Filed pursuant to Rule 497(c).
File Nos. 2-29901 and 811-01716.







    [LOGO]
      AB
ALLIANCEBERNSTEIN

                   ALLIANCEBERNSTEIN MARKET NEUTRAL STRATEGY

               -AllianceBernstein Market Neutral Strategy - U.S.
                (Class A-AMUAX; Class C-AMCUX; Advisor Class-AMUYX;
                Class R-AMURX; Class K-AMUKX; Class I-AMUIX)
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                 c/o AllianceBernstein Investor Services, Inc.
                 P.O. Box 786003, San Antonio, Texas 78278-6003
                           Toll Free: (800) 221-5672
                    For Literature: Toll Free (800) 227-4618

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                      STATEMENT OF ADDITIONAL INFORMATION
                                October 31, 2014

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            This Statement of Additional Information ("SAI") is not a
prospectus, but supplements and should be read in conjunction with the current
prospectus, dated October 31, 2014, for the AllianceBernstein(R) Market
Neutral Strategy - U.S. (the "Strategy") of AllianceBernstein Cap Fund, Inc.
(the "Fund") that offers Class A, Class C, Class R, Class K, Class I and Advisor
Class shares of the Strategy (the "Prospectus"). Financial Statements for the
year ended July 31, 2014 are included in the Strategy's annual report to
shareholders and are incorporated in this SAI by reference. Copies of the
Prospectus and the Strategy's annual reports may be obtained by contacting
AllianceBernstein Investor Services, Inc. ("ABIS") at the address or the "For
Literature" telephone number shown above or on the Internet at
www.AllianceBernstein.com.



                               TABLE OF CONTENTS
                                                                           Page
                                                                           ----

INFORMATION ABOUT THE STRATEGY AND ITS INVESTMENTS.............................1
INVESTMENT RESTRICTIONS.......................................................21
MANAGEMENT OF THE STRATEGY....................................................22
EXPENSES OF THE STRATEGY......................................................43
PURCHASE OF SHARES............................................................49
REDEMPTION AND REPURCHASE OF SHARES...........................................71
SHAREHOLDER SERVICES..........................................................73
NET ASSET VALUE...............................................................76
DIVIDENDS, DISTRIBUTIONS AND TAXES............................................80
PORTFOLIO TRANSACTIONS........................................................87
GENERAL INFORMATION...........................................................92
FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC
  ACCOUNTING FIRM.............................................................97
APPENDIX A:  STATEMENT OF POLICIES AND  PROCEDURES FOR PROXY VOTING..........A-1

-------------------

AllianceBernstein(R) and the AB Logo are registered trademarks and service marks
used by permission of the owner, AllianceBernstein L.P.


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               INFORMATION ABOUT THE STRATEGY AND ITS INVESTMENTS

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Introduction to the Strategy
----------------------------

            The Fund's shares are offered in separate series. U.S. Market
Neutral Strategy is a series of the Fund, a separate pool of assets
constituting, in effect, a separate open-end management investment company with
its own investment objective and policies. Except as otherwise noted, the
Strategy's investment objective and policies described below are not
"fundamental policies" within the meaning of the Investment Company Act of 1940,
as amended (the "1940 Act"), and may, therefore, be changed by the Board of
Directors of the Fund (the "Board" or the "Directors") without shareholder
approval. However, the Strategy will not change its investment objective without
at least 60 days' prior written notice to shareholders. There is no guarantee
that the Strategy will achieve its investment objective. Whenever any investment
policy or restriction states a percentage of the Strategy's assets that may be
invested in any security or other asset, it is intended that such percentage
limitation be determined immediately after and as a result of the Strategy's
acquisition of such securities or other assets. Accordingly, any later increases
or decreases in percentage beyond the specified limitations resulting from a
change in values or net assets will not be considered a violation of this
percentage limitation.

Additional Investment Policies and Practices
--------------------------------------------

            The following information about the Strategy's investment policies
and practices supplements the information set forth in the Prospectus.

Convertible Securities
----------------------

            Convertible securities include bonds, debentures, corporate notes
and preferred stocks. Convertible securities are instruments that are
convertible at a stated exchange ratio into shares of the underlying common
stock. Prior to their conversion, convertible securities have the same general
characteristics as non-convertible securities that provide a stable stream of
income with generally higher yields than those of equity securities of the same
or similar issuers. The market value of convertible securities tends to decrease
as interest rates rise and, conversely, to increase as interest rates decline.
While convertible securities generally offer lower interest yields than
non-convertible debt securities of similar quality, they offer investors the
potential to benefit from increases in the market price of the underlying common
stock.

            When the market price of the common stock underlying a convertible
security increases, the price of the convertible security increasingly reflects
the value of the underlying common stock and may rise accordingly. As the market
price of the underlying common stock declines, the convertible security tends to
trade increasingly on a yield basis, and thus may not depreciate to the same
extent as the underlying common stock. Convertible securities rank senior to
common stocks in an issuer's capital structure. They are consequently of higher
quality and entail less risk than the issuer's common stock, although the extent
to which such risk is reduced depends in large measure upon the degree to which
the convertible security sells above its value as a fixed-income security.

Depositary Receipts and Securities of Supranational Entities
------------------------------------------------------------

            The Strategy may invest in depositary receipts. American Depositary
Receipts, or ADRs, are depositary receipts typically issued by a U.S. bank or
trust company that evidence ownership of underlying securities issued by a
foreign corporation. Global Depositary Receipts, or GDRs, European Depositary
Receipts, or EDRs, and other types of depositary receipts are typically issued
by non-U.S. banks or trust companies and evidence ownership of underlying
securities issued by either a U.S. or a non-U.S. company. Depositary receipts
may not necessarily be denominated in the same currency as the underlying
securities into which they may be converted. In addition, the issuers of the
securities of unsponsored depositary receipts are not obligated to disclose
material information in the United States. Generally, ADRs, in registered form,
are designed for use in the U.S. securities markets, EDRs, in bearer form, are
designed for use in European securities markets, and GDRs, in bearer form, are
designed for use in two or more securities markets, such as Europe and Asia. For
purposes of determining the country of issuance, investments in depositary
receipts of either type are deemed to be investments in the underlying
securities.

            A supranational entity is an entity designated or supported by the
national government of one or more countries to promote economic reconstruction
or development. Examples of supranational entities include the World Bank
(International Bank for Reconstruction and Development) and the European
Investment Bank. "Semi-governmental securities" are securities issued by
entities owned by either a national, state or equivalent government or are
obligations of one of such government jurisdictions that are not backed by its
full faith and credit and general taxing powers.

Derivatives
-----------

            The Strategy may, but is not required to, use derivatives for
hedging or other risk management purposes or as part of its investment
practices. Derivatives are financial contracts whose value depends on, or is
derived from, the value of an underlying asset, reference rate or index. These
assets, rates, and indices may include bonds, stocks, mortgages, commodities,
interest rates, currency exchange rates, bond indices and stock indices.

            There are four principal types of derivatives--options, futures,
forwards and swaps. These principal types of derivative instruments, as well as
the methods in which they may be used are described below. Derivatives include
listed and cleared transactions where the Strategy's derivative trade
counterparty is an exchange or clearinghouse and non-cleared bilateral
"over-the-counter" ("OTC") transactions, where the Strategy's derivative trade
counterparty is a financial institution. Exchange-traded or cleared derivatives
transactions tend to be more liquid and subject to less counterparty credit risk
than those that are privately negotiated. The Strategy may use derivatives to
earn income and enhance returns, to hedge or adjust the risk profile of a
portfolio and either to replace more traditional direct investments or to obtain
exposure to otherwise inaccessible markets.

            Forward Contracts. A forward contract, which may be standardized and
exchange-traded or customized and privately negotiated, is an agreement for one
party to buy, and the other party to sell, a specific quantity of an underlying
commodity or other tangible asset for an agreed-upon price at a future date. A
forward contract generally is settled by physical delivery of the commodity or
other tangible asset underlying the forward contract to an agreed-upon location
at a future date (rather than settled by cash) or will be rolled forward into a
new forward contract. Non-deliverable forwards ("NDFs") specify a cash payment
upon maturity.

            Futures Contracts and Options on Futures Contracts. A futures
contract is an agreement that obligates the buyer to buy and the seller to sell
a specified quantity of an underlying asset (or settle for cash the value of a
contract based on an underlying asset, rate or index) at a specific price on the
contract maturity date. Options on futures contracts are options that call for
the delivery of futures contracts upon exercise. Futures contracts are
standardized, exchange-traded instruments and are fungible (i.e., considered to
be perfect substitutes for each other). This fungibility allows futures
contracts to be readily offset or canceled through the acquisition of equal but
opposite positions, which is the primary method in which futures contracts are
liquidated. A cash-settled futures contract does not require physical delivery
of the underlying asset but instead is settled for cash equal to the difference
between the values of the contract on the date it is entered into and its
maturity date.

            Options. An option, which may be standardized and exchange-traded,
or customized and privately negotiated, is an agreement that, for a premium
payment or fee, gives the option holder (the buyer) the right but not the
obligation to buy (a "call") or sell (a "put") the underlying asset (or settle
for cash an amount based on an underlying asset, rate or index) at a specified
price (the exercise price) during a period of time or on a specified date.
Likewise, when an option is exercised the writer of the option is obligated to
sell (in the case of a call option) or to purchase (in the case of a put option)
the underlying asset (or settle for cash an amount based on an underlying asset,
rate or index).

            Swaps. A swap is an agreement that obligates two parties to exchange
a series of cash flows at specified intervals (payment dates) based upon, or
calculated by, reference to changes in specified prices or rates (interest rates
in the case of interest rate swaps, currency exchange rates in the case of
currency swaps) for a specified amount of an underlying asset (the "notional"
principal amount). Swaps are entered into on a net basis (i.e., the two payment
streams are netted out, with the Strategy receiving or paying, as the case may
be, only the net amount of the two payments). Generally, the notional principal
amount is used solely to calculate the payment streams but is not exchanged.
Certain standardized swaps, including certain interest rate swaps and credit
default swaps, are (or soon will be) subject to mandatory central clearing.
Cleared swaps are transacted through futures commission merchants ("FCMs") that
are members of central clearinghouses with the clearinghouse serving as central
counterparty, similar to transactions in futures contracts. Funds post initial
and variation margin to support their obligations under cleared swaps by making
payments to their clearing member FCMs. Central clearing is expected to reduce
counterparty credit risks and increase liquidity, but central clearing does not
make swap transactions risk free. Centralized clearing will be required for
additional categories of swaps on a phased-in basis based on Commodity Futures
Trading Commission ("CFTC") approval of contracts for central clearing.
Bilateral swap agreements are two-party contracts entered into primarily by
institutional investors and are not cleared through a third party.

            Risks of Derivatives and Other Regulatory Issues. Investment
techniques employing such derivatives involve risks different from, and, in
certain cases, greater than, the risks presented by more traditional
investments. Following is a general discussion of important risk factors and
issues concerning the use of derivatives.

            -- Market Risk. This is the general risk attendant to all
            investments that the value of a particular investment will change in
            a way detrimental to the Strategy's interest.

            -- Management Risk. Derivative products are highly specialized
            instruments that require investment techniques and risk analyses
            different from those associated with stocks and bonds. The use of a
            derivative requires an understanding not only of the underlying
            instrument but also of the derivative itself, without the benefit of
            observing the performance of the derivative under all possible
            market conditions. In particular, the use and complexity of
            derivatives require the maintenance of adequate controls to monitor
            the transactions entered into, the ability to assess the risk that a
            derivative adds to the Strategy's investment portfolio, and the
            ability to forecast price, interest rate or currency exchange rate
            movements correctly.

            -- Credit Risk. This is the risk that a loss may be sustained by the
            Strategy as a result of the failure of another party to a derivative
            (usually referred to as a "counterparty") to comply with the terms
            of the derivative contract. The credit risk for derivatives traded
            on an exchange or through a clearinghouse is generally less than for
            uncleared OTC derivatives, since the exchange or clearinghouse,
            which is the issuer or counterparty to each derivative, provides a
            guarantee of performance. This guarantee is supported by a daily
            payment system (i.e., margin requirements) operated by the
            clearinghouse in order to reduce overall credit risk. For uncleared
            OTC derivatives, there is no similar clearing agency guarantee.
            Therefore, the Strategy considers the creditworthiness of each
            counterparty to an uncleared OTC derivative in evaluating potential
            credit risk.

            -- Counterparty Risk. The value of an OTC derivative will depend on
            the ability and willingness of the Strategy's counterparty to
            perform its obligations under the transaction. If the counterparty
            defaults, the Strategy will have contractual remedies but may choose
            not to enforce them to avoid the cost and unpredictability of legal
            proceedings. In addition, if a counterparty fails to meet its
            contractual obligations, the Strategy could miss investment
            opportunities or otherwise be required to retain investments it
            would prefer to sell, resulting in losses for the Strategy.
            Participants in OTC derivatives markets generally are not subject to
            the same level of credit evaluation and regulatory oversight as are
            exchanges or clearinghouses. As a result, OTC derivatives generally
            expose the Strategy to greater counterparty risk than derivatives
            traded on an exchange or through a clearinghouse.

            New regulations affecting derivatives transactions now, or will
            soon, require certain standardized derivatives, including many types
            of swaps, to be subject to mandatory central clearing. Under these
            new requirements, a central clearing organization will be
            substituted as the counterparty to each side of the derivatives
            transaction. Each party to derivatives transactions will be required
            to maintain its positions with a clearing organization through one
            or more clearing brokers. Central clearing is expected to reduce,
            but not eliminate, counterparty risk. The Strategy will be subject
            to the risk that its clearing member or clearing organization will
            itself be unable to perform its obligations.

            -- Liquidity Risk. Liquidity risk exists when a particular
            instrument is difficult to purchase or sell. If a derivative
            transaction is particularly large or if the relevant market is
            illiquid (as is the case with many privately negotiated
            derivatives), it may not be possible to initiate a transaction or
            liquidate a position at an advantageous price.

            -- Leverage Risk. Since many derivatives have a leverage component,
            adverse changes in the value or level of the underlying asset, rate
            or index can result in a loss substantially greater than the amount
            invested in the derivative itself. In the case of swaps, the risk of
            loss generally is related to a notional principal amount, even if
            the parties have not made any initial investment. Certain
            derivatives have the potential for unlimited loss, regardless of the
            size of the initial investment.

            -- Regulatory Risk. The U.S. Government is in the process of
            adopting and implementing additional regulations governing
            derivatives markets, including clearing as discussed above, margin,
            reporting and registration requirements. While the full extent and
            cost of these regulations is currently unclear, these regulations
            could, among other things, restrict the Strategy's ability to engage
            in derivatives transactions and/or increase the cost of such
            derivatives transactions (through increased margin or capital
            requirements). In addition, Congress, various exchanges and
            regulatory and self-regulatory authorities have undertaken reviews
            of options and futures trading in light of market volatility. Among
            the actions that have been taken or proposed to be taken are new
            limits and reporting requirements for speculative positions, new or
            more stringent daily price fluctuation limits for futures and
            options transactions, and increased margin requirements for various
            types of futures transactions. These regulations and actions may
            adversely affect the instruments in which the Strategy invests and
            its ability to execute its investment strategy.

            -- Other Risks. Other risks in using derivatives include the risk of
            mispricing or improper valuation of derivatives and the inability of
            derivatives to correlate perfectly with underlying assets, rates and
            indices. Many derivatives, in particular privately negotiated
            derivatives, are complex and often valued subjectively. Improper
            valuations can result in increased cash payment requirements to
            counterparties or a loss of value to the Strategy. Derivatives do
            not always perfectly or even highly correlate or track the value of
            the assets, rates or indices they are designed to closely track.
            Consequently, the Strategy's use of derivatives may not always be an
            effective means of, and sometimes could be counterproductive to,
            furthering the Strategy's investment objective.

            Other. The Strategy may purchase and sell derivative instruments
only to the extent that such activities are consistent with the requirements of
the Commodity Exchange Act and the rules adopted by the CFTC thereunder. Under
CFTC rules, a registered investment company that conducts more than a certain
amount of trading in futures, commodity options, swaps and other commodity
interests is a commodity pool and its adviser must register as a commodity pool
operator, or CPO. Under such rules, registered investment companies are subject
to additional registration and reporting requirements. The trading exemption in
Rule 4.5 is not available to the Strategy and AllianceBernstein L.P., the
Strategy's investment adviser (the "Adviser") has registered as a CPO with
respect to the Strategy. This registration subjects the Strategy to certain
registration and reporting requirements but, under rules recently adopted by the
CFTC, compliance with Securities and Exchange Commission ("SEC") disclosure and
filing requirements will, for the most part, constitute compliance with
comparable CFTC requirements.

Use of Options, Futures, Forwards and Swaps by the Strategy
-----------------------------------------------------------

            --Options on Securities. The Strategy may write and purchase call
and put options on securities. In purchasing an option on securities, the
Strategy would be in a position to realize a gain if, during the option period,
the price of the underlying securities increased (in the case of a call) or
decreased (in the case of a put) by an amount in excess of the premium paid;
otherwise the Strategy would experience a loss not greater than the premium paid
for the option. Thus, the Strategy would realize a loss if the price of the
underlying security declined or remained the same (in the case of a call) or
increased or remained the same (in the case of a put) or otherwise did not
increase (in the case of a put) or decrease (in the case of a call) by more than
the amount of the premium. If a put or call option purchased by the Strategy
were permitted to expire without being sold or exercised, its premium would
represent a loss to the Strategy.

            The Strategy may write a put or call option in return for a premium,
which is retained by the Strategy whether or not the option is exercised. The
Strategy may write covered options or uncovered options. A call option written
by the Strategy is "covered" if the Strategy owns the underlying security, has
an absolute and immediate right to acquire that security upon conversion or
exchange of another security it holds, or holds a call option on the underlying
security with an exercise price equal to or less than the exercise price of the
call option it has written. A put option written by the Strategy is covered if
the Strategy holds a put option on the underlying securities with an exercise
price equal to or greater than the exercise price of the put option it has
written. Uncovered options or "naked options" are riskier than covered options.
For example, if the Strategy wrote a naked call option and the price of the
underlying security increased, the Strategy would have to purchase the
underlying security for delivery to the call buyer and sustain a loss, which
could be substantial, equal to the difference between the option price and the
market price of the security.

            The Strategy may also purchase call options to hedge against an
increase in the price of securities that the Strategy anticipates purchasing in
the future. If such increase occurs, the call option will permit the Strategy to
purchase the securities at the exercise price, or to close out the options at a
profit. The premium paid for the call option plus any transaction costs will
reduce the benefit, if any, realized by the Strategy upon exercise of the
option, and, unless the price of the underlying security rises sufficiently, the
option may expire worthless to the Strategy and the Strategy will suffer a loss
on the transaction to the extent of the premium paid.

            The Strategy may purchase put options to hedge against a decline in
the value of portfolio securities. If such decline occurs, the put options will
permit the Strategy to sell the securities at the exercise price or to close out
the options at a profit. By using put options in this way, the Strategy will
reduce any profit it might otherwise have realized on the underlying security by
the amount of the premium paid for the put option and by transaction costs.

            The Strategy may also, as an example, write combinations of put and
call options on the same security, known as "straddles", with the same exercise
and expiration date. By writing a straddle, the Strategy undertakes a
simultaneous obligation to sell and purchase the same security in the event that
one of the options is exercised. If the price of the security subsequently rises
above the exercise price, the call will likely be exercised and the Strategy
will be required to sell the underlying security at or below market price. This
loss may be offset, however, in whole or in part, by the premiums received on
the writing of the two options. Conversely, if the price of the security
declines by a sufficient amount, the put will likely be exercised. The writing
of straddles will likely be effective, therefore, only where the price of the
security remains stable and neither the call nor the put is exercised. In those
instances where one of the options is exercised, the loss on the purchase or
sale of the underlying security may exceed the amount of the premiums received.

            The Strategy may purchase or write options on securities of the
types in which it is permitted to invest in privately-negotiated (i.e., OTC)
transactions. By writing a call option, the Strategy limits its opportunity to
profit from any increase in the market value of the underlying security above
the exercise price of the option. By writing a put option, the Strategy assumes
the risk that it may be required to purchase the underlying security for an
exercise price above its then current market value, resulting in a capital loss
unless the security subsequently appreciates in value. Where options are written
for hedging purposes, such transactions constitute only a partial hedge against
declines in the value of portfolio securities or against increases in the value
of securities to be acquired, up to the amount of the premium.

            The Strategy will effect such transactions only with investment
dealers and other financial institutions (such as commercial banks or savings
and loan institutions) deemed creditworthy by the Adviser, and the Adviser has
adopted procedures for monitoring the creditworthiness of such entities. Options
purchased or written in negotiated transactions may be illiquid and it may not
be possible for the Strategy to effect a closing transaction at a time when the
Adviser believes it would be advantageous to do so.

            --Options on Securities Indices. An option on a securities index is
similar to an option on a security except that, rather than taking or making
delivery of a security at a specified price, an option on a securities index
gives the holder the right to receive, upon exercise of the option, an amount of
cash if the closing level of the chosen index is greater than (in the case of a
call) or less than (in the case of a put) the exercise price of the option.

            The Strategy may write (sell) call and put options and purchase call
and put options on securities indices. If the Strategy purchases put options on
securities indices to hedge its investments against a decline in the value of
portfolio securities, it will seek to offset a decline in the value of
securities it owns through appreciation of the put option. If the value of the
Strategy's investments does not decline as anticipated, or if the value of the
option does not increase, the Strategy's loss will be limited to the premium
paid for the option. The success of this strategy will largely depend on the
accuracy of the correlation between the changes in value of the index and the
changes in value of the Strategy's security holdings.

            The Strategy may also write put or call options on securities
indices to, among other things, earn income. If the value of the chosen index
declines below the exercise price of the put option, the Strategy has the risk
of loss of the amount of the difference between the exercise price and the
closing level of the chosen index, which it would be required to pay to the
buyer of the put option and which may not be offset by the premium it received
upon sale of the put option. Similarly, if the value of the index is higher than
the exercise price of the call option, the Strategy has the risk of loss of the
amount of the difference between the exercise price and the closing level of the
chosen index, which may not be offset by the premium it received upon sale of
the call option. If the decline or increase in the value securities index is
significantly below or above the exercise price of the written option, the
Strategy could experience a substantial loss.

            The purchase of call options on securities indices may be used by
the Strategy to attempt to reduce the risk of missing a broad market advance, or
an advance in an industry or market segment, at a time when the Strategy holds
uninvested cash or short-term debt securities awaiting investment. When
purchasing call options for this purpose, the Strategy will also bear the risk
of losing all or a portion of the premium paid if the value of the index does
not rise. The purchase of call options on stock indices when the Strategy is
substantially fully invested is a form of leverage, up to the amount of the
premium and related transaction costs, and involves risks of loss and of
increased volatility similar to those involved in purchasing call options on
securities the Strategy owns.

            --Other Option Strategies. In an effort to earn extra income, to
adjust exposure to individual securities or markets, or to protect all or a
portion of its portfolio from a decline in value, sometimes within certain
ranges, the Strategy may use option strategies such as the concurrent purchase
of a call or put option, including on individual securities and stock indices,
futures contracts (including on individual securities and stock indices) or
shares of exchange-traded funds ("ETFs") at one strike price and the writing of
a call or put option on the same individual security, stock index, futures
contract or ETF at a higher strike price in the case of a call option or at a
lower strike price in the case of a put option. The maximum profit from this
strategy would result for the call options from an increase in the value of the
individual security, stock index, futures contract or ETF above the higher
strike price or for the put options the decline in the value of the individual
security, stock index, futures contract or ETF below the lower strike price. If
the price of the individual security, stock index, futures contract or ETF
declines in the case of the call option or increases in the case of the put
option, the Strategy has the risk of losing the entire amount paid for the call
or put options.

            --Futures Contracts and Options on Futures Contracts. Futures
contracts that the Strategy may buy and sell may include futures contracts on
fixed-income or other securities, and contracts based on interest rates, foreign
currencies or financial indices, including any index of U.S. Government
securities. The Strategy may, for example, purchase or sell futures contracts
and options thereon to hedge against changes in interest rates, securities
(through index futures or options) or currencies.

            Interest rate futures contracts are purchased or sold for hedging
purposes to attempt to protect against the effects of interest rate changes on
the Strategy's current or intended investments in fixed-income securities. For
example, if the Strategy owned long-term bonds and interest rates were expected
to increase, the Strategy might sell interest rate futures contracts. Such a
sale would have much the same effect as selling some of the long-term bonds in
the Strategy's portfolio. However, since the futures market is more liquid than
the cash market, the use of interest rate futures contracts as a hedging
technique allows the Strategy to hedge its interest rate risk without having to
sell its portfolio securities. If interest rates were to increase, the value of
the debt securities in the portfolio would decline, but the value of the
Strategy's interest rate futures contracts would be expected to increase at
approximately the same rate, thereby keeping the net asset value ("NAV") of the
Strategy from declining as much as it otherwise would have. On the other hand,
if interest rates were expected to decline, interest rate futures contracts
could be purchased to hedge in anticipation of subsequent purchases of long-term
bonds at higher prices. Because the fluctuations in the value of the interest
rate futures contracts should be similar to those of long-term bonds, the
Strategy could protect itself against the effects of the anticipated rise in the
value of long-term bonds without actually buying them until the necessary cash
becomes available or the market has stabilized. At that time, the interest rate
futures contracts could be liquidated and the Strategy's cash reserves could
then be used to buy long-term bonds on the cash market.

            Purchases or sales of stock or bond index futures contracts may be
used for hedging purposes to attempt to protect the Strategy's current or
intended investments from broad fluctuations in stock or bond prices. For
example, the Strategy may sell stock or bond index futures contracts in
anticipation of or during a market decline to attempt to offset the decrease in
market value of the Strategy's portfolio securities that might otherwise result.
If such decline occurs, the loss in value of portfolio securities may be offset,
in whole or in part, by gains on the futures position. When the Strategy is not
fully invested in the securities market and anticipates a significant market
advance, it may purchase stock or bond index futures contracts in order to gain
rapid market exposure that may, in whole or in part, offset increases in the
cost of securities that the Strategy intends to purchase. As such purchases are
made, the corresponding positions in stock or bond index futures contracts will
be closed out.

            Options on futures contracts are options that call for the delivery
of futures contracts upon exercise. Options on futures contracts written or
purchased by the Strategy will be traded on U.S. exchanges.

            The writing of a call option on a futures contract constitutes a
partial hedge against declining prices of the securities in the Strategy's
portfolio. If the futures price at expiration of the option is below the
exercise price, the Strategy will retain the full amount of the option premium,
which provides a partial hedge against any decline that may have occurred in the
Strategy's portfolio holdings. The writing of a put option on a futures contract
constitutes a partial hedge against increasing prices of the securities or other
instruments required to be delivered under the terms of the futures contract. If
the futures price at expiration of the put option is higher than the exercise
price, the Strategy will retain the full amount of the option premium, which
provides a partial hedge against any increase in the price of securities which
the Strategy intends to purchase. If a put or call option the Strategy has
written is exercised, the Strategy will incur a loss which will be reduced by
the amount of the premium it receives. Depending on the degree of correlation
between changes in the value of its portfolio securities and changes in the
value of its options on futures positions, the Strategy's losses from exercised
options on futures may to some extent be reduced or increased by changes in the
value of portfolio securities.

            The Strategy may purchase options on futures contracts for hedging
purposes instead of purchasing or selling the underlying futures contracts. For
example, where a decrease in the value of portfolio securities is anticipated as
a result of a projected market-wide decline or changes in interest or exchange
rates, the Strategy could, in lieu of selling futures contracts, purchase put
options thereon. In the event that such decrease were to occur, it may be
offset, in whole or in part, by a profit on the option. If the anticipated
market decline were not to occur, the Strategy will suffer a loss equal to the
price of the put. Where it is projected that the value of securities to be
acquired by the Strategy will increase prior to acquisition due to a market
advance or changes in interest or exchange rates, the Strategy could purchase
call options on futures contracts, rather than purchasing the underlying futures
contracts. If the market advances, the increased cost of securities to be
purchased may be offset by a profit on the call. However, if the market
declines, the Strategy will suffer a loss equal to the price of the call, but
the securities which the Strategy intends to purchase may be less expensive.

            --Total Return Swaps. The Strategy may enter into total return swaps
in order to take a "long" or "short" position with respect to an underlying
referenced asset. The Strategy is subject to market price volatility of the
referenced asset. A total return swap involves commitments to pay interest in
exchange for a market-linked return based on a notional amount. To the extent
that the total return of the security, group of securities or index underlying
the transaction exceeds or falls short of the offsetting interest obligation,
the Strategy will receive a payment or make a payment to the counterparty.

            --Variance and Correlation Swaps. The Strategy may enter into
variance or correlation swaps in an attempt to hedge equity market risk or
adjust exposure to the equity markets. Variance swaps are contracts in which two
parties agree to exchange cash payments based on the difference between the
stated level of variance and the actual variance realized on an underlying asset
or index. Actual "variance" as used here is defined as the sum of the square of
the returns on the reference asset or index (which in effect is a measure of its
"volatility") over the length of the contract term. In other words, the parties
to a variance swap can be said to exchange actual volatility for a contractually
stated rate of volatility. Correlation swaps are contracts in which two parties
agree to exchange cash payments based on the differences between the stated and
the actual correlation realized on the underlying equity securities within a
given equity index. "Correlation" as used here is defined as the weighted
average of the correlations between the daily returns of each pair of securities
within a given equity index. If two assets are said to be closely correlated, it
means that their daily returns vary in similar proportions or along similar
trajectories.

            --Special Risks Associated with Swaps. Risks may arise as a result
of the failure of the counterparty to a bilateral swap contract to comply with
the terms of the swap contract. The loss incurred by the failure of a
counterparty is generally limited to the net interim payment to be received by
the Strategy, and/or the termination value at the end of the contract.
Therefore, the Strategy considers the creditworthiness of the counterparty to a
bilateral swap contract. The risk is mitigated by having a netting arrangement
between the Strategy and the counterparty and by the posting of collateral by
the counterparty to the Strategy to cover the Strategy's exposure to the
counterparty. Certain standardized swaps, including interest rate swaps and
credit default swaps, are, or soon will be subject to mandatory central
clearing. Central clearing is expected, among other things, to reduce
counterparty credit risk, but does not eliminate it completely.

            Additionally, risks may arise from unanticipated movements in
interest rates or in the value of the underlying securities. The Strategy
accrues for the changes in value on swap contracts on a daily basis, with the
net amount recorded within unrealized appreciation/depreciation of swap
contracts on the statement of assets and liabilities. Once the interim payments
are settled in cash, the net amount is recorded as realized gain/(loss) on swaps
on the statement of operations, in addition to any realized gain/(loss) recorded
upon the termination of swap contracts. Fluctuations in the value of swap
contracts are recorded as a component of net change in unrealized appreciation/
depreciation of swap contracts on the statement of operations.

Forward Commitments and When-Issued and Delayed Delivery Securities
-------------------------------------------------------------------

            Forward commitments for the purchase or sale of securities may
include purchases on a "when-issued" basis or purchases or sales on a "delayed
delivery" basis. In some cases, a forward commitment may be conditioned upon the
occurrence of a subsequent event, such as approval and consummation of a merger,
corporate reorganization or debt restructuring (i.e., a "when, as and if issued"
trade). The use of forward commitments enables the Strategy to protect against
anticipated changes in exchange rates, interest rates and/or prices. When
forward commitment transactions are negotiated, the price is fixed at the time
the commitment is made. The Strategy assumes the rights and risks of ownership
of the security, and the Strategy does not pay for the securities until they are
received. If the Strategy is fully or almost fully invested when forward
commitment purchases are outstanding, such purchases may result in a form of
leverage. Leveraging the portfolio in this manner may increase the Strategy's
volatility of returns.

            When-issued securities and forward commitments may be sold prior to
the settlement date. If the Strategy chooses to dispose of the right to acquire
a when-issued security prior to its acquisition or dispose of its right to
deliver or receive against a forward commitment, it may incur a gain or loss.
Any significant commitment of Strategy assets to the purchase of securities on a
"when, as and if issued" basis may increase the volatility of the Strategy's
NAV.

            At the time the Strategy intends to enter into a forward commitment,
it will record the transaction and thereafter reflect the value of the security
purchased or, if a sale, the proceeds to be received, in determining its NAV.
Any unrealized appreciation or depreciation reflected in such valuation of a
"when, as and if issued" security would be canceled in the event that the
required conditions did not occur and the trade was canceled.

            Purchases of securities on a forward commitment or when-issued basis
may involve more risk than other types of purchases. For example, by committing
to purchase securities in the future, the Strategy subjects itself to a risk of
loss on such commitments as well as on its portfolio securities. Also, the
Strategy may have to sell assets which have been set aside in order to meet
redemptions. In addition, if the Strategy determines it is advisable as a matter
of investment strategy to sell the forward commitment or "when-issued" or
"delayed delivery" securities before delivery, the Strategy may incur a gain or
loss because of market fluctuations since the time the commitment to purchase
such securities was made. Any such gain or loss would be treated as a capital
gain or loss for tax purposes. When the time comes to pay for the securities to
be purchased under a forward commitment or on a "when-issued" or "delayed
delivery" basis, the Strategy will meet its obligations from the then available
cash flow or the sale of securities, or, although it would not normally expect
to do so, from the sale of the forward commitment or "when-issued" or "delayed
delivery" securities themselves (which may have a value greater or less than the
Strategy's payment obligation). No interest or dividends accrue to the purchaser
prior to the settlement date for securities purchased or sold under a forward
commitment. In addition, in the event the other party to the transaction files
for bankruptcy, becomes insolvent, or defaults on its obligation, the Strategy
may be adversely affected.

Illiquid Securities
-------------------

            The Strategy will not invest in illiquid securities if immediately
after such investment more than 15% or such other amount permitted by guidance
regarding the 1940 Act of the Strategy's net assets would be invested in such
securities. For this purpose, illiquid securities include, among others, (a)
direct placements or other securities which are subject to legal or contractual
restrictions on resale or for which there is no readily available market (e.g.,
trading in the security is suspended or, in the case of unlisted securities,
market makers do not exist or will not entertain bids or offers), (b) options
purchased by the Strategy OTC and the cover for options written by the Strategy
OTC, and (c) repurchase agreements not terminable within seven days. Securities
that have legal or contractual restrictions on resale but have a readily
available market are not deemed illiquid for purposes of this limitation.

            Mutual funds do not typically hold a significant amount of
restricted securities (securities that are subject to restrictions on resale to
the general public) or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund may also have to take certain steps
or wait a certain amount of time in order to remove the transfer restrictions
for such restricted securities in order to dispose of them, resulting in
additional expense and delay.

            Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), allows a broader institutional trading market for securities
otherwise subject to restriction on resale to the general public. Rule 144A
establishes a "safe harbor" from the registration requirements of the Securities
Act for resales of certain securities ("Rule 144A Securities") to qualified
institutional buyers. To the extent permitted by applicable law, Rule 144A
Securities will not be treated as illiquid for purposes of the foregoing
restriction so long as such securities meet the liquidity guidelines established
by the Board. Pursuant to these guidelines, the Adviser will monitor the
liquidity of the Strategy's investment in Rule 144A Securities. An insufficient
number of qualified institutional buyers interested in purchasing certain
restricted securities held by the Strategy, however, could affect adversely the
marketability of such portfolio securities and the Strategy might be unable to
dispose of such securities promptly or at reasonable prices.

            The Adviser, acting under the oversight of the Board, will monitor
the liquidity of restricted securities in the Strategy that are eligible for
resale pursuant to Rule 144A. In reaching liquidity decisions, the Adviser will
consider, among others, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers issuing quotations to
purchase or sell the security; (3) the number of other potential purchasers of
the security; (4) the number of dealers undertaking to make a market in the
security; (5) the nature of the security (including its unregistered nature) and
the nature of the marketplace for the security (e.g., the time needed to dispose
of the security, the method of soliciting offers and the mechanics of the
transfer); and (6) any applicable SEC interpretation or position with respect to
such type of securities.

Investments in Exchange-Traded Funds and Other Investment Companies
-------------------------------------------------------------------

            The Strategy may invest, sometimes significantly, in shares of ETFs,
subject to the restrictions and limitations of the 1940 Act or any applicable
rules or regulations, exemptive orders or regulatory guidance thereunder. ETFs
are pooled investment vehicles, which may be managed or unmanaged, that
generally seek to track the performance of a specific index. The ETFs in which
the Strategy invests will not be able to replicate exactly the performance of
the indices they track because the total return generated by the securities will
be reduced by transaction costs incurred in adjusting the actual balance of the
securities. In addition, the ETFs in which the Strategy invests will incur
expenses not incurred by their applicable indices. Certain securities comprising
the indices tracked by the ETFs may, from time to time, temporarily be
unavailable, which may further impede the ability of the ETFs to track their
applicable indices. The market value of the ETF shares may differ from their
NAV. This difference in price may be due to the fact that the supply and demand
in the market for ETF shares at any point in time is not always identical to the
supply and demand in the market for the underlying basket of securities.
Accordingly, there may be times when an ETF's shares trade at a discount to its
NAV.

            The Strategy may also invest in investment companies other than ETFs
as permitted by the 1940 Act or the rules and regulations thereunder. As with
ETF investments, if the Strategy acquires shares in other investment companies,
shareholders would bear, indirectly, the expenses of such investment companies
(which may include management and advisory fees), which are in addition to the
Strategy's expenses. The Strategy intends to invest uninvested cash balances in
an affiliated money market fund as permitted by Rule 12d1-1 under the 1940 Act.

Loans of Portfolio Securities
-----------------------------

            The Strategy may seek to increase income by lending portfolio
securities to brokers, dealers, and financial institutions ("borrowers") to the
extent permitted under the 1940 Act or the rules or 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.
Under the securities lending program, all securities loans will be secured
continually by cash collateral. A principal risk in lending portfolio securities
is that the borrower will fail to return the loaned securities upon termination
of the loan and that the collateral will not be sufficient to replace the
loaned securities upon the borrower's default.

            In determining whether to lend securities to a particular borrower,
the Adviser (subject to the oversight by the Boards) will consider all relevant
facts and circumstances, including the creditworthiness of the borrower. The
loans would be made only to firms deemed by the Adviser to be creditworthy and
when, in the judgment of the Adviser, the consideration that can be earned
currently from securities loans of this type justifies the attendant risk. The
Strategy will be compensated for the loan from a portion of the net return from
the interest earned on the cash collateral after a rebate paid to the borrower
(which may be a negative amount - i.e., the borrower may pay a fee to the
Strategy in connection with the loan) and payments for fees paid to the
securities lending agent and for certain other administrative expenses.

            The Strategy will have the right to call a loan and obtain the
securities loaned on notice to the borrower within the normal and customary
settlement time for the securities. While securities are on loan, the borrower
is obligated to pay the Strategy amounts equal to any income or other
distribution from the securities.

            The Strategy will invest any cash collateral in a money market fund
that complies with Rule 2a-7, has been approved by the Board and is expected to
be advised by the Adviser. Any such investment of cash collateral will be
subject to the money market fund's investment risk. The Strategy may pay
reasonable finders', administrative, and custodial fees in connection with a
loan.

            The Strategy will not have the right to vote any securities having
voting rights during the existence of the loan. The Strategy will have the right
to regain record ownership of loaned securities or equivalent securities in
order to exercise voting or ownership rights. When the Strategy lends its
securities, its investment performance will continue to reflect the value of
securities on loan.

Preferred Stock
---------------

            The Strategy may invest in preferred stock. Preferred stock is an
equity security that has features of debt because it generally entitles the
holder to periodic payments at a fixed rate of return. Preferred stock is
subordinated to any debt the issuer has outstanding but has liquidation
preference over common stock. Accordingly, preferred stock dividends are not
paid until all debt obligations are first met. Preferred stock may be subject to
more fluctuations in market value, due to changes in market participants'
perceptions of the issuer's ability to continue to pay dividends, than debt of
the same issuer.

Repurchase Agreements and Buy/Sell Back Transactions
----------------------------------------------------

            A repurchase agreement is an agreement by which the Strategy
purchases a security and obtains a simultaneous commitment from the seller to
repurchase the security at an agreed-upon price and date, normally one day or a
week later. The purchase and repurchase obligations are transacted under one
document. The resale price is greater than the purchase price, reflecting an
agreed-upon "interest rate" that is effective for the period of time the buyer's
money is invested in the security, and which is related to the current market
rate of the purchased security rather than its coupon rate. During the term of
the repurchase agreement, the Strategy monitors on a daily basis the market
value of the securities subject to the agreement and, if the market value of the
securities falls below the resale amount provided under the repurchase
agreement, the seller under the repurchase agreement is required to provide
additional securities or cash equal to the amount by which the market value of
the securities falls below the resale amount. Because a repurchase agreement
permits the Strategy to invest temporarily available cash on a
fully-collateralized basis, repurchase agreements permit the Strategy to earn a
return on temporarily available cash while retaining "overnight" flexibility in
pursuit of investments of a longer-term nature. Repurchase agreements may
exhibit the characteristics of loans by the Strategy.

            The obligation of the seller under the repurchase agreement is not
guaranteed, and there is a risk that the seller may fail to repurchase the
underlying security, whether because of the seller's bankruptcy or otherwise. In
such event, the Strategy would attempt to exercise its rights with respect to
the underlying security, including possible sale of the securities. The Strategy
may incur various expenses in connection with the exercise of its rights and may
be subject to various delays and risks of loss, including (a) possible declines
in the value of the underlying securities, (b) possible reduction in levels of
income and (c) lack of access to the securities (if they are held through a
third-party custodian) and possible inability to enforce the Strategy's rights.
The Board has established procedures, which are periodically reviewed by the
Board, pursuant to which the Adviser monitors the creditworthiness of the
dealers with which the Strategy enters into repurchase agreement transactions.

            The Strategy may enter into buy/sell back transactions, which are
similar to repurchase agreements. In this type of transaction, the Strategy
enters a trade to buy securities at one price and simultaneously enters a trade
to sell the same securities at another price on a specified date. Similar to a
repurchase agreement, the repurchase price is higher than the sale price and
reflects current interest rates. Unlike a repurchase agreement, however, the
buy/sell back transaction, though done simultaneously, is two separate legal
agreements. A buy/sell back transaction also differs from a repurchase agreement
in that the seller is not required to provide margin payments if the value of
the securities falls below the repurchase price because the transaction is two
separate transactions. The Strategy has the risk of changes in the value of the
purchased security during the term of the buy/sell back agreement although these
agreements typically provide for the repricing of the original transaction at a
new market price if the value of the security changes by a specific amount.

Rights and Warrants
-------------------

            The Strategy may invest in rights or warrants which entitle the
holder to buy equity securities at a specific price for a specific period of
time, but will do so only if the equity securities themselves are deemed
appropriate by the Adviser for inclusion in the Strategy's portfolio. Rights and
warrants may be considered more speculative than certain other types of
investments in that they do not entitle a holder to dividends or voting rights
with respect to the securities which may be purchased nor do they represent any
rights in the assets of the issuing company. Also, the value of a right or
warrant does not necessarily change with the value of the underlying securities
and a right or warrant ceases to have value if it is not exercised prior to the
expiration date.

Short Sales
-----------

            The Strategy expects to sell securities short as a regular part of
its portfolio management. A short sale is effected by selling a security that
the Strategy does not own, or if the Strategy does own such security, it is not
to be delivered upon consummation of sale. A short sale is against the box to
the extent that the Strategy contemporaneously owns or has the right to obtain
securities identical to those sold. A short sale of a security involves the risk
that, instead of declining, the price of the securities sold short will rise. If
the price of the security sold short increases between the time of the short
sale and the time the Strategy replaces the borrowed security, the Strategy will
incur a loss; conversely, if the price declines, the Strategy will realize a
capital gain. Although the Strategy's gain is limited to the price at which it
sold the security short, its potential loss is unlimited since there is a
theoretically unlimited potential for the market price of equity securities of
the security sold short to increase. Short sales may be used in some cases by
the Strategy to defer the realization of gain or loss for federal income tax
purposes on securities then owned by the Strategy.

Standby Commitment Agreements
-----------------------------

            The Strategy may from time to time enter into standby commitment
agreements. Such agreements commit the Strategy, for a stated period of time, to
purchase a stated amount of a security that may be issued and sold to the
Strategy at the option of the issuer. The price and coupon of the security are
fixed at the time of the commitment. At the time of entering into the agreement
the Strategy is paid a commitment fee, regardless of whether or not the security
ultimately is issued, which is typically approximately 0.5% of the aggregate
purchase price of the security which the Strategy has committed to purchase. The
fee is payable whether or not the security is ultimately issued.

            There can be no assurance that the securities subject to a standby
commitment will be issued and the value of the security, if issued, on the
delivery date may be more or less than its purchase price. Since the issuance of
the security underlying the commitment is at the option of the issuer, the
Strategy will bear the risk of capital loss in the event the value of the
security declines and may not benefit from an appreciation in the value of the
security during the commitment period if the issuer decides not to issue and
sell the security to the Strategy.

            The purchase of a security subject to a standby commitment agreement
and the related commitment fee will be recorded on the date on which the
security can reasonably be expected to be issued and the value of the security
will thereafter be reflected in the calculation of the Strategy's NAV. The cost
basis of the security will be adjusted by the amount of the commitment fee. In
the event the security is not issued, the commitment fee will be recorded as
income on the expiration date of the standby commitment.

Structured Products
-------------------

            The Strategy may invest in structured products. Structured products,
including indexed or structured securities, combine the elements of futures
contracts or options with those of debt, preferred equity or a depositary
instrument. Generally, the principal amount, amount payable upon maturity or
redemption, or interest rate of a structured product is tied (either positively
or negatively) to prices, changes in prices, or differences between prices, of
underlying assets, such as securities, currencies, intangibles, goods, articles
or commodities or by reference to an unrelated benchmark related to an objective
index, economic factor or other measure, such as interest rates, currency
exchange rates, commodity indices, and securities indices. The interest rate or
(unlike most fixed income securities) the principal amount payable at maturity
of a structured product may be increased or decreased depending on changes in
the value of the underlying asset or benchmark.

            Structured products may take a variety of forms. Most commonly, they
are in the form of debt instruments with interest or principal payments or
redemption terms determined by reference to the value of a currency or commodity
or securities index at a future point in time, but may also be issued as
preferred stock with dividend rates determined by reference to the value of a
currency or convertible securities with the conversion terms related to a
particular commodity.

            Investing in structured products may be more efficient and less
expensive for the Strategy than investing in the underlying assets or benchmarks
and the related derivative. These investments can be used as a means of pursuing
a variety of investment goals, including currency hedging, duration management
and increased total return. In addition, structured products may be a
tax-advantaged investment in that they generate income that may be distributed
to shareholders as income rather than short-term capital gains that may
otherwise result from a derivatives transaction.

            Structured products, however, have more risk than traditional types
of debt or other securities. These products may not bear interest or pay
dividends. The value of a structured product or its interest rate may be a
multiple of a benchmark and, as a result, may be leveraged and move (up or down)
more steeply and rapidly than the benchmark. Under certain conditions, the
redemption value of a structured product could be zero. Structured products are
potentially more volatile and carry greater market risks than traditional debt
instruments. The prices of the structured instrument and the benchmark or
underlying asset may not move in the same direction or at the same time.
Structured products may be less liquid and more difficult to price than less
complex securities or instruments or more traditional debt securities. The risk
of these investments can be substantial with the possibility that the entire
principal amount is at risk. The purchase of structured products also exposes
the Strategy to the credit risk of the issuer of the structured product.

            -Structured Notes and Indexed Securities: The Strategy may invest in
a particular type of structured instrument sometimes referred to as a
"structured note". The terms of these notes may be structured by the issuer and
the purchaser of the note. Structured notes are derivative debt instruments, the
interest rate or principal of which is determined by an unrelated indicator (for
example, a currency, security, commodity or index thereof). Indexed securities
may include structured notes as well as securities other than debt securities,
the interest rate or principal of which is determined by an unrelated indicator.
The terms of structured notes and indexed securities may provide that in certain
circumstances no principal is due at maturity, which may result in a total loss
of invested capital. Structured notes and indexed securities may be positively
or negatively indexed, so that appreciation of the unrelated indicator may
produce an increase or a decrease in the interest rate or the value of the
structured note or indexed security at maturity may be calculated as a specified
multiple of the change in the value of the unrelated indicator. Therefore, the
value of such notes and securities may be very volatile. Structured notes and
indexed securities may entail a greater degree of market risk than other types
of debt securities because the investor bears the risk of the unrelated
indicator. Structured notes or indexed securities also may be more volatile,
less liquid, and more difficult to accurately price than less complex securities
and instruments or more traditional debt securities.

            -Commodity Index-Linked Notes and Commodity-Linked Notes: Structured
products may provide exposure to the commodities markets. These structured notes
may include leveraged or unleveraged commodity index-linked notes, which are
derivative debt instruments with principal and/or coupon payments linked to the
performance of commodity indices. They also include commodity-linked notes with
principal and/or coupon payments linked to the value of particular commodities
or commodities futures contracts, or a subset of commodities and commodities
future contracts. The value of these notes will rise or fall in response to
changes in the underlying commodity, commodity futures contract, subset of
commodities or commodities futures contracts or commodity index. These notes
expose the Strategy economically to movements in commodity prices. These notes
also are subject to risks, such as credit, market and interest rate risks, that
in general affect the values of debt securities. In addition, these notes are
often leveraged, increasing the volatility of each note's market value relative
to changes in the underlying commodity, commodity futures contract or commodity
index. Therefore, the Strategy might receive interest or principal payments on
the note that are determined based upon a specified multiple of the change in
value of the underlying commodity, commodity futures contract or index.

Certain Risk and Other Considerations
-------------------------------------

            Borrowing and Use of Leverage. The Strategy may use borrowings for
investment purposes subject to the restrictions of the 1940 Act. Borrowings by
the Strategy result in leveraging of the Strategy's shares of common stock. The
proceeds of such borrowings will be invested in accordance with the Strategy's
investment objective and policies. The Strategy also may create leverage through
the use of derivatives or use leverage for investment purposes by entering into
transactions such as reverse repurchase agreements and forward contracts. This
means that the Strategy will use the cash proceeds made available during the
terms of these transactions to make investments in other securities.

            Utilization of leverage, which is usually considered speculative,
however, involves certain risks to the Strategy's shareholders. These include a
higher volatility of the NAV of the Strategy's shares of common stock and the
relatively greater effect on the NAV of the shares caused by favorable or
adverse changes in market conditions or interest rates. So long as the Strategy
is able to realize a net return on the leveraged portion of its investment
portfolio that is higher than the interest expense paid on borrowings or the
carrying costs of leveraged transactions, the effect of leverage will be to
cause the Strategy's shareholders to realize a higher net return than if the
Strategy were not leveraged. However, to the extent that the interest expense on
borrowings, or the carrying costs of leveraged transactions approaches the net
return on the leveraged portion of the Strategy's investment portfolio, the
benefit of leverage to the Strategy's shareholders will be reduced, and if the
interest expense on borrowings or the carrying costs of leveraged transactions
were to exceed the net return to shareholders, the Strategy's use of leverage
would result in a lower rate of return than if the Strategy were not leveraged.
Similarly, the effect of leverage in a declining market could be a greater
decrease in NAV per share than if the Strategy were not leveraged. In an extreme
case, if the Strategy's current investment income were not sufficient to meet
the interest expense on borrowings or the carrying costs of leveraged
transactions, it could be necessary for the Strategy to liquidate certain of its
investments, thereby reducing the NAV of the Strategy's shares.

            Certain transactions, such as derivatives transactions, forward
commitments, reverse repurchase agreements and short sales, involve leverage and
may expose the Strategy to potential losses that, in some cases, may exceed the
amount originally invested by the Strategy. When the Strategy engages in such
transactions, it will, in accordance with guidance provided by the SEC or its
staff in, among other things, regulations, interpretative releases and no-action
letters, deposit in a segregated account certain liquid assets with a value at
least equal to the Strategy's exposure, on a marked-to-market or on another
relevant basis, to the transaction. Transactions for which assets have been
segregated will not be considered "senior securities" for purposes of the
Strategy's investment restriction concerning senior securities. The segregation
of assets is intended to enable the Strategy to have assets available to satisfy
its obligations with respect to these transactions, but will not limit the
Strategy's exposure to loss.

            Risks of Investments in Foreign Securities. Investing in securities
of non-United States companies which are generally denominated in foreign
currencies, and utilization of derivative investment products denominated in, or
the value of which is dependent upon movements in the relative value of, a
foreign currency, involve certain considerations comprising both risk and
opportunity not typically associated with investing in United States companies.
These considerations include changes in exchange rates and exchange control
regulations, political and social instability, expropriation, imposition of
foreign taxes, less liquid markets and less available information than are
generally the case in the United States, higher transaction costs, less
government supervision of exchanges, brokers and issuers, difficulty in
enforcing contractual obligations, lack of uniform accounting and auditing
standards and greater price volatility.

            There is generally less publicly available information about foreign
companies comparable to reports and ratings that are published about companies
in the United States. Foreign issuers are subject to accounting and financial
standards and requirements that differ, in some cases significantly, from those
applicable to U.S. issuers. In particular, the assets and profits appearing on
the financial statements of a foreign issuer may not reflect its financial
position or results of operations in the way they would be reflected had the
financial statement been prepared in accordance with U.S. generally accepted
accounting principles. Inflation accounting may indirectly generate losses or
profits. Consequently, financial data may be materially affected by restatements
for inflation and may not accurately reflect the real condition of those issuers
and securities markets. Substantially less information is publicly available
about certain non-U.S. issuers than is available about U.S. issuers.

            Foreign securities may be purchased in over-the-counter markets or
on stock exchanges located in the countries in which the respective principal
offices of the issuers of the various securities are located, if that is the
best available market. Foreign securities markets are generally not as developed
or efficient as those in the United States. While growing in volume, they
usually have substantially less volume than the New York Stock Exchange (the
"Exchange"), and securities of some foreign companies are less liquid and more
volatile than securities of comparable United States companies. Similarly,
volume and liquidity in most foreign bond markets are less than in the United
States and, at times, volatility of price can be greater than in the United
States. Fixed commissions on foreign stock exchanges are generally higher than
negotiated commissions on United States exchanges, although the Strategy will
endeavor to achieve the most favorable net results on its portfolio
transactions. There is generally less government supervision and regulation of
stock exchanges, brokers and listed companies than in the United States.

--------------------------------------------------------------------------------

                            INVESTMENT RESTRICTIONS

--------------------------------------------------------------------------------

Fundamental Investment Policies
-------------------------------

            The following fundamental investment policies may not be changed
without approval by the vote of a majority of the Strategy's outstanding voting
securities, which means the affirmative vote of the holders of (i) 67% or more
of the shares of the Strategy represented at a meeting at which more than 50% of
the outstanding shares are present in person or by proxy or (ii) more than 50%
of the outstanding shares of the Strategy, whichever is less.

            As a matter of fundamental policy, the Strategy may not:

                   (a) concentrate 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;

                   (b) issue any 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;

                   (c) make 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;

                   (d) purchase 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 Strategy from investing in
securities or other instruments backed by real estate or in securities of
companies engaged in the real estate business;

                   (e) purchase or sell commodities except to the extent that
the Strategy may do so in accordance with applicable law and the Strategy's
Prospectus and SAI, as they may be amended from time to time, and without
registering as a commodity pool operator under the Commodity Exchange Act; or

                   (f) act as an underwriter of securities, except that the
Strategy may acquire restricted securities under circumstances in which, if such
securities were sold, the Strategy might be deemed to be an underwriter for
purposes of the Securities Act.

            As a fundamental policy, the Strategy is diversified (as that term
is defined in the 1940 Act). This means that at least 75% of the Strategy's
assets consist of:

            o     Cash or cash items;
            o     Government securities;
            o     Securities of other investment companies; and
            o     Securities of any one issuer that represent not more than 10%
                  of the outstanding voting securities of the issuer of the
                  securities and not more than 5% of the total assets of the
                  Strategy.

Non-Fundamental Investment Policy
---------------------------------

            The following is a description of an operating policy that the
Strategy has adopted but that is not fundamental and is subject to change
without shareholder approval.

            The Strategy may not purchase 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
Strategy may obtain such short-term credits as are necessary for the clearance
of portfolio transactions, and the Strategy may make margin payments in
connection with futures contracts, options, forward contracts, swaps, caps,
floors, collars and other financial instruments.

--------------------------------------------------------------------------------

                           MANAGEMENT OF THE STRATEGY

--------------------------------------------------------------------------------

Adviser
-------

            The Adviser, a Delaware limited partnership with principal offices
at 1345 Avenue of the Americas, New York, New York 10105, has been retained
under an investment advisory agreement (the "Advisory Agreement") to provide
investment advice and, in general, to conduct the management and investment
program of the Strategy under the supervision of the Board (see "Management of
the Strategy" in the Prospectus). The Adviser is an investment adviser
registered under the Investment Advisers Act of 1940, as amended.

            The Adviser is a leading global investment management firm
supervising client accounts with assets as of September 30, 2014, totaling
approximately $473 billion. The Adviser provides management services for many of
the largest U.S. public and private employee benefit plans, endowments,
foundations, public employee retirement funds, banks, insurance companies and
high net worth individuals worldwide.

            As of September 30, 2014, the ownership structure of the Adviser,
expressed as a percentage of general and limited partnership interests, was as
follows:

                AXA and its subsidiaries                       62.9%
                AllianceBernstein Holding L.P.                 35.7
                Unaffiliated holders                            1.4
                                                     ---------------------
                                                             100.0%
                                                     =====================

            As of September 30, 2014, AXA, a societe anonyme organized under the
laws of France and the holding company for an international group of insurance
and related financial services companies, through certain of its subsidiaries
("AXA and its subsidiaries") owned approximately 1.5% of the issued and
outstanding assignments of beneficial ownership of limited partnership interests
("Holding Units") in AllianceBernstein Holding L.P., a Delaware limited
partnership ("Holding"). Holding Units trade publicly on the Exchange under the
ticker symbol "AB".

            AllianceBernstein Corporation (an indirect wholly-owned subsidiary
of AXA) is the general partner of both Holding and the Adviser.
AllianceBernstein Corporation owns 100,000 general partnership units in Holding
and a 1% general partnership interest in the Adviser. Including both the general
partnership and limited partnership interests in Holding and the Adviser, AXA
and its subsidiaries had an approximate 63.5% economic interest in the Adviser
as of September 30, 2014.

Advisory Agreement and Expenses
-------------------------------

            The Adviser serves as investment manager and adviser to the Strategy
and continuously furnishes an investment program for the Strategy and manages,
supervises and conducts the affairs of the Strategy, subject to oversight of the
Board.

            Under the Strategy's Advisory Agreement, the Adviser provides advice
and recommendations with respect to the Strategy's portfolio of securities and
investments, and provides persons satisfactory to the Board to serve as the
Strategy's officers. Such officers or employees may be employees of the Adviser
or the affiliates.

            The Adviser is, under the Advisory Agreement, responsible for
certain expenses incurred by the Strategy, including, for example, office
facilities and certain administrative services, and any expenses incurred in
promoting the sale of Strategy shares (other than the portion of the promotional
expenses borne by the Strategy in accordance with an effective plan pursuant to
Rule 12b-1 under the 1940 Act, and the costs of printing Strategy prospectuses
and other reports to shareholders and fees related to registration with the SEC
and with state regulatory authorities).

            The Strategy has, under its Advisory Agreement, assumed the
obligation for payment of certain of its other expenses, including any taxes
levied against the Strategy, brokerage fees, commissions in connection with the
purchase and sale of portfolio securities, leverage expenses and other
extraordinary expenses. The Strategy may employ its own personnel to perform
services other than those specifically provided to the Strategy by the Adviser.
For such services, it also may utilize personnel employed by the Adviser or its
affiliates. In such event, the services will be provided to the Strategy at cost
and the payments thereto specifically approved by the Board. The Adviser agreed
to voluntarily waive such fees in the amount of $60,461 for the Strategy for the
fiscal year ended July 31, 2014.

            The Advisory Agreement continues in effect from year to year
provided that its continuance is specifically approved at least annually by a
vote of a majority of the Strategy's outstanding voting securities or by the
Board, and in either case, by a majority of the Trustees who are not parties to
the Advisory Agreement or "interested persons", as defined in the 1940 Act, of
any such party at a meeting called for the purpose of voting on such matter. The
continuance of the Advisory Agreement for the Strategy was most recently
approved for an additional term by the Board, including a majority of the
Directors who are not parties to the Advisory Agreement or interested persons of
any such party, at their meeting held on May 6-8, 2014.

            Any material amendment to the Advisory Agreement must be approved by
the vote of a majority of the outstanding securities of the Strategy and by the
vote of a majority of the Directors who are not interested persons of the
Strategy or the Adviser. The Advisory Agreements may be terminated without
penalty on 60 days' written notice at the option of either party, by vote of a
majority of the outstanding voting securities of the Strategy, by a vote of a
majority of the Directors, or by the Adviser and will automatically terminate in
the event of its assignment. The Advisory Agreement provides that in the absence
of willful misfeasance, bad faith or gross negligence on the part of the
Adviser, or of reckless disregard of its obligations thereunder, the Adviser
shall not be liable for any action or failure to act in accordance with its
duties thereunder.

            Certain other clients of the Adviser may have investment objectives
and policies similar to those of the Strategy. The Adviser may, from time to
time, make recommendations which result in the purchase or sale of the
particular security by its other clients simultaneously with a purchase or sale
thereof by the Strategy. If transactions on behalf of more than one client
during the same period increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on price. It is
the policy of the Adviser to allocate advisory recommendations and the placing
of orders in a manner that is deemed equitable by the Adviser to the accounts
involved, including the Strategy. When two or more of the Adviser's clients
(including the Strategy) are purchasing or selling the same security on a given
day through the same broker or dealer, such transactions may be averaged as to
price.

            Under the Advisory Agreement, the Strategy has contractually agreed
to pay a monthly fee to the Adviser at an annual rate of 1.25% of the average
daily net assets of the Strategy. For the fiscal years ended July 31, 2014, July
31, 2013 and July 31, 2012, the Adviser has received from the Strategy advisory
fees of $55,323, $91,144 and $86,475, respectively. Prior to October 31, 2014
and for the Strategy's fiscal years ended July 31, 2014, July 31, 2013 and July
31, 2012, the Adviser agreed to waive its fees and to bear certain expenses so
that total operating expenses did not, on an annual basis, exceed 1.55%, 2.25%,
1.75%, 1.50%, 1.25% and 1.25% of average daily net assets, respectively, for
Class A, Class C, Class R, Class K, Class I and Advisor Class shares. Under the
expense limitation undertaking, $1,004,449, $400,881 and $451,577 was waived
and/or reimbursed by the Adviser for the fiscal years ended July 31, 2014, July
31, 2013 and July 31, 2012, respectively. Effective October 31, 2014, the
Adviser has contractually agreed for the period from the effective date of the
Prospectus to the effective date of the subsequent prospectus incorporating the
Strategy's annual financial statements to waive its fee and bear certain
expenses so that total expenses do not exceed on an annual basis 1.50%, 2.25%,
1.75%, 1.50%, 1.25% and 1.25% of average daily net assets, respectively, for
Class A, Class C, Class R, Class K, Class I and Advisor Class shares. This fee
waiver and/or expense reimbursement agreement may not be terminated before
November 1, 2015. The fee waiver and/or expense reimbursement agreement
automatically extends each subsequent year unless the Adviser provides notice of
its intent not to extend this agreement to the Strategy at least 60 days prior
to the effective date of the Prospectus incorporating the Strategy's annual
financial statements for a subsequent fiscal year.

ALL FUNDS

            The Adviser may act as an investment adviser to other persons, firms
or corporations, including investment companies, and is the investment adviser:
AllianceBernstein Blended Style Series, Inc., AllianceBernstein Bond Fund, Inc.,
AllianceBernstein Cap Fund, Inc., AllianceBernstein Corporate Shares,
AllianceBernstein Core Opportunities Fund, Inc., AllianceBernstein Discovery
Growth Fund, Inc., AllianceBernstein Equity Income Fund, Inc., AllianceBernstein
Exchange Reserves, AllianceBernstein Fixed-Income Shares, Inc.,
AllianceBernstein Global Bond Fund, Inc., AllianceBernstein Global Real Estate
Investment Fund, Inc., AllianceBernstein Global Risk Allocation Fund, Inc.,
AllianceBernstein Global Thematic Growth Fund, Inc., AllianceBernstein Growth
and Income Fund, Inc., AllianceBernstein High Income Fund, Inc.,
AllianceBernstein Institutional Funds, Inc., AllianceBernstein International
Growth Fund, Inc., AllianceBernstein Large Cap Growth Fund, Inc.,
AllianceBernstein Municipal Income Fund, Inc., AllianceBernstein Municipal
Income Fund II, AllianceBernstein Trust, AllianceBernstein Unconstrained Bond
Fund, Inc., AllianceBernstein Variable Products Series Fund, Inc., Sanford C.
Bernstein Fund, Inc., Sanford C. Bernstein Fund II, Inc., The AllianceBernstein
Pooling Portfolios and The AllianceBernstein Portfolios, all registered open-end
investment companies; and to AllianceBernstein Global High Income Fund, Inc.,
AllianceBernstein Income Fund, Inc., AllianceBernstein Multi-Manager Alternative
Fund, AllianceBernstein National Municipal Income Fund, Inc., Alliance
California Municipal Income Fund, Inc., and Alliance New York Municipal Income
Fund, Inc., all registered closed-end investment companies.  The registered
investment companies for which the Adviser serves as investment adviser are
referred to collectively below as the "AllianceBernstein Fund Complex", while
all of these investment companies, except the Sanford C. Bernstein Fund, Inc.
and the AllianceBernstein Multi-Manager Alternative Fund, are referred to
collectively below as the "AllianceBernstein Funds".

Board of Directors Information
------------------------------

            Certain information concerning the Directors is set forth below.



                                                                           PORTFOLIOS IN         OTHER PUBLIC COMPANY
                                                                           ALLIANCEBERNSTEIN     DIRECTORSHIPS
NAME, ADDRESS,* AGE                PRINCIPAL OCCUPATION(S)                 FUND COMPLEX          HELD BY
AND                                DURING PAST                             OVERSEEN BY           DIRECTOR IN THE
(YEAR ELECTED**)                   FIVE YEARS OR LONGER                    DIRECTOR              PAST FIVE YEARS
----------------                   --------------------                    -----------------     --------------------
                                                                                       

INDEPENDENT DIRECTORS

Chairman of the Board

Marshall C. Turner, Jr.,#           Private Investor since prior to 2009.         103           Xilinx, Inc.
73                                  Former CEO of Dupont Photomasks, Inc.                       (programmable logic
(2010)                              (components of semi-conductor                               semi-conductors) and
                                    manufacturing), 2003-2006, and                              SunEdison, Inc.
                                    interim CEO 1999-2000.  He has                              (semi-conductor
                                    extensive operating and early-stage                         substrates, solar
                                    investment experience, including                            materials and solar
                                    prior service as general partner of                         power plants) since
                                    three institutional venture capital                         prior to 2009 until
                                    partnerships, and serves on the                             July 2014
                                    boards of three education and
                                    science-related non-profit
                                    organizations.  He has served as a
                                    director of one AllianceBernstein
                                    fund since 1992, and director or
                                    trustee of multiple AllianceBernstein
                                    funds since 2005.  He has been
                                    Chairman of the AllianceBernstein
                                    Funds since January 2014, and the
                                    Chairman of the Independent Directors
                                    Committees of such Funds since
                                    February 2014.

John H. Dobkin,#                    Independent Consultant since prior to         103           None
72                                  2009.  Formerly, President of Save
(2010)                              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 AllianceBernstein Funds
                                    since 1992.

Michael J. Downey,#                 Private Investor since prior to 2009.         103           Asia Pacific Fund,
70                                  Formerly, managing partner of                               Inc. (registered
(2010)                              Lexington Capital, LLC (investment                          investment company)
                                    advisory firm) from December 1997                           since prior to
                                    until December 2003. From 1987 until                        2009, Prospect
                                    1993, Chairman and CEO of Prudential                        Acquisition Corp.
                                    Mutual Fund Management, director of                         (financial services)
                                    the Prudential mutual funds and                             from 2007 until 2009
                                    member of the Executive Committee of                        and The Merger Fund
                                    Prudential Securities Inc. He has                           (registered investment
                                    served as a director or trustee of                          company) since prior
                                    the AllianceBernstein Funds since                           to 2009 until 2013
                                    2005 and is a director and Chairman
                                    of one other registered investment
                                    company.

William H. Foulk, Jr.,#             Investment Adviser and an Independent         103           None
82                                  Consultant since prior to 2009.
(2010)                              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
                                    AllianceBernstein Funds since 1983,
                                    and was Chairman of the Independent
                                    Directors Committees of the
                                    AllianceBernstein Funds from 2003
                                    to early February 2014.  He served
                                    as Chairman of such Funds from 2003
                                    through December 2013.

D. James Guzy,#                     Chairman of the Board of SRC                  103           PLX Technology
78                                  Computers, Inc. (semi-conductors),                          (semi-conductors)
(2010)                              with which he has been associated                           since prior to 2009
                                    since prior to 2009. He served as                           until November 2013,
                                    Chairman of the Board of PLX                                and Cirrus Logic
                                    Technology (semi-conductors) since                          Corporation
                                    prior to 2009 until November 2013. He                       (semi-conductors)
                                    was a director of Intel Corporation                         since prior to 2009
                                    (semi-conductors) from 1969 until                           until July 2011
                                    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 AllianceBernstein
                                    Funds since 1982.

Nancy P. Jacklin,#                  Professorial Lecturer at the Johns            103           None
66                                  Hopkins School of Advanced
(2010)                              International Studies since 2008.
                                    Formerly, 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
                                    AllianceBernstein Funds since 2006
                                    and has been Chairman of the
                                    Governance and Nominating Committees
                                    of the Funds since August 2014.

Garry L. Moody,#                    Independent Consultant. Formerly,             103           None
62                                  Partner, Deloitte & Touche LLP
(2010)                              (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); 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 both
                                    the Governing Council of the
                                    Independent Directors Council (IDC),
                                    an organization of independent
                                    directors of mutual funds, and 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
                                    AllianceBernstein Funds since 2008.

Earl D. Weiner,#                    Of Counsel, and Partner prior to              103           None
75                                  January 2007, of the law firm
(2010)                              Sullivan & 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
                                    has served as a director or trustee
                                    of the AllianceBernstein Funds
                                    since 2007 and served as Chairman of
                                    the Governance and Nominating
                                    Committees of the AllianceBernstein
                                    Funds from 2007 until August 2014.

INTERESTED DIRECTOR

Robert M. Keith,+                   Senior Vice President of the Adviser          103           None
54                                  and the head of AllianceBernstein
(2010)                              Investments, Inc. ("ABI")++ since
                                    July 2008; Director of ABI and
                                    President of the AllianceBernstein
                                    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, he was 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 Fund's 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 Fund's 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 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 Strategy.


            The management of the business and affairs of the Strategy are
overseen by the Board. Directors who are not "interested persons" of the Fund as
defined in the 1940 Act, are referred to as "Independent Directors", and
Directors who are "interested persons" of the Fund are referred to as
"Interested Directors". Certain information concerning the Fund's governance
structure and each Director is set forth below.

            Experience, Skills, Attributes, and Qualifications of the Fund's
Directors. The Governance and Nominating Committee of the Board, which is
composed of Independent Directors, reviews the experience, qualifications,
attributes and skills of potential candidates for nomination or election by the
Board, and conducts a similar review in connection with the proposed nomination
of current Directors for re-election by shareholders at any annual or special
meeting of shareholders. In evaluating a candidate for nomination or election as
a Director the Governance and Nominating Committee takes into account the
contribution that the candidate would be expected to make to the diverse mix of
experience, qualifications, attributes and skills that the Governance and
Nominating Committee believes contributes to good governance for the Fund.
Additional information concerning the Governance and Nominating Committee's
consideration of nominees appears in the description of the Committee below.

            The Board believes that, collectively, the Directors have balanced
and diverse experience, qualifications, attributes, and skills, which allow the
Board to operate effectively in governing the Fund and protecting the interests
of shareholders. The Board has concluded that, based on each Director's
experience, qualifications, attributes or skills on an individual basis and in
combination with those of the other Directors, each Director is qualified and
should continue to serve as such.

            In determining that a particular Director was and continues to be
qualified to serve as a Director, the Board has considered a variety of
criteria, none of which, in isolation, was controlling. In addition, the Board
has taken into account the actual service and commitment of each Director during
his or her tenure (including the Director's commitment and participation in
Board and committee meetings, as well as his or her current and prior leadership
of standing and ad hoc committees) in concluding that each should continue to
serve. Additional information about the specific experience, skills, attributes
and qualifications of each Director, which in each case led to the Board's
conclusion that the Director should serve (or continue to serve) as trustee or
director of the Fund, is provided in the table above and in the next paragraph.

            Among other attributes and qualifications common to all Directors
are their ability to review critically, evaluate, question and discuss
information provided to them (including information requested by the Directors),
to interact effectively with the Adviser, other service providers, counsel and
the Fund's independent registered public accounting firm, and to exercise
effective business judgment in the performance of their duties as Directors. In
addition to his or her service as a Director of the Fund and other
AllianceBernstein Funds as noted in the table above: Mr. Dobkin has experience
as an executive of a number of organizations and served as Chairman of the Audit
Committees of many of the AllianceBernstein Funds from 2001 to 2008; Mr. Downey
has experience in the investment advisory business including as Chairman and
Chief Executive Officer of a large fund complex and as director of a number of
non-AllianceBernstein funds and as Chairman of a non-AllianceBernstein
closed-end fund; Mr. Foulk has experience in the investment advisory and
securities businesses, including as Deputy Comptroller and Chief Investment
Officer of the State of New York (where his responsibilities included bond
issuances, cash management and oversight of the New York Common Retirement
Fund), has served as Chairman of the Independent Directors Committee from 2003
until early February 2014, served as Chairman of the AllianceBernstein Funds
from 2003 through December 2013, and is active in a number of mutual fund
related organizations and committees; Mr. Guzy has experience as a corporate
director including as Chairman of a public company and Chairman of the Finance
Committee of a large public technology company; Ms. Jacklin has experience as a
financial services regulator, as U.S. Executive Director of the International
Monetary Fund (which is responsible for ensuring the stability of the
international monetary system), and as a financial services lawyer in private
practice and Chairman of the Governance and Nominating Committees of the Funds
since August 2014; Mr. Keith has experience as an executive of the Adviser with
responsibility for, among other things, the AllianceBernstein Funds; Mr. Moody
has experience as a certified public accountant including experience as Vice
Chairman and U.S. and Global Investment Management Practice Partner for a major
accounting firm, is a member of both the governing council of an organization of
independent directors of mutual funds, and the Trustee Advisory Board of
BoardIQ, a biweekly publication focused on issues and news affecting directors
of mutual funds, and has served as a director or trustee and Chairman of the
Audit Committee of the AllianceBernstein Funds since 2008; Mr. Turner has
experience as a director (including as Chairman and Chief Executive Officer of a
number of companies) and as a venture capital investor including prior service
as general partner of three institutional venture capital partnerships, and has
served as Chairman of the AllianceBernstein Funds since January 2014 and the
Independent Directors Committee of such Funds since February 2014; and Mr.
Weiner has experience as a securities lawyer whose practice includes registered
investment companies and as director or trustee of various non-profit
organizations and Chairman or Vice Chairman of a number of them, and has served
as Chairman of the Governance and Nominating Committees of the AllianceBernstein
Funds from 2007 until August 2014. The disclosure herein of a director's
experience, qualifications, attributes and skills does not impose on such
director any duties, obligations, or liability that are greater than the duties,
obligations and liability imposed on such director as a member of the Board and
any committee thereof in the absence of such experience, qualifications,
attributes and skills.

            Board Structure and Oversight Function. The Board is responsible for
oversight of the Strategy. The Strategy has engaged the Adviser to manage the
Strategy on a day-to-day basis. The Board is responsible for overseeing the
Adviser and the Strategy's other service providers in the operation of the
Strategy in accordance with the Strategy's investment objective and policies and
otherwise in accordance with its prospectus, the requirements of the 1940 Act
and other applicable Federal, state and other securities and other laws, and the
Fund's charter and bylaws. The Board typically meets in-person at regularly
scheduled meetings eight times throughout the year. In addition, the Directors
may meet in-person or by telephone at special meetings or on an informal basis
at other times. The Independent Directors also regularly meet without the
presence of any representatives of management. As described below, the Board has
established three standing committees - the Audit, Governance and Nominating and
Independent Directors Committees - and may establish ad hoc committees or
working groups from time to time, to assist the Board in fulfilling its
oversight responsibilities. Each committee is composed exclusively of
Independent Directors. The responsibilities of each committee, including its
oversight responsibilities, are described further below. The Independent
Directors have also engaged independent legal counsel, and may from time to time
engage consultants and other advisors, to assist them in performing their
oversight responsibilities.

            An Independent Director serves as Chairman of the Board. The
Chairman's duties include setting the agenda for each Board meeting in
consultation with management, presiding at each Board meeting, meeting with
management between Board meetings, and facilitating communication and
coordination between the Independent Directors and management. The Directors
have determined that the Board's leadership by an Independent Director and its
committees composed exclusively of Independent Directors is appropriate because
they believe it sets the proper tone to the relationships between the Strategy,
on the one hand, and the Adviser and other service providers, on the other, and
facilitates the exercise of the Board's independent judgment in evaluating and
managing the relationships. In addition, the Fund is required to have an
Independent Director as Chairman pursuant to certain 2003 regulatory settlements
involving the Adviser.

            Risk Oversight. The Strategy is subject to a number of risks,
including investment, compliance and operational risks. Day-to-day risk
management with respect to the Strategy resides with the Adviser or other
service providers (depending on the nature of the risk), subject to supervision
by the Adviser. The Board has charged the Adviser and its affiliates with (i)
identifying events or circumstances the occurrence of which could have
demonstrable and material adverse effects on the Strategy; (ii) to the extent
appropriate, reasonable or practicable, implementing processes and controls
reasonably designed to lessen the possibility that such events or circumstances
occur or to mitigate the effects of such events or circumstances if they do
occur; and (iii) creating and maintaining a system designed to evaluate
continuously, and to revise as appropriate, the processes and controls described
in (i) and (ii) above.

            Risk oversight forms part of the Board's general oversight of the
Strategy's investment program and operations and is addressed as part of various
regular Board and committee activities. The Strategy's investment management and
business affairs are carried out by or through the Adviser and other service
providers. Each of these persons has an independent interest in risk management
but the policies and the methods by which one or more risk management functions
are carried out may differ from the Strategy's and each other's in the setting
of priorities, the resources available or the effectiveness of relevant
controls. Oversight of risk management is provided by the Board and the Audit
Committee. The Directors regularly receive reports from, among others,
management (including the Global Heads of Investment Risk and Trading Risk of
the Adviser), the Strategy's Senior Officer (who is also the Strategy's
independent compliance officer), the Strategy's Chief Compliance Officer, its
independent registered public accounting firm, and counsel, and internal
auditors for the Adviser, as appropriate, regarding risks faced by the Strategy
and the Adviser's risk management programs.

            Not all risks that may affect the Strategy can be identified, nor
can controls be developed to eliminate or mitigate their occurrence or effects.
It may not be practical or cost-effective to eliminate or mitigate certain
risks, the processes and controls employed to address certain risks may be
limited in their effectiveness, and some risks are simply beyond the reasonable
control of the Strategy or the Adviser, its affiliates or other service
providers. Moreover, it is necessary to bear certain risks (such as
investment-related risks) to achieve the Strategy's goals. As a result of the
foregoing and other factors the Strategy's ability to manage risk is subject to
substantial limitations.

            Board Committees. The Board has three standing committees - an Audit
Committee, a Governance and Nominating Committee and an Independent Directors
Committee. The members of the Audit, Governance and Nominating, and Independent
Directors Committees are identified above.

            The function of the Audit Committee is to assist the Board in its
oversight of the Strategy's financial reporting process. The Audit Committee of
the Board met four times during the Strategy's most recently completed fiscal
year.

            The function of the Governance and Nominating Committee includes the
nomination of persons to fill any vacancies or newly created positions on the
Board. The Governance and Nominating Committee of the Board met three times
during the Strategy's most recently completed fiscal year.

            The Board has adopted a charter for its Governance and Nominating
Committee. Pursuant to the charter, the Committee assists the Board in carrying
out its responsibilities with respect to governance of the Strategy and
identifies, evaluates, selects and nominates candidates for the Board. The
Committee may also set standards or qualifications for Directors and reviews at
least annually the performance of each Director, taking into account factors
such as attendance at meetings, adherence to Board policies, preparation for and
participation at meetings, commitment and contribution to the overall work of
the Board and its committees, and whether there are health or other reasons that
might affect the Director's ability to perform his or her duties. The Committee
may consider candidates as Directors submitted by the Strategy's current Board
members, officers, the Adviser, stockholders and other appropriate sources.

            Pursuant to the Charter, the Governance and Nominating Committee
will consider candidates for nomination as a Director submitted by a shareholder
or group of shareholders who have beneficially owned at least 5% of the
Strategy's common stock or shares of beneficial interest for at least two years
prior to the time of submission and who timely provide specified information
about the candidates and the nominating shareholder or group. To be timely for
consideration by the Governance and Nominating Committee, the submission,
including all required information, must be submitted in writing to the
attention of the Secretary at the principal executive offices of the Strategy
not less than 120 days before the date of the proxy statement for the previous
year's annual meeting of shareholders. If the Strategy did not hold an annual
meeting of shareholders in the previous year, the submission must be delivered
or mailed and received within a reasonable amount of time before the Strategy
begins to print and mail its proxy materials. Public notice of such upcoming
annual meeting of shareholders may be given in a shareholder report or other
mailing to shareholders or by other means deemed by the Governance and
Nominating Committee or the Board to be reasonably calculated to inform
shareholders.

            Shareholders submitting a candidate for consideration by the
Governance and Nominating Committee must provide the following information to
the Governance and Nominating Committee: (i) a statement in writing setting
forth (A) the name, date of birth, business address and residence address of the
candidate; (B) any position or business relationship of the candidate, currently
or within the preceding five years, with the shareholder or an associated person
of the shareholder as defined below; (C) the class or series and number of all
shares of the Strategy owned of record or beneficially by the candidate; (D) any
other information regarding the candidate that is required to be disclosed about
a nominee in a proxy statement or other filing required to be made in connection
with the solicitation of proxies for election of Directors pursuant to Section
20 of the 1940 Act and the rules and regulations promulgated thereunder; (E)
whether the shareholder believes that the candidate is or will be an "interested
person" of the Strategy (as defined in the 1940 Act) and, if believed not to be
an "interested person", information regarding the candidate that will be
sufficient for the Strategy to make such determination; and (F) information as
to the candidate's knowledge of the investment company industry, experience as a
director or senior officer of public companies, directorships on the boards of
other registered investment companies and educational background; (ii) the
written and signed consent of the candidate to be named as a nominee and to
serve as a Director if elected; (iii) the written and signed agreement of the
candidate to complete a directors' and officers' questionnaire if elected; (iv)
the shareholder's consent to be named as such by the Strategy; (v) the class or
series and number of all shares of the Strategy owned beneficially and of record
by the shareholder and any associated person of the shareholder and the dates on
which such shares were acquired, specifying the number of shares owned
beneficially but not of record by each, and stating the names of each as they
appear on the Strategy's record books and the names of any nominee holders for
each; and (vi) a description of all arrangements or understandings between the
shareholder, the candidate and/or any other person or persons (including their
names) pursuant to which the recommendation is being made by the shareholder.
"Associated person of the shareholder" means any person who is required to be
identified under clause (vi) of this paragraph and any other person controlling,
controlled by or under common control with, directly or indirectly, (a) the
shareholder or (b) the associated person of the shareholder.

            The Governance and Nominating Committee may require the shareholder
to furnish such other information as it may reasonably require or deem necessary
to verify any information furnished pursuant to the nominating procedures
described above or to determine the qualifications and eligibility of the
candidate proposed by the shareholder to serve on the Board. If the shareholder
fails to provide such other information in writing within seven days of receipt
of written request from the Governance and Nominating Committee, the
recommendation of such candidate as a nominee will be deemed not properly
submitted for consideration, and will not be considered, by the Committee.

            The Governance and Nominating Committee will consider only one
candidate submitted by such a shareholder or group for nomination for election
at an annual meeting of shareholders. The Governance and Nominating Committee
will not consider self-nominated candidates. The Governance and Nominating
Committee will consider and evaluate candidates submitted by shareholders on the
basis of the same criteria as those used to consider and evaluate candidates
submitted from other sources. These criteria include the candidate's relevant
knowledge, experience, and expertise, the candidate's ability to carry out his
or her duties in the best interests of the Strategy, and the candidate's ability
to qualify as an Independent Director or Director. When assessing a candidate
for nomination, the Committee considers whether the individual's background,
skills, and experience will complement the background, skills, and experience of
other nominees and will contribute to the diversity of the Board.


            The function of the Independent Directors Committee is to consider
and take action on matters that the Board or Committee believes should be
addressed in executive session of the Independent Directors, such as review and
approval of the Advisory and Distribution Services Agreements. The Independent
Directors Committee of the Strategy met seven times during the Strategy's most
recently completed fiscal year.

            The dollar range of the Strategy's securities owned by each Director
and the aggregate dollar range of securities of funds in the AllianceBernstein
Fund Complex owned by each Director are set forth below.

                                                         AGGREGATE DOLLAR
                                DOLLAR RANGE             RANGE OF EQUITY
                                 OF EQUITY              SECURITIES IN THE
                               SECURITIES IN            ALLIANCEBERNSTEIN
                             THE STRATEGY AS OF         FUND COMPLEX AS OF
                             DECEMBER 31, 2013          DECEMBER 31, 2013
                             -----------------          -----------------

John H. Dobkin                    None                   Over $100,000
Michael J. Downey                 None                   Over $100,000
William H. Foulk, Jr.             None                   Over $100,000
D. James Guzy                     None                   Over $100,000
Nancy P. Jacklin                  None                   Over $100,000
Robert M. Keith                   None                       None
Garry L. Moody                    None                   Over $100,000
Marshall C. Turner, Jr.           None                   Over $100,000
Earl D. Weiner                    None                   Over $100,000

Officer Information
-------------------

            Certain information concerning the Strategy's officers is set forth
below.




NAME, ADDRESS,*                             POSITION(S) HELD               PRINCIPAL OCCUPATION
AND AGE                                     WITH FUND                      DURING PAST 5 YEARS
----------------                            ------------------------       -------------------
                                                                     
Robert M. Keith,                            President and Chief Executive  See biography above.
54                                          Officer

Philip L. Kirstein,                         Senior Vice President and      Senior Vice President and
69                                          Independent Compliance         Independent Compliance Officer of
                                            Officer                        the Funds in the AllianceBernstein
                                                                           Fund Complex, with which he has been
                                                                           associated since October 2004.
                                                                           Prior thereto, he was Of Counsel to
                                                                           Kirkpatrick & Lockhart, LLP from
                                                                           October 2003 to October 2004, and
                                                                           General Counsel of Merrill Lynch
                                                                           Investment Managers, L.P. prior to
                                                                           March 2003.

Emilie D. Wrapp,                            Secretary                      Senior Vice President, Assistant
58                                                                         General Counsel and Assistant
                                                                           Secretary of ABI,** with which she
                                                                           has been associated since prior to
                                                                           2009.

Joseph J. Mantineo,                         Treasurer and Chief Financial  Senior Vice President of ABIS,**
55                                          Officer                        with which he has been associated
                                                                           since prior to 2009.

Vincent S. Noto,                            Chief Compliance Officer       Vice President and Mutual Fund Chief
49                                                                         Compliance Officer of the Adviser**
                                                                           since 2014.  Prior thereto, he was
                                                                           Vice President and Director of
                                                                           Mutual Fund Compliance of the
                                                                           Adviser** since 2009.

Phyllis J. Clarke,                          Controller and Chief           Vice President of ABIS,** with which
53                                          Accounting Officer             she has been associated since prior
                                                                           to 2009.

Vadim Zlotnikov,                            Vice President                 Senior Vice President of the
52                                                                         Adviser,** with which he has been
                                                                           associated since prior to 2009.

Yun Chen,                                   Vice President                 Senior Vice President of the
37                                                                         Adviser,** since April 2008. Prior
                                                                           thereto, he worked in various areas
                                                                           of quantitative investments at
                                                                           Goldman Sachs Asset Management with
                                                                           which he had been associated since
                                                                           prior to 2009.


--------
*  The address for the Strategy's Officers is 1345 Avenue of the Americas, New
   York, NY 10105.
** The Adviser, ABI and ABIS are affiliates of the Strategy.

            The Strategy does not pay any fees to, or reimburse expenses of, its
Directors who are considered "interested persons" (as defined in Section
2(a)(19) of the 1940 Act) of the Strategy. The aggregate compensation paid by
the Strategy to each of the Directors during its fiscal year ended July 31,
2014, the aggregate compensation paid to each of the Directors during calendar
year 2013 by the AllianceBernstein Fund Complex, and the total number of
registered investment companies in the AllianceBernstein Fund Complex with
respect to which each of the Directors serves as a director or trustee, are set
forth below. Neither the Strategy nor any other registered investment company in
the AllianceBernstein Fund Complex provides compensation in the form of pension
or retirement benefits to any of its Directors. Certain of the Directors are
directors of one or more other registered investment companies in the
AllianceBernstein Fund Complex.

Name of Director                     Aggregate Compensation
of the Fund                          from the Strategy
---------------                      ----------------------

John H. Dobkin                              $     751
Michael J. Downey                           $     751
William H. Foulk, Jr.                       $   1,063
D. James Guzy                               $     751
Nancy P. Jacklin                            $     751
Robert M. Keith                             $       0
Garry L. Moody                              $     851
Marshall C. Turner, Jr.                     $     903
Earl D. Weiner                              $     802

                                                               Total Number of
                                           Total Number of     Investment
                                           of Investment       Portfolios
                                           Companies in the    within the
                                           AllianceBernstein   AllianceBernstein
                        Total              Fund Complex,       Fund Complex,
                        Compensation       Including the       Including the
                        from the           Strategy, as        Strategy, as
                        AllianceBernstein  to which            to which
                        Fund Complex,      the Director is     the Director is
Name of Director        Including the      a Director or       a Director or
of the Fund             Strategy           Trustee             Trustee
----------------        -------------      -----------------   ----------------

John H. Dobkin               $262,000              31                103
Michael J. Downey            $262,000              31                103
William H. Foulk, Jr.        $487,000              31                103
D. James Guzy                $262,000              31                103
Nancy P. Jacklin             $262,000              31                103
Robert M. Keith              $      0              31                103
Garry L. Moody               $297,000              31                103
Marshall C. Turner, Jr.      $262,000              31                103
Earl D. Weiner               $280,000              31                103

            As of October 3, 2014, the Directors and officers as a group owned
less than 1% of the shares of the Strategy.

Additional Information About the Strategy's Portfolio Managers
--------------------------------------------------------------

            The management of, and investment decisions for, the Strategy's
portfolio are made by the Adviser's Market Neutral Investment Team. Vadim
Zlotnikov and Yun Chen are the investment professionals(1) primarily responsible
for the day-to-day management of the Strategy's portfolio. For additional
information about the portfolio management of the Strategy, see "Management of
the Strategy - Portfolio Managers" in the Strategy's Prospectus.

--------------------------
1     Investment professionals at the Adviser include portfolio managers and
      research analysts. Investment professionals are part of investment groups
      (or teams) that service individual fund portfolios. The number of
      investment professionals assigned to a particular fund will vary from fund
      to fund.

            The dollar ranges of the Strategy's equity securities owned directly
or beneficially by the Strategy's portfolio managers as of July 31, 2014 are set
forth below.

               DOLLAR RANGE OF EQUITY SECURITIES IN THE STRATEGY

                          Yun Chen               None
                          Vadim Zlotnikov        None

            As of July 31, 2014, employees of the Adviser had approximately
$81,807,074 invested in shares of all AllianceBernstein Mutual Funds (excluding
AllianceBernstein money market funds) through their interests in certain
deferred compensation plans, including the Partners Compensation Plan, including
both vested and unvested amounts.

            The following tables provide information regarding registered
investment companies other than the Strategy, other pooled investment vehicles
and other accounts over which the portfolio managers also have day-to-day
management responsibilities. The tables provide the numbers of such accounts,
the total assets in such accounts and the number of accounts and total assets
whose fees are based on performance. The information is provided as of the
Strategy's fiscal year ended July 31, 2014.

--------------------------------------------------------------------------------

                        REGISTERED INVESTMENT COMPANIES
                            (excluding the Strategy)

--------------------------------------------------------------------------------
                                                   Number of      Total Assets
                                                   Registered     of Registered
                  Total                            Investment     Investment
                  Number of     Total Assets       Companies      Companies
                  Registered    of Registered      Managed        Managed
                  Investment    Investment         with           with
Portfolio         Companies     Companies          Performance-   Performance-
Manager           Managed       Managed            based Fees     based Fees
--------------------------------------------------------------------------------

Yun Chen                1        $    17,000,000       None           None

Vadim Zlotnikov         64       $27,377,000,000       None           None

--------------------------------------------------------------------------------

                        OTHER POOLED INVESTMENT VEHICLES

--------------------------------------------------------------------------------
                                                                    Total Assets
                                                   Number of        of Other
                  Total                            Other Pooled     Pooled
                  Number of     Total Assets       Investment       Investment
                  Other         of Other           Vehicles         Vehicles
                  Pooled        Pooled             Managed          Managed
                  Investment    Investment         with             with
Portfolio         Vehicles      Vehicles           Performance-     Performance-
Manager           Managed       Managed            based Fees       based Fees
--------------------------------------------------------------------------------

Yun Chen                2        $    25,000,000      None             None

Vadim Zlotnikov        324       $27,783,000,000        1           $178,000,000

--------------------------------------------------------------------------------

                                 OTHER ACCOUNTS

--------------------------------------------------------------------------------
                                                   Number           Total Assets
                                                   of Other         Of Other
                   Total                           Accounts         Accounts
                   Number       Total Assets       Managed          Managed
                   of Other     of Other           with             with
Portfolio          Accounts     Accounts           Performance      Performance-
Manager            Managed      Managed            based Fees       based Fees
--------------------------------------------------------------------------------

Yun Chen              None          None              None             None

Vadim Zlotnikov         39      $19,012,000,000       None             None

--------------------------------------------------------------------------------

Investment Professional Conflict of Interest Disclosure
-------------------------------------------------------

            As an investment adviser and fiduciary, the Adviser owes its clients
and shareholders an undivided duty of loyalty. The Adviser recognizes that
conflicts of interest are inherent in its business and accordingly has developed
policies and procedures (including oversight monitoring) reasonably designed to
detect, manage and mitigate the effects of actual or potential conflicts of
interest in the area of employee personal trading, managing multiple accounts
for multiple clients, including AllianceBernstein Mutual Funds, and allocating
investment opportunities. Investment professionals, including portfolio managers
and research analysts, are subject to the above-mentioned policies and oversight
monitoring to ensure that all clients are treated equitably. The Adviser places
the interests of its clients first and expects all of its employees to meet
their fiduciary duties.

            Employee Personal Trading. The Adviser has adopted a Code of
Business Conduct and Ethics that is designed to detect and prevent conflicts of
interest when investment professionals and other personnel of the Adviser own,
buy or sell securities which may be owned by, or bought or sold for, clients.
Personal securities transactions by an employee may raise a potential conflict
of interest when an employee owns or trades in a security that is owned or
considered for purchase or sale by a client, or recommended for purchase or sale
by an employee to a client. Subject to the reporting requirements and other
limitations of its Code of Business Conduct and Ethics, the Adviser permits its
employees to engage in personal securities transactions, and also allows them to
acquire investments in certain Funds managed by the Adviser. The Adviser's Code
of Ethics and Business Conduct requires disclosure of all personal accounts and
maintenance of brokerage accounts with designated broker-dealers approved by the
Adviser. The Code of Business Conduct and Ethics also requires preclearance of
all securities transactions (except transactions in U.S. Treasuries and open-end
mutual funds) and imposes a 90-day holding period for securities purchased by
employees to discourage short-term trading.

            Managing Multiple Accounts for Multiple Clients. The Adviser has
compliance policies and oversight monitoring in place to address conflicts of
interest relating to the management of multiple accounts for multiple clients.
Conflicts of interest may arise when an investment professional has
responsibilities for the investments of more than one account because the
investment professional may be unable to devote equal time and attention to each
account. The investment professional or investment professional teams for each
client may have responsibilities for managing all or a portion of the
investments of multiple accounts with a common investment strategy, including
other registered investment companies, unregistered investment vehicles, such as
hedge funds, pension plans, separate accounts, collective trusts and charitable
foundations. Among other things, the Adviser's policies and procedures provide
for the prompt dissemination to investment professionals of initial or changed
investment recommendations by analysts so that investment professionals are
better able to develop investment strategies for all accounts they manage. In
addition, investment decisions by investment professionals are reviewed for the
purpose of maintaining uniformity among similar accounts and ensuring that
accounts are treated equitably. Investment professional compensation reflects a
broad contribution in multiple dimensions to long-term investment success for
our clients and is generally not tied specifically to the performance of any
particular client's account, nor is generally tied directly to the level or
change in level of assets under management.

            Allocating Investment Opportunities. The investment professionals at
the Adviser routinely are required to select and allocate investment
opportunities among accounts. The Adviser has adopted policies and procedures
intended to address conflicts of interest relating to the allocation of
investment opportunities. These policies and procedures are designed to ensure
that information relevant to investment decisions is disseminated promptly
within its portfolio management teams and investment opportunities are allocated
equitably among different clients. The policies and procedures require, among
other things, objective allocation for limited investment opportunities (e.g. on
a rotational basis), and documentation and review of justifications for any
decisions to make investments only for select accounts or in a manner
disproportionate to the size of the account. Portfolio holdings, position sizes,
and industry and sector exposures tend to be similar across similar accounts,
which minimizes the potential for conflicts of interest relating to the
allocation of investment opportunities. Nevertheless, access to portfolio funds
or other investment opportunities may be allocated differently among accounts
due to the particular characteristics of an account, such as size of the
account, cash position, tax status, risk tolerance and investment restrictions
or for other reasons.

            The Adviser's procedures are also designed to address potential
conflicts of interest that may arise when the Adviser has a particular financial
incentive, such as a performance-based management fee, relating to an account.
An investment professional may perceive that he or she has an incentive to
devote more time to developing and analyzing investment strategies and
opportunities or allocating securities preferentially to accounts for which the
Adviser could share in investment gains.

Portfolio Manager Compensation
------------------------------

            The Adviser's compensation program for portfolio managers is
designed to align with clients' interests, emphasizing each portfolio manager's
ability to generate long-term investment success for the Adviser's clients,
including the Strategy. The Adviser also strives to ensure that compensation is
competitive and effective in attracting and retaining the highest caliber
employees.

            Portfolio managers receive a base salary, incentive compensation
and contributions to AllianceBernstein's 401(k) plan. Part of the annual
incentive compensation is generally paid in the form of a cash bonus, and part
through an award under the firm's Incentive Compensation Award Plan (ICAP). The
ICAP awards vest over a four-year period. Deferred awards are paid in the form
of restricted grants of the firm's Master Limited Partnership Units, and award
recipients have the ability to receive a portion of their awards in deferred
cash. The amount of contributions to the 401(k) plan is determined at the sole
discretion of the Adviser. On an annual basis, the Adviser endeavors to combine
all of the foregoing elements into a total compensation package that considers
industry compensation trends and is designed to retain its best talent.

            The incentive portion of total compensation is determined by
quantitative and qualitative factors. Quantitative factors, which are weighted
more heavily, are driven by investment performance. Qualitative factors are
driven by contributions to the investment process and client success.

            The quantitative component includes measures of absolute, relative
and risk-adjusted investment performance. Relative and risk-adjusted returns are
determined based on the benchmark in the Strategy's prospectus and versus peers
over one-, three- and five-year calendar periods, with more weight given to
longer-time periods. Peer groups are chosen by Chief Investment Officers, who
consult with the product management team to identify products most similar to
our investment style and most relevant within the asset class. Portfolio
managers of the Strategy do not receive any direct compensation based upon the
investment returns of any individual client account, and compensation is not
tied directly to the level or change in level of assets under management.

            Among the qualitative components considered, the most important
include thought leadership, collaboration with other investment colleagues,
contributions to risk-adjusted returns of other portfolios in the firm, efforts
in mentoring and building a strong talent pool and being a good corporate
citizen. Other factors can play a role in determining portfolio managers'
compensation, such as the complexity of investment strategies managed, volume of
assets managed and experience.

            The Adviser emphasizes four behavioral competencies--relentlessness,
ingenuity, team orientation and accountability--that support its mission to be
the most trusted advisor to its clients. Assessments of investment professionals
are formalized in a year-end review process that includes 360-degree feedback
from other professionals from across the investment teams and the Adviser.

--------------------------------------------------------------------------------

                            EXPENSES OF THE STRATEGY

--------------------------------------------------------------------------------

Distribution Services Agreement
-------------------------------

            The Fund has entered into a Distribution Services Agreement (the
"Agreement") with ABI, the Fund's principal underwriter, to permit ABI to
distribute the Strategy's shares and to permit the Strategy to pay distribution
services fees to defray expenses associated with distribution of its Class A
shares, Class C shares, Class R shares and Class K shares in accordance with a
plan of distribution that is included in the Agreement and that has been duly
adopted and approved in accordance with Rule 12b-1 adopted by the SEC under the
1940 Act (the "Plan").

            In approving the Plan, the Directors determined that there was a
reasonable likelihood that the Plan would benefit the Strategy and its
shareholders. The distribution services fee of a particular class will not be
used to subsidize the provision of distribution services with respect to any
other class.

            The Adviser may, from time to time, and from its own funds or such
other resources as may be permitted by rules of the SEC make payments for
distribution services to ABI; the latter may in turn pay part or all of such
compensation to brokers or other persons for their distribution assistance.

            The Plan will continue in effect with respect to the Strategy and
each class of shares thereof for successive one-year periods provided that such
continuance is specifically approved at least annually by a majority of the
Independent Directors of the Fund who have no direct or indirect financial
interest in the operation of the Plan or any agreement related thereto (the
"Qualified Directors") and by a vote of a majority of the entire Board at a
meeting called for that purpose. Most recently, the Directors approved the
continuance of the Plan for an additional term at meetings held on May 6-8,
2014.

            All material amendments to the Plan will become effective only upon
approval as provided in the preceding paragraph; and the Plan may not be amended
in order to increase materially the costs that the Strategy may bear pursuant to
the Plan without the approval of a majority of the holders of the outstanding
voting shares of the Strategy or the class or classes of the Strategy affected.
The Agreement may be terminated (a) by the Fund without penalty at any time by a
majority vote of the holders of the Fund's outstanding voting securities, voting
separately by class, or by a majority vote of the Qualified Directors or (b) by
ABI. To terminate the Agreement, any party must give the other parties 60 days'
written notice; to terminate the Plan only, the Fund is not required to give
prior notice to ABI. The Agreement will terminate automatically in the event of
its assignment. The Plan is of a type known as a "reimbursement plan", which
means that it reimburses the distributor for the actual costs of services
rendered.

            In the event that the Plan is terminated by either party or not
continued with respect to the Class A, Class C, Class R or Class K shares, (i)
no distribution services fees (other than current amounts accrued but not yet
paid) would be owed by the Strategy to ABI with respect to that class, and (ii)
the Strategy would not be obligated to pay ABI for any amounts expended under
the Plan not previously recovered by ABI from distribution services fees in
respect of shares of such class or through deferred sales charges.

            Distribution services fees are accrued daily and paid monthly and
charged as expenses of the Strategy as accrued. The distribution services fees
attributable to the Class C, Class R and Class K shares or the Strategy are
designed to permit an investor to purchase such shares through broker-dealers
without the assessment of an initial sales charge, and at the same time to
permit ABI to compensate broker-dealers in connection with the sale of such
shares. In this regard, the purpose and function of the combined contingent
deferred sales charge ("CDSC") and respective distribution services fee on the
Class C shares of the Strategy and the distribution services fee on the Class R
and the Class K shares of the Strategy are the same as those of the initial
sales charge and distribution services fee with respect to the Class A shares of
the Strategy in that in each case the sales charge and/or distribution services
fee provides for the financing of the distribution of the relevant class of the
Strategy's shares.

            With respect to Class A shares of the Strategy, distribution
expenses accrued by ABI in one fiscal year may not be paid from distribution
services fees received from the Strategy in subsequent fiscal years. ABI's
compensation with respect to Class C, Class R and Class K shares of the Strategy
under the Plan is directly tied to the expenses incurred by ABI. Actual
distribution expenses for Class C shares, Class R shares and Class K shares of
the Strategy for any given year, however, will probably exceed the distribution
services fee payable under the Plan with respect to the class involved and, in
the case of Class C shares of the Strategy, payments received from CDSCs. The
excess will be carried forward by ABI and reimbursed from distribution services
fees payable under the Plan with respect to the class involved and, in the case
of Class C shares, payments subsequently received through CDSCs, so long as the
Plan is in effect.

            During the fiscal year ended July 31, 2014 for the Strategy with
respect to Class A shares, the distribution services fees for expenditures
payable to ABI amounted to $2,751, which constituted .30%, annually, of the
Strategy's aggregate average daily net assets attributable to Class A shares
during the fiscal year. The Adviser made payments from its own resources
aggregating to $1,543. For the fiscal year ended July 31, 2014 for the Strategy,
expenses incurred by the Strategy and costs allocated to the Strategy in
connection with activities primarily intended to result in the sale of Class A
shares were as follows:

                                                         U.S. Market Neutral
                   Category of Expense                   Strategy
                   -------------------                   --------


Advertising/Marketing                                    $    13

Printing and Mailing of Prospectuses and                 $     2
Semi-Annual and Annual Reports to Other than
Current Shareholders

Compensation to Underwriters                             $   370

Compensation to Dealers                                  $ 2,719

Compensation to Sales Personnel                          $   806

Interest, Carrying or Other Financing Charges            $     0

Other (Includes Personnel costs of those home            $   384
office employees involved in the distribution
effort and the travel-related expenses incurred
by the marketing personnel conducting seminars)

Totals                                                   $ 4,294

            During the fiscal year ended July 31, 2014 for the Strategy with
respect to Class C shares, the distribution services fees for expenditures
payable to ABI amounted to $2,231, which constituted 1.00%, annually, of the
Strategy's aggregate average daily net assets attributable to Class C shares
during the fiscal year. For the Strataegy, $13 may be used to offset the
distribution services fees paid in future years.

            For the fiscal year ended July 31, 2014 for the Strategy, expenses
incurred by the Strategy and costs allocated to the Strategy in connection with
activities primarily intended to result in the sale of Class C shares were as
follows:

                                                       U.S. Market Neutral
                   Category of Expense                 Strategy
                   -------------------                 -------------------

Advertising/Marketing                                    $     1

Printing and Mailing of Prospectuses and                 $     0
Semi-Annual and Annual Reports to Other than
Current Shareholders

Compensation to Underwriters                             $    81

Compensation to Dealers                                  $ 2,035

Compensation to Sales Personnel                          $     9

Interest, Carrying or Other Financing Charges            $     0

Other (Includes Personnel costs of those home            $    92
office employees involved in the distribution
effort and the travel-related expenses incurred
by the marketing personnel conducting seminars)

Totals                                                   $ 2,218

            During the fiscal year ended July 31, 2014 for the Strategy with
respect to Class R shares, the distribution services fees for expenditures
payable to ABI amounted to $50, which constituted .50%, annually, of the
Strategy's aggregate average daily net assets attributable to Class R shares
during the fiscal year. For the Strategy, $49 may be used to offset the
distribution services fees paid in future years.

            For the fiscal year ended July 31, 2014 for the Strategy, expenses
incurred by the Strategy and costs allocated to the Strategy in connection with
activities primarily intended to result in the sale of Class R shares were as
follows:

                                                       U.S. Market Neutral
                   Category of Expense                 Strategy
                   -------------------                 --------------------

Advertising/Marketing                                    $     0

Printing and Mailing of Prospectuses and                 $     0
Semi-Annual and Annual Reports to Other than
Current Shareholders

Compensation to Underwriters                             $     1

Compensation to Dealers                                  $     0

Compensation to Sales Personnel                          $     0

Interest, Carrying or Other Financing Charges            $     0

Other (Includes Personnel costs of those home            $     0
office employees involved in the distribution
effort and the travel-related expenses incurred
by the marketing personnel conducting seminars)

Totals                                                   $     1

            During the fiscal year ended July 31, 2014 for the Strategy with
respect to Class K shares, the distribution services fees for expenditures
payable to ABI amounted to $311, which constituted .25%, annually, of the
Strategy's aggregate average daily net assets attributable to Class K shares
during the fiscal year. For the Strategy, the Adviser made payments from its own
resources, aggregating to $153.

            For the fiscal year ended July 31, 2014 for the Strategy, expenses
incurred by the Strategy and costs allocated to the Strategy in connection with
activities primarily intended to result in the sale of Class K shares were as
follows:

                                                       U.S. Market Neutral
                   Category of Expense                 Strategy
                   -------------------                 -------------------

Advertising/Marketing                                    $     1

Printing and Mailing of Prospectuses and                 $     0
Semi-Annual and Annual Reports to Other than
Current Shareholders

Compensation to Underwriters                             $    44

Compensation to Dealers                                  $   348

Compensation to Sales Personnel                          $    19

Interest, Carrying or Other Financing Charges            $     0

Other (Includes Personnel costs of those home            $    52
office employees involved in the distribution
effort and the travel-related expenses incurred
by the marketing personnel conducting seminars)

Totals                                                   $   464

            For the fiscal year ended July 31, 2014 for the Strategy the amount
of, and percentage of each class's net assets, of unreimbursed distribution
expenses incurred and carried over of reimbursement in future years in respect
of the Class C, Class R and Class K shares of the Strategy were as follows:


         Class                U.S. Market Neutral Strategy
         -----                ----------------------------

Class C                                                 $ 15,392

(% of the net assets of
Class C)                                                   9.59%

Class R                                                 $    557

(% of the net assets of
Class R)                                                   5.84%

Class K                                                 $  2,937

(% of the net assets of
Class K)                                                   2.21%

Transfer Agency Agreement
-------------------------

            ABIS acts as the transfer agent for the Strategy. ABIS registers the
transfer, issuance and redemption of Fund shares and disburses dividends and
other distributions to Strategy shareholders.

            ABIS, an indirect wholly-owned subsidiary of the Adviser located
principally at 8000 IH 10 W, 4th Floor, San Antonio, Texas 78230, receives a
transfer agency fee per account holder of each of the Class A, Class C, Class R,
Class K, Class I and Advisor Class shares of the Strategy, plus reimbursement
for out-of-pocket expenses. The transfer agency fee with respect to the Class C
shares is higher than the transfer agency fee with respect to the Class A, Class
R, Class K, Class I and Advisor Class shares, reflecting the additional costs
associated with the Class C CDSCs. For the fiscal year ended July 31, 2014 for
the Strategy, the Fund paid ABIS $17,087 for transfer agency services.

            Many Strategy shares are owned by selected dealers or selected
agents, as defined below, financial intermediaries or other financial
representatives ("financial intermediaries") for the benefit of their customers.
In those cases, the Strategy often does not maintain an account for you. Thus,
some or all of the transfer agency functions for these accounts are performed by
the financial intermediaries. The Strategy, ABI and/or the Adviser pays to these
financial intermediaries, including those that sell shares of the
AllianceBernstein Mutual Funds, fees for sub-transfer agency and related
recordkeeping services in amounts ranging up to $19 per customer fund account
per annum. Retirement plans may also hold Strategy shares in the name of the
plan, rather than the participant. Plan recordkeepers, who may have affiliated
financial intermediaries who sell shares of the Strategy, may be paid for each
plan participant fund account in amounts up to $19 per account per annum and/or
up to 0.25% per annum of the average daily assets held in the plan. To the
extent any of these payments for recordkeeping services, transfer agency
services or retirement plan accounts are made by the Strategy, they are included
in the Strategy's Prospectus in the Strategy expense tables under "Fees and
Expenses of the Strategy". In addition, financial intermediaries may be
affiliates of entities that receive compensation from the Adviser or ABI for
maintaining retirement plan "platforms" that facilitate trading by affiliated
and non-affiliated financial intermediaries and recordkeeping for retirement
plans.

            Because financial intermediaries and plan recordkeepers may be paid
varying amounts per class for sub-transfer agency and related recordkeeping
services, the service requirements of which may also vary by class, this may
create an additional incentive for financial intermediaries and their financial
advisors to favor one fund complex over another or one class of shares over
another.

--------------------------------------------------------------------------------

                               PURCHASE OF SHARES

--------------------------------------------------------------------------------

            The following information supplements that set forth in your
Prospectus under the heading "Investing in the Strategy".

General
-------

            Shares of the Strategy are offered on a continuous basis at a price
equal to their NAV plus an initial sales charge at the time of purchase (the
"Class A shares"), without any initial sales charge and, as long as the shares
are held for one year or more, without any CDSC (the "Class C shares"), to group
retirement plans, as defined below, eligible to purchase Class R shares, without
any initial sales charge or CDSC (the "Class R shares"), to group retirement
plans eligible to purchase Class K shares, without any initial sales charge or
CDSC (the "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 (the "Class I shares"), or to investors eligible to purchase
Advisor Class shares, without any initial sales charge or CDSC (the "Advisor
Class shares"), in each case as described below. All of the classes of shares of
the Strategy, except Class I and Advisor Class shares, are subject to Rule 12b-1
asset-based sales charges. Shares of the Strategy that are offered subject to a
sales charge are offered through (i) investment dealers that are members of the
Financial Industry Regulatory Authority ("FINRA") and have entered into selected
dealer agreements with ABI ("selected dealers"), (ii) depository institutions
and other financial intermediaries or their affiliates, that have entered into
selected agent agreements with ABI ("selected agents") and (iii) ABI.

            Investors may purchase shares of the Strategy either through
financial intermediaries or directly through ABI. A transaction, service,
administrative or other similar fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of shares of the
Strategy made through such financial intermediary. Such financial intermediaries
may also impose requirements with respect to the purchase, sale or exchange of
shares that are different from, or in addition to, those imposed by the
Strategy, including requirements as to the classes of shares available through
such financial intermediary and the minimum initial and subsequent investment
amounts. The Strategy is not responsible for, and has no control over, the
decision of any financial intermediary to impose such differing requirements.
Sales personnel of financial intermediaries distributing the Strategy's shares
may receive differing compensation for selling different classes of shares.

            In order to open your account, the Strategy or your financial
intermediary is required to obtain certain information from you for
identification purposes. This information may include name, date of birth,
permanent residential address and social security/taxpayer identification
number. It will not be possible to establish your account without this
information. If the Strategy or your financial intermediary is unable to verify
the information provided, your account may be closed and other appropriate
action may be taken as permitted by law.

Frequent Purchases and Sales of Strategy Shares
-----------------------------------------------

            The Board has adopted policies and procedures designed to detect and
deter frequent purchases and redemptions of Strategy shares or excessive or
short-term trading that may disadvantage long-term Strategy shareholders. These
policies are described below. There is no guarantee that the Strategy 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
Strategy shares through purchases, sales and exchanges of shares. The Strategy
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 Strategy 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 Strategy's shares dilute the value of shares held
by long-term shareholders. Volatility resulting from excessive purchases and
sales or exchanges of Strategy shares, especially involving large dollar
amounts, may disrupt efficient portfolio management and cause the Strategy to
sell shares at inopportune times to raise cash to accommodate redemptions
relating to short-term trading. In particular, the Strategy 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 Strategy may incur increased administrative and other
expenses due to excessive or short-term trading, including increased brokerage
costs and realization of taxable capital gains.

            If the Strategy invests significantly in securities of foreign
issuers, it 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 the Strategy ordinarily 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 Strategy share prices that are based on closing prices of
securities of foreign issuers established some time before the Strategy
calculates its own share price (referred to as "time zone arbitrage"). The
Strategy 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 Strategy
calculates its NAV. While there is no assurance, the Strategy 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 Strategy shareholders.

            A shareholder engaging in a short-term trading strategy may also
target a fund that does not invest primarily 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 Strategy may be
adversely affected by price arbitrage.

            Policy Regarding Short-Term Trading. Purchases and exchanges of
shares of the Strategy should be made for investment purposes only. The Strategy
will seek to prevent patterns of excessive purchases and sales or exchanges of
Strategy shares. The Strategy seeks to prevent such practices to the extent they
are detected by the procedures described below, subject to the Strategy's
ability to monitor purchase, sale and exchange activity. The Strategy 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 Strategy, through its
                  agents, ABI and ABIS, maintains surveillance procedures to
                  detect excessive or short-term trading in Strategy shares.
                  This surveillance process involves several factors, which
                  include scrutinizing transactions in Strategy shares that
                  exceed certain monetary thresholds or numerical limits within
                  a specified period of time. Generally, more than two exchanges
                  of Strategy 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 Strategy 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 Strategy shares, the Strategy 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 Strategy 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 Strategy 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 Strategy shares back to the Strategy or redemptions
                  will continue to be permitted in accordance with the terms of
                  the Strategy'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 Strategy 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 Strategy, particularly among
                  certain brokers, dealers and other financial intermediaries,
                  including sponsors of retirement plans and variable insurance
                  products. The Strategy applies its surveillance procedures to
                  these omnibus account arrangements. As required by SEC rules,
                  the Strategy has entered into agreements with all of its
                  financial intermediaries that require the financial
                  intermediaries to provide the Strategy, upon the request of
                  the Strategy or its agents, with individual account level
                  information about their transactions. If the Strategy 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 Strategy to take actions to curtail the activity, which
                  may include applying blocks to accounts to prohibit future
                  purchases and exchanges of Strategy shares. For certain
                  retirement plan accounts, the Strategy may request that the
                  retirement plan or other intermediary revoke the relevant
                  participant's privilege to effect transactions in Strategy
                  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).

Purchase of Shares
------------------

            The Strategy 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. If the Strategy suspends the sale of its shares, shareholders will not
be able to acquire its shares, including through an exchange.

            The public offering price of shares of the Strategy is its NAV,
plus, in the case of Class A shares of the Strategy, a sales charge. On each
Strategy business day on which a purchase or redemption order is received by the
Strategy and trading in the types of securities in which the Strategy invests
might materially affect the value of the Strategy's shares, the NAV per share is
computed as of the Strategy Closing Time, which is the close of regular trading
on each day the Exchange 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) by dividing the value of the total assets attributable
to a class, less its liabilities, by the total number of its shares then
outstanding. A Strategy business day is any day on which the Exchange is open
for trading.

            The respective NAVs of the various classes of shares of the Strategy
are expected to be substantially the same. However, the NAVs of the Class C and
Class R shares of the Strategy will generally be slightly lower than the NAVs of
the Class A, Class K, Class I and Advisor Class shares of the Strategy as a
result of the differential daily expense accruals of the higher distribution
and, in some cases, transfer agency fees applicable with respect to those
classes of shares.

            The Strategy will accept unconditional orders for its shares to be
executed at the public offering price equal to its NAV next determined (plus
applicable Class A sales charges), as described below. Orders received by ABIS
prior to the Strategy Closing Time are priced at the NAV computed as of the
Strategy Closing Time on that day (plus applicable Class A sales charges). In
the case of orders for purchase of shares placed through financial
intermediaries, the applicable public offering price will be the NAV as so
determined, but only if the financial intermediary receives the order prior to
the Strategy Closing Time. The financial intermediary is responsible for
transmitting such orders by a prescribed time to the Strategy or its transfer
agent. If the financial intermediary fails to do so, the investor will not
receive that day's NAV. If the financial intermediary receives the order after
the Strategy Closing Time, the price received by the investor will be based on
the NAV determined as of the Strategy Closing Time on the next business day.

            The Strategy may, at its sole option, accept securities as payment
for shares of the Strategy, including from certain affiliates of the Strategy in
accordance with the Strategy's procedures, if the Adviser believes that the
securities are appropriate investments for the Strategy. The securities are
valued by the method described under "Net Asset Value" below as of the date the
Strategy receives the securities and corresponding documentation necessary to
transfer the securities to the Portfolio. This is a taxable transaction to the
shareholder.

            Following the initial purchase of the Strategy's shares, a
shareholder may place orders to purchase additional shares by telephone if the
shareholder has completed the appropriate portion of the Mutual Fund Application
or an "Autobuy" application, both of which may be obtained by calling the "For
Literature" telephone number shown on the cover of this SAI. Except with respect
to certain omnibus accounts, telephone purchase orders with payment by
electronic funds transfer may not exceed $500,000. Payment for shares purchased
by telephone can be made only by electronic funds transfer from a bank account
maintained by the shareholder at a bank that is a member of the National
Automated Clearing House Association ("NACHA"). Telephone purchase requests must
be received before Strategy Closing Time on a Strategy business day to receive
that day's public offering price. Telephone purchase requests received after
Strategy Closing Time are automatically placed the following Strategy business
day, and the applicable public offering price will be the public offering price
determined as of the Strategy Closing Time on such following business day.

            Full and fractional shares are credited to a shareholder's account
in the amount of his or her subscription. As a convenience, and to avoid
unnecessary expense to the Strategy, the Strategy will not issue share
certificates representing shares of the Strategy. Ownership of the Strategy's
shares will be shown on the books of the Strategy's transfer agent.

            Each class of shares in the Strategy represents an interest in the
same portfolio of investments of the Strategy, has the same rights and is
identical in all respects, except that (i) Class A shares bear the expense of
the initial sales charge (or CDSC, when applicable) and Class C shares bear the
expense of the CDSC, (ii) Class C and Class R shares each bear the expense of a
higher distribution services fee than those borne by Class A, Class K and Class
I shares and Advisor Class shares do not bear such a fee, (iii) Class C shares
bear higher transfer agency costs than that borne by Class A, Class R, Class K,
Class I shares and Advisor Class shares, and (iv) each of Class A, Class C,
Class R and Class K shares has exclusive voting rights with respect to
provisions of the Plan pursuant to which its distribution services fee is paid
and other matters for which separate class voting is appropriate under
applicable law. Each class has different exchange privileges and certain
different shareholder service options available.

            The Directors have determined that currently no conflict of interest
exists between or among the classes of shares of the Strategy. On an ongoing
basis, the Directors, pursuant to their fiduciary duties under the 1940 Act and
state law, will seek to ensure that no such conflict arises.

Alternative Purchase Arrangements
---------------------------------

            Classes A and C Shares. Class A and Class C shares have the
following alternative purchase arrangements: Class A shares are generally
offered with an initial sales charge and Class C shares are sold to investors
choosing the asset-based sales charge alternative. Special purchase arrangements
are available for group retirement plans. See "Alternative Purchase Arrangements
- Group Retirement Plans and Tax-Deferred Accounts" below. "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 the Strategy. These alternative purchase arrangements
permit an investor to choose the method of purchasing shares that is most
beneficial given the amount of the purchase, the length of time the investor
expects to hold the shares, and other circumstances. Investors should consider
whether, during the anticipated life of their investment in the Strategy, the
accumulated distribution services fee and CDSC on Class C shares would be less
than the initial sales charge and accumulated distribution services fee on Class
A shares purchased at the same time, and to what extent such differential would
be offset by the higher return of Class A shares. Class C shares will normally
not be suitable for the investor who qualifies to purchase Class A shares at
NAV. For this reason, ABI will reject any order for more than $1,000,000 for
Class C shares.

            Class A shares are subject to a lower distribution services fee and,
accordingly, pay correspondingly higher dividends per share than Class C shares.
However, because initial sales charges are deducted at the time of purchase,
most investors purchasing Class A shares would not have all their funds invested
initially and, therefore, would initially own fewer shares. Investors not
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class A
shares because the accumulated continuing distribution charges on Class C shares
may exceed the initial sales charge on Class A shares during the life of the
investment. Again, however, such investors must weigh this consideration against
the fact that, because of such initial sales charges, not all their funds will
be invested initially.

            Other investors might determine, however, that it would be more
advantageous to purchase Class C shares in order to have all their funds
invested initially, although remaining subject to higher continuing distribution
charges and, being subject to a CDSC for a one-year period. For example, based
on current fees and expenses, an investor subject to the 4.25% initial sales
charge on Class A shares would have to hold his or her investment approximately
seven years for the Class C distribution services fee to exceed the initial
sales charge plus the accumulated distribution services fee of Class A shares.
In this example, an investor intending to maintain his or her investment for a
longer period might consider purchasing Class A shares. This example does not
take into account the time value of money, which further reduces the impact of
the Class C distribution services fees on the investment, fluctuations in NAV or
the effect of different performance assumptions.

Compensation Paid to Principal Underwriter
------------------------------------------

            During the fiscal years ended July 31, 2014, July 31, 2013 and July
31, 2012 the aggregate amount of underwriting commission payable with respect to
shares of the Strategy was $2,566, $384 and $8,046, respectively. Of that amount
ABI retained $183, $26 and $558, respectively, representing that portion of the
sales charges paid on shares of the Strategy sold during the year which was not
re-allowed to selected dealers. During the Strategy's fiscal years ended July
31, 2014, July 31, 2013 and July 31, 2012, ABI received CDSCs of $0, $0 and $0,
respectively, on Class A shares, and $135, $642 and $0, respectively, on Class C
shares.

            Class A Shares. The public offering price of Class A shares is the
NAV per share plus a sales charge, as set forth below.

                                  Sales Charge

                                                               Discount or
                                      As %          As %       Commission to
                                     of Net        of the      Dealers or
                                     Amount        Public      Agents of up to %
Amount of Purchase                  Invested   Offering Price  of Offering Price
------------------                  --------   --------------  -----------------

Up to $100,000.................       4.44%        4.25%             4.00%
$100,000 up to $250,000........       3.36         3.25              3.00
$250,000 up to $500,000........       2.30         2.25              2.00
$500,000 up to $1,000,000*.....       1.78         1.75              1.50

-----------------

* There is no initial sales charge on transactions of $1,000,000 or more.

            All or a portion of the initial sales charge may be paid to your
financial representative. With respect to purchases of $1,000,000 or more, Class
A shares of the Strategy redeemed within one year of purchase may be subject to
a CDSC of up to 1%. The CDSC on Class A shares will be waived on certain
redemptions, as described below under "-- Contingent Deferred Sales Charge." The
Strategy receives the entire NAV of its Class A shares sold to investors. ABI's
commission is the sales charge shown above less any applicable discount or
commission "re-allowed" to selected dealers and agents. ABI will re-allow
discounts to selected dealers and agents in the amounts indicated in the table
above. In this regard, ABI may elect to re-allow the entire sales charge to
selected dealers and agents for all sales with respect to which orders are
placed with ABI. A selected dealer who receives re-allowance in excess of 90% of
such a sales charge may be deemed to be an "underwriter" under the Securities
Act.

            No initial sales charge is imposed on Class A shares issued (i)
pursuant to the automatic reinvestment of income dividends or capital gains
distributions or (ii) in exchange for Class A shares of other "AllianceBernstein
Mutual Funds" (as that term is defined under "Combined Purchase Privilege"
below), except that an initial sales charge will be imposed on Class A shares
issued in exchange for Class A shares of AllianceBernstein Exchange Reserves
that were purchased for cash without the payment of an initial sales charge and
without being subject to a CDSC.

            Commissions may be paid to selected dealers or agents who initiate
or are responsible for Class A share purchases by a single shareholder in excess
of $1,000,000 that are not subject to an initial sales charge at up to the
following rates: 1.00% on purchases up to $3,000,000; 0.75% on purchases over
$3,000,000 to $5,000,000; and 0.50% on purchases over $5,000,000. Commissions
are paid based on cumulative purchases by a shareholder over the life of an
account with no adjustments for redemptions, transfers or market declines.

            In addition to the circumstances described above, certain types of
investors may be entitled to pay no initial sales charge in certain
circumstances described below.

            Class A Shares--Sales at NAV. The Strategy may sell its Class A
shares at NAV (i.e., without any initial sales charge) to certain categories of
investors including:

            (i)           investment management clients of the Adviser or its
                          affiliates, including clients and prospective clients
                          of the Adviser's Institutional Investment Management
                          Division;

           (ii)           officers and present or former Directors of the Funds
                          or other investment companies managed by the Adviser,
                          officers, directors and present or retired full-time
                          employees and former employees (for subsequent
                          investment in accounts established during the course
                          of their employment) of the Adviser, ABI, ABIS and
                          their affiliates; officers, directors and present and
                          full-time employees of selected dealers or agents; or
                          the spouse or domestic partner, sibling, direct
                          ancestor or direct descendant (collectively,
                          "relatives") of any such person; or any trust,
                          individual retirement account or retirement plan
                          account for the benefit of any such person;

          (iii)           the Adviser, ABI, ABIS and their affiliates; certain
                          employee benefit plans for employees of the Adviser,
                          ABI, ABIS and their affiliates;

           (iv)           persons participating in a fee-based program,
                          sponsored and maintained by a 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 financial intermediaries that may or
                          may not charge a transaction fee to its clients;

            (v)           certain retirement plan accounts as described under
                          "Alternative Purchase Arrangements--Group Retirement
                          Plans and Tax-Deferred Accounts"; and

           (vi)           current Class A shareholders of AllianceBernstein
                          Mutual Funds and investors who receive a "Fair Funds
                          Distribution" (a "Distribution") resulting from a SEC
                          enforcement action against the Adviser and current
                          Class A shareholders of AllianceBernstein Mutual Funds
                          who receive a Distribution resulting from any SEC
                          enforcement action related to trading in shares of
                          AllianceBernstein Mutual Funds who, in each case,
                          purchase shares of an AllianceBernstein Mutual Fund
                          from ABI through deposit with ABI of the Distribution
                          check.

            Class C Shares. Investors may purchase Class C shares at the public
offering price equal to the NAV per share of the Class C shares on the date of
purchase without the imposition of a sales charge either at the time of purchase
or, as long as the shares are held for one year or more, upon redemption. Class
C shares are sold without an initial sales charge so that the Strategy will
receive the full amount of the investor's purchase payment and, as long as the
shares are held for one year or more, without a CDSC so that the investor will
receive as proceeds upon redemption the entire NAV of his or her Class C shares.
The Class C distribution services fee enables the Strategy to sell Class C
shares without either an initial sales charge or CDSC, as long as the shares are
held for one year or more. Class C shares do not convert to any other class of
shares of the Strategy and incur higher distribution services fees and transfer
agency costs than Class A shares and Advisor Class shares, and will thus have a
higher expense ratio and pay correspondingly lower dividends than Class A shares
and Advisor Class shares.

            Contingent Deferred Sales Charge. Class A share purchases of
$1,000,000 or more and Class C shares that in either case are redeemed within
one year of purchase will be subject to a CDSC of 1%, as will Class A share
purchases by certain group retirement plans (see "Alternative Purchase
Arrangements - Group Retirement Plans and Tax-Deferred Accounts" below). The
charge will be assessed on an amount equal to the lesser of the cost of the
shares being redeemed or their NAV at the time of redemption. Accordingly, no
sales charge will be imposed on increases in NAV above the initial purchase
price. In addition, no charge will be assessed on shares derived from
reinvestment of dividends or capital gains distributions.

            In determining the CDSC applicable to a redemption of Class C
shares, it will be assumed that the redemption is, first, of any shares that are
not subject to a CDSC (for example, because the shares were acquired upon the
reinvestment of dividends or distributions) and, second, of shares held longest
during the time they are subject to the sales charge. When shares acquired in an
exchange are redeemed, the applicable CDSC and conversion schedules will be the
schedules that applied at the time of the purchase of shares of the
corresponding class of the AllianceBernstein Mutual Fund originally purchased by
the shareholder. If you redeem your shares and directly invest the proceeds in
units of CollegeBoundfund, the CDSC will apply to the units of CollegeBoundfund.

            Proceeds from the CDSC are paid to ABI and are used by ABI to defray
the expenses of ABI related to providing distribution-related services to the
Strategy in connection with the sale of Strategy shares, such as the payment of
compensation to selected dealers and agents for selling Strategy shares. The
combination of the CDSC and the distribution services fee enables the Strategy
to sell shares without a sales charge being deducted at the time of purchase.

            The CDSC is waived on redemptions of shares (i) following the death
or disability, as defined in the United States Internal Revenue Code of 1986
(the "Code"), of a shareholder, (ii) to the extent that the redemption
represents a minimum required distribution from an individual retirement account
or other retirement plan to a shareholder that has attained the age of 70 1/2,
(iii) that had been purchased by present or former Directors, by the relative of
any such person, by any trust, individual retirement account or retirement plan
account for the benefit of any such person or relative or by the estate of any
such person or relative, (iv) pursuant to, and in accordance with, a systematic
withdrawal plan (see "Sales Charge Reduction Programs for Class A
Shares--Systematic Withdrawal Plan" below), (v) to the extent that 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,
(vi) due to the complete termination of a trust upon the death of the
trustor/grantor, beneficiary or trustee but only if the trust termination is
specifically provided for in the trust document, or (vii) that had been
purchased with proceeds from a Distribution resulting from any SEC enforcement
action related to trading in shares of AllianceBernstein Mutual Funds through
deposit with ABI of the Distribution check. The CDSC is also waived for (i)
permitted exchanges of shares, (ii) holders of Class A shares who purchased
$1,000,000 or more of Class A shares where the participating broker or dealer
involved in the sale of such shares waived the commission it would normally
receive from ABI or (iii) Class C shares sold through programs offered by
financial intermediaries and approved by ABI where such programs offer only
shares that are not subject to a CDSC, where the financial intermediary
establishes a single omnibus account for the Fund or in the case of a group
retirement plan, a single account for each plan, and where no advance commission
is paid to any financial intermediary in connection with the purchase of such
shares.

            Class R Shares. Class R shares are offered to certain group
retirement plans. Class R shares are not available to retail non-retirement
accounts, traditional or Roth IRAs, Coverdell Education Savings Accounts, SEPs,
SAR-SEPs, SIMPLE IRAs, individual 403(b) plans and to AllianceBernstein-
sponsored retirement products. Class R shares incur a .50% distribution services
fee and thus have a higher expense ratio than Class A shares, Class K shares and
Class  I  shares  and  pay  correspondingly lower dividends than Class A shares,
Class K shares and Class I shares.

            Class K Shares. Class K shares are available at NAV to group
retirement plans. Class K shares generally are not available to retail
non-retirement accounts, traditional and Roth IRAs, Coverdell Education Savings
Accounts, SEPs, SAR-SEPs, SIMPLE IRAs, individual 403(b) plans and
AllianceBernstein-sponsored retirement products. Class K shares do not have an
initial sales charge or CDSC but incur a .25% distribution services fee and thus
(i) have a lower expense ratio than Class R shares and pay correspondingly
higher dividends than Class R shares and (ii) have a higher expense ratio than
Class I shares and pay correspondingly lower dividends than Class I shares.

            Class I Shares. Class I shares are available at NAV to group
retirement plans and to certain investment advisory clients of, and certain
other persons associated with, the Adviser and its affiliates. 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,
individual 403(b) plans and AllianceBernstein-sponsored retirement products.
Class I shares do not incur any distribution services fees and will thus have a
lower expense ratio and pay correspondingly higher dividends than Class R and
Class K shares.

            Advisor Class Shares. Advisor Class shares may be purchased and held
solely (i) through accounts established under fee-based programs, sponsored and
maintained by registered broker-dealers or other financial intermediaries and
approved by ABI, (ii) through self-directed defined contribution employee
benefit plans (e.g., 401(k) plans) that purchase shares directly without the
involvement of a financial intermediary, (iii) by officers and present or former
Directors of the Funds or other investment companies managed by the Adviser,
officers, directors and present or retired full-time employees and former
employees (for subsequent investments in accounts established during the course
of their employment) of the Adviser, ABI, ABIS and their affiliates, relatives
of any such person, or any trust, individual retirement account or retirement
plan for the benefit of any such person or (iv) by the categories of investors
described in clauses (i), (iii) and through (iv) under "Class A Shares -- Sales
at NAV" (other than officers, directors and present and full-time employees of
selected dealers or agents, or relatives of such person, or any trust,
individual retirement account or retirement plan account for the benefit of such
relative, none of whom is eligible on the basis solely of such status to
purchase and hold Advisor Class shares). Generally, a fee-based program must
charge an asset-based or other similar fee and must invest at least $250,000 in
Advisor Class shares of the Strategy in order to be approved by ABI for
investment in Advisor Class shares. A transaction fee may be charged by your
financial intermediary with respect to the purchase, sale or exchange of Advisor
Class shares made through such financial intermediary. Advisor Class shares do
not incur any distribution services fees, and will thus have a lower expense
ratio and pay correspondingly higher dividends than Class A, Class C, Class R or
Class K shares.

Alternative Purchase Arrangements--Group Retirement Plans and
Tax-Deferred Accounts
--------------------------------------------------------------

            The Strategy offers special distribution arrangements for group
retirement plans. However, plan sponsors, plan fiduciaries and other financial
intermediaries may establish requirements as to the purchase, sale or exchange
of shares of the Strategy, including maximum and minimum initial investment
requirements, that are different from those described in this SAI. Group
retirement plans also may not offer all classes of shares of the Strategy. In
addition, the Class A CDSC may be waived for investments made through certain
group retirement plans. Therefore, plan sponsors or fiduciaries may not adhere
to these share class eligibility standards as set forth in the Prospectus and
this SAI. The Strategy is not responsible for, and has no control over, the
decision of any plan sponsor or fiduciary to impose such differing requirements.

            Class A Shares. Class A shares are available at NAV to all
AllianceBernstein-sponsored group retirement plans, regardless of size, and to
the AllianceBernstein Link, AllianceBernstein Individual 401(k) and
AllianceBernstein SIMPLE IRA plans with at least $250,000 in plan assets or 100
or more employees. Effective June 30, 2005, for purposes of determining whether
a SIMPLE IRA plan has at least $250,000 in plan assets, all of the SIMPLE IRAs
of an employer's employees are aggregated. ABI measures the asset levels and
number of employees in these plans once monthly. Therefore, if a plan that is
not eligible at the beginning of a month for purchases of Class A shares at NAV
meets the asset level or number of employees required for such eligibility later
in that month, all purchases by the plan will be subject to a sales charge until
the monthly measurement of assets and employees. If the plan terminates the
Strategy as an investment option within one year, then all plan purchases of
Class A shares will be subject to a 1%, 1-year CDSC on redemption. Class A
shares are also available at NAV to group retirement plans. The 1%, 1-year CDSC
also generally applies. However, the 1%, 1-year CDSC may be waived if the
financial intermediary agrees to waive all commissions or other compensation
paid in connection with the sale of such shares (typically up to a 1% advance
payment for sales of Class A shares at NAV) other than the service fee paid
pursuant to the Strategy's Rule 12b-1 plan.

            Class C Shares. Class C shares are available to AllianceBernstein
Link, AllianceBernstein Individual 401(k) and AllianceBernstein SIMPLE IRA plans
with less than $250,000 in plan assets and less than 100 employees. Class C
shares are also available to group retirement plans with plan assets of less
than $1 million. If an AllianceBernstein Link, AllianceBernstein Individual
401(k) or AllianceBernstein SIMPLE IRA plan holding Class C shares becomes
eligible to purchase Class A shares at NAV, the plan sponsor or other
appropriate fiduciary of such plan may request ABI in writing to liquidate the
Class C shares and purchase Class A shares with the liquidation proceeds. Any
such liquidation and repurchase may not occur before the expiration of the
1-year period that begins on the date of the plan's last purchase of Class C
shares.

            Class R Shares. Class R shares are available to certain group
retirement plans. Class R shares are not subject to a front-end sales charge or
CDSC, but are subject to a .50% distribution fee.

            Class K Shares. Class K shares are available to certain group
retirement plans. Class K shares are not subject to a front-end sales charge or
CDSC, but are subject to a .25% distribution fee.

            Class I Shares. Class I shares are available to certain group
retirement plans and certain institutional clients of the Adviser who invest at
least $2 million in the Strategy. Class I shares are not subject to a front-end
sales charge, CDSC or a distribution fee.

            Choosing a Class of Shares for Group Retirement Plans. Plan
sponsors, plan fiduciaries and other financial intermediaries may establish
requirements as to the purchase, sale or exchange of shares of the Strategy,
including maximum and minimum initial investment requirements, that are
different from those described in this SAI. Plan fiduciaries should consider how
these requirements differ from the Strategy's share class eligibility criteria
before determining whether to invest.

            Currently, the Strategy makes its Class A shares available at NAV to
group retirement plans. Unless waived under the circumstances described above, a
1%, 1-year CDSC applies to the sale of Class A shares by a plan. Because Class K
shares have no CDSC and lower Rule 12b-1 distribution fees and Class I shares
have no CDSC or Rule 12b-1 distribution fees, plans should consider purchasing
Class K or Class I shares, if eligible, rather than Class A shares.

            In selecting among the Class A, Class K and Class R shares, plans
purchasing shares through a financial intermediary that is not willing to waive
advance commission payments (and therefore are not eligible for the waiver of
the 1%, 1-year CDSC applicable to Class A shares) should weigh the following:

      o     the lower Rule 12b-1 distribution fees (0.25%) and the 1%, 1-year
            CDSC with respect to Class A shares;

      o     the higher Rule 12b-1 distribution fees (0.50%) and the absence of a
            CDSC with respect to Class R shares; and

      o     the lower Rule 12b-1 distribution fees (0.25%) and the absence of a
            CDSC with respect to Class K shares.

            Because Class A and Class K shares have lower Rule 12b-1
distribution fees than Class R shares, plans should consider purchasing Class A
or Class K shares, if eligible, rather than Class R shares.

Sales Charge Reduction Programs for Class A Shares
--------------------------------------------------

            The AllianceBernstein Mutual Funds offer shareholders various
programs through which shareholders may obtain reduced sales charges or
reductions in CDSC through participation in such programs. In order for
shareholders to take advantage of the reductions available through the combined
purchase privilege, rights of accumulation and letters of intent, the Strategy
must be notified by the shareholder or his or her financial intermediary that
they qualify for such a reduction. If the Strategy is not notified that a
shareholder is eligible for these reductions, the Strategy will be unable to
ensure that the reduction is applied to the shareholder's account.

            Combined Purchase Privilege. Shareholders may qualify for the sales
charge reductions by combining purchases of shares of the Strategy (and/or any
other AllianceBernstein Mutual Fund) into a single "purchase". By combining such
purchases, shareholders may be able to take advantage of the quantity discounts
described under "Alternative Purchase Arrangements - Class A Shares". A
"purchase" means a single purchase or concurrent purchases of shares of the
Strategy or any other AllianceBernstein Mutual Fund, including AllianceBernstein
Institutional Funds, by (i) an individual, his or her spouse or domestic
partner, or the individual's children under the age of 21 years purchasing
shares for his, her or their own account(s), including certain CollegeBoundfund
accounts; (ii) a trustee or other fiduciary purchasing shares for a single
trust, estate or single fiduciary account with one or more beneficiaries
involved; or (iii) the employee benefit plans of a single employer. The term
"purchase" also includes purchases by any "company", as the term is defined in
the 1940 Act, but does not include purchases by any such company that has not
been in existence for at least six months or that has no purpose other than the
purchase of shares of the Strategy or shares of other registered investment
companies at a discount. The term "purchase" does not include purchases by any
group of individuals whose sole organizational nexus is that the participants
therein are credit card holders of a company, policy holders of an insurance
company, customers of either a bank or broker-dealer or clients of an investment
adviser.

                 Currently, the AllianceBernstein Mutual Funds include:

AllianceBernstein Blended Style Series, Inc.
  -AllianceBernstein 2000 Retirement Strategy
  -AllianceBernstein 2005 Retirement Strategy
  -AllianceBernstein 2010 Retirement Strategy
  -AllianceBernstein 2015 Retirement Strategy
  -AllianceBernstein 2020 Retirement Strategy
  -AllianceBernstein 2025 Retirement Strategy
  -AllianceBernstein 2030 Retirement Strategy
  -AllianceBernstein 2035 Retirement Strategy
  -AllianceBernstein 2040 Retirement Strategy
  -AllianceBernstein 2045 Retirement Strategy
  -AllianceBernstein 2050 Retirement Strategy
  -AllianceBernstein 2055 Retirement Strategy
AllianceBernstein Bond Fund, Inc.
  -AllianceBernstein Bond Inflation Strategy
  -AllianceBernstein Credit Long/Short Portfolio
  -AllianceBernstein Government Reserves Portfolio
  -AllianceBernstein High Yield Portfolio
  -AllianceBernstein Intermediate Bond Portfolio
  -AllianceBernstein Limited Duration High Income Portfolio
  -AllianceBernstein Municipal Bond Inflation Strategy
  -AllianceBernstein Real Asset Strategy
  -AllianceBernstein Tax-Aware Fixed Income Portfolio
AllianceBernstein Cap Fund, Inc.
  -AllianceBernstein Concentrated Growth Fund
  -AllianceBernstein Dynamic All Market Fund
  -AllianceBernstein Emerging Markets Multi-Asset Portfolio
  -AllianceBernstein Long/Short Multi-Manager Fund
  -AllianceBernstein Market Neutral Strategy - U.S.
  -AllianceBernstein Multi-Manager Alternative Strategies Fund
  -AllianceBernstein Select US Equity Portfolio
  -AllianceBernstein Select US Long/Short Portfolio
  -AllianceBernstein Small Cap Growth Portfolio
AllianceBernstein Core Opportunities Fund, Inc.
AllianceBernstein Discovery Growth Fund, Inc.
AllianceBernstein Equity Income Fund, Inc.
AllianceBernstein Exchange Reserves
AllianceBernstein Global Bond Fund, Inc.
AllianceBernstein Global Real Estate Investment Fund, Inc.
AllianceBernstein Global Risk Allocation Fund, Inc.
AllianceBernstein Global Thematic Growth Fund, Inc.
AllianceBernstein Growth and Income Fund, Inc.
AllianceBernstein High Income Fund, Inc.
AllianceBernstein International Growth Fund, Inc.
AllianceBernstein Large Cap Growth Fund, Inc.
AllianceBernstein Municipal Income Fund, Inc.
  -AllianceBernstein High Income Municipal Portfolio
  -California Portfolio
  -National Portfolio
  -New York Portfolio
AllianceBernstein Municipal Income Fund II
  -Arizona Portfolio
  -Massachusetts Portfolio
  -Michigan Portfolio
  -Minnesota Portfolio
  -New Jersey Portfolio
  -Ohio Portfolio
  -Pennsylvania Portfolio
  -Virginia Portfolio
AllianceBernstein Trust
  -AllianceBernstein Discovery Value Fund
  -AllianceBernstein Global Value Fund
  -AllianceBernstein International Value Fund
  -AllianceBernstein Value Fund
AllianceBernstein Unconstrained Bond Fund, Inc.
The AllianceBernstein Portfolios
  -AllianceBernstein Balanced Wealth Strategy
  -AllianceBernstein Conservative Wealth Strategy
  -AllianceBernstein Growth Fund
  -AllianceBernstein Tax-Managed Balanced Wealth Strategy
  -AllianceBernstein Tax-Managed Conservative Wealth Strategy
  -AllianceBernstein Tax-Managed Wealth Appreciation Strategy
  -AllianceBernstein Wealth Appreciation Strategy
Sanford C. Bernstein Fund, Inc.
  -Intermediate California Municipal Portfolio
  -Intermediate Diversified Municipal Portfolio
  -Intermediate New York Municipal Portfolio
  -International Portfolio
  -Short Duration Portfolio
  -Tax-Managed International Portfolio

            Prospectuses for the AllianceBernstein Mutual Funds may be obtained
without charge by contacting ABIS at the address or the "For Literature"
telephone number shown on the front cover of this SAI or on the Internet at
www.AllianceBernstein.com.

            Cumulative Quantity Discount (Right Of Accumulation). An investor's
purchase of additional Class A shares of the Strategy may be combined with the
value of the shareholder's existing accounts, thereby enabling the shareholder
to take advantage of the quantity discounts described under "Alternative
Purchase Arrangements--Class A Shares". In such cases, the applicable sales
charge on the newly purchased shares will be based on the total of:

            (i)   the investor's current purchase;

            (ii)  the higher of cost or NAV (at the close of business on the
                  previous day) of (a) all shares of the Strategy held by the
                  investor and (b) all shares held by the investor of any other
                  AllianceBernstein Mutual Fund, including AllianceBernstein
                  Institutional Funds and certain CollegeBoundfund accounts for
                  which the investor, his or her spouse or domestic partner, or
                  child under the age of 21 is a participant; and

            (iii) the higher of cost or NAV of all shares described in paragraph
                  (ii) owned by another shareholder eligible to combine his or
                  her purchase with that of the investor into a single
                  "purchase" (see above).

            The initial sales charge you pay on each purchase of Class A shares
will take into account your accumulated holdings in all shares of
AllianceBernstein Mutual Funds. Your accumulated holdings will be calculated as
(a) the value of your existing holding as of the day prior to your additional
investment or (b) the amount you invested including reinvested dividends but
excluding appreciation and less any amount of withdrawals, whichever is higher.

            For example, if an investor owned shares of an AllianceBernstein
Mutual Fund that were purchased for $200,000 and were worth $190,000 at their
then current NAV and, subsequently, purchased Class A shares of the Strategy
worth an additional $100,000, the initial sales charge for the $100,000 purchase
would be at the 2.25% rate applicable to a single $300,000 purchase of shares of
the Strategy, rather than the 3.25% rate.

            Letter of Intent. Class A investors may also obtain the quantity
discounts described under "Alternative Purchase Arrangements-Class A Shares" by
means of a written Letter of Intent, which expresses the investor's intention to
invest at least $100,000 in Class A shares of the Strategy or any
AllianceBernstein Mutual Fund within 13 months. Each purchase of shares under a
Letter of Intent will be made at the public offering price or prices applicable
at the time of such purchase to a single transaction of the dollar amount
indicated in the Letter of Intent.

            Investors qualifying for the Combined Purchase Privilege described
above may purchase shares of the AllianceBernstein Mutual Funds under a single
Letter of Intent. The AllianceBernstein 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 at the time an investor
signs a Letter of Intent to invest at least $100,000 in Class A shares of the
Strategy, the investor and the investor's spouse or domestic partner each
purchase shares of the Strategy worth $20,000 (for a total of $40,000), but the
current NAV of all applicable accounts is $45,000 at the time a $100,000 Letter
of Intent is initiated, it will only be necessary to invest a total of $55,000
during the following 13 months in shares of the Strategy or any other
AllianceBernstein Mutual Fund, to qualify for the 3.25% sales charge on the
total amount being invested (the sales charge applicable to an investment of
$100,000).

            The Letter of Intent is not a binding obligation upon the investor
to purchase the full amount indicated. The minimum initial investment under a
Letter of Intent is 5% of such amount. Shares purchased with the first 5% of
such amount will be held in escrow (while remaining registered in the name of
the investor) to secure payment of the higher sales charge applicable to the
shares actually purchased if the full amount indicated is not purchased, and
such escrowed shares will be involuntarily redeemed at their then NAV to pay the
additional sales charge, if necessary. Dividends on escrowed shares, whether
paid in cash or reinvested in additional Strategy shares, are not subject to
escrow. When the full amount indicated has been purchased, the escrow will be
released.

            Investors wishing to enter into a Letter of Intent in conjunction
with their initial investment in Class A shares of the Strategy can obtain a
form of Letter of Intent by contacting ABIS at the address or telephone numbers
shown on the cover of this SAI.

            Reinstatement Privilege. A shareholder who has redeemed any or all
of his or her Class A shares of the Strategy may reinvest all or any portion of
the proceeds from that redemption in Class A shares of any AllianceBernstein
Mutual Fund at NAV without any sales charge, provided that such reinvestment is
made within 120 calendar days after the redemption or repurchase date. Shares
are sold to a reinvesting shareholder at the NAV next determined as described
above. A reinstatement pursuant to this privilege will not cancel the redemption
or repurchase transaction; therefore, any gain or loss so realized will be
recognized for federal income tax purposes except that no loss will be
recognized to the extent that the proceeds are reinvested in shares of the
Strategy within 30 calendar days after the redemption or repurchase transaction.
Investors may exercise the reinstatement privilege by written request sent to
the Strategy at the address shown on the cover of this SAI.

            Dividend Reinvestment Program. Under the Strategy's Dividend
Reinvestment Program, unless you specify otherwise, your dividends and
distributions will be automatically reinvested in the same class of shares of
the Strategy without an initial sales charge or CDSC. If you elect to receive
your distributions in cash, you will only receive a check if the distribution is
equal to or exceeds $25.00. Distributions of less than $25.00 will automatically
be reinvested in Strategy shares. To receive distributions of less than $25.00
in cash, you must have bank instructions associated to your account so that
distributions can be delivered to you electronically via Electronic Funds
Transfer using the Automated Clearing House or "ACH". If you elect to receive
distributions by check, your distributions and all subsequent distributions may
nonetheless be reinvested in additional shares of the Strategy under the
following circumstances:

            (a)   the postal service is unable to deliver your checks to your
                  address of record and the checks are returned to the
                  Strategy's transfer agent as undeliverable; or

            (b)   your checks remain uncashed for nine months.

            Additional shares of the Strategy will be purchased at the then
current NAV. You should contact the Strategy's transfer agent to change your
distribution option. Your request to do so must be received by the transfer
agent before the record date for a distribution in order to be effective for
that distribution. No interest will accrue on amounts represented by uncashed
distribution checks.

            Dividend Direction Plan. A shareholder who already maintains
accounts in more than one AllianceBernstein Mutual Fund may direct that income
dividends and/or capital gains paid by one AllianceBernstein Mutual Fund be
automatically reinvested, in any amount, without the payment of any sales or
service charges, in shares of the same class of the other AllianceBernstein
Mutual Fund(s). Further information can be obtained by contacting ABIS at the
address or the "For Literature" telephone number shown on the cover of this SAI.
Investors wishing to establish a dividend direction plan in connection with
their initial investment should complete the appropriate section of the Mutual
Fund Application. Current shareholders should contact ABIS to establish a
dividend direction plan.

Systematic Withdrawal Plan
--------------------------

            General. Any shareholder who owns or purchases shares of the
Strategy having a current NAV of at least $5,000 may establish a systematic
withdrawal plan under which the shareholder will periodically receive a payment
in a stated amount of not less than $50 on a selected date. The $5,000 account
minimum does not apply to a shareholder owning shares through an individual
retirement account or other retirement plan who has attained the age of 70 1/2
who wishes to establish a systematic withdrawal plan to help satisfy a required
minimum distribution. Systematic withdrawal plan participants must elect to have
their dividends and distributions from the Strategy automatically reinvested in
additional shares of the Strategy.

            Shares of the Strategy owned by a participant in the Strategy's
systematic withdrawal plan will be redeemed as necessary to meet withdrawal
payments and such payments will be subject to any taxes applicable to
redemptions and, except as discussed below with respect to Class A and Class C
shares, any applicable CDSC. Shares acquired with reinvested dividends and
distributions will be liquidated first to provide such withdrawal payments and
thereafter other shares will be liquidated to the extent necessary, and
depending upon the amount withdrawn, the investor's principal may be depleted. A
systematic withdrawal plan may be terminated at any time by the shareholder or
the Strategy.

            Withdrawal payments will not automatically end when a shareholder's
account reaches a certain minimum level. Therefore, redemptions of shares under
the plan may reduce or even liquidate a shareholder's account and may subject
the shareholder to the Strategy's involuntary redemption provisions. See
"Redemption and Repurchase of Shares--General". Purchases of additional shares
concurrently with withdrawals are undesirable because of sales charges
applicable when purchases are made. While an occasional lump-sum investment may
be made by a holder of Class A shares who is maintaining a systematic withdrawal
plan, such investment should normally be an amount equivalent to three times the
annual withdrawal or $5,000, whichever is less.

            Payments under a systematic withdrawal plan may be made by check or
electronically via the Automated Clearing House ("ACH") network. Investors
wishing to establish a systematic withdrawal plan in conjunction with their
initial investment in shares of the Strategy should complete the appropriate
portion of the Mutual Fund Application, while current Strategy shareholders
desiring to do so can obtain an application form by contacting ABIS at the
address or the "For Literature" telephone number shown on the cover of this SAI.

            CDSC Waiver for Class A Shares and Class C Shares. Under the
systematic withdrawal plan, up to 1% monthly, 2% bi-monthly or 3% quarterly of
the value at the time of redemption of the Class A or Class C shares in a
shareholder's account may be redeemed free of any CDSC.

            With respect to Class A and Class C shares, shares held the longest
will be redeemed first and will count toward the foregoing limitations.
Redemptions in excess of those limitations will be subject to any otherwise
applicable CDSC.

Payments to Financial Advisors and Their Firms
----------------------------------------------

            Financial intermediaries market and sell shares of the Strategy.
These financial intermediaries employ financial advisors and receive
compensation for selling shares of the Strategy. This compensation is paid from
various sources, including any sales charge, CDSC and/or Rule 12b-1 fee that you
or the Strategy may pay. Your individual financial advisor may receive some or
all of the amounts paid to the financial intermediary that employs him or her.

            In the case of Class A shares, all or a portion of the initial sales
charge that you pay may be paid by ABI to financial intermediaries selling Class
A shares. ABI may also pay these financial intermediaries a fee of up to 1% on
purchases of $1 million or more. Additionally, up to 100% of the Rule 12b-1 fees
applicable to Class A shares each year may be paid to financial intermediaries,
including your financial intermediary, that sell Class A shares.

            In the case of Class C shares, ABI may pay, at the time of your
purchase, a commission to firms selling Class C shares in an amount equal to 1%
of your investment. Additionally, up to 100% of the Rule 12b-1 fee applicable to
Class C shares each year may be paid to financial intermediaries, including your
financial intermediary, that sell Class C shares.

            In the case of Class R and Class K shares, up to 100% of the Rule
12b-1 fee applicable to Class R and Class K shares each year may be paid to
financial intermediaries, including your financial intermediary, that sell Class
R and Class K shares.

            In the case of Advisor Class shares, your financial advisor may
charge ongoing fees or transactional fees. ABI may pay a portion of "ticket" or
other transactional charges.

            Your financial advisor's firm receives compensation from the
Strategy, ABI and/or the Adviser in several ways from various sources, which
include some or all of the following:

            o     upfront sales commissions;

            o     Rule 12b-1 fees;

            o     additional distribution support;

            o     defrayal of costs for educational seminars and training; and

            o     payments related to providing sub-accounting or shareholder
                  servicing.

Other Payments for Distribution Services and Educational Support
----------------------------------------------------------------

            In addition to the commissions paid to financial intermediaries at
the time of sale and the fees described under "Asset-Based Sales Charges or
Distribution and/or Service (Rule 12b-1) Fees", in your Prospectus, some or all
of which may be paid to financial intermediaries (and, in turn, to your
financial advisor), ABI, at its expense, currently provides additional payments
to firms that sell shares of the AllianceBernstein 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
AllianceBernstein 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 to
reimburse directly or indirectly the costs incurred by these firms and their
employees in connection with educational seminars and training efforts about the
AllianceBernstein 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.

            For 2014, ABI's additional payments to these firms for distribution
services and educational support related to the AllianceBernstein Mutual Funds
are expected to be approximately 0.05% of the average monthly assets of the
AllianceBernstein Mutual Funds, or approximately $21 million. In 2013, ABI paid
approximately 0.05% of the average monthly assets of the AllianceBernstein
Mutual Funds or approximately $19 million for distribution services and
educational support related to the AllianceBernstein Mutual Funds.

            A number of factors are considered in determining the additional
payments, including each firm's AllianceBernstein 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 or marketing purposes. In some cases,
firms will include the AllianceBernstein 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
AllianceBernstein Mutual Funds so that they can provide suitable information and
advice about the funds and related investor services.

            The Strategy and ABI also make payments for sub-accounting or
shareholder servicing to financial intermediaries that sell AllianceBernstein
Mutual Fund shares. Please see "Expenses of the Strategy - Transfer Agency
Agreement" above. These expenses paid by the Strategy are included in "Other
Expenses" under "Fees and Expenses of the Strategy - Annual Strategy Operating
Expenses" in your 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
Strategy, 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:

         Advisor Group, Inc.
         Ameriprise Financial Services
         AXA Advisors
         Cadaret, Grant & Co.
         CCO Investment Services Corp.
         Commonwealth Financial Network
         Donegal Securities
         JP Morgan Securities
         LPL Financial
         Merrill Lynch
         Morgan Stanley
         Northwestern Mutual Investment Services
         PNC Investments
         Raymond James
         RBC Wealth Management
         Robert W. Baird
         Santander Securities
         UBS Financial Services
         US Bancorp Investments
         Wells Fargo Advisors

            ABI expects that additional firms may be added to this list from
time to time.

            Although the Strategy may use brokers and dealers who sell shares of
the Strategy to effect portfolio transactions, the Strategy does not consider
the sale of AllianceBernstein Mutual Fund shares as a factor when selecting
brokers or dealers to effect portfolio transactions.


--------------------------------------------------------------------------------

                      REDEMPTION AND REPURCHASE OF SHARES

--------------------------------------------------------------------------------

            The following information supplements that set forth in your
Prospectus under the heading "Investing in the Strategy". If you are an Advisor
Class shareholder through an account established under a fee-based program your
fee-based program may impose requirements with respect to the purchase, sale or
exchange of Advisor Class shares of the Strategy that are different from those
described herein. A transaction fee may be charged by your financial
intermediary with respect to the purchase, sale or exchange of Advisor Class
shares made through such financial intermediary. Similarly, if you are a
shareholder through a group retirement plan, your plan may impose requirements
with respect to the purchase, sale or exchange of shares of the Strategy that
are different from those imposed below. The Strategy has authorized one or more
brokers to receive on its behalf purchase and redemption orders. Such brokers
are authorized to designate other intermediaries to receive purchase and
redemption orders on the Strategy's behalf. In such cases, orders will receive
the NAV next computed after such order is properly received by the authorized
broker or designee and accepted by the Strategy.

Redemption
----------

            Subject only to the limitations described below, the Strategy will
redeem the shares tendered to it, as described below, at a redemption price
equal to their NAV as next computed following the receipt of shares tendered for
redemption in proper form. Except for any CDSC which may be applicable to Class
A or Class C shares, there is no redemption charge. Payment of the redemption
price normally will be made within seven days after the Strategy's receipt of
such tender for redemption. If a shareholder is in doubt about what documents
are required by his or her fee-based program or employee benefit plan, the
shareholder should contact his or her financial intermediary.

            The right of redemption may not be suspended or the date of payment
upon redemption postponed for more than seven days after shares are tendered for
redemption, except for any period during which the Exchange is closed (other
than customary weekend and holiday closings) or during which the SEC determines
that trading thereon is restricted, or for any period during which an emergency
(as determined by the SEC) exists as a result of which disposal by the Strategy
of securities owned by it is not reasonably practicable or as a result of which
it is not reasonably practicable for the Strategy fairly to determine the value
of its net assets, or for such other periods as the SEC may by order permit for
the protection of security holders of the Strategy.

            Payment of the redemption price normally will be made in cash but
may be made, at the option of the Strategy, in kind. No interest will accrue on
uncashed redemption checks. The value of a shareholder's shares on redemption or
repurchase may be more or less than the cost of such shares to the shareholder,
depending upon the market value of the Strategy's portfolio securities at the
time of such redemption or repurchase. Redemption proceeds on Class A and Class
C shares will reflect the deduction of the CDSC, if any. Payment received by a
shareholder upon redemption or repurchase of his or her shares, assuming the
shares constitute capital assets in his or her hands, will result in long-term
or short-term capital gain (or loss) depending upon the shareholder's holding
period and basis in respect of the shares redeemed.

            To redeem shares of the Strategy by mail, the registered owner or
owners should forward a letter to the Strategy containing a request for
redemption. The Strategy may require the signature or signatures on the letter
to be Medallion Signature Guaranteed. Please contact ABIS to confirm whether a
Medallion Signature Guarantee is needed.

            Telephone Redemption - Payment by Electronic Funds Transfer. Each
Strategy shareholder is entitled to request redemption with payment by
electronic funds transfer by telephone at (800) 221-5672 if the shareholder has
completed the appropriate portion of the Mutual Fund Application or, if an
existing shareholder has not completed this portion, by an "Autosell"
application obtained from ABIS (except for certain omnibus accounts). A
telephone redemption request for payment by electronic funds transfer may not
exceed $100,000, and must be made before the Strategy Closing Time on a Strategy
business day as defined above. Proceeds of telephone redemptions will be sent by
electronic funds transfer to a shareholder's designated bank account at a bank
selected by the shareholder that is a member of the NACHA.

            Telephone Redemption - Payment by Check. Each Strategy shareholder
is eligible to request redemption with payment by check of Strategy shares by
telephone at (800) 221-5672 before the Strategy Closing Time on a Strategy
business day in an amount not exceeding $100,000. Proceeds of such redemptions
are remitted by check to the shareholder's address of record. A shareholder
otherwise eligible for telephone redemption by check may cancel the privilege by
written instruction to ABIS, or by checking the appropriate box on the Mutual
Fund Application.

            Telephone Redemptions - General. During periods of drastic economic,
market or other developments, such as the terrorist attacks on September 11,
2001, it is possible that shareholders would have difficulty in reaching ABIS by
telephone (although no such difficulty was apparent at any time in connection
with the attacks). If a shareholder were to experience such difficulty, the
shareholder should issue written instructions to ABIS at the address shown on
the cover of this SAI. The Strategy reserves the right to suspend or terminate
its telephone redemption service at any time without notice. Telephone
redemption is not available with respect to shares (i) held in nominee or
"street name" accounts, (ii) held by a shareholder who has changed his or her
address of record within the preceding 30 calendar days or (iii) held in any
retirement plan account. Neither the Strategy, the Adviser, ABI nor ABIS will be
responsible for the authenticity of telephone requests for redemptions that the
Strategy reasonably believes to be genuine. The Strategy will employ reasonable
procedures in order to verify that telephone requests for redemptions are
genuine, including, among others, recording such telephone instructions and
causing written confirmations of the resulting transactions to be sent to
shareholders. If the Strategy did not employ such procedures, it could be liable
for losses arising from unauthorized or fraudulent telephone instructions.
Financial intermediaries may charge a commission for handling telephone requests
for redemptions.

            The Strategy may redeem shares through ABI or financial
intermediaries. The repurchase price will be the NAV next determined after ABI
receives the request (less the CDSC, if any, with respect to the Class A and
Class C shares), except that requests placed through financial intermediaries
before the Strategy Closing Time will be executed at the NAV determined as of
the Strategy Closing Time if received by ABI prior to its close of business on
that day (normally 5:00 p.m., Eastern time). The financial intermediary is
responsible for transmitting the request to ABI by 5:00 p.m., Eastern time
(certain financial intermediaries may enter into operating agreements permitting
them to transmit purchase information that was received prior to the close of
business to ABI after 5:00 p.m., Eastern time and receive that day's NAV). If
the financial intermediary fails to do so, the shareholder's right to receive
that day's closing price must be settled between the shareholder and that
financial intermediary. A shareholder may offer shares of the Strategy to ABI
either directly or through a financial intermediary. Neither the Strategy nor
ABI charges a fee or commission in connection with the redemption of shares
(except for the CDSC, if any, with respect to Class A and Class C shares).
Normally, if shares of the Strategy are offered through a financial
intermediary, the redemption is settled by the shareholder as an ordinary
transaction with or through that financial intermediary, who may charge the
shareholder for this service. The redemption of shares of the Strategy as
described above with respect to financial intermediaries is a voluntary service
of the Strategy and the Strategy may suspend or terminate this practice at any
time.

Account Closure
---------------

            The Strategy reserves the right to close out an account that has
remained below $1,000 for 90 days. No CDSC will be deducted from the proceeds of
this redemption. In the case of a redemption or repurchase of shares of the
Strategy recently purchased by check, redemption proceeds will not be made
available until the Strategy is reasonably assured that the check has cleared,
normally up to 15 calendar days following the purchase date.

--------------------------------------------------------------------------------

                              SHAREHOLDER SERVICES

--------------------------------------------------------------------------------

            The following information supplements that set forth in your
Prospectus under the heading "Investing in the Strategy". The shareholder
services set forth below are applicable to all classes of shares of the Strategy
unless otherwise indicated.

            If you are an Advisor Class shareholder through an account
established under a fee-based program or a shareholder in a group retirement
plan, your fee-based program or retirement plan may impose requirements with
respect to the purchase, sale or exchange of shares of the Strategy that are
different from those described herein. A transaction fee may be charged by your
financial intermediary with respect to the purchase, sale or exchange of Advisor
Class shares made through such intermediary.

Automatic Investment Program
----------------------------

            Investors may purchase shares of the Strategy through an automatic
investment program utilizing electronic funds transfer drawn on the investor's
own bank account. Under such a program, pre-authorized monthly drafts for a
fixed amount are used to purchase shares through the financial intermediary
designated by the investor at the public offering price next determined after
ABI receives the proceeds from the investor's bank. The monthly drafts must be
in minimum amounts of either $50 or $200, depending on the investor's initial
purchase. If an investor makes an initial purchase of at least $2,500, the
minimum monthly amount for pre-authorized drafts is $50. If an investor makes an
initial purchase of less than $2,500, the minimum monthly amount for
pre-authorized drafts is $200 and the investor must commit to a monthly
investment of at least $200 until the investor's account balance is $2,500 or
more. In electronic form, drafts can be made on or about a date each month
selected by the shareholder. Investors wishing to establish an automatic
investment program in connection with their initial investment should complete
the appropriate portion of the Mutual Fund Application. Current shareholders
should contact ABIS at the address or telephone numbers shown on the cover of
this SAI to establish an automatic investment program.

Exchange Privilege
------------------

            You may exchange your investment in the Strategy for shares of the
same class of other AllianceBernstein Mutual Funds (including AllianceBernstein
Exchange Reserves, a money market fund managed by the Adviser) if the other
AllianceBernstein Mutual Fund in which you wish to invest offers shares of the
same class. In addition, (i) present officers and full-time employees of the
Adviser, (ii) present Directors or Trustees of any AllianceBernstein Mutual
Fund, (iii) certain employee benefit plans for employees of the Adviser, ABI,
ABIS and their affiliates and (iv) certain 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 such persons pay an
asset-based fee for service in the nature of investment advisory or
administrative services may, on a tax-free basis, exchange Class A or Class C
shares of the Strategy for Advisor Class shares of the Strategy or Class C
shares of the Strategy for Class A shares of the Strategy. Exchanges of shares
are made at the NAV next determined and without sales or service charges.
Exchanges may be made by telephone or written request. In order to receive a
day's NAV, ABIS must receive and confirm a telephone exchange request by the
Strategy Closing Time on that day.

            Shares will continue to age without regard to exchanges for purpose
of determining the CDSC, if any, upon redemption. When redemption occurs, the
CDSC applicable to the shares of the AllianceBernstein Mutual Fund you
originally purchased for cash is applied.

            Please read carefully the prospectus of the AllianceBernstein Mutual
Fund into which you are exchanging before submitting the request. Call ABIS at
(800) 221-5672 to exchange uncertificated shares. Except with respect to
exchanges of Class A or Class C shares of the Strategy for Advisor Class shares
or Class C shares for Class A shares of the same Strategy, exchanges of shares
as described above in this section are taxable transactions for federal income
tax purposes. The exchange service may be modified, restricted, or terminated on
60 days' written notice.

            All exchanges are subject to the minimum investment requirements and
any other applicable terms set forth in the prospectus for the AllianceBernstein
Mutual Fund whose shares are being acquired. An exchange is effected through the
redemption of the shares tendered for exchange and the purchase of shares being
acquired at their respective NAVs as next determined following receipt by the
AllianceBernstein Mutual Fund whose shares are being exchanged of (i) proper
instructions and all necessary supporting documents as described in such fund's
prospectus, or (ii) a telephone request for such exchange in accordance with the
procedures set forth in the following paragraph. Exchanges of shares of
AllianceBernstein Mutual Funds will generally result in the realization of a
capital gain or loss for federal income tax purposes.

            Each Strategy shareholder and the shareholder's financial
intermediary are authorized to make telephone requests for exchanges unless ABIS
receives written instruction to the contrary from the shareholder, or the
shareholder declines the privilege by checking the appropriate box on the Mutual
Fund Application. Shares acquired pursuant to a telephone request for exchange
will be held under the same account registration as the shares redeemed through
such exchange.

            Eligible shareholders desiring to make an exchange should telephone
ABIS with their account number and other details of the exchange, at (800)
221-5672 before the Strategy Closing Time on the Strategy business day as
defined above. Telephone requests for exchange received before the Strategy
Closing Time on the Strategy business day will be processed as of the close of
business on that day. During periods of drastic economic, market or other
developments, such as the terrorist attacks on September 11, 2001, it is
possible that shareholders would have difficulty in reaching ABIS by telephone
(although no such difficulty was apparent at any time in connection with the
attacks). If a shareholder were to experience such difficulty, the shareholder
should issue written instructions to ABIS at the address shown on the cover of
this SAI.

            A shareholder may elect to initiate a monthly "Auto Exchange"
whereby a specified dollar amount's worth of his or her Strategy shares (minimum
$25) is automatically exchanged for shares of another AllianceBernstein Mutual
Fund.

            None of the AllianceBernstein Mutual Funds, the Adviser, ABI or ABIS
will be responsible for the authenticity of telephone requests for exchanges
that the Strategy reasonably believes to be genuine. The Strategy will employ
reasonable procedures in order to verify that telephone requests for exchanges
are genuine, including, among others, recording such telephone instructions and
causing written confirmations of the resulting transactions to be sent to
shareholders. If the Strategy did not employ such procedures, it could be liable
for losses arising from unauthorized or fraudulent telephone instructions.
Financial intermediaries may charge a commission for handling telephone requests
for exchanges.

            The exchange privilege is available only in states where shares of
the AllianceBernstein Mutual Fund being acquired may be legally sold. Each
AllianceBernstein Mutual Fund reserves the right, at any time on 60 days' notice
to its shareholders to reject any order to acquire its shares through exchange
or otherwise, to modify, restrict or terminate the exchange privilege.

Statements and Reports
----------------------

            Each shareholder receives semi-annual and annual reports which
include a portfolio of investments, financial statements and, in the case of the
annual report, the report of the Strategy's independent registered public
accounting firm, Ernst & Young LLP, as well as a confirmation of each purchase
and redemption. By contacting his or her financial intermediary or ABIS, a
shareholder can arrange for copies of his or her account statements to be sent
to another person.

--------------------------------------------------------------------------------

                                NET ASSET VALUE

--------------------------------------------------------------------------------

            The NAV of the Strategy is computed each day the Exchange is open at
the close of regular trading (ordinarily 4:00 p.m., Eastern time, but sometimes
earlier, as in the case of scheduled half-day trading or unscheduled suspensions
of trading) following receipt of a purchase or redemption order by the Strategy
on each Strategy business day on which such an order is received and on such
other days as the Board deems appropriate or necessary in order to comply with
Rule 22c-1 under the 1940 Act. The Strategy's per share NAV is calculated by
dividing the value of the Strategy's total assets, less its liabilities, by the
total number of its shares then outstanding. A Strategy business day is any
weekday on which the Exchange is open for trading.

            Portfolio securities are valued at current market value or at fair
value as determined in accordance with applicable rules under the 1940 Act and
the Fund's pricing policies and procedures (the "Pricing Policies") established
by and under the general supervision of the Board. The Board has delegated to
the Adviser, subject to the Board's continuing oversight, certain of its duties
with respect to the Pricing Policies. The Adviser has established a Valuation
Committee, which operates under policies and procedures approved by the Board,
to value the Strategy's assets on behalf of the Strategy.

            Whenever possible, securities are valued based on market information
on the business day as of which the value is being determined as follows:

            (a) an equity security listed on the Exchange, or on another
national or foreign exchange (other than securities listed on the NASDAQ Stock
Exchange ("NASDAQ")), is valued at the last sale price reflected on the
consolidated tape at the close of the exchange. If there has been no sale on the
relevant business day, the security is then valued at the last-traded price from
the previous day. If the Adviser becomes aware of any news/market events that
would cause the Valuation Committee to believe that the last-traded price does
not reflect fair value, the security is valued in good faith at fair value by,
or in accordance with procedures approved by, the Board;

            (b) an equity security traded on NASDAQ is valued at the NASDAQ
Official Closing Price;

            (c) an OTC equity security is valued at the mid level between the
current bid and asked prices. If the mid price is not available, the security
will be valued at the bid price. An equity security traded on more than one
exchange is valued in accordance with paragraph (a) above by reference to the
principal exchange (as determined by the Adviser) on which the security is
traded;

            (d) a listed or OTC put or call option is valued at the mid level
between the current bid and asked prices (for options or futures contracts, see
item (e)). If neither a current bid or a current ask price is available, the
Adviser will have discretion to determine the best valuation (e.g., last trade
price) and then bring the issue to the Board's Valuation Committee the next day;

            (e) an open futures contract and any option thereon is valued at 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 relevant business
day, the security is valued at the last available closing settlement price;

            (f) a listed right is valued at the last-traded price provided by
approved vendors. If there has been no sale on the relevant business day, the
right is valued at the last-traded price from the previous day. On the following
day, the security is valued in good faith at fair value. For an unlisted right,
the calculation used in determining a value is the price of the reference
security minus the subscription price multiplied by the terms of the right.
There may be some instances when the subscription price is greater than the
referenced security right. In such instances, the right would be valued as
worthless; (g) a listed warrant is valued at the last traded price provided by
approved vendors. If there is no sale on the relevant business day, the warrant
is valued at the last traded price from the previous day. On the following day,
the security is valued in good faith at fair value. All unlisted warrants are
valued in good faith at fair value. Once a warrant has expired, it will no
longer be valued;

            (g) a listed warrant is valued at the last-traded price provided by
approved vendors. If there is no sale on the relevant business day, the warrant
is valued at the last-traded price from the previous day. On the following day,
the security is valued in good faith at fair value. All unlisted warrants are
valued in good faith at fair value. Once a warrant has expired, it will no
longer be valued;

            (h) preferred securities are valued based on prices received from
approved vendors that use last trade data for listed preferreds and evaluated
bid prices for non-listed preferreds, as well as for listed preferreds when
there is no trade activity;

            (i) U.S. Government securities and any other debt instrument having
60 days or less remaining until maturity are generally valued at amortized cost
if its original maturity was 60 days or less. If the original term to maturity
exceeded 60 days, the securities are valued by an independent pricing vendor, if
a market price is available. If a market price is not available, the securities
are valued by using amortized cost as of the 61st day prior to maturity if the
original term to maturity exceeded 60 days. The Adviser is responsible for
monitoring whether any circumstances have occurred that indicate that the use of
the amortized cost method for any security is not appropriate due to such
factors as, but not limited to, an impairment of the creditworthiness of the
issuer or material changes in interest rates;

            (j) a fixed-income security is typically valued on the basis of bid
prices provided by an approved pricing vendor when the Adviser reasonably
believes that such prices reflect the fair market value of the security. In
certain markets, the market convention may be to use the mid price between bid
and offer. Fixed-income securities may be valued on the basis of mid prices when
the approved pricing vendor normally provides mid prices, reflecting the
conventions of the particular markets. The prices provided by an approved
pricing vendor may take into account many factors, including institutional size
trading in similar groups of securities and any developments related to specific
securities. If the Adviser determines that an appropriate pricing vendor does
not exist for a security in a market that typically values such securities on
the basis of a bid price or prices for a security are not available from a
pricing source, the security is valued on the basis of a quoted bid price or
spread over the applicable yield curve (a bid spread) by a broker/dealer in such
security. If the Adviser receives multiple broker quotes that are deemed to be
reliable, then the Adviser will utilize the second highest broker quote. If an
appropriate pricing vendor does not exist for a security in a market where
convention is to use the mid price, the security is valued on the basis of a
quoted mid price by a broker-dealer in such security;



            (k) bank loans are valued on the basis of bid prices provided by a
pricing vendor;

            (l) bridge loans are valued at fair value, which equates to the
outstanding loan amount unless it is determined by the Adviser that any
particular bridge loan should be valued at something other than outstanding loan
amount. This may occur due to, for example, a significant change in the
high-yield market and/or a significant change in the status of any particular
issuer or issuers of bridge loans;

            (m) whole loans: residential and commercial mortgage whose loans and
whole loan pools are market priced by an approved vendor;

            (n) forward and spot currency pricing is provided by an independent
vendor. The rate provided by the approved vendor is a mid price for forward and
spot rates. In most instances whenever both an "onshore" rate and an "offshore"
(i.e., NDF) rate is available, the Adviser will use the offshore (NDF) rate. NDF
contracts are used for currencies where it is difficult (and sometimes
impossible) to take actual delivery of the currency;

            (o) OTC derivatives pricing: various approved external vendors are
used to obtain derivatives values or obtain information used to derive a price
for each investment. This information is placed into various pricing models that
can be sourced by the Adviser or from approved vendors (depending on the type of
derivative) to derive a price for each investment. These pricing models are
monitored/reviewed on an ongoing basis by the Adviser;

            (p) mutual funds and other pooled vehicles: the Adviser receives
pricing information for mutual funds and other pooled vehicles from various
sources (including AllianceBernstein Global Fund Administrator and the external
custodian banks). Open-end mutual funds are valued at the closing NAV per share
and closed-end funds and exchange-traded funds are valued at the closing market
price per share;

            (q) repurchase agreements and reverse repurchase agreements:
repurchase agreements and reverse repurchase agreements will be valued based on
their original cost plus accrued interest;

            (r) hedge funds: hedge funds will be priced at the most recent
available closing NAV per share;

            (s) equity-linked notes: prices are sourced at the end of the
pricing day from approved vendors. The vendor methodology is to source the
relevant underlying exchange closing prices and convert them to U.S. dollars;

            (t) credit-linked notes: prices are sourced on the reference bond
consistent with fixed-income security methodology as noted above, which are
passed through as the price on the credit-linked note. Alternatively, broker
marks are obtained.

            The Strategy values its securities at their current market value
determined on the basis of market quotations as set forth above or, if market
quotations are not readily available or are unreliable, at "fair value" as
determined in accordance with procedures established by and under the general
supervision of the Board. When the Strategy uses fair value pricing, it may take
into account any factors it deems appropriate. The Strategy may determine fair
value based upon developments related to a specific security, current valuations
of foreign stock indices (as reflected in U.S. futures markets) and/or U.S.
sector or broader stock market indices. The prices of securities used by the
Strategy to calculate its NAV may differ from quoted or published prices for the
same securities. Fair value pricing involves subjective judgments and it is
possible that the fair value determined for a security is materially different
than the value that could be realized upon the sale of that security.

            The Strategy expects to use fair value pricing for securities
primarily traded on U.S. exchanges only under very limited circumstances, such
as the early closing of the exchange on which a security is traded or suspension
of trading in the security. The Strategy may use fair value pricing more
frequently for securities primarily traded in non-U.S. markets because, among
other things, most foreign markets close well before the Strategy ordinarily
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. For example, the Strategy
believes that foreign security values may be affected by events that occur after
the close of foreign securities markets. To account for this, the Strategy may
frequently value many of its foreign equity securities using fair value prices
based on third party vendor modeling tools to the extent available.

            Subject to the Board's oversight, the Board has delegated
responsibility for valuing the Strategy's assets to the Adviser. The Adviser has
established a Valuation Committee, which operates under the policies and
procedures approved by the Board, to value the Strategy's assets on behalf of
the Strategy. The Valuation Committee values Strategy assets as described above.

            The Board may suspend the determination of its NAV (and the offering
and sale of shares), subject to the rules of the SEC and other governmental
rules and regulations, at a time when: (1) the Exchange is closed, other than
customary weekend and holiday closings, (2) an emergency exists as a result of
which it is not reasonably practicable for the Strategy to dispose of securities
owned by it or to determine fairly the value of its net assets, or (3) for the
protection of shareholders, the SEC by order permits a suspension of the right
of redemption or a postponement of the date of payment on redemption.

            For purposes of determining the Strategy's per share NAV, all assets
and liabilities initially expressed in a foreign currency will be converted into
U.S. Dollars at the mean of the current bid and asked prices of such currency
against the U.S. Dollar last quoted by a major bank that is a regular
participant in the relevant foreign exchange market or on the basis of a pricing
service that takes into account the quotes provided by a number of such major
banks. If such quotations are not available as of the close of the Exchange, the
rate of exchange will be determined in good faith by, or under the direction of,
the Board.

            The assets attributable to the Class A shares, Class C shares, Class
R shares, Class K shares, Class I shares and Advisor Class shares will be
invested together in a single portfolio. The NAV of each class will be
determined separately by subtracting the liabilities allocated to that class
from the assets belonging to that class in conformance with the provisions of a
plan adopted by the Strategy in accordance with Rule 18f-3 under the 1940 Act.

--------------------------------------------------------------------------------

                       DIVIDENDS, DISTRIBUTIONS AND TAXES

--------------------------------------------------------------------------------

            Dividends paid by the Strategy, if any, with respect to Class A,
Class C, Class R, Class K, Class I and Advisor Class shares of the Strategy will
be calculated in the same manner at the same time on the same day and will be in
the same amount, except that the higher distribution services applicable to
Class C shares, and any incremental transfer agency costs relating to Class C
shares, will be borne exclusively by the class to which they relate.

            The following summary addresses only the principal United States
federal income tax considerations pertinent to the Strategy and to shareholders
of the Strategy. This summary does not address the United States federal income
tax consequences of owning shares to all categories of investors, some of which
may be subject to special rules. This summary is based upon the advice of
counsel for the Strategy and upon current law and interpretations thereof. No
confirmation has been obtained from the relevant tax authorities. There is no
assurance that the applicable laws and interpretations will not change.

            In view of the individual nature of tax consequences, each
shareholder is advised to consult the shareholder's own tax adviser with respect
to the specific tax consequences of being a shareholder of the Strategy,
including the effect and applicability of federal, state, local, foreign and
other tax laws and the effects of changes therein.

United States Federal Income Taxation of Dividends and Distributions
--------------------------------------------------------------------

General
-------

            The Strategy intends for each taxable year to qualify to be taxed as
a "regulated investment company" under the Code. To so qualify, the Strategy
must, among other things, (i) derive at least 90% of its gross income in each
taxable year from dividends, interest, payments with respect to securities
loans, gains from the sale or other disposition of stock, securities or foreign
currency, certain other income (including, but not limited to, gains from
options, futures or forward contracts) derived with respect to its business of
investing in stock, securities or currency or net income derived from interests
in certain qualified publicly traded partnerships; and (ii) diversify its
holdings so that, at the end of each quarter of its taxable year, the following
two conditions are met: (a) at least 50% of the value of the Strategy's assets
is represented by cash, cash items, U.S. Government securities, securities of
other regulated investment companies and other securities with respect to which
the Strategy's investment is limited, in respect of any one issuer, to an amount
not greater than 5% of the value of the Strategy's assets and not more than 10%
of the outstanding voting securities of such issuer and (b) not more than 25% of
the value of the Strategy's assets is invested in securities of any one issuer
(other than U.S. Government securities or securities of other regulated
investment companies), securities (other than securities of other regulated
investment companies) of any two or more issuers which the Strategy controls and
which are engaged in the same or similar trades or businesses or related trades
or businesses, or securities of one or more qualified publicly traded
partnerships.

            If the Strategy qualifies as a regulated investment company for any
taxable year and makes timely distributions to its shareholders of 90% or more
of its investment company taxable income for that year (calculated without
regard to its net capital gain, i.e., the excess of its net long-term capital
gain over its net short-term capital loss) it will not be subject to federal
income tax on the portion of its taxable income for the year (including any net
capital gain) that it distributes to shareholders.

            The Strategy will also avoid the 4% federal excise tax that would
otherwise apply to certain undistributed income for a given calendar year if it
makes timely distributions to the shareholders equal to at least the sum of (i)
98% of its ordinary income for that year, (ii) 98.2% of its capital gain net
income and foreign currency gains for the twelve-month period ending on October
31 that year or later, if the Strategy is permitted to so elect and so elects,
and (iii) any ordinary income or capital gain net income from the preceding
calendar year that was not distributed during that year. For this purpose,
income or gain retained by the Strategy that is subject to corporate income tax
will be considered to have been distributed by the Strategy during such year.
For federal income and excise tax purposes, dividends declared and payable to
shareholders of record as of a date in October, November or December of a given
year but actually paid during the immediately following January will be treated
as if paid by the Strategy on December 31 of such earlier calendar year, and
will be taxable to these shareholders in the year declared, and not in the year
in which the shareholders actually receive the dividend.

            The information set forth in the Prospectus and the following
discussion relate solely to the significant United States federal income taxes
on dividends and distributions by the Strategy and assume that the Strategy
qualifies to be taxed as a regulated investment company. An investor should
consult his or her own tax advisor with respect to the specific tax consequences
of being a shareholder in the Strategy, including the effect and applicability
of federal, state, local and foreign tax laws to his or her own particular
situation and the possible effects of changes therein.

Dividends and Distributions
---------------------------

            The Strategy intends to make timely distributions of the Strategy's
taxable income (including any net capital gain) so that the Strategy will not be
subject to federal income and excise taxes. Dividends of the Strategy's net
ordinary income and distributions of any net realized short-term capital gain
are taxable to shareholders as ordinary income. The investment objective of the
Strategy is such that only a small portion, if any, of the Strategy's
distributions is expected to qualify for the dividends-received deduction for
corporate shareholders.

            Some or all of the distributions from the Strategy may be treated as
"qualified dividend income", taxable to individuals, trusts and estates at the
same preferential tax rate applicable to long-term capital gains. A distribution
from the Strategy will be treated as qualified dividend income to the extent
that it is comprised of dividend income received by the Strategy from taxable
domestic corporations and certain qualified foreign corporations, and provided
that the Strategy meets certain holding period and other requirements with
respect to the security paying the dividend. In addition, the shareholder must
meet certain holding period requirements with respect to the shares of the
Strategy in order to take advantage of this preferential tax rate. To the extent
distributions from the Strategy are attributable to other sources, such as
taxable interest or short-term capital gains, dividends paid by the Strategy
will not be eligible for the lower rates. The Strategy will notify shareholders
as to how much of the Strategy's distributions, if any, would qualify for the
reduced tax rate, assuming that the shareholder also satisfies the holding
period requirements.

            Distributions of net capital gain are taxable as long-term capital
gain, regardless of how long a shareholder has held shares in the Strategy. Any
dividend or distribution received by a shareholder on shares of the Strategy
will have the effect of reducing the NAV of such shares by the amount of such
dividend or distribution. Furthermore, a dividend or distribution made shortly
after the purchase of such shares by a shareholder, although in effect a return
of capital to that particular shareholder, would be taxable to him or her as
described above. Dividends are taxable in the manner discussed regardless of
whether they are paid to the shareholder in cash or are reinvested in additional
shares of the Strategy.

            After the end of the calendar year, the Strategy will notify
shareholders of the federal income tax status of any distributions made by the
Strategy to shareholders during such year.

            Cost Basis Reporting. As part of the Energy Improvement and
Extension Act of 2008, mutual funds are required to report to the Internal
Revenue Service the "cost basis" of shares acquired by a shareholder on or after
January 1, 2012 ("covered shares") and subsequently redeemed. These requirements
do not apply to investments through a tax-deferred arrangement, such as a 401(k)
plan or an individual retirement plan. The "cost basis" of a share is generally
its purchase price adjusted for dividends, return of capital, and other
corporate actions. Cost basis is used to determine whether a sale of the shares
results in a gain or loss. The amount of gain or loss recognized by a
shareholder on the sale or redemption of shares is generally the difference
between the cost basis of such shares and their sale price. If you redeem
covered shares during any year, then the Fund will report the cost basis of such
covered shares to the Internal Revenue Service (the "IRS") and you on Form
1099-B along with the gross proceeds received on the redemption, the gain or
loss realized on such redemption and the holding period of the redeemed shares.

            Your cost basis in your covered shares is permitted to be calculated
using any one of three alternative methods: Average Cost, First In-First Out
(FIFO) and Specific Share Identification. You may elect which method you want to
use by notifying the Fund. This election may be revoked or changed by you at any
time up to the date of your first redemption of covered shares. If you do not
affirmatively elect a cost basis method then the Fund's default cost basis
calculation method, which is currently the Average Cost method - will be applied
to your account(s). The default method will also be applied to all new accounts
established unless otherwise requested.

            If you hold Strategy shares through a broker (or another nominee),
please contact that broker (nominee) with respect to the reporting of cost basis
and available elections for your account.

            You are encouraged to consult your tax advisor regarding the
application of the new cost basis reporting rules and, in particular, which cost
basis calculation method you should elect.

            Sales and Redemptions. Any gain or loss arising from a sale or
redemption of Strategy shares generally will be a capital gain or loss if the
Strategy shares are held as a capital asset, and will be a long-term capital
gain or loss if the shareholder has held such shares for more than one year at
the time of the sale or redemption; otherwise it will be a short-term capital
gain or loss. If a shareholder has held shares in the Strategy for six months or
less and during that period has received a distribution of net capital gain, any
loss recognized by the shareholder on the sale of those shares during the
six-month period will be treated as a long-term capital loss to the extent of
the distribution. In determining the holding period of such shares for this
purpose, any period during which a shareholder's risk of loss is offset by means
of options, short sales or similar transactions is not counted.

            Any loss realized by a shareholder on a sale or exchange of shares
of the Strategy will be disallowed to the extent the shares disposed of are
reacquired within a period of 61 days beginning 30 days before and ending 30
days after the shares are sold or exchanged. For this purpose, acquisitions
pursuant to the Dividend Reinvestment Plan would constitute a reacquisition if
made within the period. If a loss is disallowed, then such loss will be
reflected in an upward adjustment to the basis of the shares acquired.

            Qualified Plans. A dividend or capital gains distribution with
respect to shares of the Strategy held by a tax-deferred or qualified plan, such
as an individual retirement account, section 403(b)(7) retirement plan or
corporate pension or profit-sharing plan, generally will not be taxable to the
plan. Distributions from such plans will be taxable to individual participants
under applicable tax rules without regard to the character of the income earned
by the qualified plan.

            Backup Withholding. Any distributions and redemption proceeds
payable to a shareholder may be subject to "backup withholding" tax if such
shareholder fails to provide the Strategy with his or her correct taxpayer
identification number, fails to make required certifications, or is notified by
the IRS that he or she is subject to backup withholding. Corporate shareholders
and certain other shareholders specified in the Code are exempt from such backup
withholding. Backup withholding is not an additional tax; any amounts so
withheld may be credited against a shareholder's U.S. federal income tax
liability or refunded by filing a refund claim with the IRS, provided that the
required information is furnished to the IRS.

            The backup withholding tax rate is currently 28%.

            Foreign Income Taxes. Investment income received by the Strategy
from sources within foreign countries may be subject to foreign income taxes,
including taxes withheld at the source. The United States has entered into tax
treaties with many foreign countries which entitle the Strategy to a reduced
rate of such taxes or exemption from taxes on such income. It is impossible to
determine the effective rate of foreign tax in advance since the amount of the
Strategy's assets to be invested within various countries is not known.


United States Federal Income Taxation of the Strategy
-----------------------------------------------------

            The following discussion relates to certain significant United
States federal income tax consequences to the Strategy with respect to the
determination of its "investment company taxable income" each year. This
discussion assumes that the Strategy will be taxed as a regulated investment
company for each of its taxable years.

            Passive Foreign Investment Companies. If the Strategy owns shares in
a foreign corporation that constitutes a "passive foreign investment company" (a
"PFIC") for federal income tax purposes and the Strategy does not elect or is
unable to elect to either treat such foreign corporation as a "qualified
electing fund" within the meaning of the Code or "mark-to-market" the stock of
such foreign corporation, the Strategy may be subject to United States federal
income taxation on a portion of any "excess distribution" it receives from the
PFIC or any gain it derives from the disposition of such shares, even if such
income is distributed as a taxable dividend by the Strategy to its shareholders.
The Strategy may also be subject to additional interest charges in respect of
deferred taxes arising from such distributions or gains. Any tax paid by the
Strategy as a result of its ownership of shares in a PFIC will not give rise to
a deduction or credit to the Strategy or to any shareholder. A foreign
corporation will be treated as a PFIC if, for the taxable year involved, either
(i) such foreign corporation derives at least 75% of its gross income from
"passive income" (including, but not limited to, interest, dividends, royalties,
rents and annuities), or (ii) on average, at least 50% of the value (or adjusted
tax basis, if elected) of the assets held by the corporation produce or are held
for production of "passive income". The Strategy is generally permitted to
"mark-to-market" stock in a PFIC. If the Strategy makes such an election, the
Strategy would include in its taxable income each year an amount equal to the
excess, if any, of the fair market value of the PFIC stock as of the close of
the taxable year over the Strategy's adjusted basis in the PFIC stock. The
Strategy would be allowed a deduction for the excess, if any, of the adjusted
basis of the PFIC stock over the fair market value of the PFIC stock as of the
close of the taxable year, but only to the extent of any net mark-to-market
gains included in the Strategy's taxable income for prior taxable years. The
Strategy's adjusted basis in the PFIC stock would be adjusted to reflect the
amounts included in, or deducted from, income under this election. Amounts
included in income pursuant to this election, as well as gain realized on the
sale or other disposition of the PFIC stock, would be treated as ordinary
income. The deductible portion of any mark-to-market loss, as well as loss
realized on the sale or other disposition of the PFIC stock to the extent that
such loss does not exceed the net mark-to-market gains previously included by
the Strategy, would be treated as ordinary loss. The Strategy generally would
not be subject to the deferred tax and interest charge provisions discussed
above with respect to PFIC stock for which a mark-to-market election has been
made. If the Strategy purchases shares in a PFIC and the Strategy elects to
treat the foreign corporation as a "qualified electing fund" under the Code, the
Strategy may be required to include in its income each year a portion of the
ordinary income and net capital gains of such foreign corporation, even if this
income is not distributed to the Strategy. Any such income would be subject to
the 90% and calendar year distribution requirements described above.

            Options and Futures Contracts. Certain listed options and regulated
futures contracts are considered "section 1256 contracts" for federal income tax
purposes. Section 1256 contracts held by the Strategy at the end of each taxable
year will be "marked to market" and treated for federal income tax purposes as
though sold for fair market value on the last business day of such taxable year.
Gain or loss realized by the Strategy on section 1256 contracts other than
forward foreign currency contracts will be considered 60% long-term and 40%
short-term capital gain or loss. The Strategy can elect to exempt its section
1256 contracts which are part of a "mixed straddle" (as described below) from
the application of section 1256.

            Tax Straddles. Any option, futures contract or other position
entered into or held by the Strategy in conjunction with any other position held
by the Strategy may constitute a "straddle" for federal income tax purposes. A
straddle of which at least one, but not all, the positions are section 1256
contracts may constitute a "mixed straddle". In general, straddles are subject
to certain rules that may affect the character and timing of the Strategy's
gains and losses with respect to straddle positions by requiring, among other
things, that (i) loss realized on disposition of one position of a straddle not
be recognized to the extent that the Strategy has unrealized gains with respect
to the other position in such straddle; (ii) the Strategy's holding period in
straddle positions be suspended while the straddle exists (possibly resulting in
gain being treated as short-term capital gain rather than long-term capital
gain); (iii) losses recognized with respect to certain straddle positions which
are part of a mixed straddle and which are non-section 1256 positions be treated
as 60% long-term and 40% short-term capital loss; (iv) losses recognized with
respect to certain straddle positions which would otherwise constitute
short-term capital losses be treated as long-term capital losses; and (v) the
deduction of interest and carrying charges attributable to certain straddle
positions may be deferred. Various elections are available to the Strategy which
may mitigate the effects of the straddle rules, particularly with respect to
mixed straddles. In general, the straddle rules described above do not apply to
any straddles held by the Strategy all of the offsetting positions of which
consist of section 1256 contracts.


Other Taxes
-----------

            The Strategy may be subject to other state and local taxes.

Taxation of Foreign Stockholders
--------------------------------

            Taxation of a shareholder who, under the Code, is a nonresident
alien individual, foreign trust or estate, foreign corporation or foreign
partnership ("foreign shareholder"), depends on whether the income from the
Strategy is "effectively connected" with a U.S. trade or business carried on by
the foreign shareholder.

            If the income from the Strategy is not effectively connected with
the foreign shareholder's U.S. trade or business, then, except as discussed
below, distributions of the Strategy attributable to ordinary income and
short-term capital gain paid to a foreign shareholder by the Strategy will be
subject to U.S. withholding tax at the rate of 30% (or lower treaty rate) upon
the gross amount of the distribution. However, distributions of the Strategy
attributable to short-term capital gains and U.S. source portfolio interest
income paid during taxable years of the Strategy beginning before January 1,
2014 will not be subject to this withholding tax if so designated.

            A foreign shareholder generally would be exempt from Federal income
tax on distributions of the Strategy attributable to net long-term capital gain
and on gain realized from the sale or redemption of shares of the Strategy.
Special rules apply in the case of a shareholder that is a foreign trust or
foreign partnership.

            If the income from the Strategy is effectively connected with a
foreign shareholder's U.S. trade or business, then ordinary income
distributions, capital gain distributions, and any gain realized upon the sale
of shares of the Strategy will be subject to Federal income tax at the rates
applicable to U.S. citizens or U.S. corporations.

            The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein.

            The tax rules of other countries with respect to an investment in
the Strategy can differ from the Federal income taxation rules described above.
These foreign rules are not discussed herein. Foreign shareholders are urged to
consult their own tax advisors as to the consequences of foreign tax rules with
respect to an investment in the Strategy.



--------------------------------------------------------------------------------

                             PORTFOLIO TRANSACTIONS

--------------------------------------------------------------------------------

            Subject to the general oversight of the Board, the Adviser is
responsible for the investment decisions and the placing of orders for portfolio
transactions for the Strategy. The Adviser determines the broker or dealer to be
used in each specific transaction with the objective of negotiating a
combination of the most favorable commission (for transactions on which a
commission is payable) and the best price obtainable on each transaction
(generally defined as "best execution"). In connection with seeking best price
and execution, the Strategy does not consider sales of shares of the Strategy or
other investment companies managed by the Adviser as a factor in the selection
of brokers and dealers to effect portfolio transactions and has adopted a policy
and procedures reasonably designed to preclude such considerations.

            When consistent with the objective of obtaining best execution,
brokerage may be directed to persons or firms supplying investment information
to the Adviser. There may be occasions where the transaction cost charged by a
broker may be greater than that which another broker may charge if the Strategy
determines in good faith that the amount of such transaction cost is reasonable
in relation to the value of the brokerage, research and statistical services
provided by the executing broker.

            Neither the Strategy nor the Adviser has entered into agreements or
understandings with any brokers regarding the placement of securities
transactions because of research services they provide. A broker-dealer may
provide the Adviser with research or related services with an expectation, but
not necessarily an explicit agreement or contract, that the investment adviser
will use the broker-dealer to execute client transactions in the future. To the
extent that such persons or firms supply investment information to the Adviser
for use in rendering investment advice to the Strategy, such information may be
supplied at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the Strategy. While
it is impracticable to place an actual dollar value on such investment
information, the Adviser believes that its receipt probably does not reduce the
overall expenses of the Adviser to any material extent.

            The investment information provided to the Adviser is of the type
described in Section 28(e)(3) of the Securities Exchange Act of 1934, as
amended, and is designed to augment the Adviser's own internal research and
investment strategy capabilities. Research services furnished by brokers through
which the Strategy effects securities transactions are used by the Adviser in
carrying out its investment management responsibilities with respect to all its
client's accounts but not all such services may be used by the Adviser in
connection with the Strategy.

            The extent to which commissions that will be charged by
broker-dealers selected by the Strategy may reflect an element of value for
research cannot presently be determined. To the extent that research services of
value are provided by broker-dealers with or through whom the Strategy places
portfolio transactions, the Adviser may be relieved of expenses which it might
otherwise bear. Research services furnished by broker-dealers as a result of the
placement of portfolio transactions could be useful and of value to the Adviser
in servicing its other clients as well as the Strategy; on the other hand,
certain research services obtained by the Adviser as a result of the placement
of portfolio brokerage of other clients could be useful and of value to it in
servicing the Strategy.

            The Strategy may deal in some instances in securities that are not
listed on a national stock exchange but are traded in the OTC market. The
Strategy may also purchase listed securities through the third market, i.e.,
from a dealer that is not a member of the exchange on which a security is
listed. Where transactions are executed in the OTC market or third market, the
Strategy will seek to deal with the primary market makers; but when necessary in
order to obtain best execution, it will utilize the services of others. In all
cases, the Strategy will attempt to negotiate best execution.

            Investment decisions for the Strategy are made independently from
those for other investment companies and other advisory accounts managed by the
Adviser. It may happen, on occasion, that the same security is held in the
portfolio of the Strategy and one or more of such other companies or accounts.
Simultaneous transactions are likely when several funds or accounts are managed
by the same Adviser, particularly when a security is suitable for the investment
objectives of more than one of such companies or accounts. When two or more
companies or accounts managed by the Adviser are simultaneously engaged in the
purchase or sale of the same security, the transactions are allocated to the
respective companies or accounts both as to amount and price, in accordance with
a method deemed equitable to each company or account. In some cases this system
may adversely affect the price paid or received by the Strategy or the size of
the position obtainable for the Strategy.

            Allocations are made by the officers of the Strategy or of the
Adviser. Purchases and sales of portfolio securities are determined by the
Adviser and are placed with broker-dealers by the order department of the
Adviser.

            The Strategy's portfolio transactions in equity securities may occur
on foreign stock exchanges. Transactions on stock exchanges involve the payment
of brokerage commissions. On many foreign stock exchanges these commissions are
fixed. Securities traded in foreign OTC markets (including most fixed-income
securities) are purchased from and sold to dealers acting as principal. OTC
transactions generally do not involve the payment of a stated commission, but
the price usually includes an undisclosed commission or markup. The prices of
underwritten offerings, however, generally include a stated underwriter's
discount. The Adviser expects to effect the bulk of its transactions in
securities of companies based in foreign countries through brokers, dealers or
underwriters located in such countries. U.S. Government or other U.S. securities
constituting permissible investments will be purchased and sold through U.S.
brokers, dealers or underwriters.

            The amount of aggregate brokerage commissions paid by the Strategy
during the three most recent fiscal years, the related commissions allocated to
persons or firms because of research services provided to the Strategy or the
Adviser and the aggregate amount of transactions allocated to persons or firms
because of research services provided to the Strategy or the Adviser during the
three most recent fiscal years are as follows:


                                                                    Aggregate
                                                                    Brokerage
                                                     Commissions    Transactions
                                                     Allocated to   Allocated to
                                                     Persons or     Persons or
                                                     Firms          Firms
                                                     Because of     Because of
                                                     Research       Research
Fiscal                                 Amount        Services       Services to
Year                                   of Aggregate  Provided to    the Strategy
Ended                                  Brokerage     the Fund or    or
July 31  Strategy                      Commissions   the Adviser    the Adviser
-------  --------                      -----------   -----------    -----------

2014     U.S. Market Neutral Strategy  $ 1,747       $ 104          $ 256,391
2013                                   $31,336
2012                                   $25,943

            The Strategy may, from time to time, place orders for the purchase
or sale of securities (including listed call options) with SCB & Co., an
affiliate of the Adviser (the "Affiliated Broker"). In such instances, the
placement of orders with such broker would be consistent with the Strategy's
objective of obtaining the best execution and would not be dependent upon the
fact that the Affiliated Broker is an affiliate of the Adviser. With respect to
orders placed with the Affiliated Broker for execution on a national securities
exchange, commissions received must conform to Section 17(e)(2)(A) of the 1940
Act and Rule 17e-1 thereunder, which permit an affiliated person of a registered
investment company (such as the Strategy), or any affiliated person of such
person, to receive a brokerage commission from such registered investment
company provided that such commission is reasonable and fair compared to the
commissions received by other brokers in connection with comparable transactions
involving similar securities during a comparable period of time.

            The aggregate amount of brokerage commissions paid to the Affiliated
Broker during the three most recent fiscal years and, during the most recent
fiscal year, the Affiliated Broker's percentage of the Strategy's aggregate
brokerage commissions and the aggregate dollar amount of brokerage transactions
for the three most recent fiscal years are set forth below:

                                                                    % of
                                                      % of          Strategy's
Fiscal                                   Aggregate    Strategy's    Aggregate
Year                                     Amount of    Aggregate     Dollar
Ended                                    Brokerage    Brokerage     Brokerage
July 31    Strategy                      Commissions  Commission    Transactions
-------    --------                      -----------  -----------   ------------

2014       U.S. Market Neutral Strategy   $    0          0%             0%
2013                                      $  143
2012                                      $  288

Disclosure of Portfolio Holdings
--------------------------------

            The Strategy believes that the ideas of the Adviser's investment
staff should benefit the Strategy and its shareholders, and does not want to
afford speculators an opportunity to profit by anticipating Strategy trading
strategies or using Strategy information for stock picking. However, the
Strategy also believes that knowledge of the Strategy's portfolio holdings can
assist shareholders in monitoring their investment, making asset allocation
decisions, and evaluating portfolio management techniques.

            The Adviser has adopted, on behalf of the Strategy, policies and
procedures relating to disclosure of the Strategy's portfolio securities. The
policies and procedures relating to disclosure of the Strategy's portfolio
securities are designed to allow disclosure of portfolio holdings information
where necessary to the Strategy's operation or useful to the Strategy's
shareholders without compromising the integrity or performance of the Strategy.
Except when there are legitimate business purposes for selective disclosure and
other conditions (designed to protect the Strategy and its shareholders) are
met, the Strategy does not provide or permit others to provide information about
the Strategy's portfolio holdings on a selective basis.

            The Strategy includes portfolio holdings information as required in
regulatory filings and shareholder reports, discloses portfolio holdings
information as required by federal or state securities laws and may disclose
portfolio holdings information in response to requests by governmental
authorities. In addition, the Adviser posts portfolio holdings information on
the Adviser's website (www.AllianceBernstein.com). The Adviser posts on the
website a complete schedule of the Strategy's portfolio securities, as of the
last day of each fiscal calendar month, approximately 30 days after the end of
that month. This posted information generally remains accessible on the website
for three months. For each portfolio security, the posted information includes
its name, the number of shares held by the Strategy, the market value of the
Strategy's holdings, and the percentage of the Strategy's assets represented by
the portfolio security. In addition to the schedule of portfolio holdings, the
Adviser posts information about the number of securities the Strategy holds, a
summary of the Strategy's top ten holdings (including name and the percentage of
the Strategy's assets invested in each holding), and a percentage breakdown of
the Strategy's investments by credit risk or securities type, as applicable,
approximately 45 days after the end of the month. The day after portfolio
holdings information is publicly available on the website, it may be mailed,
e-mailed or otherwise transmitted to any person.

            The Adviser may distribute or authorize the distribution of
information about the Strategy's portfolio holdings that is not publicly
available, on the website or otherwise, to the Adviser's employees and
affiliates that provide services to the Strategy. In addition, the Adviser may
distribute or authorize distribution of information about the Strategy's
portfolio holdings that is not publicly available, on the website or otherwise,
to the Strategy's service providers who require access to the information in
order to fulfill their contractual duties relating to the Strategy (including,
without limitation, pricing services and proxy voting services), and to
facilitate the review of the Strategy by rating agencies, for the purpose of due
diligence regarding a merger or acquisition, or for the purpose of effecting
in-kind redemption of securities to facilitate orderly redemption of portfolio
assets and minimal impact on remaining Strategy shareholders. The Adviser does
not expect to disclose information about the Strategy's portfolio holdings that
is not publicly available to the Strategy's individual or institutional
investors or to intermediaries that distribute the Strategy's shares.
Information may be disclosed with any frequency and any lag, as appropriate.

            Before any non-public disclosure of information about the Strategy's
portfolio holdings is permitted, however, the Adviser's Chief Compliance Officer
(or his designee) must determine that the Strategy has a legitimate business
purpose for providing the portfolio holdings information, that the disclosure is
in the best interests of the Strategy's shareholders, and that the recipient
agrees or has a duty to keep the information confidential and agrees not to
trade directly or indirectly based on the information or to use the information
to form a specific recommendation about whether to invest in the Strategy or any
other security. Under no circumstances may the Adviser or its affiliates receive
any consideration or compensation for disclosing the information.

            The Adviser has established procedures to ensure that the Strategy's
portfolio holdings information is only disclosed in accordance with these
policies. Only the Adviser's Chief Compliance Officer (or his designee) may
approve the disclosure, and then only if he or she and a designated senior
officer in the Adviser's product management group determines that the disclosure
serves a legitimate business purpose of the Strategy and is in the best interest
of the Strategy's shareholders. The Adviser's Chief Compliance Officer (or his
designee) approves disclosure only after considering the anticipated benefits
and costs to the Strategy and its shareholders, the purpose of the disclosure,
any conflicts of interest between the interests of the Strategy and its
shareholders and the interests of the Adviser or any of its affiliates, and
whether the disclosure is consistent with the policies and procedures governing
disclosure. Only someone approved by the Adviser's Chief Compliance Officer (or
his designee) may make approved disclosures of portfolio holdings information to
authorized recipients. The Adviser reserves the right to request certifications
from senior officers of authorized recipients that the recipient is using the
portfolio holdings information only in a manner consistent with the Adviser's
policy and any applicable confidentiality agreement. The Adviser's Chief
Compliance Officer or another member of the compliance team reports all
arrangements to disclose portfolio holdings information to the Board on a
quarterly basis. If the Board determines that disclosure was inappropriate, the
Adviser will promptly terminate the disclosure arrangement.

            In accordance with these procedures, each of the following third
parties has been approved to receive information concerning the Strategy's
portfolio holdings: (i) the Strategy's independent registered public accounting
firm, for use in providing audit opinions; (ii) RR Donnelley Financial, Data
Communique International and, from time to time, other financial printers, for
the purpose of preparing Strategy regulatory filings; (iii) the Strategy's
custodian in connection with its custody of the Strategy's assets; (iv)
Institutional Shareholder Services, Inc. for proxy voting services; and (v) data
aggregators, such as Vestek. Information may be provided to these parties at any
time with no time lag. Each of these parties is contractually and ethically
prohibited from sharing the Strategy's portfolio holdings information unless
specifically authorized.

--------------------------------------------------------------------------------

                              GENERAL INFORMATION

--------------------------------------------------------------------------------

Description of the Strategy
---------------------------

            The Strategy is a series of AllianceBernstein Cap Fund, Inc., a
Maryland corporation. The Strategy was organized in 2010 under the name of
"AllianceBernstein Market Neutral Strategy - U.S.".

            It is anticipated that annual shareholder meetings will not be held;
shareholder meetings will be held only when required by federal or state law.
Shareholders have available certain procedures for the removal of Directors.

            A shareholder will be entitled to share pro rata with other holders
of the same class of shares all dividends and distributions arising from the
Strategy's assets and, upon redeeming shares, will receive the then current NAV
of the Strategy represented by the redeemed shares less any applicable CDSC. The
Fund is empowered to establish, without shareholder approval, additional
portfolios, which may have different investment objectives and policies than
those of the Strategy, and additional classes of shares within the Strategy. If
an additional portfolio or class were established in the Fund, each share of the
portfolio or class would normally be entitled to one vote for all purposes.
Generally, shares of each portfolio and class would vote together as a single
class on matters, such as the election of Directors, that affect each portfolio
and class in substantially the same manner. As to matters affecting each
portfolio differently, such as approval of the Advisory Agreement and changes in
investment policy, shares of each portfolio would vote as separate series.

            Each class of shares of the Strategy represents an interest in the
same portfolio of investments and has the same rights and is identical in all
respects, except that each of Class A, Class C, Class R and Class K shares of
the Strategy bears its own distribution expenses. Each class of shares of the
Strategy votes separately with respect to the Fund's Rule 12b-1 distribution
plan and other matters for which separate class voting is appropriate under
applicable law. Shares are freely transferable, are entitled to dividends as
determined by the Directors and, in liquidation of the Strategy, are entitled to
receive the net assets of the Strategy.

Principal Holders
-----------------

            To the knowledge of the Strategy, the following persons owned of
record or beneficially, 5% or more of a class of outstanding shares of the
Strategy as of October 6, 2014:

                                                          Number         % of
Class              Name and Address                       of Shares      Shares
-----              ----------------                       ---------      -------

Class A Shares
--------------

                   LPL Financial
                   FBO Customer Accounts
                   Attn: Mutual Fund Operations
                   P.O. Box 509046
                   San Diego, CA 92150-9046                 12,279       20.72%

                   National Financial Services LLC
                   For the Exclusive Benefit
                   of Our Customers
                   Attn: Mutual Funds Department
                   499 Washington Blvd., 4th Floor
                   Jersey City, NJ 07310                     5,774        9.75%

                   Pershing LLC
                   P.O. Box 2052
                   Jersey City, NJ  07303-2052              27,228       45.96%

                   Raymond James
                   Omnibus for Mutual Funds
                   Attn: Courtney Waller
                   880 Carillon Parkway
                   St. Petersburg, FL  33716-1102            4,073        6.87%

Class C Shares
--------------

                   AllianceBernstein L.P.
                   Attn: Brent Mather-Seed Account
                   1 N. Lexington Avenue
                   White Plains, NY  10601-1712              1,000        5.88%

                   Benjamin M. Landau
                   356 East Drive
                   Oak Ridge, TN 37830-4145                  4,999       29.42%

                   Bob J. Gilliam & Susan J. Gilliam
                   JTWROS
                   9104 Burchfield Drive
                   Oak Ridge, TN 37830-3534                  2,000       11.77%

                   Linda S. Foley
                   3300 Parrish Hill Lane
                   Knoxville, TN 37938-4090                  2,487       14.64%

                   Morgan Stanley Smith Barney
                   Harborside Financial Center
                   Plaza II, 3rd Floor
                   Jersey City, NJ 07311                     1,747       10.28%

                   Pershing LLC
                   P.O. Box 2052
                   Jersey City, NJ  07303-2052               3,514       20.68%


Advisor Class
--------------
Shares
------

                   Charles Schwab & Co.
                   For the Exclusive Benefit of
                   Customers
                   Mutual Fund Operations
                   211 Main Street
                   San Francisco, CA 94105-1905             19,464       22.84%

                   LPL Financial
                   FBO Customer Accounts
                   Attn: Mutual Fund Operations
                   P.O. Box 509046
                   San Diego, CA  92150-9046                 4,453        5.22%

                   Morgan Stanley Smith Barney
                   Harborside Financial Center
                   Plaza II, 3rd Floor
                   Jersey City, NJ 07311                    41,705       48.93%

                   Pershing LLC
                   P.O. Box 2052
                   Jersey City, NJ 07303-2052               10,459       12.27%

                   Sanford Bernstein & Co LLC
                   1 N. Lexington Ave., 17th Floor
                   White Plains, NY 10601-1783               6,649        7.80%


Class R Shares
--------------

                   AllianceBernstein L.P.
                   Attn: Brent Mather-Seed Acct
                   1 N. Lexington Ave.
                   White Plains, NY  10601-1712              1,000       99.98%


Class K Shares
--------------

                   AllianceBernstein L.P.
                   Attn: Brent Mather-Seed Acct
                   1 N. Lexington Ave.
                   White Plains, NY  10601-1712              1,000        7.02%

                   PAI Trust Company, Inc.
                   ANSI-ASQ National Accreditation BOA
                   1300 Enterprise Drive
                   De Pere, WI 54115-4934                   13,242       92.98%

Class I Shares
--------------

                   AllianceBernstein L.P.
                   Attn: Brent Mather-Seed Acct
                   1 N. Lexington Ave.
                   White Plains, NY  10601-1712             195,000        100%

Custodian
---------

            State Street Bank and Trust Company ("State Street"), State Street
Corporation CCB/5, 1 Iron Street, Boston, MA 02210, acts as the Strategy's
custodian for the assets of the Strategy but plays no part in deciding on the
purchase or sale of portfolio securities. Subject to the supervision of the
Directors, State Street may enter into subcustodial agreements for the holding
of the Strategy's foreign securities.

Principal Underwriter
---------------------

            ABI, an indirect wholly-owned subsidiary of the Adviser, located at
1345 Avenue of the Americas, New York, NY 10105, is the Strategy's principal
underwriter, and as such may solicit orders from the public to purchase shares
of the Strategy. Under the Distribution Services Agreement, the Strategy has
agreed to indemnify ABI, in the absence of its willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations thereunder, against
certain civil liabilities, including liabilities under the Securities Act.

Counsel
-------

            Legal matters in connection with the issuance of the shares of the
Strategy offered hereby are passed upon by Seward & Kissel LLP, 901 K Street NW,
Suite 800, Washington, DC 20001.

Independent Registered Public Accounting Firm
---------------------------------------------

            Ernst & Young LLP, 5 Times Square, New York, NY 10036, has been
selected as the independent registered public accounting firm for the Strategy.

Code of Ethics and Proxy Voting Policies and Procedures
--------------------------------------------------------

            The Strategy, the Adviser and ABI have each adopted codes of ethics
pursuant to Rule 17j-1 of the 1940 Act. These codes of ethics permit personnel
subject to the codes to invest in securities, including securities that may be
purchased or held by the Strategy.

            The Strategy has adopted the Adviser's proxy voting policies and
procedures. The Adviser's proxy voting policies and procedures are attached as
Appendix A.

            Information regarding how the Strategy voted proxies related to
portfolio securities during the most recent 12-month period ended June 30, 2014
is available (1) without charge, upon request, by calling (800) 227-4618; or on
or through the Strategy's website at www.AllianceBernstein.com; or both; and (2)
on the SEC's website at www.sec.gov.

Additional Information
----------------------

            Any shareholder inquiries may be directed to the shareholder's
financial intermediary or to ABIS at the address or telephone numbers shown on
the front cover of this SAI. This SAI does not contain all the information set
forth in the Registration Statement filed by the Fund with the SEC under the
Securities Act. Copies of the Registration Statement may be obtained at a
reasonable charge from the SEC or may be examined, without charge, at the
offices of the SEC in Washington, D.C., or on the Internet at
www.AllianceBernstein.com.


--------------------------------------------------------------------------------

        FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC
                                ACCOUNTING FIRM

--------------------------------------------------------------------------------

            The financial statements of the Strategy for the fiscal year ended
July 31, 2014 and the report of Ernst & Young LLP, the independent registered
public accounting firm, are incorporated herein by reference to the Strategy's
annual report. The annual report was filed on Form N-CSR with the SEC on October
3, 2014. The annual report is available without charge upon request by calling
ABIS at (800) 227-4618 or on the Internet at www.AllianceBernstein.com.



--------------------------------------------------------------------------------

                                  APPENDIX A:

                           STATEMENT OF POLICIES AND
                          PROCEDURES FOR PROXY VOTING

--------------------------------------------------------------------------------

1.    Introduction

      As an investment adviser, we are shareholder advocates and have a
      fiduciary duty to make investment decisions that are in our clients' best
      interests by maximizing the value of their shares. Proxy voting is an
      integral part of this process, through which we support strong corporate
      governance structures, shareholder rights, and transparency.

      We have an obligation to vote proxies in a timely manner and we apply the
      principles in this policy to our proxy decisions. We believe a company's
      environmental, social and governance ("ESG") practices may have a
      significant effect on the value of the company, and we take these factors
      into consideration when voting. For additional information regarding our
      ESG policies and practices, please refer to our firm's Statement of Policy
      Regarding Responsible Investment ("RI Policy").

      This Proxy Voting Policy ("Proxy Voting Policy" or "Policy"), which
      outlines our policies for proxy voting and includes a wide range of issues
      that often appear on proxies, applies to all of AllianceBernstein's
      investment management subsidiaries and investment services groups
      investing on behalf of clients globally. It is intended for use by those
      involved in the proxy voting decision-making process and those responsible
      for the administration of proxy voting ("Proxy Managers"), in order to
      ensure that our proxy voting policies and procedures are implemented
      consistently.

      We sometimes manage accounts where proxy voting is directed by clients or
      newly-acquired subsidiary companies. In these cases, voting decisions may
      deviate from this Policy.

2.    Research Underpins Decision Making

      As a research-driven firm, we approach our proxy voting responsibilities
      with the same commitment to rigorous research and engagement that we apply
      to all of our investment activities. The different investment philosophies
      utilized by our investment teams may occasionally result in different
      conclusions being drawn regarding certain proposals and, in turn, may
      result in the Proxy Manager making different voting decisions on the same
      proposal. Nevertheless, the Proxy Manager votes proxies with the goal of
      maximizing the value of the securities in client portfolios.

      In addition to our firm-wide proxy voting policies, we have a Proxy
      Committee, which provides oversight and includes senior investment
      professionals from Equities, Legal personnel and Operations personnel. It
      is the responsibility of the Proxy Committee to evaluate and maintain
      proxy voting procedures and guidelines, to evaluate proposals and issues
      not covered by these guidelines, to consider changes in policy, and to
      review the Proxy Voting Policy no less frequently than annually. In
      addition, the Proxy Committee meets as necessary to address special
      situations.

      Research Services

      We subscribe to the corporate governance and proxy research services of
      Institutional Shareholder Services ("ISS"). All our investment
      professionals can access these materials via the Proxy Manager and/or
      Proxy Committee.

      Engagement

      In evaluating proxy issues and determining our votes, we welcome and seek
      out the points of view of various parties. Internally, the Proxy Manager
      may consult the Proxy Committee, Chief Investment Officers, Directors of
      Research, and/or Research Analysts across our equities platforms, and
      Portfolio Managers in whose managed accounts a stock is held. Externally,
      the Proxy Manager may engage with company management, company directors,
      interest groups, shareholder activists, other shareholders and research
      providers.

3.    Proxy Voting Guidelines

      Our proxy voting guidelines are principles-based rather than rules-based.
      We adhere to a core set of principles that are described in this Proxy
      Voting Policy. We assess each proxy proposal in light of these principles.
      Our proxy voting "litmus test" will always be what we view as most likely
      to maximize long-term shareholder value. We believe that authority and
      accountability for setting and executing corporate policies, goals and
      compensation generally should rest with the board of directors and senior
      management. In return, we support strong investor rights that allow
      shareholders to hold directors and management accountable if they fail to
      act in the best interests of shareholders.

      With this as a backdrop, our proxy voting guidelines pertaining to
      specific issues are set forth below. We generally vote proposals in
      accordance with these guidelines but, consistent with our
      "principles-based" approach to proxy voting, we may deviate from the
      guidelines if warranted by the specific facts and circumstances of the
      situation (i.e., if, under the circumstances, we believe that deviating
      from our stated policy is necessary to help maximize long-term shareholder
      value). In addition, these guidelines are not intended to address all
      issues that may appear on all proxy ballots. Proposals not specifically
      addressed by these guidelines, whether submitted by management or
      shareholders, will be evaluated on a case-by-case basis, always keeping in
      mind our fiduciary duty to make voting decisions that, by maximizing
      long-term shareholder value, are in our clients' best interests.

                        3.1 Board and Director Proposals
                            ----------------------------

--------------------------------------------------------------------------------
1. Changes in Board Structure and Amending the Articles of Incorporation     For
--------------------------------------------------------------------------------

      Companies may propose various provisions with respect to the structure of
      the board of directors, including changing the manner in which board
      vacancies are filled, directors are nominated and the number of directors.
      Such proposals may require amending the charter or by-laws or may
      otherwise require shareholder approval. When these proposals are not
      controversial or meant as an anti-takeover device, which is generally the
      case, we vote in their favor. However, if we believe a proposal is
      intended as an anti-takeover device, we generally vote against.

      Other changes in a company's charter, articles of incorporation or by-laws
      are usually technical or administrative in nature. Absent a compelling
      reason to the contrary, we will support such proposals. However, we may
      oppose proposals that would permit management to establish the size of the
      board outside a specified range without shareholder approval.

--------------------------------------------------------------------------------
2. Classified Boards                                                     Against
--------------------------------------------------------------------------------

      A classified board typically is divided into three separate classes. Each
      class holds office for a term of two or three years. Only a portion of the
      board can be elected or replaced each year. Because this type of proposal
      has fundamental anti-takeover implications, we oppose the adoption of
      classified boards unless there is a justifiable financial reason or an
      adequate sunset provision exists. However, where a classified board
      already exists, we will not oppose directors who sit on such boards for
      that reason. We will vote against directors that fail to implement
      shareholder approved proposals to declassify boards.

--------------------------------------------------------------------------------
3. Director Liability and Indemnification                           Case-by-case
--------------------------------------------------------------------------------

      Some companies argue that increased indemnification and decreased
      liability for directors are important to ensure the continued availability
      of competent directors. However, others argue that the risk of such
      personal liability minimizes the propensity for corruption and
      recklessness.

      We generally support indemnification provisions that are consistent with
      the local jurisdiction in which the company has been formed. We vote in
      favor of proposals adopting indemnification for directors with respect to
      acts conducted in the normal course of business. We also vote in favor of
      proposals that expand coverage for directors and officers where, despite
      an unsuccessful legal defense, we believe the director or officer acted in
      good faith and in the best interests of the company. We oppose
      indemnification for gross negligence.

--------------------------------------------------------------------------------
4. Disclose CEO Succession Plan (SHP)                                        For
--------------------------------------------------------------------------------

      Proposals like these are often suggested by shareholders of companies with
      long-tenured CEOs and/or high employee turnover rates. Even though some
      markets might not require the disclosure of a CEO succession plan, we do
      think it is good business practice and will support these proposals.

--------------------------------------------------------------------------------
5. Election of Directors                                                     For
--------------------------------------------------------------------------------

      We generally vote in favor of the management-proposed slate of directors.
      However, we may not do so if we determine that there are compelling
      reasons to oppose directors (see below) or there is a proxy contest for
      seats on the board.

      We believe that directors have a duty to respond to shareholder actions
      that have received significant shareholder support. We may vote against
      directors (or withhold votes for directors if plurality voting applies)
      who fail to act on key issues, such as failure to implement proposals to
      declassify boards, failure to implement a majority vote requirement,
      failure to submit a rights plan to a shareholder vote and failure to act
      on tender offers where a majority of shareholders have tendered their
      shares (provided we supported, or would have supported, the original
      proposal). In addition, we oppose directors who fail to attend at least
      75% of board meetings within a given year without a reasonable excuse.
      Also, we may consider the number of boards on which a director sits and/or
      their length of service on a particular board. Finally, we may abstain or
      vote against (depending on a company's history of disclosure in this
      regard) directors of issuers where there is insufficient information about
      the nominees disclosed in the proxy statement.

      We believe companies should have a majority of independent directors and
      independent key committees. However, we will consider local market
      regulation as part of our decision. We will generally regard a director as
      independent if the director satisfies the criteria for independence (i)
      espoused by the primary exchange on which the company's shares are traded,
      or (ii) set forth in the code we determine to be best practice in the
      country where the subject company is domiciled. We generally vote against
      directors who, during the previous fiscal year, failed to act on a
      majority supported shareholder proposal or engaged in what we believe to
      be a poor governance practice. We may also consider engaging company
      management (by phone, in writing and in person), until any issues have
      been satisfactorily resolved.

      We may vote against directors for poor compensation practices. In our
      view, poor compensation practices include, for example, permitting option
      re-pricing without prior shareholder approval, providing continuous
      perquisites to an executive officer and his or her dependents after the
      officer is no longer employed by the company, adjusting performance-based
      diminished payouts with supplemental cash payments, eliminating
      performance goals for executive officers and crediting additional years of
      service to current executives for the purpose of enhancing the executive's
      pension benefit. However, because we do not believe that permitting
      executive officers to receive dividends on unearned performance shares is
      a poor compensation practice, we will not oppose directors who permit this
      practice.

      We consider the election of directors who are "bundled" on a single slate
      on a case-by-case basis considering the amount of information available
      and an assessment of the group's qualifications.

      a.    Controlled Company Exemption                            Case-by-case
            --------------------------------------------------------------------

      Companies where more than 50% of the voting power is held by an
      individual, group or another company, need not comply with the requirement
      to have a majority of independent directors and independent key
      committees. Conversely, we will vote against directors for failure to
      adhere to such independence standards where shareholders with a majority
      voting interest have a minority economic interest.

      Exchanges in certain jurisdictions do not have a controlled company
      exemption (or something similar). In such a jurisdiction, if a company has
      a majority shareholder or group of related majority shareholders with a
      majority economic interest, we generally will not oppose that company's
      directors simply because the board does not include a majority of
      independent members. We will, however, consider these directors in a
      negative light if the company has a history of violating the rights of
      minority shareholders.

      b.    Voting for Director Nominees in a Contested Election    Case-by-case
            --------------------------------------------------------------------

      Votes in a contested election of directors are evaluated on a case-by-case
      basis with the goal of maximizing shareholder value.

--------------------------------------------------------------------------------
6. Establish Additional Board Committees (SHP)                      Case-by-case
--------------------------------------------------------------------------------

      We believe that establishing committees should be the prerogative of a
      well-functioning board of directors. However, we may support shareholder
      proposals to establish additional board committees to address specific
      shareholder issues, including ESG issues.

--------------------------------------------------------------------------------
7. Independent Lead Director (SHP)                                           For
--------------------------------------------------------------------------------

      We support shareholder proposals that request a company to amend its
      by-laws to establish an independent lead director, if the positions of
      chairman and CEO are not separated. We view the existence of an
      independent lead director as a good example of the sufficient
      counter-balancing governance. If a company has an independent lead
      director in place, we will generally oppose a proposal to separate the
      positions of chairman and CEO.

--------------------------------------------------------------------------------
8. Limit Term of Directorship; Establish Mandatory Retirement       Case-by-case
   Age (SHP)
--------------------------------------------------------------------------------

      These proposals seek to limit the term during which a director may serve
      on a board to a set number of years and/or establish an age at which a
      director is no longer eligible to serve on the board. Proponents believe
      term limits and forced retirement help ensure that new ideas are
      introduced to the company. Opponents argue that director turnover
      decreases board stability.

      Taking into consideration local market practice, we generally believe that
      a director's qualifications, not length of service, should be the primary
      factor considered. Accordingly, we generally oppose proposals that seek to
      either limit the term during which a director may serve on a company's
      board or force a director's retirement at a certain age.

--------------------------------------------------------------------------------
9. Majority of Independent(1) Directors (SHP)                                For
--------------------------------------------------------------------------------

      Each company's board of directors has a duty to act in the best interest
      of the company's shareholders at all times. We believe that these
      interests are best served by having directors who bring objectivity to the
      company and are free from potential conflicts of interests. Accordingly,
      we support proposals seeking a majority of independent directors on the
      board. While we are aware of the listing requirements of the NYSE and
      NASDAQ (which require companies to have a majority of independent
      directors on their board), we will support such proposals regardless of
      where the company is listed.

--------
(1)   For purposes of this Policy, an independent director is one that meets the
      requirements of independence pursuant to the listing standards of the
      exchange on which the common stock is listed.

--------------------------------------------------------------------------------
10. Majority of Independent Directors on Key Committees (SHP)                For
--------------------------------------------------------------------------------

      In order to ensure that those who evaluate management's performance,
      recruit directors and set management's compensation are free from
      conflicts of interests, we believe that the audit(2),
      nominating/governance, and compensation committees should be composed of a
      majority of independent directors. While we are aware of the listing
      requirements of the NYSE and NASDAQ (that generally require fully
      independent nominating and compensation committees), we will support such
      proposals regardless of where the company is listed. However, in order to
      allow companies an opportunity to select qualified candidates for these
      important board positions, at this time we will not oppose inside
      directors that sit on these committees.

--------
(2)   Pursuant to the SEC rules, adopted pursuant to the Sarbanes-Oxley Act of
      2002, as of October 31, 2004, each U.S. listed issuer must have a fully
      independent audit committee.

--------------------------------------------------------------------------------
11. Majority Votes for Directors (SHP)                                       For
--------------------------------------------------------------------------------

      We believe that good corporate governance requires shareholders to have a
      meaningful voice in the affairs of the company. This objective is
      strengthened if directors are elected by a majority of votes cast at an
      annual meeting rather than by the plurality method commonly used. With
      plurality voting a director could be elected by a single affirmative vote
      even if the rest of the votes were withheld.

      We further believe that majority voting provisions will lead to greater
      director accountability. Therefore, we support shareholder proposals that
      companies amend their by-laws to provide that director nominees be elected
      by an affirmative vote of a majority of the votes cast, provided the
      proposal includes a carve-out to provide for plurality voting in contested
      elections where the number of nominees exceeds the number of directors to
      be elected.

--------------------------------------------------------------------------------
12. Prohibit CEOs from Serving on Compensation Committees (SHP)          Against
--------------------------------------------------------------------------------

      These proposals seek to require a board of directors to adopt a policy
      prohibiting current and former chief executive officers of other public
      companies from serving on that company's compensation committee.
      Proponents argue that having a current or former CEO serving on a
      compensation committee presents an inherent conflict of interest because
      the CEO is likely to support inflated compensation for his or her peers.
      Opponents argue, and we agree, that permitting CEOs to serve on
      compensation committees has merit because their experience with
      compensation matters (including oversight of executive pay) may be
      invaluable to a board. Accordingly, we generally oppose proposals seeking
      to prohibit CEOs from serving on compensation committees.

--------------------------------------------------------------------------------
13. Removal of Directors Without Cause (SHP)                                 For
--------------------------------------------------------------------------------

      Company by-laws sometimes define cause very narrowly, including only
      conditions of criminal indictment, final adverse adjudication that
      fiduciary duties were breached or incapacitation, while also providing
      shareholders with the right to remove directors only upon "cause".

      We believe that the circumstances under which shareholders have the right
      to remove directors should not be limited to those traditionally defined
      by companies as "cause". We also believe that shareholders should have the
      right to conduct a vote to remove directors who fail to perform in a
      manner consistent with their fiduciary duties or representative of
      shareholders' best interests. And, while we would prefer shareholder
      proposals that seek to broaden the definition of "cause" to include
      situations like these, we generally support proposals that would provide
      shareholders with the right to remove directors without cause.

--------------------------------------------------------------------------------
14. Require Independent Board Chairman (SHP)                        Case-by-case
--------------------------------------------------------------------------------

      We believe there can be benefits to having the positions of chairman and
      CEO combined as well as split. When the position is combined the company
      must have sufficient counter-balancing governance in place, generally
      through a strong lead director. Also, for companies with smaller market
      capitalizations, separate chairman and CEO positions may not be practical.

--------------------------------------------------------------------------------
15. Require Two Candidates for Each Board Seat (SHP)                     Against
--------------------------------------------------------------------------------

      We believe that proposals like these are detrimental to a company's
      ability to attract highly qualified candidates. Accordingly, we oppose
      them.

--------------------------------------------------------------------------------
16. Stock Ownership Requirement (SHP)                                    Against
--------------------------------------------------------------------------------

      These proposals require directors to own a minimum amount of company stock
      in order to qualify as a director, or to remain on the board. We do not
      believe stock ownership is necessary to align the interests of directors
      and shareholders. Accordingly, we oppose these proposals.

                           3.2 Compensation Proposals
                               ----------------------

--------------------------------------------------------------------------------
17.  Accelerated Vesting of Equity Compensation Awards-Change       Case-by-case
     of Control (SHP)
--------------------------------------------------------------------------------

      We examine proposals to prohibit accelerated vesting of equity awards in
      the event of a change in control on a case-by-case basis. If a change in
      control is triggered at or above a 50% ownership level, we generally
      support accelerated vesting. If, however, a change in control is triggered
      at less than 50% ownership, we generally oppose accelerated vesting.

--------------------------------------------------------------------------------
18. Adopt Form of Employment Contract (SHP)                         Case-by-case
--------------------------------------------------------------------------------

      These proposals ask companies to adhere to certain principles when
      drafting employment contracts for executives. We will review the criteria
      requested and consider these proposals on a case-by-case basis.

--------------------------------------------------------------------------------
19. Adopt Policies to Prohibit any Death Benefits to Senior              Against
    Executives (SHP)
--------------------------------------------------------------------------------

      We view these bundled proposals as too restrictive and conclude that
      blanket restrictions on any and all such benefits, including the payment
      of life insurance premiums for senior executives, could put a company at a
      competitive disadvantage.

--------------------------------------------------------------------------------
20. Advisory Vote to Ratify Directors' Compensation (SHP)           Case-by-case
--------------------------------------------------------------------------------

      Similar to advisory votes on executive compensation, shareholders may
      request a non-binding advisory vote to approve compensation given to board
      members which we evaluate on a case-by-case basis.

--------------------------------------------------------------------------------
21. Amend Executive Compensation Plan tied to Performance                Against
    (Bonus Banking) (SHP)
--------------------------------------------------------------------------------

      These proposals seek to force a company to amend executive compensation
      plans such that compensation awards tied to performance are deferred for
      shareholder specified and extended periods of time. As a result, awards
      may be adjusted downward if performance goals achieved during the vesting
      period are not sustained during the added deferral period.

      We believe that most companies have adequate vesting schedules and
      clawbacks in place. Under such circumstances, we will oppose these
      proposals. However, if a company does not have what we believe to be
      adequate vesting and/or clawback requirements, we decide these proposals
      on a case-by-case basis.

--------------------------------------------------------------------------------
22. Approve Remuneration for Directors and Auditors                 Case-by-case
--------------------------------------------------------------------------------

      We will vote on a case-by-case basis where we are asked to approve
      remuneration for directors or auditors. However, where disclosure relating
      to the details of such remuneration is inadequate or provided without
      sufficient time for us to consider our vote, we may abstain or vote
      against, depending on the adequacy of the company's prior disclosures in
      this regard. Where appropriate, we engage the company directly.

--------------------------------------------------------------------------------
23. Approve Remuneration Reports                                    Case-by-case
--------------------------------------------------------------------------------

      In certain markets, (e.g., Australia, Canada, Germany, the United Kingdom
      and the United States), publicly traded issuers are required by law to
      submit their company's remuneration report to a non-binding shareholder
      vote. The report contains, among other things, the nature and amount of
      the compensation of the directors and certain executive officers as well
      as a discussion of the company's performance.

      We evaluate remuneration reports on a case-by-case basis, taking into
      account the reasonableness of the company's compensation structure and the
      adequacy of the disclosure. Where a compensation plan permits retesting of
      performance-based awards, we will consider the specific terms of the plan,
      including the volatility of the industry and the number and duration of
      the retests. We may abstain or vote against a plan if disclosure of the
      remuneration details is inadequate or the report is not provided to
      shareholders with sufficient time prior to the meeting to consider its
      terms.

      In markets where remuneration reports are not required for all companies,
      we will support shareholder proposals asking the board to adopt a policy
      (i.e., "say on pay") that the company's shareholders be given the
      opportunity to vote on an advisory resolution to approve the compensation
      committee's report. Although say on pay votes are by nature only broad
      indications of shareholder views, they do lead to more
      compensation-related dialogue between management and shareholders and help
      ensure that management and shareholders meet their common objective:
      maximizing the value of the company.

--------------------------------------------------------------------------------
24. Approve Retirement Bonuses for Directors                        Case-by-case
    (Japan and South Korea)
--------------------------------------------------------------------------------

      Retirement bonuses are normal practice in Japan and South Korea. Companies
      seek approval to give the board authority to grant retirement bonuses for
      directors and/or auditors and to leave the exact amount of bonuses to the
      board's discretion. We will analyze such proposals on a case-by-case
      basis, considering management's commitment to maximizing long-term
      shareholder value.

--------------------------------------------------------------------------------
25. Approve Special Payments to Continuing Directors and            Case-by-case
    Auditors (Japan)
--------------------------------------------------------------------------------

      In conjunction with the abolition of a company's retirement allowance
      system, we will generally support special payment allowances for
      continuing directors and auditors if there is no evidence of their
      independence becoming impaired.

--------------------------------------------------------------------------------
26. Disclose Executive and Director Pay (SHP)                       Case-by-case
--------------------------------------------------------------------------------

      In December 2006 and again in February 2010, the SEC adopted rules
      requiring increased and/or enhanced compensation-related and corporate
      governance-related disclosure in proxy statements and Forms 10-K. Similar
      steps have been taken by regulators in foreign jurisdictions. We believe
      the rules enacted by the SEC and various foreign regulators generally
      ensure more complete and transparent disclosure. Therefore, while we will
      consider them on a case-by-case basis (analyzing whether there are any
      relevant disclosure concerns), we generally vote against shareholder
      proposals seeking additional disclosure of executive and director
      compensation, including proposals that seek to specify the measurement of
      performance-based compensation, if the company is subject to SEC rules or
      similar rules espoused by a regulator in a foreign jurisdiction.
      Similarly, we generally support proposals seeking additional disclosure of
      executive and director compensation if the company is not subject to any
      such rules.

--------------------------------------------------------------------------------
27. Exclude Pension Income from Performance-based Compensation (SHP)         For
--------------------------------------------------------------------------------

      We are aware that companies may seek to artificially inflate earnings
      based on questionable assumptions about pension income. Even though these
      practices are acceptable under the relevant accounting rules, we believe
      that pension income is not an acceptable way to increase executive pay and
      that management's discretion in estimating pension income is a potential
      conflict of interest. Accordingly, we support such proposals.

--------------------------------------------------------------------------------
28. Executive and Employee Compensation Plans                       Case-by-case
--------------------------------------------------------------------------------

      Executive and employee compensation plans ("Compensation Plans") usually
      are complex and are a major corporate expense, so we evaluate them
      carefully and on a case-by-case basis. In all cases, however, we assess
      each proposed Compensation Plan within the framework of four guiding
      principles, each of which ensures a company's Compensation Plan helps to
      align the long-term interests of management with shareholders:

      o     Valid measures of business performance tied to the firm's strategy
            and shareholder value creation, which are clearly articulated and
            incorporate appropriate time periods, should be utilized;

      o     Compensation costs should be managed in the same way as any other
            expense;

      o     Compensation should reflect management's handling, or failure to
            handle, any recent social, environmental, governance, ethical or
            legal issue that had a significant adverse financial or reputational
            effect on the company; and

      o     In granting compensatory awards, management should exhibit a history
            of integrity and decision-making based on logic and well thought out
            processes.

      Where disclosure relating to the details of Compensation Plans is
      inadequate or provided without sufficient time for us to consider our
      vote, we may abstain or vote against, depending on the adequacy of the
      company's prior disclosures in this regard. Where appropriate, we may
      raise the issue with the company directly or take other steps.

--------------------------------------------------------------------------------
29. Limit Dividend Payments to Executives (SHP)                          Against
--------------------------------------------------------------------------------

      We believe that management, within reason, should be given latitude in
      determining the mix and types of awards offered to executive officers.
      Therefore, we oppose withholding the dividend payment on restricted stock
      awards, even if the stock is unvested, when these awards are used as part
      of incentive compensation; we believe these awards serve as an effective
      means of executive reward and retention. We do, however, believe that it
      is acceptable for a company to accumulate dividends and tie their payment
      to the achievement of performance goals and to stipulate that the
      dividends are forfeited if the employee does not achieve his or her goal.

--------------------------------------------------------------------------------
30. Limit Executive Pay (SHP)                                       Case-by-case
--------------------------------------------------------------------------------

      We believe that management and directors, within reason, should be given
      latitude in determining the mix and types of awards offered to executive
      officers. We vote against shareholder proposals seeking to limit executive
      pay if we deem them too restrictive. Depending on our analysis of the
      specific circumstances, we are generally against requiring a company to
      adopt a policy prohibiting tax gross up payments to senior executives.

--------------------------------------------------------------------------------
31. Mandatory Holding Periods (SHP)                                      Against
--------------------------------------------------------------------------------

      We generally vote against shareholder proposals asking companies to
      require a company's executives to hold stock for a specified period of
      time after acquiring that stock by exercising company-issued stock options
      (i.e., precluding "cashless" option exercises), unless we believe
      implementing a mandatory holding period is necessary to help resolve
      underlying problems at a company that have hurt, and may continue to hurt,
      shareholder value.

--------------------------------------------------------------------------------
32. Pay Directors Only in Stock (SHP)                                    Against
--------------------------------------------------------------------------------

      As noted immediately above, we do not believe that stock ownership is
      necessary to align the interests of directors and shareholders. Further,
      we believe that the board should be given latitude in determining the mix
      and types of compensation offered to its members. Accordingly, we oppose
      these proposals.

--------------------------------------------------------------------------------
33. Performance-based Stock Option Plans (SHP)                      Case-by-case
--------------------------------------------------------------------------------

      These shareholder proposals require a company to adopt a policy that all
      or a portion of future stock options granted to executives be
      performance-based. Performance-based options usually take the form of
      indexed options (where the option sale price is linked to the company's
      stock performance versus an industry index), premium priced options (where
      the strike price is significantly above the market price at the time of
      the grant) or performance vesting options (where options vest when the
      company's stock price exceeds a specific target). Proponents argue that
      performance-based options provide an incentive for executives to
      outperform the market as a whole and prevent management from being
      rewarded for average performance. We believe that management, within
      reason, should be given latitude in determining the mix and types of
      awards it offers. However, we recognize the benefit of linking a portion
      of executive compensation to certain types of performance benchmarks.
      While we will not support proposals that require all options to be
      performance-based, we will generally support proposals that require a
      portion of options granted to senior executives be performance-based.
      However, because performance-based options can also result in unfavorable
      tax treatment and the company may already have in place an option plan
      that sufficiently ties executive stock option plans to the company's
      performance, we will consider such proposals on a case-by-case basis.

--------------------------------------------------------------------------------
34. Prohibit Relocation Benefits to Senior Executives (SHP)              Against
--------------------------------------------------------------------------------

      We do not consider such perquisites to be problematic pay practices as
      long as they are properly disclosed. Therefore we will vote against
      shareholder proposals asking to prohibit relocation benefits.

--------------------------------------------------------------------------------
35. Recovery of Performance-based Compensation (SHP)                         For
--------------------------------------------------------------------------------

      We generally support shareholder proposals requiring the board to seek
      recovery of performance-based compensation awards to senior management and
      directors in the event of a financial restatement (whether for fraud or
      other reasons) that resulted in their failure to achieve past performance
      targets. In deciding how to vote, we consider the adequacy of existing
      company clawback policy, if any.

--------------------------------------------------------------------------------
36. Single Trigger Change-in-Control Agreements (SHP)               Case-by-case
--------------------------------------------------------------------------------

      Companies often include single trigger change-in-control provisions (e.g.,
      a provision stipulating that an employee's unvested equity awards become
      fully vested upon a change-in-control of the company without any
      additional requirement) in employment agreements and compensation plans.

      We will not oppose directors who establish these provisions, nor will we
      oppose compensation plans that include them. However, we will examine on a
      case-by-case basis shareholder proposals calling for future employment
      agreements and compensation plans to include double trigger
      change-in-control provisions (e.g., a provision stipulating that an
      employee's unvested equity awards become fully vested only after a
      change-in-control of the company and termination of employment).

--------------------------------------------------------------------------------
37. Submit Golden Parachutes/Severance Plans to a                 Case-by-case
    Shareholder Vote (SHP)
--------------------------------------------------------------------------------

      Golden Parachutes assure key officers of a company lucrative compensation
      packages if the company is acquired and/or if the new owners terminate
      such officers. We recognize that offering generous compensation packages
      that are triggered by a change in control may help attract qualified
      officers. However, such compensation packages cannot be so excessive that
      they are unfair to shareholders or make the company unattractive to
      potential bidders, thereby serving as a constructive anti-takeover
      mechanism. Accordingly, we support proposals to submit severance plans
      (including supplemental retirement plans) that exceed 2.99 times the sum
      of an executive officer's base salary plus bonus, and that are triggered
      by a change in control, to a shareholder vote, but we review proposals to
      ratify or redeem such plans on a case-by-case basis.

--------------------------------------------------------------------------------
38. Submit Golden Parachutes/Severance Plans to a Shareholder     Case-by-case
    Vote prior to their being Negotiated by Management (SHP)
--------------------------------------------------------------------------------

      We believe that in order to attract qualified employees, companies must be
      free to negotiate compensation packages without shareholder interference.
      Shareholders must then be given an opportunity to analyze a compensation
      plan's final, material terms in order to ensure it is within acceptable
      limits. Accordingly, we generally oppose proposals that require submitting
      severance plans and/or employment contracts for a shareholder vote prior
      to being negotiated by management.

--------------------------------------------------------------------------------
39. Submit Option Re-pricing to a Shareholder Vote (SHP)                     For
--------------------------------------------------------------------------------

      Re-pricing underwater options reduces the incentive value of stock
      compensation plans and dilutes shareholder value. Consequently, we support
      shareholder proposals that seek to require a company to submit option
      re-pricing to a shareholder vote.

--------------------------------------------------------------------------------
40. Submit Survivor Benefit Compensation Plan to Shareholder Vote (SHP)      For
--------------------------------------------------------------------------------

      Survivor benefit compensation plans, or "golden coffins", can require a
      company to make substantial payments or awards to a senior executive's
      beneficiaries following the death of the senior executive. The
      compensation can take the form of unearned salary or bonuses, accelerated
      vesting or the continuation in force of unvested equity grants,
      perquisites and other payments or awards. This compensation would not
      include compensation that the senior executive chooses to defer during his
      or her lifetime.

      We recognize that offering generous compensation packages that are
      triggered by the passing of senior executives may help attract qualified
      officers. However, such compensation packages cannot be so excessive that
      they are unfair to shareholders or make the company unattractive to
      potential bidders, thereby serving as a constructive anti-takeover
      mechanism.

                3.3 Capital Changes and Anti-Takeover Proposals
                    -------------------------------------------

--------------------------------------------------------------------------------
41. Amend Exclusive Forum Bylaw (SHP)                                    Against
--------------------------------------------------------------------------------

      We will generally oppose proposals that ask the board to repeal the
      company's exclusive forum bylaw. Such bylaws require certain legal action
      against the company to take place in the state of the company's
      incorporation. The courts within the state of incorporation are considered
      best suited to interpret that state's laws.

--------------------------------------------------------------------------------
42. Amend Net Operating Loss ("NOL") Rights Plans                            For
--------------------------------------------------------------------------------

      NOL Rights Plans are established to protect a company's net operating loss
      carry forwards and tax credits, which can be used to offset future income.
      We believe this is a reasonable strategy for a company to employ.
      Accordingly, we will vote in favor of NOL Rights Plans unless we believe
      the terms of the NOL Rights Plan may provide for a longterm anti-takeover
      device.

--------------------------------------------------------------------------------
43. Authorize Share Repurchase                                               For
--------------------------------------------------------------------------------

      We generally support share repurchase proposals that are part of a
      well-articulated and well-conceived capital strategy. We assess proposals
      to give the board unlimited authorization to repurchase shares on a
      case-by-case basis.

      Furthermore, we would generally support the use of derivative instruments
      (e.g., put options and call options) as part of a share repurchase plan
      absent a compelling reason to the contrary. Also, absent a specific
      concern at the company, we will generally support a repurchase plan that
      could be continued during a takeover period.

--------------------------------------------------------------------------------
44. Blank Check Preferred Stock                                          Against
--------------------------------------------------------------------------------

      Blank check preferred stock proposals authorize the issuance of certain
      preferred stock at some future point in time and allow the board to
      establish voting, dividend, conversion and other rights at the time of
      issuance. While blank check preferred stock can provide a corporation with
      the flexibility needed to meet changing financial conditions, it also may
      be used as the vehicle for implementing a "poison pill" defense or some
      other entrenchment device.

      We are concerned that, once this stock has been authorized, shareholders
      have no further power to determine how or when it will be allocated.
      Accordingly, we generally oppose this type of proposal.

--------------------------------------------------------------------------------
45. Corporate Restructurings, Merger Proposals and Spin-Offs        Case-by-case
--------------------------------------------------------------------------------

      Proposals requesting shareholder approval of corporate restructurings,
      merger proposals and spin-offs are determined on a case-by-case basis. In
      evaluating these proposals and determining our votes, we are singularly
      focused on meeting our goal of maximizing long-term shareholder value.

--------------------------------------------------------------------------------
46. Elimination of Preemptive Rights                                Case-by-case
--------------------------------------------------------------------------------

      Preemptive rights allow the shareholders of the company to buy
      newly-issued shares before they are offered to the public in order to
      maintain their percentage ownership. AllianceBernstein believes that,
      because preemptive rights are an important shareholder right, careful
      scrutiny must be given to management's attempts to eliminate them.
      However, because preemptive rights can be prohibitively expensive to
      widely-held companies, the benefit of such rights will be weighed against
      the economic effect of maintaining them.

--------------------------------------------------------------------------------
47. Expensing Stock Options (SHP)                                            For
--------------------------------------------------------------------------------

      U.S. generally-accepted accounting principles require companies to expense
      stock options, as do the accounting rules in many other jurisdictions
      (including those jurisdictions that have adopted IFRS -- international
      financial reporting standards). If a company is domiciled in a
      jurisdiction where the accounting rules do not already require the
      expensing of stock options, we will support shareholder proposals
      requiring this practice and disclosing information about it.

--------------------------------------------------------------------------------
48. Fair Price Provisions                                           Case-by-case
--------------------------------------------------------------------------------

      A fair price provision in the company's charter or by laws is designed to
      ensure that each shareholder's securities will be purchased at the same
      price if the corporation is acquired under a plan not agreed to by the
      board. In most instances, the provision requires that any tender offer
      made by a third party must be made to all shareholders at the same price.

      Fair pricing provisions attempt to prevent the "two tiered front loaded
      offer" where the acquirer of a company initially offers a premium for a
      sufficient percentage of shares of the company to gain control and
      subsequently makes an offer for the remaining shares at a much lower
      price. The remaining shareholders have no choice but to accept the offer.
      The two tiered approach is coercive as it compels a shareholder to sell
      his or her shares immediately in order to receive the higher price per
      share. This type of tactic has caused many states to adopt fair price
      provision statutes to restrict this practice.

      We consider fair price provisions on a case-by-case basis. We oppose any
      provision where there is evidence that management intends to use the
      provision as an anti-takeover device as well as any provision where the
      shareholder vote requirement is greater than a majority of disinterested
      shares (i.e., shares beneficially owned by individuals other than the
      acquiring party).

--------------------------------------------------------------------------------
49. Increase Authorized Common Stock                                Case-by-case
--------------------------------------------------------------------------------

      In general we regard increases in authorized common stock as serving a
      legitimate corporate purpose when used to: implement a stock split, aid in
      a recapitalization or acquisition, raise needed capital for the firm, or
      provide for employee savings plans, stock option plans or executive
      compensation plans. That said, we may oppose a particular proposed
      increase if we consider the authorization likely to lower the share price
      (this would happen, for example, if the firm were proposing to use the
      proceeds to overpay for an acquisition, to invest in a project unlikely to
      earn the firm's cost of capital, or to compensate employees well above
      market rates). We oppose increases in authorized common stock where
      there is evidence that the shares are to be used to implement a "poison
      pill" or another form of anti-takeover device, or if the issuance of new
      shares would, in our judgment, excessively dilute the value of the
      outstanding shares upon issuance. In addition, a satisfactory explanation
      of a company's intentions - going beyond the standard "general corporate
      purposes" - must be disclosed in the proxy statement for proposals
      requesting an increase of greater than 100% of the shares outstanding. We
      view the use of derivatives, particularly warrants, as legitimate
      capital-raising instruments and apply these same principles to their use
      as we do to the authorization of common stock. Under certain circumstances
      where we believe it is important for shareholders to have an opportunity
      to maintain their proportional ownership, we may oppose proposals
      requesting shareholders approve the issuance of additional shares if those
      shares do not include preemptive rights.

      In Hong Kong, it is common for companies to request board authority to
      issue new shares up to 20% of outstanding share capital. The authority
      typically lapses after one year. We may vote against plans that do not
      prohibit issuing shares at a discount, taking into account whether a
      company has a history of doing so.

--------------------------------------------------------------------------------
50. Issuance of Equity without Preemptive Rights                             For
--------------------------------------------------------------------------------

      We are generally in favor of issuances of equity without preemptive rights
      of up to 30% of a company's outstanding shares unless there is concern
      that the issuance will be used in a manner that could hurt shareholder
      value (e.g., issuing the equity at a discount from the current market
      price or using the equity to help create a "poison pill" mechanism).

--------------------------------------------------------------------------------
51. Issuance of Stock with Unequal Voting Rights                    Case-by-case
--------------------------------------------------------------------------------

      Unequal voting rights plans are designed to reduce the voting power of
      existing shareholders and concentrate a significant amount of voting power
      in the hands of management. In the majority of instances, they serve as an
      effective deterrent to takeover attempts. These structures, however, may
      be beneficial, allowing management to focus on longer-term value creation,
      which benefits all shareholders. AllianceBernstein evaluates these
      proposals on a case-by-case basis and takes into consideration the
      alignment of management incentives with appropriate performance, metrics,
      and the effectiveness of the company's strategy.

--------------------------------------------------------------------------------
52. Net Long Position Requirement                                            For
--------------------------------------------------------------------------------

      We support proposals that require the ownership level needed to call a
      special meeting to be based on the net long position of a shareholder or
      shareholder group. This standard ensures that a significant economic
      interest accompanies the voting power.

--------------------------------------------------------------------------------
53. Opt Out of State Anti-takeover Law (US) (SHP)                   Case-by-case
--------------------------------------------------------------------------------

      Many states have enacted anti-takeover laws requiring an acquirer to
      obtain a supermajority of a company's stock in order to exercise control.
      For example, under Delaware law, absent board approval, a bidder must
      acquire at least 85% of a company's stock before the bidder can exercise
      control. Such laws represent a formidable takeover defense for companies
      because by simply placing 15% of the stock in "friendly" hands, a company
      can block an otherwise successful takeover attempt that may be in the best
      interests of the shareholders. These statutes often allow companies to
      opt-out of this law with the approval of a majority of the outstanding
      shares.

      Shareholders proposing opt out resolutions argue that these anti-takeover
      laws grant the board too much power to determine a matter that should be
      left to the shareholders. Critics of such proposals argue that opt-out
      provisions do not prevent takeovers but, rather, provide the board with an
      opportunity to negotiate a better deal for all shareholders. Because each
      state's anti-takeover laws are different and must be considered in the
      totality of all of a company's takeover defenses, we review these
      proposals on a case-by-case basis.

--------------------------------------------------------------------------------
54. Reincorporation                                                 Case-by-case
--------------------------------------------------------------------------------

      There are many valid business reasons a corporation may choose to
      reincorporate in another jurisdiction. We perform a case-by-case review of
      such proposals, taking into consideration management's stated reasons for
      the proposed move.

      Careful scrutiny also will be given to proposals that seek approval to
      reincorporate in countries that serve as tax havens. We recognize that
      such provisions can help facilitate the growth of a company's business and
      potentially can benefit shareholders when a company lowers its tax
      liability. When evaluating such proposals, we consider factors such as the
      location of the company's business, the statutory protections available in
      the country to enforce shareholder rights and the tax consequences of the
      reincorporation to shareholders.

--------------------------------------------------------------------------------
55. Reincorporation to Another jurisdiction to Permit               Case-by-case
    Majority Voting or Other Changes in Corporate
    Governance (SHP)
--------------------------------------------------------------------------------

      If a shareholder proposes that a company move to a jurisdiction where
      majority voting (among other shareholder-friendly conditions) is
      permitted, we will generally oppose the move notwithstanding the fact that
      we favor majority voting for directors. Our rationale is that the legal
      costs, taxes, other expenses and other factors, such as business
      disruption, in almost all cases would be material and outweigh the benefit
      of majority voting. If, however, we should find that these costs are not
      material and/or do not outweigh the benefit of majority voting, we may
      vote in favor of this kind of proposal. We will evaluate similarly
      proposals that would require reincorporation in another state to
      accomplish other changes in corporate governance.

--------------------------------------------------------------------------------
56. Stock Splits                                                             For
--------------------------------------------------------------------------------

      Stock splits are intended to increase the liquidity of a company's common
      stock by lowering the price, thereby making the stock seem more attractive
      to small investors. We generally vote in favor of stock split proposals.

--------------------------------------------------------------------------------
57. Submit Company's Shareholder Rights Plan to Shareholder Vote (SHP)       For
--------------------------------------------------------------------------------

      Most shareholder rights plans (also known as "poison pills") permit the
      shareholders of a target company involved in a hostile takeover to acquire
      shares of the target company, the acquiring company, or both, at a
      substantial discount once a "triggering event" occurs. A triggering event
      is usually a hostile tender offer or the acquisition by an outside party
      of a certain percentage of the target company's stock. Because most plans
      exclude the hostile bidder from the purchase, the effect in most instances
      is to dilute the equity interest and the voting rights of the potential
      acquirer once the plan is triggered. A shareholder rights plan is designed
      to discourage potential acquirers from acquiring shares to make a bid for
      the issuer. We believe that measures that impede takeovers or entrench
      management not only infringe on the rights of shareholders but also may
      have a detrimental effect on the value of the company.

      We support shareholder proposals that seek to require the company to
      submit a shareholder rights plan to a shareholder vote. We evaluate on a
      case-by-case basis proposals to implement or eliminate a shareholder
      rights plan.

--------------------------------------------------------------------------------
58. Transferrable Stock Options                                     Case-by-case
--------------------------------------------------------------------------------

      In cases where a compensation plan includes a transferable stock option
      program, we will consider the plan on a case-by-case basis.

      These programs allow stock options to be transferred to third parties in
      exchange for cash or stock. In effect, management becomes insulated from
      the downside risk of holding a stock option, while the ordinary
      shareholder remains exposed to downside risk. This insulation may
      unacceptably remove management's exposure to downside risk, which
      significantly misaligns management and shareholder interests. Accordingly,
      we generally vote against these programs if the transfer can be executed
      without shareholder approval, is available to executive officers or
      non-employee directors, or we consider the available disclosure relating
      to the mechanics and structure of the program to be insufficient to
      determine the costs, benefits and key terms of the program.

                             3.4 Auditor Proposals
                                 -----------------

--------------------------------------------------------------------------------
59. Appointment of Auditors                                                  For
--------------------------------------------------------------------------------

      We believe that the company is in the best position to choose its
      accounting firm, and we generally support management's recommendation.

      We recognize that there may be inherent conflicts when a company's
      independent auditors perform substantial non-audit related services for
      the company. Therefore, in reviewing a proposed auditor, we will consider
      the amount of fees paid for non-audit related services performed compared
      to the total audit fees paid by the company to the auditing firm, and
      whether there are any other reasons for us to question the independence or
      performance of the firm's auditor. We generally will deem as excessive the
      non-audit fees paid by a company to its auditor if those fees account for
      50% or more of total fees paid. The UK market is an exception where 100%
      is the threshold due to market demanded auditing. Under these
      circumstances, we generally vote against the auditor and the directors, in
      particular the members of the company's audit committee. In addition, we
      generally vote against authorizing the audit committee to set the
      remuneration of such auditors. We exclude from this analysis non-audit
      fees related to IPOs, bankruptcy emergence, and spin-offs and other
      extraordinary events. We may abstain due to a lack of disclosure of who
      the auditor is.

--------------------------------------------------------------------------------
60. Approval of Financial Statements                                         For
--------------------------------------------------------------------------------

      In some markets, companies are required to submit their financial
      statements for shareholder approval. This is generally a routine item and,
      as such, we will vote for the approval of financial statements unless
      there are appropriate reasons to vote otherwise. We may abstain if the
      information is not available in advance of the meeting.

--------------------------------------------------------------------------------
61. Approval of Internal Statutory Auditors                                  For
--------------------------------------------------------------------------------

      Some markets (e.g., Japan) require the annual election of internal
      statutory auditors. Internal statutory auditors have a number of duties,
      including supervising management, ensuring compliance with the articles of
      association and reporting to a company's board on certain financial
      issues. In most cases, the election of internal statutory auditors is a
      routine item and we will support management's nominee provided that the
      nominee meets the regulatory requirements for serving as internal
      statutory auditors. However, we may vote against nominees who are
      designated independent statutory auditors who serve as executives of a
      subsidiary or affiliate of the issuer or if there are other reasons to
      question the independence of the nominees.

--------------------------------------------------------------------------------
62. Limit Compensation Consultant Services (SHP)                         Against
--------------------------------------------------------------------------------

      These proposals seek to restrict a company from engaging a consultant
      retained to advise the board on compensation matters to provide the
      company with other services other than compensation consulting if such
      consultant already has been engaged to provide compensation consulting.

      In February 2010, the SEC adopted final rules regarding disclosure
      enhancements in proxy statements and Forms 10K. One such rule requires
      disclosure of the fees paid to compensation consultants and their
      affiliates if they provide consulting services relating to executive
      officer compensation and additional services, if the cost of such
      additional services exceeds $120,000. The rule does not, however, restrict
      a company from acquiring both kinds of services from a compensation
      consultant.

      We agree with the SEC that companies should be required to disclose
      payments exceeding $120,000 to compensation consultants for services other
      than executive compensation consulting services, and we do not believe
      company boards should be subject to any additional restrictions or
      requirements. Accordingly, we oppose these proposals.

      We generally apply these principles for non-US companies as well.

--------------------------------------------------------------------------------
63. Limitation of Liability of External Statutory                   Case-by-case
    Auditors (Japan)
--------------------------------------------------------------------------------

      In Japan, companies may limit the liability of external statutory auditors
      in the event of a shareholder lawsuit through any of three mechanisms: (i)
      submitting the proposed limits to shareholder vote; (ii) setting limits by
      modifying the company's articles of incorporation; and (iii) setting
      limits in contracts with outside directors, outside statutory auditors and
      external audit firms (requires a modification to the company's articles of
      incorporation). A vote by 3% or more of shareholders can nullify a limit
      set through the second mechanism. The third mechanism has historically
      been the most prevalent.

      We review proposals to set limits on auditor liability on a case-by-case
      basis, considering whether such a provision is necessary to secure
      appointment and whether it helps to maximize long-term shareholder value.

--------------------------------------------------------------------------------
64. Separating Auditors and Consultants (SHP)                       Case-by-case
--------------------------------------------------------------------------------

      We believe that a company serves its shareholders' interests by avoiding
      potential conflicts of interest that might interfere with an auditor's
      independent judgment. SEC rules adopted as a result of the Sarbanes-Oxley
      Act of 2002 attempted to address these concerns by prohibiting certain
      services by a company's independent auditors and requiring additional
      disclosure of others services.

      We evaluate on a case-by-case basis proposals that go beyond the SEC rules
      or other local market standards by prohibiting auditors from performing
      other non-audit services or calling for the board to adopt a policy to
      ensure auditor independence.

      We take into consideration the policies and procedures the company already
      has in place to ensure auditor independence and non-audit fees as a
      percentage of total fees paid to the auditor are not excessive.

                  3.5 Shareholder Access and Voting Proposals
                      ---------------------------------------

--------------------------------------------------------------------------------
65. A Shareholder's Right to Call Special Meetings (SHP)            Case-by-case
--------------------------------------------------------------------------------

      Most state corporation statutes (though not Delaware, where many U.S.
      issuers are domiciled) allow shareholders to call a special meeting when
      they want to take action on certain matters that arise between
      regularly-scheduled annual meetings. This right may apply only if a
      shareholder, or a group of shareholders, owns a specified percentage of
      the outstanding shares. (Ten percent is common among states, although one
      state sets the threshold as high as forty percent.)

      We recognize the importance of the right of shareholders to remove
      poorly-performing directors, respond to takeover offers and take other
      actions without having to wait for the next annual meeting. However, we
      also believe it is important to protect companies and shareholders from
      nuisance proposals. We further believe that striking a balance between
      these competing interests will maximize shareholder value. Accordingly, we
      will generally support a proposal to call a special meeting if the
      proposing shareholder owns, or the proposing shareholders as a group own,
      10% or more of the outstanding voting equity of the company.

      From time to time we may receive requests to join with other shareholders
      for purposes of meeting an ownership requirement necessary to call a
      special meeting. Similarly, we may receive other requests to join a voting
      block for purposes of influencing management. If the third parties
      requesting our participation are not affiliated with us and have no
      business relationships with us, we will consider the request on a
      case-by-case basis. However, where the requesting party has a business
      relationship with us (e.g., the requesting party is a client or a
      significant service provider), agreeing to such a request may pose a
      potential conflict of interest. As a fiduciary we have an obligation to
      vote proxies in the best interest of our clients (without regard to our
      own interests in generating and maintaining business with our other
      clients) and given our desire to avoid even the appearance of a conflict,
      we will generally decline such a request.

--------------------------------------------------------------------------------
66. Adopt Cumulative Voting (SHP)                                   Case-by-case
--------------------------------------------------------------------------------

      Cumulative voting is a method of electing directors that enables each
      shareholder to multiply the number of his or her shares by the number of
      directors being considered. A shareholder may then cast the total votes
      for any one director or a selected group of directors. For example, a
      holder of 10 shares normally casts 10 votes for each of 12 nominees to the
      board thus giving the shareholder 120 (10 x 12) votes. Under cumulative
      voting, the shareholder may cast all 120 votes for a single nominee, 60
      for two, 40 for three, or any other combination that the shareholder may
      choose.

      We believe that encouraging activism among shareholders generally is
      beneficial to shareholders and helps maximize shareholder value.
      Cumulative voting supports the interests of minority shareholders in
      contested elections by enabling them to concentrate their votes and
      dramatically increase their chances of electing a dissident director to a
      board. Accordingly, we generally will support shareholder proposals to
      restore or provide for cumulative voting and we generally will oppose
      management proposals to eliminate cumulative voting. However, we may
      oppose cumulative voting if a company has in place both proxy access,
      which allows shareholders to nominate directors to the company's ballot,
      and majority voting (with a carve-out for plurality voting in situations
      where there are more nominees than seats), which requires each director to
      receive the affirmative vote of a majority of votes cast and, we believe,
      leads to greater director accountability to shareholders.

      Also, we support cumulative voting at controlled companies regardless of
      any other shareholder protections that may be in place.

--------------------------------------------------------------------------------
67. Adopt Cumulative Voting in Dual Shareholder Class Structures (SHP)       For
--------------------------------------------------------------------------------

      In dual class structures (such as A&B shares) where the shareholders with
      a majority economic interest have a minority voting interest, we generally
      vote in favor of cumulative voting for those shareholders.

--------------------------------------------------------------------------------
68. Early Disclosure of Voting Results (SHP)                             Against
--------------------------------------------------------------------------------

      These proposals seek to require a company to disclose votes sooner than is
      required by the local market. In the US, the SEC requires disclosure in
      the first periodic report filed after the company's annual meeting which
      we believe is reasonable. We do not support requests that require
      disclosure earlier than the time required by the local regulator.

--------------------------------------------------------------------------------
69. Implement Confidential Voting (SHP)                                      For
--------------------------------------------------------------------------------

      Proponents of confidential voting argue that proxy voting should be
      conducted under the same rules of confidentiality as voting in political
      and other elections (by secret ballot), with an independent party
      verifying the results. They also argue that open balloting allows
      management to re-solicit shareholders and to urge--or sometimes
      coerce--them into changing their votes. Opponents argue that confidential
      voting makes it more difficult for a company to garner the necessary votes
      to conduct business (especially where a supermajority vote is required)
      because proxy solicitors cannot determine how individual shareholders
      voted.

      We support confidential voting before the actual vote has been cast,
      because we believe that voting on shareholder matters should be free of
      any potential for coercion or undue influence from the company or other
      interested parties.

--------------------------------------------------------------------------------
70. Limiting a Shareholder's Right to Call Special Meetings              Against
--------------------------------------------------------------------------------

      Companies contend that limitations on shareholders' rights to call special
      meetings are needed to prevent minority shareholders from taking control
      of the company's agenda. However, such limits also have anti-takeover
      implications because they prevent a shareholder or a group of shareholders
      who have acquired a significant stake in the company from forcing
      management to address urgent issues, such as the potential sale of the
      company. Because most states prohibit shareholders from abusing this
      right, we see no justifiable reason for management to eliminate this
      fundamental shareholder right. Accordingly, we generally will vote against
      such proposals.

      In addition, if the board of directors, without shareholder consent,
      raises the ownership threshold a shareholder must reach before the
      shareholder can call a special meeting, we will vote against those
      directors.

--------------------------------------------------------------------------------
71. Permit a Shareholder's Right to Act by Written Consent (SHP)             For
--------------------------------------------------------------------------------

      Action by written consent enables a large shareholder or group of
      shareholders to initiate votes on corporate matters prior to the annual
      meeting. We believe this is a fundamental shareholder right and,
      accordingly, will support shareholder proposals seeking to restore this
      right. However, in cases where a company has a majority shareholder or
      group of related majority shareholders with majority economic interest, we
      will oppose proposals seeking to restore this right as there is a
      potential risk of abuse by the majority shareholder or group of majority
      shareholders.

--------------------------------------------------------------------------------
72. Proxy Access for Annual Meetings (SHP)                                   For
--------------------------------------------------------------------------------

      These proposals ask companies to give shareholders equal access to proxy
      materials in order to express their views on various proxy issues.

      Management often argues that shareholders already have significant access
      to the proxy as provided by law (i.e., the right to have shareholder
      proposals included in the proxy statement and the right to suggest
      director candidates to the nominating committee). Management also argues
      that it would be unworkable to open the proxy process because of the large
      number of shareholders who might wish to comment and because it would be
      impossible to screen out "nuisance" proposals.

      We have voted in favor of certain resolutions calling for enhancement of
      shareholders' ability to access proxy materials to increase corporate
      boards' attention to shareholder concerns. While we recognize that access
      must be limited in order to discourage frivolous proposals and those put
      forward by shareholders who may not have the best interests of all
      shareholders in mind, we believe that shareholders should have a
      meaningful ability to exercise their rights to vote for and nominate
      directors of the companies in which they invest.

      To this end, in the United States we supported SEC proxy reform in 2003
      and 2007, and we supported the SEC's proposed proxy reform in 2009
      intended to solve the problem of shareholders' limited ability to exercise
      their rights to nominate directors and have the nominations disclosed to
      and considered by shareholders. In 2010, the SEC adopted new rules
      requiring companies to include the nominees of "significant, long-term
      shareholders" in their proxy materials, alongside the nominees of
      management. Under the rules, shareholders are deemed "significant and
      longterm" if they own at least three percent of the company's shares
      continuously for at least the prior three years. However, in July 2011,
      the D.C. Circuit Court of Appeals vacated the SEC's 2010 rules (Exchange
      Act Rule 14a-11), finding that, in adopting the rule, the SEC violated the
      Administrative Procedure Act by failing to adequately consider the rule's
      effect on efficiency, competition and capital formation. We continue to
      monitor the situation.

      From time to time we may receive requests to join with other shareholders
      to support a shareholder action. We may, for example, receive requests to
      join a voting block for purposes of influencing management. If the third
      parties requesting our participation are not affiliated with us and have
      no business relationships with us, we will consider the request on a
      case-by-case basis. However, where the requesting party has a business
      relationship with us (e.g., the requesting party is a client or a
      significant service provider), agreeing to such a request may pose a
      potential conflict of interest. As a fiduciary we have an obligation to
      vote proxies in the best interest of our clients (without regard to our
      own interests in generating and maintaining business with our other
      clients) and given our desire to avoid even the appearance of a conflict,
      we will generally decline such a request.

--------------------------------------------------------------------------------
73. Reduce Meeting Notification from 21 Days to 14 Days (U.K.)               For
--------------------------------------------------------------------------------

      Companies in the United Kingdom may, with shareholder approval, reduce the
      notice period for extraordinary general meetings from 21 days to 14 days.

      A reduced notice period expedites the process of obtaining shareholder
      approval of additional financing needs and other important matters.
      Accordingly, we support these proposals.

--------------------------------------------------------------------------------
74. Rotation of Locale for Annual Meeting (SHP)                          Against
--------------------------------------------------------------------------------

      Proponents contend that the site of the annual meeting should be moved
      each year to a different locale in order to allow as many shareholders as
      possible to attend the annual meeting. Conversely, we believe the location
      of a company's annual meeting is best left to the discretion of
      management, unless there is evidence that the location of previous
      meetings was specifically chosen with the intention of making it more
      difficult for shareholders to participate in the meeting. Consequently, we
      generally oppose proposals calling for the locale of the annual meeting to
      rotate.

--------------------------------------------------------------------------------
75. Shareholder Proponent Engagement Process (SHP)                           For
--------------------------------------------------------------------------------

      We believe that proper corporate governance requires that proposals
      receiving support from a majority of shareholders be considered and
      implemented by the company. Accordingly, we support establishing an
      engagement process between shareholders and management to ensure
      proponents of majority-supported proposals, have an established means of
      communicating with management.

--------------------------------------------------------------------------------
76. Supermajority Vote Requirements                                      Against
--------------------------------------------------------------------------------

      A supermajority vote requirement is a charter or by-law requirement that,
      when implemented, raises the percentage (higher than the customary simple
      majority) of shareholder votes needed to approve certain proposals, such
      as mergers, changes of control, or proposals to amend or repeal a portion
      of the Articles of Incorporation.

      In most instances, we oppose these proposals and support shareholder
      proposals that seek to reinstate the simple majority vote requirement.

               3.6 Environmental, Social and Disclosure Proposals
                   ----------------------------------------------

--------------------------------------------------------------------------------
77. Adopt a Special Corporate Policy for SEC Rule 10b5-1                 Against
    and Other Trading Plans (US) (SHP)
--------------------------------------------------------------------------------

      These shareholder proposals ask a company to adopt a special policy for
      trading by senior executives in addition to the requirements of SEC Rule
      10b5-1 and other trading plans that govern their trading. Subject to the
      history of the company and any record of abuses, we are generally against
      requiring a company to adopt additional requirements.

--------------------------------------------------------------------------------
78. Adopt Guidelines for Country Selection (SHP)                    Case-by-case
--------------------------------------------------------------------------------

      These proposals seek to require a company to prepare a special report on
      how it selects the countries in which it operates. We will evaluate
      whether sufficient information about why a company operates in various
      jurisdictions is provided in annual reports and other company documents.

--------------------------------------------------------------------------------
79. Amend EEO Statement to Include a Reference to Sexual                     For
    Orientation (US) (SHP)
--------------------------------------------------------------------------------

      We support proposals requiring a company to amend its Equal Employment
      Opportunity policies to specifically reference sexual orientation.

--------------------------------------------------------------------------------
80. Animal Testing (SHP)                                            Case-by-case
--------------------------------------------------------------------------------

      Proposals requiring companies to reduce reliance on animals for consumer
      product safety testing will be reviewed on a case-by-case basis, taking
      into account practicality and business impact. Proposals requiring
      increased disclosure on the numbers of animals tested, the types of
      animals used and the types of tests performed will be generally voted in
      favor, while carefully considering any policies that are already in place
      at the company, and to what extent such policies meet the national
      standards.

--------------------------------------------------------------------------------
81. Anti-Greenmail Proposal (SHP)                                            For
--------------------------------------------------------------------------------

      Greenmails, commonly referred to as "legal corporate blackmail," are
      payments made to a potential hostile acquirer who has accumulated a
      significant percentage of a company's stock. The company acquires the
      raider's stock at a premium in exchange for an agreement that the raider
      will not attempt to acquire control for a certain number of years. This
      practice discriminates against all other shareholders as only the hostile
      party receives payment, which is usually at a substantial premium over the
      market value of its shares. Anti-greenmail proposals seek to prevent
      greenmail by adopting amendments to the company's charter or by-laws that
      limit the ability of that company's board to acquire blocks of another
      company's stock at above-market prices.

      We vote in favor of an anti-greenmail proposal, provided the proposal has
      no other management initiated antitakeover features.

--------------------------------------------------------------------------------
82. Charitable Contributions (SHP)                                  Case-by-case
--------------------------------------------------------------------------------

      We generally support shareholder proposals relating to reporting
      charitable contributions. We will evaluate proposals seeking to restrict
      charitable contributions on a case-by-case basis. Proponents of such
      proposals argue that charitable contributions are an inappropriate use of
      company assets because the purpose of any corporation is to make a profit.
      Opponents argue that charitable contributions are a useful means for a
      company to create goodwill.

--------------------------------------------------------------------------------
83. Genetically Altered or Engineered Food (SHP)                    Case-by-case
--------------------------------------------------------------------------------

      These proposals seek to require companies to label genetically modified
      organisms in a company's products or in some cases completely eliminate
      their use. Proponents argue that such measures should be required due to
      the possible health and safety issues surrounding the use of such
      products. Opponents point out that the use of such products helps improve
      crop yield, and implementing such proposals could have immediate negative
      economic effects on the company.

--------------------------------------------------------------------------------
84. Global Labor Standards (SHP)                                             For
--------------------------------------------------------------------------------

      These proposals ask companies to issue reports on their corporate
      standards for doing business abroad and to adopt mechanisms for ensuring
      vendor compliance with these standards. The standards include policies to
      ensure that workers are paid sustainable living wages and children are not
      used as forced labor. Generally, we vote in favor, but we carefully
      consider any policies that are already in place at the company, to what
      extent such policies meet the standards espoused by the International
      Labor Organization's Declaration of Fundamental Principles and Rights at
      Work (and other relevant ILO conventions), and any evidence of prior abuse
      by the company. We will also ensure the practicality of such proposals.

--------------------------------------------------------------------------------
85. Global Warming; Reduction of Greenhouse Gas Emissions (SHP)     Case-by-case
--------------------------------------------------------------------------------

      Proposals addressing environmental and energy concerns are plentiful. We
      will generally support proposals requesting greater disclosure, but
      proposals seeking to adopt specific emissions or environmental goals or
      metrics will be evaluated on a case-by-case basis. Topics can range from
      general environmental reports to more specific reports on topics such as
      greenhouse gas emissions, the release of radioactive materials, and the
      generation or use of nuclear energy. The scope of the requested reports or
      policies can also vary. Proponents of these proposals may seek information
      on the steps the company has taken to address the environmental concern in
      question, or they may also ask the company to detail any financial risk
      associated with environmental issues. Opponents of these proposals claim
      that complying with proponents' requests would be overly costly for, or
      unduly burdensome on, the company.

--------------------------------------------------------------------------------
86. Implement the MacBride Principles (Northern Ireland) (SHP)      Case-by-case
--------------------------------------------------------------------------------

      The MacBride Principles aim to fight discriminatory anti Catholic
      employment practices in the British state of Northern Ireland. The
      Principles encourage U.S. companies to actively recruit Catholic employees
      and, where possible, groom them for management responsibilities. Companies
      are also asked to ensure job security for their Catholic employees and to
      abolish the use of inflammatory religious emblems.

      Supporters argue that the MacBride Principles effectively address Northern
      Ireland's inequalities in employment (in Northern Ireland, unemployment
      among Catholic men is twice as high as among Protestant men). Opponents
      contend that the adoption of the MacBride Principles is itself a form of
      reverse discrimination, which may violate British law. The British
      government is concerned that adoption of the MacBride Principles may
      increase the "hassle factor" of doing business in the economically
      troubled area and reduce the attractiveness of investments.

--------------------------------------------------------------------------------
87. Include Sustainability as a Performance Measure (SHP)           Case-by-case
--------------------------------------------------------------------------------

      We believe management and directors should be given latitude in
      determining appropriate performance measurements. Therefore, we will
      evaluate on a case-by-case basis proposals requesting companies to
      consider incorporating specific, measurable, practical goals consisting of
      sustainability principles and environmental impacts as metrics for
      incentive compensation.

--------------------------------------------------------------------------------
88. Military Issues (SHP)                                           Case-by-case
--------------------------------------------------------------------------------

      These proposals ask companies involved in military production to report on
      future plans and to diversify or convert to the production of civilian
      goods and services. Opponents of these resolutions are concerned that
      conversion is not economically rational, and view the proposals as
      intrusions into management's decision making prerogative. Opponents also
      point to the imperative of a strong defense as reason enough to continue
      military production.

--------------------------------------------------------------------------------
89. Nuclear Waste Disposal (SHP)                                    Case-by-case
--------------------------------------------------------------------------------

      These resolutions ask companies to allocate a portion of the cost of
      building nuclear power plants for research into nuclear waste disposal.
      Proponents argue that, because the life span of certain waste byproducts
      exceeds current containment capabilities, the industry should concentrate
      more on waste management and disposal. While opponents acknowledge the
      need for research, they contend that the problem is overstated, and that
      some suggested containment programs are unnecessarily expensive.

--------------------------------------------------------------------------------
90. Other Business                                                       Against
--------------------------------------------------------------------------------

      In certain jurisdictions, these proposals allow management to act on
      issues that shareholders may raise at the annual meeting. Because it is
      impossible to know what issues may be raised, we will vote against these
      proposals.

--------------------------------------------------------------------------------
91. Pharmaceutical Pricing (US) (SHP)                               Case-by-case
--------------------------------------------------------------------------------

      These proposals seek to require a company to implement pricing restraints
      to make prescription drugs more affordable, both domestically and in
      third-world countries. Proponents argue that drug prices in the United
      States, considered to be among the highest in the world, make adequate
      medical care inaccessible to those other than the most affluent. Critics
      of such proposals argue that artificial price controls would reduce
      revenues, deter investors and ultimately reduce funds available for future
      research and development.

--------------------------------------------------------------------------------
92. Plant Closings (US) (SHP)                                       Case-by-case
--------------------------------------------------------------------------------

      These proposals ask companies to create or expand programs to relocate
      workers displaced by a plant closing. Supporters of plant closing
      resolutions argue management should be more sensitive to employees both
      during the decision on closing a plant and in efforts at relocation.
      Companies generally respond that they already have programs to accommodate
      displaced workers. In addition, federal law now requires 60 days' advance
      notice of a major plant closing or layoff and a number of states also have
      applicable regulations.

--------------------------------------------------------------------------------
93. Reimbursement of Shareholder Proposal Expenses (SHP)                 Against
--------------------------------------------------------------------------------

      These shareholder proposals would require companies to reimburse the
      expenses of shareholders who submit proposals that receive a majority of
      votes cast. We generally vote against these proposals.

--------------------------------------------------------------------------------
94. Report on Pay Disparity (SHP)                                   Case-by-case
--------------------------------------------------------------------------------

      A report on pay disparity compares the total compensation of a company's
      executive officers with that of the company's lowest paid workers,
      including statistics and rationale pertaining to changes in the size of
      the gap, information on whether executive compensation is "excessive", and
      information on whether greater oversight is needed over certain aspects of
      the company's compensation policies.

      Proponents may note that executive compensation, in general, and the gap
      between executive compensation and the pay of a company's lowest paid
      employees, has grown significantly in recent years. They may also note
      that the gap between executive salary and the wage of the average employee
      at the company is significantly higher.

--------------------------------------------------------------------------------
95. Report on Water Pollution Prevention Measures (SHP)                      For
--------------------------------------------------------------------------------

      We will generally support proposals requesting a company report to
      shareholders on measures taken by the company to prevent runoff,
      wastewater and other forms of water pollution from the company's own (and
      its contractors') facilities, taking into account national legislation and
      practicality.

--------------------------------------------------------------------------------
96. Report on Workplace Diversity and/or Employment Policies (SHP)           For
--------------------------------------------------------------------------------

      Equal employment may refer to the right to be free from discrimination
      based on race, gender, sexual orientation, national origin, age or
      disability in the work force. Resolutions generally ask companies to
      report progress in complying with affirmative action laws. In assessing
      these proposals, we carefully consider any policies that are already in
      place at the company. However, we will also assure the practicality of
      such proposals.

--------------------------------------------------------------------------------
97. Reporting Political Contributions; Lobbying Expenses (SHP)               For
--------------------------------------------------------------------------------

      We generally vote in favor of proposals requesting increased disclosure of
      political contributions and lobbying expenses. By requiring reports to
      shareholders, proponents of these shareholder resolutions contend
      investors can help police wrongdoings in the political system and better
      evaluate the use of company resources. Critics of these proposals contend
      that reformers overstate the problem and that a company should play an
      active role in expressing its opinion about relevant legislation.

--------------------------------------------------------------------------------
98. Submit Political Spending Program to Shareholder Advisory            Against
    Vote (SHP)
--------------------------------------------------------------------------------

      We generally vote against shareholder proposals requiring the board of
      directors to adopt a policy to provide shareholders with the opportunity
      to ratify a company's political spending program. We believe such
      proposals are overly intrusive on management's discretion.

--------------------------------------------------------------------------------
99. Sustainability Report (SHP)                                              For
--------------------------------------------------------------------------------

      We generally support shareholder proposals calling for a sustainability
      report while taking into account the current reporting policies of the
      company as they relate to sustainability and whether having a report
      provides added benefits to shareholders.

      Sustainability is a business model that requires companies to balance the
      needs and interests of various stakeholders while concurrently sustaining
      their business, communities and the environment for future generations.
      Although many argue that the sustainable development concept is constantly
      evolving, core issues continue to revolve around ensuring the rights of
      future generations, adopting a long-term approach to business problems and
      strengthening the connections between the environment, society and the
      economy. This "triple bottom line" can be used as a framework for
      measuring and reporting corporate performance against economic, social and
      environmental parameters. However, the term can also encompass a set of
      values, issues and practices that companies must address in order to
      minimize harm, while simultaneously creating economic, social and
      environmental value. We evaluate these proposals on a case-by-case basis.

      Proponents of these proposals argue that investors are justified in
      seeking additional disclosure on companies' social and environmental
      performance because they affect shareholder value. Opponents argue that
      companies already include much of the information contained in a
      sustainability report in workplace policies and/or codes of ethics and
      post this information on their websites; supporting these proposals would
      therefore be unduly burdensome.

--------------------------------------------------------------------------------
100. The CERES Principles (SHP)                                     Case-by-case
--------------------------------------------------------------------------------

      Many environmental proposals include a recommendation that companies adopt
      and report their compliance with the Coalition of Environmentally
      Responsible Economies (the "CERES" Principles). The CERES Principles are a
      set of ten principles committing the company to environmental improvement.
      Proponents argue that endorsement of the CERES principles gives a company
      greater public credibility than standards created by industry or
      government regulation alone. Companies argue that implementing the CERES
      Principles only duplicates their current environmental policies and is
      unduly burdensome.

--------------------------------------------------------------------------------
101. Tobacco (SHP)
--------------------------------------------------------------------------------

      Proposals relating to tobacco issues are wide-ranging. They include
      proposals to have a company issue warnings on the environmental risks of
      tobacco smoke and the risks of smoking-related diseases, as well as
      proposals to link executive compensation with reductions in teen smoking.

      a.    End Production of Tobacco Products                           Against
            --------------------------------------------------------------------

      These proposals seek to phase-out all production, promotion and marketing
      of tobacco products by a specified date. Proponents argue that tobacco
      companies have acknowledged the serious health risks related to smoking
      cigarettes yet they continue to distribute them. When evaluating these
      resolutions, we must consider the company's risks and liabilities
      associated with those lines of business, and evaluate the overall
      strategic business plans and how those plans will serve to maximize
      long-term shareholder value.

      Because phasing out all tobacco-related operations by a tobacco company is
      very likely to result in the end of the company, which clearly is not in
      the best interests of shareholders, we will generally oppose these
      proposals.

      b.    Spin-off Tobacco-related Business                       Case-by-case
            --------------------------------------------------------------------

      The motivation for these proposals is generally in line with what we have
      described immediately above -- proponents seek for the subject company to
      phase-out all production, promotion and marketing of tobacco products by a
      specified date, citing health risks and tobacco companies' systemic
      failure to honestly inform the public about these health risks until
      recently. The key difference is that, unlike the above type of proposal,
      which would be put to a company that derives most, if not all, of its
      revenues from tobacco-related operations, a spin-off proposal would
      request that a company that derives only a portion (often a substantial
      portion) of its revenues from tobacco-related operations spinoff its
      tobacco-related operating segment/subsidiary.

      When evaluating resolutions requesting a company divest itself from one or
      more lines of business, we must consider the company's risks and
      liabilities associated with those lines of business, evaluate the overall
      strategic business plans and determine how those plans will serve to
      maximize long-term shareholder value.

4.    Conflicts of Interest

      4.1   Introduction

            As a fiduciary, we always must act in our clients' best interests.
            We strive to avoid even the appearance of a conflict that may
            compromise the trust our clients have placed in us, and we insist on
            strict adherence to fiduciary standards and compliance with all
            applicable federal and state securities laws. We have adopted a
            comprehensive Code of Business Conduct and Ethics ("Code") to help
            us meet these obligations. As part of this responsibility and as
            expressed throughout the Code, we place the interests of our clients
            first and attempt to avoid any perceived or actual conflicts of
            interest.

            We recognize that there may be a potential material conflict of
            interest when we vote a proxy solicited by an issuer whose
            retirement plan we manage, or we administer, who distributes
            AllianceBernstein-sponsored mutual funds, or with whom we or an
            employee has another business or personal relationship that may
            affect how we vote on the issuer's proxy. Similarly, we may have a
            potential material conflict of interest when deciding how to vote on
            a proposal sponsored or supported by a shareholder group that is a
            client. In order to avoid any perceived or actual conflict of
            interest, the procedures set forth below in sections 3.2 through 3.7
            have been established for use when we encounter a potential conflict
            to ensure that our voting decisions are based on our clients' best
            interests and are not the product of a conflict.

      4.2   Adherence to Stated Proxy Voting Policies

            Votes generally are cast in accordance with this policy(3). In
            situations where our policy is case-by-case, this Manual often
            provides criteria that will guide our decision. In situations where
            our policy on a particular issue is case-by-case and the vote cannot
            be clearly decided by an application of our stated policy, a member
            of the Proxy Committee or his/her designee will make the voting
            decision in accordance with the basic principle of our policy to
            vote proxies with the intention of maximizing the value of the
            securities in our client accounts. In these situations, the voting
            rationale must be documented either on the voting platform of ISS,
            by retaining relevant emails or another appropriate method. Where
            appropriate, the views of investment professionals are considered.
            All votes cast contrary to our stated voting policy on specific
            issues must be documented. On an annual basis, the Proxy Committee
            will receive a report of all such votes so as to confirm adherence
            of the policy.

--------
(3)   From time to time a client may request that we vote their proxies
      consistent with AFL-CIO guidelines or the policy of the National
      Association of Pension Funds. In those situations, AllianceBernstein
      reserves the right to depart from those policies if we believe it to be in
      the client's best interests.

      4.3   Disclosure of Conflicts

            When considering a proxy proposal, members of the Proxy Committee or
            investment professionals involved in the decision-making process
            must disclose to the Proxy Committee any potential conflict
            (including personal relationships) of which they are aware and any
            substantive contact that they have had with any interested outside
            party (including the issuer or shareholder group sponsoring a
            proposal) regarding the proposal. Any previously unknown conflict
            will be recorded on the Potential Conflicts List (discussed below).
            If a member of the Proxy Committee has a conflict of interest, he or
            she must also remove himself or herself from the decision-making
            process.

      4.4   Potential Conflicts List

            No less frequently than annually, a list of companies and
            organizations whose proxies may pose potential conflicts of interest
            is compiled by the Legal and Compliance Department (the "Potential
            Conflicts List"). The Potential Conflicts List includes:

            o     Publicly-traded Clients from the Russell 3000 Index, the
                  Morgan Stanley Capital International ("MSCI") Europe Australia
                  Far East Index (MSCI EAFE), the MSCI Canada Index and the MSCI
                  Emerging Markets Index;

            o     Publicly-traded companies that distribute AllianceBernstein
                  mutual funds;

            o     Bernstein private clients who are directors, officers or 10%
                  shareholders of publicly traded companies;

            o     Clients who sponsor, publicly support or have material
                  interest in a proposal upon which we will be eligible to vote;

            o     Publicly-traded affiliated companies;

            o     Companies where an employee of AllianceBernstein or AXA
                  Financial has identified an interest;

            o     Any other conflict of which a Proxy Committee member becomes
                  aware(4).

--------
(4)   The Proxy Committee must notify the Legal and Compliance Department
      promptly of any previously unknown conflict.


            We determine our votes for all meetings of companies on the
            Potential Conflicts List by applying the tests described in Section
            3.6 below. We document all instances when the independent compliance
            officer determines our vote.

      4.5   Determine Existence of Conflict of Interest

            When we encounter a potential conflict of interest, we review our
            proposed vote using the following analysis to ensure our voting
            decision does not generate a conflict of interest:

            o     If our proposed vote is consistent with our Proxy Voting
                  Policy, no further review is necessary.

            o     If our proposed vote is contrary to our Proxy Voting Policy
                  and our client's position on the proposal, no further review
                  is necessary.

            o     If our proposed vote is contrary to our Proxy Voting Policy or
                  is not covered herein, is consistent with our client's
                  position, and is also consistent with the views of ISS, no
                  further review is necessary.

            o     If our proposed vote is contrary to our Proxy Voting Policy or
                  is not covered herein, is consistent with our client's
                  position and is contrary to the views of ISS, the vote will be
                  presented to an independent compliance officer ("ICO"). The
                  ICO will determine whether the proposed vote is reasonable. If
                  the ICO cannot determine that the proposed vote is reasonable,
                  the ICO may instruct AllianceBernstein to refer the votes back
                  to the client(s) or take other actions as the ICO deems
                  appropriate. The ICO's review will be documented using a Proxy
                  Voting Conflict of Interest Form (a copy of which is attached
                  hereto).

      4.6   Review of Third Party Research Service Conflicts of Interest

            We consider the research of ISS, so the Proxy Committee takes
            reasonable steps to verify that ISS is, in fact, independent based
            on all of the relevant facts and circumstances. This includes
            reviewing ISS's conflict management procedures on an annual basis.
            When reviewing these conflict management procedures, we will
            consider, among other things, whether ISS (i) has the capacity and
            competency to adequately analyze proxy issues; and (ii) can offer
            research in an impartial manner and in the best interests of our
            clients.

      4.7   Confidential Voting

            It is AllianceBernstein's policy to support confidentiality before
            the actual vote has been cast. Employees are prohibited from
            revealing how we intend to vote except to (i) members of the Proxy
            Committee; (ii) Portfolio managers that hold the security in their
            managed accounts; (iii) the Research Analyst(s) who cover(s) the
            security; and (iv) clients, upon request, for the securities held in
            their portfolio. Once the votes have been cast, they are made public
            in accordance with mutual fund proxy vote disclosures required by
            the U.S. Securities and Exchange Commission ("SEC"), and we
            generally post all votes to our public website the quarter after the
            vote has been cast.

            We may participate in proxy surveys conducted by shareholder groups
            or consultants so long as such participation does not compromise our
            confidential voting policy. Specifically, prior to our required SEC
            disclosures each year, we may respond to surveys asking about our
            proxy voting policies, but not any specific votes. After our mutual
            fund proxy vote disclosures required by the SEC each year have been
            made public and/or votes have been posted to our public website, we
            may respond to surveys that cover specific votes in addition to our
            voting policies.

            On occasion, clients for whom we do not have proxy voting authority
            may ask us for advice on proxy votes that they cast. A member of the
            Proxy Committee or a Proxy Manager may offer such advice subject to
            an understanding with the client that the advice shall remain
            confidential.

            Any substantive contact regarding proxy issues from the issuer, the
            issuer's agent or a shareholder group sponsoring a proposal must be
            reported to the Proxy Committee if such contact was material to a
            decision to vote contrary to this Policy. Routine administrative
            inquiries from proxy solicitors need not be reported.

      4.8   A Note Regarding AllianceBernstein's Structure

            AllianceBernstein and AllianceBernstein Holding L.P. ("AB Holding")
            are Delaware limited partnerships. As limited partnerships, neither
            company is required to produce an annual proxy statement or hold an
            annual shareholder meeting. In addition, the general partner of
            AllianceBernstein and AB Holding, AllianceBernstein Corporation, is
            a wholly-owned subsidiary of AXA, a French holding company for an
            international group of insurance and related financial services
            companies.

            As a result, most of the positions we express in this Proxy Voting
            Policy are inapplicable to our business. For example, although units
            in AB Holding are publicly traded on the New York Stock Exchange
            ("NYSE"), the NYSE Listed Company Manual exempts limited
            partnerships and controlled companies from compliance with various
            listing requirements, including the requirement that our board have
            a majority of independent directors.

5.    Voting Transparency

      We publish our voting records on our website quarterly, 30 days after the
      end of the previous quarter. Many clients have requested that we provide
      them with periodic reports on how we voted their proxies. Clients may
      obtain information about how we voted proxies on their behalf by
      contacting their Advisor. Alternatively, clients may make a written
      request to the Chief Compliance Officer.

6.    Recordkeeping

      All of the records referenced below will be kept in an easily accessible
      place for at least the length of time required by local regulation and
      custom, and, if such local regulation requires that records are kept for
      less than five years from the end of the fiscal year during which the last
      entry was made on such record, we will follow the U.S. rule of five years.
      We maintain the vast majority of these records electronically. We will
      keep paper records, if any, in one of our offices for at least two years.

      6.1   Proxy Voting Policy

            The Proxy Voting Policy shall be maintained in the Legal and
            Compliance Department and posted on our company intranet and the
            AllianceBernstein website.

      6.2   Proxy Statements Received Regarding Client Securities

            For U.S. Securities(5), AllianceBernstein relies on the SEC to
            maintain copies of each proxy statement we receive regarding client
            securities. For Non-U.S. Securities, we rely on ISS, our proxy
            voting agent, to retain such proxy statements.

--------
(5)   U.S. securities are defined as securities of issuers required to make
      reports pursuant to ss.12 of the Securities Exchange Act of 1934. Non-U.S.
      securities are defined as all other securities.


      6.3   Records of Votes Cast on Behalf of Clients

            Records of votes cast by AllianceBernstein are retained
            electronically by our proxy voting agent, ISS.

      6.4   Records of Clients Requests for Proxy Voting Information

            Copies of written requests from clients for information on how
            AllianceBernstein voted their proxies shall be maintained by the
            Legal and Compliance Department. Responses to written and oral
            requests for information on how we voted clients' proxies will be
            kept in the Client Group.

      6.5   Documents Prepared by AllianceBernstein that are Material to Voting
            Decisions

            The Proxy Committee is responsible for maintaining documents
            prepared by the Committee or any AllianceBernstein employee that
            were material to a voting decision. Therefore, where an investment
            professional's opinion is essential to the voting decision, the
            recommendation from investment professionals must be made in writing
            to the Proxy Manager.

7.    Proxy Voting Procedures

      7.1   Vote Administration

            In an effort to increase the efficiency of voting proxies,
            AllianceBernstein uses ISS to act as its voting agent for our
            clients' holdings globally.

            Issuers initially send proxy information to the custodians of our
            client accounts. We instruct these custodian banks to direct proxy
            related materials to ISS's offices. ISS provides us with research
            related to each resolution. A Proxy Manager reviews the ballots via
            ISS's web platform, ProxyExchange (For separately managed account
            programs, Proxy Managers use Broadridge's ProxyEdge platform.).
            Using ProxyExchange (or ProxyEdge), the Proxy Manager submits our
            voting decision. ISS (or Broadridge) then returns the proxy ballot
            forms to the designated returnee for tabulation. Clients may request
            that, when voting their proxies, we utilize an ISS recommendation or
            ISS's Taft-Hartley Voting Policy.

            If necessary, any paper ballots we receive will be voted online
            using ProxyVote or via mail or fax.

      7.2   Share blocking

            Proxy voting in certain countries requires "share blocking."
            Shareholders wishing to vote their proxies must deposit their shares
            shortly before the date of the meeting (usually one week) with a
            designated depositary.

            During this blocking period, shares that will be voted at the
            meeting cannot be sold until the meeting has taken place and the
            shares are returned to the clients' custodian banks. We may
            determine that the value of exercising the vote is outweighed by the
            detriment of not being able to sell the shares during this period.
            In cases where we want to retain the ability to trade shares, we may
            abstain from voting those shares.

            We seek to vote all proxies for securities held in client accounts
            for which we have proxy voting authority. However, in some markets
            administrative issues beyond our control may sometimes prevent us
            from voting such proxies. For example, we may receive meeting
            notices after the cut-off date for voting or without enough time to
            fully consider the proxy. Similarly, proxy materials for some
            issuers may not contain disclosure sufficient to arrive at a voting
            decision, in which cases we may abstain from voting. Some markets
            outside the U.S. require periodic renewals of powers of attorney
            that local agents must have from our clients prior to implementing
            our voting instructions.

      7.3   Loaned Securities

            Many of our clients have entered into securities lending
            arrangements with agent lenders to generate additional revenue. We
            will not be able to vote securities that are on loan under these
            types of arrangements. However, under rare circumstances, for voting
            issues that may have a significant impact on the investment, we may
            request that clients or custodians recall securities that are on
            loan if we determine that the benefit of voting outweighs the costs
            and lost revenue to the client or fund and the administrative burden
            of retrieving the securities.



                                    EXHIBIT

                            PROXY COMMITTEE MEMBERS
                            -----------------------

The members of the Proxy Committee establish general proxy policies for
AllianceBernstein and consider specific proxy voting matters as necessary.
Members include senior investment personnel and representatives of the Legal and
Compliance Department. The Proxy Committee is chaired by Linda Giuliano, Senior
Vice President and Chief Administrative Officer-Equities.

Proxy Committee
---------------

Vincent DuPont:   SVP-Equities

Linda Giuliano:   SVP-Equities

Saskia Kort:      AVP-Equities

David Lesser:     VP-Legal

James MacGregor:  SVP-Equities

Mark Manley:      SVP-Legal

Ryan Oden:        Equities

Anthony Rizzi:    VP-Operations




                                    EXHIBIT

                         PROXY VOTING GUIDELINE SUMMARY
                         ------------------------------

--------------------------------------------------------------------------------
 Shareholder
  Proposal                                          For    Against  Case-by-Case
--------------------------------------------------------------------------------

                          Board and Director Proposals

--------------------------------------------------------------------------------

           Changes in Board Structure and            X
           Amending the Articles of Incorporation
--------------------------------------------------------------------------------
           Classified Boards                                X
--------------------------------------------------------------------------------
           Director Liability and                                      X
           Indemnification
--------------------------------------------------------------------------------
    X      Disclose CEO Succession Plan              X
--------------------------------------------------------------------------------
           Election of Directors                     X
--------------------------------------------------------------------------------
           Controlled Company Exemption                                X
--------------------------------------------------------------------------------
           Voting for Director Nominees in a                           X
           Contested Election
--------------------------------------------------------------------------------
    X      Establish Additional Board                                  X
           Committees
--------------------------------------------------------------------------------
    X      Independent Lead Director                 X
--------------------------------------------------------------------------------
    X      Limit Term of Directorship;                                 X
           Establish Mandatory Retirement Age
--------------------------------------------------------------------------------
    X      Majority of Independent Directors         X
--------------------------------------------------------------------------------
    X      Majority of Independent Directors         X
           on Key Committees
--------------------------------------------------------------------------------
    X      Majority Votes for Directors              X
--------------------------------------------------------------------------------
    X      Prohibit CEOs from Serving on                    X
           Compensation Committees
--------------------------------------------------------------------------------
    X      Removal of Directors Without Cause        X
--------------------------------------------------------------------------------
    X      Require Independent Board Chairman                          X
--------------------------------------------------------------------------------
    X      Require Two Candidates for Each                  X
           Board Seat
--------------------------------------------------------------------------------
    X      Stock Ownership Requirement                      X
--------------------------------------------------------------------------------

                        Compensation Proposals

--------------------------------------------------------------------------------

    X      Accelerated Vesting of Equity                               X
           Compensation Awards-Change of Control
--------------------------------------------------------------------------------
    X      Adopt Form of Employment Contract                           X
--------------------------------------------------------------------------------
    X      Adopt Policies to Prohibit any Death             X
           Benefits to Senior Executives
--------------------------------------------------------------------------------
    X      Advisory Vote to Ratify Directors'                          X
           Compensation
--------------------------------------------------------------------------------
    X      Amend Executive Compensation Plan                X
           tied to Performance (Bonus Banking)
--------------------------------------------------------------------------------
           Approve Remuneration for Directors                          X
           and Auditors
--------------------------------------------------------------------------------
           Approve Remuneration Reports                                X
--------------------------------------------------------------------------------
           Approve Retirement Bonuses for                              X
           Directors (Japan and South Korea)
--------------------------------------------------------------------------------
           Approve Special Payments to Continuing                      X
           Directors and Auditors (Japan)
--------------------------------------------------------------------------------
    X      Disclose Executive and Director Pay                         X
--------------------------------------------------------------------------------
    X      Exclude Pension Income from               X
           Performance-based Compensation
--------------------------------------------------------------------------------
           Executive and Employee Compensation                         X
           Plans
--------------------------------------------------------------------------------
    X      Limit Dividend Payments to Executives            X
--------------------------------------------------------------------------------
    X      Limit Executive Pay                                         X
--------------------------------------------------------------------------------
    X      Mandatory Holding Periods                        X
--------------------------------------------------------------------------------
    X      Pay Directors Only in Stock                      X
--------------------------------------------------------------------------------
    X      Performance-based Stock Option Plans                        X
--------------------------------------------------------------------------------
    X      Prohibit Relocation Benefits to                  X
           Senior Executives
--------------------------------------------------------------------------------
    X      Recovery of Performance-based             X
           Compensation
--------------------------------------------------------------------------------
    X      Single Trigger Change-in-Control                            X
           Agreements
--------------------------------------------------------------------------------
    X      Submit Golden Parachutes/Severance                          X
           Plans to a Shareholder Vote
--------------------------------------------------------------------------------
    X      Submit Golden Parachutes/Severance                          X
           Plans  to  a Shareholder Vote prior
           to their being Negotiated by Management
--------------------------------------------------------------------------------
    X      Submit Option Re-pricing to a             X
           Shareholder Vote
--------------------------------------------------------------------------------
    X      Submit Survivor Benefit Compensation      X
           Plans to a Shareholder Vote
--------------------------------------------------------------------------------

                  Capital Changes and Anti-Take Over Proposals

--------------------------------------------------------------------------------
    X      Amend Exclusive Forum Bylaw                      X
--------------------------------------------------------------------------------
           Amend Net Operating Loss ("NOL")          X
           Rights Plans
--------------------------------------------------------------------------------
           Authorize Share Repurchase                X
--------------------------------------------------------------------------------
           Blank Check Preferred Stock                      X
--------------------------------------------------------------------------------
           Corporate Restructurings, Merger                            X
           Proposals and Spin-offs
--------------------------------------------------------------------------------
           Elimination of Preemptive Rights                            X
--------------------------------------------------------------------------------
    X      Expensing Stock Options                   X
--------------------------------------------------------------------------------
           Fair Price Provisions                                       X
--------------------------------------------------------------------------------
           Increase Authorized Common Stock                            X
--------------------------------------------------------------------------------
           Issuance of Equity without                X
           Preemptive Rights
--------------------------------------------------------------------------------
           Issuance of Stock with Unequal                              X
           Voting Rights
--------------------------------------------------------------------------------
           Net Long Position Requirement             X
--------------------------------------------------------------------------------
    X      Opt Out of State Anti-takeover Law (US)                     X
--------------------------------------------------------------------------------
           Reincorporation                                             X
--------------------------------------------------------------------------------
    X      Reincorporation to Another jurisdiction                     X
           to Permit Majority Voting or Other
           Changes in Corporate Governance
--------------------------------------------------------------------------------
           Stock Splits                              X
--------------------------------------------------------------------------------
    X      Submit Company's Shareholder Rights       X
           Plan to a Shareholder Vote
--------------------------------------------------------------------------------
           Transferrable Stock Options                                 X
--------------------------------------------------------------------------------

                               Auditor Proposals

--------------------------------------------------------------------------------
           Appointment of Auditors                   X
--------------------------------------------------------------------------------
           Approval of Financial Statements          X
--------------------------------------------------------------------------------
           Approval of Internal Statutory Auditors   X
--------------------------------------------------------------------------------
    X      Limit Compensation Consultant Services           X
--------------------------------------------------------------------------------
           Limitation of Liability of External                         X
           Statutory Auditors (Japan)
--------------------------------------------------------------------------------
    X      Separating Auditors and Consultants                         X
--------------------------------------------------------------------------------

                     Shareholder Access & Voting Proposals

--------------------------------------------------------------------------------
    X      A Shareholder's Right to Call Special                       X
           Meetings
--------------------------------------------------------------------------------
    X      Adopt Cumulative Voting                                     X
--------------------------------------------------------------------------------
    X      Adopt Cumulative Voting in Dual           X
           Shareholder Class Structures
--------------------------------------------------------------------------------
    X      Early Disclosure of Voting Results               X
--------------------------------------------------------------------------------
    X      Implement Confidential Voting             X
--------------------------------------------------------------------------------
           Limiting a Shareholder's Right to                X
           Call Special Meetings
--------------------------------------------------------------------------------
    X      Permit a Shareholder's Right to Act       X
           by Written Consent
--------------------------------------------------------------------------------
    X      Proxy Access for Annual Meetings          X
--------------------------------------------------------------------------------
           Reduce Meeting Notification from 21       X
           Days to 14 Days (U.K.)
--------------------------------------------------------------------------------
    X      Rotation of Locale for Annual Meeting            X
--------------------------------------------------------------------------------
    X      Shareholder Proponent Engagement Process  X
--------------------------------------------------------------------------------
           Supermajority Vote Requirements                  X
--------------------------------------------------------------------------------

                  Environmental & Social, Disclosure Proposals

--------------------------------------------------------------------------------
    X      Adopt a Special Corporate Policy for             X
           SEC Rule 1b5-1 and Other Trading Plans
--------------------------------------------------------------------------------
    X      Adopt Guidelines for Country Selection                      X
--------------------------------------------------------------------------------
    X      Amend EEO Statement to Include a          X
           Reference to Sexual Orientation
--------------------------------------------------------------------------------
    X      Animal Testing                                              X
--------------------------------------------------------------------------------
    X      Anti-Greenmail Proposal                   X
--------------------------------------------------------------------------------
    X      Charitable Contributions                                    X
--------------------------------------------------------------------------------
    X      Genetically Altered or Engineered Food                      X
--------------------------------------------------------------------------------
    X      Global Labor Standards                    X
--------------------------------------------------------------------------------
    X      Global Warming; Reduction of Greenhouse                     X
           Gas Emissions
--------------------------------------------------------------------------------
    X      Implement the MacBride Principles                           X
           (Northern Ireland)
--------------------------------------------------------------------------------
    X      Include Sustainability as a                                 X
           Performance Measure
--------------------------------------------------------------------------------
    X      Military Issues                                             X
--------------------------------------------------------------------------------
    X      Nuclear Waste Disposal                                      X
--------------------------------------------------------------------------------
           Other Business                                   X
--------------------------------------------------------------------------------
    X      Pharmaceutical Pricing                                      X
--------------------------------------------------------------------------------
    X      Plant Closings                                              X
--------------------------------------------------------------------------------
    X      Reimbursement of Shareholder Proposal            X
           Expenses
--------------------------------------------------------------------------------
    X      Report on Collateral in Derivatives              X
           Trading
--------------------------------------------------------------------------------
    X      Report on Pay Disparity                                     X
--------------------------------------------------------------------------------
    X      Report on Water Pollution Prevention      X
           Measures
--------------------------------------------------------------------------------
    X      Report on Workplace Diversity and/or      X
           Employment Policies
--------------------------------------------------------------------------------
    X      Reporting Political Contributions;        X
           Lobbying Expenses
--------------------------------------------------------------------------------
    X      Submit Political Spending Program to             X
           Shareholder Advisory Vote
--------------------------------------------------------------------------------
    X      Sustainability Report                     X
--------------------------------------------------------------------------------
    X      The CERES Principles                                        X
--------------------------------------------------------------------------------
           Tobacco
--------------------------------------------------------------------------------
    X      End Production of Tobacco Products               X
--------------------------------------------------------------------------------
    X      Spin-off Tobacco-related Business                           X
--------------------------------------------------------------------------------



                                    EXHIBIT

                     PROXY VOTING CONFLICT OF INTEREST FORM
                     --------------------------------------

           ___________                                         __________
Name of   |           |                         Date of       |          |
Security  |___________|                         Shareholder   |          |
                                                Meeting       |__________|

Short description of the conflict (client, mutual fund distributor, etc.):

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

1. Is our proposed vote on all issues consistent with our stated proxy voting
policy?

     [_] Yes [_] No   If yes, stop here and sign below as no further review is
                      necessary.

2.  Is our proposed vote contrary to our client's position?

     [_] Yes [_] No   If yes, stop here and sign below as no further review is
                      necessary.

3. Is our proposed vote consistent with the views of Institutional Shareholder
Services?

     [_] Yes [_] No   If yes, stop here and sign below as no further review is
                      necessary.

Please attach a memo containing the following information and documentation
supporting the proxy voting decision:

   [_] A list of the issue(s) where our proposed vote is contrary to our stated
       policy (director election, cumulative voting, equity compensation plan,
       etc.

   [_] A description of any substantive contact with any interested outside
       party and a proxy voting committee or an AllianceBernstein investment
       professional that was material to our voting decision. Please include
       date, attendees, titles, organization they represent and topics
       discussed. If there was no such contact, please note as such.

   [_] If the Independent Compliance Officer has NOT determined that the
       proposed vote is reasonable, please explain and indicate what action has
       been, or will be taken.

Independent Compliance Officer Approval                 Prepared by:
(if necessary. Email approval is acceptable.):
                                                        ------------------------

I hereby confirm that the proxy voting decision
referenced on this form is reasonable.

--------------------------------
Phillip Kirstein                                        Print Name:
                                                        (______________________)
                                                        Date: __________________
Date:  __________________

Please return this completed form and all supporting documentation to the
Conflicts Officer in the Legal and Compliance Department and keep a copy for
your records.


                                    EXHIBIT

              STATEMENT OF POLICY REGARDING RESPONSIBLE INVESTMENT
              ----------------------------------------------------

                     Principles for Responsible Investment,
                    ESG, and Socially Responsible Investment

1.   Introduction

     AllianceBernstein L.P. ("AllianceBernstein" or "we") is appointed by our
     clients as an investment manager with a fiduciary responsibility to help
     them achieve their investment objectives over the long term. Generally, our
     clients' objective is to maximize the financial return of their portfolios
     within appropriate risk parameters. AllianceBernstein has long recognized
     that environmental, social and governance ("ESG") issues can impact the
     performance of investment portfolios. Accordingly, we have sought to
     integrate ESG factors into our investment process to the extent that the
     integration of such factors is consistent with our fiduciary duty to help
     our clients achieve their investment objectives and protect their economic
     interests.

     Our policy draws a distinction between how the Principles for Responsible
     Investment ("PRI" or "Principles"), and Socially Responsible Investing
     ("SRI") incorporate ESG factors. PRI is based on the premise that, because
     ESG issues can affect investment performance, appropriate consideration of
     ESG issues and engagement regarding them is firmly within the bounds of a
     mainstream investment manager's fiduciary duties to its clients.
     Furthermore, PRI is intended to be applied only in ways that are consistent
     with those mainstream fiduciary duties.

     SRI, which refers to a spectrum of investment strategies that seek to
     integrate ethical, moral, sustainability and other non-financial factors
     into the investment process, generally involves exclusion and/or
     divestment, as well as investment guidelines that restrict investments.
     AllianceBernstein may accept such guideline restrictions upon client
     request.

2.   Approach to ESG

     Our long-standing policy has been to include ESG factors in our extensive
     fundamental research and consider them carefully when we believe they are
     material to our forecasts and investment decisions. If we determine that
     these aspects of an issuer's past, current or anticipated behavior are
     material to its future expected returns, we address these concerns in our
     forecasts, research reviews, investment decisions and engagement. In
     addition, we have well-developed proxy voting policies that incorporate ESG
     issues and engagement.

3.   Commitment to the PRI

     In recent years, we have gained greater clarity on how the PRI initiative,
     based on information from PRI Advisory Council members and from other
     signatories, provides a framework for incorporating ESG factors into
     investment research and decision-making. Furthermore, our industry has
     become, over time, more aware of the importance of ESG factors. We
     acknowledge these developments and seek to refine what has been our process
     in this area.

     After careful consideration, we determined that becoming a PRI signatory
     would enhance our current ESG practices and align with our fiduciary duties
     to our clients as a mainstream investment manager. Accordingly, we became a
     signatory, effective November 1, 2011.

     In signing the PRI, AllianceBernstein as an investment manager publicly
     commits to adopt and implement all six Principles, where consistent with
     our fiduciary responsibilities, and to make progress over time on
     implementation of the Principles.

     The six Principles are:

            1. We will incorporate ESG issues into investment research and
            decision-making processes.

            AllianceBernstein Examples: ESG issues are included in the research
            analysis process. In some cases, external service providers of
            ESG-related tools are utilized; we have conducted proxy voting
            training and will have continued and expanded training for
            investment professionals to incorporate ESG issues into investment
            analysis and decision-making processes across our firm.

            2. We will be active owners and incorporate ESG issues into our
            ownership policies and practices.

            AllianceBernstein Examples: We are active owners through our proxy
            voting process (for additional information, please refer to our
            Statement of Policies and Procedures for Proxy Voting Manual); we
            engage issuers on ESG matters in our investment research process (we
            define "engagement" as discussions with management about ESG issues
            when they are, or we believe they are reasonably likely to become,
            material).

            3. We will seek appropriate disclosure on ESG issues by the entities
            in which we invest.

            AllianceBernstein Examples: Generally, we support transparency
            regarding ESG issues when we conclude the disclosure is reasonable.
            Similarly, in proxy voting, we will support shareholder initiatives
            and resolutions promoting ESG disclosure when we conclude the
            disclosure is reasonable.

            4. We will promote acceptance and implementation of the Principles
            within the investment industry.

            AllianceBernstein Examples: By signing the PRI, we have taken an
            important first step in promoting acceptance and implementation of
            the six Principles within our industry.

            5. We will work together to enhance our effectiveness in
            implementing the Principles.

            AllianceBernstein Examples: We will engage with clients and
            participate in forums with other PRI signatories to better
            understand how the PRI are applied in our respective businesses. As
            a PRI signatory, we have access to information, tools and other
            signatories to help ensure that we are effective in our endeavors to
            implement the PRI.

            6. We will report on our activities and progress towards
            implementing the Principles.

            AllianceBernstein Examples: We will respond to the 2012 PRI
            questionnaire and disclose PRI scores from the questionnaire in
            response to inquiries from clients and in requests for proposals; we
            will provide examples as requested concerning active ownership
            activities (voting, engagement or policy dialogue).

4.   RI Committee

     Our firm's RI Committee provides AllianceBernstein stakeholders, including
     employees, clients, prospects, consultants and service providers alike,
     with a resource within our firm on which they can rely for information
     regarding our approach to ESG issues and how those issues are incorporated
     in different ways by the PRI and SRI. Additionally, the RI Committee is
     responsible for assisting AllianceBernstein personnel to further implement
     our firm's RI policies and practices, and, over time, to make progress on
     implementing all six Principles.

     The RI Committee has a diverse membership, including senior representatives
     from investments, distribution/sales and legal. The Committee is chaired by
     Linda Giuliano, Senior Vice President and Chief Administrative
     Officer-Equities.

     If you have questions or desire additional information about this Policy,
     we encourage you to contact the RI Committee at
     RIinquiries@alliancebernstein.com or reach out to a Committee member:

     Travis Allen:          SVP-Private Client, Washington, DC
     Erin Bigley:           SVP-Fixed Income, New York
     Valerie Brown:         SVP-Equities, New York
     Nicholas Davidson:     SVP-Value, London
     Paul DeNoon:           SVP-Fixed Income, New York
     Linda Giuliano:        SVP-Equities, New York
     Saskia Kort:           AVP-Equities, London
     Christopher Kotowicz:  SVP-Growth, Chicago
     David Lesser:          VP-Legal, New York
     Mark Manley:           SVP-Legal, New York
     Takuji Oya:            SVP-Growth, Japan
     Guy Prochilo:          SVP-Institutional Investments, New York
     Nitish Sharma:         SVP- Institutional Investments, Australia
     Liz Smith:             SVP-Institutional Investments, New York
     Willem Van Gijzen:     VP-Institutional Investments, Netherlands
     James Wallin:          SVP-Fixed Income, New York