any other instruments whereby the authority of the Fund as
owner of any Securities held by the Custodian hereunder for the
Series specified in such Certificate may be exercised;
(b) Deliver any Securities held by the Custodian
hereunder for the Series specified in such Certificate in
exchange for other Securities or cash issued or paid in
connection with the liquidation, reorganization, refinancing,
merger, consolidation or recapitalization of any corporation, or
the exercise of any conversion privilege and receive and hold
hereunder specifically allocated to such Series any cash or other
Securities received in exchange;
(c) Deliver any Securities held by the Custodian
hereunder for the Series specified in such Certificate to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any
corporation, and receive and hold hereunder specifically
allocated to such Series such certificates of deposit, interim
receipts or other instruments or documents as may be issued to it
to evidence such delivery;
(d) Make such transfers or exchanges of the assets
of the Series specified in such Certificate, and take such other
steps as shall be stated in such Certificate to be for the
purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Fund; and
(e) Present for payment and collect the amount
payable upon Securities not described in preceding paragraph 5(b)
of this Article which may be called as specified in the
Certificate.
8
<PAGE>
7. Notwithstanding any provision elsewhere contained
herein, the Custodian shall not be required to obtain possession
of any instrument or certificate representing any Futures
Contract, any Option, or any Futures Contract Option until after
it shall have determined, or shall have received a Certificate
from the Fund stating, that any such instruments or certificates
are available. The Fund shall deliver to the Custodian such a
Certificate no later than the business day preceding the
availability of any such instrument or certificate. Prior to
such availability, the Custodian shall comply with Section 17(f)
of the Investment Company Act of 1940, as amended, in connection
with the purchase, sale, settlement, closing out or writing of
Futures Contracts, Options, or Futures Contract Options by making
payments or deliveries specified in Certificates received by the
Custodian in connection with any such purchase, sale, writing,
settlement or closing out upon its receipt from a broker, dealer,
or futures commission merchant of a statement or confirmation
reasonably believed by the Custodian to be in the form
customarily used by brokers, dealers, or future commission
merchants with respect to such Futures Contracts, Options, or
Futures Contract Options, as the case may be, confirming that
such Security is held by such broker, dealer or futures
commission merchant, in book-entry form or otherwise, in the name
of the Custodian (or any nominee of the Custodian) as custodian
for the Fund, provided, however, that notwithstanding the
foregoing, payments to or deliveries from the Margin Account and
payments with respect to Securities to which a Margin Account
relates, shall be made in accordance with the terms and
conditions of the Margin Account Agreement. Whenever any such
instruments or certificates are available, the Custodian shall,
notwithstanding any provision in this Agreement to the contrary,
make payment for any Futures Contract, Option, or Futures
Contract Option for which such instruments or such certificates
are available only against the delivery to the Custodian of such
instrument or such certificate, and deliver any Futures Contract,
Option or Futures Contract Option for which such instruments or
such certificates are available only against receipt by the
Custodian of payment therefor. Any such instrument or
certificate delivered to the Custodian shall be held by the
Custodian hereunder in accordance with, and subject to, the
provisions of this Agreement.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
OTHER THAN OPTIONS, FUTURES CONTRACTS AND
FUTURES CONTRACT OPTIONS
1. Promptly after each purchase of Securities by the
Fund, other than a purchase of an Option, a Futures Contract, or
a Futures Contract Option, the Fund shall deliver to the
9
<PAGE>
Custodian (i) with respect to each purchase of Securities which
are not Money Market Securities, a Certificate, and (ii) with
respect to each purchase of Money Market Securities, a
Certificate or Oral Instructions, specifying with respect to each
such purchase: (a) the Series to which such Securities are to be
specifically allocated; (b) the name of the issuer and the title
of the Securities; (c) the number of shares or the principal
amount purchased and accrued interest, if any; (d) the date of
purchase and settlement; (e) the purchase price per unit; (f) the
total amount payable upon such purchase; (g) the name of the
person from whom or the broker through whom the purchase was
made, and the name of the clearing broker, if any; and (h) the
name of the broker to whom payment is to be made. The Custodian
shall, upon receipt of Securities purchased by or for the Fund,
pay to the broker specified in the Certificate out of the moneys
held for the account of such Series the total amount payable upon
such purchase, provided that the same conforms to the total
amount payable as set forth in such Certificate or Oral
Instructions.
2. Promptly after each sale of Securities by the Fund,
other than a sale of any Option, Futures Contract, Futures
Contract Option, or any Reverse Repurchase Agreement, the Fund
shall deliver to the Custodian (i) with respect to each sale of
Securities which are not Money Market Securities, a Certificate,
and (ii) with respect to each sale of Money Market Securities, a
Certificate or Oral Instructions, specifying with respect to each
such sale: (a) the Series to which such Securities were
specifically allocated; (b) the name of the issuer and the title
of the Security; (c) the number of shares or principal amount
sold, and accrued interest, if any; (d) the date of sale; (e) the
sale price per unit; (f) the total amount payable to the Fund
upon such sale; (g) the name of the broker through whom or the
person to whom the sale was made, and the name of the clearing
broker, if any; and (h) the name of the broker to whom the
Securities are to be delivered. The Custodian shall deliver the
Securities specifically allocated to such Series to the broker
specified in the Certificate against payment upon receipt of the
total amount payable to the Fund upon such sale, provided that
the same conforms to the total amount payable as set forth in
such Certificate or Oral Instructions.
ARTICLE V
OPTIONS
1. Promptly after the purchase of any Option by the
Fund, the Fund shall deliver to the Custodian a Certificate
specifying with respect to each Option purchased: (a) the Series
to which such Option is specifically allocated; (b) the type of
Option (put or call); (c) the name of the issuer and the title
10
<PAGE>
and number of shares subject to such Option or, in the case of a
Stock Index Option, the stock index to which such Option relates
and the number of Stock Index Options purchased; (d) the
expiration date; (e) the exercise price; (f) the dates of
purchase and settlement; (g) the total amount payable by the Fund
in connection with such purchase; (h) the name of the Clearing
Member through whom such Option was purchased; and (i) the name
of the broker to whom payment is to be made. The Custodian shall
pay, upon receipt of a Clearing Member's statement confirming the
purchase of such Option held by such Clearing Member for the
account of the Custodian (or any duly appointed and registered
nominee of the Custodian) as custodian for the Fund, out of
moneys held for the account of the Series to which such Option is
to be specifically allocated, the total amount payable upon such
purchase to the Clearing Member through whom the purchase was
made, provided that the same conforms to the total amount payable
as set forth in such Certificate.
2. Promptly after the sale of any Option purchased by
the Fund pursuant to paragraph 1 hereof, the Fund shall deliver
to the Custodian a Certificate specifying with respect to each
such sale: (a) the Series to which such Option was specifically
allocated; (b) the type of Option (put or call); (c) the name of
the issuer and the title and number of shares subject to such
Option or, in the case of a Stock Index Option, the stock index
to which such Option relates and the number of Stock Index
Options sold; (d) the date of sale; (e) the sale price; (f) the
date of settlement; (g) the total amount payable to the Fund upon
such sale; and (h) the name of the Clearing Member through whom
the sale was made. The Custodian shall consent to the delivery
of the Option sold by the Clearing Member which previously
supplied the confirmation described in preceding paragraph 1 of
this Article with respect to such Option against payment to the
Custodian of the total amount payable to the Fund, provided that
the same conforms to the total amount payable as set forth in
such Certificate.
3. Promptly after the exercise by the Fund of any Call
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Call Option: (a) the Series to which such Call
Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Call Option; (c)
the expiration date; (d) the date of exercise and settlement; (e)
the exercise price per share; (f) the total amount to be paid by
the Fund upon such exercise; and (g) the name of the Clearing
Member through whom such Call Option was exercised. The
Custodian shall, upon receipt of the Securities underlying the
Call Option which was exercised, pay out of the moneys held for
the account of the Series to which such Call Option was
specifically allocated the total amount payable to the Clearing
11
<PAGE>
Member through whom the Call Option was exercised, provided that
the same conforms to the total amount payable as set forth in
such Certificate.
4. Promptly after the exercise by the Fund of any Put
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall deliver to the Custodian a Certificate specifying with
respect to such Put Option: (a) the Series to which such Put
Option was specifically allocated; (b) the name of the issuer and
the title and number of shares subject to the Put Option; (c) the
expiration date; (d) the date of exercise and settlement; (e) the
exercise price per share; (f) the total amount to be paid to the
Fund upon such exercise; and (g) the name of the Clearing Member
through whom such Put Option was exercised. The Custodian shall,
upon receipt of the amount payable upon the exercise of the Put
Option, deliver or direct the Depository to deliver the
Securities specifically allocated to such Series, provided the
same conforms to the amount payable to the Fund as set forth in
such Certificate.
5. Promptly after the exercise by the Fund of any
Stock Index Option purchased by the Fund pursuant to paragraph 1
hereof, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) the
Series to which such Stock Index Option was specifically
allocated; (b) the type of Stock Index Option (put or call); (c)
the number of Options being exercised; (d) the stock index to
which such Option relates; (e) the expiration date; (f) the
exercise price; (g) the total amount to be received by the Fund
in connection with such exercise; and (h) the Clearing Member
from whom such payment is to be received.
6. Whenever the Fund writes a Covered Call Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Covered Call Option: (a) the
Series for which such Covered Call Option was written; (b) the
name of the issuer and the title and number of shares for which
the Covered Call Option was written and which underlie the same;
(c) the expiration date; (d) the exercise price; (e) the premium
to be received by the Fund; (f) the date such Covered Call Option
was written; and (g) the name of the Clearing Member through whom
the premium is to be received. The Custodian shall deliver or
cause to be delivered, in exchange for receipt of the premium
specified in the Certificate with respect to such Covered Call
Option, such receipts as are required in accordance with the
customs prevailing among Clearing Members dealing in Covered Call
Options and shall impose, or direct the Depository to impose,
upon the underlying Securities specified in the Certificate
specifically allocated to such Series such restrictions as may be
required by such receipts. Notwithstanding the foregoing, the
Custodian has the right, upon prior written notification to the
12
<PAGE>
Fund, at any time to refuse to issue any receipts for Securities
in the possession of the Custodian and not deposited with the
Depository underlying a Covered Call Option.
7. Whenever a Covered Call Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate instructing the Custodian to deliver, or to direct
the Depository to deliver, the Securities subject to such Covered
Call Option and specifying: (a) the Series for which such Covered
Call Option was written; (b) the name of the issuer and the title
and number of shares subject to the Covered Call Option; (c) the
Clearing Member to whom the underlying Securities are to be
delivered; and (d) the total amount payable to the Fund upon such
delivery. Upon the return and/or cancellation of any receipts
delivered pursuant to paragraph 6 of this Article, the Custodian
shall deliver, or direct the Depository to deliver, the
underlying Securities as specified in the Certificate against
payment of the amount to be received as set forth in such
Certificate.
8. Whenever the Fund writes a Put Option, the Fund
shall promptly deliver to the Custodian a Certificate specifying
with respect to such Put Option: (a) the Series for which such
Put Option was written; (b) the name of the issuer and the title
and number of shares for which the Put Option is written and
which underlie the same; (c) the expiration date; (d) the
exercise price; (e) the premium to be received by the Fund; (f)
the date such Put Option is written; (g) the name of the Clearing
Member through whom the premium is to be received and to whom a
Put Option guarantee letter is to be delivered; (h) the amount of
cash, and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in the
Senior Security Account for such Series; and (i) the amount of
cash and/or the amount and kind of Securities specifically
allocated to such Series to be deposited into the Collateral
Account for such Series. The Custodian shall, after making the
deposits into the Collateral Account specified in the
Certificate, issue a Put Option guarantee letter substantially in
the form utilized by the Custodian on the date hereof, and
deliver the same to the Clearing Member specified in the
Certificate against receipt of the premium specified in said
Certificate. Notwithstanding the foregoing, the Custodian shall
be under no obligation to issue any Put Option guarantee letter
or similar document if it is unable to make any of the
representations contained therein.
9. Whenever a Put Option written by the Fund and
described in the preceding paragraph is exercised, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a)
the Series to which such Put Option was written; (b) the name of
13
<PAGE>
the issuer and title and number of shares subject to the Put
Option; (c) the Clearing Member from whom the underlying
Securities are to be received; (d) the total amount payable by
the Fund upon such delivery; (e) the amount of cash and/or the
amount and kind of Securities specifically allocated to such
Series to be withdrawn from the Collateral Account for such
Series and (f) the amount of cash and/or the amount and kind of
Securities, specifically allocated to such Series, if any, to be
withdrawn from the Senior Security Account. Upon the return
and/or cancellation of any Put Option guarantee letter or similar
document issued by the Custodian in connection with such Put
Option, the Custodian shall pay out of the moneys held for the
account of the Series to which such Put Option was specifically
allocated the total amount payable to the Clearing Member
specified in the Certificate as set forth in such Certificate
against delivery of such Securities, and shall make the
withdrawals specified in such Certificate.
10. Whenever the Fund writes a Stock Index Option, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Stock Index Option: (a) the
Series for which such Stock Index Option was written; (b) whether
such Stock Index Option is a put or a call; (c) the number of
options written; (d) the stock index to which such Option
relates; (e) the expiration date; (f) the exercise price; (g) the
Clearing Member through whom such Option was written; (h) the
premium to be received by the Fund; (i) the amount of cash and/or
the amount and kind of Securities, if any, specifically allocated
to such Series to be deposited in the Senior Security Account for
such Series; (j) the amount of cash and/or the amount and kind of
Securities, if any, specifically allocated to such Series to be
deposited in the Collateral Account for such Series; and (k) the
amount of cash and/or the amount and kind of Securities, if any,
specifically allocated to such Series to be deposited in a Margin
Account, and the name in which such account is to be or has been
established. The Custodian shall, upon receipt of the premium
specified in the Certificate, make the deposits, if any, into the
Senior Security Account specified in the Certificate, and either
(1) deliver such receipts, if any, which the Custodian has
specifically agreed to issue, which are in accordance with the
customs prevailing among Clearing Members in Stock Index Options
and make the deposits into the Collateral Account specified in
the Certificate, or (2) make the deposits into the Margin Account
specified in the Certificate.
11. Whenever a Stock Index Option written by the Fund
and described in the preceding paragraph of this Article is
exercised, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to such Stock Index Option:
(a) the Series for which such Stock Index Option was written; (b)
such information as may be necessary to identify the Stock Index
14
<PAGE>
Option being exercised; (c) the Clearing Member through whom such
Stock Index Option is being exercised; (d) the total amount
payable upon such exercise, and whether such amount is to be paid
by or to the Fund; (e) the amount of cash and/or amount and kind
of Securities, if any, to be withdrawn from the Margin Account;
and (f) the amount of cash and/or amount and kind of Securities,
if any, to be withdrawn from the Senior Security Account for such
Series; and the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Collateral Account
for such Series. Upon the return and/or cancellation of the
receipt, if any, delivered pursuant to the preceding paragraph of
this Article, the Custodian shall pay out of the moneys held for
the account of the Series to which such Stock Index Option was
specifically allocated to the Clearing Member specified in the
Certificate the total amount payable, if any, as specified
therein.
12. Whenever the Fund purchases any Option identical to
a previously written Option described in paragraphs, 6, 8 or 10
of this Article in a transaction expressly designated as a
"Closing Purchase Transaction" in order to liquidate its position
as a writer of an Option, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to the Option
being purchased: (a) that the transaction is a Closing Purchase
Transaction; (b) the Series for which the Option was written; (c)
the name of the issuer and the title and number of shares subject
to the Option, or, in the case of a Stock Index Option, the stock
index to which such Option relates and the number of Options
held; (d) the exercise price; (e) the premium to be paid by the
Fund; (f) the expiration date; (g) the type of Option (put or
call); (h) the date of such purchase; (i) the name of the
Clearing Member to whom the premium is to be paid; and (j) the
amount of cash and/or the amount and kind of Securities, if any,
to be withdrawn from the Collateral Account, a specified Margin
Account, or the Senior Security Account for such Series. Upon
the Custodian's payment of the premium and the return and/or
cancellation of any receipt issued pursuant to paragraphs 6, 8 or
10 of this Article with respect to the Option being liquidated
through the Closing Purchase Transaction, the Custodian shall
remove, or direct the Depository to remove, the previously
imposed restrictions on the Securities underlying the Call
Option.
13. Upon the expiration, exercise or consummation of a
Closing Purchase Transaction with respect to any Option purchased
or written by the Fund and described in this Article, the
Custodian shall delete such Option from the statements delivered
to the Fund pursuant to paragraph 3 Article III herein, and upon
the return and/or cancellation of any receipts issued by the
Custodian, shall make such withdrawals from the Collateral
Account, and the Margin Account and/or the Senior Security
15
<PAGE>
Account as may be specified in a Certificate received in
connection with such expiration, exercise, or consummation.
ARTICLE VI
FUTURES CONTRACTS
1. Whenever the Fund shall enter into a Futures
Contract, the Fund shall deliver to the Custodian a Certificate
specifying with respect to such Futures Contract, (or with
respect to any number of identical Futures Contract(s)): (a) the
Series for which the Futures Contract is being entered; (b) the
category of Futures Contract (the name of the underlying stock
index or financial instrument); (c) the number of identical
Futures Contracts entered into; (d) the delivery or settlement
date of the Futures Contract(s); (e) the date the Futures
Contract(s) was (were) entered into and the maturity date; (f)
whether the Fund is buying (going long) or selling (going short)
on such Futures Contract(s); (g) the amount of cash and/or the
amount and kind of Securities, if any, to be deposited in the
Senior Security Account for such Series; (h) the name of the
broker, dealer, or futures commission merchant through whom the
Futures Contract was entered into; and (i) the amount of fee or
commission, if any, to be paid and the name of the broker,
dealer, or futures commission merchant to whom such amount is to
be paid. The Custodian shall make the deposits, if any, to the
Margin Account in accordance with the terms and conditions of the
Margin Account Agreement. The Custodian shall make payment out
of the moneys specifically allocated to such Series of the fee or
commission, if any, specified in the Certificate and deposit in
the Senior Security Account for such Series the amount of cash
and/or the amount and kind of Securities specified in said
Certificate.
2. (a) Any variation margin payment or similar
payment required to be made by the Fund to a broker, dealer, or
futures commission merchant with respect to an outstanding
Futures Contract, shall be made by the Custodian in accordance
with the terms and conditions of the Margin Account Agreement.
(b) Any variation margin payment or similar
payment from a broker, dealer, or futures commission merchant to
the Fund with respect to an outstanding Futures Contract, shall
be received and dealt with by the Custodian in accordance with
the terms and conditions of the Margin Account Agreement.
3. Whenever a Futures Contract held by the Custodian
hereunder is retained by the Fund until delivery or settlement is
made on such Futures Contract, the Fund shall deliver to the
Custodian a Certificate specifying: (a) the Futures Contract and
the Series to which the same relates; (b) with respect to a Stock
16
<PAGE>
Index Futures Contract, the total cash settlement amount to be
paid or received, and with respect to a Financial Futures
Contract, the Securities and/or amount of cash to be delivered or
received; (c) the broker, dealer, or futures commission merchant
to or from whom payment or delivery is to be made or received;
and (d) the amount of cash and/or Securities to be withdrawn from
the Senior Security Account for such Series. The Custodian shall
make the payment or delivery specified in the Certificate, and
delete such Futures Contract from the statements delivered to the
Fund pursuant to paragraph 3 of Article III herein.
4. Whenever the Fund shall enter into a Futures
Contract to offset a Futures Contract held by the Custodian
hereunder, the Fund shall deliver to the Custodian a Certificate
specifying: (a) the items of information required in a
Certificate described in paragraph 1 of this Article, and (b) the
Futures Contract being offset. The Custodian shall make payment
out of the money specifically allocated to such Series of the fee
or commission, if any, specified in the Certificate and delete
the Futures Contract being offset from the statements delivered
to the Fund pursuant to paragraph 3 of Article III herein, and
make such withdrawals from the Senior Security Account for such
Series as may be specified in such Certificate. The withdrawals,
if any, to be made from the Margin Account shall be made by the
Custodian in accordance with the terms and conditions of the
Margin Account Agreement.
ARTICLE VII
FUTURES CONTRACT OPTIONS
1. Promptly after the purchase of any Futures Contract
Option by the Fund, the Fund shall promptly deliver to the
Custodian a Certificate specifying with respect to such Futures
Contract Option: (a) the Series to which such Option is
specifically allocated; (b) the type of Futures Contract Option
(put or call); (c) the type of Futures Contract and such other
information as may be necessary to identify the Futures Contract
underlying the Futures Contract Option purchased; (d) the
expiration date; (e) the exercise price; (f) the dates of
purchase and settlement; (g) the amount of premium to be paid by
the Fund upon such purchase; (h) the name of the broker or
futures commission merchant through whom such option was
purchased; and (i) the name of the broker, or futures commission
merchant, to whom payment is to be made. The Custodian shall pay
out of the moneys specifically allocated to such Series, the
total amount to be paid upon such purchase to the broker or
futures commissions merchant through whom the purchase was made,
provided that the same conforms to the amount set forth in such
Certificate.
17
<PAGE>
2. Promptly after the sale of any Futures Contract
Option purchased by the Fund pursuant to paragraph 1 hereof, the
Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to each such sale: (a) Series to which
such Futures Contract Option was specifically allocated; (b) the
type of Future Contract Option (put or call); (c) the type of
Futures Contract and such other information as may be necessary
to identify the Futures Contract underlying the Futures Contract
Option; (d) the date of sale; (e) the sale price; (f) the date of
settlement; (g) the total amount payable to the Fund upon such
sale; and (h) the name of the broker of futures commission
merchant through whom the sale was made. The Custodian shall
consent to the cancellation of the Futures Contract Option being
closed against payment to the Custodian of the total amount
payable to the Fund, provided the same conforms to the total
amount payable as set forth in such Certificate.
3. Whenever a Futures Contract Option purchased by the
Fund pursuant to paragraph 1 is exercised by the Fund, the Fund
shall promptly deliver to the Custodian a Certificate specifying:
(a) the Series to which such Futures Contract Option was
specifically allocated; (b) the particular Futures Contract
Option (put or call) being exercised; (c) the type of Futures
Contract underlying the Futures Contract Option; (d) the date of
exercise; (e) the name of the broker or futures commission
merchant through whom the Futures Contract Option is exercised;
(f) the net total amount, if any, payable by the Fund; (g) the
amount, if any, to be received by the Fund; and (h) the amount of
cash and/or the amount and kind of Securities to be deposited in
the Senior Security Account for such Series. The Custodian shall
make, out of the moneys and Securities specifically allocated to
such Series, the payments, if any, and the deposits, if any, into
the Senior Security Account as specified in the Certificate. The
deposits, if any, to be made to the Margin Account shall be made
by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
4. Whenever the Fund writes a Futures Contract Option,
the Fund shall promptly deliver to the Custodian a Certificate
specifying with respect to such Futures Contract Option: (a) the
Series for which such Futures Contract Option was written; (b)
the type of Futures Contract Option (put or call); (c) the type
of Futures Contract and such other information as may be
necessary to identify the Futures Contract underlying the Futures
Contract Option; (d) the expiration date; (e) the exercise price;
(f) the premium to be received by the Fund; (g) the name of the
broker or futures commission merchant through whom the premium is
to be received; and (h) the amount of cash and/or the amount and
kind of Securities, if any, to be deposited in the Senior
Security Account for such Series. The Custodian shall, upon
receipt of the premium specified in the Certificate, make out of
18
<PAGE>
the moneys and Securities specifically allocated to such Series
the deposits into the Senior Security Account, if any, as
specified in the Certificate. The deposits, if any, to be made
to the Margin Account shall be made by the Custodian in
accordance with the terms and conditions of the Margin Account
Agreement.
5. Whenever a Futures Contract Option written by the
Fund which is a call is exercised, the Fund shall promptly
deliver to the Custodian a Certificate specifying: (a) the Series
to which such Futures Contract Option was specifically allocated;
(b) the particular Futures Contract Option exercised; (c) the
type of Futures Contract underlying the Futures Contract Option;
(d) the name of the broker or futures commission merchant through
whom such Futures Contract Option was exercised; (e) the net
total amount, if any, payable to the Fund upon such exercise; (f)
the net total amount, if any, payable by the Fund upon such
exercise; and (g) the amount of cash and/or the amount and kind
of Securities to be deposited in the Senior Security Account for
such Series. The Custodian shall, upon its receipt of the net
total amount payable to the Fund, if any, specified in such
Certificate make the payments, if any, and the deposits, if any,
into the Senior Security Account as specified in the Certificate.
The deposits, if any, to be made to the Margin Account shall be
made by the Custodian in accordance with the terms and conditions
of the Margin Account Agreement.
6. Whenever a Futures Contract Option which is written
by the Fund and which is a put is exercised, the Fund shall
promptly deliver to the Custodian a Certificate specifying: (a)
the Series to which such Option was specifically allocated; (b)
the particular Futures Contract Option exercised; (c) the type of
Futures Contract underlying such Futures Contract Option; (d) the
name of the broker or futures commission merchant through whom
such Futures Contract Option is exercised; (e) the net total
amount, if any, payable to the Fund upon such exercise; (f) the
net total amount, if any, payable by the Fund upon such exercise;
and (g) the amount and kind of Securities and/or cash to be
withdrawn from or deposited in, the Senior Security Account for
such Series, if any. The Custodian shall, upon its receipt of
the net total amount payable to the Fund, if any, specified in
the Certificate, make out of the moneys and Securities
specifically allocated to such Series, the payments, if any, and
the deposits, if any, into the Senior Security Account as
specified in the Certificate. The deposits to and/or withdrawals
from the Margin Account, if any, shall be made by the Custodian
in accordance with the terms and conditions of the Margin Account
Agreement.
7. Whenever the Fund purchases any Futures Contract
Option identical to a previously written Futures Contract Option
19
<PAGE>
described in this Article in order to liquidate its position as a
writer of such Futures Contract Option, the Fund shall promptly
deliver to the Custodian a Certificate specifying with respect to
the Futures Contract Option being purchased: (a) the Series to
which such Option is specifically allocated; (b) that the
transaction is a closing transaction; (c) the type of Future
Contract and such other information as may be necessary to
identify the Futures Contract underlying the Futures Option
Contract; (d) the exercise price; (e) the premium to be paid by
the Fund; (f) the expiration date; (g) the name of the broker or
futures commission merchant to whom the premium is to be paid;
and (h) the amount of cash and/or the amount and kind of
Securities, if any, to be withdrawn from the Senior Security
Account for such Series. The Custodian shall effect the
withdrawals from the Senior Security Account specified in the
Certificate. The withdrawals, if any, to be made from the Margin
Account shall be made by the Custodian in accordance with the
terms and conditions of the Margin Account Agreement.
8. Upon the expiration, exercise, or consummation of a
closing transaction with respect to, any Futures Contract Option
written or purchased by the Fund and described in this Article,
the Custodian shall (a) delete such Futures Contract Option from
the statements delivered to the Fund pursuant to paragraph 3 of
Article III herein and, (b) make such withdrawals from and/or in
the case of an exercise such deposits into the Senior Security
Account as may be specified in a Certificate. The deposits to
and/or withdrawals from the Margin Account, if any, shall be made
by the Custodian in accordance with the terms and conditions of
the Margin Account Agreement.
9. Futures Contracts acquired by the Fund through the
exercise of a Futures Contract Option described in this Article
shall be subject to Article VI hereof.
ARTICLE VIII
SHORT SALES
1. Promptly after any short sales by any Series of the
Fund, the Fund shall promptly deliver to the Custodian a
Certificate specifying: (a) the Series for which such short sale
was made; (b) the name of the issuer and the title of the
Security; (c) the number of shares or principal amount sold, and
accrued interest or dividends, if any; (d) the dates of the sale
and settlement; (e) the sale price per unit; (f) the total amount
credited to the Fund upon such sale, if any, (g) the amount of
cash and/or the amount and kind of Securities, if any, which are
to be deposited in a Margin Account and the name in which such
Margin Account has been or is to be established; (h) the amount
of cash and/or the amount and kind of Securities, if any, to be
20
<PAGE>
deposited in a Senior Security Account, and (i) the name of the
broker through whom such short sale was made. The Custodian
shall upon its receipt of a statement from such broker confirming
such sale and that the total amount credited to the Fund upon
such sale, if any, as specified in the Certificate is held by
such broker for the account of the Custodian (or any nominee of
the Custodian) as custodian of the Fund, issue a receipt or make
the deposits into the Margin Account and the Senior Security
Account specified in the Certificate.
2. In connection with the closing-out of any short
sale, the Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such closing out:
(a) the Series for which such transaction is being made; (b) the
name of the issuer and the title of the Security; (c) the number
of shares or the principal amount, and accrued interest or
dividends, if any, required to effect such closing-out to be
delivered to the broker; (d) the dates of closing-out and
settlement; (e) the purchase price per unit; (f) the net total
amount payable to the Fund upon such closing-out; (g) the net
total amount payable to the broker upon such closing-out; (h) the
amount of cash and the amount and kind of Securities to be
withdrawn, if any, from the Margin Account; (i) the amount of
cash and/or the amount and kind of Securities, if any, to be
withdrawn from the Senior Security Account; and (j) the name of
the broker through whom the Fund is effecting such closing-out.
The Custodian shall, upon receipt of the net total amount payable
to the Fund upon such closing-out, and the return and/ or
cancellation of the receipts, if any, issued by the Custodian
with respect to the short sale being closed-out, pay out of the
moneys held for the account of the Fund to the broker the net
total amount payable to the broker, and make the withdrawals from
the Margin Account and the Senior Security Account, as the same
are specified in the Certificate.
ARTICLE IX
REVERSE REPURCHASE AGREEMENTS
1. Promptly after the Fund enters a Reverse Repurchase
Agreement with respect to Securities and money held by the
Custodian hereunder, the Fund shall deliver to the Custodian a
Certificate, or in the event such Reverse Repurchase Agreement is
a Money Market Security, a Certificate or Oral Instructions
specifying: (a) the Series for which the Reverse Repurchase
Agreement is entered; (b) the total amount payable to the Fund in
connection with such Reverse Repurchase Agreement and
specifically allocated to such Series; (c) the broker or dealer
through or with whom the Reverse Repurchase Agreement is entered;
(d) the amount and kind of Securities to be delivered by the Fund
to such broker or dealer; (e) the date of such Reverse Repurchase
21
<PAGE>
Agreement; and (f) the amount of cash and/or the amount and kind
of Securities, if any, specifically allocated to such Series to
be deposited in a Senior Security Account for such Series in
connection with such Reverse Repurchase Agreement. The Custodian
shall, upon receipt of the total amount payable to the Fund
specified in the Certificate or Oral Instructions make the
delivery to the broker or dealer, and the deposits, if any, to
the Senior Security Account, specified in such Certificate or
Oral Instructions.
2. Upon the termination of a Reverse Repurchase
Agreement described in preceding paragraph 1 of this Article, the
Fund shall promptly deliver a Certificate or, in the event such
Reverse Repurchase Agreement is a Money Market Security, a
Certificate or Oral Instructions to the Custodian specifying: (a)
the Reverse Repurchase Agreement being terminated and the Series
for which same was entered; (b) the total amount payable by the
Fund in connection with such termination; (c) the amount and kind
of Securities to be received by the Fund and specifically
allocated to such Series in connection with such termination; (d)
the date of termination; (e) the name of the broker or dealer
with or through whom the Reverse Repurchase Agreement is to be
terminated; and (f) the amount of cash and/or the amount and kind
of Securities to be withdrawn from the Senior Securities Account
for such Series. The Custodian shall, upon receipt of the amount
and kind of Securities to be received by the Fund specified in
the Certificate or Oral Instructions, make the payment to the
broker or dealer, and the withdrawals, if any, from the Senior
Security Account, specified in such Certificate or Oral
Instructions.
ARTICLE X
LOAN OF PORTFOLIO SECURITIES OF THE FUND
1. Promptly after each loan of portfolio Securities
specifically allocated to a Series held by the Custodian
hereunder, the Fund shall deliver or cause to be delivered to the
Custodian a Certificate specifying with respect to each such
loan: (a) the Series to which the loaned Securities are
specifically allocated; (b) the name of the issuer and the title
of the Securities, (c) the number of shares or the principal
amount loaned, (d) the date of loan and delivery, (e) the total
amount to be delivered to the Custodian against the loan of the
Securities, including the amount of cash collateral and the
premium, if any, separately identified, and (f) the name of the
broker, dealer, or financial institution to which the loan was
made. The Custodian shall deliver the Securities thus designated
to the broker, dealer or financial institution to which the loan
was made upon receipt of the total amount designated as to be
delivered against the loan of Securities. The Custodian may
22
<PAGE>
accept payment in connection with a delivery otherwise than
through the Book-Entry System or Depository only in the form of a
certified or bank cashier's check payable to the order of the
Fund or the Custodian drawn on New York Clearing House funds and
may deliver Securities in accordance with the customs prevailing
among dealers in securities.
2. Promptly after each termination of the loan of
Securities by the Fund, the Fund shall deliver or cause to be
delivered to the Custodian a Certificate specifying with respect
to each such loan termination and return of Securities: (a) the
Series to which the loaned Securities are specifically allocated;
(b) the name of the issuer and the title of the Securities to be
returned, (c) the number of shares or the principal amount to be
returned, (d) the date of termination, (e) the total amount to be
delivered by the Custodian (including the cash collateral for
such Securities minus any offsetting credits as described in said
Certificate), and (f) the name of the broker, dealer, or
financial institution from which the Securities will be returned.
The Custodian shall receive all Securities returned from the
broker, dealer, or financial institution to which such Securities
were loaned and upon receipt thereof shall pay, out of the moneys
held for the account of the Fund, the total amount payable upon
such return of Securities as set forth in the Certificate.
ARTICLE XI
CONCERNING MARGIN ACCOUNTS, SENIOR SECURITY
ACCOUNTS, AND COLLATERAL ACCOUNTS
1. The Custodian shall, from time to time, make such
deposits to, or withdrawals from, a Senior Security Account as
specified in a Certificate received by the Custodian. Such
Certificate shall specify the Series for which such deposit or
withdrawal is to be made and the amount of cash and/or the amount
and kind of Securities specifically allocated to such Series to
be deposited in, or withdrawn from, such Senior Security Account
for such Series. In the event that the Fund fails to specify in
a Certificate the Series, the name of the issuer, the title and
the number of shares or the principal amount of any particular
Securities to be deposited by the Custodian into, or withdrawn
from, a Senior Securities Account, the Custodian shall be under
no obligation to make any such deposit or withdrawal and shall so
notify the Fund.
2. The Custodian shall make deliveries or payments
from a Margin Account to the broker, dealer, futures commission
merchant or Clearing Member in whose name, or for whose benefit,
the account was established as specified in the Margin Account
Agreement.
23
<PAGE>
3. Amounts received by the Custodian as payments or
distributions with respect to Securities deposited in any Margin
Account shall be dealt with in accordance with the terms and
conditions of the Margin Account Agreement.
4. The Custodian shall have a continuing lien and
security interest in and to any property at any time held by the
Custodian in any Collateral Account described herein. In
accordance with applicable law the Custodian may enforce its lien
and realize on any such property whenever the Custodian has made
payment or delivery pursuant to any Put Option guarantee letter
or similar document or any receipt issued hereunder by the
Custodian. In the event the Custodian should realize on any such
property net proceeds which are less than the Custodian's
obligations under any Put Option guarantee letter or similar
document or any receipt, such deficiency shall be a debt owed the
Custodian by the Fund within the scope of Article XIV herein.
5. On each business day the Custodian shall furnish
the Fund with a statement with respect to each Margin Account in
which money or Securities are held specifying as of the close of
business on the previous business day: (a) the name of the Margin
Account; (b) the amount and kind of Securities held therein; and
(c) the amount of money held therein. The Custodian shall make
available upon request to any broker, dealer, or futures
commission merchant specified in the name of a Margin Account a
copy of the statement furnished the Fund with respect to such
Margin Account.
6. Promptly after the close of business on each
business day in which cash and/or Securities are maintained in a
Collateral Account for any Series, the Custodian shall furnish
the Fund with a statement with respect to such Collateral Account
specifying the amount of cash and/or the amount and kind of
Securities held therein. No later than the close of business
next succeeding the delivery to the Fund of such statement, the
Fund shall furnish to the Custodian a Certificate specifying the
then market value of the Securities described in such statement.
In the event such then market value is indicated to be less than
the Custodian's obligation with respect to any outstanding Put
Option guarantee letter or similar document, the Fund shall
promptly specify in a Certificate the additional cash and/or
Securities to be deposited in such Collateral Account to
eliminate such deficiency.
24
<PAGE>
ARTICLE XII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Fund shall furnish to the Custodian a copy of
the resolution of the Board of Trustees of the Fund, certified by
the Secretary, the Clerk, any Assistant Secretary or any
Assistant Clerk, either (i) setting forth with respect to the
Series specified therein the date of the declaration of a
dividend or distribution, the date of payment thereof, the record
date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount
payable to the Dividend Agent and any sub-dividend agent or co-
dividend agent of the Fund on the payment date, or (ii)
authorizing with respect to the Series specified therein the
declaration of dividends and distributions on a daily basis and
authorizing the Custodian to rely on Oral Instructions or a
Certificate setting forth the date of the declaration of such
dividend or distribution, the date of payment thereof, the record
date as of which shareholders entitled to payment shall be
determined, the amount payable per Share of such Series to the
shareholders of record as of that date and the total amount
payable to the Dividend Agent on the payment date.
2. Upon the payment date specified in such resolution,
Oral Instructions or Certificate, as the case may be, the
Custodian shall pay out of the moneys held for the account of
each Series the total amount payable to the Dividend Agent and
any sub-dividend agent or co-dividend agent of the Fund with
respect to such Series.
ARTICLE XIII
SALE AND REDEMPTION OF SHARES
1. Whenever the Fund shall sell any Shares, it shall
deliver to the Custodian a Certificate duly specifying:
(a) The Series, the number of Shares sold, trade
date, and price; and
(b) The amount of money to be received by the
Custodian for the sale of such Shares and specifically allocated
to the separate account in the name of such Series.
2. Upon receipt of such money from the Transfer Agent,
the Custodian shall credit such money to the separate account in
the name of the Series for which such money was received.
25
<PAGE>
3. Upon issuance of any Shares of any Series described
in the foregoing provisions of this Article, the Custodian shall
pay, out of the money held for the account of such Series, all
original issue or other taxes required to be paid by the Fund in
connection with such issuance upon the receipt of a Certificate
specifying the amount to be paid.
4. Except as provided hereinafter, whenever the Fund
desires the Custodian to make payment out of the money held by
the Custodian hereunder in connection with a redemption of any
Shares, it shall furnish to the Custodian a Certificate
specifying:
(a) The number and Series of Shares redeemed; and
(b) The amount to be paid for such Shares.
5. Upon receipt from the Transfer Agent of an advice
setting forth the Series and number of Shares received by the
Transfer Agent for redemption and that such Shares are in good
form for redemption, the Custodian shall make payment to the
Transfer Agent out of the moneys held in the separate account in
the name of the Series the total amount specified in the
Certificate issued pursuant to the foregoing paragraph 4 of this
Article.
6. Notwithstanding the above provisions regarding the
redemption of any Shares, whenever any Shares are redeemed
pursuant to any check redemption privilege which may from time to
time be offered by the Fund, the Custodian, unless otherwise
instructed by a Certificate, shall, upon receipt of an advice
from the Fund or its agent setting forth that the redemption is
in good form for redemption in accordance with the check
redemption procedure, honor the check presented as part of such
check redemption privilege out of the moneys held in the separate
account of the Series of the Shares being redeemed.
ARTICLE XIV
OVERDRAFTS OR INDEBTEDNESS
1. If the Custodian, should in its sole discretion
advance funds on behalf of any Series which results in an
overdraft because the moneys held by the Custodian in the
separate account for such Series shall be insufficient to pay the
total amount payable upon a purchase of Securities specifically
allocated to such Series, as set forth in a Certificate or Oral
Instructions, or which results in an overdraft in the separate
account of such Series for some other reason, or if the Fund is
for any other reason indebted to the Custodian with respect to a
Series, including any indebtedness to The Bank of New York under
26
<PAGE>
the Fund's Cash Management and Related Services Agreement,
(except a borrowing for investment or for temporary or emergency
purposes using Securities as collateral pursuant to a separate
agreement and subject to the provisions of paragraph 2 of this
Article), such overdraft or indebtedness shall be deemed to be a
loan made by the Custodian to the Fund for such Series payable on
demand and shall bear interest from the date incurred at a rate
per annum (based on a 360-day year for the actual number of days
involved) equal to 1/2% over Custodian's prime commercial lending
rate in effect from time to time, such rate to be adjusted on the
effective date of any change in such prime commercial lending
rate but in no event to be less than 6% per annum. In addition,
the Fund hereby agrees that the Custodian shall have a continuing
lien and security interest in and to any property specifically
allocated to such Series at any time held by it for the benefit
of such Series or in which the Fund may have an interest which is
then in the Custodian's possession or control or in possession or
control of any third party acting in the Custodian's behalf. The
Fund authorizes the Custodian, in its sole discretion, at any
time to charge any such overdraft or indebtedness together with
interest due thereon against any balance of account standing to
such Series' credit on the Custodian's books. In addition, the
Fund hereby covenants that on each Business Day on which either
it intends to enter a Reverse Repurchase Agreement and/or
otherwise borrow from a third party, or which next succeeds a
Business Day on which at the close of business the Fund had
outstanding a Reverse Repurchase Agreement or such a borrowing,
it shall prior to 9 a.m., New York City time, advise the
Custodian, in writing, of each such borrowing, shall specify the
Series to which the same relates, and shall not incur any
indebtedness not so specified other than from the Custodian.
2. The Fund will cause to be delivered to the
Custodian by any bank (including, if the borrowing is pursuant to
a separate agreement, the Custodian) from which it borrows money
for investment or for temporary or emergency purposes using
Securities held by the Custodian hereunder as collateral for such
borrowings, a notice or undertaking in the form currently
employed by any such bank setting forth the amount which such
bank will loan to the Fund against delivery of a stated amount of
collateral. The Fund shall promptly deliver to the Custodian a
Certificate specifying with respect to each such borrowing: (a)
the Series to which such borrowing relates; (b) the name of the
bank, (c) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note,
duly endorsed by the Fund, or other loan agreement, (d) the time
and date, if known, on which the loan is to be entered into, (e)
the date on which the loan becomes due and payable, (f) the total
amount payable to the Fund on the borrowing date, (g) the market
value of Securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of
27
<PAGE>
shares or the principal amount of any particular Securities, and
(h) a statement specifying whether such loan is for investment
purposes or for temporary or emergency purposes and that such
loan is in conformance with the Investment Company Act of 1940
and the Fund's prospectus. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified
collateral and the executed promissory note, if any, against
delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount
payable as set forth in the Certificate. The Custodian may, at
the option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all rights
therein given the lending bank by virtue of any promissory note
or loan agreement. The Custodian shall deliver such Securities
as additional collateral as may be specified in a Certificate to
collateralize further any transaction described in this
paragraph. The Fund shall cause all Securities released from
collateral status to be returned directly to the Custodian, and
the Custodian shall receive from time to time such return of
collateral as may be tendered to it. In the event that the Fund
fails to specify in a Certificate the Series, the name of the
issuer, the title and number of shares or the principal amount of
any particular Securities to be delivered as collateral by the
Custodian, the Custodian shall not be under any obligation to
deliver any Securities.
ARTICLE XV
TERMINAL LINK
1. At no time and under no circumstances shall the
Fund be obligated to have or utilize the Terminal Link, and the
provisions of this Article shall apply if, but only if, the Fund
in its sole and absolute discretion elects to utilize the
Terminal Link to transmit Certificates to the Custodian.
2. The Terminal Link shall be utilized by the Fund
only for the purpose of the Fund providing Certificates to the
Custodian with respect to transactions involving Securities or
for the transfer of money to be applied to the payment of
dividends, distributions or redemptions of Fund Shares, and shall
be utilized by the Custodian only for the purpose of providing
notices to the Fund. Such use shall commence only after the Fund
shall have delivered to the Custodian a Certificate substantially
in the form of Exhibit D and shall have established access codes.
Each use of the Terminal Link by the Fund shall constitute a
representation and warranty that the Terminal Link is being used
only for the purposes permitted hereby, that at least two
Officers have each utilized an access code, that such safekeeping
procedures have been established by the Fund, and that such use
28
<PAGE>
does not contravene the Investment Company Act of 1940, as
amended, or the rules or regulations thereunder.
3. The Fund shall obtain and maintain at its own cost
and expense all equipment and services, including, but not
limited to communications services, necessary for it to utilize
the Terminal Link, and the Custodian shall not be responsible for
the reliability or availability of any such equipment or
services.
4. The Fund acknowledges that any data bases made
available as part of, or through the Terminal Link and any
proprietary data, software, processes, information and
documentation (other than any such which are or become part of
the public domain or are legally required to be made available to
the public) (collectively, the "Information"), are the exclusive
and confidential property of the Custodian. The Fund shall, and
shall cause others to which it discloses the Information, to keep
the Information confidential by using the same care and
discretion it uses with respect to its own confidential property
and trade secrets, and shall neither make nor permit any
disclosure without the express prior written consent of the
Custodian.
5. Upon termination of this Agreement for any reason,
the Fund shall return to the Custodian any and all copies of the
Information which are in the Fund's possession or under its
control, or which the Fund distributed to third parties. The
provisions of this Article shall not affect the copyright status
of any of the Information which may be copyrighted and shall
apply to all Information whether or not copyrighted.
6. The Custodian reserves the right to modify the
Terminal Link from time to time without notice to the Fund except
that the Custodian shall give the Fund notice not less than 75
days in advance of any modification which would materially
adversely affect the Fund's operation, and the Fund agrees that
the Fund shall not modify or attempt to modify the Terminal Link
without the Custodian's prior written consent. The Fund
acknowledges that any software or procedures provided the Fund as
part of the Terminal Link are the property of the Custodian and,
accordingly, the Fund agrees that any modifications to the
Terminal Link, whether by the Fund, or by the Custodian and
whether with or without the Custodian's consent, shall become the
property of the Custodian.
7. Neither the Custodian nor any manufacturers and
suppliers it utilizes or the Fund utilizes in connection with the
Terminal Link makes any warranties or representations, express or
implied, in fact or in law, including but not limited to
29
<PAGE>
warranties of merchantability and fitness for a particular
purpose.
8. The Fund will cause its Officers and employees to
treat the authorization codes and the access codes applicable to
Terminal Link with extreme care, and irrevocably authorizes the
Custodian to act in accordance with and rely on Certificates
received by it through the Terminal Link. The Fund acknowledges
that it is its responsibility to assure that only its Officers
use the Terminal Link on its behalf, and that a Custodian shall
not be responsible nor liable for use of the Terminal Link on the
Fund's behalf by persons other than such persons or Officers, or
by only a single Officer, nor for any alteration, omission, or
failure to promptly forward.
9(a). Except as otherwise specifically provided in
Section 9(b) of this Article, the Custodian shall have no
liability for any losses, damages, injuries, claims, costs or
expenses arising out of or in connection with any failure,
malfunction or other problem relating to the Terminal Link except
for money damages suffered as the direct result of the negligence
of the Custodian in an amount not exceeding for any incident
$25,000 provided, however, that the Custodian shall have no
liability under this Section 9 if the Fund fails to comply with
the provisions of Section 11.
9(b). The Custodian's liability for its negligence in
executing or failing to execute in accordance with a Certificate
received through Terminal Link shall be only with respect to a
transfer of funds which is not made in accordance with such
Certificate after such Certificate shall have been duly
acknowledged by the Custodian, and shall be contingent upon the
Fund complying with the provisions of Section 12 of this Article,
and shall be limited to (i) restoration of the principal amount
mistransferred, if and to the extent that the Custodian would be
required to make such restoration under applicable law, and (ii)
the lesser of (A) a Fund's actual pecuniary loss incurred by
reason of its loss of use of the mistransferred funds or the
funds which were not transferred, as the case may be, or (B)
compensation for the loss of the use of the mistransferred funds
or the funds which were not transferred, as the case may be, at a
rate per annum equal to the average federal funds rate as
computed from the Federal Reserve Bank of New York's daily
determination of the effective rate for federal funds, for the
period during which a Fund has lost use of such funds. In no
event shall the Custodian have any liability for failing to
execute in accordance with a Certificate a transfer of funds
where the Certificate is received by the Custodian through
Terminal Link other than through the applicable transfer module
for the particular instructions contained in such Certificate.
30
<PAGE>
10. Without limiting the generality of the foregoing,
in no event shall the Custodian or any manufacturer or supplier
of its computer equipment, software or services relating to the
Terminal Link be responsible for any special, indirect,
incidental or consequential damages which the Fund may incur or
experience by reason of its use of the Terminal Link even if the
Custodian or any manufacturer or supplier has been advised of the
possibility of such damages, nor with respect to the use of the
Terminal Link shall the Custodian or any such manufacturer or
supplier be liable for acts of God, or with respect to the
following to the extent beyond such person's reasonable control:
machine or computer breakdown or malfunction, interruption or
malfunction of communication facilities, labor difficulties or
any other similar or dissimilar cause.
11. The Fund shall notify the Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, the
Terminal Link as promptly as practicable, and in any event within
24 hours after the earliest of (i) discovery thereof, (ii) the
Business Day on which discovery should have occurred through the
exercise of reasonable care and (iii) in the case of any error,
the date of actual receipt of the earliest notice which reflects
such error, it being agreed that discovery and receipt of notice
may only occur on a business day. The Custodian shall promptly
advise the Fund whenever the Custodian learns of any errors,
omissions or interruption in, or delay or unavailability of, the
Terminal Link.
12. The Custodian shall verify to the Fund, by use of
the Terminal Link, receipt of each Certificate the Custodian
receives through the Terminal Link, and in the absence of such
verification the Custodian shall not be liable for any failure to
act in accordance with such Certificate and the Fund may not
claim that such Certificate was received by the Custodian. Such
verification, which may occur after the Custodian has acted upon
such Certificate, shall be accomplished on the same day on which
such Certificate is received.
ARTICLE XVI
DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY
OF ANY SERIES HELD OUTSIDE OF THE UNITED STATES
1.1.1 The Custodian is authorized and instructed to
employ, as sub-custodian for each Series' Foreign Securities (as
such term is defined in paragraph (c)(1) of Rule 17f-5 under the
Investment Company Act of 1940, as amended) and other assets, the
foreign banking institutions and foreign securities depositories
and clearing agencies designated on Schedule I hereto ("Foreign
Sub-Custodians") to carry out their respective responsibilities
in accordance with the terms of the sub-custodian agreement
31
<PAGE>
between each such Foreign Sub-Custodian and the Custodian, copies
of which have been previously delivered to the Fund and receipt
of which is hereby acknowledged (each such agreement, a "Foreign
Sub-Custodian Agreement"). Upon receipt of a Certificate,
together with a certified resolution substantially in the form
attached as Exhibit E of the Fund's Board of Trustees, the Fund
may designate any additional foreign sub-custodian with which the
Custodian has an agreement for such entity to act as the
Custodian's agent, as its sub-custodian and any such additional
foreign sub-custodian shall be deemed added to Schedule I. Upon
receipt of a Certificate from the Fund, the Custodian shall cease
the employment of any one or more Foreign Sub-Custodians for
maintaining custody of the Fund's assets and such Foreign Sub-
Custodian shall be deemed deleted from Schedule I.
1.1.2 Each Foreign Sub-Custodian Agreement shall be
substantially in the form previously delivered to the Fund and
will not be amended in a way that materially adversely affects
the Fund without the Fund's prior written consent.
1.1.3 The Custodian shall identify on its books as
belonging to each Series of the Fund the Foreign Securities of
such Series held by each Foreign Sub-Custodian. At the election
of the Fund, it shall be entitled to be subrogated to the rights
of the Custodian with respect to any claims by the Fund or any
Series against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or
incurred by the Fund or any Series if and to the extent that the
Fund or such Series has not been made whole for any such loss,
damage, cost, expense, liability or claim.
1.1.4 Upon request of the Fund, the Custodian will,
consistent with the terms of the applicable Foreign Sub-Custodian
Agreement, use reasonable efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and
records of any Foreign Sub-Custodian insofar as such books and
records relate to the performance of such Foreign Sub-Custodian
under its agreement with the Custodian on behalf of the Fund.
1.1.5 The Custodian will supply to the Fund from
time to time, as mutually agreed upon, statements in respect of
the securities and other assets of each Series held by Foreign
Sub-Custodians, including but not limited to, an identification
of entities having possession of each Series' Foreign Securities
and other assets, and advices or notifications of any transfers
of Foreign Securities to or from each custodial account
maintained by a Foreign Sub-Custodian for the Custodian on behalf
of the Series.
1.1.6 The Custodian shall furnish annually to the
Fund, as mutually agreed upon, information concerning the Foreign
32
<PAGE>
Sub-Custodians employed by the Custodian. Such information shall
be similar in kind and scope to that furnished to the Fund in
connection with the Fund's initial approval of such Foreign Sub-
Custodians and, in any event, shall include information
pertaining to (i) the Foreign Custodians' financial strength,
general reputation and standing in the countries in which they
are located and their ability to provide the custodial services
required, and (ii) whether the Foreign Sub-Custodians would
provide a level of safeguards for safekeeping and custody of
securities not materially different form those prevailing in the
United States. The Custodian shall monitor the general operating
performance of each Foreign Sub-Custodian, and at least annually
obtain and review the annual financial report published by such
Foreign Sub-Custodian to determine that it meets the financial
criteria of an "Eligible Foreign Custodian" under Rule 17f-
5(c)(2)(i) or (ii). The Custodian will promptly inform the Fund
in the event that the Custodian learns that a Foreign Sub-
Custodian no longer satisfies the financial criteria of an
"Eligible Foreign Custodian" under such Rule. The Custodian
agrees that it will use reasonable care in monitoring compliance
by each Foreign Sub-Custodian with the terms of the relevant
Foreign Sub-Custodian Agreement and that if it learns of any
breach of such Foreign Sub-Custodian Agreement believed by the
Custodian to have a material adverse effect on the Fund or any
Series it will promptly notify the Fund of such breach. The
Custodian also agrees to use reasonable and diligent efforts to
enforce its rights under the relevant Foreign Sub-Custodian
Agreement.
1.1.7 The Custodian shall transmit promptly to the
Fund all notices, reports or other written information received
pertaining to the Fund's Foreign Securities, including without
limitation, notices of corporate action, proxies and proxy
solicitation materials.
1.1.8 Notwithstanding any provision of this
Agreement to the contrary, settlement and payment for securities
received for the account of any Series and delivery of securities
maintained for the account of such Series may be effected in
accordance with the customary or established securities trading
or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs,
including, without limitation, delivery of securities to the
purchaser thereof or to a dealer therefor (or an agent for such
purchaser or dealer) against a receipt with the expectation of
receiving later payment for such securities from such purchaser
or dealer.
1.1.9 Notwithstanding any other provision in this
Agreement to the contrary, with respect to any losses or damages
arising out of or relating to any actions or omissions of any
33
<PAGE>
Foreign Sub-Custodian the sole responsibility and liability of
the Custodian shall be to take appropriate action at the Fund's
expense to recover such loss or damage from the Foreign Sub-
Custodian. It is expressly understood and agreed that the
Custodian's sole responsibility and liability shall be limited to
amounts so recovered from the Foreign Sub-Custodian.
ARTICLE XVII
CONCERNING THE CUSTODIAN
1. Except as hereinafter provided, or as provided in
Article XVI neither the Custodian nor its nominee shall be liable
for any loss or damage, including counsel fees, resulting from
its action or omission to act or otherwise, either hereunder or
under any Margin Account Agreement, except for any such loss or
damage arising out of its own negligence or willful misconduct.
In no event shall the Custodian be liable to the Fund or any
third party for special, indirect or consequential damages or
lost profits or loss of business, arising under or in connection
with this Agreement, even if previously informed of the
possibility of such damages and regardless of the form of action.
The Custodian may, with respect to questions of law arising
hereunder or under any Margin Account Agreement, apply for and
obtain the advice and opinion of counsel to the Fund or of its
own counsel, at the expense of the Fund, and shall be fully
protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. The Custodian
shall be liable to the Fund for any loss or damage resulting from
the use of the Book-Entry System or any Depository arising by
reason of any negligence or willful misconduct on the part of the
Custodian or any of its employees or agents.
2. Without limiting the generality of the foregoing,
the Custodian shall be under no obligation to inquire into, and
shall not be liable for:
(a) The validity of the issue of any Securities
purchased, sold, or written by or for the Fund, the legality of
the purchase, sale or writing thereof, or the propriety of the
amount paid or received therefor;
(b) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid
therefor;
(c) The legality of the declaration or payment of
any dividend by the Fund;
(d) The legality of any borrowing by the Fund
using Securities as collateral;
34
<PAGE>
(e) The legality of any loan of portfolio
Securities, nor shall the Custodian be under any duty or
obligation to see to it that any cash collateral delivered to it
by a broker, dealer, or financial institution or held by it at
any time as a result of such loan of portfolio Securities of the
Fund is adequate collateral for the Fund against any loss it
might sustain as a result of such loan. The Custodian
specifically, but not by way of limitation, shall not be under
any duty or obligation periodically to check or notify the Fund
that the amount of such cash collateral held by it for the Fund
is sufficient collateral for the Fund, but such duty or
obligation shall be the sole responsibility of the Fund. In
addition, the Custodian shall be under no duty or obligation to
see that any broker, dealer or financial institution to which
portfolio Securities of the Fund are lent pursuant to Article XIV
of this Agreement makes payment to it of any dividends or
interest which are payable to or for the account of the Fund
during the period of such loan or at the termination of such
loan, provided, however, that the Custodian shall promptly notify
the Fund in the event that such dividends or interest are not
paid and received when due; or
(f) The sufficiency or value of any amounts of
money and/or Securities held in any Margin Account, Senior
Security Account or Collateral Account in connection with
transactions by the Fund. In addition, the Custodian shall be
under no duty or obligation to see that any broker, dealer,
futures commission merchant or Clearing Member makes payment to
the Fund of any variation margin payment or similar payment which
the Fund may be entitled to receive from such broker, dealer,
futures commission merchant or Clearing Member, to see that any
payment received by the Custodian from any broker, dealer,
futures commission merchant or Clearing Member is the amount the
Fund is entitled to receive, or to notify the Fund of the
Custodian's receipt or non-receipt of any such payment.
3. The Custodian shall not be liable for, or
considered to be the Custodian of, any money, whether or not
represented by any check, draft, or other instrument for the
payment of money, received by it on behalf of the Fund until the
Custodian actually receives and collects such money directly or
by the final crediting of the account representing the Fund's
interest at the Book-Entry System or the Depository.
4. The Custodian shall have no responsibility and
shall not be liable for ascertaining or acting upon any calls,
conversions, exchange offers, tenders, interest rate changes or
similar matters relating to Securities held in the Depository,
unless the Custodian shall have actually received timely notice
from the Depository. In no event shall the Custodian have any
responsibility or liability for the failure of the Depository to
35
<PAGE>
collect, or for the late collection or late crediting by the
Depository of any amount payable upon Securities deposited in the
Depository which may mature or be redeemed, retired, called or
otherwise become payable. However, upon receipt of a Certificate
from the Fund of an overdue amount on Securities held in the
Depository the Custodian shall make a claim against the
Depository on behalf of the Fund, except that the Custodian shall
not be under any obligation to appear in, prosecute or defend any
action suit or proceeding in respect to any Securities held by
the Depository which in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all
expense and liability be furnished as often as may be required.
5. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount due
to the Fund from the Transfer Agent of the Fund nor to take any
action to effect payment or distribution by the Transfer Agent of
the Fund of any amount paid by the Custodian to the Transfer
Agent of the Fund in accordance with this Agreement.
6. The Custodian shall not be under any duty or
obligation to take action to effect collection of any amount if
the Securities upon which such amount is payable are in default,
or if payment is refused after due demand or presentation, unless
and until (i) it shall be directed to take such action by a
Certificate and (ii) it shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection with any
such action.
7. The Custodian may in addition to the employment of
Foreign Sub-Custodians pursuant to Article XVI appoint one or
more banking institutions as Depository or Depositories, as Sub-
Custodian or Sub-Custodians, or as Co-Custodian or Co-Custodians
including, but not limited to, banking institutions located in
foreign countries, of Securities and moneys at any time owned by
the Fund, upon such terms and conditions as may be approved in a
Certificate or contained in an agreement executed by the
Custodian, the Fund and the appointed institution.
8. The Custodian shall not be under any duty or
obligation (a) to ascertain whether any Securities at any time
delivered to, or held by it or by any Foreign Sub-Custodian, for
the account of the Fund and specifically allocated to a Series
are such as properly may be held by the Fund or such Series under
the provisions of its then current prospectus, or (b) to
ascertain whether any transactions by the Fund, whether or not
involving the Custodian, are such transactions as may properly be
engaged in by the Fund.
9. The Custodian shall be entitled to receive and the
Fund agrees to pay to the Custodian all out-of-pocket expenses
36
<PAGE>
and such compensation as may be agreed upon from time to time
between the Custodian and the Fund. The Custodian may charge
such compensation and any expenses with respect to a Series
incurred by the Custodian in the performance of its duties
pursuant to such agreement against any money specifically
allocated to such Series. Unless and until the Fund instructs
the Custodian by a Certificate to apportion any loss, damage,
liability or expense among the Series in a specified manner, the
Custodian shall also be entitled to charge against any money held
by it for the account of a Series such Series' pro rata share
(based on such Series net asset value at the time of the charge
to the aggregate net asset value of all Series at that time) of
the amount of any loss, damage, liability or expense, including
counsel fees, for which it shall be entitled to reimbursement
under the provisions of this Agreement. The expenses for which
the Custodian shall be entitled to reimbursement hereunder shall
include, but are not limited to, the expenses of sub-custodians
and foreign branches of the Custodian incurred in settling
outside of New York City transactions involving the purchase and
sale of Securities of the Fund.
10. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing received by
the Custodian and reasonably believed by the Custodian to be a
Certificate. The Custodian shall be entitled to rely upon any
Oral Instructions actually received by the Custodian hereinabove
provided for. The Fund agrees to forward to the Custodian a
Certificate or facsimile thereof confirming such Oral
Instructions in such manner so that such Certificate or facsimile
thereof is received by the Custodian, whether by hand delivery,
telecopier or other similar device, or otherwise, by the close of
business of the same day that such Oral Instructions are given to
the Custodian. The Fund agrees that the fact that such
confirming instructions are not received by the Custodian shall
in no way affect the validity of the transactions or
enforceability of the transactions hereby authorized by the Fund.
The Fund agrees that the Custodian shall incur no liability to
the Fund in acting upon Oral Instructions given to the Custodian
hereunder concerning such transactions provided such instructions
reasonably appear to have been received from an Officer.
11. The Custodian shall be entitled to rely upon any
instrument, instruction or notice received by the Custodian and
reasonably believed by the Custodian to be given in accordance
with the terms and conditions of any Margin Account Agreement.
Without limiting the generality of the foregoing, the Custodian
shall be under no duty to inquire into, and shall not be liable
for, the accuracy of any statements or representations contained
in any such instrument or other notice including, without
limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or Clearing Member.
37
<PAGE>
12. The books and records pertaining to the Fund which
are in the possession of the Custodian shall be the property of
the Fund. Such books and records shall be prepared and
maintained as required by the Investment Company Act of 1940, as
amended, and other applicable securities laws and rules and
regulations. The Fund, or the Fund's authorized representatives,
shall have access to such books and records during the
Custodian's normal business hours. Upon the reasonable request
of the Fund, copies of any such books and records shall be
provided by the Custodian to the Fund or the Fund's authorized
representative, and the Fund shall reimburse the Custodian its
expenses of providing such copies. Upon reasonable request of
the Fund, the Custodian shall provide in hard copy or on micro-
film, whichever the Custodian elects, any records included in any
such delivery which are maintained by the Custodian on a computer
disc, or are similarly maintained, and the Fund shall reimburse
the Custodian for its expenses of providing such hard copy or
micro-film.
13. The Custodian shall provide the Fund with any
report obtained by the Custodian on the system of internal
accounting control of the Book-Entry System, the Depository or
O.C.C., and with such reports on its own systems of internal
accounting control as the Fund may reasonably request from time
to time.
14. The Fund agrees to indemnify the Custodian against
and save the Custodian harmless from all liability, claims,
losses and demands whatsoever, including attorney's fees,
howsoever arising or incurred because of or in connection with
this Agreement, including the Custodian's payment or non-payment
of checks pursuant to paragraph 6 of Article XIII as part of any
check redemption privilege program of the Fund, except for any
such liability, claim, loss and demand arising out of the
Custodian's own negligence or willful misconduct.
15. Subject to the foregoing provisions of this
Agreement, including, without limitation, those contained in
Article XVI the Custodian may deliver and receive Securities, and
receipts with respect to such Securities, and arrange for
payments to be made and received by the Custodian in accordance
with the customs prevailing from time to time among brokers or
dealers in such Securities. When the Custodian is instructed to
deliver Securities against payment, delivery of such Securities
and receipt of payment therefor may not be completed
simultaneously. The Fund assumes all responsibility and
liability for all credit risks involved in connection with the
Custodian's delivery of Securities pursuant to instructions of
the Fund, which responsibility and liability shall continue until
final payment in full has been received by the Custodian.
38
<PAGE>
16. The Custodian shall have no duties or
responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement,
and no covenant or obligation shall be implied in this Agreement
against the Custodian.
ARTICLE XVIII
TERMINATION
1. Either of the parties hereto may terminate this
Agreement by giving to the other party a notice in writing
specifying the date of such termination, which shall be not less
than ninety (90) days after the date of giving of such notice.
In the event such notice is given by the Fund, it shall be
accompanied by a copy of a resolution of the Board of Trustees of
the Fund, certified by the Secretary, the Clerk, any Assistant
Secretary or any Assistant Clerk, electing to terminate this
Agreement and designating a successor custodian or custodians,
each of which shall be a bank or trust company having not less
than $2,000,000 aggregate capital, surplus and undivided profits.
In the event such notice is given by the Custodian, the Fund
shall, on or before the termination date, deliver to the
Custodian a copy of a resolution of the Board of Trustees of the
Fund, certified by the Secretary, the Clerk, any Assistant
Secretary or any Assistant Clerk, designating a successor
custodian or custodians. In the absence of such designation by
the Fund, the Custodian may designate a successor custodian which
shall be a bank or trust company having not less than $2,000,000
aggregate capital, surplus and undivided profits. Upon the date
set forth in such notice this Agreement shall terminate, and the
Custodian shall upon receipt of a notice of acceptance by the
successor custodian on that date deliver directly to the
successor custodian all Securities and moneys then owned by the
Fund and held by it as Custodian, after deducting all fees,
expenses and other amounts for the payment or reimbursement of
which it shall then be entitled.
2. If a successor custodian is not designated by the
Fund or the Custodian in accordance with the preceding paragraph,
the Fund shall upon the date specified in the notice of
termination of this Agreement and upon the delivery by the
Custodian of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Fund) and
moneys then owned by the Fund be deemed to be its own custodian
and the Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the duty
with respect to Securities held in the Book Entry System which
cannot be delivered to the Fund to hold such Securities hereunder
in accordance with this Agreement.
39
<PAGE>
ARTICLE XIX
MISCELLANEOUS
1. Annexed hereto as Appendix A is a Certificate
signed by two of the present Officers of the Fund under its seal,
setting forth the names and the signatures of the present
Officers. The Fund agrees to furnish to the Custodian a new
Certificate in similar form in the event that any such present
Officer ceases to be an Officer or in the event that other or
additional Officers are elected or appointed. Until such new
Certificate shall be received, the Custodian shall be fully
protected in acting under the provisions of this Agreement upon
Oral Instructions or signatures of the present Officers as set
forth in the last delivered Certificate.
2. Annexed hereto as Appendix A is a Certificate
signed by two of the present Officers of the Fund under its seal,
setting forth the names and the signatures of the present
Officers of the Fund. The Fund agrees to furnish to the
Custodian a new Certificate in similar form in the event any such
present Officer ceases to be an Officer of the Fund, or in the
event that other or additional Officers are elected or appointed.
Until such new Certificate shall be received, the Custodian shall
be fully protected in acting under the provisions of this
Agreement upon the signatures of the Officers as set forth in the
last delivered Certificate.
3. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the
Custodian, shall be sufficiently given if addressed to the
Custodian and mailed or delivered to it at its offices at 90
Washington Street, New York, New York 10286, or at such other
place as the Custodian may from time to time designate in
writing.
4. Any notice or other instrument in writing,
authorized or required by this Agreement to be given to the Fund
shall be sufficiently given if addressed to the Fund and mailed
or delivered to it at its office at the address for the Fund
first above written, or at such other place as the Fund may from
time to time designate in writing.
5. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties
with the same formality as this Agreement and approved by a
resolution of the Board of Trustees of the Fund.
6. This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be
40
<PAGE>
assignable by the Fund without the written consent of the
Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of the Fund's Board
of Trustees.
7. This Agreement shall be construed in accordance
with the laws of the State of New York without giving effect to
conflict of laws principles thereof. Each party hereby consents
to the jurisdiction of a state or federal court situated in New
York City, New York in connection with any dispute arising
hereunder and hereby waives its right to trial by jury.
8. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original,
but such counterparts shall, together, constitute only one
instrument.
9. A copy of the Declaration of Trust of the Fund is
on file with the Secretary of The Commonwealth of Massachusetts,
and notice is hereby given that this instrument is executed on
behalf of the Board of Trustees of the Fund as Trustees and not
individually and that the obligations of this instrument are not
binding upon any of the Trustees or shareholders individually but
are binding only upon the assets and property of the Fund;
provided, however, that the Declaration of Trust of the Fund
provides that the assets of a particular Series of the Fund shall
under no circumstances be charged with liabilities attributable
to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a
particular Series of the Fund shall look only to the assets of
that particular Series for payment of such credit, contract or
claim.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective Officers, thereunto
duly authorized and their respective seals to be hereunto
affixed, as of the day and year first above written.
ALLIANCE MONEY MARKET FUND
[SEAL] By:_______________________
41
<PAGE>
Attest:
_______________________
THE BANK OF NEW YORK
[SEAL] By:_______________________
Name: Jorge Ramos
Title: Vice President
Attest:
_______________________
42
<PAGE>
APPENDIX A
I, , President and I,
, of ALLIANCE MONEY MARKET FUND, a Massachusetts
business trust (the "Fund"), do hereby certify that:
The following individuals serve in the following
positions with the Fund and each has been duly elected or
appointed by the Board of Trustees of the Fund to each such
position and qualified therefor in conformity with the Fund's
Declaration of Trust and By-Laws, and the signatures set forth
opposite their respective names are their true and correct
signatures:
Name Position Signature
____________________ ___________________ _________________
43
<PAGE>
APPENDIX B
ALLIANCE MONEY MARKET FUND
PORTFOLIO EXHIBIT
Prime Portfolio
Government Portfolio
General Municipal Portfolio
New Jersey Municipal Portfolio
New York Municipal Portfolio
California Municipal Portfolio
Connecticut Municipal Portfolio
44
<PAGE>
APPENDIX C
I, Jorge Ramos, a Vice President with THE BANK OF NEW
YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
45
<PAGE>
EXHIBIT A
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was at
all times present and that such resolution has not been modified
or rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1995,
(the "Custody Agreement") is authorized and instructed
on a continuous and ongoing basis to deposit in the
Book-Entry System, as defined in the Custody Agreement,
all securities eligible for deposit therein, regardless
of the Series to which the same are specifically
allocated, and to utilize the Book-Entry System to the
extent possible in connection with its performance
thereunder, including, without limitation, in connection
with settlements of purchases and sales of securities,
loans of securities, and deliveries and returns of
securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of ALLIANCE MONEY MARKET FUND, as of the day of ,
1995.
[SEAL]
46
<PAGE>
EXHIBIT B
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was at
all times present and that such resolution has not been modified
or rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1995,
(the "Custody Agreement") is authorized and instructed
on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody
Agreement, to the contrary to deposit in the Depository,
as defined in the Custody Agreement, all securities
eligible for deposit therein, regardless of the Series
to which the same are specifically allocated, and to
utilize the Depository to the extent possible in
connection with its performance thereunder, including,
without limitation, in connection with settlements of
purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of ALLIANCE MONEY MARKET FUND, as of the day of ,
1995.
[SEAL]
47
<PAGE>
EXHIBIT B-1
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was at
all times present and that such resolution has not been modified
or rescinded and is in full force and effect as of the date
hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of ,
1995, (the "Custody Agreement") is authorized and
instructed on a continuous and ongoing basis until such
time as it receives a Certificate, as defined in the
Custody Agreement, to the contrary to deposit in the
Participants Trust Company as Depository, as defined in
the Custody Agreement, all securities eligible for
deposit therein, regardless of the Series to which the
same are specifically allocated, and to utilize the
Participants Trust Company to the extent possible in
connection with its performance thereunder, including,
without limitation, in connection with settlements of
purchases and sales of securities, loans of securities,
and deliveries and returns of securities collateral.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of ALLIANCE MONEY MARKET FUND, as of the day of ,
1995.
[SEAL]
48
<PAGE>
EXHIBIT C
CERTIFICATION
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), and further certifies that the following resolution
was adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was
at all times present and that such resolution has not been
modified or rescinded and is in full force and effect as of the
date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to a Custody Agreement between The Bank of New
York and the Fund dated as of , 1995,
(the "Custody Agreement") is authorized and instructed
on a continuous and ongoing basis until such time as it
receives a Certificate, as defined in the Custody
Agreement, to the contrary, to accept, utilize and act
with respect to Clearing Member confirmations for
Options and transaction in Options, regardless of the
Series to which the same are specifically allocated, as
such terms are defined in the Custody Agreement, as
provided in the Custody Agreement.
6 IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of ALLIANCE MONEY MARKET FUND, as of the day of ,
1995.
[SEAL]
49
<PAGE>
EXHIBIT D
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), further certifies that the following resolutions
were adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was at all
times present and that such resolutions have not been modified or
rescinded and are in full force and effect as of the date hereof.
RESOLVED, that The Bank of New York, as Custodian
pursuant to the Custody Agreement between The Bank of New York
and the Fund dated as of , 1995 (the "Custody
Agreement") is authorized and instructed on a continuous and
ongoing basis to act in accordance with, and to rely on
Certificates (as defined in the Custody Agreement) given by the
Fund to the Custodian by a Terminal Link (as defined in the
Custody Agreement).
RESOLVED, that the Fund shall establish access codes and
grant us of such access codes only to Officers of the fund as
defined in the Custody Agreement, shall establish internal
safekeeping procedures to safeguard and protect the
confidentiality and availability of such access codes, shall
limit its use of the Terminal Link to those purposes permitted by
the Custody Agreement, shall require at least two such Officers
to utilize their respective access codes in connection with each
such Certificate, and shall use the Terminal Link only in a
manner that does not contravene the Investment Company Act of
1940, as amended, or the rules and regulations thereunder.
RESOLVED, that Officers of the Fund shall, following the
establishment of such access codes and such internal safekeeping
procedures, advise the Custodian that the same have been
established by delivering a Certificate, as defined in the
Custody Agreement, and the Custodian shall be entitled to rely
upon such advice.
IN WITNESS WHEREOF, I have hereunto set my hand and the
seal of ALLIANCE MONEY MARKET FUND, as of the day of
, 1995.
[SEAL]
50
<PAGE>
EXHIBIT E
The undersigned, , hereby
certifies that he or she is the duly elected and acting
of ALLIANCE MONEY MARKET FUND, a Massachusetts business trust
(the "Fund"), further certifies that the following resolutions
were adopted by the Board of Trustees of the Fund at a meeting
duly held on , 1995, at which a quorum was
at all times present and that such resolutions have not been
modified or rescinded and are in full force and effect as of the
date hereof.
RESOLVED, that the maintenance of the Fund's assets in
each country listed in Schedule I hereto be, and hereby is,
approved by the Board of Trustees as consistent with the best
interests of the Fund and its shareholders; and further
RESOLVED, that the maintenance of the Fund's assets with
the foreign branches of The Bank of New York (the "Bank") listed
in Schedule I located in the countries specified therein, and
with the foreign subcustodians and despositories listed in
Schedule I located in the countries specified therein be, and
hereby is, approved by the Board of Trustees as consistent with
the best interest of the Fund and its shareholders; and further
RESOLVED, that the Subcustodian Agreements presented to
this meeting between the Bank and each of the foreign
subcustodians and depositories listed in Schedule I providing for
the maintenance of the Fund's assets with the applicable entity,
be and hereby are, approved by the Board of Trustees as
consistent with the best interests of the Fund and its
shareholders; and further
RESOLVED, that the appropriate officers of the Fund are
hereby authorized to place assets of the Fund with the
aforementioned foreign branches and foreign subcustodians and
depositories as hereinabove provided; and further
RESOLVED, that the appropriate officers of the Fund, or
any of them, are authorized to do any and all other acts, in the
name of the Fund and on its behalf, as they, or any of them, may
determine to be necessary or desirable and proper in connection
with or in furtherance of the foregoing resolutions.
51
<PAGE>
IN WITNESS WHEREOF, I hereunto set my hand and the seal
of ALLIANCE MONEY MARKET FUND, as of the day of
, 1995.
[SEAL]
52
00250217.AE1
<PAGE>
ADMINISTRATION AGREEMENT
THIS AGREEMENT made this 16th day of March, 1995, by and
between ALLIANCE MONEY MARKET FUND (the "Trust"), a Massachusetts
business trust and ADP FINANCIAL INFORMATION SERVICES, INC., a
Delaware corporation (the "Administrator").
W I T N E S S E T H :
In consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereto agree as
follows:
FIRST: The Trust on behalf of each of its series and
any new series to be created hereby authorizes the Administrator
to provide administrative services to the Trust in accordance
with the terms and conditions of this Agreement. The
Administrator's services shall be subject to the direction and
control of the Trustees of the Trust and shall be performed under
the direction of the appropriate Trust officers. The
Administrator's functions shall be entirely ministerial in
nature, and it shall not have any responsibility or authority for
the management of the Trust, the determination of its policies,
or for any matter pertaining to the distribution of securities
issued by the Trust.
SECOND: The Administrator shall provide certain
administration services including:
<PAGE>
(A) providing a direct interface between the
Trust's Transfer Agent and the Administrator's proprietary
shareholder accounting system (referred to herein as "SHAC")
thereby permitting the creation of omnibus accounting on the
Trust's Transfer Agent's books with individual shareholder
records being maintained on SHAC.
(B) arranging for, or assisting counsel and
auditors in the preparation of, all required Trust tax returns,
proxy statements, semi-annual reports to the Trust's
shareholders, semi-annual reports to be filed with the Securities
and Exchange Commission, and updates to the Trust's Registration
Statement under the Investment Company Act of 1940 (the "Act"),
and arranging for the signature of such documents by the
appropriate Trust officer;
(C) arranging for the coordination of the printing
and mailing (at the Trust's expense) of proxy statements and
other reports or other materials provided to the Trust's
shareholders;
(D) arranging for, or overseeing of, the
computation of performance data including net asset value and
yield;
(E) arranging for, or overseeing, the publication
of current price information in newspapers and publications;
(F) responding to all inquiries or other
communications from shareholders of the Trust and other parties
2
<PAGE>
or, if the inquiry is more properly responded to by the Trust's
transfer agent or distributor, referring the individual making
the inquiry to the appropriate person;
(G) coordinating all relationships between the
Trust and its contractors, including coordinating the negotiation
of agreements, the review of performance of agreements, and the
exchange of information, provided that coordination with the
Trust's distributor shall be limited to the exchange of
information necessary for the administration of the Trust and the
reporting of that information to the Trustees and Trust officers;
and
(H) provide accounting and bookkeeping services
(including the maintenance of such accounts, books and records of
the Trust as may be required by Section 31(a) of the Act and the
rules and regulations thereunder).
THIRD: Any activities performed by the Administrator
under this Agreement shall at all times conform to, and be in
accordance with, any requirements imposed by: (1) the provisions
of the Act and of any rules or regulations in force thereunder;
(2) any other applicable provision of law; (3) the provisions of
the Agreement and Declaration of Trust and By-Laws of the Trust
as amended from time to time; (4) any policies and determinations
of the Trustees of the Trust; and (5) the fundamental policies of
each series of the Trust, as reflected in the then current
Registration Statement of the Trust. As used in this Agreement,
3
<PAGE>
the term "Registration Statement" shall mean the Registration
Statement most recently filed by the Trust with the Securities
and Exchange Commission and effective under the Securities Act of
1933, as amended, as such Registration Statement is amended at
such time, and the term "Prospectus" and "Statement of Additional
Information" shall mean for the purposes of this Agreement the
form of the then current prospectus and statement of additional
information for each series of the Trust.
FOURTH: Nothing in this Agreement shall prevent the
Administrator or any officer thereof from acting as administrator
for any other person, firm or corporation and shall not in any
way limit or restrict the Administrator or any of its directors,
officers, employees or affiliates from buying, selling or trading
any securities for its own or their own accounts or for the
accounts of others for whom it or they may be acting, provided,
however, that the Administrator expressly represents that it will
undertake no activities which, in its judgment, will adversely
affect the performance of its obligations to the Trust under this
Agreement.
FIFTH: The Administrator shall, at its own expense,
provide office space and facilities, equipment and personnel for
the performance of its functions hereunder. The Administrator
will pay the fees and expenses of Trustees who are affiliated
with the Administrator.
4
<PAGE>
SIXTH: The Trust shall pay the Administrator, as full
compensation for all services rendered hereunder, an annual fee
of a maximum of .05 of 1% on behalf of each series payable
monthly and computed on the average daily net assets of the
series at the end of each business day.
SEVENTH: In the event the operating expenses of any
series of the Trust, including all investment advisory and
administration fees, but excluding brokerage commissions and
fees, distribution fees (to the extent allowable under applicable
state law), taxes, interest and extraordinary expenses such as
litigation, for any fiscal year ending on a date on which this
Agreement is in effect exceed the most restrictive expense
limitation applicable to that series imposed by the securities
laws or regulations thereunder of any state in which the shares
of the series are qualified for sale, as such limitations may be
raised or lowered from time to time, the Administrator shall
reduce its administration fee to the extent of its share of such
excess expenses. The amount of any such reduction to be borne by
the Administrator shall be deducted from the monthly
administration fee otherwise payable to the Administrator during
such fiscal year; and if such amounts should exceed the monthly
fee, the Administrator shall pay to such series its share of such
excess expenses no later than the last day of the first month of
the next succeeding fiscal year. For the purposes of this
paragraph, the term "fiscal year" shall exclude the portion of
5
<PAGE>
the current fiscal year which shall have elapsed prior to the
date hereof and shall include the portion of the then current
fiscal year which shall have elapsed at the date of termination
of this Agreement.
EIGHTH:
(A) This Agreement shall go into effect at the
close of business on the date hereof.
(B) This Agreement may be terminated by the
Administrator at any time without penalty upon giving the Trust
sixty (60) days' written notice (which notice may be waived by
the Trust) and may be terminated by the Trust at any time without
penalty upon giving the Administrator sixty (60) days' written
notice (which notice may be waived by the Administrator).
NINTH: The Administrator will not be liable for any
error of judgment or mistake of law or any loss suffered by the
Trust or its shareholders in connection with the performance of
its duties under this Agreement, except a loss resulting from
wilful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of
its duties under this Agreement.
TENTH: A copy of the Agreement and Declaration of Trust
of the Trust is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Trust as Trustees and
not individually, and that the obligations of this instrument are
6
<PAGE>
not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Trust.
ELEVENTH: Any notice under this Agreement shall be in
writing, addressed and delivered, or mailed, postage paid, to the
other party at such address as such other party may designate for
the receipt of such notices. Until further notice to the other
party, it is agreed that the address of the Trust shall be 1345
Avenue of the Americas, New York, New York 10105, and the address
of the Administrator shall be 2 Journal Square Plaza, Jersey
City, New Jersey 07306.
IN WITNESS WHEREOF, the parties hereto have caused the
Agreement to be executed by their duly authorized officers as of
the day and year first above written.
ALLIANCE MONEY MARKET FUND
By:
ATTEST:
ADP FINANCIAL INFORMATION
SERVICES, INC.
By:
ATTEST:
7
00250217.AD8
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this 16th day of March, 1995, by
and between ALLIANCE MONEY MARKET FUND, a Massachusetts business
trust having its principal place of business at 1345 Avenue of
the Americas, New York, New York 10105 (hereinafter called the
"Fund") and The Bank of New York, a New York corporation
authorized to do a banking business, having its principal place
of business at 48 Wall Street, New York, New York 10286
(hereinafter called the "Bank").
W I T N E S S E T H:
In consideration of the mutual agreements herein
contained, the Fund and the Bank hereby agree as follows:
1. The Fund hereby appoints the Bank to perform the
duties hereinafter set forth.
2. The Bank hereby accepts appointment and agrees to
perform the duties hereinafter set forth.
3. Subject to the provisions of paragraphs 5 and 6
below, the Bank shall compute the net asset value per share of
the Fund and shall value the securities held by the Fund (the
"Securities") at such times and dates and in the manner specified
in the then currently effective Prospectus of the Fund. In the
event Schedule 1 hereto, as amended from time to time upon the
agreement of the Fund and the Bank, specifies series of a Fund
and/or classes of shares of the Fund or of a series, all
computations described with respect to the Fund or shares of the
Fund shall be made with respect to each series so specified and
the shares of each such series or such class.
4. Subject to the provisions of paragraphs 5 and 6
below, the Bank shall also compute the net income of the Fund for
dividend purposes and the net income per share at such times and
dates and in the manner specified in the then currently effective
Prospectus of the Fund.
5. To the extent valuation of Securities or
computation of a net asset value, net income for dividend
purposes, or net income per share as specified in the Fund's then
currently effective Prospectus is at any time inconsistent with
any applicable laws or regulations, the Fund shall immediately so
notify the Bank in writing and thereafter shall either furnish
the Bank at all appropriate times with the values of such
Securities, net asset value, net income for dividend purposes or
net income per share, as the case may be, or subject to the prior
<PAGE>
approval of the Bank, instruct the Bank in writing to value
Securities and compute net asset value, net income for dividend
purposes, and net income per share in a manner which the Fund
then represents in writing to be consistent with all applicable
laws and regulations. The Fund may also from time to time,
subject to the prior approval of the Bank, instruct the Bank in
writing to compute the value of the Securities, the Fund's net
asset value, net income for dividend purposes, or net income per
share in a manner other than as specified in paragraphs 3 and 4
of this Agreement. The Fund shall have sole responsibility for
determining the method of valuation of Securities and the method
of computing net asset value, net income for dividend purposes
and net income per share.
6. The Fund shall furnish the Bank with any and all
instructions, explanations, information, specifications and
documentation deemed necessary by the Bank in the performance of
its duties hereunder, including, without limitation, the amounts
or written formula for calculating the amounts and times of
accrual of Fund liabilities and expenses. The Fund shall also
furnish the Bank with bid, offer, or market values of Securities
if the Bank notifies the Fund that same are not available to the
Bank from a security pricing or similar service utilized, or
subscribed to, by the Bank which the Bank in its judgment deems
reliable at the time such information is required for
calculations hereunder. At any time and from time to time, the
Fund also may furnish the Bank with bid, offer, or market values
of Securities and instruct the Bank to use such information in
its calculations hereunder. The Bank shall at no time be
required or obligated to commence or maintain any utilization of,
or subscriptions to, any securities pricing or similar service.
7. The Bank shall advise the Fund and the Fund's
transfer agent of the net asset value, net income for dividend
purposes, and net income per share upon completion of the
computations required to be made by the Bank pursuant to this
Agreement.
8. The Bank shall, as agent for the Fund, maintain
and keep current the books, accounts and other documents (the
"Records") the Fund is required to maintain and preserve by the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder (the "Rules") with respect to the
computations by the Bank under this Agreement. Such Records
shall be preserved in accordance with the Rules and shall be made
available upon reasonable request for inspection by officers,
employees and auditors of the Fund during the Bank's normal
business hours.
9. Records maintained and preserved by the Bank
pursuant to this Agreement shall be and remain the property of
2
<PAGE>
the Fund and shall be surrendered to the Fund promptly upon
request in the form in which such Records have been maintained
and preserved. Upon reasonable request of the Fund, the Bank
shall provide in hard copy or on micro-film, whichever the Bank
shall elect, any Records included in any such delivery which are
maintained by the Bank on a computer disc, or are similarly
maintained, and the Fund shall reimburse the Bank for its
expenses of providing such hard copy or micro-film.
10. The Bank, in performing the services required of it
under the terms of this Agreement, shall be entitled to rely
fully on the accuracy and validity of any and all instructions,
explanations, information, specifications and documentation
furnished to it by the Fund and shall have no duty or obligation
to review the accuracy, validity or propriety of such
instructions, explanations, information, specifications or
documentation, including, without limitation, evaluations of
Securities; the amounts or formula for calculating the amounts
and times of accrual of liabilities and expenses; the amounts
receivable and the amounts payable on the sale or purchase of
Securities; and amounts receivable or amounts payable for the
sale or redemption of Fund shares effected by or on behalf of the
Fund. In the event the Bank's computations hereunder rely, in
whole or in part, upon information, including, without
limitation, bid, offer or market values of Securities or other
assets, or accruals of interest or earnings thereon, from a
pricing or similar service utilized, or subscribed to, by the
Bank which the Bank in its judgment deems reliable, the Bank
shall not be responsible for, under any duty to inquire into, or
deemed to make any assurances with respect to, the accuracy or
completeness of such information.
11. The Bank shall not be required to inquire into any
valuation of Securities or other assets by the Fund or any third
party described in preceding paragraph 10 hereof, even though the
Bank in performing services similar to the services provided
pursuant to this Agreement for others may receive different
valuations of the same or different securities of the same
issuers.
12. The Bank, in performing the services required of it
under the terms of this Agreement, shall not be responsible for
determining whether any interest accruable to the Fund is or will
be actually paid, but will accrue such interest until otherwise
instructed by the Fund.
13. The Bank shall not be responsible for delays or
errors which occur by reason of circumstances beyond its control
in the performance of its duties under this Agreement, including,
without limitation, labor difficulties within or without the
Bank, mechanical breakdowns, flood or catastrophe, acts of God,
3
<PAGE>
failures of transportation, communication or power supply, or
other similar circumstances. Nor shall the Bank be responsible
for delays or failures to supply the information or services
specified in this Agreement where such delays or failures are
caused by the failure of any person(s) other than the Bank to
supply any instructions, explanations, information,
specifications or documentation deemed necessary by the Bank in
the performance of its duties under this Agreement.
14. No provision of this Agreement shall prevent the
Bank from offering services similar or identical to those covered
by this Agreement to any other corporations, associations or
entities of any kind. Any and all operational procedures,
techniques and devices developed by the Bank in connection with
the performance of its duties and obligations under this
Agreement, including those developed in conjunction with the
Fund, shall be and remain the property of the Bank, and the Bank
shall be free to employ such procedures, techniques and devices
in connection with the performance of any other contract with any
other person whether or not such contract is similar or identical
to this Agreement.
15. The Bank may, with respect to questions of law,
apply to and obtain the advice and opinion of counsel to the Fund
or its own counsel and shall be entitled to rely on the advice or
opinion of such counsel. The costs of any such advice or opinion
shall be borne by the Fund.
16. The Bank shall be entitled to rely upon any oral
instructions received by the Bank and reasonably believed by the
Bank to be given by or on behalf of the Fund, even if the Bank
subsequently receives written instructions contradicting such
oral instructions. The books and records of the Bank with
respect to the content of any oral instruction shall be binding
and conclusive.
17. The Bank shall not be liable for any loss, damage
or expense, including counsel fees and other costs and expenses
of a defense against any claim or liability, resulting from,
arising out of, or in connection with its performance hereunder,
including its actions or omissions, the incompleteness or
inaccuracy of any specifications or other information furnished
by the Fund, or for delays caused by circumstances beyond the
Bank's control, unless such loss, damage or expense arises out of
the bad faith, negligence, or willful misconduct of the Bank. In
no event shall the Bank be liable to the Fund or any third party
for special, indirect, or consequential damages, or for lost
profits or loss of business, arising under or in connection with
this Agreement, even if previously informed of the possibility of
such damages and regardless of the form of action.
4
<PAGE>
18. Without limiting the generality of the foregoing,
the Fund shall indemnify the Bank against and save the Bank
harmless from any loss, damage or expense, including counsel fees
and other costs and expenses of a defense against any claim or
liability, arising from any one or more of the following:
(a) Errors in records or instructions,
explanations, information, specifications or documentation of any
kind, as the case may be, supplied to the Bank by any third party
described in preceding paragraph 10 hereof or by or on behalf of
the Fund;
(b) Action or inaction taken or omitted to be
taken by the Bank pursuant to written or oral instructions of the
Fund or otherwise without bad faith, negligence or willful
misconduct;
(c) Any action taken or omitted to be taken by the
Bank in good faith in accordance with the advice or opinion of
counsel for the Fund or its own counsel;
(d) Any improper use by the Fund or its agents,
distributor or investment advisor of any valuations or
computations supplied by the Bank pursuant to this Agreement;
(e) The method of valuation of the Securities and
the method of computing net asset value, net income for dividend
purposes, and net income per share; or
(f) Any bid, offer, market value or other
valuations of Securities, net asset value, net income for
dividend purposes, or net income per share provided by the Fund.
19. In consideration for all of the services to be
performed by the Bank as set forth herein the Bank shall be
entitled to receive reimbursement for all out-of-pocket expenses
and such compensation as may be agreed upon in writing from time
to time between the Bank and the Fund.
20. Attached hereto as Appendix A is a list of persons
duly authorized by the Board of Trustees of the Fund to execute
this Agreement and give any written or oral instructions, or
written or oral specifications, by or on behalf of the Fund.
From time to time the Fund may deliver a new Appendix A to add or
delete any person and the Bank shall be entitled to rely on the
last Appendix A actually received by the Bank.
21. The Fund represents and warrants to the Bank that
it has all requisite power to execute and deliver this Agreement,
to give any written or oral instructions contemplated hereby, and
to perform the actions or obligations contemplated to be
5
<PAGE>
performed by it hereunder, and has taken all necessary action to
authorize such execution, delivery, and performance. By giving
any instruction described in this Agreement to the Bank, the Fund
shall be deemed to have represented that such instruction is
consistent with all applicable laws and regulations and the then
currently effective Prospectus of the Fund.
22. This Agreement shall not be assignable by the Fund
without the prior written consent of the Bank, or by the Bank
without the prior written consent of the Fund.
23. Either of the parties hereto may terminate this
Agreement by giving the other party a notice in writing
specifying the date of such termination, which shall not be less
than ninety (90) days after the date of giving of such notice.
Upon the date set forth in such notice, the Bank shall deliver to
the Fund all Records then the property of the Fund and, upon such
delivery, the Bank shall be relieved of all duties and
responsibilities under this Agreement.
24. This Agreement may not be amended or modified in
any manner except by written agreement executed on behalf of both
parties hereto.
25. This Agreement is executed in the State of New York
and all laws and rules of construction of the State of New York
(other than those relating to choice of laws) shall govern the
rights, duties and obligations of the parties hereto.
26. The performance and provisions of this Agreement
are intended to benefit only the Bank and the Fund, and no rights
shall be granted to any other person by virtue of this Agreement.
27. A copy of the Agreement and Declaration of Trust of
the Fund is on file with the Secretary of The Commonwealth of
Massachusetts, and notice is hereby given that this instrument is
executed on behalf of the Trustees of the Fund as Trustees and
not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Fund;
provided, however, that the Declaration of Trust of the Fund
provides that the assets of a particular Series of the Fund shall
under no circumstances be charged with liabilities attributable
to any other Series of the Fund and that all persons extending
credit to, or contracting with or having any claim against a
particular Series of the Fund shall look only to the assets of
that particular Series for payment of such credit, contract or
claim.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.
6
<PAGE>
By:_______________________
Attest:
_______________________
THE BANK OF NEW YORK
By:_______________________
Name: Jorge Ramos
Title: Vice President
Attest:
_______________________
7
<PAGE>
SCHEDULE 1
Series and Classes
8
<PAGE>
APPENDIX A
I, , of ALLIANCE MONEY MARKET
FUND, a Massachusetts business trust (the "Fund"), do hereby
certify that:
The following individuals serve in the following
positions with the Fund, and each has been duly elected or
appointed by the Board of Trustees of the Fund to each such
position and qualified therefor in conformity with the Fund's
Declaration of Trust and By-Laws, and the signatures set forth
opposite their respective names are their true and correct
signatures. Each such person is authorized to give written or
oral instructions or written or oral specifications by or on
behalf of the Fund to the Bank.
Name Position Signature
_________________ ________________ _________________
9
00250217.AH3
SEWARD & KISSEL
One Battery Park Plaza
New York, N.Y. 10004
Telephone: (212) 574-1200x
Facsimile: (212) 480-8421
March 17, 1995
Alliance Money Market Fund
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
We have acted as counsel for Alliance Money Market
Fund, a Massachusetts business trust with transferable
shares (the "Trust"), in connection with the organization of
the Trust, the registration of the Trust under the
Investment Company Act of 1940, as amended, and the
registration under the Securities Act of 1933, as amended,
of an indefinite number of shares of beneficial interest,
without par value, of the Trust.
As counsel for the Trust, we have participated in
the preparation of Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (the "Registration
Statement") and the Prospectus and the Statement of
Additional Information contained therein (the "Prospectus"
and the "Statement of Additional Information," respectively)
relating to such shares and have examined and relied upon
such records of the Trust and such other documents,
including certificates as to factual matters, as we have
deemed to be necessary to render the opinions expressed
herein.
Based on such examination, we are of the opinion
that:
1. The Trust is validly existing as a trust
with transferable shares of the type commonly
called a Massachusetts business trust.
2. The Trust is authorized to issue an
unlimited number of shares. The shares to be
offered for sale by the Prospectus and the
Statement of Additional Information (being shares
representing interests in the Prime Portfolio, the
<PAGE>
Government Portfolio, the General Municipal
Portfolio, the New Jersey Municipal Portfolio, the
New York Municipal Portfolio, the California
Municipal Portfolio and the Connecticut Municipal
Portfolio of the Trust; which shares are
hereinafter referred to collectively as the
"Registered Shares") have been duly and validly
authorized by all requisite action of the Trustees
of the Trust, and no action of the shareholders of
the Trust is required in such connection.
3. When the Registered Shares have been duly
sold, issued and paid for as contemplated by the
Prospectus, the Registered Shares will be validly
and legally issued, fully paid and non-assessable
by the Trust.
With respect to the opinion stated in paragraph 3
above, we wish to point out that the shareholders of a
Massachusetts business trust may, under some circumstances,
be subject to assessment at the instance of creditors to pay
the obligations of such trust in the event that its assets
are insufficient for the purpose.
As to matters of Massachusetts law contained in the
foregoing opinion we have relied on the opinion of Sullivan
& Worcester of Boston, Massachusetts, dated March 17, 1995.
We hereby consent to the filing of this opinion
with the Securities and Exchange Commission as an exhibit to
the Registration Statement and to the reference to our firm
under the caption "General Information--Legal Matters" in
the Statement of Additional Information.
Very truly yours,
/s/ Seward & Kissel
2
00250217.AD5
<PAGE>
Boston
March 17, 1995
Seward & Kissel
One Battery Park Plaza
New York, N.Y. 10004
Re: ALLIANCE MONEY MARKET FUND
Ladies and Gentlemen:
You have requested our opinion as to certain matters of
Massachusetts law relating to the organization and shares of
Alliance Money Market Fund (originally named Alliance Omnibus
Reserves), a Massachusetts trust with transferable shares (the
"TRUST"), established under a Declaration of Trust dated October
26, 1994 and amended February 2, 1995 (as so amended, the
"ORIGINAL DECLARATION"), as restated and amended by a Restated
and Amended Declaration of Trust dated February 22, 1995 (the
"AMENDMENT", and the Original Declaration, as so restated and
amended, the "DECLARATION").
We have reviewed the Original Declaration and the Amendment,
the By-laws of the Trust, the actions taken by the trustees of
the Trust (the "TRUSTEES") to organize the Trust and to authorize
the issuance and sale of shares of beneficial interest, without
nominal or par value (the "SHARES"), of the seven separate and
distinct series known as the Prime Series, the Government Series,
the General Municipal Series, the New Jersey Municipal Series,
the New York Municipal Series, the California Municipal Series
and the Connecticut Municipal Series (collectively, the
"AUTHORIZED SERIES", and each singly, an "AUTHORIZED SERIES"),
each representing the beneficial interests in that one of the
seven separate, distinct and independent portfolios of the Trust
(collectively, the "AUTHORIZED PORTFOLIOS", and each singly, an
"AUTHORIZED PORTFOLIO") designated by the same name, which the
Trust desires to register for sale pursuant to the Registration
Statement referred to in the next paragraph.
In addition, we have examined copies of (a) the Trust's
Registration Statement on Form N-1A under the Securities Act of
1933, as amended (the "SECURITIES ACT"), Registration No. 33-
85850, relating to the Shares of the Authorized Series which the
Trust proposes to issue and sell pursuant thereto, and its
Registration Statement under the Investment Company Act of 1940,
as amended, Registration No. 811-8838, as originally filed with
the Securities and Exchange Commission (the "SEC") on October 31,
1994 (collectively, the "REGISTRATION STATEMENT"), and (b)
undated drafts of (i) pre-effective Amendment No. 1 to the
<PAGE>
Registration Statement (the "AMENDMENT"), which you have advised
us is about to be filed with the SEC (the Registration Statement,
as so amended, the "AMENDED REGISTRATION STATEMENT"), and (ii)
the Prospectus (the "PROSPECTUS") and the Statement of Additional
Information (the "SAI") which are to form part of the Amended
Registration Statement.
We have also examined certificates of Trustees, of officers
of the Trust as to matters of fact, including in particular the
Trustee action taken to authorize the issuance of Shares of each
of the Prime Series, the Government Series and the General
Municipal Series (the "INITIAL SERIES", and such Shares, the
"OUTSTANDING SHARES") to Alliance Capital Management L.P., for an
aggregate purchase price of $100,000 and the issuance and sale by
the Trust to the public, in the manner contemplated by, and
pursuant to, the Amended Registration Statement, of Shares of
each of the Authorized Series (the "ADDITIONAL SHARES"), and such
other documents and instruments, and such questions of law and
fact, as we have considered necessary or appropriate for purposes
of the opinions expressed herein. We have assumed the
genuineness of the signatures on, and the authenticity of, all
documents furnished to us, and the conformity to the originals of
documents submitted to us as copies, which facts we have not
independently verified.
Based upon and subject to the foregoing, we hereby advise you
that, in our opinion, under the laws of Massachusetts:
1. The Trust is validly existing as a trust with
transferable shares of the type commonly called a
Massachusetts business trust.
2. The Trust is authorized to issue an unlimited number of
Shares of each Authorized Series; the Outstanding Shares
and the Additional Shares have been duly and validly
authorized by all requisite action of the Trustees, and
no action of the shareholders of the Trust is required
in such connection.
3. The Outstanding Shares are, and when Additional Shares
have been duly sold, issued and paid for as contemplated
by the Prospectus and the SAI included in the Amended
Registration Statement such Additional Shares will be,
validly and legally issued, fully paid and non-
assessable by the Trust.
With respect to the opinion stated in paragraph 3 above, we
wish to point out that the shareholders of a Massachusetts
business trust may under some circumstances be subject to
assessment at the instance of creditors to pay the obligations of
2
<PAGE>
such trust in the event that its assets are insufficient for the
purpose.
This letter expresses our opinions as to the provisions of
the Declaration and the laws of Massachusetts applying to
business trusts generally, but does not extend to the
Massachusetts Securities Act, or to federal securities or other
laws.
You may rely upon the foregoing opinions in rendering the
opinions on the same matters which are to be set forth in the
opinion letter which the Trust is to file with the Amendment as
an exhibit to the Registration Statement, and we hereby consent
to the reference to us in the Prospectus, and to the filing of
this letter with the SEC as an exhibit to the Registration
Statement. In giving such consent, we do not thereby concede
that we fall within the category of persons whose consent is
required under Section 7 of the Securities Act.
Very truly yours,
/s/Sullivan & Worcester
SULLIVAN & WORCESTER
3
00250217.AG7
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use of our report dated March
14, 1995 on the financial statements of Alliance Money Market
Fund Prime, Government and General Municipal Portfolios referred
to therein in Pre-Effective Amendment No.1 to the Registration
Statement on Form N-1A, file No. 33-85850, as filed with the
Securities and Exchange Commission.
We also consent to the references to our firm in each of
the Statements of Additional Information under the caption
"Accountants."
/s/ MCGLADREY & PULLEN, LLP
New York, New York
March 14, 1995
00250217.AF9
March 16, 1995
Alliance Money Market Fund
1345 Avenue of the Americas
New York, New York 10105
Gentlemen:
In connection with our purchase of 100,000 shares
of beneficial interest of Alliance Money Market Fund, for an
aggregate cash consideration of one hundred thousand dollars
($100,000), representing 33,334 shares of the Prime
Portfolio, 33,333 shares of the Government Portfolio and
33,333 shares of the General Municipal Portfolio, this will
confirm that we are buying such shares for investment for
our own account only, and not with a view to reselling or
otherwise distributing them.
Very truly yours,
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its general partner
By /s/ Edmund P. Bergan, Jr.
-------------------------
00250217.AH2
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of The Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
William L. Rhoads III
------------------------
William L. Rhoads III
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Robert J. Casale
-------------------
Robert J. Casale
Dated: February 13, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Carl D. Ingrassia
-----------------
Carl D. Ingrassia
Dated: February 13, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
John D. Carifa
--------------
John D. Carifa
Dated: February 13, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
James P. Syrett
---------------
James P. Syrett
Dated: March 7, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Richard S. Borisoff
-------------------
Richard S. Borisoff
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Jeffrey M. Cole
---------------
Jeffrey M. Cole
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
William H. Foulk, Jr.
---------------------
William H. Foulk, Jr.
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Arthur S. Kranseler
-------------------
Arthur S. Kranseler
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Robert A. Lewis
---------------
Robert A. Lewis
Dated: January 23, 1995
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below hereby revokes all prior powers granted
by the undersigned to the extent inconsistent herewith and
constitutes and appoints John D. Carifa, Edmund P. Bergan, Jr.
and Emilie D. Wrapp, and each of them, to act severally as
attorneys-in-fact and agents, with power of substitution and
resubstitution, for the undersigned, solely for the purpose of
signing on such person's behalf any Registration Statement on
Form N-1A, and any amendments thereto, of the Alliance Money
Market Fund and filing the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact, or their substitute or substitutes, may
do or cause to be done by virtue hereof.
Clifford L. Michel
------------------
Clifford L. Michel
Dated: January 23, 1995
00250217.AF0
