-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, I3XvPMOBwRVsyhs9UDiBHLO/0wWPxVIc0K88fxw1GTHb3qqyiGtghPURWtFL82mQ X/oENny/wg/Va+aXqBvTBQ== 0000936772-03-000411.txt : 20031014 0000936772-03-000411.hdr.sgml : 20031013 20031014092300 ACCESSION NUMBER: 0000936772-03-000411 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20030731 FILED AS OF DATE: 20031014 EFFECTIVENESS DATE: 20031014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLIANCEBERNSTEIN QUASAR FUND INC CENTRAL INDEX KEY: 0000081443 IRS NUMBER: 132625045 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-01716 FILM NUMBER: 03937976 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS STREET 2: C/O ALLIANCE CAPITAL MANAGEMENT LP CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2125544623 MAIL ADDRESS: STREET 1: ALLIANCE CAPITAL MANAGEMENT LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCE CAPITAL QUASAR FUND INC DATE OF NAME CHANGE: 19930907 FORMER COMPANY: FORMER CONFORMED NAME: QUASAR ASSOCIATES INC DATE OF NAME CHANGE: 19890427 N-CSR 1 edg9365_ar.txt United States Securities and Exchange Commission Washington, D.C. 20549 Form N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-01716 AllianceBernstein Quasar Fund, Inc. (Exact name of registrant as specified in charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of principal executive offices) (Zip code) Edmund P. Bergan, Jr. Alliance Capital Management, L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 221-5672 Date of fiscal year end: July 31, 2003 Date of reporting period: July 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. [LOGO] AllianceBernstein(SM) Investment Research and Management AllianceBernstein Quasar Fund - -------------------------------------------------------------------------------- Small Cap Growth Annual Report--July 31, 2003 - -------------------------------------------------------------------------------- Investment Products Offered --------------------------- o Are Not FDIC Insured o May Lose Value o Are Not Bank Guaranteed --------------------------- This shareholder report must be preceded or accompanied by the Fund's prospectus for individuals who are not current shareholders of the Fund. You may obtain a description of the Fund's proxy voting policies and procedures, without charge, upon request by visiting Alliance Capital's web site at www.investor.alliancecapital.com or on the Securities and Exchange Commision's web site at http://www.sec.gov, or by calling Alliance Capital at (800) 227-4618. AllianceBernstein Investment Research and Management, Inc., the principal underwriter of the AllianceBernstein mutual funds and an affiliate of Alliance Capital Management L.P., the manager of the funds, is a member of the NASD. September 30, 2003 Annual Report This report provides management's discussion of fund performance for AllianceBernstein Quasar Fund (the "Fund") for the annual reporting period ended July 31, 2003. Investment Objective and Policies This open-end fund seeks growth of capital by pursuing aggressive investment policies. The Fund invests in a diversified portfolio of equity securities that offer the possibility of above-average earnings growth. The Fund emphasizes investment in small-capitalization companies in the United States and may also pursue investment opportunities outside the United States. Investment Results The following table provides performance data for the Fund and its benchmark, the Russell 2000 Growth Index, for the six- and 12-month periods ended July 31, 2003. INVESTMENT RESULTS* Periods Ended July 31, 2003 ---------------------- Returns ---------------------- 6 Months 12 Months - -------------------------------------------------------------------------------- AllianceBernstein Quasar Fund Class A 27.77% 21.15% - -------------------------------------------------------------------------------- Class B 27.26% 20.13% - -------------------------------------------------------------------------------- Class C 27.21% 20.20% - -------------------------------------------------------------------------------- Russell 2000 Growth Index 31.94% 27.97% - -------------------------------------------------------------------------------- * The Fund's investment results are for the periods shown and are based on the net asset value (NAV) of each class of shares as of July 31, 2003. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. All fees and expenses related to the operation of the Fund have been deducted, but no adjustment has been made for sales charges that may apply when shares are purchased or redeemed. Returns for Advisor Class shares will vary due to different expenses associated with this class. Returns for the Fund include the reinvestment of any distributions paid during each period. Past performance is no guarantee of future results. The unmanaged Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Index is a capitalization-weighted index that includes 2,000 of the smallest stocks representing approximately 10% of the U.S. equity market. An investor cannot invest directly in an index, and its results are not indicative of any specific investment, including AllianceBernstein Quasar Fund. Additional investment results appear on page 5. The Fund's Class A shares gained 27.77% over the six-month period ending July 31, 2003, underperforming the benchmark, the Russell 2000 Growth Index, which gained 31.94% over the same time frame. Relative returns during the period were negatively impacted by the Fund's underweighted exposure to stocks with smaller-than-average market capitalizations relative to the benchmark and lower-than-average returns on equity (ROE)--the period's strongest performers. These capitalization and quality biases were wide spread and led to disappointing stock selection across all major economic sectors, with the exception of - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 1 consumer/commercial services and financial services. The Fund's sector allocations, in particular underweight positions in the consumer staples and financial services sectors, provided a modest offset to the period's unfavorable stock selection. Over the 12-month period ending July 31, 2003, the Fund's Class A shares gained 21.15% versus a 27.97% gain in the Russell 2000 Growth Index. The Fund's underperformance over this time frame also stemmed from the disappointing stock selection discussed above. This underperformance was only partially offset by a favorable contribution from sector allocations. Market Overview and Investment Strategy The strong performance of small-cap stocks over the period reflects significant outperformance versus large-cap growth stocks and small-cap value stocks, as measured by the Russell 1000 Growth Index and Russell 2000 Value Index, respectively. Small-cap growth stocks also outperformed many of the more widely followed indices, including the S&P 500 Stock Index and the Dow Jones Industrials. Within the Russell 2000 Growth Index, smaller-than-average companies and those with lower-than-average ROEs outperformed larger companies with higher ROEs. Health care and technology stocks were the period's strongest performers, posting gains of 43% and 41%, respectively. During the period, we increased the Fund's active exposure to industrials and financial services stocks while we decreased its exposure to the health care sector. As of July 31, 2003, the Fund was overweight in industrials, underweight in financial services and health care stocks, and roughly market weight in the technology and consumer sectors. Cash started and finished the period at 1.4% of total assets. - -------------------------------------------------------------------------------- 2 o ALLIANCEBERNSTEIN QUASAR FUND Performance Update - -------------------------------------------------------------------------------- PERFORMANCE UPDATE ALLIANCEBERNSTEIN QUASAR FUND GROWTH OF A $10,000 INVESTMENT 7/31/93 - 7/31/03 AllianceBernstein Quasar Fund Class A: $16,519 Russell 2000 Growth Index: $16,297 AllianceBernstein Quasar Fund Russell 2000 Growth Index 7/31/93 $ 9,575 $10,000 7/31/94 $ 9,468 $10,128 7/31/95 $12,444 $13,548 7/31/96 $16,430 $13,958 7/31/97 $22,454 $17,483 7/31/98 $22,773 $17,253 7/31/99 $22,287 $19,756 7/31/00 $24,113 $23,931 7/31/01 $20,463 $18,353 7/31/02 $13,635 $12,735 7/31/03 $16,519 $16,297 This chart illustrates the total value of an assumed $10,000 investment in AllianceBernstein Quasar Fund Class A shares (from 7/31/93 to 7/31/03) as compared to the performance of an appropriate broad-based index. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The chart reflects the deduction of the maximum 4.25% sales charge from the initial $10,000 investment in the Fund and assumes the reinvestment of dividends and capital gains. Performance for Class B, Class C and Advisor Class shares will vary from the results shown above due to differences in expenses charged to these classes. Past performance is not indicative of future results, and is not representative of future gain or loss in capital value or dividend income. The unmanaged Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. The Index is a capitalization-weighted index that includes 2,000 of the smallest stocks representing approximately 10% of the U.S. equity market. When comparing AllianceBernstein Quasar Fund to the index shown above, you should note that no charges or expenses are reflected in the performance of the index. An investor cannot invest directly in an index, and its results are not indicative of any specific investment, including AllianceBernstein Quasar Fund. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 3 Portfolio Summary - -------------------------------------------------------------------------------- PORTFOLIO SUMMARY July 31, 2003 INCEPTION DATES PORTFOLIO STATISTICS Class A Shares Net Assets ($mil): $401.4 2/12/69 Class B Shares 9/17/90 Class C Shares 5/3/93 SECTOR BREAKDOWN 25.4% Technology 20.5% Health Care 19.0% Consumer Services 11.7% Finance 9.6% Capital Goods [PIE CHART OMITTED] 4.8% Energy 2.8% Transportation 1.6% Basic Industry 1.2% Consumer Manufacturing 1.2% Consumer Staples 2.2% Short-Term All data as of July 31, 2003. The Fund's sector breakdown is expressed as a percentage of total investments and may vary over time. - -------------------------------------------------------------------------------- 4 o ALLIANCEBERNSTEIN QUASAR FUND Investment Results - -------------------------------------------------------------------------------- INVESTMENT RESULTS AVERAGE ANNUAL RETURNS AS OF JULY 31, 2003 Class A Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge 1 Year 21.15% 16.03% 5 Years -6.22% -7.03% 10 Years 5.61% 5.15% Class B Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge 1 Year 20.13% 16.13% 5 Years -6.95% -6.95% 10 Years(a) 4.95% 4.95% Class C Shares - -------------------------------------------------------------------------------- Without Sales Charge With Sales Charge 1 Year 20.20% 19.20% 5 Years -6.94% -6.94% 10 Years 4.79% 4.79% SEC AVERAGE ANNUAL RETURNS (WITH SALES CHARGES) AS OF THE MOST RECENT QUARTER-END (JUNE 30, 2003) Class A Class B Class C - ------------------------------------------------------------------------------- 1 Year -8.01% -8.49% -5.62% 5 Years -10.41% -10.34% -10.33% 10 Years 4.47% 4.28%(a) 4.12% The Fund's investment results represent average annual returns. Returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The returns reflect reinvestment of dividends and/or capital gains distributions in additional shares without and with the effect of the 4.25% maximum front-end sales charge for Class A or applicable contingent deferred sales charge for Class B (4% year 1, 3% year 2, 2% year 3, 1% year 4); and for Class C shares (1% year 1). Returns for Class A shares do not reflect the imposition of the 1 year, 1% contingent deferred sales charge for accounts over $1,000,000. Returns for Advisor Class shares will vary due to different expenses associated with this class. The Fund can invest in foreign securities, which may magnify fluctuations due to changes in foreign exchange rates and the possibility of substantial volatility due to political and economic uncertainties in foreign countries. The Fund invests in small-capitalization stocks which may be more volatile because these companies tend to have limited product lines, markets, or financial resources. The Fund pursues an aggressive investment strategy and an investment in the Fund is risky. Past performance does not guarantee future results. Investment return and principal value will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. (a) Assumes conversion of Class B shares into Class A shares after 8 years. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 5 Ten Largest Holdings - -------------------------------------------------------------------------------- TEN LARGEST HOLDINGS July 31, 2003 Percent of Company Value Net Assets - -------------------------------------------------------------------------------- Stericycle, Inc. $ 6,728,883 1.7% - -------------------------------------------------------------------------------- Resources Connection, Inc. 6,296,076 1.6 - -------------------------------------------------------------------------------- Martek Biosciences Corp. 6,031,160 1.5 - -------------------------------------------------------------------------------- Amphenol Corp. Cl.A 5,745,600 1.4 - -------------------------------------------------------------------------------- Integrated Circuit Systems, Inc. 5,691,470 1.4 - -------------------------------------------------------------------------------- Macrovision Corp. 5,684,650 1.4 - -------------------------------------------------------------------------------- Getty Images, Inc. 5,662,305 1.4 - -------------------------------------------------------------------------------- Insight Enterprises, Inc. 5,524,915 1.4 - -------------------------------------------------------------------------------- Pharmaceutical Resources, Inc. 5,427,940 1.4 - -------------------------------------------------------------------------------- Navistar International Corp. 5,365,250 1.3 - -------------------------------------------------------------------------------- $58,158,249 14.5% - -------------------------------------------------------------------------------- 6 o ALLIANCEBERNSTEIN QUASAR FUND Portfolio of Investments - -------------------------------------------------------------------------------- PORTFOLIO OF INVESTMENTS July 31, 2003 Company Shares Value - ------------------------------------------------------------------------------- COMMON STOCKS-99.0% Technology-25.7% Computer Hardware/Storage-0.8% Avocent Corp.(a) ............................... 126,400 $ 3,384,992 ------------- Computer Peripherals-1.5% Imation Corp. .................................. 87,800 3,133,582 Pericom Semiconductor Corp.(a) ................. 303,000 2,734,575 ------------- 5,868,157 ------------- Computer Services-2.4% Alliance Data Systems Corp.(a) ................. 163,200 4,471,680 Anteon International Corp.(a) .................. 84,500 2,670,200 Cognizant Technology Solutions Corp.(a) ........ 78,000 2,400,840 ------------- 9,542,720 ------------- Computer Software-4.4% Cognos, Inc. (Canada)(a) ....................... 176,400 4,773,384 Hyperion Solutions Corp.(a) .................... 156,000 4,263,480 Informatica Corp.(a) ........................... 430,800 3,157,764 NetScreen Technologies, Inc.(a) ................ 178,700 3,865,281 Quest Software, Inc.(a) ........................ 179,500 1,588,395 ------------- 17,648,304 ------------- Internet Infrastructure-0.0% iPass, Inc.(a) ................................. 11,400 207,480 ------------- Internet Media-0.8% Sohu.com, Inc.(a) .............................. 78,900 3,134,697 ------------- Networking Software-0.1% NETGEAR, Inc.(a) ............................... 16,700 295,106 ------------- Semi-Conductor Capital Equipment-2.5% FormFactor, Inc.(a) ............................ 142,400 2,654,336 MKS Instruments, Inc.(a) ....................... 128,300 2,900,863 Varian Semiconductor Equipment Associates, Inc.(a) ......................... 136,300 4,531,975 ------------- 10,087,174 ------------- Semi-Conductor Components-4.8% ATMI, Inc.(a) .................................. 192,800 4,968,456 Integrated Circuit Systems, Inc.(a) ............ 189,400 5,691,470 Microsemi Corp.(a) ............................. 215,100 3,669,606 OmniVision Technologies, Inc.(a) ............... 121,200 4,919,508 ------------- 19,249,040 ------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 7 Portfolio of Investments - -------------------------------------------------------------------------------- Company Shares Value - ------------------------------------------------------------------------------- Software-4.1% Aspect Communications Corp.(a) ................. 301,400 $ 2,200,220 InterVideo, Inc.(a) ............................ 10,000 203,800 Macrovision Corp.(a) ........................... 241,900 5,684,650 SERENA Software, Inc.(a) ....................... 225,400 4,257,806 SINA Corp. (Cayman Islands)(a) ................. 119,400 4,150,344 ------------- 16,496,820 ------------- Miscellaneous-4.3% 02Micro International, Ltd.(a) ................. 242,900 3,633,784 Amphenol Corp. Cl.A(a) ......................... 106,400 5,745,600 Exar Corp.(a) .................................. 282,900 4,045,470 Power-One, Inc.(a) ............................. 358,700 3,798,633 ------------- 17,223,487 ------------- 103,137,977 ------------- Health Care-20.8% Biotechnology-5.4% Abgenix, Inc.(a) ............................... 166,700 2,115,423 MGI Pharma, Inc.(a) ............................ 132,100 5,069,998 Neurocrine Biosciences, Inc.(a) ................ 59,900 3,215,432 Onyx Pharmaceuticals, Inc.(a) .................. 149,400 2,347,074 Protein Design Labs, Inc.(a) ................... 199,300 2,543,068 Telik, Inc.(a) ................................. 180,700 3,449,563 Trimeris, Inc.(a) .............................. 70,700 3,135,545 ------------- 21,876,103 ------------- Drugs-4.2% aaiPharma, Inc.(a) ............................. 50,900 929,434 Axcan Pharma, Inc. (Canada)(a) ................. 315,300 4,212,408 Indevus Pharmaceuticals, Inc.(a) ............... 17,700 102,660 Martek Biosciences Corp.(a) .................... 124,300 6,031,160 Pharmaceutical Resources, Inc.(a) .............. 95,900 5,427,940 ------------- 16,703,602 ------------- Medical Products-6.3% Advanced Neuromodulation Systems, Inc.(a) ...... 64,100 2,635,792 Angiotech Pharmaceuticals, Inc. (Canada)(a) .... 58,100 2,570,925 Conceptus, Inc.(a) ............................. 101,900 1,709,882 Gen-Probe, Inc.(a) ............................. 91,900 5,054,500 I-STAT Corp.(a) ................................ 156,700 1,530,803 Integra LifeSciences Holdings(a) ............... 196,200 4,906,962 OraSure Technologies, Inc.(a) .................. 300,100 2,571,857 VISX, Inc.(a) .................................. 183,300 4,267,224 ------------- 25,247,945 ------------- - -------------------------------------------------------------------------------- 8 o ALLIANCEBERNSTEIN QUASAR FUND Portfolio of Investments - -------------------------------------------------------------------------------- Company Shares Value - ------------------------------------------------------------------------------- Medical Services-4.9% Centene Corp.(a) ............................... 80,700 $ 2,360,475 Covance, Inc.(a) ............................... 126,100 2,610,270 Mid Atlantic Medical Services, Inc.(a) ......... 64,700 3,518,386 Molina Healthcare, Inc.(a) ..................... 23,200 549,840 PacifiCare Health Systems, Inc.(a) ............. 69,900 3,907,410 Stericycle, Inc.(a) ............................ 149,100 6,728,883 ------------- 19,675,264 ------------- 83,502,914 ------------- Consumer Services-19.2% Advertising-1.4% Getty Images, Inc.(a) .......................... 148,500 5,662,305 ------------- Broadcasting & Cable-3.0% Cumulus Media, Inc. Cl.A(a) .................... 245,618 4,295,859 Entravision Communications Corp. Cl.A(a) ....... 312,800 3,331,320 ValueVision International, Inc. Cl.A(a) ........ 256,700 4,453,745 ------------- 12,080,924 ------------- Entertainment & Leisure-1.1% Guitar Center, Inc.(a) ......................... 123,900 4,175,430 ------------- Gaming-1.1% Station Casinos, Inc.(a) ....................... 156,800 4,547,200 ------------- Retail-General Merchandise-2.1% Cost Plus, Inc.(a) ............................. 117,700 4,386,679 The Bombay Co., Inc.(a) ........................ 198,100 1,986,943 Ultimate Electronics, Inc.(a) .................. 196,200 2,109,150 ------------- 8,482,772 ------------- Toys-0.3% Marvel Enterprises, Inc.(a) .................... 67,700 1,326,920 ------------- Miscellaneous-10.2% Bright Horizons Family Solutions, Inc.(a) ...... 89,500 3,266,750 Dycom Industries, Inc.(a) ...................... 236,400 4,021,164 Insight Enterprises, Inc.(a) ................... 355,300 5,524,915 Iron Mountain, Inc.(a) ......................... 92,850 3,398,310 MSC Industrial Direct Co., Inc. Cl.A ........... 229,200 4,618,380 Resources Connection, Inc.(a) .................. 240,400 6,296,076 ScanSource, Inc.(a) ............................ 122,560 4,113,113 Strayer Education, Inc. ........................ 47,200 3,986,984 Sylvan Learning Systems, Inc.(a) ............... 155,700 4,140,063 Wireless Facilities, Inc.(a) ................... 122,000 1,473,760 ------------- 40,839,515 ------------- 77,115,066 ------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 9 Portfolio of Investments - -------------------------------------------------------------------------------- Company Shares Value - ------------------------------------------------------------------------------- Finance-11.9% Banking-Money Centers-2.6% Boston Private Financial Holdings, Inc. ........ 100,800 $ 2,383,920 UCBH Holdings, Inc. ............................ 127,600 3,933,908 Wintrust Financial Corp. ....................... 118,600 4,197,254 ------------- 10,515,082 ------------- Banking-Regional-3.2% American Capital Strategies, Ltd. .............. 107,200 3,015,536 BankUnited Financial Corp. Cl.A(a) ............. 122,600 2,513,300 R&G Financial Corp. Cl.B ....................... 125,500 4,016,000 Westamerica Bancorp ............................ 76,700 3,393,208 ------------- 12,938,044 ------------- Brokerage & Money Management-2.9% Affiliated Managers Group, Inc.(a) ............. 61,100 3,997,162 BlackRock, Inc.(a) ............................. 60,300 2,723,751 Southwest Bancorporation of Texas, Inc.(a) ..... 134,800 4,785,400 ------------- 11,506,313 ------------- Insurance-2.0% Scottish Annuity & Life Holdings, Ltd. ......... 76,600 1,750,310 StanCorp Financial Group, Inc. ................. 48,000 2,678,400 Triad Guaranty, Inc.(a) ........................ 79,700 3,666,200 ------------- 8,094,910 ------------- Miscellaneous-1.2% Investors Financial Services Corp. ............. 145,800 4,646,646 ------------- 47,700,995 ------------- Capital Goods-9.7% Electrical Equipment-3.2% EDO Corp. ...................................... 236,200 4,686,208 Engineered Support Systems, Inc. ............... 99,650 4,409,513 United Defense Industries, Inc.(a) ............. 146,300 3,714,557 ------------- 12,810,278 ------------- Machinery-3.8% Actuant Corp. Cl.A(a) .......................... 79,600 3,876,520 Navistar International Corp.(a) ................ 137,500 5,365,250 Oshkosh Truck Corp. ............................ 51,100 3,399,172 Regal Beloit Corp. ............................. 127,600 2,590,280 ------------- 15,231,222 ------------- Pollution Control-0.7% Waste Connections, Inc.(a) ..................... 85,400 2,899,330 ------------- Miscellaneous-2.0% IDEX Corp. ..................................... 125,400 4,639,800 Simpson Manufacturing Co., Inc.(a) ............. 72,400 3,233,384 ------------- 7,873,184 ------------- 38,814,014 ------------- - -------------------------------------------------------------------------------- 10 o ALLIANCEBERNSTEIN QUASAR FUND Portfolio of Investments - -------------------------------------------------------------------------------- Shares or Principal Amount Company (000) Value - ------------------------------------------------------------------------------- Energy-4.8% Domestic Producers-0.7% Frontier Oil Corp. ............................. 197,700 $ 2,997,132 ------------- Oil Service-2.6% FMC Technologies, Inc.(a) ...................... 127,600 2,865,896 W-H Energy Services, Inc.(a) ................... 209,200 3,803,256 Westport Resources Corp.(a) .................... 172,900 3,587,675 ------------- 10,256,827 ------------- Pipelines-0.8% Hydril Co.(a) .................................. 134,200 3,043,656 ------------- Miscellaneous-0.7% Evergreen Resources, Inc.(a) ................... 60,600 3,013,638 ------------- 19,311,253 ------------- Transportation-2.9% Air Freight-0.9% UTI Worldwide, Inc. ............................ 104,800 3,697,868 ------------- Shipping-1.0% Kirby Corp.(a) ................................. 147,600 4,029,480 ------------- Trucking-0.0% Werner Enterprises, Inc. ....................... 800 19,072 ------------- Miscellaneous-1.0% Pacer International, Inc.(a) ................... 195,400 3,816,162 ------------- 11,562,582 ------------- Basic Industry-1.6% Chemicals-1.0% Georgia Gulf Corp. ............................. 171,600 3,926,208 ------------- Miscellaneous-0.6% Philadelphia Suburban Corp. .................... 106,700 2,554,398 ------------- 6,480,606 ------------- Consumer Manufacturing-1.2% Building & Related-1.2% Hughes Supply, Inc. ............................ 134,300 4,888,520 ------------- Consumer Staples-1.2% Food-0.3% United Natural Foods, Inc.(a) .................. 40,300 1,231,971 ------------- Retail-Food & Drug-0.9% PETCO Animal Supplies, Inc.(a) ................. 143,600 3,602,924 ------------- 4,834,895 ------------- Total Common Stocks (cost $321,784,961) ......................... 397,348,822 ------------- - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 11 Portfolio of Investments - -------------------------------------------------------------------------------- Principal Amount Company (000) Value - ------------------------------------------------------------------------------- SHORT-TERM INVESTMENT-2.2% Time Deposit-2.2% State Street Euro Dollar 0.50%, 8/01/03 (cost $8,923,000) ........................... $ 8,923 $ 8,923,000 ------------- Total Investments*-101.2% (cost $330,707,961) ......................... 406,271,822 Other assets less liabilities-(1.2%) ........... (4,889,518) ------------- Net Assets-100% ................................ $ 401,382,304 ============= * SECURITIES LENDING INFORMATION The Fund participates in a securities lending arrangement (see Note E) in which cash collateral is invested by the lending agent. Such investments, representing 5.9% of net assets, were as follows as of July 31, 2003: Current Yield Shares Value ========== =========== =========== UBS Private Money Market 1.02% 23,680,400 $23,680,400 Fund LLC (a) Non-income producing security. See notes to financial statements. - -------------------------------------------------------------------------------- 12 o ALLIANCEBERNSTEIN QUASAR FUND Statement of Assets & Liabilities - -------------------------------------------------------------------------------- STATEMENT OF ASSETS & LIABILITIES July 31, 2003 Assets Investments in securities, at value (cost $330,707,961) ... $ 406,271,822(a) Cash ...................................................... 25 Collateral held for securities loaned ..................... 23,680,400 Receivable for investment securities sold ................. 1,939,956 Receivable for capital stock sold ......................... 853,178 Dividends and interest receivable ......................... 48,253 ------------- Total assets .............................................. 432,793,634 ------------- Liabilities Payable for collateral received on securities loaned ...... 23,680,400 Payable for investment securities purchased ............... 5,050,327 Payable for capital stock redeemed ........................ 1,338,615 Advisory fee payable ...................................... 338,121 Distribution fee payable .................................. 214,415 Accrued expenses .......................................... 789,452 ------------- Total liabilities ......................................... 31,411,330 ------------- Net Assets ................................................ $ 401,382,304 ============= Composition of Net Assets Capital stock, at par ..................................... $ 50,446 Additional paid-in capital ................................ 727,686,056 Accumulated net realized loss on investment transactions ........................................... (401,918,059) Net unrealized appreciation of investments ................ 75,563,861 ------------- $ 401,382,304 ============= Calculation of Maximum Offering Price Class A Shares Net asset value and redemption price per share ($184,378,529 / 10,660,480 shares of capital stock issued and outstanding) ................................ $17.30 Sales charge--4.25% of public offering price .............. .77 ------ Maximum offering price .................................... $18.07 ====== Class B Shares Net asset value and offering price per share ($168,553,530 / 11,391,721 shares of capital stock issued and outstanding) ................................ $14.80 ====== Class C Shares Net asset value and offering price per share ($39,434,034 / 2,660,750 shares of capital stock issued and outstanding) ................................ $14.82 ====== Advisor Class Shares Net asset value, redemption and offering price per share ($9,016,211 / 510,025 shares of capital stock issued and outstanding) ....................................... $17.68 ====== (a) Includes securities on loan with a value of $22,704,024 (see Note E). See notes to financial statements. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 13 Statement of Operations - -------------------------------------------------------------------------------- STATEMENT OF OPERATIONS October 1, 2002 Year Ended to September 30, July 31, 2003* 2002 =============== ============= Investment Income Dividends (net of foreign taxes withheld of $4,404 and $21,890, respectively) ... $ 954,417 $ 809,315 Interest .................................. 147,270 472,971 --------------- ------------- 1,101,687 1,282,286 --------------- ------------- Expenses Advisory fee .............................. 2,997,098 5,744,209 Distribution fee--Class A ................. 362,184 632,465 Distribution fee--Class B ................. 1,280,238 2,511,529 Distribution fee--Class C ................. 296,871 599,775 Transfer agency ........................... 2,336,780 3,434,126(a) Printing .................................. 382,574 357,728 Custodian ................................. 166,204 208,991 Administrative ............................ 112,000 134,000 Audit and legal ........................... 102,096 103,052 Registration .............................. 98,872 73,857 Directors' fees ........................... 16,504 16,519 Miscellaneous ............................. 50,626 42,040 --------------- ------------- Total expenses ............................ 8,202,047 13,858,291 Less: expense offset arrangement (see Note B) ........................... (730) (10,075)(a) --------------- ------------- Net expenses .............................. 8,201,317 13,848,216 --------------- ------------- Net investment loss ....................... (7,099,630) (12,565,930) --------------- ------------- Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions Net realized gain (loss) on: Investment transactions ................ (35,585,107) (175,496,191) Foreign currency transactions .......... (3) 163 Net change in unrealized appreciation/depreciation of investments ......................... 135,998,028 119,701,358 --------------- ------------- Net gain (loss) on investment and foreign currency transactions .......... 100,412,918 (55,794,670) --------------- ------------- Net Increase (Decrease) in Net Assets from Operations ........................ $ 93,313,288 $ (68,360,600) =============== ============= * The Fund changed its fiscal year end from September 30 to July 31. (a) Amounts have been reclassified to conform to the current period's presentation. See notes to financial statements. - -------------------------------------------------------------------------------- 14 o ALLIANCEBERNSTEIN QUASAR FUND Statement of Changes in Net Assets - -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN NET ASSETS October 1, 2002 Year Ended Year Ended to September 30, September 30, July 31, 2003* 2002 2001 ================ ================ ================ Increase (Decrease) in Net Assets from Operations Net investment loss ... $ (7,099,630) $ (12,565,930) $ (17,866,615) Net realized loss on investment and foreign currency transactions ....... (35,585,110) (175,496,028) (104,553,326) Net change in unrealized appreciation/ depreciation of investments ........ 135,998,028 119,701,358 (368,065,304) ---------------- ---------------- ---------------- Net increase (decrease) in net assets from operations ......... 93,313,288 (68,360,600) (490,485,245) Distributions to Shareholders from Net realized gain on investment transactions Class A ............ -0- -0- (10,594,187) Class B ............ -0- -0- (14,207,984) Class C ............ -0- -0- (3,545,369) Advisor Class ...... -0- -0- (3,070,698) Distributions in excess of net realized gain on investment transactions Class A ............ -0- -0- (29,171,770) Class B ............ -0- -0- (39,122,600) Class C ............ -0- -0- (9,762,403) Advisor Class ...... -0- -0- (8,455,365) Capital Stock Transactions Net decrease .......... (54,233,829) (188,608,810) (49,277,329) ---------------- ---------------- ---------------- Total increase (decrease) ......... 39,079,459 (256,969,410) (657,692,950) Net Assets Beginning of period ... 362,302,845 619,272,255 1,276,965,205 ---------------- ---------------- ---------------- End of period ......... $ 401,382,304 $ 362,302,845 $ 619,272,255 ================ ================ ================ * The Fund changed its fiscal year end from September 30 to July 31. See notes to financial statements. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 15 Notes to Financial Statements - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS July 31, 2003 NOTE A Significant Accounting Policies AllianceBernstein Quasar Fund, Inc. (the "Fund"), formerly Alliance Quasar Fund, Inc., is registered under the Investment Company Act of 1940 as a diversified, open-end management investment company. The Fund offers Class A, Class B, Class C and Advisor Class shares. Class A shares are sold with a front-end sales charge of up to 4.25% for purchases not exceeding $1,000,000. With respect to purchases of $1,000,000 or more, Class A shares redeemed within one year of purchase may be subject to a contingent deferred sales charge of 1%. Class B shares are currently sold with a contingent deferred sales charge which declines from 4% to zero depending on the period of time the shares are held. Class B shares will automatically convert to Class A shares eight years after the end of the calendar month of purchase. Class C shares are subject to a contingent deferred sales charge of 1% on redemptions made within the first year after purchase. Advisor Class shares are sold without an initial or contingent deferred sales charge and are not subject to ongoing distribution expenses. Advisor Class shares are offered to investors participating in fee-based programs and to certain retirement plan accounts. All four classes of shares have identical voting, dividend, liquidation and other rights, except that each class bears different distribution expenses and has exclusive voting rights with respect to its distribution plan. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States which require management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements and amounts of income and expenses during the reporting period. Actual results could differ from those estimates. Additional information about some of the items discussed in these Notes to Financial Statements is contained in the Fund's Statement of Additional Information, which is available upon request. The following is a summary of significant accounting policies followed by the Fund. 1. Security Valuation In accordance with Pricing Policies adopted by the Board of Directors of the Fund (the "Pricing Policies") and applicable law, portfolio securities are valued at current market value or at fair value. The Board of Directors has delegated to the Adviser, subject to the Board's continuing oversight, certain responsibilities with respect to the implementation of the Pricing Policies. Pursuant to the Pricing Policies, securities for which market quotations are readily available are valued at their current market value. In general, the market value of these securities is determined as follows: Securities listed on a national securities exchange or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued in good faith at - -------------------------------------------------------------------------------- 16 o ALLIANCEBERNSTEIN QUASAR FUND Notes to Financial Statements - -------------------------------------------------------------------------------- fair value in accordance with the Pricing Policies. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities not listed on an exchange but traded on The Nasdaq Stock Market, Inc. ("NASDAQ") are valued in accordance with the NASDAQ Official Closing Price; listed put or call options are valued at the last sale price. If there has been no sale on that day, such securities will be valued at the closing bid prices on that day; open futures contracts and options thereon are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuations, the last available closing settlement price is used; securities traded in the over-the-counter market, (but excluding securities traded on NASDAQ) are valued at the mean of the current bid and asked prices as reported by the National Quotation Bureau or other comparable sources; U.S. Government securities and other debt instruments having 60 days or less remaining until maturity are valued at amortized cost if their original maturity was 60 days or less, or by amortizing their fair value as of the 61st day prior to maturity if their original term to maturity exceeded 60 days; fixed-income securities, including mortgage backed and asset backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker/dealers. In cases where broker/dealer quotes are obtained, the Pricing Policies provide that the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security; and OTC and other derivatives are valued on the basis of a quoted bid price or spread from a major broker/dealer in such security. Securities for which market quotations are not readily available are valued at fair value in accordance with the Pricing Policies. 2. Taxes It is the Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its investment company taxable income and net realized gains, if any, to shareholders. Therefore, no provisions for federal income or excise taxes are required. 3. Investment Income and Investment Transactions Dividend income is recorded on the ex-dividend date. Interest income is accrued daily. Investment transactions are accounted for on the date the securities are purchased or sold. Investment gains and losses are determined on the identified cost basis. The Fund accretes discounts as adjustments to interest income. 4. Income and Expenses All income earned and expenses incurred by the Fund are borne on a pro-rata basis by each outstanding class of shares, based on the proportionate interest in the Fund represented by the net assets of such class, except that the Fund's Class B and Class C shares bear higher distribution and transfer agent fees than Class A and Advisor Class shares. Advisor Class shares have no distribution fees. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 17 Notes to Financial Statements - -------------------------------------------------------------------------------- 5. Dividends and Distributions Dividends and distributions to shareholders, if any, are recorded on the ex-dividend date. Income dividends and capital gains distributions are determined in accordance with federal tax regulations and may differ from those determined in accordance with accounting principles generally accepted in the United States. To the extent these differences are permanent, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require such reclassification. 6. Change of Fiscal Year End The Fund changed its fiscal year end from September 30 to July 31. Accordingly, the statement of operations, the statement of changes in net assets and financial highlights reflect the period from October 1, 2002 to July 31, 2003. NOTE B Advisory Fee and Other Transactions With Affiliates Under the terms of an investment advisory agreement, the Fund pays Alliance Capital Management L.P. (the "Adviser") an advisory fee at a quarterly rate equal to .25% (approximately 1% on an annual basis) of the net assets of the Fund valued on the last business day of the previous quarter. Such fee is accrued daily and paid quarterly. Pursuant to the advisory agreement, the Fund paid $112,000 and $134,000, respectively, to the Adviser representing the cost of certain legal and accounting services provided to the Fund by the Adviser for the period ended July 31, 2003 and the year ended September 30, 2002. The Fund compensates Alliance Global Investor Services, Inc. (AGIS), a wholly-owned subsidiary of the Adviser, under a Transfer Agency Agreement for providing personnel and facilities to perform transfer agency services for the Fund. Such compensation amounted to $1,583,232 and $2,191,744, respectively, for the period ended July 31, 2003 and the year ended September 30, 2002. For the period ended July 31, 2003 and the year ended September 30, 2002, the Fund's expenses were reduced by $730 and $10,075, respectively, under an expense offset arrangement with AGIS. AllianceBernstein Investment Research and Management, Inc. (the "Distributor"), formerly Alliance Fund Distributors, Inc., a wholly-owned subsidiary of the Adviser, serves as the distributor of the Fund's shares. The Distributor has advised the Fund that it has retained front-end sales charge of $5,945 and $14,967 from the sale of Class A shares and received $2,453 and $10,863, $196,307 and $428,163, and $4,384 and $12,118, respectively, in contingent deferred sales charges imposed upon redemptions by shareholders of Class A, Class B and Class C shares for the period ended July 31, 2003 and the year ended September 30, 2002. - -------------------------------------------------------------------------------- 18 o ALLIANCEBERNSTEIN QUASAR FUND Notes to Financial Statements - -------------------------------------------------------------------------------- Brokerage commissions paid on investment transactions for the period ended July 31, 2003 and the year ended September 30, 2002 amounted to $1,480,075 and $2,157,887, respectively, of which $0 and $13,928, respectively, was paid to Sanford C. Bernstein & Co. LLC, an affiliate of the Adviser. NOTE C Distribution Services Agreement The Fund has adopted a Distribution Services Agreement (the "Agreement") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under the Agreement, the Fund pays distribution and servicing fees to the Distributor at an annual rate of up to .30% of the Fund's average daily net assets attributable to Class A shares and 1% of the average daily net assets attributable to both Class B and Class C shares. There are no distribution and servicing fees on the Advisor Class shares. The fees are accrued daily and paid monthly. The Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. The Distributor has advised the Fund that it has incurred expenses in excess of the distribution costs reimbursed by the Fund in the amount of $23,171,571 and $2,159,424 for Class B and Class C shares, respectively; such costs may be recovered from the Fund in future periods so long as the Agreement is in effect. In accordance with the Agreement, there is no provision for recovery of unreimbursed distribution costs incurred by the Distributor beyond the current fiscal year for Class A shares. The Agreement also provides that the Adviser may use its own resources to finance the distribution of the Fund's shares. NOTE D Investment Transactions Purchases and sales of investment securities (excluding short-term investments) for the period ended July 31, 2003, were as follows: Purchases Sales ============ ============ Investment securities (excluding U.S. government securities) ............. $332,180,942 $389,695,818 U.S. government securities ................. -0- -0- At July 31, 2003, the cost of investments for federal income tax purposes, gross unrealized appreciation and unrealized depreciation are as follows: Cost ................................................... $ 348,435,844 ============= Gross unrealized appreciation .......................... $ 79,305,923 Gross unrealized depreciation .......................... (21,469,945) ------------- Net unrealized appreciation ............................ $ 57,835,978 ============= NOTE E Securities Lending The Fund has entered into a securities lending agreement with UBS Warburg LLC (the "Lending Agent"), formerly UBS/PaineWebber, Inc. Under the terms - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 19 Notes to Financial Statements - -------------------------------------------------------------------------------- of the agreement, the Lending Agent, on behalf of the Fund, administers the lending of portfolio securities to certain broker-dealers. In return, the Fund earns fee income from the lending transactions or it retains a portion of interest on the investment of any cash received as collateral. The Fund also continues to receive dividends or interest on the securities loaned. Unrealized gain or loss on the value of the securities loaned that may occur during the term of the loan will be reflected in the accounts of the Fund. All loans are continuously secured by collateral exceeding the value of the securities loaned. All collateral consists of either cash or U.S. government securities. The Lending Agent invests the cash collateral received in an eligible money market vehicle in accordance with the investment restrictions of the Fund. The Lending Agent will indemnify the Fund for any loss resulting from a borrower's failure to return a loaned security when due. As of July 31, 2003, the Fund had loaned securities with a value of $22,704,024 and received cash collateral which was invested in a money market fund valued at $23,680,400 as included in the footnotes to the accompanying portfolio of investments. For the period ended July 31, 2003, the Fund earned fee income of $86,174 which is included in interest income in the accompanying statement of operations. NOTE F Capital Stock There are 12,000,000,000 shares of $.002 par value capital stock authorized, divided into four classes, designated Class A, Class B, Class C and Advisor Class shares. Each class consists of 3,000,000,000 authorized shares. Transactions in capital stock were as follows:
---------------------------------------------------- Shares ---------------------------------------------------- October 1, 2002 Year Ended Year Ended to July 31, September 30, September 30, 2003(a) 2002 2001 ---------------------------------------------------- Class A Shares sold 21,673,280 4,270,744 7,111,614 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 1,501,955 - ------------------------------------------------------------------------------------ Shares converted from Class B 297,254 211,616 70,946 - ------------------------------------------------------------------------------------ Shares redeemed (23,031,319) (7,067,128) (9,267,139) - ------------------------------------------------------------------------------------ Net decrease (1,060,785) (2,584,768) (582,624) ==================================================================================== Class B Shares sold 815,483 1,427,398 1,950,555 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 2,268,280 - ------------------------------------------------------------------------------------ Shares converted to Class A (342,155) (244,199) (86,173) - ------------------------------------------------------------------------------------ Shares redeemed (2,990,411) (5,500,367) (5,919,036) - ------------------------------------------------------------------------------------ Net decrease (2,517,083) (4,317,168) (1,786,374) ====================================================================================
(a) The Fund changed its fiscal year end from September 30 to July 31. - -------------------------------------------------------------------------------- 20 o ALLIANCEBERNSTEIN QUASAR FUND Notes to Financial Statements - --------------------------------------------------------------------------------
---------------------------------------------------- Shares ---------------------------------------------------- October 1, 2002 Year Ended Year Ended to July 31, September 30, September 30, 2003(a) 2002 2001 ---------------------------------------------------- Class C Shares sold 376,983 780,705 797,584 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 566,471 - ------------------------------------------------------------------------------------ Shares redeemed (954,897) (1,855,191) (2,073,468) - ------------------------------------------------------------------------------------ Net decrease (577,914) (1,074,486) (709,413) ==================================================================================== Advisor Class Shares sold 90,677 500,904 1,242,926 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 438,884 - ------------------------------------------------------------------------------------ Shares redeemed (236,241) (4,004,915) (1,880,852) - ------------------------------------------------------------------------------------ Net decrease (145,564) (3,504,011) (199,042) ====================================================================================
(a) The Fund changed its fiscal year end from September 30 to July 31.
---------------------------------------------------- Amount ---------------------------------------------------- October 1, 2002 Year Ended Year Ended to July 31, September 30, September 30, 2003(a) 2002 2001 ---------------------------------------------------- Class A Shares sold $ 305,897,763 $ 76,838,507 $ 153,464,725 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 37,278,216 - ------------------------------------------------------------------------------------ Shares converted from Class B 4,327,131 3,754,642 1,610,077 - ------------------------------------------------------------------------------------ Shares redeemed (325,096,195) (125,712,831) (201,469,898) - ------------------------------------------------------------------------------------ Net decrease $ (14,871,301) $ (45,119,682) $ (9,116,880) ==================================================================================== Class B Shares sold $ 10,221,382 $ 22,381,783 $ 37,583,730 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 49,221,600 - ------------------------------------------------------------------------------------ Shares converted to Class A (4,327,131) (3,754,642) (1,610,077) - ------------------------------------------------------------------------------------ Shares redeemed (36,292,442) (83,631,416) (110,669,443) - ------------------------------------------------------------------------------------ Net decrease $ (30,398,191) $ (65,004,275) $ (25,474,190) ==================================================================================== Class C Shares sold $ 4,743,734 $ 12,441,554 $ 15,558,688 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 12,309,456 - ------------------------------------------------------------------------------------ Shares redeemed (11,627,959) (28,463,454) (39,538,054) - ------------------------------------------------------------------------------------ Net decrease $ (6,884,225) $ (16,021,900) $ (11,669,910) ====================================================================================
(a) The Fund changed its fiscal year end from September 30 to July 31. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 21 Notes to Financial Statements - --------------------------------------------------------------------------------
---------------------------------------------------- Amount ---------------------------------------------------- October 1, 2002 Year Ended Year Ended to July 31, September 30, September 30, 2003(a) 2002 2001 ---------------------------------------------------- Advisor Class Shares sold $ 1,304,540 $ 9,556,707 $ 26,711,352 - ------------------------------------------------------------------------------------ Shares issued in reinvestment of distributions -0- -0- 11,020,368 - ------------------------------------------------------------------------------------ Shares redeemed (3,384,652) (72,019,660) (40,748,069) - ------------------------------------------------------------------------------------ Net decrease $ (2,080,112) $ (62,462,953) $ (3,016,349) ====================================================================================
(a) The Fund changed its fiscal year end from September 30 to July 31. NOTE G Joint Credit Facility A number of open-end mutual funds managed by the Adviser, including the Fund, participate in a $500 million revolving credit facility (the "Facility") intended to provide short-term financing if necessary, subject to certain restrictions in connection with abnormal redemption activity. Commitment fees related to the Facility are paid by the participating funds and are included in miscellaneous expenses in the statement of operations. The Fund did not utilize the Facility during the period ended July 31, 2003. NOTE H Distributions to Shareholders The tax character of distributions paid during the fiscal periods ended July 31, 2003, September 30, 2002 and September 30, 2001 were as follows: 2003 2002 2001 ======== ======== ============ Distributions paid from: Ordinary income ........................ $ -0- $ -0- $117,930,376 -------- -------- ------------ Total taxable distributions .......................... -0- -0- 117,930,376 -------- -------- ------------ Total distributions paid ................................... $ -0- $ -0- $117,930,376 -------- -------- ------------ - -------------------------------------------------------------------------------- 22 o ALLIANCEBERNSTEIN QUASAR FUND Notes to Financial Statements - -------------------------------------------------------------------------------- As of July 31, 2003, the components of accumulated earnings/(deficit) on a tax basis were as follows: Accumulated capital and other losses .................. $(384,190,176)(a) Unrealized appreciation/(depreciation) ................ 57,835,978(b) ------------- Total accumulated earnings/(deficit) .................. $(326,354,198) ------------- (a) On July 31, 2003, the Fund had a net capital loss carryforward for federal income tax purposes of $372,300,767 of which $108,609,712 expires in the year 2009, $117,231,356 expires in the year 2010 and $146,459,699 expires in the year 2011. To the extent future capital gains are offset by capital loss carryforwards, such gains will not be distributed. Net capital losses incurred after October 31, and within the taxable year are deemed to arise on the first business day of the Fund's next taxable year. For the year ended July 31, 2003, the Fund deferred to August 1, 2003 post October capital losses of $11,889,409. (b) The differences between book-basis and tax-basis unrealized appreciation/(depreciation) are attributable primarily to the tax deferral of losses on wash sales. During the current fiscal period, permanent differences, primarily due to net investment loss resulted in a net decrease in accumulated net investment loss, a net decrease in accumulated net realized loss on investment and foreign currency transactions and a decrease in additional paid-in capital. This reclassification had no effect on net assets. NOTE I Subsequent Events Alliance Capital Management L.P., ("Alliance Capital") the Fund's Adviser, has been contacted by the Office of the New York State Attorney General ("NYAG") and the United States Securities and Exchange Commission ("SEC") in connection with their investigation of practices in the mutual fund industry identified as "market timing" and "late trading" of mutual fund shares. Alliance Capital has been providing full cooperation with respect to these investigations. Based on the preliminary results of its own ongoing internal investigation concerning mutual fund transactions, Alliance Capital has identified conflicts of interest in connection with certain market timing transactions. In this regard, Alliance Capital has suspended two of its employees, neither of which was a portfolio manager or officer of the Fund. Alliance Capital continues to review the facts and circumstances relevant to the SEC's and NYAG's investigations, including whether third parties may have engaged in illegal late trading in the Funds and whether any of its employees knowingly facilitated such late trading. Consistent with the best interests of the Fund and its shareholders, Alliance Capital intends to vigorously pursue its rights, and the rights of the Fund and its shareholders, if it is determined that such trading occurred. At the present time, management of Alliance Capital is unable to estimate the impact, if any, that the outcome of these investigations may have on the Fund or Alliance Capital's results of operations or financial condition. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 23 Notes to Financial Statements - -------------------------------------------------------------------------------- Alliance Capital also announced that its Board of Directors authorized a special committee, comprised of the members of Alliance Capital's Audit Committee and the other independent member of the Board, to direct and oversee a comprehensive review of the facts and circumstances relevant to the SEC's and the NYAG's investigations. On October 2, 2003, a class action complaint entitled Hindo et al. v. AllianceBernstein Growth & Income Fund et al. (the "Hindo Complaint"), was filed in federal district court in the Southern District of New York against Alliance Capital Management Holding L.P.; Alliance Capital; Alliance Capital Management Corporation (collectively, the "Alliance Capital defendants"); certain of the AllianceBernstein Mutual Funds, including the Fund, AXA Financial, Inc.; Gerald Malone; Charles Schaffran; Edward J. Stern; Canary Capital Partners, LLC; Canary Investment Management LLC; Canary Capital Partners, Ltd.; and other unnamed defendants. The action, which is brought on behalf of a putative class of all persons who purchased shares in one or more of the defendant mutual funds between October 2, 1998 and September 29, 2003, alleges violations of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Investment Advisors Act of 1940. The principal allegations of the Hindo Complaint are that the Alliance Capital defendants entered into agreements under which certain named and unnamed parties were permitted to engage in late trading and market timing transactions in the defendant funds. According to the Complaint, these agreements were fraudulent and a breach of fiduciary duty to fund shareholders. In addition, plaintiffs allege that the prospectuses for the named AllianceBernstein mutual funds were false and misleading because they: (i) failed to disclose the existence of these late trading and market timing agreements; and (ii) represented that fund shareholders would be safeguarded against the effects of such agreements. Plaintiffs seek unspecified damages, the rescission of plaintiffs' contracts with Alliance Capital, and recovery of any fees paid in connection therewith. Alliance Capital is evaluating the claims in the Hindo Complaint and intends to vigorously defend against them. At the present time, management of Alliance Capital is unable to estimate the impact, if any, that the outcome of this action may have on the Fund or on Alliance Capital's results of operations or financial condition. On October 8, 2003, a similar complaint was filed in federal district court in the Eastern District of New York in which all AllianceBernstein Funds are named as nominal defendants. Alliance Capital understands that additional lawsuits that are similar to these lawsuits have been filed, and believes that others may be filed, against Alliance Capital defendants and related parties. - -------------------------------------------------------------------------------- 24 o ALLIANCEBERNSTEIN QUASAR FUND Financial Highlights - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------------------------- Class A ----------------------------------------------------------------------------------------- October 1, 2002 to Year Ended September 30, July 31, ------------------------------------------------------------------------ 2003(a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------- Net asset value, beginning of period ....................... $ 13.34 $ 16.25 $ 30.76 $ 23.84 $ 22.27 $ 30.37 ----------------------------------------------------------------------------------------- Income From Investment Operations Net investment loss(b) ......... (.24) (.30) (.35) (.38) (.22) (.17) Net realized and unrealized gain (loss) on investment and foreign currency transactions 4.20 (2.61) (11.46) 7.30 2.80 (6.70) ----------------------------------------------------------------------------------------- Net increase (decrease) in net asset value from operations .. 3.96 (2.91) (11.81) 6.92 2.58 (6.87) ----------------------------------------------------------------------------------------- Less: Distributions Distributions from net realized gain on investment transactions ................. -0- -0- (.72) -0- (1.01) (1.23) Distributions in excess of net realized gain on investment transactions ................. -0- -0- (1.98) -0- -0- -0- ----------------------------------------------------------------------------------------- Total distributions ............ -0- -0- (2.70) -0- (1.01) (1.23) ----------------------------------------------------------------------------------------- Net asset value, end of period . $ 17.30 $ 13.34 $ 16.25 $ 30.76 $ 23.84 $ 22.27 ========================================================================================= Total Return Total investment return based on net asset value(c) ........ 29.69% (17.91)% (41.42)% 29.03% 11.89% (23.45)% Ratios/Supplemental Data Net assets, end of period (000's omitted) .............. $ 184,378 $ 156,340 $ 232,456 $ 458,008 $ 517,289 $ 495,070 Ratio to average net assets of: Expenses ..................... 2.32%(d) 1.92% 1.79% 1.68%(e) 1.69%(e) 1.61%(e) Net investment loss .......... (1.95)%(d) (1.71)% (1.58)% (1.39)% (.90)% (.59)% Portfolio turnover rate ........ 94% 98% 109% 160% 91% 109%
See footnote summary on page 28. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 25 Financial Highlights - -------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------------------------- Class B ----------------------------------------------------------------------------------------- October 1, 2002 to Year Ended September 30, July 31, ------------------------------------------------------------------------ 2003(a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------- Net asset value, beginning of period ....................... $ 11.49 $ 14.11 $ 27.30 $ 21.32 $ 20.17 $ 27.83 ----------------------------------------------------------------------------------------- Income From Investment Operations Net investment loss(b) ......... (.28) (.39) (.45) (.52) (.37) (.36) Net realized and unrealized gain (loss) on investment and foreign currency transactions 3.59 (2.23) (10.04) 6.50 2.53 (6.07) ----------------------------------------------------------------------------------------- Net increase (decrease) in net asset value from operations .. 3.31 (2.62) (10.49) 5.98 2.16 (6.43) ----------------------------------------------------------------------------------------- Less: Distributions Distributions from net realized gain on investment transactions ................. -0- -0- (.72) -0- (1.01) (1.23) Distributions in excess of net realized gain on investment transactions ................. -0- -0- (1.98) -0- -0- -0- ----------------------------------------------------------------------------------------- Total distributions ............ -0- -0- (2.70) -0- (1.01) (1.23) ----------------------------------------------------------------------------------------- Net asset value, end of period . $ 14.80 $ 11.49 $ 14.11 $ 27.30 $ 21.32 $ 20.17 ========================================================================================= Total Return Total investment return based on net asset value(c) ........... 28.81% (18.57)% (41.88)% 28.05% 11.01% (24.03)% Ratios/Supplemental Data Net assets, end of period (000's omitted) .............. $ 168,554 $ 159,791 $ 257,161 $ 546,302 $ 587,919 $ 625,147 Ratio to average net assets of: Expenses ..................... 3.14%(d) 2.72% 2.57% 2.44%(e) 2.46%(e) 2.39%(e) Net investment loss .......... (2.78)%(d) (2.50)% (2.36)% (2.16)% (1.68)% (1.36)% Portfolio turnover rate ........ 94% 98% 109% 160% 91% 109%
See footnote summary on page 28. - -------------------------------------------------------------------------------- 26 o ALLIANCEBERNSTEIN QUASAR FUND Financial Highlights - -------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------------------------- Class C ----------------------------------------------------------------------------------------- October 1, 2002 to Year Ended September 30, July 31, ------------------------------------------------------------------------ 2003(a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------- Net asset value, beginning of period ....................... $ 11.50 $ 14.13 $ 27.32 $ 21.34 $ 20.18 $ 27.85 ----------------------------------------------------------------------------------------- Income From Investment Operations Net investment loss(b) ......... (.28) (.39) (.45) (.52) (.36) (.35) Net realized and unrealized gain (loss) on investment and foreign currency transactions 3.60 (2.24) (10.04) 6.50 2.53 (6.09) ----------------------------------------------------------------------------------------- Net increase (decrease) in net asset value from operations .. 3.32 (2.63) (10.49) 5.98 2.17 (6.44) ----------------------------------------------------------------------------------------- Less: Distributions Distributions from net realized gain on investment transactions ................. -0- -0- (.72) -0- (1.01) (1.23) Distributions in excess of net realized gain on investment transactions ................. -0- -0- (1.98) -0- -0- -0- ----------------------------------------------------------------------------------------- Total distributions ............ -0- -0- (2.70) -0- (1.01) (1.23) ----------------------------------------------------------------------------------------- Net asset value, end of period . $ 14.82 $ 11.50 $ 14.13 $ 27.32 $ 21.34 $ 20.18 ========================================================================================= Total Return Total investment return based on net asset value(c) ........ 28.87% (18.61)% (41.85)% 28.02% 11.05% (24.05)% Ratios/Supplemental Data Net assets, end of period (000's omitted) .............. $ 39,434 $ 37,256 $ 60,925 $ 137,242 $ 168,120 $ 182,110 Ratio to average net assets of: Expenses ..................... 3.10%(d) 2.71% 2.56% 2.43%(e) 2.45%(e) 2.38%(e) Net investment loss .......... (2.73)%(d) (2.49)% (2.35)% (2.12)% (1.66)% (1.35)% Portfolio turnover rate ........ 94% 98% 109% 160% 91% 109%
See footnote summary on page 28. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 27 Financial Highlights - -------------------------------------------------------------------------------- Selected Data For A Share Of Capital Stock Outstanding Throughout Each Period
----------------------------------------------------------------------------------------- Advisor Class ----------------------------------------------------------------------------------------- October 1, 2002 to Year Ended September 30, July 31, ------------------------------------------------------------------------ 2003(a) 2002 2001 2000 1999 1998 ----------------------------------------------------------------------------------------- Net asset value, beginning of period ....................... $ 13.60 $ 16.52 $ 31.07 $ 24.01 $ 22.37 $ 30.42 ----------------------------------------------------------------------------------------- Income From Investment Operations Net investment loss(b) ......... (.21) (.28) (.29) (.30) (.15) (.09) Net realized and unrealized gain (loss) on investment and foreign currency transactions 4.29 (2.64) (11.56) 7.36 2.80 (6.73) ----------------------------------------------------------------------------------------- Net increase (decrease) in net asset value from operations .. 4.08 (2.92) (11.85) 7.06 2.65 (6.82) ----------------------------------------------------------------------------------------- Less: Distributions Distributions from net realized gain on investment transactions ................. -0- -0- (.72) -0- (1.01) (1.23) Distributions in excess of net realized gain on investment transactions ................. -0- -0- (1.98) -0- -0- -0- ----------------------------------------------------------------------------------------- Total distributions ............ -0- -0- (2.70) -0- (1.01) (1.23) ----------------------------------------------------------------------------------------- Net asset value, end of period . $ 17.68 $ 13.60 $ 16.52 $ 31.07 $ 24.01 $ 22.37 ========================================================================================= Total Return Total investment return based on net asset value(c) ........ 30.00% (17.68)% (41.11)% 29.40% 12.16% (23.24)% Ratios/Supplemental Data Net assets, end of period (000's omitted) .............. $ 9,016 $ 8,916 $ 68,730 $ 135,414 $ 164,671 $ 175,037 Ratio to average net assets of: Expenses ..................... 2.05%(d) 1.60% 1.52% 1.39%(e) 1.42%(e) 1.38%(e) Net investment loss .......... (1.69)%(d) (1.41)% (1.31)% (1.08)% (.62)% (.32)% Portfolio turnover rate ........ 94% 98% 109% 160% 91% 109%
(a) The Fund changed its fiscal year end from September 30 to July 31. (b) Based on average shares outstanding. (c) Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all dividends and distributions at net asset value during the period, and redemption on the last day of the period. Initial sales charges or contingent deferred sales charges are not reflected in the calculation of total investment return. Total return does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Total investment return calculated for a period of less than one year is not annualized. (d) Annualized. (e) Ratios reflect expenses grossed up for expense offset arrangement with the Transfer Agent. For the periods shown below, the net expense ratios were as follows: Year Ended September 30, ----------------------------- 2000 1999 1998 ----------------------------- Class A................... 1.67% 1.68% 1.60% Class B................... 2.42% 2.45% 2.38% Class C................... 2.42% 2.44% 2.37% Advisor Class............. 1.38% 1.41% 1.37% - -------------------------------------------------------------------------------- 28 o ALLIANCEBERNSTEIN QUASAR FUND Report of Ernst & Young LLP, Independent Auditors - -------------------------------------------------------------------------------- REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS To the Shareholders and Board of Directors of AllianceBernstein Quasar Fund, Inc. We have audited the accompanying statement of assets and liabilities of AllianceBernstein Quasar Fund, Inc., formerly Alliance Quasar Fund, Inc., (the "Fund"), including the portfolio of investments, as of July 31, 2003, and the related statement of operations for the period from October 1, 2002 to July 31, 2003 and for the year ended September 30, 2002, the statement of changes in net assets for the period from October 1, 2002 to July 31, 2003 and for each of the two years in the period ended September 30, 2002, and the financial highlights for the period from October 1, 2002 to July 31, 2003 and for each of the five years in the period ended September 30, 2002. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian and others. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of AllianceBernstein Quasar Fund, Inc. at July 31, 2003, the results of its operations for the period from October 1, 2002 to July 31, 2003 and for the year ended September 30, 2002, the changes in its net assets for the period from October 1, 2002 to July 31, 2003 and for each of the two years in the period ended September 30, 2002, and the financial highlights for the period from October 1, 2002 to July 31, 2003 and for each of the five years in the period ended September 30, 2002, in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP New York, New York September 12, 2003, except for Note I, as to which the date is October 9, 2003 - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 29 Board of Directors - -------------------------------------------------------------------------------- BOARD OF DIRECTORS John D. Carifa, Chairman and President Ruth Block(1) David H. Dievler((1) John H. Dobkin(1) William H. Foulk, Jr.(1) Clifford L. Michel(1) Donald J. Robinson(1) OFFICERS Bruce K. Aronow, Senior Vice President Thomas J. Bardong, Vice President Edmund P. Bergan, Jr., Secretary Mark D. Gersten, Treasurer & Chief Financial Officer Vincent S. Noto, Controller Custodian Sttate Street Bank & Trust Company 225 Franklin Street Boston, MA 02110 Distributor AllianceBernstein Investment Research and Management, Inc. 1345 Avenue of the Americas New York, NY 10105 Legal Counsel Seward & Kissel LLP One Battery Park Plaza New York, NY 10004 Transfer Agent Alliance Global Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 Toll-free (800) 221-5672 Independent Auditors Ernst & Young LLP 5 Times Square New York, NY 10036 (1) Member of the Audit Committee. - -------------------------------------------------------------------------------- 30 o ALLIANCEBERNSTEIN QUASAR FUND Management of the Fund - -------------------------------------------------------------------------------- MANAGEMENT OF THE FUND Board of Directors Information The business and affairs of the Fund are managed under the direction of the Board of Directors. Certain information concerning the Fund's Directors is set forth below.
PORTFOLIOS IN FUND OTHER NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR - ------------------------------------------------------------------------------------------------------- INTERESTED DIRECTOR John D. Carifa, **, 58 President, Chief Operating Officer 116 None 1345 Avenue of the and a Director of Alliance Capital Americas Management Corporation New York, NY 10105 (16) ("ACMC"), with which he has been associated with since prior to 1998. DISINTERESTED DIRECTORS Ruth Block, #+, 72 Formerly Executive Vice 97 None P.O. Box 4623 President and Chief Insurance Stamford, CT 06903 (11) Officer of The Equitable Life Assurance Society of the United States; Chairman and Chief Executive Officer of Evlico; a Director of Avon, BP (oil and gas), Ecolab Incorporated (specialty chemicals), Tandem Financial Group and Donaldson, Lufkin & Jenrette Securities Corporation. Former Governor at Large National Association of Securities Dealers, Inc. David H. Dievler, #+, 73 Independent Consultant. Until 101 None P.O. Box 167 December 1994, Senior Vice Spring Lake, NJ 07762 President of ACMC responsible (16) for mutual fund administration. Prior to joining ACMC in 1984, Chief Financial Officer of Eberstadt Asset Management since 1968. Prior to that, Senior Manager at Price Waterhouse & Co. Member of the American Institute of Certified Public Accountants since 1953. John H. Dobkin,#+, 61 Consultant. Formerly President 98 None P.O. Box 12 of Save Venice, Inc. (preservation Annandale, NY 12504 (9) organization) from 2001 - 2002, a 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 and during 1988 - 1992, Director and Chairman of the Audit Committee of ACMC.
- -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 31 Management of the Fund - --------------------------------------------------------------------------------
PORTFOLIOS IN FUND OTHER NAME, AGE OF DIRECTOR, PRINCIPAL COMPLEX DIRECTORSHIPS ADDRESS OCCUPATION(S) OVERSEEN BY HELD BY (YEARS OF SERVICE*) DURING PAST 5 YEARS DIRECTOR DIRECTOR - ---------------------------------------------------------------------------------------------------------- DISINTERESTED DIRECTORS (continued) William H. Foulk, Jr., #+, 71 Investment Adviser and 113 None 2 Soundview Drive independent consultant. Formerly Suite 1000 Senior Manager of Barrett Greenwich, CT 06830 (11) Associates, Inc., a registered investment adviser, with which he had been associated since prior to 1998. Formerly Deputy Comptroller of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. Clifford L. Michel, #+, 64 Senior Counsel of the law firm of 97 Placer Dome, Inc. 15 St. Bernard's Road Cahill Gordon & Reindel since Gladstone, NJ 07934 (17) February 2001 and a partner of that firm for more than twenty-five years prior thereto. President and Chief Executive Officer of Wenonah Development Company (investments) and a Director of Placer Dome, Inc. (mining). Donald J. Robinson, #+, 69 Senior Counsel of the law firm of 96 None 98 Hell's Peak Road Orrick, Herrington & Sutcliffe LLP Weston, VT 05161 (7) since prior to 1998. Formerly a senior partner and a member of the Executive Committee of that firm. He was also a member and Chairman of the Municipal Securities Rulemaking Board and a Trustee of the Museum of the City of New York.
* There is no stated term of office for the Fund's directors. ** Mr. Carifa is an "interested director," as defined in the 1940 Act, due to his position as President and Chief Operating Officer of ACMC, the Fund's investment adviser. # Member of the Audit Committee. + Member of the Nominating Committee. - -------------------------------------------------------------------------------- 32 o ALLIANCEBERNSTEIN QUASAR FUND Management of the Fund - -------------------------------------------------------------------------------- Officer Information Certain information concerning the Fund's Officers is set forth below.
NAME, PRINCIPAL POSITION(S) PRINCIPAL OCCUPATION ADDRESS* AND AGE HELD WITH FUND DURING PAST 5 YEARS - ----------------------------------------------------------------------------------------------------------- John D. Carifa, 58 Chairman and President See biography above. Bruce K. Aronow, 37 Senior Vice President Senior Vice President of ACMC** since 1999. Prior thereto, he was a Vice President at Invesco since 1998, and a Vice President at LGT Asset Management since prior to 1998. Thomas J. Bardong, 58 Vice President Senior Vice President of ACMC**, with which he has been associated since prior to 1998. Edmund P. Bergan, Jr., 53 Secretary Senior Vice President and General Counsel of AllianceBernstein Investment Research and Management, Inc. (ABIRM)** and Alliance Global Investor Services, Inc. ("AGIS")**, with which he has been associated since prior to 1998. Mark D. Gersten, 52 Treasurer and Chief Senior Vice President of AGIS** and a Financial Officer Vice President of ABIRM**, with which he has been associated since prior to 1998. Vincent S. Noto, 38 Controller Vice President of AGIS**, with which he has been associated since prior to 1998.
* The address for each of the Fund's Officers is 1345 Avenue of the Americas, New York, NY 10105. ** ACMC, ABIRM and AGIS are affiliates of the Fund. The Fund's Statement of Additional Information ("SAI") has additional information about the Fund's Directors and Officers and is available without charge upon request. Contact your financial representative or Alliance Capital at 800-227-4618 for a free prospectus or SAI. - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN QUASAR FUND o 33 AllianceBernstein Family of Funds - -------------------------------------------------------------------------------- ALLIANCEBERNSTEIN FAMILY OF FUNDS Wealth Strategies Funds Balanced Wealth Strategy Wealth Appreciation Wealth Preservation Tax-Managed Balanced Wealth Strategy Tax-Managed Wealth Appreciation Tax-Managed Wealth Preservation U.S. Growth Funds Growth Fund Health Care Fund Mid-Cap Growth Fund Premier Growth Fund Quasar Fund Select Investor Series Biotechnology Portfolio Select Investor Series Premier Portfolio Select Investor Series Technology Portfolio Technology Fund U.S. Value Funds Balanced Shares Disciplined Value Fund Growth & Income Fund Real Estate Investment Fund Small Cap Value Fund Utility Income Fund Value Fund Blended Style Series U.S. Large Cap Portfolio Global & International Growth Funds All-Asia Investment Fund Global Small Cap Fund Greater China '97 Fund International Premier Growth Fund New Europe Fund Worldwide Privatization Fund Global & International Value Funds Global Value Fund International Value Fund Bond Funds Americas Government Income Trust Corporate Bond Portfolio Emerging Market Debt Fund Global Strategic Income Trust High Yield Fund Multi-Market Strategy Trust Quality Bond Portfolio U.S. Government Portfolio Municipal Income Funds Intermediate California Intermediate Diversified Intermediate New York Arizona California Insured California Insured National Florida Massachusetts Michigan Minnesota National New Jersey New York Ohio Pennsylvania Virginia Closed-End Funds All-Market Advantage Fund ACM Income Fund ACM Government Opportunity Fund ACM Managed Dollar Income Fund ACM Managed Income Fund ACM Municipal Securities Income Fund California Municipal Income Fund National Municipal Income Fund New York Municipal Income Fund The Spain Fund World Dollar Government Fund World Dollar Government Fund II AllianceBernstein also offers AllianceBernstein Exchange Reserves, which serves as the money market fund exchange vehicle for the AllianceBernstein mutual funds. To obtain a prospectus for any AllianceBernstein fund, call your investment professional, or call AllianceBernstein at (800) 227-4618 or visit our web site at www.alliancebernstein.com. - -------------------------------------------------------------------------------- 34 o ALLIANCEBERNSTEIN QUASAR FUND ALLIANCEBERNSTEIN QUASAR FUND 1345 Avenue of the Americas New York, NY 10105 (800) 221-5672 [LOGO] AllianceBernstein(SM) Investment Research and Management (SM) This service mark used under license from the owner, Alliance Capital Management L.P. QSRAR0703 ITEM 2. CODE OF ETHICS. (a) The registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the registrant's code of ethics is filed herewith as Exhibit 10(a)(1). (b) During the period covered by this report, no amendments were made to the provisions of the code of ethics adopted in 2(a) above. (c) During the period covered by this report, no implicit or explicit waivers to the provisions of the code of ethics adopted in 2(a) above were granted. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors has determined that independent directors Messrs. David H. Dievler and William H. Foulk qualify as audit committee financial experts. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement not yet effective with respect to the registrant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to the registrant. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable to the registrant. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended) are effective at the reasonable assurance level based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document. (b) There were no significant changes in the registrant's internal controls that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. The following exhibits are attached to this Form N-CSR: Exhibit No. DESCRIPTION OF EXHIBIT 10 (a) (1) Code of ethics that is subject to the disclosure of Item 2 hereof 10 (b) (1) Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 10 (b) (2) Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 10 (c) Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant): AllianceBernstein Quasar Fund, Inc. By: /s/John D. Carifa --------------------------------- John D. Carifa President Date: October 9, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/John D. Carifa --------------------------------- John D. Carifa President Date: October 9, 2003 By: /s/Mark D. Gersten ------------------------------- Mark D. Gersten Treasurer and Chief Financial Officer Date: October 9, 2003 EX-99.CODE ETH 3 edg9365-ethics.txt Exhibit 10(a)(1) CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. Covered Officers/Purpose of the Code The AllianceBernstein Mutual Fund Complex's code of ethics (this "Code") for the investment companies within the complex (collectively, the "Funds" and each, a "Company") applies to each Company's Principal Executive Officer, Principal Financial and Accounting Officer and Controller (the "Covered Officers," each of whom is set forth in Exhibit A) for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Company. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Company. For the purposes of this Code, members of the Covered Officer's family include his or her spouse, children, stepchildren, financial dependents, parents and stepparents. Certain conflicts of interest arise out of the relationships between Covered Officers and the Company and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Company because of their status as "affiliated persons" of the Company. The Company's and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company and the investment adviser of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Company or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Company. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Company's Board of Directors or Trustees (the "Directors") that the Covered Officers may also be officers or employees of one or more of the other Funds or of other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company. Each Covered Officer must: o not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company; o not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Company; o not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; There are some conflict of interest situations, whether involving a Covered Officer directly or a member of his family, that should always be discussed with the General Counsel of AllianceBernstein Investment Research and Management, Inc.(the "General Counsel"), if material. Examples of these include: o service as a director on the board of directors or trustees of any public or private company (other than a not-for-profit organization); o the receipt of any non-nominal gifts; o the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, any of the Company's service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. Disclosure and Compliance o Each Covered Officer should familiarize himself with the disclosure requirements and disclosure controls and procedures generally applicable to the Company; o each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's directors and auditors, and to governmental regulators and self-regulatory organizations; o each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; and o it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. Reporting and Accountability Each Covered Officer must: o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the General Counsel that he has received, read, and understands the Code; o annually thereafter affirm to the General Counsel that he has complied with the requirements of the Code; o complete at least annually a questionnaire relating to affiliations or other relationships that may give rise to conflicts of interest; o not retaliate against any other Covered Officer or any employee of the Company or their affiliated persons for reports of potential violations that are made in good faith; and o notify the General Counsel promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code. The General Counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, waivers sought by a Covered Officer will be considered by the Company's Audit Committee (the "Committee"). The Company will follow these procedures in investigating and enforcing this Code: o the General Counsel will take all appropriate action to investigate any potential violations reported to him; o if, after such investigation, the General Counsel believes that no material violation has occurred, the General Counsel is not required to take any further action; o any matter that the General Counsel believes is a material violation will be reported to the Committee; o if the Committee concurs that a material violation has occurred, it will inform and make a recommendation to the Directors, who will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the investment adviser or its board; or a recommendation to dismiss the Covered Officer; o the Committee will be responsible for granting waivers, as appropriate; and o any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Company, the Company's adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, it is understood that this Code is in all respects separate and apart from, and operates independently of, any such policies and procedures. In particular, the Company's and its investment adviser's and principal underwriter's codes of ethics under Rule 17j-l under the Investment Company Act are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Directors, including a majority of independent directors. VII. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Directors, the investment adviser, their counsel, counsel to the Company and, if deemed appropriate by the Directors of the Company, to the Directors of the other Funds. VIII. Internal Use The Code is intended solely for internal use by the Funds and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion. Date: July 22, 2003 Exhibit A Persons Covered by this Code of Ethics John Carifa, Principal Executive Officer Mark Gersten, Principal Financial and Accounting Officer Vince Noto, Controller EX-99.CERT 4 edg9365-ex10b_302.txt Exhibit 10(b)(1) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER I, John D. Carifa, certify that: 1. I have reviewed this report on Form N-CSR (the "Report") of AllianceBernstein Quasar Fund, Inc. (the "Fund"); 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this Report; 4. The Fund's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this Report based on such evaluation; and c) disclosed in this Report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year [or second fiscal half-year in the case of an annual report] that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors: a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls. Date: October 9, 2003 /s/ John D. Carifa ----------------------- John D. Carifa Chairman and President Exhibit 10(b)(2) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER I, Mark D. Gersten, certify that: 1. I have reviewed this report on Form N-CSR (the "Report") of AllianceBernstein Quasar Fund, Inc. (the "Fund"); 2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; 3. Based on my knowledge, the financial statements and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the Fund as of, and for, the periods presented in this Report; 4. The Fund's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) for the Fund and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Fund, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; b) evaluated the effectiveness of the Fund's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this Report based on such evaluation; and c) disclosed in this Report any change in the Fund's internal control over financial reporting that occurred during the Fund's most recent fiscal half-year [or second fiscal half-year in the case of an annual report] that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting; and 5. The Fund's other certifying officer and I have disclosed to the Fund's auditors and the audit committee of the Fund's board of directors: a) all significant deficiencies in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Fund's ability to record, process, summarize, and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Fund's internal controls. Date: October 9, 2003 /s/ Mark D. Gersten ----------------------- Mark D. Gersten Treasurer and Chief Financial Officer EX-99.906 CERT 5 edg9365-ex10c_906.txt Exhibit 10(c) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT Pursuant to 18 U.S.C. 1350, each of the undersigned, being the Principal Executive Officer and Principal Financial Officer of AllianceBernstein Quasar Fund, Inc. (the "Registrant"), hereby certifies that the Registrant's report on Form N-CSR for the period ended July 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: October 9, 2003 By: /s/ John D. Carifa ----------------------- John D. Carifa Chairman and President By: /s/ Mark D. Gersten ----------------------- Mark D. Gersten Treasurer and Chief Financial Officer This certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and is not being filed as part of the Report or as a separate disclosure document. A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----