As filed with the Securities and Exchange Commission on November 2, 2016
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 2
Post-Effective Amendment No.
-------------------------
AB CAP FUND, INC.
(Exact Name of Registrant as Specified in Charter)
1345 Avenue of the Americas, New York, New York 10105
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code:
(800) 221-5672
-------------------------
EMILIE D. WRAPP
AllianceBernstein L.P.
1345 Avenue of the Americas
New York, New York 10105
(Name and address of agent for service)
Copies of communications to:
Paul M. Miller
Seward & Kissel LLP
901 K Street, NW
Suite 800
Washington, D.C. 20001
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
The Registrant hereby amends this registration statement 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 Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
No filing fee is required because an indefinite number of shares has previously
been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940,
as amended.
THE AB PORTFOLIOS
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800) 324-5060
November [__], 2016
Dear Shareholder:
The Board of Trustees (the "Trustees") of The AB Portfolios (the "Trust"),
a Massachusetts business trust and an open-end management investment company, is
asking the shareholders of the AB Conservative Wealth Strategy, a series of the
Trust (the "Acquired Fund"), to approve an Agreement and Plan of Acquisition and
Liquidation (the "Plan") providing for the acquisition of the assets and
assumption of the liabilities of the Acquired Fund by AB All Market Income
Portfolio (the "Acquiring Fund"), a series of AB Cap Fund, Inc. (the "Company"),
a Maryland corporation and an open-end management investment company. For this
purpose, the Trustees have approved a Special Meeting of Shareholders of the
Acquired Fund (the "Meeting") to be held on January 30, 2017.
The proposed acquisition (the "Acquisition") is described in more detail
in the attached Proxy Statement/Prospectus. You should review the Proxy
Statement/Prospectus carefully and retain it for future reference. If the
shareholders of the Acquired Fund approve the Plan providing for the Acquisition
at the Meeting, the Acquisition is expected to be completed on or about February
28, 2017.
The Adviser and Trustees believe the Acquisition will benefit shareholders
of the Acquired Fund because they believe that the investment approach of the
Acquiring Fund is better able to generate return in various market environments,
including the current low-yield environment. In addition, the Acquisition will
result in shareholders of the Acquired Fund owning an investment with a lower
expense ratio at least through February 28, 2018. The Acquisition is intended to
be tax-free to the shareholders of the Acquired Fund for federal income tax
purposes.
The Trustees have given careful consideration to the proposed Plan and the
Acquisition and have concluded that the Acquisition is in the best interests of
the Acquired Fund. The Trustees unanimously recommend that you vote "for" the
proposed Plan providing for the Acquisition.
We welcome your attendance at the Meeting. If you are unable to attend, we
encourage you to authorize proxies to vote your shares. Computershare Fund
Services, a proxy solicitation firm (the "Proxy Solicitor"), has been selected
to assist in the proxy solicitation process. If we have not received your proxy
as the date of the Meeting approaches, you may receive a telephone call from the
Proxy Solicitor to remind you to authorize a proxy to vote your shares. No
matter how many shares you own, your vote is important.
Sincerely,
Robert M. Keith
President
THE AB PORTFOLIOS
AB Conservative Wealth Strategy
1345 Avenue of the Americas
New York, New York 10105
Toll Free (800) 324-5060
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2017
To the Shareholders of AB Conservative Wealth Strategy:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Meeting") of AB Conservative Wealth Strategy (the "Acquired Fund"), a series of
The AB Portfolios (the "Trust"), a Massachusetts business trust and an open-end
management investment company, is to be held at 2:30 p.m. Eastern time at the
offices of AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New
York l0105, on January 30, 2017.
At the Meeting you will be asked to consider and approve an Agreement and
Plan of Acquisition and Liquidation (the "Plan") providing for the acquisition
of all of the assets of the Acquired Fund in exchange for shares of AB All
Market Income Portfolio (the "Acquiring Fund"), a series of AB Cap Fund, Inc., a
Maryland corporation and an open-end management investment company, the
assumption by the Acquiring Fund of all of the liabilities of the Acquired Fund
and the termination of the Acquired Fund.
Record owners of shares of the Acquired Fund as of the close of business
on November 1, 2016, are entitled to vote at the Meeting or any adjournments or
postponements thereof. If you attend the Meeting, you may vote your shares in
person. If you do not attend the Meeting, you may authorize a proxy to vote your
shares by completing, signing and returning the enclosed proxy card by mail in
the envelope provided, or by following the instructions on the proxy card to
authorize a proxy to vote your shares by telephone or the Internet.
Your vote is important. If you have any questions, please contact us
toll-free at (800) 324-5060 for additional information.
By order of the Board of Trustees
Sincerely,
---------------
Emilie Wrapp
Secretary
November [__], 2016
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IMPORTANT -- WE URGE YOU TO SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
IN THE ENCLOSED ADDRESSED ENVELOPE, WHICH REQUIRES NO POSTAGE AND IS INTENDED
FOR YOUR CONVENIENCE. YOU ALSO MAY VOTE THROUGH THE INTERNET, BY VISITING THE
WEBSITE ADDRESS ON YOUR PROXY CARD, OR BY TELEPHONE, BY USING THE TOLL-FREE
NUMBER ON YOUR PROXY CARD. YOUR PROMPT VOTE MAY SAVE AB CONSERVATIVE WEALTH
STRATEGY THE NECESSITY OF FURTHER SOLICITATIONS TO ENSURE A QUORUM AT THE
MEETING. IF YOU CAN ATTEND THE MEETING AND WISH TO VOTE YOUR SHARES IN PERSON AT
THAT TIME, YOU WILL BE ABLE TO DO SO.
--------------------------------------------------------------------------------
THE AB PORTFOLIOS
AB Conservative Wealth Strategy
1345 Avenue of the Americas
New York, New York 10105
Toll Free: (800) 324-5060
QUESTIONS AND ANSWERS
The following questions and answers provide an overview of key features of the
proposed acquisition and of the information contained in the attached Combined
Proxy Statement and Prospectus ("Proxy Statement/Prospectus"). Please review
the full Proxy Statement/Prospectus before casting your vote or authorizing a
proxy to vote your shares.
1. What is this document and why was it sent to you?
The attached Proxy Statement/Prospectus provides you with information
about the proposed acquisition of the assets and liabilities of AB Conservative
Wealth Strategy (the "Acquired Fund"), a series of The AB Portfolios (the
"Trust"), a Massachusetts business trust and an open-end management investment
company, by AB All Market Income Portfolio (the "Acquiring Fund," and, together
with the Acquired Fund, the "Funds"), a series of AB Cap Fund, Inc. (the
"Company"), an open-end management investment company organized as a Maryland
corporation (the "Acquisition"). The purposes of the Proxy Statement/Prospectus
are to (1) solicit votes from shareholders of the Acquired Fund to approve the
Agreement and Plan of Acquisition and Liquidation, between the Trust, on behalf
of the Acquired Fund, and the Company, on behalf of the Acquiring Fund (the
"Plan"), and (2) register the shares of, and provide information about, the
Acquiring Fund.
This Proxy Statement/Prospectus contains information that shareholders of
the Acquired Fund should know before voting on the Acquisition. The Proxy
Statement/Prospectus should be retained for future reference.
2. Do the Funds have similar investment objectives and principal investment
strategies?
The Funds have similar investment objectives and multi-asset exposures.
The Acquiring Fund's investment objective is to seek current income with
consideration of capital appreciation, and the Acquired Fund's investment
objective is to achieve a high total return without, in the opinion of the
Adviser, undue risk to principal. The Acquired Fund is structured as a fund of
funds and seeks to achieve its investment objective by investing in a
combination of affiliated investment companies ("Underlying Portfolios")
representing a variety of asset classes and investment styles(1). The Acquiring
Fund is not structured as a fund of funds and seeks to achieve its investment
objective by making direct investments. Most of the assets of the Acquired Fund
are invested through Underlying Portfolios in high quality bonds, which have not
generated substantial income in recent years and may decline in value if
interest rates rise. In contrast, the Acquiring Fund's focus on income has
allowed it to generate return through investments in high-yield debt securities,
income-producing equity securities, and derivative strategies intended to
generate income, without a substantially higher risk profile than that of the
Acquired Fund.
--------
(1) The Acquired Fund's Board of Trustees recently approved changes to the
principal strategies of the Fund. The Fund will no longer seek to
achieve its objective by investing in the Underlying Portfolios.
Instead, the Acquired Fund will seek to achieve its objective by
investing primarily directly in securities and other investments, while
continuing to invest a portion of its assets in certain Underlying
Portfolios, in accordance with its targeted percentages in certain
asset classes and investment styles. It is anticipated that these
changes will take effect on or about January 26, 2017.
3. What is the purpose of the Acquisition?
The purpose of the Acquisition is to transfer the assets and liabilities
of the Acquired Fund to the Acquiring Fund. As discussed in the Proxy
Statement/Prospectus, after carefully considering the recommendation of the
Adviser, the Board approved the Acquisition and Plan and submission of the Plan
to shareholders of the Acquired Fund for their approval. In reaching this
conclusion, the Trustees considered, among other factors:
o the continuity of management, as the Acquiring Fund will have the
same Adviser and certain of the same portfolio managers, and will be
overseen by the same Directors/Trustees and be serviced by the same
service providers as the Acquired Fund;
o the Adviser's belief that the investment approach of the Acquiring
Fund is better able to generate return in various market
environments, including the current low-yield environment, resulting
in better outcomes for shareholders as well as the opportunity for
asset growth and the potential for expense ratio reductions that
would accompany such growth;
o the historical investment performance of both Funds, and the
similarities and differences in their respective investment
objectives and policies;
o that the Acquiring Fund currently pays a higher advisory fee than
the Acquired Fund, but its net expenses are lower than the Acquired
Fund's expenses due to a contractual fee waiver/expense
reimbursement agreement in effect through February 28, 2018, and
that, if the Plan is approved by the Acquired Fund's shareholders,
the Adviser has agreed to lower the Acquiring Fund's advisory fee in
connection with the Acquisition to match the advisory fee schedule
of the Acquired Fund, as well as the gross and net pro forma
expenses of the Acquiring Fund after the Acquisition;
o the costs of the Acquisition and the allocation thereof; and
o that the Acquisition is intended to be a tax-free reorganization
within the meaning of the regulations under Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"). This means
that it is intended that shareholders of the Acquired Fund will
become shareholders of the Acquiring Fund without realizing any gain
or loss for federal income tax purposes. However, the IRS may
disagree with the position that the Acquisition is a tax-free
reorganization, and shareholders of the Acquired Fund could realize
gain or loss (as applicable) when they become shareholders of the
Acquiring Fund.
The Acquisition will not occur unless it is approved by the holders of
majority of the Acquired Fund's outstanding voting securities as defined in the
Investment Company Act of 1940, as amended, which means (a) 67% or more of the
shares of the Acquired Fund represented at a meeting at which more than 50% of
the outstanding shares are present in person or by proxy or (b) more than 50% of
the outstanding shares of the Acquired Fund, whichever is less. The Trustees
unanimously recommend that you vote "FOR" the Acquisition.
4. How will the proposed Acquisition work?
Subject to the approval of the shareholders of the Acquired Fund, the Plan
provides for:
o the transfer of all of the assets of the Acquired Fund in exchange
for shares of the Acquiring Fund and the assumption by the Acquiring
Fund of all of the liabilities of the Acquired Fund;
o the distribution of the shares of the Acquiring Fund received by the
Acquired Fund to shareholders of the Acquired Fund; and
o the termination of the Acquired Fund.
If the Plan is approved by the Acquired Fund's shareholders at the Special
Meeting of Shareholders to be held on January 30, 2017 (the "Meeting"), the
Acquisition is expected to occur on or about February 28, 2017.
5. How will the Acquisition affect shareholders of the Acquired Fund?
Shareholders of the Acquired Fund will receive the same class of shares
that they hold in the Acquired Fund at the time of the Acquisition, except that
Class B shareholders of the Acquired Fund will receive Class A shares of the
Acquiring Fund. The shares of the Acquiring Fund that an Acquired Fund
shareholder receives will have an aggregate net asset value ("NAV") equal to the
NAV of shares held by the shareholder in the Acquired Fund as of the time that
the shares of the Acquired Fund and Acquiring Fund (each, a "Fund" and together,
the "Funds") are valued for determining NAV for the Acquisition (4:00 p.m.
Eastern time, on the day before the date of the closing of the Acquisition (the
"Closing Date"), or such other date and time as may be agreed upon by the
parties to the Plan (the "Valuation Time"). Shareholders of the Acquiring Fund
will be able to redeem their Acquiring Fund shares at any time for such shares'
then-current NAV after the Acquisition.
6. Who is eligible to vote on the Acquisition?
Shareholders of record of the Acquired Fund at the close of business on
November 1, 2016 (the "Record Date") are entitled to notice of, and to vote at,
the Meeting or any adjournment or postponement thereof. If you held Acquired
Fund shares on the Record Date, you have the right to vote even if you later
sold your shares. Each share is entitled to one vote. Shares represented by
properly executed proxies, unless the proxies are revoked before or at the
Meeting, will be voted according to shareholders' instructions. If you date,
sign and return a proxy but do not fill in a vote, your shares will be voted
"FOR" the Acquisition. If any other business properly comes before the Meeting,
your shares will be voted at the discretion of the persons named as proxies.
7. Who manages the Acquiring Fund?
The Adviser serves as investment adviser to the Acquiring Fund and the
Acquired Fund. The Adviser manages assets totaling approximately $490 billion as
of September 30, 2016, of which approximately $96 billion represented assets of
registered investment companies sponsored by the Adviser. As of September 30,
2016, the Adviser advises 31 registered investment companies, comprising 129
separate investment portfolios.
The day-to-day management of, and investment decisions for, the Acquired
Fund are made by Daniel J. Loewy, Christopher H. Nikolich and Vadim Zlotnikov.
The day-to-day management of, and investment decisions for, the Acquiring Fund
are made by Mr. Loewy, Mr. Zlotnikov and Morgan C. Harting.
The Acquiring Fund is overseen by the same Board of Directors/Trustees as
the Acquired Fund.
8. How will the Acquisition affect the advisory fees and expenses?
The Acquiring Fund currently pays a higher advisory fee than the Acquired
Fund, but its net expenses are lower than the Acquired Fund's expenses due to a
contractual fee waiver/expense reimbursement agreement in effect at least
through February 28, 2018. If the Plan is approved by the Acquired Fund's
shareholders, the Adviser has agreed to lower the Acquiring Fund's advisory fee
in connection with the Acquisition to match the advisory fee schedule of the
Acquired Fund.
9. What happens if shareholders of the Acquired Fund do not approve the Plan?
If shareholders of the Acquired Fund do not approve the Plan, the
Acquisition will not occur. The Trustees of the Acquired Fund may consider other
alternatives for the Fund in such event.
10. Who is paying the expenses of the Acquisition?
The Funds will bear 50% of the costs and expenses of the Acquisition,
allocated to each Fund based on the respective net assets of the total net
assets of both Funds, with the other 50% being borne by the Adviser. In
addition, it is expected that the Adviser will bear the costs and expenses of
the Acquisition allocable to the Acquiring Fund pursuant to the fee
waiver/expense reimbursement agreement in effect for the Acquiring Fund.
The total costs and expenses of the Acquisition are estimated to
be approximately $243,000.
The Funds ordinarily bear certain expenses such as brokerage commissions
and any other transaction charges, as well as interest on borrowed money, and
will bear these expenses and any extraordinary expenses that may be associated
with the Acquisition.
11. Who do I call if I have questions about the Meeting or the Acquisition?
If you have any questions about the Meeting or the Acquisition, please
call AllianceBernstein Investor Services, Inc. toll-free at (800) 324-5060 from
9:00 a.m. to 5:00 p.m. Eastern time, or Computershare Fund Services, the
Acquired Fund's proxy solicitor, at (800) 708-7956.
12. Where may I find additional information regarding the Acquired Fund and
the Acquiring Fund?
Additional information relating to the Acquired Fund and the Acquiring
Fund has been filed with the Securities and Exchange Commission ("SEC") and can
be found in the following documents, which are incorporated into the Proxy
Statement/Prospectus by reference:
o The Statement of Additional Information dated as of November [__],
2016 that has been filed with the SEC in connection with the Proxy
Statement/Prospectus (the "Acquisition SAI");
o The audited financial statements and related independent registered
public accounting firm's report for the Acquired Fund contained in
its annual report for the fiscal year ended August 31, 2016;
o The unaudited financial statements for the six-month period ended
February 29, 2016 contained in the Acquired Fund's semi-annual
report;
o The audited financial statements and related independent registered
public accounting firm's report for the Acquiring Fund contained in
its annual report for the fiscal period ended November 30, 2015; and
o The unaudited financial statements for the six-month period ended
May 31, 2016 contained in the Acquiring Fund's semi-annual report.
Copies of the annual and semi-annual reports to shareholders of the
Acquired Fund and the Acquiring Fund are available, along with the Proxy
Statement/Prospectus and Acquisition SAI, upon request, without charge, by
writing to the address or calling the telephone number listed below.
By mail: c/o AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By phone: (800) 324-5060
You may also view or obtain these documents from the SEC:
In person: at the SEC's Public Reference Room in Washington, DC
By phone: 1-202-551-8090 (for information on the operations of the Public
Reference Room only)
By mail: Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, DC 20549 (copies may be obtained at prescribed
rates)
On the Internet: www.sec.gov
o The SEC has not approved or disapproved these securities or passed
upon the adequacy of the Proxy Statement/Prospectus. Any
representation to the contrary is a criminal offense.
PROXY STATEMENT/PROSPECTUS
NOVEMBER [__], 2016
FOR THE ACQUISITION OF
AB Conservative Wealth Strategy
a series of The AB Portfolios
1345 Avenue of the Americas
New York, New York 10105
BY
AB All Market Income Portfolio
a series of AB Cap Fund, Inc.
1345 Avenue of the Americas
New York, New York l0105
(800) 324-5060
This Combined Proxy Statement and Prospectus (the "Proxy
Statement/Prospectus") is being sent to you in connection with the solicitation
of proxies by the Board of Trustees of The AB Portfolios (the "Trust"), a
Massachusetts business trust, on behalf of its series AB Conservative Wealth
Strategy (the "Acquired Fund"), for use at a Special Meeting of Shareholders
(the "Meeting") of the Acquired Fund at 2:30 p.m. Eastern time at the principal
executive offices of AllianceBernstein, L.P., the investment adviser to the
Acquired Fund (the "Adviser"), located at 1345 Avenue of the Americas, New York,
New York 10105, on January 30, 2017.
At the Meeting you will be asked to consider and vote upon the following
proposal (the "Proposal"):
To approve an Agreement and Plan of Acquisition and Liquidation (the
"Plan") providing for the acquisition of the assets and assumption
of the liabilities of the Acquired Fund by AB All Market Income
Portfolio (the "Acquiring Fund"), a series of AB Cap Fund, Inc. (the
"Company"), a Maryland corporation, and the termination of the
Acquired Fund in exchange for shares of a corresponding class of
shares of the Acquiring Fund (the "Acquisition"), as described in
the table below:
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AB Conservative Wealth Strategy AB All Market Income Portfolio
(Acquired Fund) (Acquiring Fund)
--------------------------------------------------------------------
Class A Class A
Class B* Class A
Class C Class C
Advisor Class Advisor Class
Class R Class R
Class K Class K
Class I Class I
--------------------------------------------------------------------
* The Acquiring Fund does not offer, and does not intend to offer,
Class B shares. Class B shareholders of the Acquired Fund will
receive Class A shares of the Acquiring Fund in connection with
the Acquisition at net asset value ("NAV").
Each of the Trust and the Company is an open-end management investment
company registered with the Securities and Exchange Commission (the "SEC").
This Proxy Statement/Prospectus sets forth the basic information you
should consider before voting on the Proposal. You should read it and keep it
for future reference.
If the Proposal is approved, the Acquisition will be accomplished through
the transfer of all of the assets of the Acquired Fund to the Acquiring Fund in
exchange for shares of the Acquiring Fund, which will be distributed to
shareholders of the Acquired Fund, and the assumption by the Acquiring Fund of
the Acquired Fund's liabilities. The shares of the Acquiring Fund that a
Acquired Fund shareholder receives will have a total NAV equal to the NAV of
shares held by the shareholder in the Acquired Fund as of the Valuation Time.
Since Acquired Fund shareholders will receive Class A, Class C, Advisor Class,
Class R, Class K or Class I shares of the Acquiring Fund, this Prospectus/Proxy
Statement also serves as a prospectus for the offering of Class A, C, Advisor,
R, K and I shares of the Acquiring Fund in connection with the Acquisition.
The Acquired Fund expects that this Proxy Statement/Prospectus will be
distributed on or about November [__], 2016.
Additional information relating to the Funds and this Proxy
Statement/Prospectus is set forth in the Statement of Additional Information to
this Proxy Statement/Prospectus dated November [__], 2016 (the "Acquisition
SAI"), which is incorporated herein by reference. Additional information about
the Funds has been filed with the SEC and is available upon request and without
charge by writing to the applicable Fund or by calling (800) 324-5060.
Important Notice Regarding Availability of Proxy Materials for the Meeting to Be
Held on January 30, 2017. The Proxy Statement is available on the Internet at
www.abglobal.com/abfundsproxy.
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THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES NOR HAS IT PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
Page
PROPOSAL APPROVAL OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION........6
SUMMARY........................................................................7
COMPARISON OF INVESTMENT MANAGEMENT FEES AND OPERATING EXPENSES..........7
COMPARISON OF INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT
STRATEGIES........................................................14
COMPARISON OF BENCHMARKS................................................18
COMPARISON OF FUND SHARES...............................................18
COMPARISON OF PURCHASE AND REDEMPTION PROCEDURES........................19
SERVICE PROVIDERS.......................................................19
COMPARISON OF BUSINESS STRUCTURES.......................................19
FEDERAL INCOME TAX CONSEQUENCES.........................................19
PRINCIPAL RISKS...............................................................20
PRINCIPAL RISKS OF BOTH THE ACQUIRED FUND AND ACQUIRING FUND............20
ADDITIONAL PRINCIPAL RISKS OF THE ACQUIRED FUND.........................21
ADDITIONAL PRINCIPAL RISKS OF THE ACQUIRING FUND........................21
INFORMATION ABOUT THE ACQUISITION.............................................22
INTRODUCTION............................................................22
DESCRIPTION OF THE PLAN.................................................22
REASONS FOR THE ACQUISITION AND BOARD CONSIDERATION OF THE PLAN
AND ACQUISITION...................................................23
DESCRIPTION OF THE SECURITIES TO BE ISSUED..............................25
DIVIDENDS AND OTHER DISTRIBUTIONS.......................................25
SHARE CERTIFICATES......................................................26
FEDERAL INCOME TAX CONSEQUENCES.........................................26
CAPITALIZATION INFORMATION..............................................27
INFORMATION ABOUT THE FUNDS...................................................27
MANAGEMENT OF THE FUNDS.................................................27
ADVISORY AGREEMENTS AND FEES............................................33
DISTRIBUTION ARRANGEMENTS...............................................34
ADMINISTRATIVE AND TRANSFER AGENCY ARRANGEMENTS.........................34
VOTING INFORMATION............................................................34
LEGAL MATTERS.................................................................35
FINANCIAL HIGHLIGHTS..........................................................35
INFORMATION FILED WITH THE SEC................................................36
Appendix A FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION........A-1
Appendix B CERTAIN INFORMATION APPLICABLE TO SHARES OF THE ACQUIRING FUND...B-1
Appendix C COMPARISON OF BUSINESS STRUCTURE AND ORGANIZATION................C-1
Appendix D CAPITALIZATION...................................................D-1
Appendix E SHARE OWNERSHIP INFORMATION......................................E-1
PROPOSAL
APPROVAL OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
The Board of Trustees (the "Board" or the "Trustees") of the Trust
approved the Plan at a meeting of the Board held on September 21, 2016. Subject
to the approval of the shareholders of the Acquired Fund, the Plan provides for:
o the transfer of all of the assets of the Acquired Fund to the
Acquiring Fund in exchange for shares of the Acquiring Fund and the
assumption by the Acquiring Fund of all of the liabilities of the
Acquired Fund;
o the distribution of Class A, Class C, Advisor Class, Class R, Class
K or Class I shares of the Acquiring Fund to the shareholders of the
Acquired Fund; and
o the liquidation and termination of the Acquired Fund.
Each shareholder of the Acquired Fund will become the owner of the number
of full and fractional Class A, Class C, Advisor Class, Class R, Class K or
Class I shares, as applicable, of the Acquiring Fund having an NAV equal to the
aggregate NAV of the shareholder's Acquired Fund shares as of the Valuation
Time. It is intended that shareholders of the Acquired Fund should recognize no
gain or loss for federal income tax purposes in connection with the Acquisition.
If the Proposal is approved by the shareholders of the Acquired Fund, the
Acquisition is expected to occur on or about February 28, 2017.
The shareholders of the Acquired Fund must approve the Proposal in order
for the Acquisition to occur. Approval of the Proposal requires the affirmative
vote of the holders of a majority of the Acquired Fund's outstanding voting
securities as defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), which means (a) 67% or more of the shares of the Acquired Fund
represented at a meeting at which more than 50% of the outstanding shares are
present in person or by proxy or (b) more than 50% of the outstanding shares of
the Acquired Fund, whichever is less. The Acquisition does not require approval
of the shareholders of the Acquiring Fund.
A quorum for the transaction of business by shareholders of the Acquired
Fund at the Meeting will consist of the presence in person or by proxy of the
holders of 30% of the aggregate number of outstanding shares of the Acquired
Fund entitled to vote at the Meeting.
Based on their consideration of, among other factors, the benefits
expected to be received by shareholders of the Acquired Fund in becoming
shareholders of the Acquiring Fund, the Trustees of the Trust concluded that the
Acquisition is in the best interests of the Acquired Fund. In reaching this
conclusion, the Trustees considered: the continuity of management, as the
Acquiring Fund will have the same Adviser and certain of the same portfolio
managers, and will be overseen by the same Directors/Trustees and be serviced by
the same service providers as the Acquired Fund; the Adviser's belief that the
investment approach of the Acquiring Fund is better able to generate return in
various market environments, including the current low-yield environment, and to
result in more favorable outcomes to shareholders as well as the opportunity for
asset growth and the potential for expense ratio reductions; the historical
investment performance of the Funds, and the similarities and differences in
their respective investment objective and policies; the gross and net pro forma
expenses of the Acquiring Fund after the Acquisition and that the Acquiring Fund
currently pays a higher advisory fee than the Acquired Fund, but its total net
expenses are lower than the Acquired Fund's expenses due to a contractual fee
waiver/expense reimbursement agreement in effect at least through February 28,
2018, and that the Adviser has agreed to contractually lower the Acquiring
Fund's advisory fee after the Acquisition to match the advisory fee schedule of
the Acquired Fund; the costs of the Acquisition and the allocation thereof; and
the expectation that the Acquired Fund and its shareholders should not recognize
any gain or loss upon the Acquisition for federal income tax purposes.
The Trustees unanimously recommend that shareholders of the Acquired Fund
vote "FOR" the Plan.
For a more complete discussion of the factors considered by the Trustees
in approving the Acquisition, see "Information about the Acquisition - Reasons
for the Acquisition."
SUMMARY
The following summary compares certain features of the Funds and discusses
the primary federal tax consequences of the Acquisition to the Funds and their
shareholders. This summary is not complete and does not contain all of the
information that you should consider before voting on the Plan. This Summary is
qualified in its entirety by reference to the additional information contained
elsewhere in this Proxy Statement/Prospectus and the Plan, a form of which is
attached to this Proxy Statement/Prospectus as Appendix A. Shareholders of the
Acquired Fund should read this entire Proxy Statement/Prospectus carefully. For
additional information about the Acquiring Fund, please read the prospectus of
the Acquiring Fund. This Proxy Statement/Prospectus, the accompanying Notice of
Special Meeting of Shareholders, and the enclosed Proxy Card are being
distributed to shareholders of the Acquired Fund on or about November [__],
2016.
The Acquired Fund is a series of the Trust, an open-end management
investment company that is organized as a Massachusetts business trust. The
Acquiring Fund is a series of the Company, an open-end management investment
company that is organized as a Maryland corporation. The Acquiring Fund's
investment objective is to seek current income with consideration of capital
appreciation, and the Acquired Fund's investment objective is to achieve a high
total return without, in the opinion of the Adviser, undue risk to principal.
The Acquired Fund is a diversified investment company, and the Acquiring Fund is
a non-diversified investment company.
The Acquiring Fund will be the accounting survivor in the Acquisition.
Comparison of Investment Management Fees and Operating Expenses
Investment Management Fees
The investment advisory fee of the Acquired Fund consists of a base fee of
0.55% of the first $2.5 billion of the Acquired Fund's average daily net assets;
0.45% of the excess of $2.5 billion up to $5 billion; and 0.40% of the excess
over $5 billion, which fee accrues daily and is paid monthly. For the Acquired
Fund, the Adviser furnishes or pays the expenses of the Trust for office space,
facilities and equipment, services of executives and other personnel of the
Trust who are affiliated with the Adviser and certain administrative services.
The investment advisory fee of the Acquiring Fund consists of a fee of
0.70% of the Acquiring Fund's average daily net assets, which fee accrues daily
and is paid monthly. In addition, the Acquiring Fund reimburses the Adviser for
the costs of providing certain administrative and accounting services to the
Fund. If the Plan is approved by the Acquired Fund's shareholders, the Adviser
has agreed to lower the Acquiring Fund's advisory fee after the Acquisition to
match the advisory fee schedule of the Acquired Fund.
Operating and Other Expenses
The gross expenses of the Acquiring Fund's Class A, Class C and Advisor
Class shares are higher than those of the corresponding classes of the Acquired
Fund. The Acquiring Fund's gross expenses for Class A, Class C and Advisor Class
shares were 3.64%, 4.46% and 3.40% for its fiscal year ended November 30, 2015
as compared to the gross expenses of the Acquired Fund of 1.20%, 1.96%, 1.96%,
0.95%, 1.62%, 1.29% and 0.98% for Class A, Class B, Class C, Advisor Class,
Class R, Class K and Class I, respectively, for the Acquired Fund's fiscal year
ended August 31, 2015. However, the net expenses of the Acquiring Fund Class A,
Class C and Advisor Class shares are lower than those of the corresponding
classes of the Acquired Fund due to a contractual fee waiver/expense
reimbursement agreement in effect at least through February 28, 2018. The
Acquiring Fund's net expenses for Class A, Class C and Advisor Class shares were
0.99%, 1.74% and 0.74% for its fiscal year ended November 30, 2015 as compared
to the net expenses of the Acquired Fund of 1.14%, 1.90%, 1.90%, 0.89%, 1.56%,
1.23% and 0.92% for Class A, Class B, Class C, Advisor Class, Class R, Class K
and Class I, respectively, for the Acquired Fund's fiscal year ended August 31,
2015. The Acquiring Fund did not offer Class R, Class K and Class I shares prior
to the Acquisition.
Fee Table
The purpose of the tables below is to assist an investor in understanding
the various costs and expenses that a shareholder bears directly and indirectly
from an investment in the Funds. The tables allow you to compare any sales
charges and expenses of the Acquired Fund and (pro forma) estimates for the
Acquiring Fund in its first year following the Acquisition. Under the Plan,
shares of beneficial interest in the Acquired Fund will be exchanged for Class
A, Class C, Advisor Class, Class R, Class K and Class I shares, as applicable,
of the Acquiring Fund. Class B shareholders of the Acquired Fund will receive
Class A shares of the Acquiring Fund at NAV. The tables also include Annual Fund
Operating Expenses and Expense Examples on a pro forma combined basis.
The fees and expenses of the Acquired Fund shown below are based on the
annualized fees and expenses of the Acquired Fund incurred during its fiscal
year ended August 31, 2016. The fees and expenses of the Acquiring Fund shown
below are based on the fees and expenses of the Acquiring Fund incurred during
the nine month period ended August 31, 2016. Pro forma fees and expenses are
based on the estimated fees and expenses of the Acquiring Fund for its first
fiscal period ending after the Acquisition. Pro forma numbers are estimated in
good faith and are hypothetical.
Shareholder Fees (fees paid directly from your investment)
-----------------------------------------------------------
Acquired Fund
Class B Shares Advisor Class R,
Class A (not currently offered Class C Class K and
Shares to new investors) Shares Shares I Shares
------------------------------------------------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% None None None None
--------------------------------------------------------------------------------------------------------------
Maximum Deferred Sales
Charge (Load) None(a) 4.00%(b) 1.00%(c) None None
--------------------------------------------------------------------------------------------------------------
Exchange Fee None None None None None
--------------------------------------------------------------------------------------------------------------
(a) Purchases of Class A shares in amounts of $1,000,000 or more, or by
certain group retirement plans, may be subject to a 1%, 1-year contingent
deferred sales charge, or CDSC, which may be subject to waiver in certain
circumstances.
(b) Class B shares automatically convert to Class A shares after eight years.
The CDSC decreases over time. For Class B shares, the CDSC decreases
1.00%annually to 0% after the fourth year. (c) For Class C shares, the
CDSC is 0% after the first year.
Acquiring Fund
Advisor Class R,
Class A Class C Class K and
Shares Shares Shares I Shares
--------------------------------------------------------------------------------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price) 4.25% None None None
--------------------------------------------------------------------------------
Maximum Deferred Sales Charge
(Load) None(a) 1.00%(b) None None
--------------------------------------------------------------------------------
Exchange Fee None None None None
--------------------------------------------------------------------------------
(a) Purchases of Class A shares in amounts of $1,000,000 or more, or by
certain group retirement plans, may be subject to a 1%, 1-year contingent
deferred sales charge, or CDSC, which may be subject to waiver in certain
circumstances.
(b) For Class C shares, the CDSC is 0% after the first year.
Annual Fund Operating Expenses (expenses that you pay each year as a percentage
of the value of your investment)
Acquired Fund
Class A Class B Class C Advisor Class Class R Class K Class I
-------------------------------------------------------------------------------------------------------------
Management Fees .55% .55% .55% .55% .55% .55% .55%
Distribution and/or Service
(12b-1) Fees .25% 1.00% 1.00% None .50% .25% None
Other Expenses
Transfer Agent .10% .10% .10% .10% .25% .19% .12%
Other Expenses .10% .10% .10% .10% .10% .10% .10%
------ ------ ------ ----------- ------ ------ ------
Total Other Expenses .20% .20% .20% .20% .35% .29% .22%
------ ------ ------ ----------- ------ ------ ------
Acquired Fund Fees and
Expenses (Underlying
Portfolios)(a) .24% .24% .24% .24% .24% .24% .24%
------ ------ ------ ----------- ------ ------ ------
Total Annual Strategy
Operating Expenses 1.24% 1.99% 1.99% .99% 1.64% 1.33% 1.01%
====== ====== ====== =========== ====== ====== ======
Fee Waiver and/or Expense
Reimbursement(b) (.06)% (.06)% (.06)% (.06)% (.06)% (.06)% (.05)%
------ ------ ------ ----------- ------ ------ ------
Total Annual Strategy
Operating Expenses After
Fee Waiver and/or
Expense Reimbursement 1.18% 1.93% 1.93% .93% 1.58% 1.27% .96%
====== ====== ====== =========== ====== ====== ======
--------------------------------------------------------------------------------------------------------------
(a) Restated to reflect current fees and expenses.
(b) In connection with the Acquired Fund investments in AB Multi-Manager
Alternative Strategies Fund (the "Fund"), the Adviser has contractually
agreed to (i) waive the portion of its management fee attributable to its
services after paying subadvisory fees to sub-advisers and (ii) reimburse
the Acquired Fund for the "Total Other Expenses" of the Fund (excluding
interest and short sales expenses), in each case as included in "Acquired
Fund Fees and Expenses" and paid by the Acquired Fund. This fee waiver
will remain in effect until December 31, 2016.
Acquiring Fund
Advisor
Class A Class C Class
--------------------------------------------------------------------------------
Management Fees .70% .70% .70%
Distribution and/or Service (12b-1) Fees .25% 1.00% None
Other Expenses:
Transfer Agent .10% .22% .10%
Other Expenses 2.32% 2.41% 2.34%
------------ ----------- -----------
Total Other Expenses 2.42% 2.63% 2.44%
------------ ----------- -----------
Acquired Fund Fees and Expenses .22% .22% .22%
------------ ----------- -----------
Total Annual Fund Operating Expenses 3.59% 4.55% 3.36%
============ =========== ===========
Fee Waiver and/or Expense Reimbursement(a) (2.60)% (2.81)% (2.62)%
------------ ----------- -----------
Total Annual Fund Operating Expenses
After Fee Waiver and/or Expense
Reimbursement .99% 1.74% .74%
============ =========== ===========
--------------------------------------------------------------------------------
(a) The Adviser has contractually agreed to waive its management fees and/or
to bear expenses of the Fund through February 28, 2018 to the extent
necessary to prevent total Fund operating expenses (excluding acquired
fund fees and expenses, interest expense, taxes, extraordinary expenses,
and brokerage commissions and other transaction costs), on an annualized
basis, from exceeding .99%, 1.74% and .74% of average daily net assets,
respectively, for Class A, Class C and Advisor Class shares ("expense
limitations"). Any fees waived and expenses borne by the Adviser may be
reimbursed by the Fund until the end of the third fiscal year after the
fiscal period in which the fee was waived or the expense was borne,
provided that no reimbursement payment will be made that would cause the
Fund's Total Annual Fund Operating Expenses to exceed the expense
limitations. In addition, the Adviser has contractually agreed to waive
its management fees and/or bear Fund expenses through February 28, 2018 in
an amount equal to the Fund's share of all fees and expenses of any AB
Mutual Funds in which the Fund invests.
Combined Fund--Pro Forma
Class A Class C Advisor Class Class R Class K Class I
-----------------------------------------------------------------------------------------------------
Management Fees(a) .55% .55% .55% .55% .55% .55%
Distribution and/or Service
(12b-1) Fees .25% 1.00% None .50% .25% None
Other Expenses
Transfer Agent .10% .11% .10% .25% .18% .12%
Other Expenses(b) .20% .20% .20% .20% .20% .20%
---------- ---------- ------------- ---------- --------- --------
Total Other Expenses .30% .31% .30% .45% .38% .32%
---------- ---------- ------------- ---------- --------- --------
Acquired Fund Fees and
Expenses (Underlying
Portfolios) .19% .19% .19% .19% .19% .19%
---------- ---------- ------------- ---------- --------- --------
Total Annual Strategy
Operating Expenses 1.29% 2.05% 1.04% 1.69% 1.37% 1.06%
========== ========== ============= ========== ========= ========
Fee Waiver and/or Expense
Reimbursement(c) (.30)% (.31)% (.30)% (.45)% (.38)% (.32)%
---------- ---------- ------------- ---------- --------- --------
Total Annual Strategy
Operating Expenses After
Fee Waiver and/or
Expense Reimbursement .99% 1.74% .74% 1.24% .99% .74%
========== ========== ============= ========== ========= ========
-----------------------------------------------------------------------------------------------------
(a) The advisory fee of the Acquiring Fund will be lowered to equal the
advisory fee schedule of the Acquired Fund at the time of the Acquisition.
(b) Other expenses do not include the projected costs and expenses of the
Acquisition. The basis point impact of such costs and expenses is
projected to be approximately 0.04% based on current Acquired Fund assets.
It is expected that the Adviser will bear the costs and expenses of the
Acquisition allocable to the Acquiring Fund pursuant to the fee
waiver/expense reimbursement agreement in effect for the Acquiring Fund.
(c) The Adviser has contractually agreed to waive its management fees and/or
to bear expenses of the Acquiring Fund through February 28, 2018 to the
extent necessary to prevent total Fund operating expenses (excluding
acquired fund fees and expenses, interest expense, taxes, extraordinary
expenses, and brokerage commissions and other transaction costs), on an
annualized basis, from exceeding .99%, 1.74%, .74%, 1.24%, .99% and .74%
of average daily net assets, respectively, for Class A, Class C, Advisor
Class, Class R, Class K and Class I shares ("expense limitations"). Any
fees waived and expenses borne by the Adviser may be reimbursed by the
Fund until the end of the third fiscal year after the fiscal period in
which the fee was waived or the expense was borne, provided that no
reimbursement payment will be made that would cause the Fund's Total
Annual Fund Operating Expenses to exceed the expense limitations. In
addition, the Adviser has contractually agreed to waive its management
fees and/or bear Fund expenses through February 28, 2018 in an amount
equal to the Fund's share of all fees and expenses of any AB Mutual Funds
in which the Fund invests.
Examples
--------
The following examples are intended to help you compare the costs of
investing in each of the Acquired Fund, the Acquiring Fund and the combined Fund
after the Acquisition. The examples assume that you invest $10,000 in each of
the Acquired Fund, the Acquiring Fund and the combined Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
examples also assume that your investment has a 5% return each year, that all
distributions are reinvested, that each Fund's operating expenses remain the
same and that the fee waiver, if applicable, is in effect for the first year.
Although your actual costs may be higher or lower, based on these assumptions
your costs would be:
Acquired Fund
Advisor
Class A Class B Class C Class Class R Class K Class I
--------------------------------------------------------------------------------
After 1 Year $ 540 $ 596 $ 296 $ 95 $ 161 $ 129 $ 98
After 3 Years $ 796 $ 819 $ 619 $ 309 $ 511 $ 416 $ 317
After 5 Years $ 1,072 $ 1,067 $ 1,067 $ 541 $ 886 $ 732 $ 553
After 10 Years $ 1,856 $ 2,118 $ 2,312 $ 1,208 $ 1,939 $ 1,596 $ 1,232
--------------------------------------------------------------------------------
For the share classes listed below, you would pay the following expenses if you
did not redeem your shares at the end of the period:
Class B Class C
--------------------------------------------------------------------------------
After 1 Year $ 196 $ 196
After 3 Years $ 619 $ 619
After 5 Years $ 1,067 $ 1,067
After 10 Years $ 2,118 $ 2,312
--------------------------------------------------------------------------------
Acquiring Fund
Class A Class C Advisor Class
--------------------------------------------------------------------------------
After 1 Year $ 522 $ 277* $ 76
After 3 Years $ 1,247 $ 1,121 $ 788
After 5 Years $ 1,993 $ 2,073 $ 1,523
After 10 Years $ 3,951 $ 4,492 $ 3,471
--------------------------------------------------------------------------------
* If you did not redeem your shares at the end of the period, your
expenses would be decreased by approximately $100.
Combined Fund--Pro Forma
Advisor
Class A Class C Class Class R Class K Class I
--------------------------------------------------------------------------------
After 1 Year $ 522 $ 277* $ 76 $ 126 $ 101 $ 76
After 3 Years $ 788 $ 613 $ 301 $ 489 $ 396 $ 305
After 5 Years $ 1,075 $ 1,075 $ 545 $ 876 $ 714 $ 554
After 10 Years $ 1,890 $ 2,355 $ 1,244 $ 1,960 $ 1,613 $ 1,265
--------------------------------------------------------------------------------
* If you did not redeem your shares at the end of the period, your
expenses would be decreased by approximately $100.
As a result of the Expense Limitations, the net operating expenses for
Class A, Class C, Advisor Class, Class R, Class K and Class I shares of the
Acquiring Fund that would effectively be borne by the shareholders of the
Acquired Fund after the Acquisition are expected to be approximately .99%,
1.74%, .74%, 1.24%, .99% and .74%, respectively, lower than the expenses of the
Acquired Fund borne by shareholders of the Acquired Fund as of November [__],
2016 in connection with their investments in the Acquired Fund. If the Expense
Limitations are allowed to expire without renewal, the cost to the shareholders
of the Acquired Fund of investing in the Acquiring Fund would be higher than the
cost of investing in the Acquired Fund. More detailed information about the
Funds' fees is included in the tables above.
Fund Performance
----------------
The performance information provided below indicates some of the risks of
investing in each Fund by showing changes in each Fund's performance from year
to year and by comparing the performance of each Fund with the performance of a
broad-based securities market index. Updated performance information for each
Fund is available on the Fund's website at www.ABfunds.com. Performance
information represents only past performance, before and after taxes, and does
not necessarily indicate future results. The Acquired Fund and the Acquiring
Fund may not perform at the same level in the future.
Acquired Fund
The performance information shown below for the Acquired Fund may not be
representative of the performance the Acquiring Fund would have achieved under
its expense levels. The annual returns in the bar chart are for the Acquired
Fund's Class A shares and do not reflect sales loads. If sales loads were
reflected, returns would be less than those shown. Through September 30, 2016,
the year-to-date unannualized return for the Acquired Fund's Class A shares was
4.19%.
9.58 4.70 -19.29 19.06 8.59 -0.50 7.06 6.31 3.56 -0.73
-----------------------------------------------------------------
06 07 08 09 10 11 12 13 14 15
Calendar Year End (%)
Best Quarter was up 9.90%, 3rd quarter, 2009; and Worst Quarter was down -9.60%,
4th quarter, 2008.
Average Annual Total Returns
(for periods ended December 31, 2015)
1 Year 5 Years 10 Years
-------------------------------------------------------------------------------------------------------------
Class A* Return Before Taxes -4.98% 2.29% 2.97%
----------------------------------------------------------------------------------------------
Return After Taxes on Distributions -5.76% 1.63% 2.11%
----------------------------------------------------------------------------------------------
Return After Taxes on Distributions
and Sale of Strategy Shares -2.71% 1.54% 2.04%
----------------------------------------------------------------------------------------------
Class B Return Before Taxes -5.30% 2.44% 2.83%
-------------------------------------------------------------------------------------------------------------
Class C Return Before Taxes -2.41% 2.45% 2.70%
-------------------------------------------------------------------------------------------------------------
Advisor Class Return Before Taxes -.46% 3.48% 3.74%
-------------------------------------------------------------------------------------------------------------
Class R Return Before Taxes -1.10% 2.79% 3.05%
-------------------------------------------------------------------------------------------------------------
Class K Return Before Taxes -.78% 3.13% 3.38%
-------------------------------------------------------------------------------------------------------------
Class I Return Before Taxes -.56% 3.44% 3.70%
-------------------------------------------------------------------------------------------------------------
Bloomberg Barclays U.S. Aggregate Bond Index
(reflects no deduction for fees, expenses, or taxes) .55% 3.25% 4.51%
-------------------------------------------------------------------------------------------------------------
S&P 500 Index
(reflects no deduction for fees, expenses, or taxes) 1.38% 12.57% 7.31%
-------------------------------------------------------------------------------------------------------------
65% Bloomberg Barclays U.S. Aggregate Bond Index/
35% S&P 500 Index#
(reflects no deduction for fees, expenses, or taxes) 1.06% 6.61% 5.77%
-------------------------------------------------------------------------------------------------------------
* After-tax returns:
- Are shown for Class A shares only and will vary for Class B, Class C
and Advisor Class shares because these Classes have different
expense ratios;
- Are estimates based on the highest historical individual federal
marginal income tax rates, and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown;
and
- Are not relevant to investors who hold Strategy shares through
tax-deferred arrangements such as 401(k) plans or individual
retirement accounts.
# The information in the 65% Bloomberg Barclays U.S. Aggregate Bond
Index/35% S&P 500 Index shows how the Strategy's performance compares with
the returns of an index of securities similar to those in which the
Strategy invests.
Acquiring Fund
The annual returns in the bar chart are for the Fund's Class A shares and
do not reflect sales loads. If sales loads were reflected, returns would be less
than those shown. Through September 30, 2016, the year-to-date unannualized
return for the Acquiring Fund's Class A shares was 10.94%.
n/a n/a n/a n/a n/a n/a n/a n/a n/a -1.8
-----------------------------------------------------------------
06 07 08 09 10 11 12 13 14 15
Calendar Year End (%)
Best Quarter was up 2.59%, 1st quarter, 2015; and Worst Quarter was down -3.38%,
3rd quarter, 2015.
Average Annual Total Returns*
(for periods ended December 31, 2015)
Since
1 Year Inception***
-----------------------------------------------------------------------------------------------------------------
Class A** Return Before Taxes -5.40% -4.32%
----------------------------------------------------------------------------------------------
Return After Taxes on Distributions -7.00% -5.92%
----------------------------------------------------------------------------------------------
Return After Taxes on Distributions and Sale of Fund Shares -2.41% -3.65%
-----------------------------------------------------------------------------------------------------------------
Class C Return Before Taxes -2.90% -1.05%
-----------------------------------------------------------------------------------------------------------------
Advisor Class Return Before Taxes -0.95% -0.02%
-----------------------------------------------------------------------------------------------------------------
MSCI ACWI (net) -2.36% -1.85%
-----------------------------------------------------------------------------------------------------------------
* The Acquiring Fund did not offer Class R, Class K and Class I shares prior
to the Acquisition.
** After-tax returns:
- Are shown for Class A shares only and will vary for the other
Classes of shares because these Classes have different expense
ratios;
- Are estimates based on the highest historical individual federal
marginal income tax rates, and do not reflect the impact of state
and local taxes; actual after-tax returns depend on an individual
investor's tax situation and are likely to differ from those shown;
and
- Are not relevant to investors who hold fund shares through
tax-deferred arrangements such as 401(k) plans or individual
retirement accounts.
*** Inception date for Class A, Class C and Advisor Class is 12/18/14.
Portfolio Turnover
------------------
Each Fund pays transaction costs, such as commissions, when it buys and
sells securities (or "turns over" its portfolio). A higher portfolio turnover
rate may indicate higher transaction costs and may result in higher taxes when
Acquired Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the examples, affect the
Acquired Fund's performance. During its most recent fiscal year ended August 31,
2016, the Acquired Fund's portfolio turnover rate (which reflects only purchases
and sales of the Underlying Portfolios) was 5% of the average value of its
portfolio. During its most recent fiscal year ended November 30, 2015, the
Acquiring Fund's portfolio turnover rate was 88% of the average value of its
portfolio.
Comparison of Investment Objectives and Principal Investment Strategies
The Funds have similar investment objectives. The Acquiring Fund's
investment objective is to seek current income with consideration of capital
appreciation, and the Acquired Fund's investment objective is to achieve a high
total return without, in the opinion of the Adviser, undue risk to principal.
While the Acquired Fund's investment objective has a greater emphasis on
downside protection, the Adviser does not believe that the Funds differ
substantially in that regard in terms of their actual management. While the
Funds have similar multi-asset exposures, the Funds seek to achieve their
investment objectives by pursuing different principal investment strategies. The
primary difference is that the Acquired Fund is structured as a fund of funds,
investing in a combination of Underlying Portfolios to pursue its principal
investment strategies, while the Acquiring Fund predominantly pursues its
principal investment strategies through direct investments.(2) Most of the
assets of the Acquired Fund are invested through Underlying Portfolios in high
quality bonds, which have not generated substantial income in recent years and
may decline in value if interest rates rise. In contrast, the Acquiring Fund's
focus on income has allowed it to generate return through investments in
high-yield debt securities, income-producing equity securities, and derivative
strategies intended to generate income, without a substantially higher risk
profile than that of the Acquired Fund.
--------
(2) The Acquired Fund's Board of Trustees recently approved changes to the
principal strategies of the Fund. The Fund will no longer seek to achieve
its objective by investing in the Underlying Portfolios. Instead, the
Acquired Fund will seek to achieve its objective by investing primarily
directly in securities and other investments, while continuing to invest a
portion of its assets in certain Underlying Portfolios, in accordance with
its targeted percentages in certain asset classes and investment styles.
It is anticipated that these changes will take effect on or about January
26, 2017.
The following charts compare the investment objective and principal
investment policies of each Fund as well as the other fundamental and
non-fundamental investment policies of each Fund. Fundamental policies are
policies that, under the 1940 Act, may not be changed without a shareholder
vote.
The AB Portfolios--AB AB Cap Fund, Inc.--AB All
Conservative Wealth Strategy Market Income Portfolio
(Acquired Fund) (Acquiring Fund)
--------------------------------------------------------------------------------
Investment The Acquired Fund's investment The Acquiring Fund's
Objective objective is to achieve a high investment objective is to
total return without, in the seek current income with
opinion of the Adviser, undue consideration of capital
risk to principal. appreciation.
This is not a fundamental Same.
policy.
Status The Acquired Fund is The Acquiring Fund is
diversified. non-diversified.
This is a fundamental policy. This is not a fundamental
policy.
Principal Investment Policies
--------------------------------------------------------------------------------
Fund of Funds The Acquired Fund seeks to The Acquiring Fund is not
achieve its objective by structured as a "fund of
investing in a combination of funds", but may invest in
Underlying Portfolios investment companies,
representing a variety of including exchange-traded
asset classes and investment funds, as permitted by the
styles that are also managed 1940 Act or the rules and
by the Adviser. regulations or exemptive
orders thereunder.
Equity The Acquired Fund targets a The Acquiring Fund may
Securities weighting of approximately invest in a broad range
20% in Underlying Portfolios of income-producing
that invest primarily in securities, including
equity securities of common stock of companies
companies, or traditional that regularly pay
equity investments. Within dividends (including real
the Acquired Fund's estate investment
traditional equity trusts), preferred
component, the targeted blend stocks, and derivatives
is an equal weighting related to these types of
of Underlying Portfolios that securities.
invest in growth and value
style stocks (approximately
50% each), with
approximately 60% of each
equity style invested in
Underlying Portfolios that
invest in U.S. companies.
Debt The Acquired Fund targets a The Acquiring Fund will invest
Securities weighting of approximately 52% in debt securities (including
in Underlying Portfolios that high-yield debt securities,
invest primarily in also known as "junk bonds").
traditional debt securities. The Adviser intends to gain
exposure to high-yield debt
securities through
investment in the AB High
Income Fund and may, in the
future, gain such exposure
through direct investments
in high-income securities.(3)
------------
(3) Following the Acquisition, the Adviser may reduce or eliminate the
Acquiring Fund's position in AB High Income Fund and make direct
investments in high-yield debt securities for the Fund.
Foreign Within the Acquired Fund's The Fund pursues a global
Securities traditional equity strategy, typically
component, the targeted investing in securities
blend is an equal weighting of issuers located in the
of Underlying Portfolios United States and in
that invest in growth and other countries
value style stocks throughout the world,
(approximately 50% each), including emerging market
with approximately 40% countries.
of each equity style
invested in Underlying
Portfolios that invest in
non-U.S. companies.
Diversification The Acquired Fund targets a The Adviser will adjust the
Investments weighting of approximately 29% Acquiring Fund's investment
in Underlying Portfolios that exposure utilizing the
invest primarily in Adviser's Dynamic Asset
diversification investments Allocation ("DAA") approach.
(i.e., investments that DAA comprises a series of
provide additional analytical and forecasting
diversification by seeking tools employed by the
returns that are less Adviser to gauge
sensitive to the general fluctuations in the
direction of the equity risk/return profile of
markets) with a goal of various asset classes. DAA
providing reduced volatility seeks to adjust the
and modest upside potential. Acquiring Fund's investment
exposure in changing market
conditions and thereby
reduce overall portfolio
volatility by mitigating the
effects of market
fluctuations, while
preserving consistent
long-term return potential.
Derivative The Underlying Portfolios may The Adviser intends to
Transactions enter into other derivatives utilize a variety of
transactions, such as options, derivatives in its
futures contracts, forwards, management of the Acquiring
and swaps. Fund. It is expected that
the Acquiring Fund will
pursue a number of generally
derivatives-based
alternative investment
strategies, such as taking
long positions in currency
derivatives on higher
yielding currencies and/or
short positions in currency
derivatives on lower
yielding currencies.
As a result of the use of
derivatives and short sales
of securities, the Fund will
frequently be leveraged,
with gross investment
exposure substantially in
excess of its net assets.
Currency To hedge all or a portion of The Adviser may seek to
Exposures their currency risk, the hedge all or a portion of
Underlying Portfolios may, the currency exposure
from time to time, invest in resulting from Fund
currency-related derivatives, investments or decide not to
including forward currency hedge this exposure. The
exchange contracts, futures Adviser may seek investment
contracts, options on futures opportunities by taking long
contracts, swaps and options. or short positions in
The Adviser may also seek currencies through the use
investment opportunities by of currency-related
taking long or short positions derivatives.
in currencies through the use
of currency-related
derivatives.
Fundamental Policies
--------------------------------------------------------------------------------
Concentration The Acquired Fund may not Same.
concentrate its investments in an
industry, as concentration may be
defined under the 1940 Act or the
rules and regulations thereunder
(as such statute, rules or
regulations may be amended from
time to time) or by guidance
regarding, interpretations of, or
exemptive orders under, the 1940
Act or the rules or regulations
thereunder published by appropriate
regulatory authorities.
Make Loans The Acquired Fund may not make Same.
loans except through: (i) the
purchase of debt obligations in
accordance with its investment
objective and policies; (ii) the
lending of portfolio securities;
(iii) the use of repurchase
agreements; or (iv) the making of
loans to affiliated funds as
permitted under the 1940 Act, the
rules and regulations thereunder
(as such statutes, rules or
regulations may be amended from
time to time), or by guidance
regarding, and interpretations of,
or exemptive orders under, the 1940
Act.
Issue Senior The Acquired Fund may not issue any Same.
Securities senior security (as that term is
defined in the 1940 Act) or borrow
money, except to the extent
permitted by the 1940 Act or the
rules and regulations thereunder
(as such statute, rules or
regulations may be amended from
time to time) or by guidance
regarding, or interpretations of,
or exemptive orders under, the 1940
Act or the rules or regulations
thereunder published by appropriate
regulatory authorities. For
purposes of this restriction,
margin and collateral arrangements,
including, for example, with
respect to permitted borrowings,
options, futures contracts, options
on futures contracts and other
derivatives such as swaps, are not
deemed to involve the issuance of a
senior security.
Commodities The Acquired Fund may not purchase The Acquiring Fund may
or sell commodities regulated by purchase and sell
the Commodities Futures Trading commodities to the extent
Commission under the Commodity allowed by applicable law.
Exchange Act or commodities
contracts except for futures
contracts and options on futures
contracts.
Real Estate The Acquired Fund may not purchase Same.
or sell real estate except that it
may dispose of real estate acquired
as a result of the ownership of
securities or other instruments.
This restriction does not prohibit
the Acquired Fund from investing in
securities or other instruments
backed by real estate or in
securities of companies engaged in
the real estate business.
Underwritings The Acquired Fund may not act as an Same.
underwriter of securities, except
that the Acquired Fund may acquire
restricted securities under
circumstances in which, if such
securities were sold, the Acquired
Fund might be deemed to be an
underwriter for purposes of the
Securities Act of 1933.
Non-Fundamental Policy
--------------------------------------------------------------------------------
Securities on The Acquired Fund may not purchase Same.
Margin securities on margin, except (i) as
otherwise provided under rules
adopted by the SEC under the 1940
Act or by guidance regarding the
1940 Act, or interpretations
thereof, and (ii) that the Acquired
Fund may obtain such short-term
credits as are necessary for the
clearance of portfolio
transactions, and the Acquired Fund
may make margin payments in
connection with futures contracts,
options, forward contracts, swaps,
caps, floors, collars and other
financial instruments.
Comparison of Benchmarks
The Acquired Fund uses the Bloomberg Barclay's U.S. Aggregate Bond Index
as its primary benchmark, and the S&P 500 Index as its secondary benchmark. The
Acquiring Fund uses the MSCI AC World Index (net) as its primary benchmark.
Following the Acquisition, the Acquiring Fund will adopt the Bloomberg Barclays
Global Aggregate Bond Index as a secondary benchmark.
Comparison of Fund Shares
The Acquired Fund offers seven classes of shares. The Acquiring Fund
currently offers Class A, Class C, and Advisor Class shares, and will offer
Class R, Class K and Class I shares (such classes, collectively, the "Share
Classes"). The Acquiring Fund does not offer Class B shares. Information
regarding the Share Classes, including the expenses of the Share Classes, is
available in the Acquiring Fund's prospectus.
Comparison of Purchase and Redemption Procedures
Both Funds are subject to the same purchase and redemption procedures. As
a result of the Acquisition, holders of Acquired Fund shares will receive Class
A, Class C, Advisor Class, Class R, Class K or Class I shares, as applicable, of
the Acquiring Fund. Class B shareholders of the Acquired Fund will receive Class
A shares of the Acquiring Fund.
Shares of both Funds are offered on a continuous basis at a price equal to
their NAV plus an initial sales charge at the time of purchase ("Class A
shares"); with a CDSC (for the Acquired Fund only) ("Class B shares"); without
any initial sales charge and, as long as the shares are held for one year or
more, without any CDSC ("Class C shares"); to group retirement plans, as defined
below, eligible to purchase Class R shares, without any initial sales charge or
CDSC ("Class R shares"); to group retirement plans eligible to purchase Class K
shares, without any initial sales charge or CDSC ("Class K shares"); to group
retirement plans and certain investment advisory clients of, and certain other
persons associated with, the Adviser and its affiliates eligible to purchase
Class I shares, without any initial sales charge or CDSC ("Class I shares");
and, to investors eligible to purchase Advisor Class shares, without any initial
sales charge or CDSC ("Advisor Class shares"). "Group retirement plans" are
defined as 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit
sharing and money purchase pension plans, defined benefit plans, and
non-qualified deferred compensation plans where plan level or omnibus accounts
are held on the books of a Fund. All classes of shares of the Funds, except
Class I and Advisor Class shares, are subject to Rule 12b-1 asset-based sales
charges.
Shares of both Funds may be exchanged for shares of the same class of
other AB Mutual Funds provided that the other fund offers the same class of
shares. More information on distribution, purchase and redemption procedures of
the Acquiring Fund is provided in Appendix B.
Service Providers
Both Funds are serviced by the same service providers. The Adviser is the
investment adviser to each Fund, AllianceBernstein Investment Services, Inc.
("ABIS") is the transfer agent for each Fund, AllianceBernstein Investments,
Inc. is the distributor for both Funds, State Street Bank and Trust Company
("State Street") is the custodian, foreign custody manager and accounting agent
for both Funds and Ernst & Young LLP is the independent registered public
accounting firm for both Funds.
Comparison of Business Structures
As described above, the Acquired Fund is a series of the Trust, which is
an open-end management investment company organized as a Massachusetts business
trust governed by its Agreement and Declaration of Trust ("Declaration"), Bylaws
and Massachusetts law. The Acquiring Fund is a series of the Company, an
open-end management investment company organized as a Maryland corporation,
which is governed by its Charter, Bylaws and Maryland law. Both Funds provide
comparable shareholder rights. For more information on the comparison of the
business structures and governance of the Funds, see Appendix C.
Federal Income Tax Consequences
The Acquisition is intended to be a tax-free "reorganization" within the
meaning of the regulations under Section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"). This means that it is intended that shareholders
of the Acquired Fund will become shareholders of the Acquiring Fund without
realizing any gain or loss for federal income tax purposes. This also means that
the reorganization is intended to be tax-free with respect to the Acquiring Fund
for federal income tax purposes. However, the IRS may disagree with the position
that the Acquisition is a tax-free reorganization, resulting in the shareholders
of the Acquired Fund realizing gain or loss (as applicable) when they become
shareholders of the Acquiring Fund.
Nonetheless, the Funds expect that the Acquisition will constitute a
"reorganization" within the meaning of Section 368 of the Code, with
substantially the following results: No gain or loss should be recognized by the
Acquired Fund or its shareholders or the Acquiring Fund or its shareholders as a
result of the Acquisition. The aggregate tax basis of the shares of the
Acquiring Fund received by a shareholder of the Acquired Fund (including any
fractional shares to which the shareholder may be entitled) should be the same
as the aggregate tax basis of the shareholder's shares of the Acquired Fund. The
holding period of the shares of the Acquiring Fund received by a shareholder of
the Acquired Fund (including any fractional share to which the shareholder may
be entitled) should include the holding period of the shares of the Acquired
Fund held by the shareholder, provided that such shares are held as capital
assets by the shareholder of the Acquired Fund at the time of the Acquisition.
The holding period and tax basis of each asset of the Acquired Fund in the hands
of the Acquiring Fund as a result of the Acquisition should generally be the
same as the holding period and tax basis of each such asset in the hands of the
Acquired Fund prior to the Acquisition. It is a condition to the closing of the
Acquisition that both the Acquired Fund and Acquiring Fund receive an opinion of
Seward & Kissel LLP that the Acquisition should be a tax-free reorganization, as
further discussed below under "Information About the Acquisition--Federal Income
Tax Consequences." An opinion of counsel is not binding on the Internal Revenue
Service or any court and, thus, does not preclude the Internal Revenue Service
from asserting, or a court from rendering, a contrary position. The sale of
securities prior to the Acquisition could result in the Acquired Fund realizing
gains or losses that would not otherwise have been realized but for the
Acquisition.
The Acquired Fund's portfolio holdings are not identical to the portfolio
holdings of the Acquiring Fund. As a result, the Acquired Fund is expected to
redeem in kind the shares of certain of the Underlying Portfolios held by the
Acquired Fund, which means that the Acquired Fund will receive portfolio
investments of its Underlying Portfolios in such redemptions. These redemptions
in kind will result in the Acquired Fund realizing gains or losses. It is also
expected that the Acquired Fund will dispose of or purchase certain investments
prior to the Acquisition, including disposing of securities received in
connection with the redemptions in kind. The need for the Acquired Fund to
dispose of certain portfolio investments prior to the Acquisition could result
in the Adviser selling such portfolio investments at a disadvantageous time.
With respect to the portfolio assets of the Acquired Fund that are sold (or
deemed sold by reason of marking to market of certain assets upon the
termination of the Acquired Fund's taxable year) by the Acquired Fund in
connection with the Acquisition, the tax impact of such sales (or deemed sales)
will depend on the difference between the price at which such portfolio assets
are sold and the Acquired Fund's basis in such assets. Any gains will be
distributed to the Acquired Fund's shareholders as either capital gain dividends
(to the extent of long-term capital gains) or ordinary dividends (to the extent
of short-term capital gains) during or with respect to the year of sale (or
deemed sale) after taking into consideration loss carryforward, and such
distributions will be taxable to shareholders.
Federal income tax law permits a regulated investment company to carry
forward net capital losses that arose in tax years that began on or before
December 22, 2010 ("Pre-2011 Losses") for a period of up to eight taxable years.
Net capital losses that arise in tax years beginning after December 22, 2010
("Post-2010 Losses") may generally be carried forward without limit and such
carryforwards must be fully utilized before the regulated investment company is
permitted to utilize carryforwards of Pre-2011 Losses. The Acquired Fund has net
capital loss carryforwards from its prior taxable years in the amount of
$(15,603,824) and the Acquiring Fund does not have capital loss carryforwards.
The Acquired Fund's Pre-2011 Losses and expiration dates are as follows:
AB Conservative Wealth Strategy
2017 2018
---- ----
$(1,963,389) $(13,640,435)
It is expected that all of the Acquiring Fund's capital loss carryforwards
will be used as part of the Acquired Fund's redemptions in kind prior to the
Acquisition.
Additional tax considerations are discussed below under "Information About
the Acquisition--Federal Income Tax Consequences."
PRINCIPAL RISKS
The Acquired Fund and the Acquiring Fund are subject to a number of the
same principal risk factors. These similar risks include credit risk, interest
rate risk, foreign (Non-U.S.) risk, currency risk, derivatives risk and market
risk. However, each Fund is also subject to several risks that are not common to
both Funds. For instance, the Acquired Fund is a diversified investment company,
and the Acquiring Fund is a non-diversified investment company, which means that
the Acquiring Fund can invest a greater portion of its assets in securities of
individual issuers than a diversified fund and, thus, has greater exposure to
risks associated with those issuers.
The principal risks of investing in the Acquired Fund and the Acquiring
Fund are described below. Each of the Acquired Fund and the Acquiring Fund could
become subject to additional risks because the types of investments made by each
Fund can change over time.
Principal Risks of both the Acquired Fund and Acquiring Fund
Credit Risk. Credit risk is the risk that the issuer or the guarantor of a
fixed-income security, or the counterparty to a derivatives or other contract,
may be unable or unwilling to make timely payments of interest or principal, or
to otherwise honor its obligations. The issuer or guarantor may default, causing
a loss of the full principal amount of a security and accrued interest. The
degree of risk for a particular security may be reflected in its credit rating.
There is the possibility that the credit rating of a fixed-income security may
be downgraded after purchase, which may adversely affect the value of the
security. Investments in fixed-income securities with lower ratings (commonly
known as "junk bonds") are subject to a higher probability that an issuer will
default or fail to meet its payment obligations.
Interest Rate Risk. Interest rate risk is the risk that changes in interest
rates will affect the value of investments in fixed-income securities. When
interest rates rise, the value of existing investments in fixed-income
securities tends to fall and this decrease in value may not be offset by higher
income from new investments. The Fund may be subject to heightened interest rate
risk due to rising rates as the current period of historically low interest
rates ends. Interest rate risk is generally greater for fixed-income securities
with longer maturities or durations.
Foreign (Non-U.S.) Risk. Foreign risk is the risk that investments in securities
of non-U.S. issuers may involve more risk than those of U.S. issuers. These
securities may fluctuate more widely in price and may be less liquid due to
adverse market, economic, political, regulatory or other factors.
Currency Risk. Currency risk is the risk that fluctuations in currency exchange
rates may negatively affect the value of the Fund's investments or reduce its
returns.
Derivatives Risk. Derivatives may be illiquid, difficult to price, and leveraged
so that small changes may produce disproportionate losses for the Fund, and may
be subject to counterparty risk to a greater degree than more traditional
investments.
Market Risk. Market risk is the risk that the value of the Fund's investments
will fluctuate as the bond or stock market fluctuates. The value of its
investments may decline, sometimes rapidly and unpredictably, simply because or
economic changes or other events that affect large portions of the market.
In addition, the Funds are also both subject to liquidity risk, to varying
degrees:
Liquidity Risk. Liquidity risk occurs when certain investments become difficult
to purchase or sell. Difficulty in selling less liquid securities may result in
sales at disadvantageous prices affecting the value of your investment in the
Fund. Causes of liquidity risk may include low trading volumes, large positions
and heavy redemptions of Fund shares. Over recent years liquidity risk has also
increased because the capacity of dealers in the secondary market for
fixed-income securities to make markets in these securities has decreased, even
as the overall bond market has grown significantly, due to, among other things,
structural changes, additional regulatory requirements and capital and risk
restraints that have led to reduced inventories. Liquidity risk may be higher in
a rising interest rate environment, when the value and liquidity of fixed-income
securities generally decline.
Additional Principal Risks of the Acquired Fund
Capitalization Risk. Investments in small- and mid-capitalization companies by
the Underlying Portfolios may be more volatile than investments in
large-capitalization companies. Investments in small-capitalization companies
may have additional risks because these companies have limited product lines,
markets, or financial resources.
Allocation Risk. The allocation of investments among the Underlying Portfolios'
different investment styles, such as equity or debt, growth or value, U.S. or
non-U.S. securities, or diversification strategies, may have a more significant
effect on the Acquired Fund's NAV when one of these investments is performing
more poorly than another.
Additional Principal Risks of the Acquiring Fund
High Yield Debt Securities. Investments in fixed-income securities with lower
ratings (commonly known as "junk bonds") tend to have a higher probability that
an issuer will default or fail to meet its payment obligations. These securities
may be subject to greater price volatility due to such factors as specific
corporate developments, interest rate sensitivity, negative perceptions of the
junk bond market generally and less secondary market liquidity.
Inflation Risk. This is the risk that the value of assets or income from
investments will be less in the future as inflation decreases the value of
money. As inflation increases, the value of the Fund's assets can decline as can
the value of the Fund's distributions. This risk is significantly greater for
fixed-income securities with longer maturities.
Emerging Market Risk. Investments in emerging market countries may have more
risk because the markets are less developed and less liquid, and because these
investments may be subject to increased economic, political, regulatory or other
uncertainties.
Short Sale Risk. Short sales involve the risk that the Fund will incur a loss by
subsequently buying a security at a higher price than the price at which it sold
the security. The amount of such loss is theoretically unlimited, as it will be
based on the increase in value of the security sold short. In contrast, the risk
of loss from a long position is limited to the Fund's investment in the
security, because the price of the security cannot fall below zero. The Fund may
not always be able to close out a short position on favorable terms.
Leverage Risk. To the extent the Fund uses leveraging techniques, its NAV may be
more volatile because leverage tends to exaggerate the effect of changes in
interest rates and any increase or decrease in the value of the Fund's
investments.
Diversification Risk. The Acquiring Fund may have more risk because it is
"non-diversified", meaning that it can invest more of its assets in a smaller
number of issuers. Accordingly, changes in the value of a single security may
have a more significant effect, either negative or positive, on the Acquiring
Fund's NAV.
Management Risk. The Fund is subject to management risk because it is an
actively-managed investment fund. The Adviser will apply its investment
techniques and risk analyses in making investment decisions, but there is no
guarantee that its techniques will produce the intended results.
INFORMATION ABOUT THE ACQUISITION
Introduction
This Proxy Statement/Prospectus is provided to you to solicit your proxy
for exercise at the Meeting to approve the Proposal. The Meeting will be held at
1345 Avenue of the Americas, New York, New York 10105 at 2:30 p.m., Eastern
time, on January 30, 2017. This Proxy Statement/Prospectus, the accompanying
Notice of Special Meeting of Shareholders and the enclosed Proxy Card are being
mailed to shareholders of the Acquired Fund on or about November [__], 2016.
Description of the Plan
As provided in the Plan, the Acquired Fund will transfer all of its assets
to the Acquiring Fund, and in exchange, the Acquiring Fund will assume all the
liabilities of the Acquired Fund and deliver to the Acquired Fund a number of
Class A, Class C, Advisor Class, Class R, Class K and Class I shares of the
Acquiring Fund having an aggregate NAV equal to the value of the assets of the
Acquired Fund, less the value of the liabilities of the Acquired Fund assumed by
the Acquiring Fund. The assets and liabilities of the Acquired Fund will be
valued as of the Valuation Time, as defined in the Plan. The Class A, Class C,
Advisor Class, Class R, Class K and Class I shares of the Acquiring Fund will be
delivered to the Acquired Fund as soon as reasonably practical after the Closing
Date. Immediately following the delivery of the Class A, Class C, Advisor Class,
Class R, Class K and Class I shares to the Acquired Fund, the Acquired Fund will
distribute pro rata to its shareholders of record as of the Valuation Time the
Class A, Class C, Advisor Class, Class R, Class K and Class I shares, as
applicable, received from the Acquiring Fund. As noted above, Class B
shareholders of the Acquired Fund will receive Class A shares of the Acquiring
Fund. The Class A, Class C, Advisor Class, Class R, Class K or Class I shares of
the Acquiring Fund that a Acquired Fund shareholder receives will have a total
NAV equal to the NAV of shares held by the shareholder in the Acquired Fund.
The distribution of Class A, Class C, Advisor Class, Class R, Class K and
Class I shares to Acquired Fund shareholders will be accomplished by the
establishment of accounts on the share records of the Acquiring Fund in the name
of such Acquired Fund shareholders, each account representing the respective
number of Class A, Class C, Advisor Class, Class R, Class K or Class I shares
due the respective shareholder. Certificates for Acquiring Fund shares will not
be issued.
Following the distribution of Class A, Class C, Advisor Class, Class R,
Class K and Class I shares of the Acquiring Fund in full liquidation of the
Acquired Fund, the Acquired Fund will wind up its affairs, cease operations and
terminate as soon as is reasonably practicable after the Acquisition. If the
shareholders do not approve the Plan, the Acquisition will not occur. The
Adviser will continue as investment adviser to the Acquired Fund and the current
service providers will continue to provide services to the Acquired Fund. The
Trustees of the Acquired Fund will consider options for the Acquired Fund.
The Acquired Fund's portfolio holdings are not identical to the portfolio
holdings of the Acquiring Fund. As a result, the Acquired Fund is expected to
redeem in kind the shares of certain of the Underlying Portfolios held by the
Acquired Fund, which means that the Acquired Fund will receive portfolio
investments of its Underlying Portfolios in such redemptions. These redemptions
in kind will result in the Acquired Fund realizing gains or losses. It is also
expected that the Acquired Fund will dispose of or purchase certain investments
prior to the Acquisition, including disposing of securities received in
connection with the redemptions in kind. The securities received by the Acquired
Fund as redemption proceeds would be contributed to the Acquiring Fund in
connection with the Acquisition. The need for the Acquired Fund to dispose of
certain portfolio investments prior to the Acquisition could result in the
Adviser selling such portfolio investments at a disadvantageous time.
The Funds will bear 50% of the costs and expenses of the Acquisition,
allocated to each Fund based on the respective net assets of the total net
assets of both Funds, with the other 50% being borne by the Adviser. In
addition, it is expected that the Adviser will bear the costs and expenses of
the Acquisition allocable to the Acquiring Fund pursuant to the fee
waiver/expense reimbursement agreement in effect for the Acquiring Fund. The
Funds ordinarily bear certain expenses such as brokerage commissions (including
those incurred by the Acquired Fund prior to the Acquisition) and any other
transaction charges, as well as interest on borrowed money, and will bear these
expenses and any extraordinary expenses that may be associated with the
Acquisition. The total costs and expenses of the Acquisition are estimated to be
approximately $243,000, and are expected to be allocated as follows:
Acquired Fund Acquiring Fund Adviser
------------- -------------- -------
$113,404 $8,096* $121,500
* Covered by the fee waiver/expense reimbursement.
The impact of these expenses is less than $.01 per share.
Completion of the Acquisition is subject to certain conditions set forth
in the Plan, including approval of the Proposal by shareholders of the Acquired
Fund and issuance of an opinion that the Acquisition should be a tax-free
reorganization. Assuming satisfaction of the conditions in the Plan, the
Acquisition will be completed on the Closing Date, which is expected to be on or
about February 28, 2017, or later if it is necessary to adjourn the meeting in
order to solicit additional proxies. However, any shareholder of the Acquired
Fund may redeem his or her shares prior to the Acquisition.
The Plan may be amended in any mutually agreed manner, except that no
amendment may be made subsequent to shareholder approval of the Acquisition that
materially alters the obligations of either party. The parties to the Plan may
terminate the Plan by mutual consent and either party has the right to terminate
the Plan under certain circumstances. Among other circumstances, either party
may at any time terminate the Plan unilaterally upon a determination by the
party's Directors or Trustees that proceeding with the Plan is not in the best
interests of the relevant Fund or its shareholders.
A form of the Plan is attached as Appendix A.
Reasons for the Acquisition and Board Consideration of the Plan and Acquisition
At a Special Meeting of the Board of Trustees of the Trust held on
September 21, 2016, the Adviser recommended that the Board of Trustees approve
and recommend to the Acquired Fund's shareholders for their approval the
proposed Plan and Acquisition. In connection with the meeting, the Trustees were
provided, in advance of the meeting, detailed information about the proposed
Acquisition, including information regarding: (1) the investment objectives and
principal investment strategies of the Acquiring Fund and their relative
compatibility with those of the Acquired Fund, as well as information about the
portfolio management teams and service providers of the Funds; (2) the Adviser's
views of the respective strategies of the Funds, and the historical performance
records of the Acquired Fund and the Acquiring Fund; (3) the investment advisory
fee and total expenses payable and paid by the Acquiring Fund (including gross
and net pro forma expense information), as compared with those of the Acquired
Fund and the proposed reduction in the Acquiring Fund's investment advisory fee
schedule should the Acquisition be completed; (4) the current size of the
Acquiring Fund and the prospects for its future growth, as compared to the
Acquired Fund; (5) alternatives to the Acquisition, including liquidating the
Acquired Fund; (6) the expected tax consequences of the Acquisition; (7) the
estimated costs of the Acquisition and the proposed allocation thereof; and (8)
the terms of the proposed Plan. The Trustees considered the factors discussed
below from the point of view of the interests of the Acquired Fund and its
shareholders. After careful consideration, the Board of Trustees (including all
Trustees who are not "interested persons" of the Trust, the Adviser or its
affiliates) determined that the Acquisition would provide potential benefits and
be in the best interests of the Acquired Fund's shareholders and that the
interests of existing shareholders of the Acquired Fund would not be diluted as
a result of the Acquisition. The Trustees have unanimously approved the Plan and
Acquisition and recommended that the shareholders of the Acquired Fund vote in
favor of the Acquisition by approving the Plan.
The Adviser presented the following reasons relative to the Acquisition,
and in turn, the Trustees considered the factors discussed below from the point
of view of the interests of the Acquired Fund and its shareholders:
o the Acquired Fund is an open-end fund originally created in 2003.
Given the Acquired Fund's current size and ongoing redemptions, as
well as the Acquired Fund's Morningstar rankings and prior
performance, the Adviser discussed its view that the Acquired Fund
is unlikely to grow its assets, rendering the continued operation of
the Acquired Fund inefficient. The Adviser believes that the
Acquiring Fund, established in 2014, is better able to generate
return in various market environments, including the current
low-yield environment, resulting in better returns for investors as
well as the opportunity for asset growth and the potential for
expense ratio reductions that may accompany such growth, making it
an appropriate choice for the acquisition of the Acquired Fund.
At the meeting, the Trustees (with the advice and assistance of
independent counsel) also considered, among other things:
o the current asset levels of the Acquired Fund and the combined pro
forma asset levels of the Acquiring Fund;
o the fact that the Acquiring Fund will be the accounting survivor of
the Acquisition, and the factors leading to that conclusion,
including that the investment objective, principal investment
strategies and portfolio management team of the Acquiring Fund will
remain the same following the Acquisition, that the Acquiring Fund's
total fund operating expenses will remain the same due to the
Acquiring Fund's Expense Limitations;
o the historical performance record of the Acquiring Fund over the
Fund's relatively short life compares favorably to that of the
Acquired Fund for the same period, although there is no guarantee or
assurance as to the future performance of the Acquiring Fund;
o the service providers and Trustees/Directors overseeing each Fund
are the same, and certain of the portfolio managers of the Acquired
Fund are part of the portfolio management team of the Acquiring
Fund;
o the gross and net pro forma expenses of the Acquiring Fund after the
Acquisition; the differences in expense ratios of the Funds; and the
net expense ratio of the Acquiring Fund, giving effect to the
Acquisition, the related investment advisory fee schedule reduction
that the Adviser will implement in respect of the Acquiring Fund in
the event the Acquisition takes place, and the expense limitation in
place for the Acquiring Fund through February 28, 2018; and
o as a result of the Acquisition, each shareholder of the Acquired
Fund would hold, immediately after the Acquisition, shares of the
corresponding class of the Acquiring Fund (except with respect to
Class B shareholders of the Acquired Fund, who will receive Class A
shares of the Acquiring Fund) having an aggregate value equal to the
aggregate value of the shares of the Acquired Fund held immediately
before the Acquisition.
The Trustees also considered, among other things:
o the form of the Plan and the terms and conditions of the
Acquisition;
o whether the Acquisition would result in the dilution of
shareholders' interests;
o information about the shareholders of the Funds;
o the benefits of the Acquisition to persons other than the Acquired
Fund and its shareholders, in particular, the Adviser, which will
benefit from the reduction of its waiver/reimbursement obligations
to the Acquiring Fund; the elimination of monitoring and
administering the Acquired Fund, and being able to divert its
resources that are currently committed to the Acquired Fund to more
profitable uses; and the improved ability to market the Acquiring
Fund due to its greater size;
o the fact that the Acquiring Fund will assume all the liabilities of
the Acquired Fund;
o the expected federal income tax consequences of the Acquisition;
o whether the Acquisition would be preferable to acquisition by
potential acquirers other than the Acquiring Fund, including funds
that are not sponsored by the Adviser; and
o 50% of the costs of the Acquisition will be borne proportionately by
the Funds based on each Fund's respective net assets of the total
net assets of both Funds, and 50% of the costs of the Acquisition
will be borne by the Adviser.
After careful consideration, the Board of Trustees (including all Trustees
who are not "interested persons" of the Trust, the Adviser or its affiliates)
determined that the Acquisition would be in the best interests of, and would
provide potential benefits to, the Acquired Fund's shareholders and that the
interests of existing shareholders of the Acquired Fund would not be diluted as
a result of the Acquisition. The Trustees have unanimously approved the Plan and
Acquisition and recommended that the shareholders of the Acquired Fund vote in
favor of the Acquisition by approving the Plan.
Also, at the September 21, 2016 Meeting of the Board of Directors of the
Company (comprised of the same persons as the Board of the Trust) (the
"Directors"), the Directors approved the proposed Plan in respect of the
Acquiring Fund and determined that the Acquisition offered potential benefits to
shareholders of the Acquiring Fund and that interests of shareholders of the
Acquiring Fund would not be diluted. No vote of shareholders of the Acquiring
Fund is required in connection with the Acquisition.
Description of the Securities to be Issued
Under the Plan, the Acquiring Fund will issue Class A, Class C, Advisor
Class, Class R, Class K and Class I shares for distribution to the Acquired Fund
shareholders. Each Class A, Class C, Advisor Class, Class R, Class K and Class I
share of the Acquiring Fund represents an equal proportionate interest with the
other shares of the same class of the Acquiring Fund. Each share has equal
earnings, assets and voting privileges and is entitled to dividends and other
distributions out of the income earned and gain realized on the assets belonging
to the Acquiring Fund as authorized by the Company's Board of Directors. Holders
of each class of shares of the Acquiring Fund have one vote per full share and
fractional votes for fractional shares held. Shares of the Acquiring Fund issued
to the shareholders of the Acquired Fund pursuant to the Acquisition will be
duly authorized, validly issued, fully paid and non-assessable when issued, will
be transferable without restriction and will have no preemptive or conversion
rights. Shares will be sold and redeemed based upon their NAV per share next
determined after receipt of the purchase or redemption request.
Dividends and Other Distributions
On or before the Valuation Time, as defined in the Plan, the Acquired Fund
will, if necessary, declare and pay as a distribution substantially all of its
undistributed net investment income, net short-term capital gain and net
long-term capital gain as applicable to maintain its treatment as a regulated
investment company under the Code. The sale of securities by the Acquired Fund
prior to the Acquisition, including the sale of the Underlying Portfolios, will
increase the amount of the final distribution to shareholders that the Acquired
Fund makes prior to the Acquisition.
Share Certificates
The Acquiring Fund does not issue certificates representing Acquiring Fund
shares. Ownership of the Acquiring Fund's Class A, Class C, Advisor Class, Class
R, Class K and Class I shares will be shown on the books of the Acquiring Fund's
transfer agent.
Federal Income Tax Consequences
The Acquisition is intended to qualify as a tax-free "reorganization" for
U.S. federal income tax purposes; however the IRS may disagree. The federal
income tax consequences discussed below reflect the uncertainty of the IRS
agreeing with the opinion that the Acquisition is a tax-free reorganization.
However, the IRS may disagree with the opinion that the Acquisition should be a
tax-free reorganization, and shareholders of the Acquired Fund could realize
gain or loss (as applicable) when they become shareholders of the Acquiring
Fund.
If the Acquisition so qualifies, in general, the Acquired Fund and the
Acquiring Fund should not recognize gain or loss for U.S. federal income tax
purposes in the transactions contemplated by the Acquisition (except for any
gain or loss that may be required to be recognized solely as a result of the
close of the Acquired Fund's taxable year due to the Acquisition or as a result
of the transfer of certain assets). Subject to certain stated assumptions
contained therein, the Acquired Fund and the Acquiring Fund will receive an
opinion of Seward & Kissel LLP substantially to the effect that, for United
States federal income tax purposes:
(i) the Acquisition should constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and each of the Acquired Fund and the
Acquiring Fund should be a "party to a reorganization" within the meaning of
Section 368(b) of the Code;
(ii) no gain or loss should be recognized by the Acquired Fund on the
transfer of all of the Acquired Fund's assets to the Acquiring Fund solely in
exchange for Acquiring Fund shares and the assumption by the Acquiring Fund of
the liabilities of the Acquired Fund, or upon the distribution of the Acquiring
Fund shares to the shareholders of the Acquired Fund, except for (A) gain or
loss that may be recognized on the transfer of "section 1256 contracts" as
defined in Section 1256(b) of the Code, (B) gain that may be recognized on the
transfer of stock in a "passive foreign investment company" as defined in
Section 1297(a) of the Code, and (C) any other gain or loss that may be required
to be recognized upon the transfer of an asset regardless of whether such
transfer would otherwise be a non-recognition transaction under the Code;
(iii) the tax basis in the hands of the Acquiring Fund of each asset of
the Acquired Fund should be the same as the tax basis of such asset in the hands
of the Acquired Fund immediately prior to the transfer thereof, increased by the
amount of gain (or decreased by the amount of loss), if any, recognized by the
Acquired Fund on the transfer;
(iv) the holding period of each asset of the Acquired Fund in the hands of
the Acquiring Fund, other than assets with respect to which gain or loss is
required to be recognized, should include in each instance the period during
which such asset was held by the Acquired Fund (except where investment
activities of the Acquiring Fund have the effect of reducing or eliminating the
holding period with respect to an asset);
(v) no gain or loss should be recognized by the Acquiring Fund upon its
receipt of the assets of the Acquired Fund solely in exchange for Acquiring Fund
shares and the assumption of the liabilities of the Acquired Fund;
(vi) no gain or loss should be recognized by the Acquired Fund
shareholders upon the exchange of their Acquired Fund shares for Acquiring Fund
shares as part of the Acquisition;
(vii) the aggregate tax basis of the Acquiring Fund shares that each Fund
shareholder receives in the Acquisition should be the same as the aggregate tax
basis of the Acquired Fund shares exchanged therefor; and
(viii) each Fund shareholder's holding period for the Acquiring Fund
shares received in the Acquisition should include the period for which such
shareholder held the Acquired Fund shares exchanged therefor, provided that the
Acquired Fund shareholder held such Acquired Fund shares as capital assets on
the date of the exchange.
The opinion will not express an opinion as to the tax effects to the
Acquired Fund or the Acquiring Fund from the marking to market of certain
categories of assets as of the closing of the taxable year of the Acquired Fund
at the time of the Acquisition or as a result of the transfer of certain types
of assets. This opinion of counsel will not be binding on the Internal Revenue
Service or a court and there is no assurance that the Internal Revenue Service
or a court will not take a view contrary to those expressed in the opinion.
Shareholders of the Acquired Fund are encouraged to consult their tax
advisers regarding the effect, if any, of the Acquisition in light of their
individual circumstances. Because the foregoing only relates to the federal
income tax consequences of the Acquisition, those shareholders also should
consult their tax advisers as to foreign, state and local tax consequences, if
any, of the Acquisition.
Capitalization Information
For information on the existing capitalization of the Acquired Fund and
pro forma capitalization of the Acquiring Fund, see Appendix D.
INFORMATION ABOUT THE FUNDS
The Acquired Fund, a "diversified" investment company registered under the
1940 Act, is a series of the Trust, which is organized as a Massachusetts
business trust. The Acquiring Fund, a "non-diversified" investment company
registered under the 1940 Act, is a series of the Company, which is organized as
a Maryland corporation.
Management of the Funds
The Board of each of the Trust and the Company is comprised of the same
individuals. In overseeing the management of the business and affairs of each
Fund, each Board approves all significant agreements between the Trust (or the
Company, as applicable) and persons or companies furnishing services to it,
including the Trust's agreements with the Adviser and the Trust's other service
providers, including the administrator, custodian and transfer agent. The
day-to-day operations of each of the Trust and the Company are delegated to the
officers of the Trust and the Company, as applicable, subject to each Fund's
investment objective and policies and the general supervision by the Board.
Subsequent to the consummation of the Acquisition, the Directors and officers of
the Acquiring Fund will continue to serve as the Directors and officers of the
combined Fund.
The following table presents information about the Board.
Principal Funds in Other Public
Occupation(s) AB Fund Company
Name, Address,* During Past Five Complex Directorships
Age and Years and Other Overseen Currently Held
(Year First Elected**) Information by Director by Director
---------------------- -------------- ----------- --------------
INDEPENDENT DIRECTORS
Marshall C. Turner, Jr.,# Private Investor since 108 Xilinx, Inc.
Chairman of the Board prior to 2011. Former (programmable
75 Chairman and CEO of logic semi-
(2005 - Trust) Dupont Photomasks, conductors)
(2014 - Company) Inc. (components of since 2007
semi-conductor
manufacturing). He
has extensive
operating leadership
and venture capital
investing experience,
including five interim
or full-time CEO
roles, and prior
service as general
partner of
institutional venture
capital partnerships.
He also has extensive
non-profit board
leadership experience,
and currently serves
on the boards of two
education and
science-related
non-profit
organizations. He has
served as a director
of one AB Fund since
1992, and director or
trustee of multiple AB
Funds since 2005. He
has been Chairman of
the AB Funds since
January 2014, and the
Chairman of the
Independent Directors
Committees of such AB
Funds since February
2014.
John H. Dobkin,# Independent Consultant 108 None
74 since prior to 2011.
(1999 - Trust) Formerly, President of
(2014 - Company) Save Venice, Inc.
(preservation
organization) from
2001-2002; Senior
Advisor from June
1999-June 2000 and
President of Historic
Hudson Valley
(historic
preservation) from
December 1989-May
1999. Previously,
Director of the
National Academy of
Design. He has served
as a director or
trustee of various AB
Funds since 1992 and
as Chairman of the
Audit Committees of a
number of such AB
Funds from 2001-2008.
Michael J. Downey,# Private Investor since 108 Asia Pacific
72 prior to 2011. Fund, Inc.
(2005 - Trust) Formerly, managing (registered
(2014 - Company) partner of Lexington investment
Capital, LLC company) since
(investment advisory prior to 2011
firm) from December
1997 until December
2003. He served as
Director of Prospect
Acquisition Corp.
(financial services)
from 2007 until 2009.
From 1987 until 1993,
Chairman and CEO of
Prudential Mutual Fund
Management, director
of the Prudential
mutual funds, and
member of the
Executive Committee of
Prudential Securities
Inc. He has served as
a director or trustee
of the AB Funds since
2005 and is a director
and Chairman of one
other registered
investment company.
William H. Foulk, Jr.# Investment Adviser and 108 None
84 an Independent
(1990 - Trust) Consultant since prior
(2014 - Company) to 2011. Previously,
he was Senior Manager
of Barrett Associates,
Inc., a registered
investment adviser.
He was formerly Deputy
Comptroller and Chief
Investment Officer of
the State of New York
and, prior thereto,
Chief Investment
Officer of the New
York Bank for Savings.
He has served as a
director or trustee of
various AB Funds since
1983 and was Chairman
of the Independent
Directors Committees
of the AB Funds from
2003 until early
February 2014. He
served as Chairman of
such AB Funds from
2003 through December
2013. He is also
active in a number of
mutual fund related
organizations and
committees.
D. James Guzy,# Chairman of the Board 108 None
80 of SRC Computers, Inc.
(2005 - Trust) (semi-conductors),
(2014 - Company) with which he has been
associated since prior
to 2011. He served as
Chairman of the Board
of PLX Technology
(semi-conductors)
since prior to 2011
until November 2013.
He was a director of
Intel Corporation
(semi-conductors) from
1969 until 2008, and
served as Chairman of
the Finance Committee
of such company for
several years until
May 2008. He has
served as a director
or trustee of one or
more of the AB Funds
since 1982.
Nancy P. Jacklin,# Professorial Lecturer 108 None
68 at the Johns Hopkins
(2006 - Trust) School of Advanced
(2014 - Company) International Studies
(2008-2015). U.S.
Executive Director of
the International
Monetary Fund (which
is responsible for
ensuring the stability
of the international
monetary system),
(December 2002-May
2006); Partner,
Clifford Chance
(1992-2002); Sector
Counsel, International
Banking and Finance,
and Associate General
Counsel, Citicorp
(1985-1992); Assistant
General Counsel
(International),
Federal Reserve Board
of Governors
(1982-1985); and
Attorney Advisor, U.S.
Department of the
Treasury (1973-1982).
Member of the Bar of
the District of
Columbia and of New
York; and member of
the Council on Foreign
Relations. She has
served as a director
or trustee of the AB
Funds since 2006 and
has been Chairman of
the Governance and
Nominating Committees
of the AB Funds since
August 2014.
Carol C. McMullen,# Managing Director of 108 None
61 Slalom Consulting
(2016 - Trust and Company) (consulting) since 2014
and private investor;
Director of Norfolk &
Dedham Group (mutual
property and casualty
insurance) since 2011;
and Director of Partners
Community Physicians
Organization
(healthcare) since
2014. Formerly,
Managing Director of The
Crossland Group
(consulting) from 2012
to 2013. She has held a
number of senior
positions in the asset
and wealth management
industries, including at
Eastern Bank (where her
roles included President
of Eastern Wealth
Management), Thomson
Financial (Global Head
of Sales for Investment
Management), and Putnam
Investments (where her
roles included Head of
Global Investment
Research). She has
served on a number of
private company and
nonprofit boards, and as
a director or trustee of
the AB Funds since June
2016.
Garry L. Moody,# Independent Consultant. 108 None
64 Formerly, Partner,
(2008 - Trust) Deloitte & Touche LLP,
(2014 - Company) (1995-2008) where he
held a number of
senior positions,
including Vice
Chairman, and U.S. and
Global Investment
Management Practice
Managing Partner;
President, Fidelity
Accounting and Custody
Services Company
(1993-1995), where he
was responsible for
accounting, pricing,
custody and reporting
for the Fidelity
mutual funds; and
Partner, Ernst & Young
LLP (1975-1993), where
he served as the
National Director of
Mutual Fund Tax
Services and Managing
Partner of its Chicago
Office Tax department.
He is a member of the
Trustee Advisory Board
of BoardIQ, a biweekly
publication focused on
issues and news
affecting directors of
mutual funds. He has
served as a director
or trustee, and as
Chairman of the Audit
Committees of the AB
Funds since 2008.
Earl D. Weiner,# Of Counsel, and Partner 108 None
77 prior to January 2007,
(2007 - Trust) of the law firm Sullivan &
(2014 - Company) Cromwell LLP and is a
former member of the
ABA Federal Regulation
of Securities
Committee Task Force
to draft editions of
the Fund Director's
Guidebook. He also
serves as a director
or trustee of various
non-profit
organizations and has
served as Chairman or
Vice Chairman of a
number of them. He
has served as a
director or trustee of
the AB Funds since
2007 and served as
Chairman of the
Governance and
Nominating Committees
of the AB Funds from
2007 until August
2014.
INTERESTED DIRECTOR
Robert M. Keith,+ Senior Vice President 108 None
56 of the Adviser++ and
1345 Avenue of the the head of
Americas AllianceBernstein
New York, NY 10105 Investments, Inc.
(2010 - Trust) ("ABI")++ since July
(2014 - Company) 2008; Director of ABI
and President of the
AB Mutual Funds.
Previously, he served
as Executive Managing
Director of ABI from
December 2006 to June
2008. Prior to
joining ABI in 2006,
Executive Managing
Director of Bernstein
Global Wealth
Management, and prior
thereto, Senior
Managing Director and
Global Head of Client
Service and Sales of
the Adviser's
institutional
investment management
business since 2004.
Prior thereto, he was
Managing Director and
Head of North American
Client Service and
Sales in the Adviser's
institutional
investment management
business with which he
had been associated
since prior to 2004.
* The address for each of the Independent Trustees/Directors is c/o
AllianceBernstein L.P., Attention: Philip L. Kirstein, 1345 Avenue of the
Americas, New York, NY 10105.
** There is no stated term of office for the Trustees/Directors.
# Member of the Audit Committee, the Governance and Nominating Committee,
and the Independent Directors Committee.
+ Mr. Keith is an "interested person," as defined in Section 2(a)(19) of the
Investment Company Act of 1940 (the "1940 Act"), of the Fund due to his
position as a Senior Vice President of the Adviser.
++ The Adviser and ABI are affiliates of the Fund.
In addition to the public company directorships currently held by the
Directors set forth in the table above, Mr. Turner was a director of SunEdison,
Inc. (solar materials and power plants) since prior to 2011 until July 2014, Mr.
Downey was a director of the Merger Fund (a registered investment company) since
prior to 2011 until 2013, Mr. Guzy was a director of Cirrus Logic Corporation
(semi-conductors) from prior to 2011 until July 2011 and served as Chairman of
the Board of PLX Technology (semi-conductors) since prior to 2011 until November
2013, and Mr. Moody was a director of Greenbacker Renewable Energy Company LLC
(renewable energy and energy efficiency projects) from August 2013 until January
2014.
The day-to-day management of, and investment decisions for, the Acquired
Fund are made by Daniel J. Loewy, Vadim Zlotnikov and Christopher H. Nikolich.
The day-to-day management of, and investment decisions for, the Acquiring Fund
are made by Mr. Loewy, Mr. Zlotnikov and Morgan C. Harting.
Each of Mr. Loewy, Mr. Nikolich, Mr. Zlotnikov and Mr. Harting is a Senior
Vice President of the Adviser, and has been associated with the Adviser since
prior to 2011. Each Fund's SAI provides additional information about each
portfolio manager's compensation, other accounts managed by each portfolio
manager, and each portfolio manager's ownership of securities in the Fund.
Advisory Agreements and Fees
Each Fund's investment adviser is the Adviser, which is located at 1345
Avenue of the Americas, New York, New York 10105. The Adviser is a leading
international investment adviser supervising client accounts with assets as of
September 30, 2016 totaling approximately $490 billion (of which more than $96
billion represented assets of registered investment companies sponsored by the
Adviser). As of September 30, 2016, the Adviser managed retirement assets for
many of the largest public and private employee benefit plans (including 18 of
the nation's FORTUNE 100 companies), for public employee retirement Funds in 27
states and the District of Columbia, for investment companies, and for
foundations, endowments, banks and insurance companies worldwide. The 31
registered investment companies managed by the Adviser, comprising approximately
129 separate investment portfolios, had as of September 30, 2016 approximately
2.4 million shareholder accounts.
The Adviser provides investment advisory services to each Fund under an
advisory agreement (each an "Advisory Agreement").
Under the terms of its Advisory Agreement, the Acquired Fund pays the
Adviser a monthly advisory fee of 0.55% of the first $2.5 billion of the
Acquired Fund's average daily net assets; 0.45% of the excess of $2.5 billion up
to $5 billion; and 0.40% of the excess over $5 billion. The Adviser has
contractually agreed in connection with the Acquired Fund's investments in AB
Multi-Manager Alternative Strategies Fund (the "MMAS") to (i) waive the portion
of its advisory fee attributable to its services after paying subadvisory fees
to sub-advisers and (ii) reimburse the Acquired Fund for the "Total Other
Expenses" of MMAS (excluding interest and short sales expenses), in each case as
included in "Acquired Fund Fees and Expenses" and paid by the Acquired Fund.
This fee waiver will remain in effect until December 31, 2016. This contractual
agreement automatically extends each year, unless the Adviser provides written
notice of termination to the Acquired Fund 60 days prior to December 31, 2016.
Under the terms of its Advisory Agreement, the Acquiring Fund pays the
Adviser a monthly advisory fee of 0.70% of the Acquiring Fund's average daily
net assets. The Adviser has contractually agreed to waive its management fee
and/or to bear expenses of the Acquiring Fund through February 28, 2018 to the
extent necessary to prevent total Fund operating expenses (excluding acquired
fund fees and expenses, interest expense, taxes, extraordinary expenses, and
brokerage commissions and other transaction costs), on an annualized basis, from
exceeding 0.99%, 1.74%, 0.74%, 1.24%, 0.99% and 0.74% of average daily net
assets, respectively, for Class A, Class C, Advisor Class, Class R, Class K and
Class I shares ("Expense Limitations"). Any fees borne by the Adviser may be
reimbursed by the Acquiring Fund until the end of the third fiscal year after
the fiscal period in which the fee was waived or the expense was borne, provided
that no reimbursement payment will be made that would cause the Fund's "Total
Annual Fund Operating Expenses" to exceed the Expense Limitations. In addition,
the Adviser has contractually agreed to waive its management fees and/or bear
expenses through February 28, 2018 in an amount equal to the Acquiring Fund's
share of all fees and expenses of any AB Mutual Funds in which the Fund invests.
In connection with the Acquisition, if the Plan is approved by the
Acquired Fund's shareholders, the Adviser has agreed to lower the Acquiring
Fund's advisory fee to 0.55% of the first $2.5 billion of the Acquiring Fund's
average daily net assets, 0.45% of the excess of $2.5 billion up to $5 billion,
and 0.40% of the excess over $5 billion, to match the advisory fee schedule of
the Acquired Fund.
For both Funds, the Adviser will furnish or pay the expenses of the Trust
for office space, facilities and equipment, services of executives and other
personnel of the Trust who are affiliated with the Adviser and certain
administrative services.
Both Advisory Agreements continue in effect from year to year if such
continuance is specifically approved, at least annually, by a majority vote of
the Trustees/Directors of the Fund who neither are interested persons of the
Fund nor have any direct or indirect financial interest in the Advisory
Agreement, cast in person at a meeting called for the purpose of voting on such
approval. A discussion regarding the basis for the Trustees' approval of the
Acquired Fund's Advisory Agreement is available in the Acquired Fund's annual
report to shareholders for the period ended August 31, 2016. A discussion
regarding the basis for the Directors' approval of the Acquiring Fund's Advisory
Agreement is available in the Acquiring Fund's semi-annual report to
shareholders for the period ended May 31, 2016.
Termination of the Expense Limitations may, depending on the assets of the
Acquiring Fund at termination, result in a substantial increase in the expense
ratios of the Class A, Class C, Advisor Class, Class R, Class K and Class I
shares of the Acquiring Fund.
Distribution Arrangements
ABI, a wholly-owned subsidiary of the Adviser, serves as the distributor
(principal underwriter) of both Funds' shares. Under Distribution Services
Agreements between ABI and both the Trust, and the Company, (the "Distribution
Services Agreement"), each Fund may pay distribution and service fees to ABI at
an annual rate of up to 0.25%, 1.00%, 1.00%, 0.50% and 0.25% of each Fund's
average daily net assets attributable to its Class A, Class B, Class C, Class R
and Class K shares, respectively (as applicable). The Distribution Services
Agreement is intended to defray expenses associated with the distribution of
such share classes in accordance with a plan of distribution that is included in
the Distribution Services Agreement and that has been duly adopted and approved
in accordance with Rule 12b-1 adopted by the SEC under the 1940 Act. The
Distribution Services Agreement provides that the Distributor will use such
payments in their entirety for distribution assistance and promotional
activities. Because these fees are paid out of each Fund's assets on an ongoing
basis, over time these fees will increase the cost of an investment in these
share classes and may cost more than paying other types of sales charges.
No distribution and/or service fees are paid with respect to Advisor Class
and Class I shares.
Administrative and Transfer Agency Arrangements
The Acquiring Fund reimburses the Adviser for the costs of providing
administrative and accounting services to the Fund. State Street provides
certain administrative services to the Acquired Fund and the Acquiring Fund,
respectively.
ABIS, an indirect wholly-owned subsidiary of the Adviser, acts as transfer
agent for both Funds. Under a Transfer Agency Agreement between ABIS and the
Company, each Fund compensates ABIS for providing personnel and facilities to
perform transfer agency services for the Fund.
VOTING INFORMATION
The Trustees have fixed the close of business on November 1, 2016 (the
"Record Date") as the date for the determination of shareholders entitled to
vote on the Proposal. Shareholders of record of the Acquired Fund at the close
of business on the Record Date are entitled to vote, even if they later sold
such shares. As of November 1, 2016, the Acquired Fund had [___________] shares
issued and outstanding. Appendix E to this Proxy Statement/Prospectus identifies
holders of more than five percent (5%) of the Acquired Fund's shares, and
contains information about any holdings of the shares of the Acquired Fund by
the executive officers and Trustees of the Acquired Fund. Appendix E also
identifies the Adviser as holding a significant ownership interest in the Class
C and Advisor Class shares of the Acquiring Fund.
Those shareholders who hold shares directly and not through a broker or
nominee (that is, a shareholder of record) may vote by appearing in person at
the Meeting, by returning the enclosed Proxy Card or by authorizing a proxy to
vote their shares by telephone or the Internet using the instructions provided
on the enclosed Proxy Card. To authorize a proxy to vote your shares by
telephone or using the Internet, please use the telephone number or Internet
address, as applicable, found on the Proxy Card. Owners of shares held through a
broker or nominee (who is the shareholder of record for those shares) should
follow directions provided to the shareholder by the broker or nominee to submit
voting instructions. Instructions to be followed by a shareholder of record to
submit a proxy via telephone or through the Internet, including use of the
Control Number on the shareholder's Proxy Card, are designed to verify
shareholder identities, to allow shareholders to give voting instructions and to
confirm that shareholder instructions have been recorded properly. Shareholders
who authorize proxies by telephone or through the Internet should not also
return a Proxy Card.
A shareholder of record may revoke its proxy at any time prior to exercise
thereof by notifying the Secretary of the Acquired Fund in writing at 1345
Avenue of the Americas, New York, New York 10105, or by returning a proxy with a
later date. You also can revoke a proxy by voting in person at the Meeting.
All properly executed proxies received prior to the Meeting will be voted
in accordance with the instructions marked thereon or otherwise as provided
therein. Unless instructions to the contrary are marked, proxies will be voted
"FOR" the approval of the Proposal.
Properly executed proxies may be returned with instructions to abstain
from voting or to withhold authority to vote (an "abstention") or may represent
a broker "non-vote" (which is a proxy from a broker or nominee indicating that
the broker or nominee has not received instructions from the beneficial owner or
other person entitled to vote shares on a particular matter with respect to
which the broker or nominee does not have discretionary power to vote).
Abstentions and broker non-votes will be considered present for purposes of
determining the existence of a quorum for the transaction of business, but will
have the effect of a vote against the Acquisition.
Approval of the Proposal requires the affirmative vote of the holders of
majority of the Acquired Fund's outstanding voting securities as defined in the
1940 Act, which means (a) 67% or more of the shares of the Acquired Fund
represented at a meeting at which more than 50% of the outstanding shares are
present in person or by proxy or (b) more than 50% of the outstanding shares of
the Acquired Fund, whichever is less.
A quorum for the transaction of business by shareholders of the Acquired
Fund at the Meeting will consist of the presence in person or by proxy of the
holders of 30% of the aggregate number of outstanding shares of the Acquired
Fund entitled to vote at the Meeting. Any lesser number shall be sufficient for
adjournments. If a quorum is not represented at the Meeting or, even if a quorum
is so present, if sufficient votes in favor of the Proposal are not received by
the date of the Meeting, or for any other reason, the Chairman of the Meeting
may authorize, or the persons named as proxy may propose and vote for, one or
more adjournments of the Meeting within a reasonable time after the date set for
the Meeting, with no other notice than an announcement of the Meeting in order
to permit further solicitation of proxies. Shares represented by proxies
indicating a vote against the Proposal will be voted against the adjournment.
The Acquired Fund has engaged Computershare Fund Services (the "Proxy
Solicitor") to assist in soliciting proxies for the Meeting. The Acquired Fund
will pay the Proxy Solicitor a fee of approximately $20,000 for the Proxy
Solicitor's solicitation services for the Acquired Fund, plus reimbursement of
out-of-pocket expenses.
LEGAL MATTERS
The validity of shares offered hereby will be passed upon for the
Acquiring Fund by Seward & Kissel LLP.
FINANCIAL HIGHLIGHTS
The fiscal year-end of the Acquired Fund is August 31. The fiscal year-end
of the Acquiring Fund is November 30.
The financial highlights of the Acquired Fund for the period ended August
31, 2016 are contained in the Acquired Fund's most recent annual report to
shareholders of the Acquired Fund dated August 31, 2016, and are incorporated
herein by reference. The financial highlights of the Acquired Fund for the five
years ended August 31, 2015 and the six-month period ended February 29, 2016 are
contained in the Acquired Fund's most recent semi-annual report to shareholders
of the Acquired Fund dated February 29, 2016, and are incorporated herein by
reference. The financial highlights of the Acquiring Fund for the period ended
November 30, are contained in the Acquiring Fund's most recent annual report to
shareholders of the Acquiring Fund dated November 30, 2015, and are incorporated
herein by reference. The financial highlights of the Acquiring Fund for the
period ended November 30, 2015 and the six-month period ended May 31, 2016 are
contained in the Acquiring Fund's most recent semi-annual report to shareholders
of the Acquiring Fund dated May 31, 2016, and are incorporated herein by
reference.
INFORMATION FILED WITH THE SEC
Each Fund is subject to the information requirements of the Securities
Exchange Act of 1934, as amended, and the 1940 Act and in accordance therewith,
file reports and other information, including proxy materials and charter
documents, with the SEC. Reports, proxy statements, registration statements and
other information filed by each Fund may be inspected without charge and copied
at the public reference facilities maintained by the SEC at 100 F Street, N.E.,
Washington, DC 20549.
You may also view or obtain these documents from the SEC:
By phone: 1-202-551-8090 (for information on the operations of the
Public Reference Room only)
By electronic mail: publicinfo@sec.gov (duplicating fee required)
On the Internet: www.sec.gov
Information relating to the Acquired Fund and the Acquiring Fund can be
found in the following documents, which are incorporated herein by reference:
o The Acquisition SAI dated as of November [__], 2016 that has been
filed with the SEC in connection with the Proxy Statement/Prospectus
(File No. 811-213893);
o The prospectus and SAI of the Acquired Fund dated December 31, 2015,
which were filed with the SEC on December 30, 2015, each as
supplemented through the date hereof (File No. 811-05088);
o The prospectus and SAI of the Acquiring Fund dated February 29,
2016, which were filed with the SEC on February 29, 2016, each as
amended and supplemented through the date hereof (File No.
811-01716);
o The annual report to shareholders of the Acquired Fund dated August
31, 2016, which contains audited financial statements and the
related independent registered public accounting firm's report for
the Acquired Fund for its fiscal year ended August 31, 2016 (File
No. 811-05088);
o The semi-annual report to shareholders of the Acquired Fund dated
February 29, 2016, which contains unaudited financial statements for
the Acquired Fund for the six-month period ended February 29, 2016
(File No. 811-05088);
o The annual report to shareholders of the Acquiring Fund dated
November 30, 2015, which contains audited financial statements and
the related independent registered public accounting firm's report
for the Acquiring Fund for its fiscal period ended November 30, 2015
(File No. 811-01716); and
o The semi-annual report to shareholders of the Acquiring Fund dated
May 31, 2016, which contains unaudited financial statements for the
Acquiring Fund for the six-month period ended May 31, 2016 (File No.
811-01716).
Copies of the annual and semi-annual reports to shareholders of the
Acquired Fund and Acquiring Fund are available, along with the Proxy
Statement/Prospectus and Acquisition SAI, upon request, without charge, by
writing to the address or calling the telephone number listed below.
By mail: c/o AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By phone: (800) 324-5060
THE TRUSTEES RECOMMEND THAT YOU VOTE FOR THE PROPOSAL.
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Appendix A
FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION
As of
September 21, 2016
This Agreement and Plan of Acquisition and Liquidation (the "Plan") is
made as of this 21st day of September, 2016, by and among AB Cap Fund, Inc. (the
"Company"), a Maryland corporation, on behalf of its series, AB All Market
Income Portfolio (the "Acquiring Fund"); The AB Portfolios (the "Trust"), a
Massachusetts business trust, on behalf of its series, AB Conservative Wealth
Strategy (the "Acquired Fund"); and solely for purposes of Section 24,
AllianceBernstein L.P., the investment adviser to the Acquiring Fund and the
Acquired Fund (the "Adviser").
WHEREAS, the Acquired Fund and the Acquiring Fund are each series of
entities registered as open-end management investment companies with the
Securities and Exchange Commission (the "SEC") under the Investment Company Act
of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Acquired Fund transfer all of its
assets to the Acquiring Fund in exchange for shares of a corresponding class of
shares of the Acquiring Fund of equal net asset value ("Acquisition Shares"), as
set forth below:
--------------------------------------------------------------------------------
AB Conservative Wealth Strategy AB All Market Income Portfolio
(Acquired Fund) (Acquiring Fund)
--------------------------------------------------------------------------------
Class A Class A
Class B* Class A
Class C Class C
Advisor Class Advisor Class
Class R Class R
Class K Class K
Class I Class I
--------------------------------------------------------------------------------
and that the Acquiring Fund assume the liabilities of the Acquired Fund and
distribute the Acquisition Shares to shareholders of the Acquired Fund (the
"Acquisition"); and that the Acquired Fund thereafter liquidate and terminate;
WHEREAS, the parties intend that the Acquisition qualify as a
"reorganization" within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"), and any successor
provisions, and that with respect to the Acquisition, the Acquiring Fund and the
Acquired Fund will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code; and
WHEREAS, the Board of Trustees of the Trust and the Board of Directors of
the Company have determined that the Acquisition is in the best interests of the
Acquired Fund and the Acquiring Fund, respectively, and that the interests of
the existing shareholders of the Acquired Fund and the Acquiring Fund,
respectively, would not be diluted as a result of the Acquisition;
Now, therefore, the Company, on behalf of the Acquiring Fund, and the
Trust, on behalf of the Acquired Fund, agree as follows:
1. Definitions
-----------
In addition to the terms elsewhere defined herein, each of the following
terms shall have the meaning indicated for that term as follows:
1934 Act................. Securities Exchange Act of 1934, as amended.
1933 Act................. Securities Act of 1933, as amended.
Assets ................... All assets of any kind and all interests, rights,
privileges and powers of or attributable to the
Acquired Fund or its shares, as appropriate, whether
or not determinable at the appropriate Effective Time
and wherever located, including, without limitation,
all cash, cash equivalents, securities, commodities,
futures interests, claims (whether absolute or
contingent, known or unknown, accrued or unaccrued or
conditional or unmatured), accounts, contract rights
and receivables (including dividend and interest
receivables) owned by the Acquired Fund or
attributable to its shares and any deferred or prepaid
expense shown as an asset on the Acquired Fund's
books.
Closing Date ............. Shall be on such date following the date that
shareholders of the Acquired Fund approve the Plan as
the parties may agree.
Declaration .............. The Trust's Agreement and Declaration of Trust.
Effective Time ........... [10:00 a.m.] Eastern time on the Closing Date, or
such other time as the parties may agree to in
writing.
Financial Statements ..... The audited financial statements of the relevant Fund
for its most recently completed fiscal year.
Fund ..................... The Acquiring Fund and/or the Acquired Fund, as the
case may be.
Liabilities .............. All liabilities, expenses and obligations of any kind
whatsoever of the Acquired Fund, whether known or
unknown, accrued or unaccrued, absolute or contingent
or conditional or unmatured, except that expenses of
the Acquisition contemplated hereby to be paid by the
Acquired Fund pursuant to Section 24 of the Plan and
which shall not be assumed or paid by the Acquiring
Fund shall not fall within the definition of
Liabilities for purposes of this Plan.
N-14 Registration
Statement ................ The Registration Statement of the Company (with
respect to the Acquiring Fund) on Form N-14 under the
1940 Act that will register the Acquisition Shares to
be issued in the Acquisition and will include the
proxy materials necessary for the shareholders of the
Acquired Fund to approve the Acquisition.
Valuation Time ........... The close of regular session trading on the New York
Stock Exchange ("NYSE") on the day before the Closing
Date or such other time as may be mutually agreed
upon, when for purposes of the Plan, the Acquiring
Fund determines the net asset value per Acquisition
Share and the Acquired Fund determines the net value
of the Assets.
NAV ...................... Except as otherwise provided, the net asset value per
share of each of the Acquiring Fund and the Acquired
Fund, shall be calculated by valuing and totaling its
assets and then subtracting its liabilities and then
dividing the balance by the number of its shares that
are outstanding.
2. Regulatory Filings
------------------
The Company, on behalf of the Acquiring Fund, shall promptly prepare and
file the N-14 Registration Statement with the SEC, and the Company and the
Trust, on behalf of each Fund, also shall make any other required or appropriate
filings with respect to the actions contemplated hereby.
3. Shareholder Action
------------------
As soon as practicable after the effective date of the N-14 Registration
Statement, the Acquired Fund shall hold a meeting of the shareholders of the
Acquired Fund to consider and vote upon the Plan and such other matters as the
Board of Trustees may determine. Such approval by the shareholders of the
Acquired Fund shall, to the extent necessary to permit the consummation of the
transactions contemplated herein without violating any investment objective,
policy or restriction of the Acquired Fund, be deemed to constitute approval by
the shareholders of a temporary amendment of any investment objective, policy or
restriction that would otherwise be inconsistent with or violated upon the
consummation of such transactions solely for the purpose of consummating such
transactions.
4. Transfer of the Acquired Fund's Assets
--------------------------------------
The Acquiring Fund and the Acquired Fund shall take the following steps
with respect to the Acquisition, as applicable:
(a) On or prior to the Closing Date, the Acquired Fund shall pay or
provide for the payment of all of the Liabilities, expenses, costs
and charges of or attributable to the Acquired Fund that are known
to the Acquired Fund and that are due and payable prior to or as of
the Closing Date.
(b) On or prior to the Valuation Date, the Acquired Fund will redeem its
respective holdings in any underlying investment companies
("Underlying Funds") in which it invests and will receive a pro rata
portion of the portfolio securities and other assets by the
Underlying Funds equal to its proportional ownership of each
Underlying Fund and thereafter, and take such actions as are set
forth in Section 4(d) below, and except to the extent prohibited by
Rule 19b-1 under the 1940 Act, the Acquired Fund will declare to
Acquired Fund shareholders of record a dividend or dividends which,
together with all previous such dividends, shall have the effect of
distributing (a) all the excess of (i) Acquired Fund's investment
income excludable from gross income under Section 103(a) of the Code
over (ii) Acquired Fund's deductions disallowed under Sections 265
and 171(a)(2) of the Code, (b) all of Acquired Fund's investment
company taxable income (as defined in Code Section 852), (computed
in each case without regard to any deduction for dividends paid),
and (c) all of Acquired Fund's net realized capital gain (as defined
in Code Section 1222), if any (after reduction for any capital loss
carryover), in each case for both the taxable year ending on
December 31, 2016, and for the short taxable year beginning on
January 1, 2017, and ending on the Closing Date. Such dividends will
be declared and paid to ensure continued qualification of the
Acquired Fund as a "regulated investment company" for tax purposes
and to eliminate fund-level tax.
(c) At the Effective Time, the Acquired Fund shall assign, transfer,
deliver and convey the Assets to the Acquiring Fund, subject to the
Liabilities. The Acquiring Fund shall then accept the Assets and
assume the Liabilities such that at and after the Effective Time (i)
the Assets at and after the Effective Time shall become and be
assets of the Acquiring Fund, and (ii) the Liabilities at the
Effective Time shall attach to the Acquiring Fund, and shall be
enforceable against the Acquiring Fund to the same extent as if
initially incurred by the Acquiring Fund.
(d) Within a reasonable time prior to the Closing Date, the Acquired
Fund shall provide, if requested, a list of the Assets to the
Acquiring Fund. The Acquired Fund may sell any asset on such list
prior to the Effective Time. After the Acquired Fund provides such
list, the Acquired Fund will not acquire any additional securities
or permit to exist any encumbrances, rights, restrictions or claims
not reflected on such list, without the approval of the Acquiring
Fund. Within a reasonable time after receipt of the list and prior
to the Closing Date, the Acquiring Fund will advise the Acquired
Fund in writing of any investments shown on the list that the
Acquiring Fund has determined to be inconsistent with its investment
objective, policies and restrictions. The Acquired Fund will dispose
of any such securities prior to the Closing Date to the extent
practicable and consistent with applicable legal requirements,
including the Acquired Fund's investment objectives, policies and
restrictions. In addition, if the Acquiring Fund determines that, as
a result of the Acquisition, the Acquiring Fund would own an
aggregate amount of an investment that would exceed a percentage
limitation applicable to the Acquiring Fund, the Acquiring Fund will
advise the Acquired Fund in writing of any such limitation and the
Acquired Fund shall dispose of a sufficient amount of such
investment as may be necessary to avoid the limitation as of the
Effective Time, to the extent practicable and consistent with
applicable legal requirements, including the Acquired Fund's
investment objectives, policies and restrictions.
(e) The Acquired Fund shall assign, transfer, deliver and convey the
Assets to the Acquiring Fund at the Effective Time on the following
basis:
(1) The value of the Assets shall be determined as of the
Valuation Time, using the valuation procedures of the Trust,
or such other valuation procedures as shall be mutually agreed
upon by the parties, and, in exchange for the transfer of the
Assets by the Acquired Fund to the Acquiring Fund, the
Acquiring Fund shall assume the Liabilities and simultaneously
issue and deliver to the Acquired Fund the number of
Acquisition Shares (including fractional Acquisition Shares)
with respect to each class equal in net asset value to the
aggregate value of the net assets attributable to the
corresponding class of the Acquired Fund then outstanding,
rounded to the fourth decimal place or such other decimal
place as the parties may agree to in writing;
(2) The NAV of each Acquisition Share of each class to be
delivered to the Acquired Fund shall be the NAV determined as
of the Valuation Time in accordance with the valuation
procedures of the Company, with the NAV of each Acquisition
Share of each class to be delivered to the Acquired Fund being
equal to the last determined NAV of such class of the
Acquiring Fund;
(3) The number of Acquisition Shares of each class (including
fractional shares, if any) to be delivered to the Acquired
Fund shall be determined by dividing the aggregate net assets
attributable to the class of the Acquired Fund by the NAV per
share of the corresponding class of the Acquiring Fund
(determined in accordance with Section 4(e)(2) of this Plan),
except that in determining the number of Class A shares of the
Acquiring Fund to be delivered to the Class B shareholders of
the Acquired Fund, the aggregate net assets attributable to
the Class B shares of the Acquired Fund shall be divided by
the NAV per share of the Class A shares of the Acquiring Fund;
and
(4) The Assets of the Acquired Fund shall be made available by the
Acquired Fund to State Street Bank & Trust Company, as the
custodian for the Acquiring Fund (the "Custodian"), for
examination no later than five business days preceding the
Valuation Time. On the Closing Date, such portfolio securities
and all the Acquired Fund's cash shall be delivered by the
Acquired Fund to the Custodian for the account of the
Acquiring Fund, such portfolio securities to be duly endorsed
in proper form for transfer in such manner and condition as to
constitute good delivery thereof in accordance with the custom
of brokers or, in the case of portfolio securities held in the
U.S. Treasury Department's book-entry system or other third
party depositories, by transfer to the account of the
Custodian in accordance with Rule 17f-4, Rule 17f-5 or Rule
17f-7, as the case may be, under the 1940 Act and accompanied
by all necessary federal and state stock transfer stamps or a
check for the appropriate purchase price thereof. The cash
delivered shall be in the form of currency or certified or
official bank checks, payable to the order of the Custodian or
shall be wired to an account pursuant to instructions provided
by the Acquiring Fund.
(f) Promptly after the Closing Date, the Acquired Fund will deliver to
the Acquiring Fund a Statement of Assets and Liabilities of the
Acquired Fund as of the Closing Date.
5. Liquidation and Termination of the Acquired Fund, Registration of
Acquisition Shares and Access to Records
----------------------------------------
The Acquired Fund and the Acquiring Fund also shall take the following
steps, as applicable:
(a) At or as soon as reasonably practical after the Effective Time, the
Acquired Fund shall completely liquidate and terminate by
transferring to its shareholders of record the Acquisition Shares it
receives pursuant to this Plan. The Acquiring Fund shall establish
accounts on its share records and note on such accounts the names of
the former Acquired Fund shareholders and the amount of Acquisition
Shares that former Acquired Fund shareholders are due based on their
respective holdings of shares of the Acquired Fund as of the close
of business on the Closing Date. The Acquiring Fund shall not issue
certificates representing Acquisition Shares in connection with such
exchange. All issued and outstanding shares in connection with such
exchange will be simultaneously cancelled on the books of the
Acquired Fund. Ownership of Acquisition Shares will be shown on the
books of the Acquiring Fund's transfer agent.
Following distribution by the Acquired Fund to its shareholders of
all Acquisition Shares delivered to the Acquired Fund, the Acquired
Fund shall wind up its affairs and shall take all steps as are
necessary and proper to terminate its existence as soon as is
reasonably possible after the Effective Time.
(b) At and after the Closing Date, the Acquired Fund shall provide the
Acquiring Fund and its transfer agent with immediate access to: (i)
all records containing the names, addresses and taxpayer
identification numbers of all of the Acquired Fund's shareholders
and the number and percentage ownership of the outstanding shares of
the Acquired Fund owned by shareholders as of the Effective Time,
and (ii) all original documentation (including all applicable
Internal Revenue Service forms, certificates, certifications and
correspondence) relating to the Acquired Fund shareholders' taxpayer
identification numbers and their liability for or exemption from
back-up withholding. The Acquired Fund shall preserve and maintain,
or shall direct its service providers to preserve and maintain,
records with respect to the Acquired Fund as required by Section 31
of, and Rules 31a-1 and 31a-2 under, the 1940 Act.
6. Certain Representations and Warranties of the Acquired Fund
-----------------------------------------------------------
The Trust, on behalf of itself or the Acquired Fund, as applicable,
represents and warrants to the Acquiring Fund as follows:
(a) The Acquired Fund is a duly established series of the Trust, which
is a Massachusetts business trust duly organized and validly
existing and in good standing under the laws of the Commonwealth of
Massachusetts. The Trust is registered with the SEC as an open-end
management investment company under the 1940 Act and the
registration of the Acquired Fund shares under the 1933 Act will be
in full force and effect as of the Effective Time.
(b) The Trust, on behalf of the Acquired Fund, has the power and all
necessary federal, state and local qualifications and authorizations
to own all of the Assets, to carry on its business, to enter into
this Plan and to consummate the transactions contemplated herein.
(c) The Board of Trustees of the Trust has duly authorized the execution
and delivery of this Plan and the transactions contemplated herein
with respect to the Acquired Fund. Duly authorized officers of the
Trust, on behalf of the Acquired Fund, have executed and delivered
the Plan. The Plan represents a valid and binding contract of the
Trust, on behalf of the Acquired Fund, enforceable against the
Acquired Fund in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, arrangement,
moratorium, and other similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
The execution and delivery of this Plan by the Trust does not, and,
subject to the approval of shareholders referred to in Section 3
hereof, the consummation of the transactions contemplated by this
Plan will not, violate federal securities laws or Massachusetts law,
or the Trust's Declaration or Bylaws or any material agreement to
which the Acquired Fund is subject. Except for the approval of the
Acquired Fund's shareholders and the Board of Trustees of the Trust,
the Trust does not need to take any other action to authorize its
officers to effectuate this Plan and the transactions contemplated
herein on behalf of the Acquired Fund.
(d) The Acquired Fund is a separate series of the Trust that is treated
as a separate corporation from each other series of the Trust under
Section 851(g) of the Code. The Acquired Fund has qualified as a
regulated investment company under Part I of Subchapter M of
Subtitle A, Chapter 1, of the Code, and has been eligible for
taxation under Section 852(b) of the Code, in respect of each
taxable year since the commencement of its operations and intends to
continue to qualify as a regulated investment company for its
taxable year that includes the Closing Date.
(e) The information pertaining to the Acquired Fund included within the
N-14 Registration Statement when Part A of the N-14 Registration
Statement is distributed to shareholders, at the time of the
shareholder meeting of the Acquired Fund for approval of the
Acquisition and at the Effective Time, insofar as it relates to the
Acquired Fund, shall (i) comply in all material respects with the
applicable provisions of the 1933 Act and the 1940 Act, and the
rules and regulations thereunder and applicable state securities
laws, and (ii) not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(f) The Trust has duly authorized and validly issued all issued and
outstanding shares of the Acquired Fund, and all such shares are
fully paid and nonassessable and were offered for sale and sold in
conformity with the registration requirements of all applicable
federal and state securities laws. There are no outstanding options,
warrants or other rights to subscribe for or purchase any of the
shares of the Acquired Fund, and there are no securities convertible
into shares of the Acquired Fund.
(g) The Trust shall operate its business in the ordinary course between
the date hereof and the Effective Time. Such ordinary course of
business will include the declaration and payment of customary
dividends and distributions and any other dividends and
distributions referred to in Section 4(b) hereof.
(h) At the Effective Time, the Acquired Fund will have good and
marketable title to the Assets and full right, power and authority
to assign, transfer, deliver and convey the Assets.
(i) The Financial Statements of the Acquired Fund, a copy of which has
been previously delivered to the Acquiring Fund, fairly present the
financial position of the Acquired Fund as of the Acquired Fund's
most recent fiscal year-end and the results of the Acquired Fund's
operations and changes in the Acquired Fund's net assets for the
periods indicated.
(j) To the knowledge of the Acquired Fund, the Acquired Fund has no
liabilities, whether or not determined or determinable, other than
the liabilities disclosed or provided for in its Financial
Statements or liabilities incurred in the ordinary course of
business subsequent to the date of the most recent Financial
Statement referencing liabilities and reflected in its NAV.
(k) To the knowledge of the Acquired Fund, except as has been disclosed
in writing to the Acquiring Fund, no claims, actions, suits,
investigations or proceedings of any type are pending or threatened
against the Acquired Fund or any of its properties or assets or any
person whom the Acquired Fund may be obligated to indemnify in
connection with such litigation, proceeding or investigation.
Subject to the foregoing, there are no facts that the Acquired Fund
has reason to believe are likely to form the basis for the
institution of any such claim, action, suit, investigation or
proceeding against the Acquired Fund. The Acquired Fund is not a
party to nor subject to the provisions of any order, decree or
judgment of any court or governmental body that adversely affects,
or is reasonably likely to adversely affect, its financial
condition, results of operations, or the Assets or its ability to
consummate the transactions contemplated by the Plan.
(l) Except for agreements entered into or granted in the ordinary course
of its business, in each case under which no material default
exists, and this Plan, the Acquired Fund is not a party to or
subject to any material contract or other commitments which, if
terminated, may result in material liability to the Acquired Fund or
under which (whether or not terminated) any material payment for
periods subsequent to the Closing Date will be due from the Acquired
Fund.
(m) The Trust has filed or will file its federal income tax returns,
copies of which have been previously made available or will be made
available to the Acquiring Fund, for all taxable years ending on or
before the Closing Date, and has paid or will pay all taxes shown as
due on such returns. All of the Acquired Fund's tax liabilities will
have been adequately provided for on its books. No such return is
currently under audit and no unpaid assessment has been asserted
with respect to such returns. To the best of the Trust's knowledge,
it will not have any tax deficiency or liability asserted against it
or question with respect thereto raised, and it will not be under
audit by the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid. The Trust will
timely file its federal income tax return for each subsequent
taxable year including its current taxable year.
(n) Since the date of the Financial Statements of the Acquired Fund,
there has been no material adverse change in the Acquired Fund's
financial condition, results of operations, business, or Assets. For
this purpose, negative investment performance shall not be
considered a material adverse change.
(o) The Acquired Fund's investment operations from inception to the date
hereof have been in compliance in all material respects with the
investment policies and investment restrictions set forth in its
prospectus or prospectuses and statement or statements of additional
information as in effect from time to time, except as previously
disclosed in writing to the Acquiring Fund.
(p) The Acquisition Shares to be issued to the Acquired Fund pursuant to
paragraph 4(e)(1) will not be acquired for the purpose of making any
distribution thereof other than the Acquired Fund shareholders as
provided in paragraph 4(e)(1).
(q) The Trust, or its agent(s), (i) holds or has obtained a valid Form
W-8BEN, Certificate of Foreign Status of Beneficial Owner for United
States Withholding (or other appropriate series of Form W-8, as the
case may be) or Form W-9, Request for Taxpayer Identification Number
and Certification, for each Fund shareholder of record, which Form
W-8 or Form W-9 can be associated with reportable payments made by
the Acquired Fund to such shareholder, and/or (ii) has otherwise
timely instituted any required backup withholding procedures with
respect to such shareholder as provided by Section 3406 of the Code
and the regulations thereunder.
7. Certain Representations and Warranties of the Acquiring Fund
------------------------------------------------------------
The Company, on behalf of itself or the Acquiring Fund, as applicable,
represents and warrants to the Acquired Fund as follows:
(a) The Acquiring Fund is a duly established series of the Company,
which is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Maryland. The Company
is registered with the SEC as an open-end management investment
company under the 1940 Act and the registration of the Acquiring
Fund shares under the 1933 Act will be in full force and effect as
of the Effective Time.
(b) The Company, on behalf of the Acquiring Fund, has the power and all
necessary federal, state and local qualifications and authorizations
to own all of its assets, to carry on its business, to enter into
this Plan and to consummate the transactions contemplated herein.
(c) The Board of Directors of the Company has duly authorized execution
and delivery of this Plan and the transactions contemplated herein
on behalf of the Company, on behalf of the Acquiring Fund. Duly
authorized officers of the Acquiring Fund have executed and
delivered the Plan. The Plan represents a valid and binding contract
of the Company, on behalf of the Acquiring Fund, enforceable against
the Acquiring Fund in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization, arrangement,
moratorium and other similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
The execution and delivery of this Plan by the Company does not, and
the consummation of the transactions contemplated by this Plan will
not, violate the federal securities laws or Maryland law or the
Company's Charter or Bylaws or any material agreement to which the
Acquiring Fund is subject. Except for the approval of the Board of
Directors of the Company, the Company does not need to take any
other action to authorize its officers to effectuate the Plan and
the transactions contemplated herein on behalf of the Acquiring
Fund.
(d) The Acquiring Fund is a separate series of the Company that is
treated as a separate corporation from each other series of the
Company under Section 851(g) of the Code. The Acquiring Fund has
qualified as a regulated investment company under Part I of
Subchapter M of Subtitle A, Chapter 1, of the Code and is eligible
for taxation under Section 852(b) of the Code for the taxable year
that will include the Closing Date and expects to so qualify for
each subsequent taxable year.
(e) The N-14 Registration Statement when Part A of the N-14 Registration
Statement is distributed to shareholders of the Acquired Fund, at
the time of the shareholder meeting of the Acquired Fund for
approval of this Plan providing for the Acquisition and at the
Effective Time, insofar as it relates to the Acquiring Fund, shall
(i) comply in all material respects with the applicable provisions
of the 1933 Act and the 1940 Act, and the rules and regulations
thereunder and applicable state securities laws and (ii) not contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which
they were made, not misleading.
(f) The Company has duly authorized and validly issued all issued and
outstanding shares of the Acquiring Fund, and all such shares are
fully paid and nonassessable and were offered for sale and sold in
conformity with the registration requirements of all applicable
federal and state securities laws. The Acquiring Fund has duly
authorized the Acquisition Shares referred to in Section 4(e) hereof
to be issued and delivered to the Acquired Fund's stockholders as of
the Effective Time. When issued and delivered, such Acquisition
Shares shall be validly issued, fully paid and nonassessable, and no
shareholder of the Acquiring Fund shall have any preemptive right of
subscription or purchase in respect of any such share. There are no
outstanding options, warrants or other rights to subscribe for or
purchase any Acquisition Shares, nor are there any securities
convertible into Acquisition Shares.
(g) To the knowledge of the Acquiring Fund, except as has been disclosed
in writing to the Acquired Fund, no claims, actions, suits,
investigations or proceedings of any type are pending or threatened
against the Acquiring Fund or any of its properties or assets or any
person whom the Acquiring Fund may be obligated to indemnify in
connection with such litigation, proceeding or investigation.
Subject to the foregoing, there are no facts that the Acquiring Fund
currently has reason to believe are likely to form the basis for the
institution of any such claim, action, suit, investigation or
proceeding against the Acquiring Fund. The Acquiring Fund is not a
party to or subject to the provisions of any order, decree or
judgment of any court or governmental body that adversely affects,
or is reasonably likely to adversely affect its financial condition,
results of operations, its assets or its ability to consummate the
transactions contemplated by this Plan.
(h) Except for agreements entered into or granted in the ordinary course
of its business, in each case under which no material default
exists, the Acquiring Fund is not a party to or subject to any
material contract, debt instrument, employee benefit plan, lease,
franchise, license or permit of any kind or nature whatsoever.
(i) The Acquiring Fund will use all reasonable efforts to obtain the
approvals and authorizations required by the 1933 Act, the 1940 Act
and such state securities laws as it may deem appropriate in order
to continue its operations after the Closing Date.
8. Conditions to the Obligations of the Acquiring Fund and the Acquired Fund
-------------------------------------------------------------------------
The obligations of the Acquiring Fund and the Acquired Fund with respect
to the Acquisition shall be subject to the following conditions precedent:
(a) The shareholders of the Acquired Fund shall have approved the
Acquisition in the manner required by the Declaration, the Trust's
Bylaws and applicable law. If shareholders of the Acquired Fund fail
to approve this Plan providing for the Acquisition as required, that
failure shall release the Funds of their obligations under this
Plan.
(b) The Acquiring Fund and the Acquired Fund shall have delivered to the
other party a certificate dated as of the Closing Date and executed
in its name by its Secretary or an Assistant Secretary, in a form
reasonably satisfactory to the receiving party, stating that the
representations and warranties of the Acquiring Fund or the Acquired
Fund, as applicable, in this Plan that apply to the Acquisition are
true and correct in all material respects at and as of the Valuation
Time.
(c) The Acquiring Fund and the Acquired Fund shall have performed and
complied in all material respects with each of its representations
and warranties required by this Plan to be performed or complied
with by it prior to or at the Valuation Time and the Effective Time.
(d) There shall have been no material adverse change in the financial
condition, results of operations, business, properties or assets of
the Acquired Fund since the date of its most recent financial
statement. Negative investment performance shall not be considered a
material adverse change.
(e) The Acquiring Fund and the Acquired Fund shall have received an
opinion of Seward & Kissel LLP reasonably satisfactory to each of
them, substantially to the effect that for federal income tax
purposes:
(1) the Acquisition should constitute a "reorganization" within
the meaning of Section 368(a) of the Code and that each of the
Acquiring Fund and the Acquired Fund will be "a party to a
reorganization" within the meaning of Section 368(b) of the
Code;
(2) no gain or loss should be recognized by the Acquired Fund on
the transfer of all of the Acquired Fund's Assets to the
Acquiring Fund solely in exchange for the Acquisition Shares
and the assumption by the Acquiring Fund of the Liabilities,
or upon the distribution of the Acquisition Shares to
shareholders of the Acquired Fund;
(3) the tax basis in the hands of the Acquiring Fund of each Asset
of the Acquired Fund should be the same as the tax basis of
such Asset in the hands of the Acquired Fund immediately prior
to the transfer thereof, increased by the amount of gain (or
decreased by the amount of loss), if any, recognized by the
Acquired Fund on the transfer;
(4) the holding period of each Asset of the Acquired Fund in the
hands of the Acquiring Fund, other than Assets with respect to
which gain or loss is required to be recognized, should
include in each instance the period during which such Asset
was held by the Acquired Fund (except where investment
activities of the Acquiring Fund have the effect of reducing
or eliminating the holding period with respect to an Asset);
(5) no gain or loss should be recognized by the Acquiring Fund
upon its receipt of the Assets of the Acquired Fund solely in
exchange for Acquisition Shares and the assumption of the
Liabilities;
(6) no gain or loss should be recognized by the shareholders of
the Acquired Fund upon the exchange of their Acquired Fund
shares for Acquisition Shares as part of the Acquisition;
(7) the aggregate tax basis of the Acquisition Shares that each
shareholder of the Acquired Fund receives in the Acquisition
should be the same as the aggregate tax basis of the Acquired
Fund shares exchanged therefor; and
(8) each Acquired Fund shareholder's holding period for the
Acquisition Shares received in the Acquisition should include
the period for which such shareholder held the Acquired Fund
shares exchanged therefor, provided that the shareholder held
such Acquired Fund shares as capital assets on the date of the
exchange.
No opinion will be expressed as to the effect of the Acquisition on
(i) the Acquired Fund or the Acquiring Fund with respect to any
assets as to which any unrealized gain or loss is required to be
recognized for U.S. federal income tax purposes at the end of a
taxable year (or on the termination or transfer thereof) under a
mark-to-market system of accounting or (ii) any shareholder of the
Acquired Fund that is required to recognize unrealized gains and
losses for U.S. federal income tax purposes under a mark-to market
system of accounting.
The opinion will be based on certain factual certifications made by
officers of the Funds and will also be based on customary
assumptions and subject to certain qualifications. The opinion is
not a guarantee that the tax consequences of the Acquisition will be
as described above.
Notwithstanding this subparagraph (e), Seward & Kissel LLP will
express no view with respect to the effect of the Acquisition on any
transferred asset as to which any unrealized gain or loss is
required to be recognized at the end of a taxable year (or on the
termination or transfer thereof) under federal income tax
principles. Each Fund shall agree to make and provide to Seward &
Kissel LLP additional factual representations with respect to the
Funds that are reasonably necessary to enable Seward & Kissel LLP to
deliver the tax opinion. Notwithstanding anything in this Plan to
the contrary, neither Fund may waive in any material respect the
conditions set forth under this subparagraph (e).
(f) The N-14 Registration Statement shall have become effective under
the 1933 Act as to the Acquisition Shares, and the SEC shall not
have instituted and, to the knowledge of the Acquiring Fund, is not
contemplating instituting any stop order suspending the
effectiveness of the N-14 Registration Statement.
(g) No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in
connection with, the Acquisition.
(h) The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking
to enjoin consummation of the Acquisition under Section 25(c) of the
1940 Act.
(i) Neither party shall have terminated this Plan with respect to the
Acquisition pursuant to Section 13 of this Plan.
9. Conditions to the Obligations of the Acquired Fund
--------------------------------------------------
The obligations of the Acquired Fund with respect to the Acquisition shall
be subject to the following conditions precedent:
(a) The Acquired Fund shall have received an opinion of Seward & Kissel
LLP, counsel to the Company and the Acquiring Fund, in form and
substance reasonably satisfactory to the Acquired Fund and dated as
of the Closing Date, substantially to the effect that:
(1) The Acquiring Fund is a series of a corporation, and the
corporation is duly incorporated and existing under and by
virtue of the laws of the State of Maryland, is in good
standing with the State Department of Assessments and Taxation
of Maryland ("SDAT"), and is an open-end management investment
company registered under the 1940 Act;
(2) This Plan has been duly authorized, executed and delivered by
the Company, on behalf of the Acquiring Fund, and, assuming
the N-14 Registration Statement referred to in Section 2 of
this Plan does not contain any material misstatements or
omissions, and assuming due authorization, execution and
delivery of this Plan by the Acquired Fund, represents a
legal, valid and binding contract, enforceable in accordance
with its terms, subject to the effect of bankruptcy,
insolvency, moratorium, fraudulent conveyance and transfer and
similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, and
further subject to the application of equitable principles in
any proceeding, whether at law or in equity or with respect to
the enforcement of provisions of the Plan and the effect of
judicial decisions which have held that certain provisions are
unenforceable when their enforcement would violate an implied
covenant of good faith and fair dealing or would be
commercially unreasonable or when default under the Plan is
not material;
(3) The Acquisition Shares to be delivered as provided for by this
Plan are duly authorized and upon delivery will be validly
issued, fully paid and nonassessable by the Acquiring Fund;
(4) The execution and delivery of this Plan by the Company, on
behalf of the Acquiring Fund, did not, and the consummation of
the Acquisition will not, violate the Charter of the Company
or the Bylaws, and no approval of the Plan by the shareholders
of the Acquiring Fund is required under Maryland law, the
Company's Charter or the Bylaws; and
(5) To the knowledge of such counsel, no consent, approval,
authorization or order of any federal or state court or
administrative or regulatory agency is required for the
Company to enter into this Plan on behalf of the Acquiring
Fund or carry out its terms, except those that have been
obtained under the 1933 Act, the 1934 Act, the 1940 Act and
the rules and regulations under those Acts, if any, or that
may be required under state securities laws or subsequent to
the Effective Time or when the failure to obtain the consent,
approval, authorization or order would not have a material
adverse effect on the operation of the Company or the
Acquiring Fund, as applicable.
In rendering such opinion, Seward & Kissel LLP may (i) rely on the
opinion of Venable LLP as to matters of Maryland law to the extent
set forth in such opinion, (ii) make assumptions regarding the
authenticity, genuineness and/or conformity of documents and copies
thereof without independent verification thereof, (iii) limit such
opinion to applicable federal and state law, (iv) define the word
"knowledge" and related terms to mean the knowledge of attorneys
then with such firm who have devoted substantive attention to
matters directly related to this Plan and (v) rely on certificates
of officers or directors of the Company as to factual matters.
(b) The Acquired Fund shall have received a letter from
AllianceBernstein L.P., the investment adviser to the Acquiring Fund
and the Acquired Fund (the "Adviser") with respect to insurance
matters in form and substance satisfactory to the Acquired Fund.
10. Conditions to the Obligations of the Company or the Acquiring Fund
------------------------------------------------------------------
The obligations of the Company or the Acquiring Fund, as applicable, with
respect to the Acquisition shall be subject to the following conditions
precedent:
(a) The Company, on behalf of the Acquiring Fund, shall have received an
opinion of Seward & Kissel LLP, counsel to the Acquired Fund, in
form and substance reasonably satisfactory to the Company and dated
as of the Closing Date, substantially to the effect that:
(1) The Acquired Fund is a duly established series of the Trust,
which is a Massachusetts business trust duly organized and
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and is an open-end management
investment company registered under the 1940 Act;
(2) This Plan has been duly authorized, executed and delivered by
the Acquired Fund and, assuming the N-14 Registration
Statement referred to in Section 2 of this Plan does not
contain any material misstatements or omissions, and assuming
due authorization, execution and delivery of this Plan by the
Company, on behalf of the Acquiring Fund, represents a legal,
valid and binding contract, enforceable in accordance with its
terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and transfer and similar
laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, and further subject to
the application of equitable principles in any proceeding,
whether at law or in equity or with respect to the enforcement
of provisions of the Plan and the effect of judicial decisions
which have held that certain provisions are unenforceable when
their enforcement would violate an implied covenant of good
faith and fair dealing or would be commercially unreasonable
or when default under the Plan is not material;
(3) The execution and delivery of this Plan by the Trust did not,
and the consummation of the Acquisition will not, violate the
Declaration or the Trust's Bylaws, and no approval of the Plan
by the shareholders of the Acquiring Fund is required under
the Declaration, the Trust's Bylaws or the laws of the
Commonwealth of Massachusetts applicable to Massachusetts
business trusts; and
(4) To the knowledge of such counsel, no consent, approval,
authorization or order of any federal or state court or
administrative or regulatory agency is required for the
Acquired Fund to enter into the Plan or carry out its terms,
except those that have been obtained under the 1933 Act, the
1934 Act, the 1940 Act and the rules and regulations under
those Acts, if any, or that may be required under state
securities laws or subsequent to the Effective Time or when
the failure to obtain the consent, approval, authorization or
order would not have a material adverse effect on the
operation of the Acquired Fund.
In rendering such opinion, Seward & Kissel LLP may (i) rely on the
opinion of Dechert LLP as to matters of Massachusetts law, (ii) make
assumptions regarding the authenticity, genuineness and/or
conformity of documents and copies thereof without independent
verification thereof, (iii) limit such opinion to applicable federal
and state law, (iv) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such firm who have devoted
substantive attention to matters directly related to this Plan and
(v) rely on certificates of officers or directors of the Acquired
Fund as to factual matters.
(b) The Company, on behalf of the Acquiring Fund, shall have received a
letter from the Adviser agreeing to indemnify the Acquiring Fund in
respect of certain liabilities of the Acquired Fund in form and
substance satisfactory to the Company.
11. Closing
-------
(a) The Closing shall be held at the offices of the Funds, 1345 Avenue
of the Americas, New York, New York 10105, or at such other time or
place as the parties may agree.
(b) In the event that at the Valuation Time (a) the NYSE shall be closed
to trading or trading thereon shall be restricted, or (b) trading or
the reporting of trading on the NYSE or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of the
Acquired Fund or the Acquiring Fund is impracticable, the Closing
Date shall be postponed until the first business day after the day
when trading shall have been fully resumed and reporting shall have
been restored; provided that if trading shall not be fully resumed
and reporting restored within three business days of the Valuation
Time, this Plan may be terminated by either the Acquired Fund or the
Acquiring Fund upon the giving of written notice to the other party.
(c) The Acquiring Fund will provide to the Acquired Fund evidence
satisfactory to the Acquired Fund that Acquisition Shares issuable
pursuant to the Acquisition have been credited to accounts
established on the records of the Acquiring Fund in the name of the
Acquired Fund's shareholders. After the Closing Date, the Acquiring
Fund will provide to the Acquired Fund evidence satisfactory to the
Acquired Fund that such Acquisition Shares have been credited to
open accounts in the names of the Acquired Fund shareholders.
(d) At the Closing, each party shall deliver to the other such bills of
sale, instruments of assumption of liabilities, checks, assignments,
stock certificates, receipts or other documents as such other party
or its counsel may reasonably request in connection with the
transfer of assets, assumption of liabilities and liquidation
contemplated by the Plan.
12. Survival of Representations and Warranties
------------------------------------------
(a) Except for Sections 6, 7, 14, 18, 19, 21, 22, 23 and 24, no
representations, warranties or covenants in or pursuant to this Plan
(including certificates of officers) shall survive the completion of
the transactions contemplated herein.
(b) Each party agrees to treat confidentially and as proprietary
information of the other party all records and other information,
including any information relating to portfolio holdings, of its
Fund and not to use such records and information for any purpose
other than the performance of its duties under the Plan; provided,
however, that after prior notification of and written approval by
party (which approval shall not be withheld if the other party would
be exposed to civil or criminal contempt proceedings for failure to
comply when requested to divulge such information by duly
constituted authorities having proper jurisdiction, and which
approval shall not be withheld unreasonably in any other
circumstance), the other party may disclose such records and/or
information as so approved.
13. Termination of Plan
-------------------
A majority of the Directors/Trustees of either the Company or the Trust
may terminate this Plan with respect to the Acquiring Fund or the Acquired Fund,
respectively, at any time before the applicable Effective Time if: (i) the
conditions precedent set forth in Sections 8, 9 or 10 as appropriate, are not
satisfied; or (ii) either the Board of Directors/Trustees of the Company or the
Trust determines that the consummation of the Acquisition is not in the best
interests of the Acquiring Fund or its shareholders, or the Acquired Fund or its
shareholders, respectively, and gives notice of such termination to the other
party.
14. Governing Law
-------------
This Plan and the transactions contemplated hereby shall be governed,
construed and enforced in accordance with the laws of the State of New York,
except to the extent preempted by federal law, without regard to conflicts of
law principles.
15. Brokerage Fees
--------------
Each party represents and warrants that there are no brokers or finders
entitled to receive any payments in connection with the transactions provided
for in the Plan.
16. Amendments
----------
The Company, on behalf of the Acquiring Fund, and the Trust, on behalf of
the Acquired Fund, may, by agreement in writing authorized by its respective
Board of Directors/Trustees, amend this Plan at any time before or after the
shareholders of the Acquired Fund approve this Plan providing for the
Acquisition. However, after shareholders of the Acquired Fund approve the
Acquisition, the parties may not amend this Plan in a manner that materially
alters the obligations of the other party. This Section 16 shall not preclude
the parties from changing the Closing Date or the Effective Time by mutual
agreement.
17. Waivers
-------
At any time prior to the Closing Date, either party may by written
instrument signed by it (i) waive the effect of any inaccuracies in the
representations and warranties made to it contained herein and (ii) waive
compliance with any of the agreements, covenants or conditions made for its
benefit contained herein. Any waiver shall apply only to the particular
inaccuracy or requirement for compliance waived, and not any other or future
inaccuracy or lack of compliance.
18. Indemnification of Trustees
---------------------------
The Acquiring Fund agrees that all rights to indemnification and all
limitations of liability existing in favor of the Trust's current and former
Trustees and officers, acting in their capacities as such, under the Declaration
and the Trust's Bylaws as in effect as of the date of this Plan shall survive
the Acquisition as obligations of the Company or the Acquiring Fund, as
applicable, and shall continue in full force and effect, without any amendment
thereto, and shall constitute rights which may be asserted against the Acquiring
Fund, its successors or assigns.
19. Cooperation and Further Assurances
----------------------------------
Each party will cooperate with the other in fulfilling its obligations
under this Plan and will provide such information and documentation as is
reasonably requested by the other in carrying out the Plan's terms. Each party
will provide such further assurances concerning the performance of its
obligations hereunder and execute all documents for or in connection with the
consummation of the Acquisition as, with respect to such assurances or
documents, the other shall deem necessary or appropriate.
20. Updating of N-14 Registration Statement
---------------------------------------
If at any time prior to the Effective Time, a party becomes aware of any
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements made in the
N-14 Registration Statement not misleading, the party discovering the item shall
notify the other party and the parties shall cooperate in promptly preparing,
filing and clearing with the SEC and, if appropriate, distributing to
shareholders appropriate disclosure with respect to such item.
21. Limitation on Liabilities
-------------------------
The obligations of the Trust, the Acquired Fund, the Company and the
Acquiring Fund shall not bind any of the directors/trustees, shareholders,
nominees, officers, employees or agents of the Trust or the Company personally,
but shall bind only the Trust, the Acquired Fund, the Company or the Acquiring
Fund, as appropriate. The execution and delivery of this Plan by an officer of
either party shall not be deemed to have been made by the officer individually
or to impose any liability on the officer personally, but shall bind only the
Trust or the Company, as appropriate. No other series of the Company shall be
liable for the obligations of the Acquiring Fund. No other series of the Trust
shall be liable for the obligations of the Acquired Fund.
22. Termination of the Acquired Fund
--------------------------------
If the parties complete the Acquisition, the Acquired Fund shall terminate
its registration under the 1940 Act, the 1933 Act, and the 1934 Act and
liquidate and terminate.
23. Notices
-------
Any notice, report, statement, certificate or demand required or permitted
by any provision of the Plan shall be in writing and shall be given in person or
by telecopy, certified mail or overnight express courier to:
For the Acquired Fund:
The AB Portfolios--AB Conservative Wealth Strategy
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
For the Acquiring Fund:
AB Cap Fund, Inc.--AB All Market Income Portfolio
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
24. Expenses
--------
The Adviser agrees to bear 50% of the expenses relating to the
Acquisition. The total remaining expenses relating to the Acquisition shall be
paid proportionately by the Acquired Fund and the Acquiring Fund, allocated to
each Fund based on its respective net assets as of the Valuation Time.
Notwithstanding the foregoing, expenses relating to the Acquisition will in any
event be paid by the party directly incurring such expenses if and to the extent
that the payment by another person of such expenses would result in a Fund's
failure to qualify for tax treatment as a "regulated investment company" within
the meaning of Section 851 of the Code or would prevent the Acquisition from
qualifying as a "reorganization" within the meaning of Section 368(a) of the
Code.
25. General
-------
This Plan supersedes all prior agreements between the parties with respect
to the subject matter hereof and may be amended only by a writing signed by both
parties. The headings contained in this Plan are for reference only and shall
not affect in any way the meaning or interpretation of this Plan. Whenever the
context so requires, the use in the Plan of the singular will be deemed to
include the plural and vice versa. Nothing in this Plan, expressed or implied,
confers upon any other person any rights or remedies under or by reason of this
Plan. Neither party may assign or transfer any right or obligation under this
Plan without the written consent of the other party.
In Witness Whereof, the parties hereto have executed this Plan as of the day and
year first above written.
The AB Portfolios, on behalf of its series,
AB Conservative Wealth Strategy
Attest:
/s/ By: /s/
-------------------------------- -----------------------------
Name: Name:
--------------------------- --------------------------
Title: Title:
--------------------------- ---------------------------
AB Cap Fund, Inc., on behalf of its series,
AB All Market Income Portfolio
Attest:
/s/ By: /s/
-------------------------------- -----------------------------
Name: Name:
--------------------------- ---------------------------
Title: Title:
--------------------------- ---------------------------
Accepted and agreed with respect to Section 24 only:
AllianceBernstein L.P.
By: /s/
--------------------------
Name:
-------------------------
Title:
------------------------
Appendix B
CERTAIN INFORMATION APPLICABLE TO SHARES OF THE ACQUIRING FUND
Acquired Fund shareholders will receive Class A, Class C, Advisor Class,
Class R, Class K or Class I shares (the "Share Classes"), as applicable, of the
Acquiring Fund through the Acquisition, as described in this Proxy
Statement/Prospectus. Class B shareholders of the Acquired Fund will receive
Class A shares of the Acquiring Fund. Each shareholder of the Acquired Fund will
become the owner of the number of full and fractional Class A, Class C, Advisor
Class, Class R, Class K or Class I shares of the Acquiring Fund having a NAV
equal to the aggregate NAV of the shareholder's Acquired Fund shares as of the
Valuation Time (as such term is defined in the Proxy Statement/Prospectus).
Investors may purchase shares of the Share Classes on any business day (i.e.,
any day that the NYSE is open for trading). The purchase of shares of the Share
Classes is priced at the next-determined NAV after an order is received in
proper form. Shareholders may "redeem" shares of any class of the Acquiring Fund
(i.e., sell their shares to the Fund) on any day the NYSE is open, either
directly or through a financial intermediary. The sale price will be the
next-determined NAV, less any applicable contingent deferred sales charge (if
any), after the Fund receives the redemption request in proper form. Each share
class represents an investment in the same portfolio of securities, but the
classes may have different sales charges and bear different ongoing distribution
expenses.
The Acquiring Fund currently offers Class A, Class C and Advisor Class
shares and will begin to offer Class R, Class K and Class I shares at the time
of the Acquisition. The following provides information on Class A, Class C,
Advisor Class, Class R, Class K and Class I shares.
Additional information regarding the Share Classes, including more
detailed information about the purchase and redemption procedures for the Share
Classes, is available in the Acquiring Fund's prospectus.
HOW TO BUY SHARES OF THE ACQUIRING FUND
As noted above, Acquired Fund shareholders will receive Class A, Class C,
Advisor Class, Class R, Class K or Class I shares, as applicable, of the
Acquiring Fund through the Acquisition. Each shareholder of the Acquired Fund
will become the owner of the number of full and fractional Class A, Class C,
Advisor Class, Class R, Class K or Class I shares of the Acquiring Fund having
an NAV equal to the aggregate NAV of the shareholder's Acquired Fund shares as
of the Valuation Time, as such term is defined in the Proxy
Statement/Prospectus.
The purchase of the Acquiring Fund's shares is priced at the
next-determined net asset value ("NAV") after your order is received in proper
form.
Class A and Class C Shares - Shares Available to Retail Investors
You may purchase the Acquiring Fund's Class A or Class C shares through
financial intermediaries, such as broker-dealers or banks. You also may purchase
shares directly from the Acquiring Fund's principal underwriter,
AllianceBernstein Investments, Inc., or ABI. These purchases may be subject to
an initial sales charge, an asset-based sales charge or CDSC as described below.
Purchase Minimums and Maximums
--------------------------------------------------------------------------------
Minimums:*
--Initial: $ 2,500
--Subsequent: $ 50
* Purchase minimums may not apply to some accounts established in
connection with the Automatic Investment Program and to some
retirement-related investment programs. These investment minimums also
do not apply to persons participating in a fee-based program sponsored
and maintained by a registered broker-dealer or other financial
intermediary and approved by ABI.
Maximum Individual Purchase Amount:
--Class A shares None
--Class C shares $ 1,000,000
Purchase Information for Share Classes
A shareholder's broker or financial advisor must receive a purchase
request by the Fund Closing Time, which is the close of regular trading on any
day the NYSE is open (ordinarily, 4:00 p.m., Eastern time, but sometimes
earlier, as in the case of scheduled half-day trading or unscheduled suspensions
of trading) and submit it to the Acquiring Fund by a pre-arranged time for the
shareholder to receive the next-determined NAV, less any applicable initial
sales charge.
Acquiring Fund shareholders who have completed the appropriate section of
the Mutual Fund Application may purchase additional shares by telephone with
payment by electronic funds transfer in amounts not exceeding $500,000.
AllianceBernstein Investor Services, Inc., or ABIS, must receive and confirm
telephone requests before the Fund Closing Time to receive that day's public
offering price. A shareholder may call 800-324-5060 to arrange a transfer from
the shareholder's bank account.
Shares of the Acquiring Fund are generally available for purchase in the
United States, Puerto Rico, Guam, American Samoa and the U.S. Virgin Islands.
Except to the extent otherwise permitted by the Acquiring Fund, the Fund will
only accept purchase orders directly from U.S. citizens with a U.S. address
(including an APO or FPO address) or resident aliens with a U.S. address
(including an APO or FPO address) and a U.S. taxpayer identification number
(i.e., W-9 tax status). Subject to the requirements of local law applicable to
the offering of Acquiring Fund shares, U.S. citizens (i.e., W-9 tax status)
residing in foreign countries are permitted to purchase shares of the Acquiring
Fund through their accounts at U.S. registered broker/dealers and other similar
U.S. financial intermediaries, provided the broker-dealer or intermediary has an
agreement with the Acquiring Fund's distributor permitting it to accept orders
for the purchase and sale of Acquiring Fund shares.
The Acquiring Fund will not accept purchase orders (including orders for
the purchase of additional shares) from foreign persons or entities or from
resident aliens who, to the knowledge of the Acquiring Fund, have reverted to
non-resident status (e.g., a resident alien who has a non-US address at time of
purchase).
Tax-Deferred Accounts
Class A shares are also available to the following tax-deferred
arrangements:
o Traditional and Roth IRAs (minimums listed in the table above
apply);
o SEPs, SAR-SEPs, SIMPLE IRAs, and individual 403(b) plans (no
investment minimum); and
o AllianceBernstein-sponsored Coverdell Education Savings Accounts
($2,000 initial investment minimum, $150 Automatic Investment
Program monthly minimum).
Class C shares are available to AllianceBernstein Link, AllianceBernstein
Individual 401(k), AllianceBernstein SIMPLE IRA plans with less than $250,000 in
plan assets and 100 employees, and to group retirement plans with plan assets of
less than $1,000,000.
Advisor Class Shares
A shareholder may purchase Advisor Class shares through your financial
advisor at NAV. Advisor Class shares may be purchased and held solely:
o through accounts established under a fee-based program, sponsored
and maintained by a registered broker-dealer or other financial
intermediary and approved by ABI;
o through a defined contribution employee benefit plan (e.g., a 401(k)
plan) that purchases shares directly without the involvement of a
financial intermediary; and
o by investment advisory clients of, and certain other persons
associated with, the Adviser and its affiliates or the Acquiring
Fund.
The Acquiring Fund's SAI has more detailed information about who may purchase
and hold Advisor Class shares.
Class A, Class R, Class K and Class I Shares - Shares Available to Group
Retirement Plans
Class A, Class R, Class K and Class I shares are available at NAV, without
an initial sales charge, to 401(k) plans, 457 plans, employer-sponsored 403(b)
plans, profit-sharing and money purchase pension plans, defined benefit plans,
and non-qualified deferred compensation plans where plan level or omnibus
accounts are held on the books of the Acquiring Fund ("group retirement plans").
Class A shares are also available at NAV to the AllianceBernstein Link,
AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans but
only if such plans have at least $250,000 in plan assets or 100 employees, and
to certain defined contribution retirement plans that do not have plan level or
omnibus accounts on the books of the Acquiring Fund.
Class A, Class R, Class K and Class I shares are also available to certain
AllianceBernstein-sponsored group retirement plans. Class R, Class K and Class I
shares generally are not available to retail non-retirement accounts,
traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs,
SIMPLE IRAs and individual 403(b) plans. Class I shares are not currently
available to group retirement plans in the AllianceBernstein-sponsored programs
known as the "Informed Choice" programs.
Class I shares are also available to certain institutional clients of the
Adviser who invest at least $2,000,000 in the Acquiring Fund.
Required Information
The Acquiring Fund is required by law to obtain, verify and record certain
personal information from investors or persons on an investor's behalf in order
to establish an account. Required information includes name, date of birth,
permanent residential address and taxpayer identification number (for most
investors, the investor's social security number). The Acquiring Fund may also
ask to see other identifying documents. If an investor does not provide the
information, the Acquiring Fund will not be able to open an account for such
investor. If the Acquiring Fund is unable to verify an investor's identity, or
that of another person(s) authorized to act on the investor's behalf, or if the
Acquiring Fund believes it has identified potentially criminal activity, the
Acquiring Fund reserves the right to take any action it deems appropriate or as
required by law, which may include closing the investor's account. If an
investor is not a U.S. citizen or resident alien, the account must be affiliated
with a Financial Industry Regulatory Authority, or FINRA, member firm.
The Acquiring Fund is required to withhold 28% of taxable dividends,
capital gains distributions, and redemptions paid to any shareholder who has not
provided the Acquiring Fund with his or her correct taxpayer identification
number. To avoid this, an investor must provide the investor's correct taxpayer
identification number on the Mutual Fund Application.
General
IRA custodians, plan sponsors, plan fiduciaries, plan recordkeepers, and
other financial intermediaries may establish their own eligibility requirements
as to the purchase, sale or exchange of Acquiring Fund shares, including minimum
and maximum investment requirements. The Acquiring Fund is not responsible for,
and has no control over, the decisions of any plan sponsor, fiduciary or other
financial intermediary to impose such differing requirements. ABI may refuse any
order to purchase shares. The Acquiring Fund reserves the right to suspend the
sale of its shares to the public in response to conditions in the securities
markets or for other reasons.
THE DIFFERENT SHARE CLASS EXPENSES
Information about the expenses applicable to the Share Classes is
available in the Acquiring Fund's prospectus.
Asset-Based Sales Charges or Distribution and/or Service (Rule 12b-1) Fees
The amount of Rule 12b-1 and/or service fees for each class of the Acquiring
Fund's shares is up to:
Distribution and/or Service
(Rule 12b-1) Fee (as a
Percentage of Aggregate
Average Daily Net Assets)
--------------------------------------------------------------------------------
Class A 0.30%*
Class C 1.00%
Advisor Class None
Class R 0.50%
Class K 0.25%
Class I None
* The maximum fee allowed under the Rule 12b-1 Plan for the Class A shares
of the Fund is .30% of the aggregate average daily net assets. The Board
currently limits the payments to 0.25%.
Because these fees are paid out of the Acquiring Fund's assets on an ongoing
basis, over time these fees will increase the cost of a shareholder's investment
and may cost the shareholder more than paying other types of sales fees. Class C
and Class R shares are subject to higher Rule 12b-1 fees than Class A or Class K
shares. Class B shares are subject to these higher fees for a period of eight
years, after which they convert to Class A shares. Share classes with higher
Rule 12b-1 fees will have a higher expense ratio, pay correspondingly lower
dividends and may have a lower NAV (and returns). All or some of these fees may
be paid to financial intermediaries, including a shareholder's financial
intermediary's firm.
Sales Charges
Class A Shares. A shareholder can purchase Class A shares at their public
offering price (or cost), which is NAV plus an initial sales charge of up to
4.25% of the offering price. Any applicable sales charge will be deducted
directly from the shareholder's investment.
The initial sales charge a shareholder pays each time the shareholder buys Class
A shares differs depending on the amount the shareholder invests and may be
reduced or eliminated for larger purchases as indicated below. These discounts,
which are also known as Breakpoints or Quantity Discounts, can reduce or, in
some cases, eliminate the initial sales charges that would otherwise apply to a
shareholder's investment in Class A shares.
The sales charge schedule of Class A share Quantity Discounts is as follows:
Initial Sales Charge
------------------------------------------
as % of as % of
Net Amount Offering
Amount Purchased Invested Price
--------------------------------------------------------------------------------
Up to $100,000 4.44% 4.25%
$100,000 up to $250,000 3.36 3.25
$250,000 up to $500,000 2.30 2.25
$500,000 up to $1,000,000 1.78 1.75
$1,000,000 and above 0.00 0.00
Except as noted below, purchases of Class A shares in the amount of $1,000,000
or more or by AllianceBernstein or non-AllianceBernstein sponsored group
retirement plans are not subject to an initial sales charge, but may be subject
to a 1% CDSC if redeemed or terminated within one year.
Class A share purchases not subject to sales charges. The Acquiring Fund may
sell its Class A shares at NAV without an initial sales charge or CDSC to some
categories of investors, including:
- persons participating in a fee-based program, sponsored and
maintained by a registered broker-dealer or other financial
intermediary and approved by ABI, under which persons pay an
asset-based fee for services in the nature of investment advisory or
administrative services, or clients of broker-dealers or other
financial intermediaries approved by ABI who purchase Class A shares
for their own accounts through self-directed brokerage accounts with
the broker-dealers or other financial intermediaries that may or may
not charge a transaction fee to their customers;
- plan participants who roll over amounts distributed from employer
maintained retirement plans to AllianceBernstein-sponsored IRAs
where the plan is a client of or serviced by the Adviser's
Institutional Investment Management Division or Bernstein Global
Wealth Management Division including subsequent contributions to
those IRAs; or
- certain other investors, such as investment management clients of
the Adviser or its affiliates, including clients and prospective
clients of the Adviser's Institutional Investment Management
Division, employees of selected dealers authorized to sell the
Acquiring Fund's shares, and employees of the Adviser.
Please see the Acquiring Fund's SAI for more information about purchases of
Class A shares without sales charges.
Class C Shares. A shareholder can purchase Class C shares at NAV without an
initial sales charge. This means that the full amount of the shareholder's
purchase is invested in the Acquiring Fund. The shareholder's investment is
subject to a 1% CDSC if the shareholder redeems the shareholder's shares within
1 year. If the shareholder exchanges the shareholder's shares for the Class C
shares of another AB Mutual Fund, the 1% CDSC also will apply to the Class C
shares received. The 1-year period for the CDSC begins with the date of a
shareholder's original purchase, not the date of the exchange for the other
Class C shares.
Class C shares do not convert to any other class of shares of the Acquiring
Fund.
--------------------------------------------------------------------------------
HOW IS THE CDSC CALCULATED?
The CDSC is applied to the lesser of NAV at the time of redemption or the
original cost of shares being redeemed (or, as to Fund shares acquired through
an exchange, the cost of the AB Mutual Fund shares originally purchased for
cash). This means that no sales charge is assessed on increases in NAV above the
initial purchase price. Shares obtained from dividend or distribution
reinvestment are not subject to the CDSC. In determining the CDSC, it will be
assumed that the redemption is, first, of any shares not subject to a CDSC and,
second, of shares held the longest.
--------------------------------------------------------------------------------
Advisor Class, Class R, Class K and Class I Shares. These classes of shares are
not subject to any initial sales charge or CDSC, although a shareholder's
financial advisor may charge a fee.
SALES CHARGE REDUCTION PROGRAMS FOR CLASS A SHARES This section includes
important information about sales charge reduction programs available to
investors in Class A shares and describes information or records a shareholder
may need to provide to a Fund or the shareholder's financial intermediary in
order to be eligible for sales charge reduction programs.
Information about Quantity Discounts and sales charge reduction programs also is
available free of charge and in a clear and prominent format on the Acquiring
Fund's website at www.ABfunds.com (click on "Investments--Understanding Sales
Charges & Expenses").
Rights of Accumulation
To determine if a new investment in Class A shares is eligible for a Quantity
Discount, a shareholder can combine the value of the new investment in the
Acquiring Fund with the higher of cost or NAV of existing investments in the
Fund, any other AB Mutual Fund, AB Institutional Funds. The AB Mutual Funds use
the higher of cost or current NAV of a shareholder's existing investments when
combining them with the shareholder's new investment.
Combined Purchase Privileges
A shareholder may qualify for a Quantity Discount by combining purchases of
shares of the Acquiring Fund into a single "purchase". A "purchase" means a
single purchase or concurrent purchases of shares of the Acquiring Fund or any
other AB Mutual Fund, including AB Institutional Funds, by:
o an individual, his or her spouse or domestic partner, or the individual's
children under the age of 21 purchasing shares for his, her or their own
account(s);
o a trustee or other fiduciary purchasing shares for a single trust, estate
or single fiduciary account with one or more beneficiaries involved;
o the employee benefit plans of a single employer; or
o any company that has been in existence for at least six months or has a
purpose other than the purchase of shares of the Fund.
Letter of Intent
An investor may not immediately invest a sufficient amount to reach a Quantity
Discount, but may plan to make one or more additional investments over a period
of time that, in the end, would qualify for a Quantity Discount. For these
situations, the Acquiring Fund offers a Letter of Intent, which permits new
investors to express the intention, in writing, to invest at least $100,000 in
Class A shares of the Fund or any other AB Mutual Fund within 13 months. The
Acquiring Fund will then apply the Quantity Discount to each of the investor's
purchases of Class A shares that would apply to the total amount stated in the
Letter of Intent. In the event an existing investor chooses to initiate a Letter
of Intent, the AB Mutual Funds will use the higher of cost or current NAV of the
investor's existing investments and of those accounts with which investments are
combined via Combined Purchase Privileges toward the fulfillment of the Letter
of Intent. For example, if the combined cost of purchases totaled $80,000 and
the current NAV of all applicable accounts is $85,000 at the time a $100,000
Letter of Intent is initiated, the subsequent investment of an additional
$15,000 would fulfill the Letter of Intent. If an investor fails to invest the
total amount stated in the Letter of Intent, the Acquiring Fund will
retroactively collect the sales charge otherwise applicable by redeeming shares
in the investor's account at their then current NAV. Investors qualifying for
Combined Purchase Privileges may purchase shares under a single Letter of
Intent.
Required Shareholder Information and Records
In order for shareholders to take advantage of sales charge reductions, a
shareholder or his or her financial intermediary must notify the Acquiring Fund
that the shareholder qualifies for a reduction. Without notification, the
Acquiring Fund is unable to ensure that the reduction is applied to the
shareholder's account. A shareholder may have to provide information or records
to his or her financial intermediary or the Acquiring Fund to verify eligibility
for breakpoint privileges or other sales charge waivers. This may include
information or records, including account statements, regarding shares of the
Fund or other AB Mutual Funds held in:
o all of the shareholder's accounts at the Fund or a financial intermediary;
and
o accounts of related parties of the shareholder, such as members of the
same family, at any financial intermediary.
CDSC WAIVERS AND OTHER PROGRAMS
--------------------------------------------------------------------------------
Here Are Some Ways To Avoid Or
Minimize Charges On Redemption.
--------------------------------------------------------------------------------
CDSC Waivers
The Acquiring Fund will waive the CDSCs on redemptions of shares in the
following circumstances, among others:
o permitted exchanges of shares;
o following the death or disability of a shareholder;
o if the redemption represents a minimum required distribution from an IRA
or other retirement plan to a shareholder who has attained the age of 70
1/2; or
o if the redemption is necessary to meet a plan participant's or
beneficiary's request for a distribution or loan from a group retirement
plan or to accommodate a plan participant's or beneficiary's direction to
reallocate his or her plan account among other investment alternatives
available under a group retirement plan.
OTHER PROGRAMS
Dividend Reinvestment Program
Unless a shareholder specifically has elected to receive dividends or
distributions in cash, the shareholder will automatically be reinvested, without
an initial sales charge or CDSC, in the same class of additional shares of the
Acquiring Fund. If a shareholder elects to receive distributions in cash, the
shareholder will only receive a check if the amount of the distribution is equal
to or exceeds $25.00. Distributions of less than $25.00 will automatically be
reinvested in shares of the Acquiring Fund. To receive distributions of less
than $25.00 in cash, a shareholder must have bank instructions associated to the
shareholder's account so that distributions can be delivered to the shareholder
electronically via Electronic Funds Transfer using the Automated Clearing House
or "ACH". In addition, the Acquiring Fund may reinvest a shareholder's
distribution check (and future checks) in additional shares of the Acquiring
Fund if the shareholder's check (i) is returned as undeliverable or (ii) remains
uncashed for nine months.
Dividend Direction Plan
A shareholder who already maintains accounts in more than one AB Mutual
Fund may direct the automatic investment of income dividends and/or capital
gains by one fund, in any amount, without the payment of any sales charges, in
shares of any eligible class of one or more other AB Mutual Fund(s) in which the
shareholder maintains an account.
Automatic Investment Program
The Automatic Investment Program allows investors to purchase shares of
the Acquiring Fund through pre-authorized transfers of funds from the investor's
bank account. Under the Automatic Investment Program, an investor may (i) make
an initial purchase of at least $2,500 and invest at least $50 monthly or (ii)
make an initial purchase of less than $2,500 and commit to a monthly investment
of $200 or more until the investor's account balance is $2,500 or more. Please
see the Acquiring Fund's Statement of Additional Information for more details.
Reinstatement Privilege
A shareholder who has redeemed all or any portion of his or her Class A
shares may reinvest all or any portion of the proceeds from the redemption in
Class A shares of any AB Mutual Fund at NAV without any sales charge, if the
reinvestment is made within 120 calendar days after the redemption date.
Systematic Withdrawal Plan
The Acquiring Fund offers a systematic withdrawal plan that permits the
redemption of Class A or Class C shares without payment of a CDSC. Under this
plan, redemptions equal to 1% a month, 2% every two months or 3% a quarter of
the value of the Acquiring Fund account would be free of a CDSC. Shares held the
longest would be redeemed first.
CHOOSING A SHARE CLASS
Each share class represents an interest in the same portfolio of
securities, but each class has its own sales charge and expense structure,
allowing a shareholder to choose the class that best fits the shareholder's
situation. In choosing a class of shares, a shareholder should consider:
o the amount the shareholder intends to invest;
o how long the shareholder expects to own shares;
o expenses associated with owning a particular class of shares;
o whether the shareholder qualifies for any reduction or waiver of sales
charges (for example, if the shareholder is making a large investment that
qualifies for a Quantity Discount, the shareholder might consider
purchasing Class A shares); and
o whether a share class is available for purchase (Class R, Class K and
Class I shares are only offered to group retirement plans, not
individuals).
Among other things, Class A shares, with their lower Rule 12b-1 fees, are
designed for investors with a long-term investing time frame. Class C shares
should not be considered as a long-term investment because they are subject to a
higher distribution fee indefinitely. Class C shares do not, however, have an
initial sales charge or a CDSC so long as the shares are held for one year or
more. Class C shares are designed for investors with a short-term investing time
frame.
A transaction, service, administrative or other similar fee may be charged
by a shareholder's broker-dealer, agent or other financial intermediary, with
respect to the purchase, sale or exchange of Class A, Class C or Advisor Class
shares made through the shareholder's financial advisor. Financial
intermediaries, a fee-based program, or, for group retirement plans, a plan
sponsor or plan fiduciary, also may impose requirements on the purchase, sale or
exchange of shares that are different from, or in addition to, those described
in this Prospectus and the Acquiring Fund's SAI, including requirements as to
the minimum initial and subsequent investment amounts. In addition, group
retirement plans may not offer all classes of shares of the Acquiring Fund. The
Acquiring Fund is not responsible for, and has no control over, the decision of
any financial intermediary, plan sponsor or fiduciary to impose such differing
requirements.
A shareholder should consult the shareholder's financial advisor for assistance
in choosing a class of Acquiring Fund shares.
PAYMENTS TO FINANCIAL ADVISORS AND THEIR FIRMS
Financial intermediaries market and sell shares of the Acquiring Fund.
These financial intermediaries employ financial advisors and receive
compensation for selling shares of the Fund. This compensation is paid from
various sources, including any sales charge, CDSC and/or Rule 12b-1 fee that a
shareholder or the Acquiring Fund may pay. A shareholder's individual financial
advisor may receive some or all of the amounts paid to the financial
intermediary that employs him or her.
--------------------------------------------------------------------------------
WHAT IS A FINANCIAL INTERMEDIARY?
A financial intermediary is a firm that receives compensation for
selling shares of the Fund and/or provides services to the Fund's
shareholders. Financial intermediaries may include, among others, your
broker, your financial planner or advisors, banks and insurance companies.
Financial intermediaries may employ financial advisors who deal with you and
other investors on an individual basis.
--------------------------------------------------------------------------------
All or a portion of the initial sales charge that a shareholder pays may be paid
by ABI to financial intermediaries selling Class A shares. ABI may also pay
financial intermediaries a fee of up to 1% on purchases of Class A shares that
are sold without an initial sales charge.
For Class A, Class C, Class R and Class K shares, up to 100% of the Rule 12b-1
fees applicable to these classes of shares each year may be paid to financial
intermediaries.
--------------------------------------------------------------------------------
A shareholder's financial advisor's firm receives compensation from the
Acquiring Fund, ABI and/or the Adviser in several ways from various sources,
which include some or all of the following:
- up front sales commissions;
- Rule 12b-1 fees;
- additional distribution support;
- defrayal of costs for educational seminars and training; and
- payments related to providing shareholder recordkeeping and/or transfer
agency services.
Please read the Acquiring Fund's prospectus carefully for information on this
compensation.
--------------------------------------------------------------------------------
Other Payments for Distribution Services and Educational Support
In addition to the commissions paid to financial intermediaries at the
time of sale and Rule 12b-1 fees, some or all of which may be paid to financial
intermediaries (and, in turn, to financial advisors), ABI, at its expense,
currently provides additional payments to firms that sell shares of the AB
Mutual Funds. Although the individual components may be higher and the total
amount of payments made to each qualifying firm in any given year may vary, the
total amount paid to a financial intermediary in connection with the sale of
shares of the AB Mutual Funds will generally not exceed the sum of (a) 0.25% of
the current year's fund sales by that firm and (b) 0.10% of average daily net
assets attributable to that firm over the year. These sums include payments for
distribution analytical data regarding AB Mutual Fund sales by financial
advisors of these firms and to reimburse directly or indirectly the costs
incurred by these firms and their employees in connection with educational
seminars and training efforts about the AB Mutual Funds for the firms' employees
and/or their clients and potential clients. The costs and expenses associated
with these efforts may include travel, lodging, entertainment and meals. ABI may
pay a portion of "ticket" or other transactional charges.
For 2016, ABI expects to pay approximately 0.05% of the average monthly
assets of the AB Mutual Funds, or approximately $21 million, for distribution
services and education support related to the AB Mutual Funds. In 2015, ABI paid
approximately 0.05% of the average monthly assets of the AB Mutual Funds or
approximately $20 million, for distribution services and education support
related to the AB Mutual Funds.
A number of factors are considered in determining the additional payments,
including each firm's AB Mutual Fund sales, assets and redemption rates, and the
willingness and ability of the firm to give ABI access to its financial advisors
for educational and marketing purposes. In some cases, firms will include the AB
Mutual Funds on a "preferred list". ABI's goal is to make the financial advisors
who interact with current and prospective investors and shareholders more
knowledgeable about the AB Mutual Funds so that they can provide suitable
information and advice about the funds and related investor services.
The Acquiring Fund and ABI also make payments for recordkeeping and other
transfer agency services to financial intermediaries that sell AB Mutual Fund
shares. These expenses paid by the Fund are included in "Other Expenses" under
"Fees and Expenses of the Fund--Annual Fund Operating Expenses" in the Summary
Information at the beginning of the Acquiring Fund's prospectus.
--------------------------------------------------------------------------------
If one mutual fund sponsor makes greater distribution assistance payments than
another, your financial advisor and his or her firm may have an incentive to
recommend one fund complex over another. Similarly, if your financial advisor
or his or her firm receives more distribution assistance for one share class
versus another, then they may have an incentive to recommend that class.
Please speak with your financial advisor to learn more about the total amounts
paid to your financial advisor and his or her firm by the Acquiring Fund, the
Adviser, ABI and by sponsors of other mutual funds he or she may recommend to
you. You should also consult disclosures made by your financial advisor at the
time of purchase.
--------------------------------------------------------------------------------
ABI anticipates that the firms that will receive additional payments for
distribution services and/or educational support include:
AIG Advisor Group
Ameriprise Financial Services
AXA Advisors
Cadaret, Grant & Co.
Citigroup Global Markets
Citizens Securities
Commonwealth Financial Network
Donegal Securities
JP Morgan Securities
Lincoln Financial Advisors Corp.
Lincoln Financial Securities Corp.
LPL Financial
Merrill Lynch
Morgan Stanley
Northwestern Mutual Investment Services
PNC Investments
Raymond James
RBC Wealth Management
Robert W. Baird
Santander Securities
SunTrust Bank
UBS Financial Services
US Bancorp Investments
Wells Fargo Advisors
Although the Acquiring Fund may use brokers and dealers that sell shares
of the Fund to effect portfolio transactions, the Fund does not consider the
sale of AB Mutual Funds shares as a factor when selecting brokers or dealers to
effect portfolio transactions.
HOW TO EXCHANGE SHARES
Shareholders of the Acquiring Fund, including shareholders who received
shares of the Acquiring Fund through the Acquisition, will have exchange
privileges with other AB Mutual Funds. Shareholders may generally exchange their
shares for shares of the same class of another fund in the AB Mutual Fund group.
Exchanges of each class of Acquiring Fund shares are made at the next-determined
NAV after an order is received in proper form. All exchanges are subject to the
minimum investment restrictions set forth in the prospectus for the AB Mutual
Fund whose shares are being acquired. Shareholders may request an exchange
either directly or through a financial intermediary or, in the case of
retirement plan participants, by following the procedures specified by the plan
sponsor or plan recordkeeper. In order to receive a day's NAV, ABIS must receive
and confirm a telephone exchange request by the Fund Closing Time on that day.
The Acquiring Fund may modify, restrict or terminate the exchange privilege on
60 days' written notice.
HOW TO SELL OR REDEEM SHARES OF THE ACQUIRING FUND
Shareholders of the Acquiring Fund, including shareholders who received
shares of the Acquiring Fund through the Acquisition, may "redeem" their shares
(i.e., sell shares to the Acquiring Fund) on any day the NYSE is open, either
directly or through a financial intermediary or, in the case of retirement plan
participants, by following the procedures specified by the plan sponsor or plan
recordkeeper. The sale price will be the next-determined NAV, less any
applicable CDSC, after the Acquiring Fund receives the redemption request in
proper form. Normally, redemption proceeds are sent to shareholders within seven
days. If shares were recently purchased by check or electronic funds transfer,
the redemption payment may be delayed until the Acquiring Fund is reasonably
satisfied that the check or electronic funds transfer has been collected (which
may take up to 10 days). Any shareholder who is in doubt about what procedures
or documents are required by a fee-based program or employee benefit plan to
sell shares should contact the financial advisor.
Selling Shares Through a Financial Intermediary or Retirement Plan
A shareholder's financial intermediary or plan recordkeeper must receive a
sales request by the Fund Closing Time and submit it to the Acquiring Fund by a
pre-arranged time for the shareholder to receive that day's NAV, less any
applicable CDSC. A shareholder's financial intermediary, plan sponsor or plan
recordkeeper is responsible for submitting all necessary documentation to the
Acquiring Fund and may charge a fee for this service.
Selling Shares Directly to the Acquiring Fund By Mail:
o Send a signed letter of instruction or stock power to:
AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
o For certified or overnight deliveries, send to:
AllianceBernstein Investor Services, Inc.
8000 IH 10 W, 4th floor
San Antonio, TX 78230
o For shareholder protection, a bank, a member firm of a national
stock exchange or another eligible guarantor institution must
guarantee signatures. Stock power forms are available from a
shareholder's financial intermediary, ABIS and many commercial
banks. Additional documentation is required for the sale of shares
by corporations, intermediaries, fiduciaries and surviving joint
owners. If a shareholder has any questions about these procedures,
contact ABIS.
By Telephone:
o A shareholder may redeem the shareholder's shares by telephone
request. A shareholder may call ABIS at 800-324-5060 with
instructions on how the shareholder wishes to receive the sale
proceeds.
o ABIS must receive and confirm a telephone redemption request by the
Fund Closing Time for a shareholder to receive that day's NAV, less
any applicable CDSC.
o For the protection of shareholders, ABIS will request personal or
other information from shareholders to verify their identity and
will generally record the calls. Neither the Acquiring Fund nor the
Adviser, ABIS, ABI or other Acquiring Fund agent will be liable for
any loss, injury, damage or expense as a result of acting upon
telephone instructions purporting to be on behalf of a shareholder
that ABIS reasonably believes to be genuine.
o If a shareholder has selected electronic funds transfer in the
shareholder's Mutual Fund Application, the redemption proceeds will
be sent directly to the shareholder's bank. Otherwise, the proceeds
will be mailed to the shareholder.
o Redemption requests by electronic funds transfer or check may not
exceed $100,000 per fund account per day.
o Telephone redemption is not available for shares held in nominee or
"street name" accounts, retirement plan accounts, or shares held by
a shareholder who has changed his or her address of record within
the previous 30 calendar days.
FREQUENT PURCHASES AND REDEMPTIONS OF FUND SHARES
The Acquiring Fund's Board has adopted policies and procedures designed to
detect and deter frequent purchases and redemptions of Acquiring Fund shares or
excessive or short-term trading that may disadvantage long-term Fund
shareholders. These policies are described below. There is no guarantee that the
Acquiring Fund will be able to detect excessive or short-term trading or to
identify shareholders engaged in such practices, particularly with respect to
transactions in omnibus accounts. Shareholders should be aware that application
of these policies may have adverse consequences, as described below, and avoid
frequent trading in Acquiring Fund shares through purchases, sales and exchanges
of shares. The Acquiring Fund reserves the right to restrict, reject or cancel,
without any prior notice, any purchase or exchange order for any reason,
including any purchase or exchange order accepted by any shareholder's financial
intermediary.
Risks Associated With Excessive or Short-Term Trading Generally. While the
Acquiring Fund will try to prevent market timing by utilizing the procedures
described below, these procedures may not be successful in identifying or
stopping excessive or short-term trading in all circumstances. By realizing
profits through short-term trading, shareholders that engage in rapid purchases
and sales or exchanges of the Acquiring Fund's shares dilute the value of shares
held by long-term shareholders. Volatility resulting from excessive purchases
and sales or exchanges of Acquiring Fund shares, especially involving large
dollar amounts, may disrupt efficient portfolio management and cause the
Acquiring Fund to sell shares at inopportune times to raise cash to accommodate
redemptions relating to short-term trading activity. In particular, the
Acquiring Fund may have difficulty implementing its long-term investment
strategies if it is forced to maintain a higher level of its assets in cash to
accommodate significant short-term trading activity. In addition, the Acquiring
Fund may incur increased administrative and other expenses due to excessive or
short-term trading, including increased brokerage costs and realization of
taxable capital gains.
Funds that may invest significantly in securities of foreign issuers may
be particularly susceptible to short-term trading strategies. This is because
securities of foreign issuers are typically traded on markets that close well
before the time a Fund calculates its NAV at 4:00 p.m., Eastern time, which
gives rise to the possibility that developments may have occurred in the interim
that would affect the value of these securities. The time zone differences among
international stock markets can allow a shareholder engaging in a short-term
trading strategy to exploit differences in Acquiring Fund share prices that are
based on closing prices of securities of foreign issuers established some time
before a Fund calculates its own share price (referred to as "time zone
arbitrage"). The Acquiring Fund has procedures, referred to as fair value
pricing, designed to adjust closing market prices of securities of foreign
issuers to reflect what is believed to be the fair value of those securities at
the time the Acquiring Fund calculates its NAV. While there is no assurance, the
Acquiring Fund expects that the use of fair value pricing, in addition to the
short-term trading policies discussed below, will significantly reduce a
shareholder's ability to engage in time zone arbitrage to the detriment of other
Acquiring Fund shareholders.
A shareholder engaging in a short-term trading strategy may also target
the Acquiring Fund irrespective of its investments in securities of foreign
issuers. Any Fund that invests in securities that are, among other things,
thinly traded, traded infrequently or relatively illiquid has the risk that the
current market price for the securities may not accurately reflect current
market values. A shareholder may seek to engage in short-term trading to take
advantage of these pricing differences (referred to as "price arbitrage"). The
Acquiring Fund may be adversely affected by price arbitrage.
Policy Regarding Short-Term Trading. Purchases and exchanges of shares of
the Acquiring Fund should be made for investment purposes only. The Acquiring
Fund seeks to prevent patterns of excessive purchases and sales of Acquiring
Fund shares to the extent they are detected by the procedures described below,
subject to the Acquiring Fund's ability to monitor purchase, sale and exchange
activity. The Acquiring Fund reserves the right to modify this policy, including
any surveillance or account blocking procedures established from time to time to
effectuate this policy, at any time without notice.
o Transaction Surveillance Procedures. The Acquiring Fund, through its
agents, ABI and ABIS, maintains surveillance procedures to detect
excessive or short-term trading in Fund shares. This surveillance
process involves several factors, which include scrutinizing
transactions in Acquiring Fund shares that exceed certain monetary
thresholds or numerical limits within a specified period of time.
Generally, more than two exchanges of Acquiring Fund shares during
any 60-day period or purchases of shares followed by a sale within
60 days will be identified by these surveillance procedures. For
purposes of these transaction surveillance procedures, the Acquiring
Fund may consider trading activity in multiple accounts under common
ownership, control or influence. Trading activity identified by
either, or a combination, of these factors, or as a result of any
other information available at the time, will be evaluated to
determine whether such activity might constitute excessive or
short-term trading. With respect to managed or discretionary
accounts for which the account owner gives his/her broker,
investment adviser or other third-party authority to buy and sell
Acquiring Fund shares, the Acquiring Fund may consider trades
initiated by the account owner, such as trades initiated in
connection with bona fide cash management purposes, separately in
their analysis. These surveillance procedures may be modified from
time to time, as necessary or appropriate to improve the detection
of excessive or short-term trading or to address specific
circumstances.
o Account Blocking Procedures. If the Acquiring Fund determines, in
its sole discretion, that a particular transaction or pattern of
transactions identified by the transaction surveillance procedures
described above is excessive or short-term trading in nature, the
Acquiring Fund will take remedial action that may include issuing a
warning, revoking certain account-related privileges (such as the
ability to place purchase, sale and exchange orders over the
internet or by phone) or prohibiting or "blocking" future purchase
or exchange activity. However, sales of Acquiring Fund shares back
to the Acquiring Fund or redemptions will continue to be permitted
in accordance with the terms of the Acquiring Fund's current
Prospectus. As a result, unless the shareholder redeems his or her
shares, which may have consequences if the shares have declined in
value, a CDSC is applicable or adverse tax consequences may result,
the shareholder may be "locked" into an unsuitable investment. A
blocked account will generally remain blocked for 90 days.
Subsequent detections of excessive or short-term trading may result
in an indefinite account block or an account block until the account
holder or the associated broker, dealer or other financial
intermediary provides evidence or assurance acceptable to the
Acquiring Fund that the account holder did not or will not in the
future engage in excessive or short-term trading.
o Applications of Surveillance Procedures and Restrictions to Omnibus
Accounts. Omnibus account arrangements are common forms of holding
shares of the Acquiring Fund, particularly among certain brokers,
dealers and other financial intermediaries, including sponsors of
retirement plans. The Acquiring Fund applies its surveillance
procedures to these omnibus account arrangements. As required by SEC
rules, the Acquiring Fund has entered into agreements with all of
its financial intermediaries that require the financial
intermediaries to provide the Acquiring Fund, upon the request of
the Acquiring Fund or its agents, with individual account level
information about their transactions. If the Acquiring Fund detects
excessive trading through its monitoring of omnibus accounts,
including trading at the individual account level, the financial
intermediaries will also execute instructions from the Acquiring
Fund to take actions to curtail the activity, which may include
applying blocks to accounts to prohibit future purchases and
exchanges of Acquiring Fund shares. For certain retirement plan
accounts, the Acquiring Fund may request that the retirement plan or
other intermediary revoke the relevant participant's privilege to
effect transactions in Acquiring Fund shares via the internet or
telephone, in which case the relevant participant must submit future
transaction orders via the U.S. Postal Service (i.e., regular mail).
DIVIDENDS, DISTRIBUTIONS AND TAXES
Income dividends and capital gains distributions, if any, declared by the
Acquiring Fund on its outstanding shares will be paid in cash if elected by the
shareholder or in additional shares of the same class of shares of the Acquiring
Fund. If paid in additional shares, the shares will have an aggregate NAV as of
the close of business on the declaration date of the dividend or distribution
equal to the cash amount of the dividend or distribution. A shareholder may make
an election to receive dividends and distributions in cash or in shares at the
time the shareholder purchases shares. A shareholder's election can be changed
at any time prior to a record date for a dividend. There is no sales or other
charge in connection with the reinvestment of dividends or capital gains
distributions. Cash dividends may be paid by check, or, at a shareholder's
election, electronically via the ACH network.
If a shareholder receives an income dividend or capital gains distribution
in cash the shareholder may, within 120 days following the date of its payment,
reinvest the dividend or distribution in additional shares of the Acquiring Fund
without charge by returning to the Adviser, with appropriate instructions, the
check representing the dividend or distribution. Thereafter, unless the
shareholder otherwise specifies, the shareholder will be deemed to have elected
to reinvest all subsequent dividends and distributions in shares of the
Acquiring Fund.
While it is the intention of the Acquiring Fund to distribute to its
shareholders substantially all of each fiscal year's net income and net realized
capital gains, if any, the amount and timing of any dividend or distribution
will depend on the realization by the Acquiring Fund of income and capital gains
from investments. There is no fixed dividend rate and there can be no assurance
that the Acquiring Fund will pay any dividends or realize any capital gains. The
final determination of the amount of the Acquiring Fund's return of capital
distributions for the period will be made after the end of each calendar year.
Investments made through a 401(k) plan, 457 plan, employer sponsored 403(b)
plan, profit sharing and money purchase plan, defined benefit plan or a
nonqualified deferred compensation plan are subject to special United States
federal income tax rules. Therefore, the federal income tax consequences
described below apply only to investments made other than by such plans.
A shareholder will normally have to pay federal income tax, and any state
or local income taxes, on the distributions the shareholder receives from the
Acquiring Fund, whether the shareholder takes the distributions in cash or
reinvests them in additional shares. Distributions of net capital gains from the
sale of investments that the Acquiring Fund owned for more than one year and
that are properly designated as capital gains distributions are taxable as
long-term capital gains. Distributions of dividends to the Acquiring Fund's
non-corporate shareholders may be treated as "qualified dividend income", which
is taxed at the same preferential tax rates applicable to long-term capital
gains, if, in general, such distributions are derived from, and designated by
the Acquiring Fund as, "qualified dividend income" and provided that holding
period and other requirements are met by both the shareholder and the Acquiring
Fund. "Qualified dividend income" generally is income derived from dividends
from U.S. corporations and "qualified foreign corporations".
Other distributions by the Acquiring Fund are generally taxable to a
shareholder as ordinary income. Dividends declared in October, November, or
December and paid in January of the following year are taxable as if they had
been paid the previous December. The Acquiring Fund will notify a shareholder as
to how much of the Acquiring Fund's distributions, if any, qualify for these
reduced tax rates.
Investment income received by the Acquiring Fund from sources within
foreign countries may be subject to foreign income taxes withheld at the source.
To the extent that the Acquiring Fund is liable for foreign income taxes
withheld at the source, the Acquiring Fund intends, if possible, to operate so
as to meet the requirements of the Code to "pass through" to the Acquiring
Fund's shareholders credits for foreign income taxes paid (or to permit
shareholders to claim a deduction for such foreign taxes), but there can be no
assurance that the Acquiring Fund will be able to do so. Furthermore, a
shareholder's ability to claim a foreign tax credit or deduction for foreign
taxes paid by the Acquiring Fund may be subject to certain limitations imposed
by the Code, as a result of which a shareholder may not be permitted to claim a
credit or deduction for all or a portion of the amount of such taxes.
Under certain circumstances, if the Acquiring Fund realizes losses (e.g.,
from fluctuations in currency exchange rates) after paying a dividend, all or a
portion of the dividend may subsequently be characterized as a return of
capital. Returns of capital are generally nontaxable, but will reduce a
shareholder's basis in shares of the Acquiring Fund. If that basis is reduced to
zero (which could happen if the shareholder does not reinvest distributions and
returns of capital are significant), any further returns of capital will be
taxable as capital gain.
If a shareholder buy shares just before the Acquiring Fund deducts a
distribution from its NAV, the shareholder will pay the full price for the
shares and then receive a portion of the price back as a taxable distribution.
The sale or exchange of Acquiring Fund shares is a taxable transaction for
federal income tax purposes.
Each year shortly after December 31, the Acquiring Fund will send
shareholders tax information stating the amount and type of all its
distributions for the year. A shareholder is encouraged to consult the
shareholder's tax adviser about the federal, state, and local tax consequences
in the shareholder's particular circumstances, as well as about any possible
foreign tax consequences.
Non-U.S. Shareholders
If a shareholder is a nonresident alien individual or a foreign
corporation for federal income tax purposes, please see the Acquiring Fund's
Statement of Additional Information for information on how the shareholder will
be taxed as a result of holding shares in the Acquiring Fund.
Appendix C
COMPARISON OF BUSINESS STRUCTURE AND ORGANIZATION
The following information provides only a summary of the key features of
the organizational structure and governing documents of the Acquiring Fund and
the Acquired Fund. The Acquiring Fund is a series of the Company, an open-end
management investment company organized as a Maryland corporation. The Charter
and Bylaw provisions and state law that govern the Company apply to the
Acquiring Fund. The Acquired Fund is a series of the Trust, an open-end
management investment company organized as a Massachusetts business trust. It is
governed by the Trust's Declaration and Bylaw provisions and state law. Certain
differences in the respective Charter/Declaration and Bylaw provisions and state
law of the Acquiring Fund and the Acquired Fund are noted below.
Shareholder Meetings
Each Fund has procedures available to its respective shareholders for
calling shareholders' meetings and for the removal of Trustees/Directors.
Under Maryland law, unless a charter provides otherwise (which the
Company's does not), a director may be removed, either with or without cause, at
a meeting duly called and at which a quorum is present by the affirmative vote
of the holders of a majority of the votes entitled to be cast for the election
of directors. Under the Bylaws of the Company, a special meeting of shareholders
may be called by the Company's secretary upon the written request of
shareholders entitled to cast not less than a majority of all the votes entitled
to be cast at such meeting.
Under the Bylaws of the Trust, the Trust must promptly call a meeting of
shareholders for the purpose of voting upon the removal of any Trustee when
requested to do so by the record holders of not less than 10% of the outstanding
shares.
For the Company, and with respect to the Acquiring Fund, the presence in
person or by proxy of shareholders entitled to cast one-third of all the votes
entitled to be cast at any meeting of shareholders on any matter shall
constitute a quorum. For the Trust, and with respect to the Acquired Fund, the
presence in person or by proxy of stockholders entitled to cast 30% of the votes
entitled to be cast shall constitute a quorum. When a quorum is present at any
meeting of the Company or the Trust, the affirmative vote of a majority of the
votes (or with respect to the election of Directors/Trustees, a plurality of
votes) cast or, with respect to any matter requiring a class vote, the
affirmative vote of a majority of the votes cast of each class entitled to vote
as a class on the matter, shall decide any question brought before such meeting,
except as otherwise required by law.
Shares of the Funds
The Trust's Declaration authorizes the issuance of an unlimited number of
shares of beneficial interest, which may be divided into separate and distinct
series or classes. The Company's Charter authorizes a set number of shares of
common stock. The Directors of the Company may classify any unissued shares of
common stock in one or more series or classes of stock.
The Company's Charter provides that no shareholder is entitled to any
preemptive rights except as the Board may establish. Shareholders of the Trust
are also not entitled to preemptive rights. Shareholders of the Trust and
Company are entitled to one vote per share. All voting rights for the election
of Trustees are non-cumulative, which means that the holders of a plurality of
the shares of common stock of the Trust can elect 100% of the Trustees then
nominated for election if they choose to do so and, in such event, the holders
of the remaining shares will not be able to elect any Trustees.
The Trust and the Company are not required to, and do not, hold annual
meetings of shareholders and have no current intention to hold such meetings,
except as required by the 1940 Act. Under the 1940 Act, the Trust and the
Company are required to hold a shareholder meeting if, among other reasons, the
number of Trustees/Directors elected by shareholders is less than a majority of
the total number of Trustees/Directors, or if the a Fund seeks to change its
fundamental investment policies.
Dividends and Distributions
For each Fund, dividends may be authorized by the Board and declared by
the Fund at any time, and the amount and number of capital gains distributions
paid to shareholders during each fiscal year are determined by the Board. Each
such payment shall be accompanied by a statement as to the source of such
payment, to the extent required by law.
With respect to the Company, each share class is entitled to such
dividends or distributions, in cash, property or additional shares of stock of
the same or another series of the Company, or class, as may be authorized from
time to time by the Board. With respect to the Trust, each share class is
entitled to such dividends or distributions, in cash or otherwise (but only from
assets belonging to the Acquired Fund) an amount approximately equal to the net
income attributable to the assets belonging to the Acquired Fund and such
additional amounts as the Trustees may authorize.
A shareholder of each Fund may make an election to receive dividends and
distributions in cash or in shares at the time of purchase of shares. The
shareholder's election can be changed at any time prior to a record date for a
dividend. There is no sales or other charge in connection with the reinvestment
of dividends or capital gains distributions.
Indemnification and Liability of Directors and Officers
The Charter and Bylaws of the Company provide for the indemnification of
officers and Directors, as applicable, to the fullest extent permitted by
Maryland law. Maryland law permits a Maryland corporation to include in its
charter a provision limiting the liability of its Directors and officers to the
corporation and its shareholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter of the
Company contains such a provision that eliminates Directors' and officers'
liability to the maximum extent permitted by Maryland law. This exculpation does
not protect any such person against any liability to the Company or any
shareholder thereof to which such person would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the satisfaction of such person's office.
The Declaration and Bylaws of the Trust provide for the indemnification of
officers and Trustees against all liabilities and expenses, including but not
limited to amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees reasonably incurred by any officer or Trustee in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, before any court or administrative or
legislative body, in which such person may be or may have been involved as a
party or otherwise or with which such person may be or may have been threatened,
while in office or thereafter, by reason of any alleged act or omission as a
Trustee or officer or by reason of his or her being or having been such a
Trustee or officer, except with respect to any matter as to which such person
shall have been finally adjudicated in any such action, suit or other proceeding
(a) not to have acted in good faith in the reasonable belief that such person's
action was in the best interest of the Trust or (b) to be liable to the Trust or
its Shareholders by reason of willful misfeasance, bad faith, gross negligence
or reckless disregard of the duties involved in the conduct of the office of
Trustee or officer.
Appendix D
CAPITALIZATION
The following table shows on an unaudited basis the capitalization of each
of the Acquired Fund and the Acquiring Fund as of May 31, 2016, and on a pro
forma combined basis for the combined Fund, giving effect to the acquisition of
the assets and liabilities of the Acquired Fund by the Acquiring Fund at net
asset value as of May 31, 2016:
Acquired Fund Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Class A) (Class B) (Class A) Adjustments (Class A) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 180,004,413 $ 7,860,357 $ 67,776 $ 74,273(2) $ 187,858,273
Shares Outstanding 14,818,244 654,051 6,927 3,729,187 19,208,409(3)
NAV Per Share $ 12.15 $ 12.02 $ 9.78 -- $ 9.78
Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Class C) (Class C) Adjustments (Class C) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 75,646,727 $ 9,807 $ 29,907(2) $ 75,626,627
Shares Outstanding 6,323,578 1,001 1,392,424 7,717,003(3)
NAV Per Share $ 11.96 $ 9.80 -- $ 9.80
Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Advisor Class) (Advisor Class) Adjustments (Advisor Class) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 11,947,529 $ 18,502,160 $ 4,723(2) $ 30,444,966
Shares Outstanding 978,639 1,889,994 241,259 3,109,892(3)
NAV Per Share $ 12.21 $ 9.79 -- $ 9.79
Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Class R) (Class R) Adjustments (Class R) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 4,415,764 -- $ 1,746(2) $ 4,414,018
Shares Outstanding 363,960 -- 87,371 451,331(3)
NAV Per Share $ 12.13 -- -- $ 9.78
Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Class K) (Class K) Adjustments (Class K) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 8,410,419 -- $ 3,325(2) $ 8,407,094
Shares Outstanding 694,119 -- 165,502 859,621(3)
NAV Per Share $ 12.12 -- -- $ 9.78
Acquired Fund Acquiring Fund Pro Forma Combined Fund
(Class I) (Class I) Adjustments (Class I) (pro forma)(1)
------------------- ------------------- ------------------- ---------------- --------------------------------
Total Net Assets $ 456,566 -- $ 180(2) $ 456,386
Shares Outstanding 37,491 -- 9,127 46,618(3)
NAV Per Share $ 12.18 -- -- $ 9.79
--------------------------
(1) Assumes the Acquisition was consummated on May 31, 2016 and is for
information purposes only. No assurance can be given as to how many shares
of the Acquiring Fund will be received by shareholders of the Acquiring
Fund on the date the Acquisition takes place, and the foregoing should not
be relied upon to reflect the number of shares of the Acquiring Fund that
will actually be received on or after such date.
(2) Estimated expenses of the Acquisition allocable to the Funds
proportionately based on each Fund's net assets.
(3) In connection with the Acquisition, shares of the Acquiring Fund will be
issued to the shareholders of the Acquiring Fund. The number of shares
assumed to be issued is equal to the net asset value of the Acquired Fund
divided by the net asset value per share of the Acquiring Fund as of May
31, 2016.
Appendix E
SHARE OWNERSHIP INFORMATION
Shares Outstanding
As of November 1, 2016, each Fund had the following number of shares of
common stock outstanding.
Number of Outstanding Shares
Fund Class of Common Stock
--------------------------------------------------------------------------------
Acquired Fund A [_____________]
B
C
Advisor
R
K
I
Acquiring Fund* A [_____________]
C [_____________]
Advisor [_____________]
--------------------
* The Acquiring Fund did not offer Class R, Class K and Class I shares prior
to the Acquisition.
Ownership of Shares
[As of November 1, 2016, the Trustees/Directors and officers of each Fund
as a group beneficially owned less than 1% of the outstanding shares of common
stock of that Fund.] To the knowledge of each Fund, the following persons owned,
either of record or beneficially, 5% or more of the outstanding shares of each
class of the Fund. [As of November 1, 2016, [____________] may be deemed to
"control" the [Acquired Fund/Acquiring Fund].] "Control" for this purpose is the
ownership of more than 25% of the Fund's voting securities.
Number of Percentage of
Name and Address Outstanding Shares Outstanding
Fund and Class of Shareholder of Class Owned Shares of Class Owned
-------------- -------------- ----------------- ---------------------
Acquired Fund
-------------
Class A [_________] [________] [____]%
Class B [_________] [________] [____]%
Class C [_________] [________] [____]%
Advisor Class [_________] [________] [____]%
Class R [_________] [________] [____]%
Class K [_________] [________] [____]%
Class I [_________] [________] [____]%
Acquiring Fund
--------------
Class A [_________] [_______] [___]%
Class C [_________] [_______] [___]%
Advisor Class [_________] [_______] [___]%
The following table shows the percentage of combined Fund's shares to be
owned by the above listed shareholders, if the Acquisition had been consummated
as of November 1, 2016.
Percentage Outstanding
Name and Address Shares of Combined Fund
Fund and Class of Shareholder Class Owned
-------------- -------------- ----------------------
Acquiring Fund
Class A* [____________] [___]%
Class C [____________] [___]%
Advisor Class [____________] [___]%
Class R [____________] [___]%
Class K [____________] [___]%
Class I [____________] [___]%
-------------------
* Class B shareholders of the Acquired Fund will receive Class A shares of
the Acquiring Fund.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
EASY VOTING OPTIONS:
VOTE ON THE INTERNET
Log on to:
www.proxy-direct.com
or scan the QR code
Follow the on-screen instructions
available 24 hours
VOTE BY PHONE
Call 1-800-337-3503
Follow the recorded instructions
available 24 hours
VOTE BY MAIL
Vote, sign and date this Proxy
Card and return in the
postage-paid envelope
VOTE IN PERSON
Attend Shareholder Meeting
1345 Avenue of the Americas
New York, NY 10105
on January 30, 2017
Please detach at perforation before mailing.
PROXY THE AB PORTFOLIOS PROXY
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 30, 2017
The undersigned shareholder of AB Conservative Wealth Strategy (the "Acquired
Fund"), a series of The AB Portfolios (the "Trust"), a Massachusetts business
trust, hereby appoints Eric Freed and Carol Rappa, or either of them, as proxies
for the undersigned, with full power of substitution in each of them, to attend
the Special Meeting of Shareholders of the Acquired Fund (the "Meeting") to be
held at 2:30 p.m., Eastern Time, on January 30, 2017, at the offices of the
Trust, 1345 Avenue of the Americas, New York, New York 10105, and any
postponement or adjournment thereof, to cast on behalf of the undersigned all
votes that the undersigned is entitled to cast at the Meeting and otherwise to
represent the undersigned with all powers possessed by the undersigned if
personally present at such Meeting. The undersigned hereby acknowledges receipt
of the Notice of Special Meeting of Shareholders and accompanying Proxy
Statement/Prospectus and revokes any proxy heretofore given with respect to the
Meeting.
Receipt of the Notice of Special Meeting of Shareholders and the accompanying
Proxy Statement/Prospectus is hereby acknowledged. The shares represented hereby
will be voted as indicated or FOR the Proposal if no choice is indicated.
VOTE VIA THE INTERNET: www.proxy-direct.com
VOTE VIA TELEPHONE: 1-800-337-3503
Note: Please sign exactly as your name(s) appear(s) on
this proxy card, and date it. When shares are held
jointly, each holder should sign. When signing in a
representative capacity, please give title.
________________________________________________________
Signature and Title, if applicable
________________________________________________________
Signature (if held jointly)
________________________________________________________
Date
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED ABOVE.
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
Important Notice Regarding the Availability of Proxy Materials for the
Special Meeting of Shareholders to be Held on January 30, 2017.
The Proxy Statement and Proxy Card for this meeting are
available at: [___________]
IF YOU VOTE ON THE INTERNET OR BY TELEPHONE, YOU NEED NOT
RETURN THIS PROXY CARD
Please detach at perforation before mailing.
PLEASE MARK A BOX BELOW IN BLUE OR BLACK INK AS FOLLOWS. Example: [X]
THE BOARD OF TRUSTEES RECOMMENDS A VOTE "FOR" THE PROPOSAL.
1. To approve an Agreement and Plan of Acquisition and Liquidation
providing for the acquisition of all of the assets of AB Conservative
Wealth Strategy (the "Acquired Fund"), a series of The AB Portfolios, a
Massachusetts business trust, in exchange for shares of AB All Market
Income Portfolio (the "Acquiring Fund"), a series of AB Cap Fund, Inc.,
a Maryland corporation, assumption by the Acquiring Fund of all of the
liabilities of the Acquired Fund and the termination of the Acquired
Fund.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
PLEASE SIGN AND DATE ON THE REVERSE SIDE
_________________________________________
STATEMENT OF ADDITIONAL INFORMATION
November [__], 2016
For the Acquisition of:
AB CONSERVATIVE WEALTH STRATEGY
a series of The AB Portfolios
1345 Avenue of the Americas
New York, New York 10105
BY
AB ALL MARKET INCOME PORTFOLIO
a series of AB Cap Fund, Inc.
1345 Avenue of the Americas
New York, New York l0105
(800) 324-5060
_________________________________________
This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Proxy Statement/Prospectus dated November [__],
2016 relating to the solicitation of shareholder approval of the acquisition of
the assets and assumption of the liabilities (the "Acquisition") of the AB
Conservative Wealth Strategy (the "Acquired Fund"), a series of The AB
Portfolios, a Massachusetts business trust (the "Trust"), by AB All Market
Income Portfolio (the "Acquiring Fund"), a series of AB Cap Fund, Inc., a
Maryland corporation (the "Company"), pursuant to an Agreement and Plan of
Acquisition and Liquidation (the "Plan"). Subject to the approval of the
shareholders of the Acquired Fund, the Plan provides for:
o the transfer of all of the assets of the Acquired Fund in exchange
for shares of the Acquiring Fund and the assumption by the Acquiring
Fund of all of the liabilities of the Acquired Fund;
o the distribution of the shares of the Acquiring Fund received by the
Acquired Fund to shareholders of the Acquired Fund; and
o the termination of the Acquired Fund.
Shareholders of the Acquired Fund will receive the same class of shares
that they hold in the Acquired Fund at the time of the Acquisition, except that
Class B shareholders of the Acquired Fund will receive Class A shares of the
Acquiring Fund. If the Plan is approved by the Acquired Fund's shareholders, the
Acquisition is expected to occur on or about February 28, 2017.
The Proxy Statement/Prospectus and this Statement of Additional
Information are available upon request, without charge, by writing to the
applicable address or calling the telephone numbers listed below.
By mail: c/o AllianceBernstein Investor Services, Inc.
P.O. Box 786003
San Antonio, TX 78278-6003
By phone: (800) 324-5060
All of this additional information is also available in documents filed
with the Securities and Exchange Commission (the "SEC"). You may view or obtain
these documents from the SEC:
In person: at the SEC's Public Reference Room in Washington, DC
By phone: 1-202-551-8090 (for information on the operations of the
Public Reference Room only)
By mail: Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission,
Washington, DC 20549 (copies may be obtained at prescribed
rates)
On the Internet: www.sec.gov
TABLE OF CONTENTS
ADDITIONAL INFORMATION ABOUT THE FUNDS 3
FINANCIAL INFORMATION 3
ADDITIONAL INFORMATION ABOUT THE FUNDS
This Statement of Additional Information, which supplements and is related
to the Proxy Statement/Prospectus, is accompanied by and incorporates by
reference the Statement of Additional Information of the Acquiring Fund dated
November [ ], 2016 (Filed on [___________], 2016; File No. 2-29901), as
supplemented or amended to the date hereof.
FINANCIAL INFORMATION
This Statement of Additional Information is accompanied by and
incorporates by reference the documents referenced below, which contain
historical financial information regarding the Acquired Fund and the Acquiring
Fund.
o The annual report to shareholders of the Acquired Fund dated August
31, 2016, which contains audited financial statements and the
related independent registered public accounting firm's report for
the Acquired Fund for its fiscal year ended August 31, 2016 (File
No. 811-05088);
o The annual report to shareholders of the Acquiring Fund dated
November 30, 2015, which contains audited financial statements and
the related independent registered public accounting firm's report
for the Acquiring Fund for its fiscal year ended November 30, 2015
(File No. 811-01716); and
o The semi-annual report to shareholders of the Acquiring Fund dated
May 31, 2016, which contains unaudited financial statements for the
Acquiring Fund for its semi-annual period ended May 31, 2016 (File
No. 811-01716).
The following represents the pro forma financial information. The pro
forma Financial Statements give effect to the Acquisition of the assets and
liabilities of the Acquired Fund by the Acquiring Fund in exchange for shares of
the Acquiring Fund pursuant to the Agreement and Plan of Acquisition and
Liquidation as of May 31, 2016. The Acquired Fund is expected to redeem in kind
prior to the Acquisition, the shares of certain of the affiliated investment
companies held by the Acquired Fund.
PRO FORMA FINANCIAL INFORMATION
The unaudited pro forma financial information set forth herein is for
informational purposes only and does not purport to be indicative of the
financial condition that actually would have resulted if the Reorganization had
been consummated. These pro forma numbers have been estimated in good faith
based on information regarding each Fund as of May 31, 2016.
The unaudited pro forma information provided herein should be read in
conjunction with the historical financial statements of the Acquired Fund and
the Acquiring Fund, which are available in their annual and semi-annual reports
to shareholders.
Narrative Description of the Pro Forma Effects of the Reorganizations
Note A: General
The pro forma financial statements give effect to the proposed acquisition
of the assets and liabilities of AB Conservative Wealth Strategy (the "Acquired
Fund") by AB All Market Income Portfolio (the "Acquiring Fund") pursuant to the
Plan of Acquisition and Liquidation.
The pro forma combined Statement of Assets and Liabilities, Statement of
Operations, and Schedule of Investments reflect the accounts of the Acquired
Fund and the Acquiring Fund as if the proposed reorganization occurred as of May
31, 2016. The pro forma information has been derived from the books and records
of the Acquired Fund utilized in calculating daily net asset value for the Fund
and conforms to generally accepted accounting principles for U.S. mutual funds.
The Acquisition is expected to be completed on or about February 28, 2017. The
Acquiring Fund will be the accounting survivor of the reorganization.
Note B: Basis of Pro Forma
The Reorganization is expected to be accounted for as a tax-free
reorganization for federal income tax purposes. In accordance with accounting
principles generally accepted in the United States of America, for financial
reporting purposes, the historical cost basis of the investments received from
the Acquired Fund will be carried forward to align ongoing reporting of the
realized and unrealized gains and losses of the Acquiring Fund with amounts
distributable to shareholders for tax purposes.
Note C: Significant Accounting Policies
The Pro Forma Financial Statements have been prepared in conformity with
U.S. generally accepted accounting principles, which require management to make
certain estimates and assumptions that affect the reported amounts of assets and
liabilities in the financial statements and amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
No significant accounting policies (including valuation of portfolio
securities or compliance with Subchapter M of Subtitle A, Chapter 1, of the
Internal Revenue Code of 1986, as amended) will change as a result of the
Reorganization. No significant changes to any existing contracts of the Survivor
Fund are expected as a result of the Reorganization.
Note D: Security Valuation
Acquired Fund
Net asset value per share of the Strategies, which may be based on the
NAVs of the Underlying Portfolios, is calculated as of the close of business of
the New York Stock Exchange, normally 4:00 p.m., Eastern Time. Investments in
the Underlying Portfolios are valued at their net asset value each business day.
Acquiring Fund
Portfolio securities are valued at their current market value determined
on the basis of market quotations or, if market quotations are not readily
available or are deemed unreliable, at "fair value" as determined in accordance
with procedures established by and under the general supervision of the Fund's
Board of Directors.
In general, the market values of securities which are readily available
and deemed reliable are determined as follows: securities listed on a national
securities exchange (other than securities listed on the NASDAQ Stock Market,
Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale
price at the close of the exchange or foreign securities exchange. If there has
been no sale on such day, the securities are valued at the last traded price
from the previous day. Securities listed on more than one exchange are valued by
reference to the principal exchange on which the securities are traded;
securities listed only on NASDAQ are valued in accordance with the NASDAQ
Official Closing Price; listed or over the counter ("OTC") market put or call
options are valued at the mid level between the current bid and ask prices. If
either a current bid or current ask price is unavailable, the Adviser will have
discretion to determine the best valuation (e.g. last trade price in the case of
listed options); open futures are valued using the closing settlement price or,
in the absence of such a price, the most recent quoted bid price. If there are
no quotations available for the day of valuation, the last available closing
settlement price is used; U.S. Government securities and any other debt
instruments having 60 days or less remaining until maturity are generally valued
at market by an independent pricing vendor, if a market price is available. If a
market price is not available, the securities are valued at amortized cost. This
methodology is commonly used for short term securities that have an original
maturity of 60 days or less, as well as short term securities that had an
original term to maturity that exceeded 60 days. In instances when amortized
cost is utilized, the Valuation Committee (the "Committee") must reasonably
conclude that the utilization of amortized cost is approximately the same as the
fair value of the security. Such factors the Committee will consider include,
but are not limited to, an impairment of the creditworthiness of the issuer or
material changes in interest rates. Fixed-income securities, including
mortgage-backed and asset-backed securities, may be valued on the basis of
prices provided by a pricing service or at a price obtained from one or more of
the major broker-dealers. In cases where broker-dealer quotes are obtained, the
Adviser may establish procedures whereby changes in market yields or spreads are
used to adjust, on a daily basis, a recently obtained quoted price on a
security. Swaps and other derivatives are valued daily, primarily using
independent pricing services, independent pricing models using market inputs, as
well as third party broker-dealers or counterparties. Investment companies are
valued at their net asset value each day.
Securities for which market quotations are not readily available
(including restricted securities) or are deemed unreliable are valued at fair
value. Factors considered in making this determination may include, but are not
limited to, information obtained by contacting the issuer, analysts, analysis of
the issuer's financial statements or other available documents. In addition, the
Portfolio may use fair value pricing for securities primarily traded in non-U.S.
markets because most foreign markets close well before the Portfolio values its
securities at 4:00 p.m., Eastern Time. The earlier close of these foreign
markets gives rise to the possibility that significant events, including broad
market moves, may have occurred in the interim and may materially affect the
value of those securities. To account for this, the Portfolio may frequently
value many of its foreign equity securities using fair value prices based on
third party vendor modeling tools to the extent available.
Note E: Capital Loss Carryforwards
At September 30, 2016, the Acquired Fund had unused capital loss
carryforwards available for federal income tax purposes to be applied against
future capital gains, if any. The Acquiring Fund did not have capital gain/loss
carryforwards. For net capital losses arising in taxable years beginning after
December 22, 2010, a Fund will generally be able to carry-forward such capital
losses indefinitely. A Fund's net capital losses from taxable years beginning on
or prior to December 22, 2010, however, will remain subject to their current
expiration dates and can be used only after the post-enactment losses. The
Acquired Fund had capital loss carryforwards as follows:
Capital Loss Carryforward - expiring Nov. 2017 $ (1,963,389)
Capital Loss Carryforward - expiring Nov. 2018 $(13,640,435)
-------------------
Total Capital Loss Carryforward from PY $(15,603,824)
-------------------
Note F - Costs Associated with the Reorganization
Approximately half of the costs of the Acquisition will be borne
proportionately by the Funds based on each Fund's respective net assets of the
total net assets of both Funds, and the other half of the costs of the
Acquisition will be borne by the Adviser. The total costs and expenses of the
Acquisition are estimated to be $243,000. The expected allocation among the
Funds and the Adviser is as follows:
Acquired Fund Acquiring Fund Adviser
------------- -------------- -------
$113,404 $8,096(1) $121,500
__________________________
(1)Expense covered by expense cap.
Pro Forma Financial Statements
------------------------------
Portfolio of Investments
as of May 31, 2016 (unaudited)
AB All AB AB AB
Market Conservative Pro-Forma All Market Conservative Pro-Forma
Income Wealth Combined Income Wealth Combined
Portfolio Strategy Portfolio Portfolio Strategy Portfolio
----------------------------------------------------------------------------------------
Company Shares Shares Shares U.S. Value U.S. Value U.S. Value
----------------------------------------------------------------------------------------
INVESTMENT COMPANIES - 96.6%
Funds and Investment Trusts - 96.6%
AB High Income Fund, Inc.
- Class Z(a)* 855,543 - 855,543 $ 7,143,785 - 7,143,785
AB Multi-Manager Alternative
Strategies Fund - Class Z(a)* - 1,762,090 1,762,090 - 17,374,206 17,374,206
AB Pooling Portfolio - AB Bond
Inflation Protection Portfolio(a)* - 2,811,952 2,811,952 - 27,360,296 27,360,296
AB Pooling Portfolio -
AB Global Core Bond Portfolio(a)* - 6,860,886 6,860,886 - 69,089,123 69,089,123
AB Pooling Portfolio -
AB International Growth Portfolio(a)* - 1,399,014 1,399,014 - 11,709,748 11,709,748
AB Pooling Portfolio -
AB International Value Portfolio(a)* - 1,735,969 1,735,969 - 11,683,072 11,683,072
AB Pooling Portfolio -
AB Multi-Asset Real Return Portfolio(a)* - 719,905 719,905 - 4,355,425 4,355,425
AB Pooling Portfolio -
AB Short Duration Bond Portfolio(a)* - 8,378,593 8,378,593 - 78,926,346 78,926,346
AB Pooling Portfolio -
AB Small-Mid Cap Growth Portfolio(a)* - 247,781 247,781 - 2,239,938 2,239,938
AB Pooling Portfolio -
AB Small-Mid Cap Value Portfolio(a)* - 216,629 216,629 - 2,224,779 2,224,779
AB Pooling Portfolio -
AB U.S. Large Cap Growth Portfolio(a)* - 1,546,060 1,546,060 - 15,352,381 15,352,381
AB Pooling Portfolio -
AB U.S. Value Portfolio(a)* - 1,181,864 1,181,864 - 15,364,230 15,364,230
AB Pooling Portfolio -
AB Volatility Management Portfolio(a)* - 3,123,719 3,123,719 - 33,392,553 33,392,553
Vanguard REIT ETF 8,633 - 8,633 722,496 - 722,496
----------------------------------------
Total Investment Companies 7,866,281 289,072,097 296,938,378
----------------------------------------
(cost $280,844,337)
____________________________
* To be sold pursuant to redemption in kind prior to the Acquisition.
COMMON STOCKS - 2.1%
Financials - 0.4%
Banks - 0.2%
Aozora Bank Ltd. 6,000 - 6,000 20,302 - 20,302
BNP Paribas SA 1,169 - 1,169 64,782 - 64,782
Fifth Third Bancorp 2,252 - 2,252 42,495 - 42,495
Hang Seng Bank Ltd. 3,200 - 3,200 56,728 - 56,728
HSBC Holdings PLC 3,883 - 3,883 25,098 - 25,098
Intesa Sanpaolo SpA 8,053 - 8,053 20,666 - 20,666
JPMorgan Chase & Co. 1,026 - 1,026 66,967 - 66,967
Nordea Bank AB 4,419 - 4,419 42,889 - 42,889
Oversea-Chinese Banking Corp., Ltd. 1,800 - 1,800 11,271 - 11,271
People's United Financial, Inc. 2,843 - 2,843 45,147 - 45,147
Royal Bank of Canada 1,243 - 1,243 74,722 - 74,722
Seven Bank Ltd. 7,000 - 7,000 25,620 - 25,620
Toronto-Dominion Bank (The) 410 - 410 17,856 - 17,856
Wells Fargo & Co. 1,585 - 1,585 80,391 - 80,391
Westpac Banking Corp. 1,805 - 1,805 39,912 - 39,912
-----------------------------------------
634,846 - 634,846
----------------------------------------
Banks - 0.0%
Mitsubishi UFJ Financial Group, Inc. 4,900 - 4,900 24,209 - 24,209
----------------------------------------
Capital Markets - 0.0%
Partners Group Holding AG 60 - 60 25,300 - 25,300
T Rowe Price Group, Inc. 540 - 540 41,613 - 41,613
-----------------------------------------
66,913 - 66,913
----------------------------------------
Diversified Financial Services - 0.0%
IG Group Holdings PLC 2,090 - 2,090 24,184 - 24,184
----------------------------------------
Insurance - 0.2%
Allstate Corp. (The) 640 - 640 43,206 - 43,206
Euler Hermes Group 410 - 410 35,241 - 35,241
FNF Group 1,480 - 1,480 51,726 - 51,726
Legal & General Group PLC 13,186 - 13,186 45,636 - 45,636
Marsh & McLennan Cos., Inc.(b) 480 - 480 31,714 - 31,714
NN Group NV 1,050 - 1,050 35,048 - 35,048
Progressive Corp. (The) 661 - 661 22,011 - 22,011
Swiss Re AG 1,401 - 1,401 125,895 - 125,895
Tryg A/S 740 - 740 14,572 - 14,572
----------------------------------------
405,049 - 405,049
----------------------------------------
Real Estate Investment Trusts
(REITs) - 0.0%
Ascendas Real Estate Investment Trust 11,900 - 11,900 19,783 - 19,783
HCP, Inc. 1,271 - 1,271 41,778 - 41,778
----------------------------------------
61,561 - 61,561
----------------------------------------
Real Estate Management
& Development - 0.0%
Daito Trust Construction Co., Ltd. 300 - 300 43,467 - 43,467
----------------------------------------
1,260,229 - 1,260,229
----------------------------------------
Information Technology - 0.3%
Communications Equipment - 0.0%
Cisco Systems, Inc. 2,290 - 2,290 66,525 - 66,525
----------------------------------------
Internet Software & Services - 0.0%
Moneysupermarket.com Group PLC 5,260 - 5,260 25,196 - 25,196
----------------------------------------
IT Services - 0.1%
Amadeus IT Holding SA - Class A 640 - 640 29,631 - 29,631
Amdocs Ltd. 850 - 850 49,292 - 49,292
Booz Allen Hamilton Holding Corp. 1,010 - 1,010 29,563 - 29,563
CGI Group, Inc. - Class A(c) 370 - 370 17,304 - 17,304
Fidelity National Information
Services, Inc.(b) 410 - 410 30,451 - 30,451
Fiserv, Inc.(b) (c) 190 - 190 20,013 - 20,013
International Business Machines Corp. 268 - 268 41,202 - 41,202
Paychex, Inc. 1,558 - 1,558 84,475 - 84,475
SCSK Corp. 900 - 900 33,798 - 33,798
Total System Services, Inc. 590 - 590 31,683 - 31,683
Vantiv, Inc. - Class A(c) 620 - 620 33,337 - 33,337
----------------------------------------
400,749 - 400,749
----------------------------------------
Semiconductors &
Semiconductor Equipment - 0.1%
Intel Corp. 666 - 666 21,039 - 21,039
Linear Technology Corp. 1,339 - 1,339 63,361 - 63,361
Texas Instruments, Inc. 693 - 693 41,996 - 41,996
----------------------------------------
126,396 - 126,396
----------------------------------------
Software - 0.1%
CA, Inc. 670 - 670 21,654 - 21,654
Microsoft Corp. 2,629 - 2,629 139,337 - 139,337
NICE-Systems Ltd. 300 - 300 19,239 - 19,239
Oracle Corp. 900 - 900 36,180 - 36,180
Oracle Corp. Japan 400 - 400 21,156 - 21,156
Sage Group PLC (The) 1,390 - 1,390 12,326 - 12,326
----------------------------------------
249,892 - 249,892
----------------------------------------
Technology Hardware, Storage
& Peripherals - 0.0%
Apple, Inc. 779 - 779 77,791 - 77,791
HP, Inc. 3,537 - 3,537 47,325 - 47,325
----------------------------------------
125,116 - 125,116
----------------------------------------
993,874 - 993,874
----------------------------------------
Consumer Staples - 0.3%
Beverages - 0.1%
Coca-Cola Co. (The) 621 - 621 27,697 - 27,697
Dr Pepper Snapple Group, Inc.(b) 260 - 260 23,764 - 23,764
PepsiCo, Inc.(b) 360 - 360 36,421 - 36,421
----------------------------------------
87,882 - 87,882
----------------------------------------
Food & Staples Retailing - 0.0%
Axfood AB 650 - 650 11,972 - 11,972
Kroger Co. (The) 470 - 470 16,807 - 16,807
Lawson, Inc. 200 - 200 15,753 - 15,753
Wm Morrison Supermarkets PLC 15,007 - 15,007 43,026 - 43,026
----------------------------------------
87,558 - 87,558
----------------------------------------
Food Products - 0.0%
Nestle SA (REG) 160 - 160 11,824 - 11,824
Salmar ASA 780 - 780 23,375 - 23,375
Tyson Foods, Inc. - Class A 460 - 460 29,339 - 29,339
----------------------------------------
64,538 - 64,538
----------------------------------------
Household Products - 0.0%
Procter & Gamble Co. (The) 511 - 511 41,412 - 41,412
Reckitt Benckiser Group PLC 260 - 260 25,885 - 25,885
----------------------------------------
67,297 - 67,297
----------------------------------------
Tobacco - 0.2%
Altria Group, Inc.(b) 2,304 - 2,304 146,626 - 146,626
British American Tobacco PLC 880 - 880 53,532 - 53,532
Imperial Brands PLC 2,039 - 2,039 110,890 - 110,890
Japan Tobacco, Inc. 1,600 - 1,600 63,097 - 63,097
Philip Morris International, Inc.(b) 1,443 - 1,443 142,396 - 142,396
----------------------------------------
516,541 - 516,541
----------------------------------------
823,816 - 823,816
----------------------------------------
Consumer Discretionary - 0.3%
Automobiles - 0.1%
Daimler AG (REG) 497 - 497 33,976 - 33,976
Ford Motor Co. 3,112 - 3,112 41,981 - 41,981
Fuji Heavy Industries Ltd. 700 - 700 25,926 - 25,926
General Motors Co. 1,998 - 1,998 62,497 - 62,497
----------------------------------------
164,380 - 164,380
----------------------------------------
Hotels, Restaurants & Leisure - 0.1%
Aristocrat Leisure Ltd. 2,380 - 2,380 22,076 - 22,076
Darden Restaurants, Inc. 651 - 651 44,157 - 44,157
Domino's Pizza Group PLC 1,800 - 1,800 27,494 - 27,494
McDonald's Corp.(b) 500 - 500 61,030 - 61,030
Sands China Ltd. 6,400 - 6,400 24,412 - 24,412
Tabcorp Holdings Ltd. 3,850 - 3,850 12,282 - 12,282
Tatts Group Ltd. 12,390 - 12,390 35,219 - 35,219
----------------------------------------
226,670 - 226,670
----------------------------------------
Household Durables - 0.0%
Electrolux AB - Class B 1,544 - 1,544 41,476 - 41,476
----------------------------------------
Media - 0.1%
Cineplex, Inc. 520 - 520 20,450 - 20,450
Omnicom Group, Inc. 440 - 440 36,665 - 36,665
Regal Entertainment Group - Class A 870 - 870 18,296 - 18,296
RELX NV 1,070 - 1,070 18,523 - 18,523
Thomson Reuters Corp. 740 - 740 31,076 - 31,076
Viacom, Inc. - Class B 526 - 526 23,339 - 23,339
Wolters Kluwer NV 480 - 480 19,140 - 19,140
WPP PLC 1,290 - 1,290 29,750 - 29,750
----------------------------------------
197,239 - 197,239
----------------------------------------
Multiline Retail - 0.0%
Dollar General Corp.(b) 590 - 590 53,041 - 53,041
Target Corp. 230 - 230 15,819 - 15,819
----------------------------------------
68,860 - 68,860
----------------------------------------
Specialty Retail - 0.0%
Home Depot, Inc. (The)(b) 220 - 220 29,067 - 29,067
Ross Stores, Inc.(b) 450 - 450 24,030 - 24,030
TJX Cos., Inc. (The) 510 - 510 38,821 - 38,821
----------------------------------------
91,918 - 91,918
----------------------------------------
Textiles, Apparel & Luxury Goods - 0.0%
Pacific Textiles Holdings Ltd. 13,000 - 13,000 15,638 - 15,638
----------------------------------------
806,181 - 806,181
----------------------------------------
Health Care - 0.2%
Biotechnology - 0.0%
AbbVie, Inc. 1,020 - 1,020 64,188 - 64,188
Amgen, Inc. 279 - 279 44,068 - 44,068
Gilead Sciences, Inc. 310 - 310 26,989 - 26,989
----------------------------------------
135,245 - 135,245
----------------------------------------
Health Care Providers & Services - 0.0%
Anthem, Inc.(b) 210 - 210 27,753 - 27,753
UnitedHealth Group, Inc.(b) 837 - 837 111,882 - 111,882
----------------------------------------
139,635 - 139,635
----------------------------------------
Pharmaceuticals - 0.2%
Allergan PLC(c) 90 - 90 21,218 - 21,218
GlaxoSmithKline PLC 3,890 - 3,890 81,296 - 81,296
Johnson & Johnson(b) 1,055 - 1,055 118,888 - 118,888
Merck & Co., Inc.(b) 650 - 650 36,569 - 36,569
Pfizer, Inc.(b) 2,645 - 2,645 91,781 - 91,781
Recordati SpA 710 - 710 20,975 - 20,975
Roche Holding AG 353 - 353 92,718 - 92,718
Teva Pharmaceutical Industries Ltd. 532 - 532 27,631 - 27,631
----------------------------------------
491,076 - 491,076
----------------------------------------
765,956 - 765,956
----------------------------------------
Industrials - 0.2%
Aerospace & Defense - 0.0%
Raytheon Co. 497 - 497 64,446 - 64,446
----------------------------------------
Airlines - 0.0%
Delta Air Lines, Inc. 270 - 270 11,734 - 11,734
----------------------------------------
Construction & Engineering - 0.0%
CIMIC Group Ltd. 1,276 - 1,276 34,422 - 34,422
Vinci SA 658 - 658 49,554 - 49,554
----------------------------------------
83,976 - 83,976
----------------------------------------
Electrical Equipment - 0.0%
Emerson Electric Co. 755 - 755 39,275 - 39,275
----------------------------------------
Industrial Conglomerates - 0.1%
General Electric Co. 2,749 - 2,749 83,103 - 83,103
Siemens AG (REG) 463 - 463 49,877 - 49,877
----------------------------------------
132,980 - 132,980
----------------------------------------
Machinery - 0.1%
Deere & Co. 414 - 414 34,068 - 34,068
Illinois Tool Works, Inc. 398 - 398 42,200 - 42,200
KION Group AG 390 - 390 21,595 - 21,595
----------------------------------------
97,863 - 97,863
----------------------------------------
Professional Services - 0.0%
Equifax, Inc. 410 - 410 51,549 - 51,549
Experian PLC 1,310 - 1,310 24,768 - 24,768
----------------------------------------
76,317 - 76,317
----------------------------------------
Trading Companies & Distributors - 0.0%
MSC Industrial Direct Co., Inc. - Class A 240 - 240 17,988 - 17,988
----------------------------------------
Transportation Infrastructure - 0.0%
Transurban Group 4,779 - 4,779 41,548 - 41,548
----------------------------------------
566,127 - 566,127
----------------------------------------
Telecommunication Services - 0.1%
Diversified Telecommunication
Services - 0.1%
BCE, Inc. 1,334 - 1,334 61,494 - 61,494
Bezeq The Israeli
Telecommunication Corp., Ltd. 8,027 - 8,027 15,508 - 15,508
Frontier Communications Corp. 8,126 - 8,126 42,011 - 42,011
HKT Trust & HKT Ltd. - Class SS 21,000 - 21,000 30,429 - 30,429
Nippon Telegraph & Telephone Corp. 700 - 700 30,636 - 30,636
Verizon Communications, Inc.(b) 2,441 - 2,441 124,247 - 124,247
----------------------------------------
304,325 - 304,325
----------------------------------------
Wireless Telecommunication
Services - 0.0%
NTT DOCOMO, Inc. 2,400 - 2,400 59,961 - 59,961
Vodafone Group PLC 12,455 - 12,455 41,596 - 41,596
----------------------------------------
101,557 - 101,557
----------------------------------------
405,882 - 405,882
----------------------------------------
Energy - 0.1%
Energy Equipment & Services - 0.0%
Schlumberger Ltd. 230 - 230 17,549 - 17,549
----------------------------------------
Oil, Gas & Consumable Fuels - 0.1%
Chevron Corp. 411 - 411 41,511 - 41,511
Exxon Mobil Corp.(b) 1,203 - 1,203 107,091 - 107,091
Royal Dutch Shell PLC - Class A 1,606 - 1,606 38,557 - 38,557
Royal Dutch Shell PLC - Class B 1,370 - 1,370 32,889 - 32,889
Statoil ASA 4,090 - 4,090 64,656 - 64,656
TOTAL SA 630 - 630 30,554 - 30,554
TransCanada Corp. 1,702 - 1,702 70,528 - 70,528
----------------------------------------
385,786 - 385,786
----------------------------------------
403,335 - 403,335
----------------------------------------
Utilities - 0.1%
Electric Utilities - 0.1%
Entergy Corp. 809 - 809 61,419 - 61,419
Fortum Oyj 1,405 - 1,405 21,069 - 21,069
Southern Co. (The) 801 - 801 39,601 - 39,601
Terna Rete Elettrica Nazionale SpA 15,728 - 15,728 87,259 - 87,259
----------------------------------------
209,348 - 209,348
----------------------------------------
Multi-Utilities - 0.0%
Consolidated Edison, Inc. 537 - 537 39,341 - 39,341
Engie SA 1,373 - 1,373 21,166 - 21,166
----------------------------------------
60,507 - 60,507
----------------------------------------
269,855 - 269,855
----------------------------------------
Materials - 0.1%
Chemicals - 0.1%
Dow Chemical Co. (The) 1,676 - 1,676 86,079 - 86,079
LyondellBasell Industries NV - Class A 594 - 594 48,328 - 48,328
Sherwin-Williams Co. (The)(b) 40 - 40 11,644 - 11,644
----------------------------------------
146,051 - 146,051
----------------------------------------
Containers & Packaging - 0.0%
Amcor Ltd./Australia 2,060 - 2,060 24,202 - 24,202
Bemis Co., Inc. 480 - 480 24,163 - 24,163
----------------------------------------
48,365 - 48,365
----------------------------------------
Metals & Mining - 0.0%
BHP Billiton Ltd. 1,522 - 1,522 20,524 - 20,524
----------------------------------------
Paper & Forest Products - 0.0%
UPM-Kymmene Oyj 2,185 - 2,185 42,042 - 42,042
----------------------------------------
256,982 - 256,982
----------------------------------------
Total Common Stocks 6,552,237 - 6,552,237
----------------------------------------
(cost $6,186,344)
PREFERRED STOCKS - 0.5%
Retail - 0.2%
Regional Mall - 0.0%
Pennsylvania Real Estate
Investment Trust
7.38% 2,000 - 2,000 51,600 - 51,600
----------------------------------------
Shopping Center/Other Retail - 0.2%
CBL & Associates Properties, Inc.
6.63% 1,100 - 1,100 26,653 - 26,653
Cedar Realty Trust, Inc.
Series B
7.25% 2,000 - 2,000 52,620 - 52,620
DDR Corp.
6.50% 400 - 400 10,308 - 10,308
DDR Corp.
Series K
6.25% 1,400 - 1,400 36,848 - 36,848
Kimco Realty Corp.
Series K
5.63% 1,800 - 1,800 46,872 - 46,872
National Retail Properties, Inc.
Series D
6.63% 1,400 - 1,400 36,302 - 36,302
Realty Income Corp.
6.63% 1,400 - 1,400 36,792 - 36,792
Regency Centers Corp.
6.00% 800 - 800 21,128 - 21,128
Retail Properties of America, Inc.
7.00% 2,000 - 2,000 52,500 - 52,500
Saul Centers, Inc.
6.88% 1,100 - 1,100 28,952 - 28,952
Taubman Centers, Inc.
6.50% 1,400 - 1,400 36,442 - 36,442
Urstadt Biddle Properties, Inc.
7.13% 1,500 - 1,500 39,225 - 39,225
----------------------------------------
424,642 - 424,642
----------------------------------------
476,242 - 476,242
----------------------------------------
Equity: Other - 0.1%
Diversified/Specialty - 0.1%
CoreSite Realty Corp.
7.25% 2,000 - 2,000 53,200 - 53,200
Digital Realty Trust, Inc.
7.38% 1,100 - 1,100 30,525 - 30,525
EPR Properties
6.63% 2,200 - 2,200 58,234 - 58,234
First Potomac Realty Trust
7.75% 206 - 206 5,232 - 5,232
Gramercy Property Trust
7.13% 1,200 - 1,200 32,142 - 32,142
Public Storage
0.00% 600 - 600 15,000 - 15,000
Public Storage
5.38% 850 - 850 22,075 - 22,075
Summit Hotel Properties, Inc.
7.88% 1,500 - 1,500 38,820 - 38,820
----------------------------------------
255,228 - 255,228
----------------------------------------
Health Care - 0.0%
Sabra Health Care REIT, Inc.
Series A
7.13% 2,100 - 2,100 54,915 - 54,915
----------------------------------------
310,143 - 310,143
----------------------------------------
Office - 0.1%
Office - 0.1%
Alexandria Real Estate Equities, Inc.
6.45% 2,200 - 2,200 57,464 - 57,464
Brandywine Realty Trust
Series E
6.90% 2,000 - 2,000 52,000 - 52,000
Corporate Office Properties Trust
7.38% 700 - 700 18,137 - 18,137
Kilroy Realty Corp.
Series H
6.38% 1,500 - 1,500 38,625 - 38,625
PS Business Parks, Inc.
5.70% 1,000 - 1,000 25,970 - 25,970
PS Business Parks, Inc.
6.00% 800 - 800 20,936 - 20,936
SL Green Realty Corp.
6.50% 1,800 - 1,800 47,124 - 47,124
Vornado Realty Trust
5.40% 800 - 800 20,480 - 20,480
Vornado Realty Trust
Series K
5.70% 800 - 800 20,704 - 20,704
----------------------------------------
301,440 - 301,440
----------------------------------------
Lodging - 0.1%
Lodging - 0.1%
Chesapeake Lodging Trust
7.75% 1,800 - 1,800 47,106 - 47,106
Hersha Hospitality Trust
6.50% 700 - 700 17,367 - 17,367
Hersha Hospitality Trust
Series C
6.88% 1,100 - 1,100 28,776 - 28,776
LaSalle Hotel Properties
6.30% 800 - 800 20,152 - 20,152
LaSalle Hotel Properties
6.38% 1,400 - 1,400 35,532 - 35,532
Pebblebrook Hotel Trust
6.50% 1,500 - 1,500 38,700 - 38,700
Sunstone Hotel Investors, Inc.
6.45% 1,425 - 1,425 37,157 - 37,157
Sunstone Hotel Investors, Inc.
6.95% 475 - 475 12,697 - 12,697
----------------------------------------
237,487 - 237,487
----------------------------------------
Industrials - 0.0%
Industrial Warehouse
Distribution - 0.0%
Monmouth Real Estate
Investment Corp.
7.88% 1,800 - 1,800 47,034 - 47,034
STAG Industrial, Inc.
6.63% 2,200 - 2,200 56,958 - 56,958
Terreno Realty Corp.
7.75% 1,400 - 1,400 37,100 - 37,100
----------------------------------------
141,092 - 141,092
----------------------------------------
Residential - 0.0%
Multi-Family - 0.0%
Apartment Investment & Management Co.
6.88% 2,000 - 2,000 55,500 - 55,500
Equity LifeStyle Properties, Inc.
6.75% 1,400 - 1,400 36,470 - 36,470
Sun Communities, Inc.
7.13% 1,300 - 1,300 34,391 - 34,391
----------------------------------------
126,361 - 126,361
----------------------------------------
Total Preferred Stocks 1,592,765 - 1,592,765
----------------------------------------
(cost $1,583,956)
Principal Principal Principal
Amount Amount Amount
(000) (000) (000)
----------------------------------------------
EMERGING MARKETS - SOVEREIGNS - 0.1%
Angola - 0.1%
Angolan Government International Bond
9.50%, 11/12/25 (d) U.S. $200 - 200 194,500 - 194,500
----------------------------------------
Venezuela - 0.0%
Venezuela Government International Bond
7.65%, 4/21/25 (d) 498 - 498 179,902 - 179,902
----------------------------------------
Total Emerging Markets - Sovereigns 374,402 - 374,402
----------------------------------------
(cost $371,840)
EMERGING MARKETS - TREASURIES - 0.1%
Brazil - 0.1%
Brazil Notas do Tesouro Nacional
Series F
10.00%, 1/01/27 BRL 825 - 825 191,391 - 191,391
----------------------------------------
(cost $181,011)
GOVERNMENTS - SOVEREIGN AGENCIES - 0.1%
Brazil - 0.1%
Petrobras Global Finance BV
6.25%, 3/17/24 U.S. $223 - 223 187,476 - 187,476
----------------------------------------
(cost $181,091)
GOVERNMENTS - TREASURIES - 0.1%
Turkey - 0.1%
Turkey Government Bond
10.60%, 2/11/26 TRY 491 - 491 175,052 - 175,052
----------------------------------------
(cost $179,345)
Shares Shares Shares
----------------------------------------------
SHORT-TERM INVESTMENTS - 0.4%
Investment Companies - 0.4%
AB Fixed Income Shares, Inc.
- Government STIF Portfolio, 0.41%(a)(e) 1,230,122 - 1,230,122 1,230,122 - 1,230,122
-------------------------------------
(cost $1,230,122)
Principal Principal Principal
Amount Amount Amount
(000) (000) (000)
-----------------------------------------------
U.S. TREASURY BILLS - 0.0%
U.S. Treasury Bill
Zero Coupon, 8/11/16 U.S.$ 10 - 10 9,995 - 9,995
----------------------------------------
(cost $9,995)
Total Short-Term Investments 1,240,117 - 1,240,117
----------------------------------------
(cost $1,240,117)
Total Investments - 100.0% 18,179,721 289,072,097 307,251,818
----------------------------------------
(cost $290,768,041)
Other assets less liabilities - 0.0% 400,022 (330,322) 69,700
Net Assets - 100.0% $18,579,743 288,741,775 307,321,518
----------------------------------------
FUTURES
----------------------------------------
AB All Market Income Portfolio
----------------------------------------
Number Value at Unrealized
of Expiration Original May 31, Appreciation/
Type Contracts Month Value 2016 (Depreciation)
---------------------------------------------------------------------------------------------------------------------------
Purchased Contracts
10 Yr Australian Bond Futures 3 June 2016 $ 281,296 $ 288,129 $ 6,833
Euro STOXX 50 Index Futures 8 June 2016 264,042 271,754 7,712
FTSE 100 Index Futures 2 June 2016 176,524 180,160 3,636
S&P 500 E-Mini Futures 8 June 2016 798,550 837,960 39,410
TOPIX Index Futures 1 June 2016 120,962 124,351 3,389
U.S. T-Note 10 Yr (CBT) Futures 1 September 2016 129,651 129,688 37
Sold Contracts
Mini MSCI EAFE Futures 19 June 2016 1,540,579 1,577,475 (36,896)
Mini S&P TSX 60 Index Futures 3 June 2016 88,907 93,774 (4,867)
S&P 500 E-Mini Index Futures 17 June 2016 1,679,225 1,780,665 (101,440)
-----------
$ (82,186)
-----------
Pro-Forma Combined Portfolio
---------------------------------------
Number Value at Unrealized
of Expiration Original May 31, Appreciation/
Type Contracts Month Value 2016 (Depreciation)
-------------------------------------------------------------------------------------------------------------------------------
Purchased Contracts
10 Yr Australian Bond Futures 3 June 2016 $ 281,296 $ 288,129 $ 6,833
Euro STOXX 50 Index Futures 8 June 2016 264,042 271,754 7,712
FTSE 100 Index Futures 2 June 2016 176,524 180,160 3,636
S&P 500 E-Mini Futures 8 June 2016 798,550 837,960 39,410
TOPIX Index Futures 1 June 2016 120,962 124,351 3,389
U.S. T-Note 10 Yr (CBT) Futures 1 September 2016 129,651 129,688 37
Sold Contracts
Mini MSCI EAFE Futures 19 June 2016 1,540,579 1,577,475 (36,896)
Mini S&P TSX 60 Index Futures 3 June 2016 88,907 93,774 (4,867)
S&P 500 E-Mini Index Futures 17 June 2016 1,679,225 1,780,665 (101,440)
-----------
$ (82,186)
-----------
FORWARD CURRENCY EXCHANGE CONTRACTS
------------------------------------------------------
AB All Market Income Portfolio
------------------------------------------------------
Contracts to In Exchange Unrealized
Deliver For Settlement Appreciation/
Counterparty (000) (000) Date (Depreciation)
----------------------------- ----------------- -------------- ---------- --------------
Bank of America, NA GBP 255 USD 370 7/1/2016 $ 339
Barclays Bank PLC KRW 334,704 USD 276 6/17/2016 (4,879)
Barclays Bank PLC MXN 4,539 USD 253 6/17/2016 7,347
Barclays Bank PLC TWD 19,981 USD 607 6/17/2016 (5,362)
Barclays Bank PLC USD 514 INR 35,159 6/17/2016 7,066
Barclays Bank PLC PHP 4,116 USD 87 9/20/2016 (42)
Deutsche Bank AG USD 225 BRL 809 7/5/2016 (3,187)
Goldman Sachs Bank International USD 270 JPY 30,093 6/17/2016 2,268
Goldman Sachs Bank International CLP 43,648 USD 64 9/20/2016 1,251
Goldman Sachs Bank International USD 17 COP 51,089 9/20/2016 (560)
Standard Chartered Bank CLP 127,554 USD 185 6/17/2016 1,164
Standard Chartered Bank USD 333 IDR 4,457,238 6/17/2016 (6,672)
Standard Chartered Bank USD 291 PEN 1,019 6/17/2016 10,618
State Street Bank & Trust Co. AUD 53 USD 39 6/17/2016 337
State Street Bank & Trust Co. CAD 120 USD 93 6/17/2016 1,543
State Street Bank & Trust Co. CAD 349 USD 261 6/17/2016 (4,986)
State Street Bank & Trust Co. CHF 501 USD 508 6/17/2016 3,582
State Street Bank & Trust Co. EUR 120 USD 135 6/17/2016 1,698
State Street Bank & Trust Co. EUR 114 USD 126 6/17/2016 (839)
State Street Bank & Trust Co. GBP 32 USD 47 6/17/2016 224
State Street Bank & Trust Co. GBP 268 USD 381 6/17/2016 (7,125)
State Street Bank & Trust Co. HKD 569 USD 73 6/17/2016 78
State Street Bank & Trust Co. ILS 213 USD 56 6/17/2016 1,084
State Street Bank & Trust Co. ILS 390 USD 100 6/17/2016 (1,204)
State Street Bank & Trust Co. INR 2,547 USD 38 6/17/2016 284
State Street Bank & Trust Co. JPY 14,440 USD 134 6/17/2016 3,322
State Street Bank & Trust Co. JPY 10,882 USD 97 6/17/2016 (1,770)
State Street Bank & Trust Co. MXN 682 USD 37 6/17/2016 314
State Street Bank & Trust Co. MYR 531 USD 128 6/17/2016 (577)
State Street Bank & Trust Co. NOK 100 USD 12 6/17/2016 243
State Street Bank & Trust Co. NOK 2,707 USD 316 6/17/2016 (7,906)
State Street Bank & Trust Co. NZD 296 USD 203 6/17/2016 2,236
State Street Bank & Trust Co. SEK 980 USD 115 6/17/2016 (2,071)
State Street Bank & Trust Co. SGD 13 USD 9 6/17/2016 29
State Street Bank & Trust Co. SGD 19 USD 14 6/17/2016 (104)
State Street Bank & Trust Co. USD 35 AUD 47 6/17/2016 (906)
State Street Bank & Trust Co. USD 212 CAD 276 6/17/2016 (2,092)
State Street Bank & Trust Co. USD 230 CHF 224 6/17/2016 (5,277)
State Street Bank & Trust Co. USD 9 DKK 58 6/17/2016 70
State Street Bank & Trust Co. USD 5 DKK 35 6/17/2016 (94)
State Street Bank & Trust Co. USD 436 EUR 395 6/17/2016 2,811
State Street Bank & Trust Co. USD 450 EUR 397 6/17/2016 (8,055)
State Street Bank & Trust Co. USD 47 GBP 33 6/17/2016 921
State Street Bank & Trust Co. USD 57 GBP 39 6/17/2016 (128)
State Street Bank & Trust Co. USD 33 HKD 259 6/17/2016 (70)
State Street Bank & Trust Co. USD 102 ILS 390 6/17/2016 (1,182)
State Street Bank & Trust Co. USD 449 JPY 50,608 6/17/2016 8,612
State Street Bank & Trust Co. USD 21 JPY 2,236 6/17/2016 (592)
State Street Bank & Trust Co. USD 137 MYR 531 6/17/2016 (8,426)
State Street Bank & Trust Co. USD 96 NOK 789 6/17/2016 (1,903)
State Street Bank & Trust Co. USD 199 NZD 296 6/17/2016 1,316
State Street Bank & Trust Co. USD 3 NZD 4 6/17/2016 (3)
State Street Bank & Trust Co. USD 250 SEK 2,117 6/17/2016 3,544
State Street Bank & Trust Co. USD 134 SEK 1,093 6/17/2016 (3,141)
State Street Bank & Trust Co. USD 9 SGD 13 6/17/2016 6
State Street Bank & Trust Co. USD 14 SGD 19 6/17/2016 (202)
State Street Bank & Trust Co. USD 8 EUR 7 7/15/2016 7
State Street Bank & Trust Co. AUD 197 USD 144 9/20/2016 1,949
State Street Bank & Trust Co. AUD 234 USD 167 9/20/2016 (1,423)
State Street Bank & Trust Co. CHF 272 USD 278 9/20/2016 3,011
State Street Bank & Trust Co. GBP 62 USD 91 9/20/2016 793
State Street Bank & Trust Co. NOK 962 USD 115 9/20/2016 5
State Street Bank & Trust Co. SEK 2,694 USD 325 9/20/2016 774
State Street Bank & Trust Co. USD 55 CAD 72 9/20/2016 169
State Street Bank & Trust Co. USD 67 CAD 87 9/20/2016 (757)
State Street Bank & Trust Co. USD 206 JPY 22,521 9/20/2016 (1,669)
State Street Bank & Trust Co. USD 383 NZD 571 9/20/2016 1,989
---------------
$ (12,200)
---------------
Pro-Forma Combined Portfolio
----------------------------------------------------
Contracts to In Exchange Unrealized
Deliver For Settlement Appreciation/
Counterparty (000) (000) Date (Depreciation)
------------------------------ ------------------- ------------------ ---------- -------------
Bank of America, NA GBP 255 USD 370 7/1/2016 $ 339
Barclays Bank PLC KRW 334,704 USD 276 6/17/2016 (4,879)
Barclays Bank PLC MXN 4,539 USD 253 6/17/2016 7,347
Barclays Bank PLC TWD 19,981 USD 607 6/17/2016 (5,362)
Barclays Bank PLC USD 514 INR 35,159 6/17/2016 7,066
Barclays Bank PLC PHP 4,116 USD 87 9/20/2016 (42)
Deutsche Bank AG USD 225 BRL 809 7/5/2016 (3,187)
Goldman Sachs Bank International USD 270 JPY 30,093 6/17/2016 2,268
Goldman Sachs Bank International CLP 43,648 USD 64 9/20/2016 1,251
Goldman Sachs Bank International USD 17 COP 51,089 9/20/2016 (560)
Standard Chartered Bank CLP 127,554 USD 185 6/17/2016 1,164
Standard Chartered Bank USD 333 IDR 4,457,238 6/17/2016 (6,672)
Standard Chartered Bank USD 291 PEN 1,019 6/17/2016 10,618
State Street Bank & Trust Co. AUD 53 USD 39 6/17/2016 337
State Street Bank & Trust Co. CAD 120 USD 93 6/17/2016 1,543
State Street Bank & Trust Co. CAD 349 USD 261 6/17/2016 (4,986)
State Street Bank & Trust Co. CHF 501 USD 508 6/17/2016 3,582
State Street Bank & Trust Co. EUR 120 USD 135 6/17/2016 1,698
State Street Bank & Trust Co. EUR 114 USD 126 6/17/2016 (839)
State Street Bank & Trust Co. GBP 32 USD 47 6/17/2016 224
State Street Bank & Trust Co. GBP 268 USD 381 6/17/2016 (7,125)
State Street Bank & Trust Co. HKD 569 USD 73 6/17/2016 78
State Street Bank & Trust Co. ILS 213 USD 56 6/17/2016 1,084
State Street Bank & Trust Co. ILS 390 USD 100 6/17/2016 (1,204)
State Street Bank & Trust Co. INR 2,547 USD 38 6/17/2016 284
State Street Bank & Trust Co. JPY 14,440 USD 134 6/17/2016 3,322
State Street Bank & Trust Co. JPY 10,882 USD 97 6/17/2016 (1,770)
State Street Bank & Trust Co. MXN 682 USD 37 6/17/2016 314
State Street Bank & Trust Co. MYR 531 USD 128 6/17/2016 (577)
State Street Bank & Trust Co. NOK 100 USD 12 6/17/2016 243
State Street Bank & Trust Co. NOK 2,707 USD 316 6/17/2016 (7,906)
State Street Bank & Trust Co. NZD 296 USD 203 6/17/2016 2,236
State Street Bank & Trust Co. SEK 980 USD 115 6/17/2016 (2,071)
State Street Bank & Trust Co. SGD 13 USD 9 6/17/2016 29
State Street Bank & Trust Co. SGD 19 USD 14 6/17/2016 (104)
State Street Bank & Trust Co. USD 35 AUD 47 6/17/2016 (906)
State Street Bank & Trust Co. USD 212 CAD 276 6/17/2016 (2,092)
State Street Bank & Trust Co. USD 230 CHF 224 6/17/2016 (5,277)
State Street Bank & Trust Co. USD 9 DKK 58 6/17/2016 70
State Street Bank & Trust Co. USD 5 DKK 35 6/17/2016 (94)
State Street Bank & Trust Co. USD 436 EUR 395 6/17/2016 2,811
State Street Bank & Trust Co. USD 450 EUR 397 6/17/2016 (8,055)
State Street Bank & Trust Co. USD 47 GBP 33 6/17/2016 921
State Street Bank & Trust Co. USD 57 GBP 39 6/17/2016 (128)
State Street Bank & Trust Co. USD 33 HKD 259 6/17/2016 (70)
State Street Bank & Trust Co. USD 102 ILS 390 6/17/2016 (1,182)
State Street Bank & Trust Co. USD 449 JPY 50,608 6/17/2016 8,612
State Street Bank & Trust Co. USD 21 JPY 2,236 6/17/2016 (592)
State Street Bank & Trust Co. USD 137 MYR 531 6/17/2016 (8,426)
State Street Bank & Trust Co. USD 96 NOK 789 6/17/2016 (1,903)
State Street Bank & Trust Co. USD 199 NZD 296 6/17/2016 1,316
State Street Bank & Trust Co. USD 3 NZD 4 6/17/2016 (3)
State Street Bank & Trust Co. USD 250 SEK 2,117 6/17/2016 3,544
State Street Bank & Trust Co. USD 134 SEK 1,093 6/17/2016 (3,141)
State Street Bank & Trust Co. USD 9 SGD 13 6/17/2016 6
State Street Bank & Trust Co. USD 14 SGD 19 6/17/2016 (202)
State Street Bank & Trust Co. USD 8 EUR 7 7/15/2016 7
State Street Bank & Trust Co. AUD 197 USD 144 9/20/2016 1,949
State Street Bank & Trust Co. AUD 234 USD 167 9/20/2016 (1,423)
State Street Bank & Trust Co. CHF 272 USD 278 9/20/2016 3,011
State Street Bank & Trust Co. GBP 62 USD 91 9/20/2016 793
State Street Bank & Trust Co. NOK 962 USD 115 9/20/2016 5
State Street Bank & Trust Co. SEK 2,694 USD 325 9/20/2016 774
State Street Bank & Trust Co. USD 55 CAD 72 9/20/2016 169
State Street Bank & Trust Co. USD 67 CAD 87 9/20/2016 (757)
State Street Bank & Trust Co. USD 206 JPY 22,521 9/20/2016 (1,669)
State Street Bank & Trust Co. USD 383 NZD 571 9/20/2016 1,989
---------------
$ (12,200)
--------------
CALL OPTIONS WRITTEN
---------------------------------------
AB All Market Income Portfolio
---------------------------------------
Exercise Expiration Premiums
Description Contracts Price Month Received U.S. $ Value
------------------------ --------- ----------------- ------------ ---------- ------------
Euro STOXX 50 Index (f) 100 EUR 3,075.00 July 2016 $ 8,597 $ (8,549)
FTSE 100 Index (f) 30 GBP 6,275.00 July 2016 5,162 (5,162)
S&P 500 Index (g) 6 $ 2,105.00 July 2016 16,482 (16,494)
S&P ASX 200 Index (f) 10 AUD 5,325.00 June 2016 698 (683)
S&P TSX 60 Index (f) 130 CAD 820 June 2016 889 (686)
-------------------------------
$ 31,828 $ (31,574)
-------------------------------
Pro-Forma Combined Portfolio
--------------------------------------
Exercise Expiration Premiums
Description Contracts Price Month Received U.S. $ Value
------------------------ --------- ----------------- ------------ ---------- ------------
Euro STOXX 50 Index (f) 100 EUR 3,075.00 July 2016 $ 8,597 $ (8,549)
FTSE 100 Index (f) 30 GBP 6,275.00 July 2016 5,162 (5,162)
S&P 500 Index (g) 6 $ 2,105.00 July 2016 16,482 (16,494)
S&P ASX 200 Index (f) 10 AUD 5,325.00 June 2016 698 (683)
S&P TSX 60 Index (f) 130 CAD 820 June 2016 889 (686)
-----------------------------
$ 31,828 $ (31,574)
-----------------------------
PUT OPTIONS WRITTEN
---------------------------------------
AB All Market Income Portfolio
--------------------------------------
Exercise Expiration Premiums
Description Contracts Price Month Received U.S. $ Value
------------------------ --------- ----------------- ------------ ---------- ------------
Nikkei 225 Index (f) 1,000 JPY 16,875.00 July 2016 $ 5,356 $ (6,462)
Pro-Forma Combined Portfolio
--------------------------------------
Exercise Expiration Premiums
Description Contracts Price Month Received U.S. $ Value
------------------------ --------- ----------------- ------------ ---------- ------------
Nikkei 225 Index (f) 1,000 JPY 16,875.00 July 2016 $ 5,356 $ (6,462)
CURRENCY OPTIONS WRITTEN
----------------------------------------
AB All Market Income Portfolio
----------------------------------------
Exercise Expiration Contracts Premiums
Description Price Date (000) Received U.S. $ Value
----------------------- -------- ---------- -------- --------- ------------
Put - GBP vs. USD GBP 1.390 7/1/2016 GBP 1,382 $ 19,200 $ (20,020)
Pro-Forma Combined Portfolio
------------------------------------
Exercise Expiration Contracts Premiums
Description Price Date (000) Received U.S. $ Value
---------------------- -------- ---------- -------- --------- ------------
Put - GBP vs. USD GBP 1.390 7/1/2016 GBP 1,382 $ 19,200 $ (20,020)
CENTRALLY CLEARED CREDIT DEFAULT SWAPS
------------------------------------------
AB All Market Income Portfolio
------------------------------------------
Fixed Implied
Rate Credit Notional Unrealized
Clearing Broker/(Exchange) (Pay) Spread at Amount Market Appreciation/
& Referenced Obligation Receive May 31, 2016 (000) Value (Depreciation)
------------------------- -------- ------------ -------- --------- ------------
Sale Contracts
Morgan Stanley & Co., LLC/(INTRCONX)
CDX-NAHY Series 25, 5 Year Index, 12/20/20** 5.00% 4.06% $ 168 $ 7,903 $ 10,856
CDX-NAIG Series 25, 5 Year Index, 12/20/20** 1.00 0.83 510 4,713 8,335
-----------------------------
$ 12,616 $ 19,191
-----------------------------
** Termination date
Pro-Forma Combined Portfolio
------------------------------------------
Fixed Implied
Rate Credit Notional Unrealized
Clearing Broker/(Exchange) (Pay) Spread at Amount Market Appreciation/
& Referenced Obligation Receive May 31, 2016 (000) Value (Depreciation)
------------------------- -------- ------------ -------- --------- ------------
Sale Contracts
Morgan Stanley & Co., LLC/(INTRCONX)
CDX-NAHY Series 25, 5 Year Index, 12/20/20** 5.00% 4.06% $ 168 $ 7,903 $ 10,856
CDX-NAIG Series 25, 5 Year Index, 12/20/20** 1.00 0.83 510 4,713 8,335
-------------------------
$ 12,616 $ 19,191
-------------------------
** Termination date
CENTRALLY CLEARED INTEREST RATE SWAPS
Rate Type
AB All Market Income Portfolio ------------------------
------------------------------------- Payments Payments
Notional made received Unrealized
Amount Termination by the by the Appreciation/
Clearing Broker/(Exchange) (000) Date Fund Fund (Depreciation)
------------------------------------- ------- ---------- ---------- ---------- --------------
Morgan Stanley & Co., LLC/(CME Group) $ 310 8/21/2020 3 Month LIBOR 1.62% $ 6,020
Morgan Stanley & Co., LLC/(CME Group) JPY 18,790 12/22/2024 0.52% 6 Month LIBOR (7,258)
Morgan Stanley & Co., LLC/(CME Group) $ 170 12/22/2024 3 Month LIBOR 2.34% 11,807
Morgan Stanley & Co., LLC/(CME Group) JPY 10,630 1/14/2025 0.48% 6 Month LIBOR (3,732)
Morgan Stanley & Co., LLC/(CME Group) $ 230 1/28/2025 3 Month LIBOR 1.98% 8,568
Morgan Stanley & Co., LLC/(CME Group) GBP 180 2/4/2025 6 Month LIBOR 1.62% 5,390
Morgan Stanley & Co., LLC/(CME Group) JPY 10,450 2/6/2025 0.55% 6 Month LIBOR (4,280)
Morgan Stanley & Co., LLC/(CME Group) $ 610 2/11/2025 3 Month LIBOR 2.08% 27,552
Morgan Stanley & Co., LLC/(CME Group) CAD 90 3/3/2025 3 Month CDOR 1.89% 2,717
Morgan Stanley & Co., LLC/(CME Group) EUR 10 6/30/2025 1.28% 6 Month EURIBOR (1,032)
Morgan Stanley & Co., LLC/(CME Group) GBP 140 7/6/2025 6 Month LIBOR 2.13% 13,399
Morgan Stanley & Co., LLC/(CME Group) CHF 110 8/3/2025 0.32% 6 Month LIBOR (5,900)
Morgan Stanley & Co., LLC/(CME Group) GBP 120 8/5/2025 6 Month LIBOR 2.07% 10,389
Morgan Stanley & Co., LLC/(CME Group) EUR 160 8/14/2025 0.96% 6 Month EURIBOR (9,654)
Morgan Stanley & Co., LLC/(CME Group) SEK 40 8/17/2025 3 Month STIBOR 1.29% 170
Morgan Stanley & Co., LLC/(CME Group) CHF 60 9/2/2025 0.26% 6 Month LIBOR (2,815)
Morgan Stanley & Co., LLC/(CME Group) 140 10/2/2025 0.21% 6 Month LIBOR (5,676)
Morgan Stanley & Co., LLC/(CME Group) AUD 210 11/3/2025 6 Month BBSW 2.92% 6,646
Morgan Stanley & Co., LLC/(CME Group) NZD 400 11/19/2025 3 Month BKBM 3.61% 15,948
Morgan Stanley & Co., LLC/(CME Group) CHF 170 11/19/2025 0.05% 6 Month LIBOR (3,758)
Morgan Stanley & Co., LLC/(CME Group) $ 90 11/19/2025 3 Month LIBOR 2.20% 4,438
Morgan Stanley & Co., LLC/(CME Group) SEK 990 1/12/2026 3 Month STIBOR 1.47% 5,158
Morgan Stanley & Co., LLC/(CME Group) AUD 70 2/2/2026 6 Month BBSW 2.76% 1,577
Morgan Stanley & Co., LLC/(CME Group) NZD 90 2/3/2026 3 Month BKBM 3.38% 2,886
Morgan Stanley & Co., LLC/(CME Group) CAD 130 3/31/2026 3 Month CDOR 1.52% (163)
Morgan Stanley & Co., LLC/(CME Group) JPY 8,540 4/4/2026 0.14% 6 Month LIBOR (438)
Morgan Stanley & Co., LLC/(CME Group) EUR 170 4/4/2026 0.56% 6 Month EURIBOR (1,025)
Morgan Stanley & Co., LLC/(CME Group) $ 100 4/4/2026 3 Month LIBOR 1.69% 217
Morgan Stanley & Co., LLC/(CME Group) 310 8/21/1945 3 Month LIBOR 2.63% 37,172
Morgan Stanley & Co., LLC/(CME Group) 70 9/4/1945 3 Month LIBOR 2.71% 9,496
-------------
$ 123,819
-------------
Rate Type
Pro-Forma Combined Portfolio ------------------------
------------------------------------- Payments Payments
Notional made received Unrealized
Amount Termination by the by the Appreciation/
Clearing Broker/(Exchange) (000) Date Fund Fund (Depreciation)
------------------------------------- ------- ---------- ---------- ---------- --------------
Morgan Stanley & Co., LLC/(CME Group) $ 310 8/21/2020 3 Month LIBOR 1.62% $ 6,020
Morgan Stanley & Co., LLC/(CME Group) JPY 18,790 12/22/2024 0.52% 6 Month LIBOR (7,258)
Morgan Stanley & Co., LLC/(CME Group) $ 170 12/22/2024 3 Month LIBOR 2.34% 11,807
Morgan Stanley & Co., LLC/(CME Group) JPY 10,630 1/14/2025 0.48% 6 Month LIBOR (3,732)
Morgan Stanley & Co., LLC/(CME Group) $ 230 1/28/2025 3 Month LIBOR 1.98% 8,568
Morgan Stanley & Co., LLC/(CME Group) GBP 180 2/4/2025 6 Month LIBOR 1.62% 5,390
Morgan Stanley & Co., LLC/(CME Group) JPY 10,450 2/6/2025 0.55% 6 Month LIBOR (4,280)
Morgan Stanley & Co., LLC/(CME Group) $ 610 2/11/2025 3 Month LIBOR 2.08% 27,552
Morgan Stanley & Co., LLC/(CME Group) CAD 90 3/3/2025 3 Month CDOR 1.89% 2,717
Morgan Stanley & Co., LLC/(CME Group) EUR 10 6/30/2025 1.28% 6 Month EURIBOR (1,032)
Morgan Stanley & Co., LLC/(CME Group) GBP 140 7/6/2025 6 Month LIBOR 2.13% 13,399
Morgan Stanley & Co., LLC/(CME Group) CHF 110 8/3/2025 0.32% 6 Month LIBOR (5,900)
Morgan Stanley & Co., LLC/(CME Group) GBP 120 8/5/2025 6 Month LIBOR 2.07% 10,389
Morgan Stanley & Co., LLC/(CME Group) EUR 160 8/14/2025 0.96% 6 Month EURIBOR (9,654)
Morgan Stanley & Co., LLC/(CME Group) SEK 40 8/17/2025 3 Month STIBOR 1.29% 170
Morgan Stanley & Co., LLC/(CME Group) CHF 60 9/2/2025 0.26% 6 Month LIBOR (2,815)
Morgan Stanley & Co., LLC/(CME Group) 140 10/2/2025 0.21% 6 Month LIBOR (5,676)
Morgan Stanley & Co., LLC/(CME Group) AUD 210 11/3/2025 6 Month BBSW 2.92% 6,646
Morgan Stanley & Co., LLC/(CME Group) NZD 400 11/19/2025 3 Month BKBM 3.61% 15,948
Morgan Stanley & Co., LLC/(CME Group) CHF 170 11/19/2025 0.05% 6 Month LIBOR (3,758)
Morgan Stanley & Co., LLC/(CME Group) $ 90 11/19/2025 3 Month LIBOR 2.20% 4,438
Morgan Stanley & Co., LLC/(CME Group) SEK 990 1/12/2026 3 Month STIBOR 1.47% 5,158
Morgan Stanley & Co., LLC/(CME Group) AUD 70 2/2/2026 6 Month BBSW 2.76% 1,577
Morgan Stanley & Co., LLC/(CME Group) NZD 90 2/3/2026 3 Month BKBM 3.38% 2,886
Morgan Stanley & Co., LLC/(CME Group) CAD 130 3/31/2026 3 Month CDOR 1.52% (163)
Morgan Stanley & Co., LLC/(CME Group) JPY 8,540 4/4/2026 0.14% 6 Month LIBOR (438)
Morgan Stanley & Co., LLC/(CME Group) EUR 170 4/4/2026 0.56% 6 Month EURIBOR (1,025)
Morgan Stanley & Co., LLC/(CME Group) $ 100 4/4/2026 3 Month LIBOR 1.69% 217
Morgan Stanley & Co., LLC/(CME Group) 310 8/21/1945 3 Month LIBOR 2.63% 37,172
Morgan Stanley & Co., LLC/(CME Group) 70 9/4/1945 3 Month LIBOR 2.71% 9,496
-------------
$ 123,819
-------------
INFLATION (CPI) SWAPS (see Note D)
Rate Type
AB All Market Income Portfolio ------------------------
----------------------------------------- Payments Payments
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Fund Fund (Depreciation)
----------------------------------------- ------- ---------- ---------- ---------- --------------
Deutsche Bank AG $ 1,920 10/1/2020 1.27% CPI# $ 22,181
# Variable interest rate based on the rate of inflation as determined by the
Consumer Price Index (CPI).
Rate Type
Pro-Forma Combined Portfolio ------------------------
----------------------------------------- Payments Payments
Notional made received Unrealized
Swap Amount Termination by the by the Appreciation/
Counterparty (000) Date Fund Fund (Depreciation)
----------------------------------------- ----------- ---------- ---------- ---------- --------------
Deutsche Bank AG $ 1,920 10/1/2020 1.27% CPI# $ 22,181
# Variable interest rate based on the rate of inflation as determined by the
Consumer Price Index (CPI).
TOTAL RETURN SWAPS
AB All Market Income Portfolio
----------------------------------------
Notional Unrealized
Counterparty & # of Shares Rate Paid/ Amount Maturity Appreciation/
Referenced Obligation or Units Received (000) Date (Depreciation)
------------------------------------------ --------- ---------- --------- ------ -------------
Receive Total Return on Reference Obligation
Morgan Stanley Capital Services LLC
MS Global Equity Long Index 37,000 FedFundEffective $ 3,700 6/30/2016 $ -
Plus 0.55%
Pro-Forma Combined Portfolio
-----------------------------------------
Notional Unrealized
Counterparty & # of Shares Rate Paid/ Amount Maturity Appreciation/
Referenced Obligation or Units Received (000) Date (Depreciation)
------------------------------------------ --------- ---------- --------- ------ -------------
Receive Total Return on Reference Obligation
Morgan Stanley Capital Services LLC
MS Global Equity Long Index 37,000 FedFundEffective 3,700 6/30/2016 $ -
Plus 0.55%
(a) To obtain a copy of the fund's financial statements, please go to the
Securities and Exchange Commission's website at www.sec.gov, or call AB at (800)
227-4618.
(b) Position, or a portion thereof, has been segregated to collateralize margin
requirements for open futures contracts.
(c) Non-income producing security.
(d) Security is exempt from registration under Rule 144A of the Securities Act
of 1933. These securities are considered liquid and may be resold in
transactions exempt from registration, normally to qualified institutional
buyers. At May 31, 2016, the aggregate market value of these securities amounted
to $374,402 or 2.0% of net assets.
(e) Investment in affiliated money market mutual fund. The rate shown represents
the 7-day yield as of period end.
(f) One contract relates to 1 share.
(g) One contract relates to 100 shares.
Currency Abbreviations:
AUD - Australian Dollar
BRL - Brazilian Real
CAD - Canadian Dollar
CHF - Swiss Franc
CLP - Chilean Peso
COP - Colombian Peso
DKK - Danish Krone
EUR - Euro
GBP - Great British Pound
HKD - Hong Kong Dollar
IDR - Indonesian Rupiah
ILS - Israeli Shekel
INR - Indian Rupee
JPY - Japanese Yen
KRW - South Korean Won
MXN - Mexican Peso
MYR - Malaysian Ringgit
NOK - Norwegian Krone
NZD - New Zealand Dollar
PEN - Peruvian Sol
PHP - Philippine Peso
SEK - Swedish Krona
SGD - Singapore Dollar
TRY - Turkish Lira
TWD - New Taiwan Dollar
USD - United States Dollar
Glossary:
ASX - Australian Stock Exchange
BBSW - Bank Bill Swap Reference Rate (Australia)
BKBM - Bank Bill Benchmark (New Zealand)
CBT - Chicago Board of Trade
CDOR - Canadian Dealer Offered Rate
CDX-NAHY - North American High Yield Credit Default Swap Index
CDX-NAIG - North American Investment Grade Credit Default Swap Index
CME - Chicago Mercantile Exchange
EAFE - Europe, Australia, and Far East
ETF - Exchange Traded Fund
EURIBOR - Euro Interbank Offered Rate
FTSE - Financial Times Stock Exchange
FedFundEffective - Federal Funds Effective Rate
INTRCONX - Inter-Continental Exchange
LIBOR - London Interbank Offered Rates
MSCI - Morgan Stanley Capital International
REG - Registered Shares
REIT - Real Estate Investment Trust
STIBOR - Stockholm Interbank Offered Rate
TOPIX - Tokyo Price Index
TSX - Toronto Stock Exchange
The following table represents the equity basket holdings underlying the total
return swap with MS (Morgan Stanley) Global Equity Long Index as of May 31,
2016.
AB All Market Income Portfolio
--------------------------------------------------------------------------------
Security Description Shares
--------------------------------------------------------------------------------
MS Global Equity Long Index
Alimentation Couche-Tard, Inc. 1,151
Allstate Corp. (The) 2,687
Altria Group, Inc. 3,082
Amadeus IT Holding SA 3,345
Amdocs Ltd. 3,832
AmerisourceBergen Corp. 893
Anthem, Inc. 900
Apple, Inc. 1,540
Aristocrat Leisure Ltd. 10,143
Axfood AB 2,685
Bank Hapoalim BM 5,073
Bezeq The Israeli Telecommunication Corp. Ltd. 34,818
BOC Hong Kong Holdings Ltd. 32,239
Booz Allen Hamilton Holding Corp. 4,247
British American Tobacco PLC 3,639
CGI Group, Inc. 1,595
Cineplex, Inc. 2,156
CTS Eventim AG & Co KGaA 1,423
Dollar General Corp. 2,431
Domino's Pizza Group PLC 3,498
Dr Pepper Snapple Group, Inc. 1,051
Equifax, Inc. 1,767
Euler Hermes Group 1,814
Experian PLC 3,098
Exxon Mobil Corp. 1,210
Fidelity National Information Services, Inc. 1,810
Fiserv, Inc. 800
FNF Group 7,857
Fuji Heavy Industries Ltd. 3,000
Gilead Sciences, Inc. 1,062
Hang Seng Bank Ltd. 8,285
Home Depot, Inc. (The) 923
IG Group Holdings PLC 6,453
Imperial Brands PLC 2,164
Johnson & Johnson 1,343
KION Group AG 977
Kroger Co. (The) 1,948
L Brands, Inc. 1,437
Lawson, Inc. 847
Marsh & McLennan Cos., Inc. 1,999
Merck & Co., Inc. 2,722
Microsoft Corp. 4,573
Mitsubishi UFJ Financial Group, Inc. 21,518
Moneysupermarket.com Group PLC 16,434
Nestle SA 655
NICE-Systems Ltd. 1,279
NIKE, Inc. 1,690
Nippon Telegraph & Telephone Corp. 3,001
NN Group NV 4,585
Novartis AG 1,339
ObicCo., Ltd. 836
Omnicom Group, Inc. 1,430
Oracle Corp. 2,936
Oracle Corp. Japan 1,687
Pacific Textiles Holdings Ltd. 55,578
Park24Co., Ltd. 1,273
Partners Group Holding AG 248
PepsiCo, Inc. 1,496
Pfizer, Inc. 4,714
Philip Morris International, Inc. 1,292
Reckitt Benckiser Group PLC 788
Recordati SpA 3,145
Regal Entertainment Group 3,597
Roche Holding AG 800
Ross Stores, Inc. 1,456
Royal Bank of Canada 775
Royal Dutch Shell PLC 3,990
Sage Group PLC (The) 5,727
Salmar ASA 3,105
SCSK Corp. 2,483
Seven Bank Ltd. 19,097
Sherwin-Williams Co. (The) 295
Singapore Telecommunications Ltd. 38,542
Sonic Healthcare Ltd. 5,226
Sumitomo Mitsui Financial Group, Inc. 1,317
Tabcorp Holdings Ltd. 16,710
Target Corp. 963
Tatts Group Ltd. 53,198
Telstra Corp. Ltd. 18,345
Teva Pharmaceutical Industries Ltd. 2,624
Thomson Reuters Corp. 3,067
Toronto-Dominion Bank (The) 1,809
TOTAL SA 3,592
Total System Services, Inc. 1,954
Travelers Cos., Inc. (The) 384
Tryg A/S 3,156
Tyson Foods, Inc. 1,942
UnitedHealth Group, Inc. 1,550
Vantiv, Inc. 1,962
Verizon Communications, Inc. 1,498
Wells Fargo & Co. 1,004
Wolters Kluwer NV 2,542
WPP PLC 4,430
Pro-Forma Combined Portfolio
--------------------------------------------------------------------------------
Security Description Shares
--------------------------------------------------------------------------------
MS Global Equity Long Index
Alimentation Couche-Tard, Inc. 1,151
Allstate Corp. (The) 2,687
Altria Group, Inc. 3,082
Amadeus IT Holding SA 3,345
Amdocs Ltd. 3,832
AmerisourceBergen Corp. 893
Anthem, Inc. 900
Apple, Inc. 1,540
Aristocrat Leisure Ltd. 10,143
Axfood AB 2,685
Bank Hapoalim BM 5,073
Bezeq The Israeli Telecommunication Corp. Ltd. 34,818
BOC Hong Kong Holdings Ltd. 32,239
Booz Allen Hamilton Holding Corp. 4,247
British American Tobacco PLC 3,639
CGI Group, Inc. 1,595
Cineplex, Inc. 2,156
CTS Eventim AG & Co KGaA 1,423
Dollar General Corp. 2,431
Domino's Pizza Group PLC 3,498
Dr Pepper Snapple Group, Inc. 1,051
Equifax, Inc. 1,767
Euler Hermes Group 1,814
Experian PLC 3,098
Exxon Mobil Corp. 1,210
Fidelity National Information Services, Inc. 1,810
Fiserv, Inc. 800
FNF Group 7,857
Fuji Heavy Industries Ltd. 3,000
Gilead Sciences, Inc. 1,062
Hang Seng Bank Ltd. 8,285
Home Depot, Inc. (The) 923
IG Group Holdings PLC 6,453
Imperial Brands PLC 2,164
Johnson & Johnson 1,343
KION Group AG 977
Kroger Co. (The) 1,948
L Brands, Inc. 1,437
Lawson, Inc. 847
Marsh & McLennan Cos., Inc. 1,999
Merck & Co., Inc. 2,722
Microsoft Corp. 4,573
Mitsubishi UFJ Financial Group, Inc. 21,518
Moneysupermarket.com Group PLC 16,434
Nestle SA 655
NICE-Systems Ltd. 1,279
NIKE, Inc. 1,690
Nippon Telegraph & Telephone Corp. 3,001
NN Group NV 4,585
Novartis AG 1,339
ObicCo., Ltd. 836
Omnicom Group, Inc. 1,430
Oracle Corp. 2,936
Oracle Corp. Japan 1,687
Pacific Textiles Holdings Ltd. 55,578
Park24Co., Ltd. 1,273
Partners Group Holding AG 248
PepsiCo, Inc. 1,496
Pfizer, Inc. 4,714
Philip Morris International, Inc. 1,292
Reckitt Benckiser Group PLC 788
Recordati SpA 3,145
Regal Entertainment Group 3,597
Roche Holding AG 800
Ross Stores, Inc. 1,456
Royal Bank of Canada 775
Royal Dutch Shell PLC 3,990
Sage Group PLC (The) 5,727
Salmar ASA 3,105
SCSK Corp. 2,483
Seven Bank Ltd. 19,097
Sherwin-Williams Co. (The) 295
Singapore Telecommunications Ltd. 38,542
Sonic Healthcare Ltd. 5,226
Sumitomo Mitsui Financial Group, Inc. 1,317
Tabcorp Holdings Ltd. 16,710
Target Corp. 963
Tatts Group Ltd. 53,198
Telstra Corp. Ltd. 18,345
Teva Pharmaceutical Industries Ltd. 2,624
Thomson Reuters Corp. 3,067
Toronto-Dominion Bank (The) 1,809
TOTAL SA 3,592
Total System Services, Inc. 1,954
Travelers Cos., Inc. (The) 384
Tryg A/S 3,156
Tyson Foods, Inc. 1,942
UnitedHealth Group, Inc. 1,550
Vantiv, Inc. 1,962
Verizon Communications, Inc. 1,498
Wells Fargo & Co. 1,004
Wolters Kluwer NV 2,542
WPP PLC 4,430
Pro Forma Combined Condensed Statements of Assets and Liabilities
As of May 31, 2016 (Unaudited)
AB All
AB Conservative Market Income Pro-forma
Wealth Strategy Portfolio Adjustments Combined
--------------- --------- ----------- --------
Assets
Investments in securities, at value
Unaffiliated issuers (cost $0 and
$9,394,768, respectively) $ - $ 9,805,814 $ 9,805,814
Affiliated issuers (cost $0 and
$8,638,505, respectively) - 8,373,907 8,373,907
Affiliated Underlying Portfolios,
at value (cost $272,734,768 and $0,
respectively) 289,072,097 - 289,072,097
Cash - 3,097 3,097
Cash collateral due from broker - 345,039 345,039
Foreign currencies, at value (cost $0 and
$61,118, respectively) - 60,847 60,847
Dividends and interest receivable 92,540 92,540
Receivable for investment securities sold
and foreign currency transactions 118,950 80,691 199,641
Receivable for capital stock sold 319,799 - 319,799
Unrealized appreciation of forward currency
exchange contracts - 71,004 71,004
Receivable for terminated total return swaps - 40,827 40,827
Receivable due from Adviser - 24,682 24,682
Unrealized appreciation on inflation swaps - 22,181 22,181
Receivable for variation margin on exchange-
traded derivatives - 9,483 9,483
Receivable for terminated interest rate swaps - 933 933
-----------------------------------------------------------------
Total assets 289,510,846 18,931,045 - 308,441,891
-----------------------------------------------------------------
Liabilities
Payable for capital stock redeemed 439,408 - 439,408
Advisory fee payable 116,744 116,744
Distribution fee payable 109,990 17 110,007
Transfer Agent fee payable 18,496 2,356 20,852
Options written, at value (premiums
received $0 and $56,384, respectively) - 58,056 58,056
Payable for investment securities purchased
and foreign currency transactions - 117,586 117,586
Unrealized depreciation of forward
currency exchange contracts - 83,204 83,204
Audit and tax fee payable - 44,846 44,846
Custody fee payable - 25,635 25,635
Payable for terminated total return swaps - 584 584
Accrued expenses and other liabilities 84,433 19,018 114,154 217,605(a)
-----------------------------------------------------------------
Total liabilities 769,071 351,302 114,154 1,234,527
-----------------------------------------------------------------
Net Assets $ 288,741,775 $ 18,579,743 $ (114,154) $ 307,207,364
-----------------------------------------------------------------
Composition of Net Assets
Capital stock, at par $ 239 $ 190 $ 429
Additional paid-in capital 289,114,808 18,939,372 308,054,180
Undistributed net investment income 5,361,882 46,169 (114,154) 5,293,897(a)
Accumulated net realized loss
on investment and foreign currency
transactions (22,072,483) (621,351) (22,693,834)
Net unrealized appreciation on investments
and foreign currency denominated assets
and liabilities 16,337,329 215,363 16,552,692
-----------------------------------------------------------------
Net Assets $ 288,741,775 $ 18,579,743 $ (114,154) $ 307,207,364
-----------------------------------------------------------------
Class A (assets from Class B)
------------------------------
Net Assets $ 180,004,413 $ 67,776 7,786,084 $ 187,858,273
Shares Outstanding 14,818,244 6,927 4,383,238 19,208,409
Net Asset Value $ 12.15 $ 9.78 $ 9.78*
Class B
-------
Net Assets $ 7,860,357 (7,860,357) $ -
Shares Outstanding 654,051 (654,051) $ -
Net Asset Value $ 12.02
Class C
-------
Net Assets $ 75,646,727 $ 9,807 (29,907) $ 75,626,627
Shares Outstanding 6,323,578 1,001 1,392,424 7,717,003
Net Asset Value $ 11.96 $ 9.80 $ 9.80
Class Advisor
-------------
Net Assets $ 11,947,529 $ 18,502,160 (4,723) $ 30,444,966
Shares Outstanding 978,639 1,889,994 241,259 3,109,892
Net Asset Value $ 12.21 $ 9.79 $ 9.79
Class R
-------
Net Assets $ 4,415,764 (1,746) $ 4,414,018
Shares Outstanding 363,960 87,371 451,331
Net Asset Value $ 12.13 $ 9.78
Class K
-------
Net Assets $ 8,410,419 (3,325) $ 8,407,094
Shares Outstanding 694,119 165,502 859,621
Net Asset Value $ 12.12 $ 9.78
Class I
-------
Net Assets $ 456,566 (180) $ 456,386
Shares Outstanding 37,491 9,127 46,618
Net Asset Value $ 12.18 $ 9.79
(a) Includes adjustment for estimated Acquisition costs of $114,154.
* The maximum offering price per share for Class A shares was $12.69 which
reflects a sales charge of 4.25%.
Pro Forma Combining Condensed Statement of Operations
For The Six Months Ended May 31, 2016 (Unaudited)
AB All
Market
AB Conservative Income Pro-forma
Wealth Strategy Portfolio Adjustments* Combined
--------------- --------- ------------ --------
Investment Income
Income distributions from affiliated Underlying
Portfolios $ 7,080,396 $ - $ 7,080,396
Dividends
Affiliated issuers 362,946 362,946
Unaffiliated issuers 197,121 197,121
Interest 23,466 23,466
--------------------------------------------------------------------
Total income 7,080,396 583,533 - 7,663,929
--------------------------------------------------------------------
Expenses
Advisory fee 818,078 61,647 (34,905) 844,820(a)
Distribution fee - Class A 227,094 28 227,122
Distribution fee - Class B 57,961 - 57,961
Distribution fee - Class C 392,120 47 392,167
Distribution fee - Class K 10,824 - 10,824
Distribution fee - Class I 10,136 - 10,136
Transfer Agency - Class A 91,666 12 2,251 93,929(b)
Transfer Agency - Class B 6,910 - (6,910) -(b)
Transfer Agency - Class C 41,255 9 41,264
Transfer Agency - Class Advisor Class 6,483 9,104 15,587
Transfer Agency - Class R 5,628 - 5,628
Transfer Agency - Class K 7,054 - 7,054
Transfer Agency - Class I 272 - 272
Registration fees 52,482 40,227 (52,482) 40,227(c)
Custodian 33,540 71,636 1,204 106,380(d)
Legal 18,985 18,876 (18,985) 18,876(e)
Printing 21,961 14,509 (20,220) 16,250(f)
Audit and tax 15,843 47,500 (15,843) 47,500(g)
Trustees' fees 11,078 9,937 (11,078) 9,937(h)
Amortization of offering expenses - 3,029 3,029
Administrative - 41,776 41,776
Miscellaneous 5,152 3,573 (5,152) 3,573(i)
--------------------------------------------------------------------
Total expenses 1,834,522 321,910 (162,120) 1,994,312
Less: expenses waived and reimbursed by the Adviser (89,219) (276,682) (24,436) (390,337)(j)
Net expenses 1,745,303 45,228 (186,556) 1,603,975
--------------------------------------------------------------------
Net investment income 5,335,093 538,305 186,556 6,059,954
--------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on
Investment and Foreign Currency Transactions
Net realized gain (loss) on:
Sale of affiliated Underlying Portfolios Shares (698,745) (164,493) (863,238)
Investment transactions - (559,866) (559,866)
Futures - (140,618) (140,618)
Options written - (108,188) (108,188)
Swaps - 212,053 212,053
Foreign currency transactions - 122,386 122,386
Net realized gain distributions received from affiliated
Underlying Portfolios 5,423,193 - 5,423,193
Net change in unrealized appreciation/depreciation of:
Investments in affiliated Underlying Portfolios (8,861,181) 197,484 (8,663,697)
Investments - 604,551 604,551
Futures - (3,823) (3,823)
Options written - (1,672) (1,672)
Swaps - 125,491 125,491
Foreign currency denominated assets and liabilities - (27,627) (27,627)
--------------------------------------------------------------------
Net gain (loss) on investment and foreign
currency transactions (4,136,733) 255,678 - (3,881,055)
--------------------------------------------------------------------
Net Increase in Net Assets from Operations $ 1,198,360 $ 793,983 $ 186,556 $ 2,178,899
--------------------------------------------------------------------
(a) Advisory fee based on annual rate of .55% of the first $2.5 billion, .45%
of the excess of $2.5 billion up to $5 billion, and .40% of the excess
over $5 billion, of the Portfolio's average daily net assets. The
adjustment reflects a decrease in advisory fees as a result of the
Reorganization.
(b) The adjustment reflects a decrease in transfer agency fees for Class B as
this class will exchange into Class A with the Reorganization. The
adjustment also reflects an increase in transfer agency fees for Class A
as a result of the Class B assets moving into this class.
(c) The adjustment reflects the elimination of Conservative Wealth Strategy's
registration fees as a result of the Reorganization.
(d) The adjustment reflects an increase in custody fees as a result of the
Reorganization.
(e) The adjustment reflects the elimination of Conservative Wealth Strategy's
legal fees as a result of the Reorganization.
(f) The adjustment reflects a decrease in printing fees as a result of the
Reorganization.
(g) The adjustment reflects the elimination of Conservative Wealth Strategy's
audit and tax fees as a result of the Reorganization.
(h) The adjustment reflects the elimination of Conservative Wealth Strategy's
trustees' fees as a result of the Reorganization.
(i) The adjustment reflects the elimination of Conservative Wealth Strategy's
miscellaneous fees as a result of the Reorganization.
(j) The adjustment reflects a decrease in reimbursement as a result of the
Reorganization.
* Does not reflect the estimated Reorganization costs of $114,154, which
will be assumed by Conservative Wealth Strategy prior to the
Reorganization.
AB All Market AB Conservative Pro-Forma
Portfolios Income Portfolio Wealth Strategy Combined Portfolio
-------------------------------------------------------------------------------------------------------------
Investments in Securities (Level 1) $14,697,505 $289,072,097 $303,769,602
Investments in Securities (Level 2) 3,494,965 - 3,494,965
Investments in Securities (Level 3) - - -
-------------------------------------------------------------------------------------------------------------
Total for Investments in Securities $18,192,470 $289,072,097 $307,264,567
==============================================================================================================
PART C
OTHER INFORMATION
ITEM 15. Indemnification
It is the Registrant's policy to indemnify its directors and officers,
employees and other agents to the maximum extent permitted by Section
2-418 of the General Corporation Law of the State of Maryland, which
is incorporated by reference herein, and as set forth in Article
EIGHTH of Registrant's Articles of Amendment and Restatement of
Articles of Incorporation, filed as Exhibit (a) to Post-Effective
Amendment No. 96 of Registrant's Registration Statement on Form N-1A
(File Nos. 2-29901 and 811-01716), filed with the Securities and
Exchange Commission on June 3, 2011, Article IX of the Registrant's
Amended and Restated By-Laws filed as Exhibit (b) to Post-Effective
Amendment No. 81 of Registrant's Registration Statement on Form N-1A
(File Nos. 2-29901 and 811-01716), filed with the Securities and
Exchange Commission on August 30, 2006 and Section 10(a) of the
Distribution Services Agreement filed as Exhibit 6(a) to
Post-Effective Amendment No. 63 of Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on January 30, 1998, as amended by
Exhibit (e)(5) to Post-Effective Amendment No. 86 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901 and 811-01716),
filed with the Securities and Exchange Commission on October 6, 2009,
all as set forth below.
The liability of the Registrant's directors and officers is dealt with
in Article EIGHTH of Registrant's articles of Amendment and
Restatement of Articles of Incorporation, as set forth below. The
Adviser's liability for any loss suffered by the Registrant or its
shareholders is set forth in Section 4 of the Investment Advisory
Contract filed as Exhibit (d)(1) to Post-Effective Amendment No. 209
of Registrant's POS EX filing to the Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the Securities and
Exchange Commission on March 31, 2016, as set forth below.
ARTICLE EIGHTH OF THE REGISTRANT'S ARTICLES OF AMENDMENT AND RESTATEMENT OF
ARTICLES OF INCORPORATION READS AS FOLLOWS:
(1) To the maximum extent that Maryland law in effect from time to
time permits limitation of the liability of directors and officers of a
corporation, no present or former director or officer of the Corporation shall
be liable to the Corporation or its stockholders for money damages.
(2) The Corporation shall have the power, to the maximum extent
permitted by Maryland law in effect from time to time, to obligate itself to
indemnify, and to pay or reimburse reasonable expenses in advance of final
disposition of a proceeding to, (a) any individual who is a present or former
director or officer of the Corporation or (b) any individual who, while a
director or officer of the Corporation and at the request of the Corporation,
serves or has served as a director, officer, partner or trustee of another
corporation, real estate investment trust, partnership, joint venture, trust,
employee benefit plan or any other enterprise from and against any claim or
liability to which such person may become subject or which such person may incur
by reason of his status as a present or former director or officer of the
Corporation. The Corporation shall have the power, with the approval of the
Board of Directors, to provide such indemnification and advancement of expenses
to a person who served a predecessor of the Corporation in any of the capacities
described in (a) or (b) above and to any employee or agent of the Corporation or
a predecessor of the Corporation.
(3) The provisions of this Article EIGHTH shall be subject to the
limitations of the Investment Company Act.
(4) Neither the amendment nor repeal of this Article EIGHTH, nor the
adoption or amendment of any other provision of the Charter or Bylaws
inconsistent with this Article EIGHTH, shall apply to or affect in any respect
the applicability of the preceding sections of this Article EIGHTH with respect
to any act or failure to act which occurred prior to such amendment, repeal or
adoption.
ARTICLE IX OF THE REGISTRANT'S AMENDED AND RESTATED BY-LAWS READS AS FOLLOWS:
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made or threatened to be made a party to the proceeding
by reason of his or her service in any such capacity or (b) any individual who,
while a director or officer of the Corporation and at the request of the
Corporation, serves or has served as a director, officer, partner or trustee of
another corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or other enterprise and who is made or threatened
to be made a party to the proceeding by reason of his or her service in any such
capacity. The Corporation may, with the approval of its Board of Directors or
any duly authorized committee thereof, provide such indemnification and advance
for expenses to a person who served a predecessor of the Corporation in any of
the capacities described in (a) or (b) above and to any employee or agent of the
Corporation or a predecessor of the Corporation. The termination of any claim,
action, suit or other proceeding involving any person, by judgment, settlement
(whether with or without court approval) or conviction or upon a plea of guilty
or nolo contendere, or its equivalent, shall not create a presumption that such
person did not meet the standards of conduct required for indemnification or
payment of expenses to be required or permitted under Maryland law, these Bylaws
or the Charter. Any indemnification or advance of expenses made pursuant to this
Article shall be subject to applicable requirements of the 1940 Act. The
indemnification and payment of expenses provided in these Bylaws shall not be
deemed exclusive of or limit in any way other rights to which any person seeking
indemnification or payment of expenses may be or may become entitled under any
bylaw, regulation, insurance, agreement or otherwise.
Neither the amendment nor repeal of this Article, nor the adoption or
amendment of any other provision of the Bylaws or Charter inconsistent with this
Article, shall apply to or affect in any respect the applicability of the
preceding paragraph with respect to any act or failure to act which occurred
prior to such amendment, repeal or adoption.
SECTION 10(a) OF THE DISTRIBUTION SERVICES AGREEMENT READS AS FOLLOWS:
Section 10. Indemnification.
(a) The Fund agrees to indemnify, defend and hold the Underwriter,
and any person who controls the Underwriter within the meaning
of Section 15 of the Securities Act of 1933, as amended (the
"Securities Act"), free and harmless from and against any and
all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or
liabilities and any counsel fees incurred in connection
therewith) which the Underwriter or any such controlling
person may incur, under the Securities Act, or under common
law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in the Funds
Registration Statement, Prospectus or Statement of Additional
Information in effect from time to time under the Securities
Act or arising out of or based upon any alleged omission to
state a material fact required to be stated in any one thereof
or necessary to make the statements in any one thereof not
misleading; provided, however, that in no event shall anything
herein contained be so construed as to protect the Underwriter
against any liability to the Fund or its security holders to
which the Underwriter would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of the Underwriters
reckless disregard of its obligations and duties under this
Agreement. The Funds agreement to indemnify the Underwriter
and any such controlling person as aforesaid is expressly
conditioned upon the Funds being notified of the commencement
of any action brought against the Underwriter or any such
controlling person, such notification to be given by letter or
by telegram addressed to the Fund at its principal office in
New York, New York, and sent to the Fund by the person against
whom such action is brought within ten days after the summons
or other first legal process shall have been served. The
failure to so notify the Fund of the commencement of any such
action shall not relieve the Fund from any liability which it
may have to the person against whom such action is brought by
reason of any such alleged untrue statement or omission
otherwise than on account of the indemnity agreement contained
in this Section 10. The Fund will be entitled to assume the
defense of any suit brought to enforce any such claim, and to
retain counsel of good standing chosen by the Fund and
approved by the Underwriter. In the event the Fund does not
elect to assume the defense of any such suit and retain
counsel of good standing approved by the Underwriter, the
defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them;
but in case the Fund does not elect to assume the defense of
any such suit, or in case the Underwriter does not approve of
counsel chosen by the Fund, the Fund will reimburse the
Underwriter or the controlling person or persons named as
defendant or defendants in such suit, for the fees and
expenses of any counsel retained by the Underwriter or such
persons. The indemnification agreement contained in this
Section 10 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the
Underwriter or any controlling person and shall survive the
sale of any of the Funds shares made pursuant to subscriptions
obtained by the Underwriter. This agreement of indemnity will
inure exclusively to the benefit of the Underwriter, to the
benefit of its successors and assigns, and to the benefit of
any controlling persons and their successors and assigns. The
Fund agrees promptly to notify the Underwriter of the
commencement of any litigation or proceeding against the Fund
in connection with the issue and sale of any of its shares.
SECTION 4 OF THE INVESTMENT ADVISORY CONTRACT READS AS FOLLOWS:
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 your reckless disregard of your
obligations and duties hereunder.
The foregoing summaries are qualified by the entire text of
Registrant's articles of Restatement of Articles of Incorporation, Amended and
Restated By-Laws, the Investment Advisory Contact between the Registrant and
AllianceBernstein L.P. and the Distribution Services Agreement between the
Registrant and ABI.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
In accordance with Release No. IC-11330 (September 2, 1980), the
Registrant will indemnify its directors, officers, investment adviser and
principal underwriters only if (1) a final decision on the merits was issued by
the court or other body before whom the proceeding was brought that the person
to be indemnified (the "indemnitee") was not liable by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office ("disabling conduct") or (2) a reasonable
determination is made, based upon a review of the facts, that the indemnitee was
not liable by reason of disabling conduct, by (a) the vote of a majority of a
quorum of the directors who are neither "interested persons" of the Registrant
as defined in section 2(a)(19) of the Investment Company Act of 1940 nor parties
to the proceeding ("disinterested, non-party directors"), or (b) an independent
legal counsel in a written opinion. The Registrant will advance attorneys fees
or other expenses incurred by its directors, officers, investment adviser or
principal underwriters in defending a proceeding, upon the undertaking by or on
behalf of the indemnitee to repay the advance unless it is ultimately determined
that he is entitled to indemnification and, as a condition to the advance, (1)
the indemnitee shall provide a security for his undertaking, (2) the Registrant
shall be insured against losses arising by reason of any lawful advances, or (3)
a majority of a quorum of disinterested, non-party directors of the Registrant,
or an independent legal counsel in a written opinion, shall determine, based on
a review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the indemnitee ultimately will be found
entitled to indemnification.
The Registrant participates in a joint directors' liability insurance
policy issued by the ICI Mutual Insurance Company. Under this policy, outside
trustees and directors are covered up to the limits specified for any claim
against them for acts committed in their capacities as trustee or director. A
pro rata share of the premium for this coverage is charged to each participating
investment company. In addition, the Adviser's liability insurance policy, which
is issued by a number of underwriters, including Greenwich Insurance Company as
primary underwriter, extends to officers of the Registrant and such officers are
covered up to the limits specified for any claim against them for acts committed
in their capacities as officers of the investment companies sponsored by the
Adviser.
ITEM 16. Exhibits
(1) (a) Articles of Amendment and Restatement of Articles of
Incorporation of the Registrant, dated May 11, 2011 and
filed May 16, 2011 - Incorporated by reference to
Exhibit (a) to Post-Effective Amendment No. 96 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on June 3, 2011.
(b) Articles Supplementary to Articles of Incorporation of
the Registrant, dated June 15, 2011 and filed June 17,
2011 - Incorporated by reference to Exhibit (a)(2) to
Post-Effective Amendment No. 97 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on June 17, 2011.
(c) Articles Supplementary to Articles of Incorporation of
the Registrant, dated September 21, 2011 and filed
September 21, 2011 - Incorporated by reference to
Exhibit (a)(3) to Post-Effective Amendment No. 105 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on September 22, 2011.
(d) Articles Supplementary to Articles of Incorporation of
the Registrant, dated August 5, 2011 and filed August 8,
2011 - Incorporated by reference to Exhibit (a)(4) to
Post-Effective Amendment No. 106 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 23, 2011.
(e) Articles Supplementary to Articles of Incorporation of
the Registrant, dated November 30, 2011 and filed
December 27, 2011 - Incorporated by reference to Exhibit
(a)(5) to Post-Effective Amendment No. 117 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on June 29, 2012.
(f) Articles Supplementary to Articles of Incorporation of
the Registrant, dated November 21, 2012 and filed
November 21, 2012 - Incorporated by reference to Exhibit
(a)(6) to Post-Effective Amendment No. 130 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on December 11, 2012.
(g) Articles Supplementary to Articles of Incorporation of
the Registrant, dated February 6, 2014 and filed
February 7, 2014 - Incorporated by reference to Exhibit
(a)(7) to Post-Effective Amendment No. 145 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on February 10, 2014.
(h) Articles Supplementary to Articles of Incorporation of
the Registrant, dated November 7, 2013 and filed
November 25, 2013 - Incorporated by reference to Exhibit
(a)(8) to Post-Effective Amendment No. 146 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on February 26, 2014.
(i) Articles of Amendment to Articles of Incorporation of
the Registrant, dated March 17, 2014 and filed March 17,
2014 - Incorporated by reference to Exhibit (a)(9) to
Post-Effective Amendment No. 149 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on March 17, 2014.
(j) Articles Supplementary to Articles of Incorporation of
the Registrant, dated March 17, 2014 and filed March 17,
2014 - Incorporated by reference to Exhibit (a)(10) to
Post-Effective Amendment No. 149 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on March 17, 2014.
(k) Articles Supplementary to Articles of Incorporation of
the Registrant, dated May 27, 2014 and filed May 29,
2014 - Incorporated by reference to Exhibit (a)(11) of
Post-Effective Amendment No. 153 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on May 30, 2014.
(l) Articles Supplementary to Articles of Incorporation of
the Registrant, dated August 6, 2014 and filed August 7,
2014 - Incorporated by reference to Exhibit (a)(12) of
Post-Effective Amendment No. 163 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on August 8, 2014.
(m) Articles Supplementary to Articles of Incorporation of
the Registrant, dated August 6, 2014 and filed August
11, 2014 - Incorporated by reference to Exhibit (a)(13)
of Post-Effective Amendment No. 166 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on August 13, 2014.
(n) Articles Supplementary to Articles of Incorporation of
the Registrant, dated September 15, 2014 and filed
September 18, 2014 - Incorporated by reference to
Exhibit (a)(14) of Post-Effective Amendment No. 174 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on November 5, 2014.
(o) Articles of Amendment to Articles of Incorporation of
the Registrant, dated November 7, 2014 and filed
November 7, 2014 - Incorporated by reference to Exhibit
(a)(15) to Post-Effective Amendment No. 175 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on November 7, 2014.
(p) Articles Supplementary to Articles of Incorporation of
the Registrant, dated November 7, 2014 and filed
November 7, 2014 - Incorporated by reference to Exhibit
(a)(16) to Post-Effective Amendment No. 175 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on November 7, 2014.
(q) Articles of Amendment to the Articles of Incorporation
of the Registrant effective February 5, 2015 and filed
February 5, 2015 - Incorporated by reference to Exhibit
(a)(17) to Post-Effective Amendment No. 182 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on February 6, 2015.
(r) Articles of Amendment to the Articles of Incorporation
of the Registrant effective January 5, 2015 and filed
January 5, 2015 - Incorporated by reference to Exhibit
(a)(18) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(s) Articles Supplementary to the Articles of Incorporation
of the Registrant effective May 7, 2015 and filed May 7,
2015 - Incorporated by reference to Exhibit (a)(19) to
Post-Effective Amendment No. 184 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on May 8, 2015.
(t) Articles Supplementary to the Articles of Incorporation
of the Registrant, dated June 24, 2015 and filed June
24, 2015 - Incorporated by reference to Exhibit (a)(20)
to Post-Effective Amendment No. 185 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on June 24, 2015.
(2) Amended and Restated By-Laws of the Registrant - Incorporated
by reference to Exhibit (b) to Post-Effective Amendment No. 81
of Registrant's Registration Statement on Form N-1A (File Nos.
2-29901 and 811-01716), filed with the Securities and Exchange
Commission on August 30, 2006.
(3) Voting Trust Agreements. - Not applicable.
(4) Form of Agreement and Plan of Acquisition and Liquidation -
filed as Appendix A to the Proxy Statement/Prospectus.
(5) Instruments defining the rights of holders of the securities
being registered - Not applicable.
(6) (a) Investment Advisory Contract between the Registrant and
AllianceBernstein L.P., with respect to the AB Small Cap
Growth Portfolio, AB Emerging Markets Multi-Asset
Portfolio, AB Select US Equity Portfolio, AB All Market
Growth Portfolio, AB Select US Long/Short Portfolio, AB
Concentrated Growth Fund, AB Emerging Markets Growth
Portfolio, AB Global Core Equity Portfolio, AB Small Cap
Value Portfolio, AB All Market Income Portfolio, AB All
Market Alternative Return Portfolio, AB Concentrated
International Growth Portfolio, AB International
Strategic Core Portfolio, AB Emerging Markets Core
Portfolio and AB Asia ex-Japan Equity Portfolio, dated
July 22, 1992, as amended September 7, 2004, December
15, 2004, December 23, 2009, August 2, 2010, October 26,
2010, July 6, 2011, August 31, 2011, December 8, 2011,
December 15, 2011, September 27, 2012, December 12,
2012, March 1, 2014, October 22, 2014, November 12,
2014, December 3, 2014, December 18, 2014, March 4,
2015, April 15, 2015, July 1, 2015, July 29, 2015,
September 9, 2015 and December 3, 2015 - Incorporated by
reference to Exhibit (d)(1) to Post-Effective Amendment
No. 209 of Registrant's POS EX filing to the
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on March 31, 2016.
(b) Investment Advisory Fee Waiver Agreement between the
Registrant, on behalf of the AllianceBernstein
Concentrated Growth Fund, and AllianceBernstein L.P.,
dated March 1, 2014 - Incorporated by reference to
Exhibit (d)(2) to Post-Effective Amendment No. 215 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on October 28, 2016.
(c) Investment Advisory Contract between the Registrant and
AllianceBernstein L.P., with respect to
AllianceBernstein Multi-Manager Alternative Strategies
Fund, dated July 31, 2014 - Incorporated by reference to
Exhibit (d)(2) to Post-Effective Amendment No. 160 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on July 29, 2014.
(d) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Chilton Investment Company LLC - Incorporated
by reference to Exhibit (d)(3) to Post-Effective
Amendment No. 160 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on July 29,
2014.
(e) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Impala Asset Management LLC - Incorporated by
reference to Exhibit (d)(4) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(f) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Kynikos Associates LP - Incorporated by
reference to Exhibit (d)(5) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(g) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Lyrical Asset Management LP - Incorporated by
reference to Exhibit (d)(6) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(h) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Sirios Capital Management LP - Incorporated by
reference to Exhibit (d)(7) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(i) Form of Subadvisory Agreement between AllianceBernstein
L.P. and River Canyon Fund Management LLC - Incorporated
by reference to Exhibit (d)(8) to Post-Effective
Amendment No. 160 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on July 29,
2014.
(j) Form of Subadvisory Agreement between AllianceBernstein
L.P. and First Pacific Advisors, LLC - Incorporated by
reference to Exhibit (d)(9) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(k) Form of Subadvisory Agreement between AllianceBernstein
L.P., on behalf of the AB Multi-Manager Alternative
Strategies Fund, and Halcyon Liquid Strategies IC
Management LP - Incorporated by reference to Exhibit
(d)(11) to Post-Effective Amendment No. 193 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on September 29, 2015.
(l) Form of Subadvisory Agreement between AllianceBernstein
L.P. and CQS (US), LLC - Incorporated by reference to
Exhibit (d)(11) to Post-Effective Amendment No. 160 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on July 29, 2014.
(m) Form of Subadvisory Agreement between AllianceBernstein
L.P. and MPAM Credit Trading Partners LP - Incorporated
by reference to Exhibit (d)(12) to Post-Effective
Amendment No. 160 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on July 29,
2014.
(n) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Passport Capital, LLC - Incorporated by
reference to Exhibit (d)(13) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(o) Form of Investment Advisory Contract between
AllianceBernstein L.P. and AllianceBernstein
Multi-Manager Alternative Strategies Fund (Cayman) Ltd.-
Incorporated by reference to Exhibit (d)(14) to
Post-Effective Amendment No. 162 of Registrant's POS EX
filing to the Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on August 7, 2014.
(p) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Passport Capital, LLC - Incorporated by
reference to Exhibit (d)(16) to Post-Effective Amendment
No. 168 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on September 9, 2014.
(q) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Impala Asset Management LLC - Incorporated by
reference to Exhibit (d)(17) to Post-Effective Amendment
No. 168 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on September 9, 2014.
(r) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Lyrical Asset Management LP - Incorporated by
reference to Exhibit (d)(18) to Post-Effective Amendment
No. 168 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on September 9, 2014.
(s) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Sirios Capital Management LP - Incorporated by
reference to Exhibit (d)(19) to Post-Effective Amendment
No. 168 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on September 9, 2014.
(t) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Kynikos Associates LP - Incorporated by
reference to Exhibit (d)(20) to Post-Effective Amendment
No. 168 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on September 9, 2014.
(u) Form of Advisory Contract between the Registrant, on
behalf of AllianceBernstein Long/Short Multi-Manager
Fund, and AllianceBernstein L.P., dated September 30,
2014 - Incorporated by reference to Exhibit (d)(21) to
Post-Effective Amendment No. 168 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 9, 2014.
(v) Form of Subadvisory Agreement between AllianceBernstein
L.P. and Chilton Investment Company LLC - Incorporated
by reference to Exhibit (d)(22) to Post-Effective
Amendment No. 169 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on September
26, 2014.
(w) Investment Advisory Contract between the Registrant, on
behalf of the AllianceBernstein Multi-Manager Select
Retirement Allocation Fund, AllianceBernstein
Multi-Manager Select 2010 Fund, AllianceBernstein
Multi-Manager Select 2015 Fund, AllianceBernstein
Multi-Manager Select 2020 Fund, AllianceBernstein
Multi-Manager Select 2025 Fund, AllianceBernstein
Multi-Manager Select 2030 Fund, AllianceBernstein
Multi-Manager Select 2035 Fund, AllianceBernstein
Multi-Manager Select 2040 Fund, AllianceBernstein
Multi-Manager Select 2045 Fund, AllianceBernstein
Multi-Manager Select 2050 Fund, AllianceBernstein
Multi-Manager Select 2055 Fund, and AllianceBernstein
L.P., dated December 18, 2014 - Incorporated by
reference to Exhibit (d)(23) to Post-Effective Amendment
No. 184 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on May 8, 2015.
(x) Sub-Advisory Agreement dated December 15, 2014 between
AllianceBernstein L.P., on behalf of the
AllianceBernstein Multi-Manager Select Retirement
Allocation Fund, AllianceBernstein Multi-Manager Select
2010 Fund, AllianceBernstein Multi-Manager Select 2015
Fund, AllianceBernstein Multi-Manager Select 2020 Fund,
AllianceBernstein Multi-Manager Select 2025 Fund,
AllianceBernstein Multi-Manager Select 2030 Fund,
AllianceBernstein Multi-Manager Select 2035 Fund,
AllianceBernstein Multi-Manager Select 2040 Fund,
AllianceBernstein Multi-Manager Select 2045 Fund,
AllianceBernstein Multi-Manager Select 2050 Fund,
AllianceBernstein Multi-Manager Select 2055 Fund, and
Morningstar Associates, LLC - Incorporated by reference
to Exhibit (d)(24) to Post-Effective Amendment No. 201
to Registrant's Registration Statement on Form N-1A
(File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on November 30, 2015.
(y) Form of Sub-Advisory Agreement between AllianceBernstein
L.P., on behalf of the AB Multi-Manager Alternative
Strategies Fund, and Brigade Capital Management, LP -
Incorporated by reference to Exhibit (d)(25) to
Post-Effective Amendment No. 193 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 29, 2015.
(z) Sub-Advisory Agreement between AllianceBernstein L.P.,
on behalf of the AB Multi-Manager Alternative Strategies
Fund, and One River Asset Management, LLC - Incorporated
by reference to Exhibit (d)(26) to Post-Effective
Amendment No. 213 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on September
28, 2016.
(aa) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Multi-Manager
Alternative Strategies Fund, and Passport Capital, LLC -
Incorporated by reference to Exhibit (d)(27) to
Post-Effective Amendment No. 213 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 28, 2016.
(bb) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Multi-Manager
Alternative Strategies Fund, and Kynikos Associates LP -
Incorporated by reference to Exhibit (d)(28) to
Post-Effective Amendment No. 213 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 28, 2016.
(cc) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Multi-Manager
Alternative Strategies Fund, and Lyrical Asset
Management LP - Incorporated by reference to Exhibit
(d)(29) to Post-Effective Amendment No. 213 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on September 28, 2016.
(dd) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Long/Short
Multi-Manager Fund, and Passport Capital, LLC -
Incorporated by reference to Exhibit (d)(30) to
Post-Effective Amendment No. 213 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 28, 2016.
(ee) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Long/Short
Multi-Manager Fund, and Kynikos Associates LP -
Incorporated by reference to Exhibit (d)(31) to
Post-Effective Amendment No. 213 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 28, 2016.
(ff) Sub-Advisory Agreement Amendment between
AllianceBernstein L.P, on behalf of the AB Long/Short
Multi-Manager Fund, and Lyrical Asset Management LP -
Incorporated by reference to Exhibit (d)(32) to
Post-Effective Amendment No. 213 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 28, 2016.
(7) (a) Distribution Services Agreement between the Registrant
and AllianceBernstein Investments, Inc. (formerly known
as Alliance Fund Distributors, Inc.), dated July 22,
1992 - Incorporated by reference to Exhibit 6(a) to
Post-Effective Amendment No. 63 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on January 30, 1998.
(b) Amendment to Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as Alliance Fund Distributors, Inc.)
dated July 19, 1996 - Incorporated by reference to
Exhibit 6 to Post-Effective Amendment No. 61 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on February 3, 1997.
(c) Amendment to Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.), dated March 1, 2005 -
Incorporated by reference to Exhibit (e)(3) to
Post-Effective Amendment No. 215 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 28, 2016.
(d) Amendment to Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc.,
dated June 14, 2006 - Incorporated by reference to
Exhibit (e)(4) to Post-Effective Amendment No. 82 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on October 31, 2006.
(e) Distribution Services Agreement between the Registrant
and AllianceBernstein Investments, Inc. (formerly known
as Alliance Fund Distributors, Inc.), dated July 22,
1992, as amended as of April 30, 1993 - Incorporated by
reference to Exhibit (e)(5) to Post-Effective Amendment
No. 86 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on October 6, 2009.
(f) Amendment to Distribution Services Agreement, dated as
of August 4, 2011 between Registrant and
AllianceBernstein Investments, Inc. - Incorporated by
reference to Exhibit (e)(6) to Post-Effective Amendment
No. 117 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on June 29, 2012.
(g) Form of Selected Dealer Agreement between
AllianceBernstein Investments, Inc. and selected dealers
offering shares of the Registrant - Incorporated by
reference to Exhibit (e)(6) to Post-Effective Amendment
No. 39 of the Registration Statement on Form N-1A of
AllianceBernstein Large Cap Growth Fund, Inc. (File Nos.
33-49530 and 811-06730), filed with the Securities and
Exchange Commission on October 15, 2009.
(h) Form of Selected Agent Agreement between
AllianceBernstein Investments, Inc. (formerly known as
AllianceBernstein Investment Research and Management,
Inc.) and selected agents making available shares of the
Registrant - Incorporated by reference to Exhibit (e)(4)
to Post-Effective Amendment No. 34 of the Registration
Statement on Form N-1A of AllianceBernstein Municipal
Income Fund, Inc. (File Nos. 33-7812 and 811-04791),
filed with the Securities and Exchange Commission on
January 28, 2005.
(i) Selected Dealer Agreement between AllianceBernstein
Investments, Inc. and Merrill Lynch, Pierce, Fenner &
Smith Incorporated making available shares of the
Registrant effective April 30, 2009 - Incorporated by
reference to Exhibit (e)(8) to Post-Effective Amendment
No. 39 of the Registration Statement on Form N-1A of
AllianceBernstein Large Cap Growth Fund, Inc. (File Nos.
33-49530 and 811-06730), filed with the Securities and
Exchange Commission on October 15, 2009.
(j) Load Fund Operating Agreement between AllianceBernstein
Investments, Inc. and Charles Schwab & Co., Inc. making
available shares of the Registrant, dated as of June 1,
2007 - Incorporated by reference to Exhibit (e)(9) to
Post-Effective Amendment No. 39 of the Registration
Statement on Form N-1A of AllianceBernstein Large Cap
Growth Fund, Inc. (File Nos. 33-49530 and 811-06730),
filed with the Securities and Exchange Commission on
October 15, 2009.
(k) Cooperation Agreement between AllianceBernstein
Investments, Inc. (formerly known as AllianceBernstein
Research and Management, Inc.) and UBS AG, dated
November 1, 2005 - Incorporated by reference to Exhibit
(e)(10) to Post-Effective Amendment No. 39 of the
Registration Statement on Form N-1A of AllianceBernstein
Large Cap Growth Fund, Inc. (File Nos. 33-49530 and
811-06730), filed with the Securities and Exchange
Commission on October 15, 2009.
(l) Amendment to Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.), amended as of August 9, 2013 -
Incorporated by reference to Exhibit (e)(12) to
Post-Effective Amendment No. 147 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on February 28, 2014.
(m) Amendment to Distribution Services Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.) amended as of April 15, 2015 -
Incorporated by reference to Exhibit (e)(13) to
Post-Effective Amendment No. 195 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(n) Amendment to Distribution Service Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.), amended as of July 29, 2015
-Incorporated by reference to Exhibit (e)(14) to
Post-Effective Amendment No. 210 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2016.
(o) Amendment to Distribution Service Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.), amended as of September 9, 2015 -
Incorporated by reference to Exhibit (e)(15) to
Post-Effective Amendment No. 210 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2016.
(p) Amendment to Distribution Service Agreement between the
Registrant and AllianceBernstein Investments, Inc.
(formerly known as AllianceBernstein Investment Research
and Management, Inc.), amended as of December 3, 2015 -
Incorporated by reference to Exhibit (e)(16) to
Post-Effective Amendment No. 210 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2016.
(8) Bonus, profit sharing, pension or other similar contracts or
arrangements. - Not applicable.
(9) (a) Master Custodian Agreement between the Registrant and
State Street Bank and Trust Company, effective August 3,
2009 - Incorporated by reference to Exhibit (g) to
Post-Effective Amendment No. 51 of the Registration
Statement on Form N-1A of AllianceBernstein Variable
Products Series Fund, Inc. (File Nos. 33-18647 and
811-05398), filed with the Securities and Exchange
Commission on April 29, 2010.
(b) Amendment to Master Custodian Agreement between the
Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein International Discovery
Equity Portfolio, effective October 15, 2010 -
Incorporated by reference to Exhibit (g)(2) to
Post-Effective Amendment No. 92 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 25, 2010.
(c) Form of Novation and Amendment Agreement to Custodian
Agreement effective September 14, 2009 between the
Registrant, on behalf of AllianceBernstein Emerging
Markets Multi-Asset Portfolio, AllianceBernstein Dynamic
All Market Fund and AllianceBernstein Dynamic All Market
Plus Fund, and Brown Brothers Harriman & Co. -
Incorporated by reference to Exhibit (g)(3) to
Post-Effective Amendment No. 117 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on June 29, 2012.
(d) Form of Novation and Amendment Agreement to Custodian
Agreement dated, as of December 5, 2011 between the
Registrant, on behalf of AllianceBernstein Emerging
Markets Multi-Asset Portfolio, AllianceBernstein Dynamic
All Market Fund, AllianceBernstein Dynamic All Market
Plus Fund and AllianceBernstein Select US Equity
Portfolio, and Brown Brothers Harriman & Co. -
Incorporated by reference to Exhibit (g)(4) to
Post-Effective Amendment No. 117 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on June 29, 2012.
(e) Amendment to Master Custodian Agreement between the
Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein International Focus 40
Portfolio, effective July 1, 2011 - Incorporated by
reference to Exhibit (g)(5) to Post-Effective Amendment
No. 119 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 30, 2012.
(f) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Emerging Markets Equity
Portfolio, dated October 12, 2012 - Incorporated by
reference to Exhibit (g)(6) to Post-Effective Amendment
No. 122 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on October 12, 2012.
(g) Amendment to Master Custodian Agreement between the
Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Select US Long/Short
Portfolio, dated December 6, 2012 - Incorporated by
reference to Exhibit (g)(7) to Post-Effective Amendment
No. 215 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on October 28, 2016.
(h) Form of Amendment to Services Agreement between each
Fund set forth on Schedule A to the Agreement and State
Street Bank and Trust Company - Incorporated by
reference to Exhibit (g)(8) to Post-Effective Amendment
No. 160 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on July 29, 2014.
(i) Form of Investment Analytics Agreement between the
Registrant and State Street Bank and Trust Company -
Incorporated by reference to Exhibit (g)(9) to
Post-Effective Amendment No. 160 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2014.
(j) Form of Derivative Calculation Services Agreement
between the Registrant and State Street Bank and Trust
Company Incorporated by reference to Exhibit (g)(10) to
Post-Effective Amendment No. 160 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2014.
(k) Form of Securities Lending and Services Agreement
between the Registrant and State Street Bank and Trust
Company - Incorporated by reference to Exhibit (g)(11)
to Post-Effective Amendment No. 160 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 29, 2014.
(l) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Concentrated Growth
Fund, dated March 3, 2014 - Incorporated by reference to
Exhibit (g)(12) to Post-Effective Amendment No. 175 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on November 7, 2014.
(m) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Multi-Manager
Alternative Strategies Fund, dated July 31, 2014 -
Incorporated by reference to Exhibit (g)(13) to
Post-Effective Amendment No. 175 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on November 7, 2014.
(n) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Long/Short Multi-Manager
Fund, dated September 30, 2014 - Incorporated by
reference to Exhibit (g)(14) to Post-Effective Amendment
No. 175 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on November 7, 2014.
(o) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein All Market Alternative
Return Portfolio - Incorporated by reference to Exhibit
(g)(15) to Post-Effective Amendment No. 175 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on November 7, 2014.
(p) Amendment to Master Custodian Agreement, dated April 15,
2015, between the Registrant and State Street Bank and
Trust Company, regarding the AB Concentrated
International Growth Portfolio - Incorporated by
reference to Exhibit (g)(16) to Post-Effective Amendment
No. 197 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on October 30, 2015.
(q) Amendment to Master Custodian Agreement between the
Registrant and State Street Bank and Trust Company,
regarding the AllianceBernstein Multi-Manager Select
Retirement Allocation Fund, AllianceBernstein
Multi-Manager Select 2010 Fund, AllianceBernstein
Multi-Manager Select 2015 Fund, AllianceBernstein
Multi-Manager Select 2020 Fund, AllianceBernstein
Multi-Manager Select 2025 Fund, AllianceBernstein
Multi-Manager Select 2030 Fund, AllianceBernstein
Multi-Manager Select 2035 Fund, AllianceBernstein
Multi-Manager Select 2040 Fund, AllianceBernstein
Multi-Manager Select 2045 Fund, AllianceBernstein
Multi-Manager Select 2050 Fund, AllianceBernstein
Multi-Manager Select 2055 Fund, dated December 15, 2014
- Incorporated by reference to Exhibit (g)(17) to
Post-Effective Amendment No. 184 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on May 8, 2015.
(r) Form of Amendment to Master Custodian Agreement between
the Registrant and State Street Bank and Trust Company,
regarding the AB International Strategic Core Portfolio
- Incorporated by reference to Exhibit (g)(18) to
Post-Effective Amendment No. 184 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on May 8, 2015.
(s) Novation and Amendment Agreement, between the Registrant
and Brown Brothers Harriman & Co., regarding the AB
Global Core Equity Portfolio, AB Emerging Markets Growth
Portfolio, AB Emerging Markets Core Portfolio, AB
Emerging Markets Multi-Asset Portfolio, AB International
Strategic Core Portfolio and AB Asia ex-Japan Portfolio
- Incorporated by reference to Exhibit (g)(19) to
Post-Effective Amendment No. 215 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 28, 2016.
(10) (a) Rule 12b-1 Plan - See Exhibit (7)(a) hereto.
(b) Amended and Restated Rule 18f-3 Plan, dated August 9,
2013 - Incorporated by reference to Exhibit (n) to
Post-Effective Amendment No. 163 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on August 8, 2014.
(11) Opinion and Consent of Seward & Kissel LLP regarding the
legality of securities being registered - Incorporated by
reference to Exhibit (11) to the Registrant's Registration
Statement on Form N-14 (File No. 333-213893), filed with the
Securities and Exchange Commission on September 30, 2016.
(12) Opinion and Consent of Seward & Kissel LLP as to Tax matters -
To be filed by amendment.
(13) (a) Transfer Agency Agreement between the Registrant and
AllianceBernstein Investor Services, Inc. (formerly
known as Alliance Fund Services, Inc.), dated November
17, 1988 - Incorporated by reference to Exhibit 9 to
Post-Effective Amendment No. 63 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on January 30, 1998.
(b) Form of Amendment to Transfer Agency Agreement between
the Registrant and AllianceBernstein Investor Services,
Inc. - Incorporated by reference to Exhibit (h)(2) to
Post-Effective Amendment No. 82 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 31, 2006.
(c) Form of Expense Limitation Agreement, dated July 6, 2011
between the Registrant, on behalf of AllianceBernstein
International Focus 40 Portfolio, and AllianceBernstein
L.P. - Incorporated by reference to Exhibit (h)(3) to
Post-Effective Amendment No. 99 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on July 6, 2011.
(d) Form of Expense Limitation Agreement, dated October 26,
2010 between the Registrant, on behalf of the
AllianceBernstein International Discovery Equity
Portfolio, and AllianceBernstein L.P. - Incorporated by
reference to Exhibit (h)(4) to Post-Effective Amendment
No. 117 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on June 29, 2012.
(e) Form of Expense Limitation Agreement, dated August 31,
2011 between the Registrant, on behalf of the
AllianceBernstein Emerging Markets Multi-Asset
Portfolio, and AllianceBernstein L.P. - Incorporated by
reference to Exhibit (h)(5) to Post-Effective Amendment
No. 117 of Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on June 29, 2012.
(f) Form of Expense Limitation Agreement, dated December 15,
2011 between the Registrant, on behalf of the AB All
Market Growth Portfolio (formerly, AllianceBernstein
Dynamic All Market Fund), and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(7) to
Post-Effective Amendment No. 117 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on June 29, 2012.
(g) Expense Limitation Agreement, dated September 27, 2012,
between the Registrant, on behalf of the
AllianceBernstein Emerging Markets Equity Portfolio, and
AllianceBernstein, L.P. - Incorporated by reference to
Exhibit (h)(8) to Post-Effective Amendment No. 134 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on June 27, 2013.
(h) Expense Limitation Agreement, dated March 1, 2014,
between the Registrant, on behalf of the
AllianceBernstein Concentrated Growth Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(10) to Post-Effective Amendment No.195 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on October 30, 2015.
(i) Expense Limitation Agreement, dated October 22, 2014,
between the Registrant, on behalf of the
AllianceBernstein Emerging Markets Growth Portfolio, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(12) to Post-Effective Amendment No.196 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on October 30, 2015.
(j) Form of Expense Limitation Agreement, between the
Registrant, on behalf of the AllianceBernstein Mid Cap
Growth Portfolio, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(13) to
Post-Effective Amendment No. 149 of Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on March 17, 2014.
(k) Form of Expense Limitation Agreement between the
Registrant, on behalf of the AllianceBernstein
Multi-Manager Alternative Strategies Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(5) to Post-Effective Amendment No. 160 of
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on July 29, 2014.
(l) Form of Expense Limitation Agreement between the
Registrant, on behalf of the AllianceBernstein
Long/Short Multi-Manager Fund, and AllianceBernstein
L.P. - Incorporated by reference to Exhibit (h)(17) to
Post-Effective Amendment No. 168 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on September 9, 2014.
(m) Expense Limitation Undertaking, dated October 31, 2014,
between the Registrant, on behalf of AllianceBernstein
Market Neutral Strategy-U.S., and AllianceBernstein L.P.
- Incorporated by reference to Exhibit (h)(18) to
Post-Effective Amendment No. 173 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 31, 2014.
(n) Expense Limitation Agreement, dated April 15, 2015,
between the Registrant, on behalf of AB Concentrated
International Growth Portfolio, and AllianceBernstein
L.P. - Incorporated by reference to Exhibit (h)(19) to
Post-Effective Amendment No. 197 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(o) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select Retirement
Allocation Fund, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(21) to
Post-Effective Amendment No. 184 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on May 8, 2015.
(p) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2010 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(22) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(q) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2015 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(23) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(r) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2020 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(24) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(s) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2025 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(25) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(t) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2030 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(26) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(u) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2035 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(27) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(v) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2040 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(28) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(w) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2045 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(29) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(x) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2050 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(30) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(y) Expense Limitation Agreement, dated December 15, 2014,
between the Registrant, on behalf of the
AllianceBernstein Multi-Manager Select 2055 Fund, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(31) to Post-Effective Amendment No. 184 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on May 8, 2015.
(z) Expense Limitation Agreement, dated November 1, 2014,
between the Registrant, on behalf of the AB Select US
Equity Portfolio, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(33) to
Post-Effective Amendment No.195 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(aa) Expense Limitation Agreement, dated November 1, 2014,
between the Registrant, on behalf of the
AllianceBernstein Select US Long/Short Portfolio, and
AllianceBernstein, L.P. - Incorporated by reference to
Exhibit (h)(34) to Post-Effective Amendment No.195 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission on October 30, 2015.
(bb) Expense Limitation Agreement, dated November 12, 2014,
between the Registrant, on behalf of AllianceBernstein
Global Core Equity Portfolio, and AllianceBernstein L.P.
- Incorporated by reference to Exhibit (h)(35) to
Post-Effective Amendment No.195 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(cc) Expense Limitation Undertaking, dated December 8, 2014,
between the Registrant, on behalf of the AB Select US
Equity Portfolio, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(36) to
Post-Effective Amendment No.195 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(dd) Expense Limitation Undertaking, dated October 30, 2015,
between the Registrant, on behalf of the AB Select US
Long/Short Portfolio, and AllianceBernstein, L.P. -
Incorporated by reference to Exhibit (h)(37) to
Post-Effective Amendment No.195 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 30, 2015.
(ee) Form of Expense Limitation Agreement, between the
Registrant, on behalf of the AB Asia ex-Japan Equity
Portfolio and AllianceBernstein, L.P. - Incorporated by
reference to Exhibit (h)(37) to Post-Effective Amendment
No. 202 to Registrant's Registration Statement on Form
N-1A (File Nos. 2-29901 and 811-01716), filed with the
Securities and Exchange Commission on December 3, 2015.
(ff) Expense Limitation Agreement, dated March 4, 2015,
between the Registrant, on behalf of AB All Market
Alternative Return Portfolio, and AllianceBernstein L.P.
- Incorporated by reference to Exhibit (h)(37) to
Post-Effective Amendment No. 205 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission February 29, 2016.
(gg) Expense Limitation Agreement, dated December 3, 2014,
between the Registrant, on behalf of the
AllianceBernstein Small Cap Value Portfolio, and
AllianceBernstein L.P. - Incorporated by reference to
Exhibit (h)(37) to Post-Effective Amendment No. 206 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission February 29, 2016.
(hh) Expense Limitation Agreement, dated December 18, 2014,
between the Registrant, on behalf of the
AllianceBernstein All Market Income Portfolio, and
AllianceBernstein, L.P. - Incorporated by reference to
Exhibit (h)(38) to Post-Effective Amendment No. 206 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission February 29, 2016.
(ii) Acquired Fund Fee Waiver Agreement, dated December 18,
2014, between the Registrant, on behalf of the
AllianceBernstein All Market Income Portfolio, and
AllianceBernstein, L.P. Incorporated by reference to
Exhibit (h)(38) to Post-Effective Amendment No. 206 to
Registrant's Registration Statement on Form N-1A (File
Nos. 2-29901 and 811-01716), filed with the Securities
and Exchange Commission February 29, 2016.
(jj) Expense Limitation Agreement, dated July 29, 2015,
between the Registrant, on behalf of AB International
Strategic Core Portfolio, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(37) to
Post-Effective Amendment No. 215 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 28, 2016.
(kk) Expense Limitation Undertaking, dated October 30, 2015,
between the Registrant, on behalf of the AB Concentrated
Growth Fund, and AllianceBernstein L.P. - Incorporated
by reference to Exhibit (h)(38) to Post-Effective
Amendment No. 215 to Registrant's Registration Statement
on Form N-1A (File Nos. 2-29901 and 811-01716), filed
with the Securities and Exchange Commission on October
28, 2016.
(ll) Expense Limitation Agreement, dated September 9, 2015,
between the Registrant, on behalf of the AB Emerging
Markets Core Portfolio, and AllianceBernstein L.P. -
Incorporated by reference to Exhibit (h)(38) to
Post-Effective Amendment No. 216 to Registrant's
Registration Statement on Form N-1A (File Nos. 2-29901
and 811-01716), filed with the Securities and Exchange
Commission on October 28, 2016.
(14) Consent of Independent Registered Public Accounting Firm -
Incorporated by reference to Exhibit (14) to the Registrant's
Registration Statement on Form N-14 (File No. 333-213893),
filed with the Securities and Exchange Commission on September
30, 2016.
(15) Financial statements omitted pursuant to Item 14(a)(1). - Not
applicable.
(16) Powers of Attorney for: John H. Dobkin, Michael J. Downey,
William H. Foulk, Jr., D. James Guzy, Nancy P. Jacklin, Robert
M. Keith, Carol C. McMullen, Garry L. Moody, Marshall C.
Turner, Jr. and Earl D. Weiner - Incorporated by reference to
Exhibit (16) to the Registrant's Registration Statement on
Form N-14 (File No. 333-213893), filed with the Securities and
Exchange Commission on September 30, 2016.
(17) Additional Exhibits - Not Applicable.
ITEM 17. Undertakings.
(1) The undersigned registrant agrees that prior to any public
reoffering of the securities registered through the use of a
prospectus which is a part of this registration statement by any
person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) of the Securities Act 17 CFR 230.145(c),
the reoffering prospectus will contain the information called for
by the applicable registration form for reofferings by persons who
may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is
filed under paragraph (1) above will be filed as a part of an
amendment to the registration statement and will not be used until
the amendment is effective, and that, in determining any liability
under the 1933 Act, each post-effective amendment shall be deemed
to be a new registration statement for the securities offered
therein, and the offering of the securities at that time shall be
deemed to be the initial bona fide offering of them.
(3) The undersigned registrant undertakes to file a post-effective
amendment to this registration statement upon the closing of the
Acquisition described in this registration statement that contains
an opinion of counsel supporting the tax matters discussed in this
registration statement.
SIGNATURES
----------
As required by the Securities Act of 1933, as amended, this Amendment to
the Registration Statement has been signed on behalf of the Registrant, in the
City of New York and the State of New York, on the 2nd day of November, 2016.
AB CAP FUND, INC.
By: Robert M. Keith*
---------------------
Robert M. Keith
President
As required by the Securities Act of 1933, as amended, this Amendment
to the Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
(1) Principal Executive Officer:
Robert M. Keith* President and November 2, 2016
-------------------------- Chief Executive
Robert M. Keith Officer
(2) Principal Financial and
Accounting Officer:
/s/ Joseph J. Mantineo Treasurer November 2, 2016
-------------------------- and Chief
Joseph J. Mantineo Financial Officer
(3) All of the Directors:
John H. Dobkin*
Michael J. Downey*
William H. Foulk, Jr.*
D. James Guzy*
Nancy P. Jacklin*
Robert M. Keith*
Carol C. McMullen*
Garry L. Moody*
Marshall C. Turner, Jr.*
Earl D. Weiner*
*By: /s/ Eric C. Freed November 2, 2016
---------------------
Eric C. Freed
(Attorney-in-fact)
INDEX TO EXHIBITS
-----------------
Exhibit No. Description of Exhibits
------------ -----------------------