This is filed pursuant to Rule 497(c).
File Nos. 33-18647 and 811-5398.



[LOGO]

                           ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC.

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c/o AllianceBernstein Investor Services, Inc.
P. O. Box 786003, San Antonio, Texas 78278-6003
Toll Free (800) 221-5672

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                       STATEMENT OF ADDITIONAL INFORMATION
                                   May 1, 2008

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          This Statement of Additional Information ("SAI") is not a prospectus
but supplements and should be read in conjunction with the current prospectuses
dated May 1, 2008, for AllianceBernstein(R) Variable Products Series (VPS) Fund,
Inc. (the "Fund") that offer Class A shares and Class B shares of the Fund (each
a "Prospectus," and together, the "Prospectuses"). Financial statements for each
Portfolio of the Fund for the year ended December 31, 2007, are included in the
Portfolio's annual report to shareholders and are incorporated into this SAI by
reference. Copies of the Prospectuses of the Portfolios and the annual reports
for the Portfolios of the Fund may be obtained by contacting AllianceBernstein
Investor Services, Inc. ("ABIS") at the address or telephone number shown above.

                                TABLE OF CONTENTS
                                                                            PAGE

Introduction................................................................   2
Investment Policies And Restrictions........................................   2
   AllianceBernstein Money Market Portfolio.................................   2
   AllianceBernstein Large Cap Growth Portfolio.............................   5
   AllianceBernstein Growth and Income Portfolio............................   5
   AllianceBernstein Balanced Shares Portfolio..............................   6
   AllianceBernstein Utility Income Portfolio...............................   6
   AllianceBernstein Growth Portfolio.......................................   9
   AllianceBernstein International Growth Portfolio.........................  11
   AllianceBernstein Global Technology Portfolio............................  12
   AllianceBernstein Small Cap Growth Portfolio.............................  12
   AllianceBernstein Real Estate Investment Portfolio.......................  13
   AllianceBernstein International Value Portfolio..........................  14
   AllianceBernstein Small/Mid Cap Value Portfolio..........................  14
   AllianceBernstein Value Portfolio........................................  14
   AllianceBernstein U.S. Large Cap Blended Style Portfolio.................  16
   AllianceBernstein Wealth Appreciation Strategy Portfolio.................  17
   AllianceBernstein Balanced Wealth Strategy Portfolio.....................  17
   AllianceBernstein Global Research Growth Portfolio.......................  19
Description of Investment Practices and Other Investment Policies...........  23
Management of the Fund......................................................  60
Purchase and Redemption of Shares........................................... 120
Net Asset Value............................................................. 126
Portfolio Transactions...................................................... 130
Dividends, Distributions and Taxes.......................................... 136
General Information......................................................... 137
Financial Statements and Report of Independent Registered Public
   Accounting Firm ......................................................... 148
Appendix A: Description of Obligations Issued or Guaranteed by U.S.
   Government Agencies or Instrumentalities................................. A-1
Appendix B: Statement of Policies and Procedures for Voting Proxies......... B-1

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


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                                  INTRODUCTION

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          The Fund is an open-end series investment company designed to fund
variable annuity contracts and variable life insurance policies offered by the
separate accounts of certain life insurance companies. The Fund currently offers
an opportunity to choose among the separately managed pools of assets (the
"Portfolios") described in the Portfolios' Prospectuses, which have differing
investment objectives and policies. The Fund currently has eighteen Portfolios,
all of which, except Intermediate Bond Portfolio, are described in this SAI.

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                      INVESTMENT POLICIES AND RESTRICTIONS

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          The following investment policies and restrictions supplement, and
should be read in conjunction with, the information regarding the investment
objectives, policies and restrictions of each Portfolio set forth in the
Prospectuses. Except as otherwise noted, the investment policies described below
are not fundamental and may be changed by the Board of Directors of the Fund
(the "Board") without shareholder approval for the affected Portfolio; however,
shareholders will be notified prior to a material change in such policies.

          Whenever any investment policy or restriction states a minimum or
maximum percentage of a Portfolio's assets which may be invested in any security
or other asset, it is intended that such minimum or maximum percentage
limitation be determined immediately after and as a result of such Portfolio's
acquisition of such security or other asset. Accordingly, any later increase or
decrease in percentage beyond the specified limitations resulting from a change
in value or net assets will not be considered a violation.

          For a general description of each Portfolio's investment policies, see
the Portfolio's Prospectuses.

ALLIANCEBERNSTEIN MONEY MARKET PORTFOLIO

          General. The Portfolio may make the following investments diversified
by maturities and issuers:

          1. Marketable obligations of, or guaranteed by, the U.S. Government,
its agencies or instrumentalities. These include issues of the U.S. Treasury,
such as bills, certificates of indebtedness, notes and bonds, and issues of
agencies and instrumentalities established under the authority of an act of
Congress. The latter issues include, but are not limited to, obligations of the
Bank for Cooperatives, Federal Financing Bank, Federal Home Loan Bank, Federal
Intermediate Credit Banks, Federal Land Banks, Federal National Mortgage
Association ("FNMA") and Tennessee Valley Authority. Some of the securities are
supported by the full faith and credit of the U.S. Treasury, others are
supported by the right of the issuer to borrow from the U.S. Treasury, and still
others are supported only by the credit of the agency or instrumentality.

          2. Certificates of deposit, bankers' acceptances and time deposits
issued or guaranteed by banks or savings and loan associations having net assets
of more than $500 million and which are members of the Federal Deposit Insurance
Corporation.

          3. Commercial paper, including variable amount master demand notes, of
prime quality rated A-1+ or A-1 by Standard & Poor's Corporation ("S&P"),
Prime-1 by Moody's Investors Service, Inc. ("Moody's") or F1 by Fitch Ratings
("Fitch") or, if not rated, issued by domestic and foreign companies which have
an outstanding debt issue rated AAA or AA (including AA+ and AA-) by S&P or
Fitch, or Aaa or Aa (including Aa1, Aa2 and Aa3) by Moody's. For a description
of such ratings see Appendix A to the Portfolio's Prospectuses.

          4. Repurchase agreements that are collateralized fully as that term is
defined in Rule 2a-7 under the Investment Company Act of 1940, as amended (the
"1940 Act"). Repurchase agreements may be entered into with member banks of the
Federal Reserve System or primary dealers (as designated by the Federal Reserve
Bank of New York) in U.S. Government securities or the Fund's custodian. It is
the Portfolio's current practice, which may be changed at any time without
shareholder approval, to enter into repurchase agreements only with such primary
dealers or the Fund's custodian. While the maturities of the underlying
collateral may exceed one year, the term of the repurchase agreement is always
less than one year.

          For additional information regarding certificates of deposit, bankers'
acceptances, bank time deposits, commercial paper, variable notes and repurchase
agreements, see "Description of Investment Practices and Other Investment
Policies," below.

          Reverse Repurchase Agreements. The Portfolio may enter into reverse
repurchase agreements, which involve the sale of money market securities held by
the Portfolio with an agreement to repurchase the securities at an agreed-upon
price, date and interest payment. The Fund's custodian will place cash not
available for investment or securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities ("U.S. Government Securities") or
other liquid high-quality debt securities in a separate account of the Fund
having a value equal to the aggregate amount of the Portfolio's commitments in
reverse repurchase agreements. For additional information regarding reverse
repurchase agreements, see "Description of Investment Practices and Other
Investment Polices," below.

          Illiquid Securities and Non-Publicly Traded Securities. The Portfolio
may purchase restricted securities eligible for resale under Rule 144A of the
Securities Act of 1933, as amended (the "Securities Act") that are determined by
AllianceBernstein L.P. (the "Adviser") to be liquid in accordance with
procedures adopted by the Board. Restricted securities are securities subject to
contractual or legal restrictions on resale, such as those arising from an
issuer's reliance upon certain exemptions from registration under the Securities
Act. See "Description of Investment Practices and Other Investment Policies,"
below, for additional information on restricted securities.

          Money Market Requirements. While there are many kinds of short-term
securities used by money market investors, the Portfolio, in keeping with its
primary investment objective of safety of principal, restricts its portfolio to
the types of investments listed above. The Portfolio does not invest in issues
of savings and loan associations, letters of credit, or issues of foreign banks.
The Portfolio may make investments in certificates of deposit issued by, and
time deposits maintained at, foreign branches of domestic banks specified above,
prime quality Dollar-denominated commercial paper issued by foreign companies
meeting the rating criteria specified above, and certificates of deposit and
bankers' acceptances denominated in U.S. Dollars that are issued by U.S.
branches of foreign banks having total assets of at least $500 million that are
believed by the Adviser to be of quality equivalent to that of other such
investments in which the Portfolio may invest. To the extent that the Portfolio
invests in such instruments, consideration is given to their domestic
marketability, the lower reserve requirements generally mandated for overseas
banking operations, the possible impact of interruptions in the flow of
international currency transactions, potential political and social instability
or expropriation, imposition of foreign taxes, less government supervision of
issuers, difficulty in enforcing contractual obligations and lack of uniform
accounting standards. As even the safest of securities involve some risk, there
can be no assurance, as is true with all investment companies, that the
Portfolio's objective will be achieved. The market value of the Portfolio's
investments tends to decrease during periods of rising interest rates and to
increase during intervals of falling rates.

          The Portfolio intends to comply with Rule 2a-7 under the 1940 Act, as
amended from time to time, including the diversification, quality and maturity
limitations imposed by the Rule. To the extent that the Portfolio's limitations
are more permissive than Rule 2a-7, the Portfolio will comply with the more
restrictive provisions of the Rule.

          Currently, pursuant to Rule 2a-7, the Portfolio may invest only in
U.S. Dollar denominated "Eligible Securities," (as that term is defined in the
Rule). Generally, an Eligible Security is a security that (i) is denominated in
U.S. Dollars and has a remaining maturity of 397 days or less; (ii) is rated, or
is issued by an issuer with short-term debt outstanding that is rated, in one of
the two highest rating categories by two nationally recognized statistical
rating organizations ("NRSROs") or, if only one NRSRO has issued a rating, by
that NRSRO; and (iii) has been determined by the Adviser to present minimal
credit risks pursuant to procedures approved by the Board. A security that
originally had a maturity of greater than 397 days is an Eligible Security if
its remaining maturity at the time of purchase is 397 calendar days or less and
the issuer has outstanding short-term debt that would be an Eligible Security.
Unrated securities may also be Eligible Securities if the Adviser determines
that they are of comparable quality to a rated Eligible Security pursuant to
guidelines approved by the Board. A description of the ratings of some NRSROs
appears in Appendix A to the Portfolio's Prospectuses.

          Under Rule 2a-7, the Portfolio may not invest more than 5% of its
assets in the first tier securities of any one issuer other than the U.S.
Government, its agencies and instrumentalities. Generally, a first tier security
is an Eligible Security that has received a short-term rating from the requisite
NRSROs in the highest short-term rating category for debt obligations, or is an
unrated security deemed to be of comparable quality. U.S. Government Securities
are also considered to be first tier securities. A security that has received
the second highest rating by the requisite number of NRSROs is a second tier
security. The Portfolio may not invest in a second tier security if immediately
after the acquisition thereof that Portfolio would have invested more than (A)
the greater of 1% of its total assets or one million dollars in securities
issued by that issuer which are second tier securities, and (B) 5% of its total
assets in second tier securities.

ALLIANCEBERNSTEIN LARGE CAP GROWTH PORTFOLIO

          Special Situations. The Portfolio may invest in special situations
from time to time. For a general discussion on special situations, see
"Description of Investment Practices and Other Investment Policies," below.

          Short Sales. The Portfolio may not sell securities short, except that
it may make short sales against the box. For a general discussion of short
sales, see "Description of Investment Practices and Other Investment Policies,"
below.

          Options. The Portfolio may write call options and may purchase and
sell put and call options written by others, combinations thereof, or similar
options. For further information about options, see "Description of Investment
Practices and Other Investment Policies," below.

          Securities of Foreign Issuers. The Portfolio may invest in securities
of foreign issuers. For a general discussion on investments in securities of
foreign issuers, including risks, see "Description of Investment Practices and
Other Investment Policies," below.

          Options on Foreign Currencies. The Portfolio may invest in options on
foreign currencies. For a general discussion on options on foreign currencies,
including the use, risks and costs of options on foreign currencies, see
"Description of Investment Practices and Other Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights or warrants.
For a general discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

ALLIANCEBERNSTEIN GROWTH AND INCOME PORTFOLIO

          General. The Portfolio engages primarily in holding securities for
investment and not for trading purposes. Purchases and sales of portfolio
securities are made at such times and in such amounts as are deemed advisable in
the light of market, economic and other conditions, irrespective of the volume
of portfolio turnover.

          The Portfolio may invest in securities of foreign issuers.

          Options. The Portfolio may write covered call options, provided that
the option is listed on a domestic securities exchange. The Portfolio will
purchase call options only to close out a position in an option written by it.
In order to close out a position, the Portfolio will make a closing purchase
transaction if such is available. For a discussion of options, see "Description
of Investment Practices and Other Investment Policies," below.


ALLIANCEBERNSTEIN BALANCED SHARES PORTFOLIO

          Derivatives. The Portfolio may enter into derivatives transactions.
Derivatives that the Portfolio may enter into include options on securities,
options on foreign currencies, futures contracts and options thereon, forward
currency exchange contracts, credit default swap agreements and synthetic
foreign equity securities. For a general discussion on derivatives, see
"Description of Investment Practices and Other Investment Policies," below.

          Options on Securities. Subject to market conditions, the Portfolio may
try to realize income by writing covered call option contracts provided that the
option is listed on a domestic securities exchange and that no option will be
written, if, as a result, more than 25% of the Portfolio's assets are subject to
call options.

          The Portfolio may write a call option in return for a premium, which
is retained by the Portfolio whether or not the option is exercised. The
Portfolio will not write uncovered call options on securities.

          The Portfolio may write options on securities of the types in which it
is permitted to invest in privately negotiated (i.e., over-the-counter)
transactions. The Portfolio will effect such transactions only with investment
dealers and other financial institutions (such as commercial banks or savings
and loans institutions) deemed creditworthy by the Adviser, and the Adviser has
adopted procedures for monitoring the creditworthiness of such entities.

          Except as stated above, the Portfolio may not purchase or sell put or
call options on securities or combinations of put and call options on
securities. For a general discussion of options on securities, see "Description
of Investment Practices and Other Investment Policies," below.

          Repurchase Agreements. The Portfolio may enter into repurchase
agreements pertaining to the types of securities in which it invests with member
banks of the Federal Reserve System or "primary dealers" (as designated by the
Federal Reserve Bank of New York) in such securities. There is no percentage
restriction on the Portfolio's ability to enter into repurchase agreements.
Currently, the Portfolio intends to enter into repurchase agreements only with
its custodian and such primary dealers. For a general discussion of repurchase
agreements, see "Description of Investment Practices and Other Investment
Policies," below.

          Securities of Foreign Issuers. The Portfolio may invest in securities
of foreign issuers. For a general discussion on investments in securities of
foreign issuers, including risks, see "Description of Investment Practices and
Other Investment Policies," below.

ALLIANCEBERNSTEIN UTILITY INCOME PORTFOLIO

          General. The utilities industry consists of companies engaged in (i)
the manufacture, production, generation, provision, transmission, sale and
distribution of gas and electric energy, and communications equipment and
services, including telephone, telegraph, satellite, microwave and other
companies providing communication facilities for the public, or (ii) the
provision of other utility or utility related goods and services, including, but
not limited to, entities engaged in water provision, cogeneration, waste
disposal system provision, solid waste electric generation, independent power
producers and non-utility generators. In evaluating particular issuers, the
Adviser considers a number of factors, including historical growth rates and
rates of return on capital, financial condition and resources, management skills
and such industry factors as regulatory environment and energy sources. With
respect to investments in equity securities, the Adviser considers the
prospective growth in earnings and dividends in relation to price/earnings
ratios, yield and risk. The Adviser believes that above-average dividend returns
and below-average price/earnings ratios are factors that not only provide
current income but also generally tend to moderate risk and to afford
opportunity for appreciation of securities owned by the Portfolio.

          The Portfolio invests in equity securities, such as common stocks,
securities convertible into common stocks and rights and warrants to subscribe
for the purchase of common stocks, and in fixed-income securities, such as bonds
and preferred stocks. The Portfolio may vary the percentage of assets invested
in any one type of security based upon the Adviser's evaluation as to the
appropriate portfolio structure for achieving the Portfolio's investment
objective under prevailing market, economic and financial conditions. Certain
securities (such as fixed-income securities) will be selected on the basis of
their current yield, while other securities may be purchased for their growth
potential.

          Depositary Receipts. The Portfolio may invest in depositary receipts.
For a general discussion on depositary receipts, see "Description of Investment
Practices and Other Investment Policies," below.

          Forward Contracts. The Portfolio may invest in forward contracts. For
a general discussion on forward contracts, see "Description of Investment
Practices and Other Investment Policies," below.

          Convertible Securities. The Portfolio may invest up to 30% of its net
assets in the convertible securities of companies whose common stocks are
eligible for purchase by the Portfolio under the investment policies described
above and in the Portfolio's Prospectuses. For a general discussion of
convertible securities, see "Description of Investment Practices and Other
Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights or warrants.
For a general discussion of rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

          Options. The Portfolio may invest in options. For a general discussion
on options, see "Description of Investment Practices and Other Investment
Policies," below.

          Options on Securities Indices. The Portfolio may purchase and sell
exchange-traded index options on any securities index composed of the types of
securities in which it may invest. For a general discussion on options on
securities indices, see "Description of Investment Practices and Other
Investment Policies," below.

          Futures Contracts and Options on Futures Contracts. The Portfolio may
invest in futures contracts and options thereon. For a general discussion
regarding futures contracts and options on futures contracts, see "Description
of Investment Practices and Other Investment Policies," below.

          Options on Foreign Currencies. The Portfolio may invest in options on
foreign currencies. For a general discussion on options on foreign currencies,
see "Description of Investment Practices and Other Investment Policies," below.

          Forward Currency Exchange Contracts. The Portfolio may purchase or
sell forward currency exchange contracts. For a discussion regarding forward
currency exchange contracts, see "Description of Investment Practices and Other
Investment Policies," below.

          Repurchase Agreements. The Portfolio may invest in repurchase
agreements pertaining to the types of securities in which it invests. For
additional information regarding repurchase agreements, see "Description of
Investment Practices and Other Investment Policies," below.

          Investments in Lower-Rated Fixed-Income Securities. The Portfolio may
invest in lower-rated fixed-income securities. For a general discussion on
lower-rated fixed-income securities, see "Description of Investment Practices
and Other Investment Policies," below.

          Utility Company Risks. Utility companies may be subject to a variety
of risks depending, in part, on such factors as the type of utility involved and
its geographic location. The revenues of domestic and foreign utilities
companies generally reflect the economic growth and development in the
geographic areas in which they do business. The Adviser takes into account
anticipated economic growth rates and other economic developments when selecting
securities of utility companies. Some of the risks involved in investing in the
principal sectors of the utilities industry are discussed below.

          Telecommunications regulation typically limits rates charged, returns
earned, providers of services, types of services, ownership, areas served and
terms for dealing with competitors and customers. Telecommunications regulation
generally has tended to be less stringent for newer services, such as mobile
services, than for traditional telephone service, although there can be no
assurances that such newer services will not be heavily regulated in the future.
Regulation may limit rates based on an authorized level of earnings, a price
index, or some other formula. Telephone rate regulation may include
government-mandated cross-subsidies that limit the flexibility of existing
service providers to respond to competition. Regulation may also limit the use
of new technologies and hamper efficient depreciation of existing assets. If
regulation limits the use of new technologies by established carriers or forces
cross-subsidies, large private networks may emerge.

          Declines in the price of alternative fuels have adversely affected gas
utilities. Many gas utilities generally have been adversely affected by
oversupply conditions, and by increased competition from other providers of
utility services. In addition, some gas utilities entered into long-term
contracts with respect to the purchase or sale of gas at fixed prices, which
prices have since changed significantly in the open market. In many cases, such
price changes have been to the disadvantage of the gas utility. Gas utilities
are particularly susceptible to supply and demand imbalances due to
unpredictable climate conditions and other factors and are subject to regulatory
risks as well.

          Although there can be no assurance that increased competition and
other structural changes will not adversely affect the profitability of gas and
telephone utilities, or that other negative factors will not develop in the
future, in the Adviser's opinion, increased competition and change may provide
better positioned utility companies with opportunities for enhanced
profitability.

          Electric utilities that use coal in connection with the production of
electric power are particularly susceptible to environmental regulation,
including the requirements of the federal Clean Air Act and of similar state
laws. Such regulation may necessitate large capital expenditures in order for
the utility to achieve compliance. Due to the public, regulatory and
governmental concern with the cost and safety of nuclear power facilities in
general, certain electric utilities with incomplete nuclear power facilities may
have problems completing and licensing such facilities. Regulatory changes with
respect to nuclear and conventionally fueled generating facilities could
increase costs or impair the ability of such electric utilities to operate such
facilities, thus reducing their ability to service dividend payments with
respect to the securities they issue. Furthermore, rates of return of utility
companies generally are subject to review and limitation by state public
utilities commissions and tend to fluctuate with marginal financing costs.
Electric utilities that utilize nuclear power facilities must apply for
recommissioning from the Nuclear Regulatory Commission after 40 years. Failure
to obtain recommissioning could result in an interruption of service or the need
to purchase more expensive power from other entities and could subject the
utility to significant capital construction costs in connection with building
new nuclear or alternative-fuel power facilities, upgrading existing facilities
or converting such facilities to alternative fuels.

          Foreign utility companies, like those in the United States, are
generally subject to regulation, although the regulation may or may not be
comparable to domestic regulations. Foreign utility companies in certain
countries may be more heavily regulated by their respective governments than
utility companies located in the United States. As in the United States, foreign
utility companies generally are required to seek government approval for rate
increases. In addition, many foreign utility companies use fuels that cause more
pollution than those used in the United States and may yet be required to invest
in pollution control equipment. Foreign utility regulatory systems vary from
country to country and may evolve in ways different from regulation in the
United States. The percentage of the Portfolio's assets invested in issuers of
particular countries will vary.

ALLIANCEBERNSTEIN GROWTH PORTFOLIO

          Repurchase Agreements. The Portfolio may invest in repurchase
agreements. For a general discussion on repurchase agreements, see "Description
of Investment Practices and Other Investment Policies," below.

          Illiquid Securities and Non-Publicly Traded Securities. The Portfolio
will limit its investment in illiquid securities to no more than 15% of its net
assets or such other amount permitted by guidance regarding the 1940 Act. For a
general discussion on illiquid securities and non-publicly traded securities,
see "Description of Investment Practices and Other Investment Policies," below.

          Securities of Foreign Issuers. The Portfolio may invest without limit
in securities of foreign issuers which are not publicly traded in the United
States. For additional information on the risks involved in investing in
securities of foreign issuers, see "Description of Investment Practices and
Other Investment Policies," below.

          Forward Commitments and When-Issued and Delayed Delivery Securities.
The Portfolio may enter into forward commitments for the purchase of securities
and may purchase securities on a when-issued or delayed delivery basis. For
additional information on when-issued securities and forward commitments, see
"Description of Investment Practices and Other Investment Policies," below.

          Options. As noted in the Portfolio's Prospectuses, the Portfolio may
write call and put options and may purchase call and put options on securities.
The Portfolio intends to write only covered options. In the case of call options
on U.S. Treasury Bills, the Portfolio might own U.S. Treasury Bills of a
different series from those underlying the call option, but with a principal
amount and value corresponding to the option contract amount and a maturity date
no later than that of the securities deliverable under the call option.

          The Portfolio may purchase a security and then write a call option
against that security, or it may purchase a security and concurrently write an
option on it. The Portfolio also may write combinations of put and call options
on the same security, known as "straddles," with the same exercise and
expiration date.

          For a general discussion on options, including puts and calls, see
"Description of Investment Practices and Other Investment Policies," below.

          Options on Securities Indices. The Portfolio may write (sell) covered
call and put options on securities indices and purchase call and put options on
securities indices. The Portfolio may also purchase put options on securities
indices to hedge its investments against a decline in value. For additional
information on options on securities indices, see "Description of Investment
Practices and Other Investment Policies," below.

          Futures and Options on Futures Contracts. The Portfolio may enter into
stock futures contracts and may enter into foreign currency futures contracts.
Such investment strategies will be used as a hedge and not for speculation. For
further information on futures contracts and options on futures contracts, see
"Description of Investment Practices and Other Investment Policies," below.

          Forward Currency Exchange Contracts. The Portfolio may enter into
forward currency exchange contracts to attempt to minimize the risk to the
Portfolio from adverse changes in the relationship between the U.S. Dollar and
foreign currencies. The Portfolio intends to enter into forward currency
exchange contracts for hedging purposes. For a general discussion of forward
currency exchange contracts and their uses, see "Description of Investment
Practices and Other Investment Policies," below.

          Options on Forward Currencies. The Portfolio may purchase and write
options on foreign currencies for hedging purposes. The Portfolio may also write
options on foreign currencies to increase return. For additional information
about options on foreign currencies and the risks involved, see "Description of
Investment Practices and Other Investment Policies," below.

ALLIANCEBERNSTEIN INTERNATIONAL GROWTH PORTFOLIO

          Derivatives. The Portfolio may enter into derivatives transactions.
The derivatives that the Portfolio may use include options on securities,
options on securities indices, futures contracts and options thereon, options on
foreign currencies, forward contracts, forward currency exchange contracts and
currency swaps. For a general discussion on derivatives, see "Description of
Investment Practices and Other Investment Policies," below.

          Forward Commitments. The Portfolio may enter into forward commitments
for the purchase or sale of securities. For a general discussion on forward
commitments, see "Description of Investment Practices and Other Investment
Policies," below.

          Standby Commitment Agreements. The Portfolio may from time to time
enter into standby commitment agreements. For a general discussion on standby
commitment agreements, see "Description of Investment Practices and Other
Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights or warrants.
For a general discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

          Short Sales. The Portfolio may make short sales of securities or
maintain a short position. For a general discussion on short sales, see
"Description of Investment Practices and Other Investment Policies," below.

          Repurchase Agreements. The Portfolio may invest in repurchase
agreements. For additional information regarding repurchase agreements, see
"Description of Investment Practices and Other Investment Policies," below.

          Participation in Privatizations. The governments of certain foreign
countries have, to varying degrees, embarked on privatization programs
contemplating the sale of all or part of their interests in state enterprises.
In certain jurisdictions, the ability of foreign entities, such as the
Portfolio, to participate in privatizations may be limited by local law, or the
price or terms on which the Portfolio may be able to participate may be less
advantageous than for local investors. Moreover, there can be no assurance that
governments that have embarked on privatization programs will continue to divest
their ownership of state enterprises, that proposed privatizations will be
successful or that governments will not re-nationalize enterprises that have
been privatized.

          Risk of Foreign Investments. For a general discussion on foreign
investments, see "Description of Investment Practices and Other Investment
Policies," below.

          U.S. and Foreign Taxes. Foreign taxes paid by the Portfolio may be
creditable or deductible by U.S. shareholders for U.S. income tax purposes. No
assurance can be given that applicable tax laws and interpretations will not
change in the future. Moreover, non-U.S. investors may not be able to credit or
deduct such foreign taxes. Investors should review carefully the information
discussed under the heading "Dividends, Distributions and Taxes," below, and
should discuss with their tax advisers the specific tax consequences of
investing in the Portfolio.

ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY PORTFOLIO

          Securities of Foreign Issuers. The Portfolio invests in the securities
of non-U. S. companies. For a general discussion on securities of foreign
issuers, including the risks involved in investing in securities of foreign
issuers, see "Description of Investment Practices and Other Investment
Policies," below.

          Options. The Portfolio may write and purchase call and put options.
For a general discussion on options, see "Description of Investment Practices
and Other Investment Policies," below.

          Options on Foreign Currencies. The Portfolio may purchase and sell
call options and purchase put options on foreign currencies traded on securities
exchanges or boards of trade (foreign and domestic) or over-the-counter. For a
general discussion on options on foreign currencies, see "Description of
Investment Practices and Other Investment Policies," below.

          Options on Securities Indices. The Portfolio also may invest in
options on securities indices. For a general discussion of options on securities
indices, see "Description of Investment Practices and Other Investment
Policies," below.

          Rights and Warrants. The Portfolio may invest in rights and warrants.
For a general discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.


ALLIANCEBERNSTEIN SMALL CAP GROWTH PORTFOLIO

          Special Situations. The Portfolio intends to invest in special
situations from time to time. The Portfolio will not, however, purchase
securities of any company with a record of less than three years continuous
operation (including that of predecessors) if such purchase would cause the
Portfolio's investments in such companies, taken at cost, to exceed 25% of the
value of the Portfolio's total assets. For a general discussion on special
situations, see "Description of Investment Practices and Other Investment
Policies," below.

          Short Sales. The Portfolio may only make short sales of securities
against the box. For a general discussion on short sales, see "Description of
Investment Practices and Other Investment Policies," below.

          Puts and Calls. The Portfolio may write and purchase call and put
options. The Portfolio may purchase and sell put and call options written by
others, combinations thereof, or similar options. There are markets for put and
call options written by others, and the Portfolio may from time to time sell or
purchase such options in such markets. If an option is not sold and is permitted
to expire without being exercised, its premium would be lost by the Portfolio.
For a general discussion of put and call options, see "Description of Investment
Practices and Other Investment Policies," below.

ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO


          The Portfolio may invest in debt securities rated BBB- or higher by
S&P or Baa3 or higher by Moody's or, if not rated, of equivalent credit quality
as determined by the Adviser. The Portfolio expects that it will not retain a
debt security that is downgraded below BBB- or Baa3 or, if unrated, determined
by the Adviser to have undergone similar credit quality deterioration,
subsequent to purchase by the Portfolio.

          Convertible Securities. The Portfolio may invest in convertible
securities of issuers whose common stocks are eligible for purchase by the
Portfolio under the investment policies described above. For a general
discussion on convertible securities, see "Description of Investment Practices
and Other Investment Policies," below.

          Forward Commitments. The Portfolio may invest in forward commitments.
For a general discussion of forward commitments, see "Description of Investment
Practices and Other Investment Policies," below.

          Standby Commitment Agreements. The Portfolio may invest in standby
commitment agreements. For a general discussion on standby commitment
agreements, see "Description of Investment Practices and Other Investment
Policies," below.

          Repurchase Agreements. The Portfolio may enter into repurchase
agreements pertaining to U.S. Government Securities with member banks of the
Federal Reserve System or primary dealers (as designated by the Federal Reserve
Bank of New York) in such securities. There is no percentage restriction on the
Portfolio's ability to enter into repurchase agreements. For a general
discussion of repurchase agreements, see "Description of Investment Practices
and Other Investment Policies," below.

          Short Sales. The Portfolio may invest in short sales. For a general
discussion of short sales, see "Description of Investment Practices and Other
Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights and warrants.
For a general discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

Risk Factors Associated With the Real Estate Industry
- -----------------------------------------------------

          REITS. Investing in REITs involves certain unique risks in addition to
those risks associated with investing in the real estate industry in general.
Equity REITs may be affected by changes in the value of the underlying property
owned by the REITs, while mortgage REITs may be affected by the quality of any
credit extended. REITs are dependent upon management skills, are not
diversified, and are subject to heavy cash flow dependency, default by borrowers
and self-liquidation. REITs are also subject to the possibilities of failing to
qualify for tax-free pass-through of income under the Code and failing to
maintain their exemptions from registration under the 1940 Act.

          REITs (especially mortgage REITs) also are subject to interest rate
risks. When interest rates decline, the value of a REIT's investment in fixed
rate obligations can be expected to rise. Conversely, when interest rates rise,
the value of a REIT's investment in fixed rate obligations can be expected to
decline. In contrast, as interest rates on adjustable rate mortgage loans are
reset periodically, yields on a REIT's investments in such loans will gradually
align themselves to reflect changes in market interest rates, causing the value
of such investments to fluctuate less dramatically in response to interest rate
fluctuations than would investments in fixed rate obligations.

          Investing in REITs involves risks similar to those associated with
investing in small capitalization companies. REITs may have limited financial
resources, may trade less frequently and in a limited volume and may be subject
to more abrupt or erratic price movements than larger company securities.
Historically, small capitalization stocks, such as REITs, have been more
volatile in price than the larger capitalization stocks included in the S&P 500.

          General. Although the Portfolio does not invest directly in real
estate, it invests primarily in Real Estate Equity Securities and has a policy
of concentration of its investments in the real state industry. Therefore, an
investment in the Portfolio is subject to certain risks associated with the
direct ownership of real estate and with the real estate industry in general.
These risks include, among others: possible declines in the value of real
estate; risks related to general and local economic conditions; possible lack of
availability of mortgage funds; overbuilding; extended vacancies of properties;
increases in competition, property taxes and operating expenses; changes in
zoning laws; costs resulting from the clean-up of, and liability to third
parties for damages resulting from, environmental problems; casualty or
condemnation losses; uninsured damages from floods, earthquakes or other natural
disasters; limitations on and variations in rents; and changes in interest
rates. To the extent that assets underlying the Portfolio's investments are
concentrated geographically, by property type or in certain other respects, the
Portfolio may be subject to certain of the foregoing risks to a greater extent.

          In addition, if the Portfolio receives rental income or income from
the disposition of real property acquired as a result of a default on securities
the Portfolio owns, the receipt of such income may adversely affect the
Portfolio's ability to retain its tax status as a regulated investment company.
Investments by the Portfolio in securities of companies providing mortgage
servicing will be subject to the risks associated with refinancings and their
impact on servicing rights.

ALLIANCEBERNSTEIN INTERNATIONAL VALUE PORTFOLIO
ALLIANCEBERNSTEIN SMALL/MID CAP VALUE PORTFOLIO
ALLIANCEBERNSTEIN VALUE PORTFOLIO

          Currency Swaps. The Portfolios may enter into currency swaps for
hedging purposes. For a general discussion on currency swaps, see "Description
of Investment Practices and other Investment Policies," below.

          Forward Commitments and When-Issued Securities. The Portfolios may
enter into forward commitments for the purchase or sale of securities. Such
transactions may include purchases on a "when-issued" basis or purchases or
sales on a "delayed delivery" basis. A Portfolio's right to receive or deliver a
security under a forward commitment may be sold prior to the settlement date,
but a Portfolio will enter into forward commitments only with the intention of
actually receiving or delivering the securities, as the case may be. For
additional information on forward commitments and when-issued securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Forward Currency Exchange Contracts. Each Portfolio may purchase or
sell forward currency exchange contracts to attempt to minimize the risk to the
Portfolio of adverse changes in the relationship between the U.S. Dollar and
foreign currencies. For a general discussion on forward currency exchange
contracts, see "Description of Investment Practices and Other Investment
Policies," below.

          Convertible Securities. The AllianceBernstein Value Portfolio may
invest in convertible securities of issuers whose common stocks are eligible for
purchase by the Portfolio under its investment policies described in the
Portfolio's prospectus. For a general discussion on convertible securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Options. Each Portfolio may purchase put and call options written by
others and write covered put and call options overlying the types of securities
in which the Portfolio may invest. For a general discussion on put and call
options, see "Description of Investment Practices and Other Investment
Policies," below.

          Options on Securities Indices. Each Portfolio may purchase put and
call options and write covered put and call options on securities indices for
the purpose of hedging against the risk of unfavorable price movements adversely
affecting the value of a Portfolio's securities or securities it intends to
purchase. For a general discussion on options on securities indices, see
"Description of Investment Practices and Other Investment Policies," below.

          Options on Foreign Currencies. The Portfolios may purchase and write
put and call options on foreign currencies for the purpose of protecting against
declines in the U.S. Dollar value of foreign currency-denominated portfolio
securities and against increases in the U.S. Dollar cost of such securities to
be acquired.

          For additional information on options on foreign currencies, see
"Description of Investment Practices and Other Investment Policies," below.

          Futures Contracts and Options on Futures Contracts. The Portfolios may
purchase and sell futures contracts and related options on debt securities and
on indices of debt securities to hedge against anticipated changes in interest
rates that might otherwise have an adverse effect on the value of its assets or
assets it intends to acquire. Each Portfolio may also enter into futures
contracts and related options on foreign currencies in order to limit its
exchange rate risk. For additional information on futures contracts and options
on futures contracts, see "Description of Investment Practices and Other
Investment Policies," below.

          Repurchase Agreements. The Portfolios may enter into repurchase
agreements pertaining to U.S. Government Securities with member banks of the
Federal Reserve System or "primary dealers" (as designated by the Federal
Reserve Bank of New York) in such securities. There is no percentage restriction
on the Portfolios' ability to enter into repurchase agreements. Currently, each
Portfolio intends to enter into repurchase agreements only with the Fund's
custodian and such primary dealers. For a general discussion on repurchase
agreements, see "Description of Investment Practices and Other Investment
Policies," below.

          Rights and Warrants. The Portfolios may invest in rights and warrants
but will do so only if the equity securities themselves are deemed appropriate
by the Adviser for inclusion in the Portfolios' investment portfolio. For
further discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

          Risks of Investments in Securities of Foreign Issuers. For a general
discussion on the risks involved in investments in securities of foreign
issuers, see "Description of Investment Practices and Other Investment
Policies," below.


          The Portfolios may purchase securities of foreign issuers directly, as
well as through depository receipts.

ALLIANCEBERNSTEIN U.S. LARGE CAP BLENDED STYLE PORTFOLIO

          Convertible Securities. The Portfolio may invest in the convertible
securities of companies whose common stocks are eligible for purchase by the
Portfolio under the investment policies described in the Portfolio's
Prospectuses. For a general discussion regarding convertible securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Depositary Receipts. The Portfolio may invest in depositary receipts.
For a general discussion on depositary receipts, see "Description of Investment
Practices and Other Investment Policies," below.

          Forward Commitments. The Portfolio may enter into forward commitments
for the purchase or sale of securities. For a general discussion on forward
commitments, see "Description of Investment Practices and Other Investment
Policies," below.

          Forward Currency Exchange Contracts. The Portfolio may purchase or
sell forward currency exchange contracts to attempt to minimize the risk to the
Portfolio of adverse changes in the relationship between the U.S. Dollar and
foreign currencies. For a general discussion on forward currency exchange
contracts, see "Description of Investment Practices and Other Investment
Policies," below.

          Futures Contracts and Options on Futures Contracts. The Portfolio may
enter into contracts for the purchase or sale for future delivery of
fixed-income securities or foreign currencies, or contracts based on financial
indices, including any index of U.S. Government Securities, securities issued by
foreign government entities, or common stocks ("futures contracts") and may
purchase and write put and call options to buy or sell futures contracts
("options on futures contracts"). For a discussion regarding futures contracts
and options on futures contracts, see "Description of Investment Practices and
Other Investment Policies," below.

          Options on Foreign Currencies. The Portfolio may invest in options on
foreign currencies. For a general discussion on options on foreign currencies,
see "Description of Investment Practices and Other Investment Policies," below.

          Options on Securities Indices. The Portfolio may purchase and sell
exchange-traded index options. For a general discussion of options on securities
indices, see "Description of Investment Practices and Other Investment
Policies," below.

          Puts and Calls. The Portfolio may write and purchase exchange-traded
call options on common stocks, for which it will receive a purchase premium from
the buyer, and exchange-traded put options on common stocks written by others or
combinations thereof. For additional information on put and call options, see
"Description of Investment Practices and Other Investment Policies," below.

          Stock Index Futures. The Portfolio may purchase and sell stock index
futures contracts. The Portfolio will not purchase and sell options on stock
index futures contacts.

          Repurchase Agreements. The Portfolio may enter into repurchase
agreements. For a general discussion on repurchase agreements, see "Description
of Investment Practices and Other Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights or warrants.
For additional information on rights and warrants, see "Description of
Investment Practices and Other Investment Policies," below.

          Short Sales. The Portfolio may make short sales of securities or
maintain a short position. For further information on short sales, see
"Description of Investment Practices and Other Investment Policies," below.

ALLIANCEBERNSTEIN WEALTH APPRECIATION STRATEGY PORTFOLIO
ALLIANCEBERNSTEIN BALANCED WEALTH STRATEGY PORTFOLIO

          The Portfolios may invest in emerging market debt securities.
Investments in emerging markets may be significantly more volatile and returns
may differ substantially from investments in U.S. debt securities generally.
Market changes or other factors affecting emerging markets, including political
instability and unpredictable economic conditions, may have a significant effect
on the value of the Portfolios' investments in emerging market debt securities.

          Stripped Mortgage-Related Securities. Each Portfolio may invest in
stripped mortgage-related securities ("SMRS"). For a general discussion of
mortgage-related securities, including SMRS, see "Description of Investment
Practices and Other Investment Policies - Mortgage-Related Securities," below.

          Repurchase Agreements. Each of the Portfolios may enter into
repurchase agreements. For a general discussion of repurchase agreements, see
"Description of Investment Practices and Other Investment Policies," below.

          Description of Certain Money Market Securities in Which the Portfolios
May Invest. The Portfolios may invest in the following money market securities:
certificates of deposit, bankers' acceptances, bank time deposits, commercial
paper and variable notes. For information on these types of securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Rights and Warrants. The Portfolio may invest in rights and warrants.
For a general discussion on rights and warrants, see "Description of Investment
Practices and Other Investment Policies," below.

          Asset-Backed Securities. The Portfolios may invest in asset-backed
securities. For a general discussion on asset-backed securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Forward Commitments and When-Issued and Delayed Delivery Securities.
Each Portfolio may enter into forward commitments for the purchase of securities
and may purchase securities on a "when-issued" or "delayed delivery" basis. For
additional information on forward commitments and when-issued and delayed
delivery securities, see "Description of Investment Practices and Other
Investment Policies," below.

          Options on Securities. Each Portfolio may write and purchase call and
put options on securities. Each Portfolio intends to write only covered options.
Each of the Portfolios may also write combinations of put and call options on
the same security, known as "straddles," with the same exercise and expiration
date. For additional information regarding options on securities, see
"Description of Investment Practices and Other Investment Policies," below.

          Options on Securities Indices. Each Portfolio may write (sell) covered
call and put options and purchase call and put options on securities indices.
For further information on options on securities indices, see "Description of
Investment Practices and Other Investment Policies," below.

          Futures Contracts. Each Portfolio may enter into interest rate futures
contracts, index futures contracts and foreign currency futures contracts. For a
general discussion of futures contracts, see "Description of Investment
Practices and Other Investment Policies," below.

          Options on Futures Contracts. The Portfolios may purchase options on
futures contracts for hedging purposes instead of purchasing or selling the
underlying futures contracts. For a general discussion on options on futures
contracts, see "Description of Investment Practices and Other Investment
Policies," below.

          Synthetic Foreign Equity Securities. The Portfolios may invest in
synthetic foreign equity securities. For a general discussion on these
transactions, see "Synthetic Foreign Equity Securities," below.

          Forward Currency Exchange Contracts. Each Portfolio may enter into
forward currency exchange contracts to attempt to minimize the risk to the
Portfolio from adverse changes in the relationship between the U.S. Dollar and
foreign currencies. For additional information about forward currency exchange
contracts, see "Description of Investment Practices and Other Investment
Policies," below.

          Options on Foreign Currencies. Each Portfolio may purchase and write
options on foreign currencies for hedging purposes or to increase return. For
additional information on options on foreign currencies, see "Description of
Investment Practices and Other Investment Policies," below.

ALLIANCEBERNSTEIN GLOBAL RESEARCH GROWTH PORTFOLIO

          Options. In seeking to attain long-term growth of capital, the
Portfolio may supplement customary investment practices by writing and
purchasing call options listed on one or more U.S. or foreign securities
exchanges and purchasing put options, including listed put options and put
options on market indices. For additional information on options, see
"Description of Investment Practices and Other Investment Policies," below.

          Options on Securities Indices. The Portfolio may deal only in options
on securities indices that are listed on a stock exchange or dealt in on a
regulated market. However, the Portfolio may purchase or sell OTC options on
financial instruments, if such transactions are more advantageous to the
Portfolio or if quoted options having the required features are not available,
provided that such transactions are made with highly rated counterparties
specializing in these types of transactions. For a general discussion on options
on securities indices, see "Description of Investment Practices and Other
Investment Policies," below.

          Forward Currency Exchange Contracts. The Portfolio may purchase or
sell forward currency exchange contracts to attempt to minimize the risk to the
Portfolio from adverse changes in the relationship between the U.S. Dollar and
other currencies. Generally, the foreign exchange transactions of the Portfolio
will be conducted on a spot, i.e., cash, basis at the spot rate for purchasing
or selling currency prevailing in the foreign exchange market. Under normal
market conditions, this rate differs from the prevailing exchange rate in an
amount generally less than one-tenth of one percent due to the costs of
converting from one currency to another. However, the Portfolio has authority to
deal in forward foreign exchange between currencies of the different countries
in whose securities it will invest as a hedge against possible variations in the
foreign exchange rates between these currencies.

          Forward currency exchange contracts must be either quoted on a stock
exchange or dealt in or on a regulated market. However, the Portfolio may enter
into forward currency exchange contracts with highly rated financial
institutions. For a general discussion on forward currency exchange contracts,
see "Description of Investment Practices and Other Investment Polices," below.

          Foreign Currency Options, Foreign Currency Futures and Options on
Foreign Currency Futures. The Portfolio is also authorized to purchase or sell
listed or unlisted foreign currency options, foreign currency futures and
related options on foreign currency futures as a short or long hedge against
possible variations in foreign exchange rates.

          Contracts on currencies must either be quoted on a stock exchange or
dealt in or on a regulated market except that the Portfolio may enter into
currency forward contracts or swap arrangements with highly rated financial
institutions.

          The Portfolio will segregate in a segregated account with its
custodian bank liquid assets having a market value substantially representing
any subsequent decrease in the market value of such hedged security, less any
initial or variation margin held in the account of its broker.

          Currency Swaps. The Portfolio may enter into currency swaps for
hedging purposes. For a general discussion on currency swaps, see "Description
of Investment Practices and Other Investment Policies," below.

          Depository Receipts. In addition to purchasing corporate securities of
non-U.S. issuers in overseas securities markets, the Portfolio may invest in
depository receipts. For a general discussion on depository receipts, see
"Description of Investment Practices and Other Investment Policies," below.

          Stock Index Futures. The Portfolio may purchase and sell stock index
futures contracts. For a general discussion on stock index futures contracts,
see "Description of Investment Practices and Other Investment Policies," below.

          Futures Contracts and Options on Futures Contracts. The Portfolio may
enter into contracts for the purchase or sale for future delivery of foreign
currencies, or contracts based on financial indices, including any index of U.S.
Government Securities, securities issued by foreign government entities, or
common stocks ("futures contracts") and may purchase and write put and call
options to buy or sell futures contracts ("options on futures contracts").

          Options on interest rate futures must either be listed on an exchange
or dealt in on a regulated market, except that the Portfolio may purchase or
sell OTC options on financial instruments, if such transactions are more
advantageous to the Portfolio or if quoted options having the required features
are not available, provided that such transactions must be made with highly
rated counterparties specializing in these types of transactions.

          For additional information on the use, risks and costs of futures
contracts and options on futures contracts, see "Description of Investment
Practices and Other Investment Policies," below.

          Synthetic Foreign Equity Securities. The Portfolio may invest in
synthetic foreign equity securities. For a general discussion on synthetic
foreign equity securities, see "Description of Investment Practices and Other
Investment Policies," below.

          Interest Rate Transactions (Swaps, Caps and Floors). In order to
attempt to protect the value of the Portfolio's investments from interest rate
fluctuations, the Portfolio may enter into various hedging transactions, such as
interest rate swaps and the purchase or sale of interest rate caps and floors.
For additional information on interest rate transactions, see "Description of
Investment Practices and Other Investment Policies," below.

INVESTMENT RESTRICTIONS

          Fundamental Investment Policies. The following investment
restrictions, which are applicable to each of the Portfolios, supplement those
set forth above and may not be changed without shareholder approval. The term
"shareholder approval" generally means (1) the vote of 67% or more of the shares
of that Portfolio represented at a meeting at which more than 50% of the
outstanding shares are represented or (2) more than 50% of the outstanding
shares of that Portfolio, whichever is less. A Portfolio may not:

          (a) concentrate investments in an industry as concentration may be
defined under the 1940 Act or the rules and regulations thereunder (as such
statute, rules or regulations may be amended from time to time) or by guidance
regarding, interpretations of, or exemptive orders under, the 1940 Act or the
rules or regulations thereunder published by appropriate regulatory
authorities;(1)

- ----------
(1)  For AllianceBernstein Money Market Portfolio, this limitation does not
     apply to investments in securities issued or guaranteed by the United
     States Government, its agencies or instrumentalities or certificates of
     deposit and bankers' acceptances issued or guaranteed by, or
     interest-bearing savings deposits maintained at, banks and savings
     institutions and loan associations (including foreign branches of U.S.
     banks and U.S. branches of foreign banks).

          (b) issue any senior security (as that term is defined in the 1940
Act) or borrow money, except to the extent permitted by the 1940 Act or the
rules and regulations thereunder (as such statute, rules or regulations may be
amended from time to time) or by guidance regarding, or interpretations of, or
exemptive orders under, the 1940 Act or the rules or regulations thereunder
published by appropriate regulatory authorities. For purposes of this
restriction, margin and collateral arrangements, including, for example, with
respect to permitted borrowings, options, futures contracts, options on futures
contracts and other derivatives such as swaps are not deemed to involve the
issuance of a senior security;

          (c) make loans except through (i) the purchase of debt obligations in
accordance with its investment objective and policies; (ii) the lending of
portfolio securities; (iii) the use of repurchase agreements; or (iv) the making
of loans to affiliated funds as permitted under the 1940 Act, the rules and
regulations thereunder (as such statutes, rules or regulations may be amended
from time to time), or by guidance regarding, and interpretations of, or
exemptive orders under, the 1940 Act;

          (d) purchase or sell real estate except that it may dispose of real
estate acquired as a result of the ownership of securities or other instruments.
This restriction does not prohibit a Portfolio from investing in securities or
other instruments backed by real estate or in securities of companies engaged in
the real estate business;

          (e) purchase or sell commodities regulated by the Commodity Futures
Trading Commission under the Commodity Exchange Act or commodities contracts
except for futures contracts and options on futures contracts; or

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

          As a fundamental policy, each Portfolio is diversified (as that term
is defined in the 1940 Act).(2) This means that at least 75% of the Portfolio's
assets consist of:

- ----------
(2)  As a matter of operating policy, pursuant to Rule 2a-7, the
     AllianceBernstein Money Market Portfolio will invest no more than 5% of its
     assets in the first tier (as defined in Rule 2a-7) securities of any one
     issuer, except that under Rule 2a-7, the Portfolio may invest up to 25% of
     its total assets in the first tier securities of a single issuer for a
     period of up to three business days. This policy with respect to
     diversification would give the Portfolio the ability to invest, with
     respect to 25% of its assets, more than 5% of its assets, in any one issuer
     only in the event rule 2a-7 is amended in the future.

          o    Cash or cash items;

          o    Government securities;

          o    Securities of other investment companies; and

          o    Securities of any one issuer that represent not more than 10% of
               the outstanding voting securities of the issuer of the securities
               and not more than 5% of the total assets of the Portfolio.

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

          Each Portfolio may not purchase securities on margin, except (i) as
otherwise provided under rules adopted by the Securities and Exchange Commission
(the "Commission") under the 1940 Act or by guidance regarding the 1940 Act, or
interpretations thereof, and (ii) that the Portfolio may obtain such short-term
credits as are necessary for the clearance of portfolio transactions, and the
Portfolio may make margin payments in connection with futures contracts,
options, forward contracts, swaps, caps, floors, collars and other financial
instruments.



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

                       DESCRIPTION OF INVESTMENT PRACTICES
                          AND OTHER INVESTMENT POLICIES

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

          This section describes the Portfolios' investment practices and
associated risks, as well as certain other investment policies. Unless otherwise
noted, a Portfolio's use of any of these practices is specified in "Investment
Polices and Restrictions," above.

Certificates Of Deposit, Bankers' Acceptances and Bank Time Deposits
- --------------------------------------------------------------------

          Certificates of deposit are receipts issued by a bank in exchange for
the deposit of funds. The issuer agrees to pay the amount deposited plus
interest to the bearer of the receipt on the date specified on the certificate.
The certificate usually can be traded in the secondary market prior to maturity.

          Bankers' acceptances typically arise from short-term credit
arrangements designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then accepted by another bank that, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most maturities are six months or less.

          Bank time deposits are funds kept on deposit with a bank for a stated
period of time in an interest bearing account. At present, bank time deposits
maturing in more than seven days are not considered by the Adviser to be readily
marketable.

Commercial Paper
- ----------------

          Commercial paper consists of short-term (usually from 1 to 270 days)
unsecured promissory notes issued by entities in order to finance their current
operations.

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

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

          When the market price of the common stock underlying a convertible
security increases, the price of the convertible security increasingly reflects
the value of the underlying common stock and may rise accordingly. As the market
price of the underlying common stock declines, the convertible security tends to
trade increasingly on a yield basis, and thus may not depreciate to the same
extent as the underlying common stock. Convertible securities rank senior to
common stocks in an issuer's capital structure. They are consequently of higher
quality and entail less risk than the issuer's common stock, although the extent
to which such risk is reduced depends in large measure upon the degree to which
the convertible security sells above its value as a fixed-income security.
Convertible debt securities that are rated Baa or lower by Moody's or BBB or
lower by S&P or Fitch and comparable unrated securities as determined by the
Adviser may share some or all of the risks of non-convertible debt securities
with those ratings.

Depositary Receipts
- -------------------

          In addition to purchasing corporate securities of non-U.S. issuers in
overseas securities markets, the Portfolios may invest in American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs"), Global Depositary
Receipts ("GDRs") or other securities representing securities of companies based
in countries other than the United States. Transactions in these securities may
not necessarily be settled in the same currency as transactions in the
securities into which they represent. Generally, ADRs, in registered form, are
designed for use in the U.S. securities markets, EDRs, in bearer form, are
designed for use in European securities markets and GDRs, in bearer form, are
designed for use in two or more securities markets, such as Europe and Asia.

          ADRs are traded in the United States on exchanges or over-the-counter,
are issued by domestic banks or trust companies and have readily available
market quotations. ADRs do not lessen the foreign exchange risk inherent in
investing in the securities of foreign issuers. However, by investing in ADRs
rather than directly in stock of foreign issuers, the Portfolios can avoid
currency risks which might occur during the settlement period for either
purchases or sales.

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

          Derivatives are financial contracts whose value depends on, or is
derived from, the value of an underlying asset, reference rate or index. Each
Portfolio may, but is not required to, use derivatives for risk management
purposes or as part of its investment practices. These assets, rates, and
indices may include bonds, stocks, mortgages, commodities, interest rates,
currency exchange rates, bond indices and stock indices. Derivatives may be (i)
standardized, exchange-traded contracts or (ii) customized, privately-negotiated
contracts. Exchange-traded derivatives tend to be more liquid and subject to
less credit risk than those that are privately negotiated. A Portfolio may use
derivatives to earn income and enhance returns, to hedge or adjust the risk
profile of a portfolio and either to replace more traditional direct investments
or to obtain exposure to otherwise inaccessible markets.

          The Portfolios are required, under current interpretations of the SEC,
to establish and maintain segregated assets, which must consist of liquid
securities and be marked to market daily, to "cover" its obligations under
derivatives transactions. If the segregation of assets reaches certain levels,
the Portfolios may impair their ability to meet current obligations, to honor
requests for redemption and to manage their investment portfolios consistent
with their investment objectives.

          The four principal types of derivatives, which include options,
futures, forwards and swaps, as well as the methods in which they may be used by
a Portfolio, are described below. From the four principal types of derivative
instruments, virtually any type of derivative transaction can be created.

          Forward Contracts. A forward contract is a customized, privately
negotiated agreement for one party to buy, and the other party to sell, a
specific quantity of an underlying commodity or other tangible asset for an
agreed-upon price at a future date. A forward contract generally is settled by
physical delivery of the commodity or other tangible asset underlying the
forward contract to an agreed upon location at a future date (rather than
settled by cash) or will be rolled forward into a new forward contract.
Non-deliverable forwards ("NDFs") specify a cash payment upon maturity. NDFs are
normally used when the market for physical settlement of the currency is
underdeveloped, heavily regulated or highly taxed.


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

          Options. An option, which may be standardized and exchange-traded, or
customized and privately negotiated, is an agreement that, for a premium payment
or fee, gives the option holder (the buyer) the right but not the obligation to
buy (a "call") or sell (a "put") the underlying asset (or settle for cash an
amount based on an underlying asset, rate or index) at a specified price (the
exercise price) during a period of time or on a specified date. Likewise, when
an option is exercised the writer of the option is obligated to sell (in the
case of a call option) or to purchase (in the case of a put option) the
underlying asset (or settle for cash an amount based on an underlying asset,
rate or index). Investments in options are considered speculative. A Portfolio
may lose the premium paid for them if the price of the underlying security or
other asset decreased or remained the same (in the case of a call option) or
increased or remained the same (in the case of a put option). If a put or call
option purchased by a Portfolio were permitted to expire without being sold or
exercised, its premium would represent a loss to the Portfolio.

          Swaps. A swap is a customized, privately negotiated agreement that
obligates two parties to exchange a series of cash flows at specified intervals
(payment dates) based upon or calculated by reference to changes in specified
prices or rates (interest rates in the case of interest rate swaps, currency
exchange rates in the case of currency swaps) for a specified amount of an
underlying asset (the "notional" principal amount). The payment flows are netted
against each other, with the difference being paid by one party to the other.
Except for currency swaps, the notional principal amount is used solely to
calculate the payment streams but is not exchanged. With respect to currency
swaps, actual principal amounts of currencies may be exchanged by the
counterparties at the initiation, and again upon the termination, of the
transaction. Swap transactions also include credit default swaps in which one
party pays a periodic fee, typically expressed in basis points on a notational
amount, in return for a contingent payment by the counterparty following a
credit event in a specific debt obligation or obligations. A credit event is
typically a default and the contingent payment may be a cash settlement or by
physical delivery of the reference obligation in return for payment of its face
amount.

          Risks of Derivatives. Investment techniques employing such derivatives
involve risks different from, and, in certain cases, greater than, the risks
presented by more traditional investments. Following is a general discussion of
important risk factors and issues concerning the use of derivatives that
investors should understand in considering the proposed amendment of a
Portfolio's investment policies.

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

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

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

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

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

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

          Use of Options, Futures, Forwards and Swaps by the Portfolios.
          -------------------------------------------------------------

          -- Forward Currency Exchange Contracts. A forward currency exchange
contract is an obligation by one party to buy, and the other party to sell, a
specific amount of a currency for an agreed upon price at a future date. Forward
currency exchange contracts are customized, privately negotiated agreements
designed to satisfy the objectives of each party. A forward currency exchange
contract usually results in the delivery of the underlying asset upon maturity
of the contract in return for the agreed upon payment. NDFs specify a cash
payment upon maturity. NDFs are normally used when the market for physical
settlement of the currency is underdeveloped, heavily regulated or highly taxed.

          A Portfolio will enter into forward currency exchange contracts to
attempt to minimize the risk to the Portfolio from adverse changes in the
relationship between the U.S. Dollar and other currencies. A Portfolio may
purchase or sell forward currency exchange contracts for hedging purposes
similar to those described below in connection with its transactions in foreign
currency futures contracts. A Portfolio may also purchase or sell forward
currency exchange contracts for non-hedging purposes as direct investments in
foreign currencies, as described below under "Currency Transactions".

          If a hedging transaction in forward currency exchange contracts is
successful, the decline in the value of portfolio securities or the increase in
the cost of securities to be acquired may be offset, at least in part, by
profits on the forward currency exchange contract. Nevertheless, by entering
into such forward currency exchange contracts, a Portfolio may be required to
forego all or a portion of the benefits which otherwise could have been obtained
from favorable movements in exchange rates.

          A Portfolio may also use forward currency exchange contracts to seek
to increase total return when the Adviser anticipates that a foreign currency
will appreciate or depreciate in value but securities denominated in that
currency are not held by the Portfolio and do not present attractive investment
opportunities. For example, a Portfolio may enter into a foreign currency
exchange contract to purchase a currency if the Adviser expects the currency to
increase in value. The Portfolio would recognize a gain if the market value of
the currency is more than the contract value of the currency at the time of
settlement of the contract. Similarly, a Portfolio may enter into a foreign
currency exchange contract to sell a currency if the Adviser expects the
currency to decrease in value. The Portfolio would recognize a gain if the
market value of the currency is less than the contract value of the currency at
the time of settlement of the contract.

          The cost of engaging in forward currency exchange contracts varies
with such factors as the currencies involved, the length of the contract period
and the market conditions then prevailing. Since transactions in foreign
currencies are usually conducted on a principal basis, no fees or commissions
are involved. A Portfolio will segregate and mark to market liquid assets in an
amount at least equal to the Portfolio's obligations under any forward currency
exchange contracts.

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

          A Portfolio may write a put or call option in return for a premium,
which is retained by the Portfolio whether or not the option is exercised. A
Portfolio will not write uncovered call or put options on securities. A call
option written by a Portfolio is "covered" if the Portfolio owns the underlying
security, has an absolute and immediate right to acquire that security upon
conversion or exchange of another security it holds, or holds a call option on
the underlying security with an exercise price equal to or less than of the call
option it has written. A put option written by a Portfolio is covered if the
Portfolio holds a put option on the underlying securities with an exercise price
equal to or greater than of the put option it has written.

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

          By writing a call option, a Portfolio limits its opportunity to profit
from any increase in the market value of the underlying security above the
exercise price of the option. By writing a put option, a Portfolio assumes the
risk that it may be required to purchase the underlying security for an exercise
price above its then current market value, resulting in a capital loss unless
the security subsequently appreciates in value. Where options are written for
hedging purposes, such transactions constitute only a partial hedge against
declines in the value of portfolio securities or against increases in the value
of securities to be acquired, up to the amount of the premium. A Portfolio may
purchase put options to hedge against a decline in the value of portfolio
securities. If such decline occurs, the put options will permit the Portfolio to
sell the securities at the exercise price or to close out the options at a
profit. By using put options in this way, a Portfolio will reduce any profit it
might otherwise have realized on the underlying security by the amount of the
premium paid for the put option and by transaction costs.

          A security on which an option has been written will be held in escrow
by a Portfolio's custodian until the option expires, is exercised, or a closing
purchase transaction is made. By writing a put option, the Portfolio assumes the
risk that it may be required to purchase the underlying security for an exercise
price above its then current market value, resulting in a capital loss unless
the security subsequently appreciates in value. Where options are written for
hedging purposes, such transactions constitute only a partial hedge against
declines in the value of portfolio securities or against increases in the value
of securities to be acquired, up to the amount of the premium. A Portfolio may
purchase put options to hedge against a decline in the value of portfolio
securities. If such decline occurs, the put options will permit the Portfolio to
sell the securities at the exercise price or to close out the options at a
profit. By using put options in this way, the Portfolio will reduce any profit
it might otherwise have realized on the underlying security by the amount of the
premium paid for the put option and by transaction costs.

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

          A Portfolio may purchase or write options on securities of the types
in which it is permitted to invest in privately negotiated (i.e.,
over-the-counter) transactions. A Portfolio will effect such transactions only
with investment dealers and other financial institutions (such as commercial
banks or savings and loan institutions) deemed creditworthy by the Adviser, and
the Adviser has adopted procedures for monitoring the creditworthiness of such
entities.

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

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

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

          -- Options on Foreign Currencies. A Portfolio may purchase and write
options on foreign currencies for hedging purposes. For example, a decline in
the dollar value of a foreign currency in which portfolio securities are
denominated will reduce the dollar value of such securities, even if their value
in the foreign currency remains constant. In order to protect against such
diminutions in the value of portfolio securities, a Portfolio may purchase put
options on the foreign currency. If the value of the currency does decline, the
Portfolio will have the right to sell such currency for a fixed amount in
dollars and could thereby offset, in whole or in part, the adverse effect on its
portfolio which otherwise would have resulted.

          Conversely, where a rise in the dollar value of a currency in which
securities to be acquired are denominated is projected, thereby increasing the
cost of such securities, a Portfolio may purchase call options thereon. The
purchase of such options could offset, at least partially, the effects of the
adverse movements in exchange rates. As in the case of other types of options,
however, the benefit to a Portfolio from purchases of foreign currency options
will be reduced by the amount of the premium and related transaction costs. In
addition, where currency exchange rates do not move in the direction or to the
extent anticipated, a Portfolio could sustain losses on transactions in foreign
currency options which would require it to forego a portion or all of the
benefits of advantageous changes in such rates.

          A Portfolio may write options on foreign currencies for hedging
purposes or to increase return. For example, where a Portfolio anticipates a
decline in the dollar value of foreign-denominated securities due to adverse
fluctuations in exchange rates it could, instead of purchasing a put option,
write a call option on the relevant currency. If the expected decline occurs,
the option will most likely not be exercised, and the diminution in value of
portfolio securities could be offset by the amount of the premium received.

          Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the dollar cost of securities to be acquired, a
Portfolio could write a put option on the relevant currency, which, if rates
move in the manner projected, will expire unexercised and allow the Portfolio to
hedge such increased cost up to the amount of the premium. As in the case of
other types of options, however, the writing of a foreign currency option will
constitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may be
exercised and a Portfolio will be required to purchase or sell the underlying
currency at a loss which may not be offset by the amount of the premium. Through
the writing of options on foreign currencies, a Portfolio also may be required
to forego all or a portion of the benefits which might otherwise have been
obtained from favorable movements in exchange rates.

          In addition to using options for the hedging purposes described above,
a Portfolio may also invest in options of foreign currencies for non-hedging
purposes as a means of making direct investments in foreign currencies. A
Portfolio may use options on currency to seek to increase total return when the
Adviser anticipates that a foreign currency will appreciate or depreciate in
value but securities denominated in that security are not held by the Portfolio
and do not present attractive investment opportunities. For example, a Portfolio
may purchase call options in anticipation of an increase in the market value of
a currency. The Portfolio would ordinarily realize a gain if, during the option
period, the value of such currency exceeded the sum of the exercise price, the
premium paid and transactions costs. Otherwise, the Portfolio would realize no
gain or a loss on the purchase of the call option. Put options may be purchased
by a Portfolio for the purpose of benefiting from a decline in the value of a
currency that the Portfolio does not own. The Portfolio would normally realize a
gain if, during the option period, the value of the underlying currency
decreased below the exercise price sufficiently to more than cover the premium
and transaction costs. Otherwise, the Portfolio would realize no gain or loss on
the purchase of the put option. For additional information on the use of options
on foreign currencies for non-hedging purposes, see "Currency Transactions"
below.

          Special Risks Associated with Options on Currency. An exchange traded
options position may be closed out only on an options exchange that provides a
secondary marker for an option of the same series. Although a Portfolio will
generally purchase or sell options for which there appears to be an active
secondary market, there is no assurance that a liquid secondary market on an
exchange will exist for any particular option, or at any particular time. For
some options, no secondary market on an exchange may exist. In such event, it
might not be possible to effect closing transactions in particular options, with
the result that a Portfolio would have to exercise its options in order to
realize any profit and would incur transaction costs on the sale of the
underlying currency.

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

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

          A Portfolio may purchase and sell foreign currency futures contracts
for hedging purposes in order to protect against fluctuations in currency
exchange rates. Such fluctuations could reduce the dollar value of portfolio
securities denominated in foreign currencies, or increase the cost of
foreign-denominated securities to be acquired, even if the value of such
securities in the currencies in which they are denominated remains constant. A
Portfolio may sell futures contracts on a foreign currency, for example, when it
holds securities denominated in such currency and it anticipates a decline in
the value of such currency relative to the dollar. If such a decline were to
occur, the resulting adverse effect on the value of foreign-denominated
securities may be offset, in whole or in part, by gains on the futures
contracts. However, if the value of the foreign currency increases relative to
the dollar, a Portfolio's loss on the foreign currency futures contract may or
may not be offset by an increase in the value of the securities because a
decline in the price of the security stated in terms of the foreign currency may
be greater than the increase in value as a result of the change in exchange
rates.

          Conversely, a Portfolio could protect against a rise in the dollar
cost of foreign-denominated securities to be acquired by purchasing futures
contracts on the relevant currency, which could offset, in whole or in part, the
increased cost of such securities resulting from a rise in the dollar value of
the underlying currencies. When a Portfolio purchases futures contracts under
such circumstances, however, and the price in dollars of securities to be
acquired instead declines as a result of appreciation of the dollar, the
Portfolio will sustain losses on its futures position which could reduce or
eliminate the benefits of the reduced cost of portfolio securities to be
acquired.

          A Portfolio may also engage in currency "cross hedging" when, in the
opinion of the Adviser, the historical relationship among foreign currencies
suggests that a Portfolio may achieve protection against fluctuations in
currency exchange rates similar to that described above at a reduced cost
through the use of a futures contract relating to a currency other than the U.S.
Dollar or the currency in which the foreign security is denominated. Such "cross
hedging" is subject to the same risks as those described above with respect to
an unanticipated increase or decline in the value of the subject currency
relative to the U.S. Dollar.

          A Portfolio may also use foreign currency futures contracts and
options on such contracts for non-hedging purposes. Similar to options on
currencies described above, a Portfolio may use foreign currency futures
contracts and options on such contracts to seek to increase total return when
the Adviser anticipates that a foreign currency will appreciate or depreciate in
value but securities denominated in that security are not held by the Underlying
Portfolio and do not present attractive investment opportunities. The risks
associated with foreign currency futures contracts and options on futures are
similar to those associated with options on foreign currencies, as described
above. For additional information on the use of options on foreign currencies
for non-hedging purposes, see "Currency Transactions" below.

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

          Each Portfolio has claimed an exclusion from the definition of the
term "commodity pool operator" under the Commodity Exchange Act and therefore is
not subject to registration or regulation as a pool operator under that Act.

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

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

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

          -- Forward Currency Exchange Contracts. A forward currency exchange
contract is an obligation by one party to buy, and the other party to sell, a
specific amount of a currency for an agreed upon price at a future date. Forward
currency exchange contracts are customized, privately negotiated agreements
designed to satisfy the objectives of each party. A forward currency exchange
contract usually results in the delivery of the underlying asset upon maturity
of the contract in return for the agreed upon payment. NDFs specify a cash
payment upon maturity. NDFs are normally used when the market for physical
settlement of the currency is underdeveloped, heavily regulated or highly taxed.

          A Portfolio may enter into forward currency exchange contracts to
attempt to minimize the risk to a Portfolio from adverse changes in the
relationship between the U.S. Dollar and foreign currencies. A Portfolio intends
to enter into forward currency exchange contracts for hedging purposes similar
to those described above in connection with its transactions in foreign currency
futures contracts. In particular, a forward currency exchange contract to sell a
currency may be entered into in lieu of the sale of a foreign currency futures
contract where a Portfolio seeks to protect against an anticipated increase in
the exchange rate for a specific currency which could reduce the dollar value of
portfolio securities denominated in such currency. Conversely, a Portfolio may
enter into a forward currency exchange contract to purchase a given currency to
protect against a projected increase in the dollar value of securities
denominated in such currency which the Portfolio intends to acquire. A Portfolio
also may enter into a forward currency exchange contract in order to assure
itself of a predetermined exchange rate in connection with a security
denominated in a foreign currency. A Portfolio may engage in currency "cross
hedging" when, in the opinion of the Adviser, the historical relationship among
foreign currencies suggests that the Portfolio may achieve the same protection
for a foreign security at a reduced cost through the use of a forward currency
exchange contract relating to a currency other than the U.S. Dollar or the
foreign currency in which the security is denominated.

          If a hedging transaction in forward currency exchange contracts is
successful, the decline in the value of portfolio securities or the increase in
the cost of securities to be acquired may be offset, at least in part, by
profits on the forward currency exchange contract. Nevertheless, by entering
into such forward currency exchange contracts, a Portfolio may be required to
forego all or a portion of the benefits which otherwise could have been obtained
from favorable movements in exchange rates.

          -- Credit Default Swap Agreements. The "buyer" in a credit default
swap contract is obligated to pay the "seller" a periodic stream of payments
over the term of the contract in return for a contingent payment upon the
occurrence of a credit event with respect to an underlying reference obligation.
Generally, a credit event means bankruptcy, failure to pay, obligation
acceleration or modified restructuring. A Portfolio may be either the buyer or
seller in the transaction. As a seller, a Portfolio receives a fixed rate of
income throughout the term of the contract, which typically is between one month
and five years, provided that no credit event occurs. If a credit event occurs,
a Portfolio typically must pay the contingent payment to the buyer, which is
typically the "par value" (full notional value) of the reference obligation. The
contingent payment may be a cash settlement or by physical delivery of the
reference obligation in return for payment of the face amount of the obligation.
If a Portfolio is a buyer and no credit event occurs, the Portfolio will lose
its periodic stream of payments over the term of the contract. However, if a
credit event occurs, the buyer typically receives full notional value for a
reference obligation that may have little or no value.

          Credit default swaps may involve greater risks than if a Portfolio had
invested in the reference obligation directly. Credit default swaps are subject
to general market risk, liquidity risk and credit risk. As noted above, if a
Portfolio is a buyer and no credit event occurs, it will lose its periodic
stream of payments over the term of the contract. In addition, the value of the
reference obligation received by a Portfolio as a seller if a credit event
occurs, coupled with the periodic payments previously received, may be less than
the full notional value it pays to the buyer, resulting in a loss of value to
the Portfolio.

          -- Currency Swaps. A Portfolio may enter into currency swaps for
hedging purposes to protect against adverse changes in exchange rates between
the U.S. Dollar and other currencies or for non-hedging purposes as means of
making direct investments in foreign currencies, as described below under
"Currency Transactions". Currency swaps involve the individually negotiated
exchange by a Portfolio with another party of a series of payments in specified
currencies. Actual principal amounts of currencies may be exchanged by the
counterparties at the initiation, and again upon the termination of the
transaction. Since currency swaps are individually negotiated, a Portfolio
expects to achieve an acceptable degree of correlation between its portfolio
investments and its currency swaps positions. Therefore, the entire principal
value of a currency swap is subject to the risk that the other party to the swap
will default on its contractual delivery obligations. The net amount of the
excess, if any, of a Portfolio's obligations over its entitlements with respect
to each currency swap will be accrued on a daily basis and an amount of liquid
assets having an aggregate NAV at least equal to the accrued excess will be
maintained in a segregated account by the Portfolio's custodian. A Portfolio
will not enter into any currency swap unless the credit quality of the unsecured
senior debt or the claims-paying ability of the other party thereto is rated in
the highest rating category of at least one nationally recognized rating
organization at the time of entering into the transaction. If there is a default
by the other party to such a transaction, a Portfolio will have contractual
remedies pursuant to the agreements related to the transactions.

          -- Swaps: Interest Rate Transactions. A Portfolio may enter into
interest rate swap, cap or floor transactions, which may include preserving a
return or spread on a particular investment or portion of its portfolio or
protecting against an increase in the price of securities the Portfolio
anticipates purchasing at a later date. The Adviser does not intend to use these
transactions in a speculative manner. A Portfolio also may invest in interest
rate transaction futures.

          Interest Rate Swaps. Interest rate swaps involve the exchange by a
Portfolio with another party of their respective commitments to pay or receive
interest (e.g., an exchange of floating rate payments for fixed rate payments)
computed based on a contractually-based principal (or "notional") amount.
Interest rate swaps are entered into on a net basis (i.e., the two payment
streams are netted out, with a Portfolio receiving or paying, as the case may
be, only the net amount of the two payments).

          Interest Rate Caps and Floors. Interest rate caps and floors are
similar to options in that the purchase of an interest rate cap or floor
entitles the purchaser, to the extent that a specified index exceeds (in the
case of a cap) or falls below (in the case of a floor) a predetermined interest
rate, to receive payments of interest on a notional amount from the party
selling the interest rate cap or floor.

          The swap market has grown substantially in recent years, with a large
number of banks and investment banking firms acting both as principals and as
agents utilizing standardized swap documentation. As a result, the swap market
has become well established and relatively liquid. Caps and floors are less
liquid than swaps. These transactions do not involve the delivery of securities
or other underlying assets or principal. Accordingly, unless there is a
counterparty default, the risk of loss to a Portfolio from interest rate
transactions is limited to the net amount of interest payments that the
Portfolio is contractually obligated to make.

          -- Synthetic Foreign Equity Securities. A Portfolio may invest in a
form of synthetic foreign equity securities, referred to as international
warrants. International warrants are financial instruments issued by banks or
other financial institutions, which may or may not be traded on a foreign
exchange. International warrants are a form of derivative security that may give
holders the right to buy or sell an underlying security or a basket of
securities representing an index from or to the issuer for a particular price or
may entitle holders to receive a cash payment relating to the value of the
underlying security or index. International warrants are similar to options in
that they are exercisable by the holder for an underlying security or the value
of that security, but are generally exercisable over a longer term than typical
options. These types of instruments may be American style exercise, which means
that they can be exercised at any time on or before the expiration date of the
international warrant, or European style exercise, which means that they may be
exercised only on the expiration date. International warrants have an exercise
price, which is fixed when the warrants are issued.

          A Portfolio normally will invest in covered warrants, which entitle
the holder to purchase from the issuer common stock of an international company
or receive a cash payment (generally in U.S. Dollars). The cash payment is
calculated according to a predetermined formula. A Portfolio may invest in low
exercise price warrants, which are warrants with an exercise price that is very
low relative to the market price of the underlying instrument at the time of
issue (e.g., one cent or less). The buyer of a low exercise price warrant
effectively pays the full value of the underlying common stock at the outset. In
the case of any exercise of warrants, there may be a time delay between the time
a holder of warrants gives instructions to exercise and the time the price of
the common stock relating to exercise or the settlement date is determined,
during which time the price of the underlying security could change
significantly. In addition, the exercise or settlement date of the warrants may
be affected by certain market disruption events, such as difficulties relating
to the exchange of a local currency into U.S. Dollars, the imposition of capital
controls by a local jurisdiction or changes in the laws relating to foreign
investments. These events could lead to a change in the exercise date or
settlement currency of the warrants, or postponement of the settlement date. In
some cases, if the market disruption events continue for a certain period of
time, the warrants may become worthless resulting in a total loss of the
purchase price of the warrants.

          A Portfolio will acquire covered warrants issued by entities deemed to
be creditworthy by the Adviser, who will monitor the creditworthiness of the
issuers on an on-going basis. Investments in these instruments involve the risk
that the issuer of the instrument may default on its obligation to deliver the
underlying security or cash in lieu thereof. These instruments may also be
subject to liquidity risk because there may be a limited secondary market for
trading the warrants. They are also subject, like other investments in
securities of foreign issuers, to foreign risk and currency risk.

          International warrants also include equity warrants, index warrants,
and interest rate warrants. Equity warrants are generally issued in conjunction
with an issue of bonds or shares, although they also may be issued as part of a
rights issue or scrip issue. When issued with bonds or shares, they usually
trade separately from the bonds or shares after issuance. Most warrants trade in
the same currency as the underlying stock (domestic warrants), but also may be
traded in different currency (euro-warrants). Equity warrants are traded on a
number of foreign exchanges and in over-the-counter markets. Index warrants and
interest rate warrants are rights created by an issuer, typically a financial
institution, entitling the holder to purchase, in the case of a call, or sell,
in the case of a put, respectively, an equity index or a specific bond issue or
interest rate index at a certain level over a fixed period of time. Index
warrants transactions settle in cash, while interest rate warrants can typically
be exercised in the underlying instrument or settle in cash.

          A Portfolio also may invest in long-term options of, or relating to,
international issuers. Long-term options operate much like covered warrants.
Like covered warrants, long term-options are call options created by an issuer,
typically a financial institution, entitling the holder to purchase from the
issuer outstanding securities of another issuer. Long-term options have an
initial period of one year or more, but generally have terms between three and
five years. Unlike U.S. options, long-term European options do not settle
through a clearing corporation that guarantees the performance of the
counterparty. Instead, they are traded on an exchange and subject to the
exchange's trading regulations.

          -- Currency Transactions. A Portfolio may invest in non-U.S. Dollar
denominated securities on a currency hedged or un-hedged basis. The Adviser will
actively manage a Portfolio's currency exposures and may seek investment
opportunities by taking long or short positions in currencies through the use of
currency-related derivatives, including forward currency exchange contracts,
futures and options on futures, swaps and options. The Adviser may enter into
transactions for investment opportunities when it anticipates that a foreign
currency will appreciate or depreciate in value but securities denominated in
that currency are not held by the Portfolio and do not present attractive
investment opportunities. Such transactions may also be used when the Adviser
believes that it may be more efficient than a direct investment in a foreign
currency-denominated security. A Portfolio may also conduct currency exchange
contracts on a spot basis (i.e., for cash at the spot rate prevailing in the
currency exchange market for buying or selling securities).

Investments in Lower-Rated Fixed-Income Securities
- --------------------------------------------------

          Debt securities rated below investment grade, i.e., Ba3 and lower by
Moody's or BB- and lower by S&P, and Fitch (lower-rated securities), or, if not
rated, determined by the Adviser to be of equivalent quality, are subject to
greater risk of loss of principal and interest than higher-rated securities.
They are also generally considered to be subject to greater market risk than
higher-rated securities and the capacity of issuers of lower-rated securities to
pay interest and repay principal is more likely to weaken than is that of
issuers of higher-rated securities in times of deteriorating economic conditions
or rising interest rates. In addition, lower-rated securities may be more
susceptible to real or perceived adverse economic conditions than investment
grade securities, although the market values of securities rated below
investment grade and comparable unrated securities tend to react less to
fluctuations in interest rate levels than do those of higher-rated securities.
Debt securities rated Ba (including Ba1, Ba2 and Ba3) by Moody's or BB
(including BB+ and BB-) by S&P and Fitch are judged to have speculative elements
or to be predominantly speculative with respect to the issuer's ability to pay
interest and repay principal. Debt securities rated B (including B1, B2, B3, B+
and B-) by Moody's, S&P, and Fitch are judged to have highly speculative
characteristics or to be predominantly speculative. Such securities may have
small assurance of interest and principal payments. Securities rated Baa
(including Baa1, Baa2 and Baa3) by Moody's are also judged to have speculative
characteristics.

          The market for lower-rated securities may be thinner and less active
than that for higher-rated securities, which can adversely affect the prices at
which these securities can be sold. Adverse publicity and investor perceptions
about lower-rated securities, whether or not based on fundamental analysis, may
tend to decrease the market value and liquidity of such lower-rated securities.
To the extent that there is no established secondary market for lower-rated
securities, the Portfolios may experience difficulty in valuing such securities
and, in turn, a Portfolio's assets.

          The Adviser will try to reduce the risk inherent in investment in
lower-rated securities through credit analysis, diversification and attention to
current developments and trends in interest rates and economic and political
conditions. However, there can be no assurance that losses will not occur. Since
the risk of default is higher for lower-rated securities, the Adviser's research
and credit analysis are a correspondingly more important aspect of its program
for managing the Portfolios' securities than would be the case if a Portfolio
did not invest in lower-rated securities. In considering investments for the
Portfolios, the Adviser will attempt to identify those high-risk, high-yield
securities whose financial condition is adequate to meet future obligations, has
improved or is expected to improve in the future. The Adviser's analysis focuses
on relative values based on such factors as interest or dividend coverage, asset
coverage earnings prospects and the experience and managerial strength of the
issuer.

          Non-rated securities will also be considered for investment by the
Portfolios when the Adviser believes that the financial condition of the issuers
of such securities, or the protection afforded by the terms of the securities
themselves, limits the risk to a Portfolio to a degree comparable to that of
rated securities which are consistent with the Portfolios' objectives and
policies.

          In seeking to achieve the Portfolios' investment objectives, there
will be times, such as during periods of rising interest rates, when
depreciation and realization of capital losses on securities in a Portfolio's
portfolio will be unavoidable. Moreover, medium-and lower-rated securities and
non-rated securities of comparable quality may be subject to wider fluctuations
in yield and market values than higher-rated securities under certain market
conditions. Such fluctuations after a security is acquired do not affect the
cash income received from that security but are reflected in the NAV of a
Portfolio.

          Certain lower-rated securities in which the Portfolios may invest may
contain call or buy-back features that permit the issuers thereof to call or
repurchase such securities. Such securities may present risks based on
prepayment expectations. If an issuer exercises such a provision, a Portfolio
may have to replace the called security with a lower yielding security,
resulting in a decreased rate of return to that Portfolio.

          Ratings of fixed-income securities by Moody's, S&P, Fitch, Dominion
Bond Rating Service Ltd. and A.M. Best Company are a generally accepted
barometer of credit risk. They are, however, subject to certain limitations from
an investor's standpoint. The rating of a security is heavily weighted by past
developments and does not necessarily reflect probable future conditions. There
is frequently a lag between the time a rating is assigned and the time it is
updated. In addition, there may be varying degrees of difference in the credit
risk of securities within each rating category. See Appendix A to the
Portfolios' Prospectuses for a description of Moody's, S&P's, Fitch's and
Dominion Bond Rating Service's bond and commercial paper ratings.

          The Adviser generally uses ratings issued by S&P, Moody's, Fitch and
Dominion Bond Rating Service Ltd. Some securities are rated by more than one of
these ratings agencies, and the ratings assigned to the security by the rating
agencies may differ. In such an event and for purposes of determining compliance
with restrictions on investments for the Portfolios, if a security is rated by
two or more rating agencies, the Adviser will deem the security to be rated at
the highest rating. For example, if a security is rated by Moody's and S&P only,
with Moody's rating the security as Ba and S&P as BBB, the Adviser will deem the
security to be rated as the equivalent of BBB (i.e., Baa by Moody's and BBB by
S&P). Or, if a security is rated by Moody's, S&P and Fitch, with Moody's rating
the security as Ba1, S&P as BBB and Fitch as BB, the Adviser will deem the
security to be rated as the equivalent of BBB (i.e., Ba1 by Moody's, BBB by S&P
and BBB by Fitch).

          Unless otherwise indicated, references to securities ratings by one
rating agency in this SAI shall include the equivalent rating by another rating
agency.

Securities of Foreign (Non-U.S.) Issuers
- ----------------------------------------

          The securities markets of many foreign countries are relatively small,
with the majority of market capitalization and trading volume concentrated in a
limited number of companies representing a small number of industries.
Consequently, a Portfolio whose investments include securities of non-U.S.
issuers may experience greater price volatility and significantly lower
liquidity than a portfolio invested solely in equity securities of U.S.
companies. These markets may be subject to greater influence by adverse events
generally affecting the market, and by large investors trading significant
blocks of securities, than is usual in the United States. Securities settlements
may in some instances be subject to delays and related administrative
uncertainties.

          Certain foreign countries require governmental approval prior to
investments by foreign persons or limit investment by foreign persons to only a
specified percentage of an issuer's outstanding securities or a specific class
of securities that may have less advantageous terms (including price) than
securities of the company available for purchase by nationals. These
restrictions or controls may at times limit or preclude investment in certain
securities and may increase the costs and expenses of a Portfolio. In addition,
the repatriation of investment income, capital, or the proceeds of sales of
securities from certain countries is controlled under regulations, including in
some cases the need for certain advance government notification or authority. If
a deterioration occurs in a country's balance of payments, the country could
impose temporary or indefinite restrictions on foreign capital remittances.

          A Portfolio also could be adversely affected by delays in, or a
refusal to grant, any required governmental approval for repatriation, as well
as by the application of other restrictions on investment. Investing in local
markets may require a Portfolio to adopt special procedures that may involve
additional costs to a Portfolio. These factors may affect the liquidity of a
Portfolio's investments in any country and the Adviser will monitor the effect
of any such factor or factors on a Portfolio's investments. Furthermore,
transaction costs including brokerage commissions for transactions both on and
off the securities exchanges in many foreign countries are generally higher than
in the United States.

          Issuers of securities in foreign jurisdictions are generally not
subject to the same degree of regulation as are U.S. issuers with respect to
such matters as insider trading rules, restrictions on market manipulation,
shareholder proxy requirements, and timely disclosure of information. The
reporting, accounting and auditing standards of foreign countries may differ, in
some cases significantly, from U.S. standards in important respects and less
information may be available to investors in securities of non-U.S. issuers than
to investors in U.S. securities. Substantially less information is publicly
available about certain non-U.S. issuers than is available about U.S. issuers.

          The economies of individual non-U.S. countries may differ favorably or
unfavorably from the U.S. economy in such respects as growth of gross domestic
product or gross national product, rate of inflation, capital reinvestment,
resource self-sufficiency, and balance of payments position. Nationalization,
expropriation or confiscatory taxation, currency blockage, political changes,
government regulation, political or social instability, revolutions, wars or
diplomatic developments could affect adversely the economy of a non-U.S. country
and the Portfolio's investments. In such events, a Portfolio could lose its
entire investment in the country involved. In addition, laws in non-U.S.
countries governing business organizations, bankruptcy and insolvency may
provide less protection to security holders such as the Portfolio than that
provided by U.S. laws.


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

          Forward commitments for the purchase or sale of securities may include
purchases on a "when-issued" basis or purchases or sales on a "delayed delivery"
basis. In some cases, a forward commitment may be conditioned upon the
occurrence of a subsequent event, such as approval and consummation of a merger,
corporate reorganization or debt restructuring (i.e., a "when, as and if issued"
trade). When forward commitment transactions are negotiated, the price is fixed
at the time the commitment is made, a Portfolio does not pay for the securities
until they are received, and the Portfolio is required to create a segregated
account with its custodian and to maintain in that account liquid assets in an
amount equal to or greater than, on a daily basis, the amount of the Portfolio's
forward commitments and "when-issued" or "delayed delivery" commitments.

          The use of forward commitments enables a Portfolio to protect against
anticipated changes in exchange rates, interest rates and/or prices. For
instance, a Portfolio may enter into a forward contract when it enters into a
contract for the purchase or sale of a security denominated in a foreign
currency in order to "lock in" the U.S. Dollar price of the security
("transaction hedge"). In addition, when a Portfolio believes that a foreign
currency may suffer a substantial decline against the U.S. Dollar, it may enter
into a forward sale contract to sell an amount of that foreign currency
approximating the value of some or all of that Portfolio's securities
denominated in such foreign currency, or when a Portfolio believes that the U.S.
Dollar may suffer a substantial decline against a foreign currency, it may enter
into a forward purchase contract to buy that foreign currency for a fixed dollar
amount ("position hedge"). If the Adviser were to forecast incorrectly the
direction of exchange rate movements, a Portfolio might be required to complete
such when-issued or forward transactions at prices inferior to the then current
market values. When-issued securities and forward commitments may be sold prior
to the settlement date, but a Portfolio enters into when-issued and forward
commitments only with the intention of actually receiving securities or
delivering them, as the case may be. If a Portfolio chooses to dispose of the
right to acquire a when-issued security prior to its acquisition or dispose of
its right to deliver or receive against a forward commitment, it may incur a
gain or loss. Any significant commitment of a Portfolio's assets to the purchase
of securities on a "when, as and if issued" basis may increase the volatility of
the Portfolio's NAV.

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

          A Portfolio will enter into forward commitments and make commitments
to purchase securities on a "when-issued" or "delayed delivery" basis only with
the intention of actually acquiring the securities. However, a Portfolio may
sell these securities before the settlement date if, in the opinion of the
Adviser, it is deemed advisable as a matter of investment strategy.

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

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

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

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

          Rule 144A under the Securities Act allows a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. An insufficient number of qualified
institutional buyers interested in purchasing certain restricted securities held
by a Portfolio, however, could affect adversely the marketability of such
portfolio securities and the Portfolio might be unable to dispose of such
securities promptly or at reasonable prices.

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

Investments in Other Investment Companies
- -----------------------------------------

          The Portfolios may invest in other investment companies as permitted
by the 1940 Act or the rules and regulations thereunder. If a Portfolio acquires
shares in investment companies, shareholders would bear, indirectly, the
expenses of such investment companies (which may include management and advisory
fees), which are in addition to the Portfolio's expenses. The Portfolios may
also invest in exchange-traded funds, subject to the restrictions and
limitations of the 1940 Act.

Lending of Portfolio Securities
- -------------------------------

          Each Portfolio may seek to increase income by lending portfolio
securities. A principal risk in lending portfolio securities, as with other
extensions of credit, consists of the possible loss of rights in the collateral
should the borrower fail financially. In addition, the Portfolios may be exposed
to the risk that the sale of any collateral realized upon the borrower's default
will not yield proceeds sufficient to replace the loaned securities. In
determining whether to lend securities to a particular borrower, the Adviser
will consider all relevant facts and circumstances, including the
creditworthiness of the borrower. The loans would be made only to firms deemed
by the Adviser to be of good standing, and when, in the judgment of the Adviser,
the consideration that can be earned currently from securities loans of this
type justifies the attendant risk. The Portfolios may lend portfolio securities
to the extent permitted under the 1940 Act or the rules and regulations
thereunder (as such statute, rules or regulations may be amended from time to
time) or by guidance regarding, interpretations of, or exemptive orders under,
the 1940 Act.

          Under present regulatory policies, including those of the Board of
Governors of the Federal Reserve System and the Commission, such loans may be
made only to member firms of the New York Stock Exchange (the "Exchange") and
will be required to be secured continuously by collateral in cash, cash
equivalents, or U.S. Treasury Bills maintained on a current basis at an amount
at least equal to the market value of the securities loaned. The Portfolios will
have the right to call a loan and obtain the securities loaned at any time on
five days' notice.

          While securities are on loan, the borrower will pay the Portfolio any
income from the securities. The Portfolio may invest any cash collateral in
portfolio securities and earn additional income or receive an agreed-upon amount
of income from a borrower who has delivered equivalent collateral. Any such
investment of cash collateral will be subject to the Portfolio's investment
risks.

          The Portfolios will not, however, have the right to vote any
securities having voting rights during the existence of the loan. The Portfolios
will have the right to regain record ownership of loaned securities or
equivalent securities in order to exercise ownership rights such as voting
rights, subscription rights and rights to dividends, interest, or distributions.

          The Portfolios may pay reasonable finders', administrative, and
custodial fees in connection with a loan.

Mortgage-Related Securities
- ---------------------------

          The mortgage-related securities in which a Portfolio may invest
typically are securities representing interests in pools of mortgage loans made
by lenders such as savings and loan associations, mortgage bankers and
commercial banks and are assembled for sale to investors (such as the Portfolio)
by governmental, government-related or private organizations. Private
organizations include commercial banks, savings associations, mortgage
companies, investment banking firms, finance companies, special purpose finance
entities (called special purpose vehicles or SPVs) and other entities that
acquire and package loans for resales as mortgage-related securities.
Specifically, these securities may include pass-through mortgage-related
securities, CMOs, CMO residuals, adjustable-rate mortgage securities ("ARMS"),
stripped mortgage-backed securities ("SMBSs"), commercial mortgage-backed
securities, "to be announced" ("TBA") mortgage-backed securities, mortgage
dollar rolls, collateralized obligations, Canadian Government Guaranteed
Mortgage Related Securities and other securities that directly or indirectly
represent a participation in or are secured by and payable from mortgage loans
on real property and other assets.

          Pass-Through Mortgage-Related Securities. Interests in pools of
mortgage-related securities differ from other forms of debt securities, which
normally provide for periodic payment of interest in fixed amounts with
principal payments at maturity or specified call dates. Instead, these
securities provide a monthly payment consisting of both interest and principal
payments. In effect, these payments are a "pass-through" of the monthly payments
made by the individual borrowers on their residential mortgage loans, net of any
fees paid to the issuer or guarantor of such securities. Additional payments are
caused by repayments of principal resulting from the sale of the underlying
residential property, refinancing or foreclosure, net of fees or costs that may
be incurred. Some mortgage-related securities, such as securities issued by the
GNMA, are described as "modified pass-through." These securities entitle the
holder to receive all interest and principal payments owed on the mortgage pool,
net of certain fees, regardless of whether or not the mortgagor actually makes
the payment.

          The average life of pass-through pools varies with the maturities of
the underlying mortgage instruments. In addition, a pool's term may be shortened
by unscheduled or early payments of principal and interest on the underlying
mortgages. The occurrence of mortgage prepayments is affected by factors
including the level of interest rates, general economic conditions, the location
and age of the mortgage and other social and demographic conditions. As
prepayment rates of individual pools vary widely, it is not possible to
accurately predict the average life of a particular pool. For pools of
fixed-rate 30-year mortgages, common industry practice is to assume that
prepayments will result in a 12-year average life. Pools of mortgages with other
maturities or different characteristics will have varying average life
assumptions. The assumed average life of pools of mortgages having terms of less
than 30 years, is less than 12 years, but typically not less than 5 years.

          Yields on pass-through securities are typically quoted by investment
dealers and vendors based on the maturity of the underlying instruments and the
associated average life assumption. In periods of falling interest rates, the
rate of prepayment tends to increase, thereby shortening the actual average life
of a pool of mortgage-related securities. Conversely, in periods of rising
interest rates the rate of prepayment tends to decrease, thereby lengthening the
actual average life of the pool. Historically, actual average life has been
consistent with the 12-year assumption referred to above. Actual prepayment
experience may cause the yield to differ from the assumed average life yield.
Reinvestment of prepayments may occur at higher or lower interest rates than the
original investment, thus affecting the yield of a Portfolio. The compounding
effect from reinvestment of monthly payments received by a Portfolio will
increase the yield to shareholders compared with bonds that pay interest
semi-annually.

          The principal governmental (i.e., backed by the full faith and credit
of the U.S. Government) guarantor of mortgage-related securities is GNMA. GNMA
is a wholly-owned United States Government corporation within the Department of
Housing and Urban Development. GNMA is authorized to guarantee, with the full
faith and credit of the U.S. Government, the timely payment of principal and
interest on securities issued by institutions approved by GNMA (such as savings
and loan institutions, commercial banks and mortgage bankers) and backed by
pools of FHA-insured or VA-guaranteed mortgages.

          Government-related (i.e., not backed by the full faith and credit of
the United States Government) guarantors include the FNMA and the FHLMC. FNMA is
a government-sponsored corporation owned entirely by private stockholders. It is
subject to general regulation and oversight by the Office of Federal Housing
Enterprise Oversight ("OFHEO"). FNMA purchases residential mortgages from a list
of approved seller/servicers which include state and federally-chartered savings
and loan associations, mutual savings banks, commercial banks and credit unions
and mortgage bankers. Pass-through securities issued by FNMA are guaranteed as
to timely payment of principal and interest by FNMA but are not backed by the
full faith and credit of the U.S. Government. FHLMC is a corporate
instrumentality of the U.S. Government whose stock is owned by private
stockholders. Participation certificates issued by FHLMC, which represent
interests in mortgages from FHLMC's national portfolio, are guaranteed by FHLMC
as to the timely payment of interest and ultimate collection of principal but
are not backed by the full faith and credit of the U.S. Government.

          Commercial banks, savings and loan associations, private mortgage
insurance companies, mortgage bankers and other secondary market issuers create
pass-through pools of conventional residential mortgage loans. Securities
representing interests in pools created by non-governmental private issuers
generally offer a higher rate of interest than securities representing interests
in pools created by governmental issuers because there are no direct or indirect
governmental guarantees of the underlying mortgage payments. However, private
issuers sometimes obtain committed loan facilities, lines of credit, letters of
credit, surety bonds or other forms of liquidity and credit enhancement to
support the timely payment of interest and principal with respect to their
securities if the borrowers on the underlying mortgages fail to make their
mortgage payments. The ratings of such non-governmental securities are generally
dependent upon the ratings of the providers of such liquidity and credit support
and would be adversely affected if the rating of such an enhancer were
downgraded.

          The structuring of the pass-through pool may also provide credit
enhancement. Examples of such credit support arising out of the structure of the
transaction include the issue of senior and subordinated securities (e.g., the
issuance of securities by a SPV in multiple classes or "tranches", with one or
more classes being senior to other subordinated classes as to payment of
principal and interest, with the result that defaults on the underlying mortgage
loans are borne first by the holders of the subordinated class); creation of
"reserve funds" (in which case cash or investments sometimes funded from a
portion of the payments on the underlying mortgage loans, are held in reserve
against future losses); and "overcollateralization" (in which case the scheduled
payments on, or the principal amount of, the underlying mortgage loans exceeds
that required to make payment of the securities and pay any servicing or other
fees). There can be no guarantee the credit enhancements, if any will be
sufficient to prevent losses in the event of defaults on the underlying mortgage
loans.

          In addition, mortgage-related securities that are issued by private
issuers are not subject to the underwriting requirements for the underlying
mortgages that are applicable to those mortgage-related securities that have a
government or government-sponsored entity guarantee. As a result, the mortgage
loans underlying private mortgage-related securities may, and frequently do,
have less favorable collateral, credit risk or other underwriting
characteristics than government or government-sponsored mortgage-related
securities and have wider variances in a number of terms, including interest
rate, term, size, purposes and borrower characteristics. Privately issued pools
more frequently include second mortgages, high loan-to-value mortgages and
manufactured housing loans. The coupon rates and maturities of the underlying
mortgage loans in a private-label mortgage-related pool may vary to a greater
extent than those included in a government guaranteed pool, and the pool may
include subprime mortgage loans. Subprime loans refer to loans made to borrowers
with weakened credit histories or with a lower capacity to make timely payments
on their loans. For these reasons, the loans underlying these securities have
had in many cases higher default rates than those loans that meet government
underwriting requirements.

          Collateralized Mortgage Obligations. Another form of mortgage-related
security is a "pay-through" security, which is a debt obligation of the issuer
secured by a pool of mortgage loans pledged as collateral that is legally
required to be paid by the issuer, regardless of whether payments are actually
made on the underlying mortgages. CMOs are the predominant type of "pay-through"
mortgage-related security. In a CMO, a series of bonds or certificates is issued
in multiple classes. Each class of a CMO, often referred to as a "tranche," is
issued at a specific coupon rate and has a stated maturity or final distribution
date. Principal prepayments on collateral underlying a CMO may cause one or more
tranches of the CMO to be retired substantially earlier than the stated
maturities or final distribution dates of the collateral. Although payment of
the principal of, and interest on, the underlying collateral securing privately
issued CMOs may be guaranteed by GNMA, FNMA or FHLMC, these CMOs represent
obligations solely of the private issuer and are not insured or guaranteed by
GNMA, FNMA, FHLMC, any other governmental agency or any other person or entity.

          Adjustable-Rate Mortgage Securities. Another type of mortgage-related
security, known as adjustable-rate mortgage securities ("ARMS"), bears interest
at a rate determined by reference to a predetermined interest rate or index.
ARMS may be secured by fixed-rate mortgages or adjustable-rate mortgages. ARMS
secured by fixed-rate mortgages generally have lifetime caps on the coupon rates
of the securities. To the extent that general interest rates increase faster
than the interest rates on the ARMS, these ARMS will decline in value. The
adjustable-rate mortgages that secure ARMS will frequently have caps that limit
the maximum amount by which the interest rate or the monthly principal and
interest payments on the mortgages may increase. These payment caps can result
in negative amortization (i.e., an increase in the balance of the mortgage
loan). Furthermore, since many adjustable-rate mortgages only reset on an annual
basis, the values of ARMS tend to fluctuate to the extent that changes in
prevailing interest rates are not immediately reflected in the interest rates
payable on the underlying adjustable-rate mortgages.

          Stripped Mortgage-Related Securities. Stripped mortgage-related
securities (SMRS) are mortgage-related securities that are usually structured
with separate classes of securities collateralized by a pool of mortgages or a
pool of mortgage backed bonds or pass-through securities, with each class
receiving different proportions of the principal and interest payments from the
underlying assets. A common type of SMRS has one class of interest-only
securities (IOs) receiving all of the interest payments from the underlying
assets and one class of principal-only securities (POs) receiving all of the
principal payments from the underlying assets. IOs and POs are extremely
sensitive to interest rate changes and are more volatile than mortgage-related
securities that are not stripped. IOs tend to decrease in value as interest
rates decrease and are extremely sensitive to the rate of principal payments
(including prepayments) on the related underlying mortgage assets, and a rapid
rate of principal prepayments may have a material adverse effect on the yield to
maturity of the IO class. POs generally increase in value as interest rates
decrease. If prepayments of the underlying mortgages are greater than
anticipated, the amount of interest earned on the overall pool will decrease due
to the decreasing principal balance of the assets. Due to their structure and
underlying cash flows, SMRS may be more volatile than mortgage-related
securities that are not stripped. Changes in the values of IOs and POs can be
substantial and occur quickly, such as occurred in the first half of 1994 when
the value of many POs dropped precipitously due to increases in interest rates.

          A Portfolio will only invest in SMRS that are issued by the U.S.
Government, its agencies or instrumentalities and supported by the full faith
and credit of the United States. Although SMRS are purchased and sold by
institutional investors through several investment banking firms acting as
brokers or dealers, the complexity of these instruments and the smaller number
of investors in the sector can lend to illiquid markets in the sector.

          Commercial Mortgage-Backed Securities. Commercial mortgage-backed
securities are securities that represent an interest in, or are secured by,
mortgage loans secured by multifamily or commercial properties, such as
industrial and warehouse properties, office buildings, retail space and shopping
malls, and cooperative apartments, hotels and motels, nursing homes, hospitals
and senior living centers. Commercial mortgage-backed securities have been
issued in public and private transactions by a variety of public and private
issuers using a variety of structures, some of which were developed in the
residential mortgage context, including multi-class structures featuring senior
and subordinated classes. Commercial mortgage-backed securities may pay fixed or
floating-rates of interest. The commercial mortgage loans that underlie
commercial mortgage-related securities have certain distinct risk
characteristics. Commercial mortgage loans generally lack standardized terms,
which may complicate their structure, tend to have shorter maturities than
residential mortgage loans and may not be fully amortizing. Commercial
properties themselves tend to be unique and are more difficult to value than
single-family residential properties. In addition, commercial properties,
particularly industrial and warehouse properties, are subject to environmental
risks and the burdens and costs of compliance with environmental laws and
regulations.

          "To Be Announced" Mortgaged-Backed Securities. TBA mortgage-backed
securities are described in "Forward Commitments and When-Issued and Delayed
Delivery Securities" above.

          Canadian Government Guaranteed Mortgage Related Securities. Canadian
mortgage-related securities may be issued in several ways, the most common of
which is a modified pass-through vehicle issued pursuant to the program (the
"NHA MBS Program") established under the National Housing Act of Canada ("NHA").
Certificates issued pursuant to the NHA MBS Program ("NHA Mortgage-Related
Securities") benefit from the guarantee of the Canada Mortgage and Housing
Corporation ("CMHC"), a federal Crown corporation that is (except for certain
limited purposes) an agent of the Government of Canada whose guarantee (similar
to that of GNMA in the United States) is an unconditional obligation of the
Government of Canada except as described below. The NHA currently provides that
the aggregate principal amount of all issues of NHA Mortgage-Related Securities
in respect of which CMHC may give a guarantee must not exceed $60 billion.

          NHA Mortgage-Related Securities are backed by a pool of insured
mortgages that satisfy the requirements established by the NHA. Issuers that
wish to issue NHA Mortgage-Related Securities must meet the status and other
requirements of CMHC and submit the necessary documentation to become an
approved issuer. When an approved issuer wishes to issue NHA Mortgage-Related
Securities in respect of a particular pool of mortgages, it must seek the
approval of CMHC. Such mortgages must, among other things, be first mortgages
that are insured under the NHA, not be in default and provide for equal monthly
payments throughout their respective terms.

          The mortgages in each NHA Mortgage-Related Securities pool are
assigned to CMHC which, in turn, issues a guarantee of timely payment of
principal and interest that is shown on the face of the certificates
representing the NHA Mortgage-Related Securities (the "NHA MBS Certificates").
NHA Mortgage-Related Securities do not constitute any liability of, nor evidence
any recourse against, the issuer of the NHA Mortgage-Related Securities, but in
the event of any failure, delay or default under the terms of NHA MBS
Certificates, the holder has recourse to CMHC in respect of its guarantee set
out on the NHA MBS Certificates.

          In any legal action or proceeding or otherwise, CMHC has agreed not to
contest or defend against a demand for the timely payment of the amount set
forth and provided for in, and unpaid on, any duly and validly issued NHA MBS
Certificate, provided that such payment is sought and claimed by or on behalf of
a bona fide purchaser of and investor in such security, without actual notice at
the time of the purchase of the basis or grounds for contesting or defending
against that demand for timely payment.

          While most Canadian Mortgage-Related Securities are subject to
voluntary prepayments, some pools are not and function more like a traditional
bond. The typical maturity of Canadian Mortgage-Related Securities is five
years, as most Canadian residential mortgages provide for a five-year maturity
with equal monthly blended payments of interest and principal based on a
twenty-five year amortization schedule. Pursuant to recent changes adopted by
CMHC, maturities of NHA Mortgaged-Related Securities may be as short as six
months or as long as eighteen years.

          Certain Risks. The value of mortgage-related securities is affected by
a number of factors. Unlike traditional debt securities, which have fixed
maturity dates, mortgage-related securities may be paid earlier than expected as
a result of prepayments of underlying mortgages. Such prepayments generally
occur during periods of falling mortgage interest rates. If property owners make
unscheduled prepayments of their mortgage loans, these prepayments will result
in the early payment of the applicable mortgage-related securities. In that
event, a Portfolio may be unable to invest the proceeds from the early payment
of the mortgage-related securities in investments that provide as high a yield
as the mortgage-related securities. Early payments associated with
mortgage-related securities cause these securities to experience significantly
greater price and yield volatility than is experienced by traditional
fixed-income securities. The level of general interest rates, general economic
conditions and other social and demographic factors affect the occurrence of
mortgage prepayments. During periods of falling interest rates, the rate of
mortgage prepayments tends to increase, thereby tending to decrease the life of
mortgage-related securities. Conversely, during periods of rising interest
rates, a reduction in prepayments may increase the effective life of
mortgage-related securities, subjecting them to greater risk of decline in
market value in response to rising interest rates. If the life of a
mortgage-related security is inaccurately predicted, the Portfolio may not be
able to realize the rate of return it expected.

          As with other fixed-income securities, there is also the risk of
nonpayment of mortgage-related securities, particularly for those securities
that are backed by mortgage pools that contain subprime loans. Market factors
adversely affecting mortgage loan repayments include a general economic
downturn, high unemployment, a general slowdown in the real estate market, a
drop in the market prices of real estate, or higher mortgage payments required
to be made by holders of adjustable rate mortgages due to scheduled increases or
increases due to higher interest rates.

          Subordinated mortgage-related securities may have additional risks.
The subordinated mortgage-related security may serve as credit support for the
senior securities purchased by other investors. In addition, the payments of
principal and interest on these subordinated securities generally will be made
only after payments are made to the holders of securities senior to the
subordinated securities. Therefore, if there are defaults on the underlying
mortgage loans, the holders of subordinated mortgage-related securities will be
less likely to receive payments of principal and interest and will be more
likely to suffer a loss.

          Commercial mortgage-related securities, like all fixed-income
securities, generally decline in value as interest rates rise. Moreover,
although generally the value of fixed-income securities increases during periods
of falling interest rates, this inverse relationship is not as marked in the
case of single-family residential mortgage-related securities, due to the
increased likelihood of prepayments during periods of falling interest rates,
and may not be as marked in the case of commercial mortgage-related securities.
The process used to rate commercial mortgage-related securities may focus on,
among other factors, the structure of the security, the quality and adequacy of
collateral and insurance, and the creditworthiness of the originators, servicing
companies and providers of credit support.

          Although the market for mortgage-related securities is becoming
increasingly liquid, those issued by certain private organizations may not be
readily marketable because there may be a limited market for these securities,
especially when there is a perceived weakness in the mortgage and real estate
market sectors. In particular, the secondary markets for CMOs, IOs and POs may
be more volatile and less liquid than those for other mortgage-related
securities, thereby potentially limiting a Portfolio's ability to buy or sell
those securities at any particular time. Without an active trading market,
mortgage-related securities held in the Portfolio's portfolio may be
particularly difficult to value because of the complexities involved in the
value of the underlying mortgages. In addition, the rating agencies have not had
experience in rating commercial mortgage-related securities through different
economic cycles and in monitoring such ratings on a longer-term basis.

          As with fixed-income securities generally, the value of
mortgage-related securities can also be adversely affected by increases in
general interest rates relative to the yield provided by such securities. Such
an adverse effect is especially possible with fixed-rate mortgage securities. If
the yield available on other investments rises above the yield of the fixed-rate
mortgage securities as a result of general increases in interest rate levels,
the value of the mortgage-related securities will decline.

          Other Asset-Backed Securities. A Portfolio may invest in other
asset-backed securities. The securitization techniques used to develop
mortgage-related securities are being applied to a broad range of financial
assets. Through the use of trusts and special purpose corporations, various
types of assets, including automobile loans and leases, credit card receivables,
home equity loans, equipment leases and trade receivables, are being securitized
in structures similar to the structures used in mortgage securitizations. For
example, a Portfolio may invest in collateralized debt obligations ("CDOs"),
which include collateralized bond obligations ("CBOs"), collateralized loan
obligations ("CLOs"), and other similarly structured securities. CBOs and CLOs
are types of asset-backed securities. A CBO is a trust, which is backed by a
diversified pool of high-risk, below investment grade fixed-income securities. A
CLO is a trust typically collateralized by a pool of loans, which may include,
among others, domestic and foreign senior secured loans, senior unsecured loans,
and subordinate corporate loans, including loans that may be rated below
investment grade or equivalent unrated loans. These asset-backed securities are
subject to risks associated with changes in interest rates and prepayment of
underlying obligations and defaults similar to the risks of investment in
mortgage-related securities discussed above.

          Each type of asset-backed security also entails unique risks depending
on the type of assets involved and the legal structure used. For example, credit
card receivables are generally unsecured obligations of the credit card holder
and the debtors are entitled to the protection of a number of state and federal
consumer credit laws, many of which give such debtors the right to set off
certain amounts owed on the credit cards, thereby reducing the balance due.
There have also been proposals to cap the interest rate that a credit card
issuer may charge. In some transactions, the value of the asset-backed security
is dependent on the performance of a third party acting as credit enhancer or
servicer. Furthermore, in some transactions (such as those involving the
securitization of vehicle loans or leases) it may be administratively burdensome
to perfect the interest of the security issuer in the underlying collateral and
the underlying collateral may become damaged or stolen.

Repurchase Agreements
- ---------------------

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

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

          A Portfolio may enter into repurchase agreements with member banks of
the Federal Reserve System or "primary dealers" (as designated by the Federal
Reserve Bank of New York) in such securities. There is no percentage restriction
on a Portfolio's ability to enter into repurchase agreements. Currently, a
Portfolio intends to enter into repurchase agreements only with its custodian
and such primary dealers.

Reverse Repurchase Agreements
- -----------------------------

          Reverse repurchase agreements are identical to repurchase agreements
except that rather than buying securities for cash subject to their repurchase
by the seller, a Portfolio sells portfolio assets concurrently with an agreement
by the Portfolio to repurchase the same assets at a later date at a fixed price
slightly higher than the sale price. During the reverse repurchase agreement
period, the Portfolio continues to receive principal and interest payments on
these securities. Generally, the effect of a reverse repurchase agreement is
that the Portfolio can recover all or most of the cash invested in the portfolio
securities involved during the term of the reverse repurchase agreement, while
it will be able to keep the interest income associated with those portfolio
securities. Such transactions are advantageous only if the "interest cost" to
the Portfolio of the reverse repurchase transaction, i.e., the difference
between the sale and repurchase price for the securities, is less than the cost
of otherwise obtaining the cash.

          Reverse repurchase agreements involve the risk that the market value
of the securities the Portfolio is obligated to repurchase under the agreement
may decline below the repurchase price. In the event the buyer of securities
under a reverse repurchase agreement files for bankruptcy or becomes insolvent,
the Portfolio's use of the proceeds of the agreement may be restricted pending a
determination by the other party, or its trustee or receiver, whether to enforce
the Portfolio's obligation to repurchase the securities. In addition, the use of
these investments results in leveraging the Portfolio's common stocks because
the Portfolio uses the proceeds to make investments in other fixed-income
securities. Use of leverage is considered speculative and has, among other
things, the risk that the Portfolio's NAV may be more volatile.

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

          Certain of the Portfolios will invest in rights and warrants only if
the Adviser deems the underlying equity securities themselves appropriate for
inclusion in the Portfolio. Rights and warrants may be considered more
speculative than certain other types of investments in that they do not entitle
a holder to dividends or voting rights with respect to the underlying securities
nor do they represent any rights in the assets of the issuing company. Also, the
value of a right or warrant does not necessarily change with the value of the
underlying securities and a right or warrant ceases to have value if it is not
exercised prior to the expiration date.

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

          A short sale is effected by selling a security that a Portfolio does
not own, or if the Portfolio does own such security, it is not to be delivered
upon consummation of the sale. A short sale is against the box to the extent
that a Portfolio contemporaneously owns or has the right to obtain securities
identical to those sold short without payment. Short sales may be used in some
cases by a Portfolio to defer the realization of gain or loss for federal income
tax purposes on securities then owned by the Portfolio. However, if a Portfolio
has unrealized gain with respect to a security and enters into a short sale with
respect to such security, the Portfolio generally will be deemed to have sold
the appreciated security and thus will recognize gain for tax purposes.

Special Situations
- ------------------

          A special situation arises when, in the opinion of the Adviser, the
securities of a particular company will, within a reasonably estimable period of
time, be accorded market recognition at an appreciated value solely by reason of
a development particularly or uniquely applicable to that company, and
regardless of general business conditions or movements of the market as a whole.
Developments creating special situations might include, among others,
liquidations, reorganizations, recapitalizations or mergers, material
litigation, technological breakthroughs and new management or management
policies. Although large and well-known companies may be involved, special
situations often involve much greater risk than is inherent in ordinary
investment securities.

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

          Certain of the Portfolios may from time to time enter into standby
commitment agreements. Such agreements commit a Portfolio, for a stated period
of time, to purchase a stated amount of a security that may be issued and sold
to the Portfolio at the option of the issuer. The price and coupon of the
security are fixed at the time of the commitment. At the time of entering into
the agreement a Portfolio is paid a commitment fee, regardless of whether or not
the security is ultimately issued, which is typically approximately 0.5% of the
aggregate purchase price of the security that a Portfolio has committed to
purchase. A Portfolio will enter into such agreements only for the purpose of
investing in the security underlying the commitment at a yield and price that
are considered advantageous to the Portfolio and that are unavailable on a firm
commitment basis. A Portfolio will not enter into a standby commitment with a
remaining term in excess of 45 days and will limit its investment in such
commitments so that the aggregate purchase price of the securities subject to
the commitments will not exceed 50% of its assets taken at the time of
acquisition of such commitment. A Portfolio will at all times maintain a
segregated account with its liquid assets in an aggregate amount equal to the
purchase price of the securities underlying the commitment.

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

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

Structured Securities
- ---------------------

          Certain of the Portfolios may invest in securities issued in
structured financing transactions, which generally involve aggregating types of
debt assets in a pool or special purpose entity and then issuing new securities.
Types of structured financings include, for example, mortgage-related and other
asset-backed securities. A Portfolio's investments include investments in
structured securities that represent interests in entities organized and
operated solely for the purpose of restructuring the investment characteristics
of debt obligations. This type of restructuring involves the deposit with or
purchase by an entity, such as a corporation or trust, of specified instruments
(such as commercial bank loans) and the issuance by that entity of one or more
classes of securities ("Structured Securities") backed by, or representing
interests in, the underlying instruments. The cash flow on the underlying
instruments may be apportioned among the newly issued Structured Securities to
create securities with different investment characteristics such as varying
maturities, payment priorities and interest rate provisions, and the extent of
the payments made with respect to Structured Securities is dependent on the
extent of the cash flow on the underlying instruments. Because Structured
Securities of the type in which a Portfolio anticipates it will invest typically
involve no credit enhancement, their credit risk generally will be equivalent to
that of the underlying instruments.

          A Portfolio is permitted to invest in a class of Structured Securities
that is either subordinated or unsubordinated to the right of payment of another
class. Subordinated Structured Securities typically have higher yields and
present greater risks than unsubordinated Structured Securities.

          Certain issuers of Structured Securities may be deemed to be
"investment companies" as defined in the 1940 Act. As a result, a Portfolio's
investment in these Structured Securities may be limited by the restrictions
contained in the 1940 Act described under "Investment in Other Investment
Companies."

Trust Preferred Securities
- --------------------------

          Trust preferred securities are preferred securities typically issued
by a special purpose trust subsidiary and backed by subordinated debt of that
subsidiary's parent corporation. Unlike typical asset-backed securities, which
have many underlying payors and usually are overcollateralized, trust preferred
securities have only one underlying payor and are not overcollateralized. Trust
preferred securities may have varying maturity dates, at times in excess of 30
years, or may have no specified maturity date with an onerous interest rate
adjustment if not called on the first call date. Dividend payments of the trust
preferred securities generally coincide with interest payments on the underlying
subordinated debt. Issuers of trust preferred securities and their parents
currently enjoy favorable tax treatment. If the tax characterization of trust
preferred securities were to change, they could be redeemed by the issuers,
resulting in a loss to a Portfolio. Trust preferred securities are subject to
special risks. Dividend payments only will be paid if interest payments on the
underlying obligations are made. These interest payments are dependent on the
financial condition of the parent corporation and may be deferred for up to 20
consecutive quarters. There is also the risk that the underlying obligations,
and thus the trust preferred securities, may be prepaid after a stated call date
or as a result of certain tax or regulatory events, resulting in a lower yield
to maturity.

U.S. Government Securities
- --------------------------

          U.S. Government securities may be backed by the full faith and credit
of the United States, supported only by the right of the issuer to borrow from
the U.S. Treasury or backed only by the credit of the issuing agency itself.
These securities include: (i) the following U.S. Treasury securities, which are
backed by the full faith and credit of the United States and differ only in
their interest rates, maturities and times of issuance: U.S. Treasury bills
(maturities of one year or less with no interest paid and hence issued at a
discount and repaid at full face value upon maturity), U.S. Treasury notes
(maturities of one to ten years with interest payable every six months) and U.S.
Treasury bonds (generally maturities of greater than ten years with interest
payable every six months); (ii) obligations issued or guaranteed by U.S.
Government agencies and instrumentalities that are supported by the full faith
and credit of the U.S. Government, such as securities issued by GNMA, the
Farmers Home Administration, the Department of Housing and Urban Development,
the Export-Import Bank, the General Services Administration and the Small
Business Administration; and (iii) obligations issued or guaranteed by U.S.
government agencies and instrumentalities that are not supported by the full
faith and credit of the U.S. Government or a right to borrow from the U.S.
Treasury, such as securities issued by the FNMA and FHLMC, and governmental
collateralized mortgage obligations ("CMOs"). The maturities of the U.S.
Government securities listed in paragraphs (i) and (ii) above usually range from
three months to 30 years. Such securities, except GNMA certificates, normally
provide for periodic payments of interest in fixed amount with principal
payments at maturity or specified call dates.

          U.S. Government securities also include zero coupon securities and
principal-only securities and certain stripped mortgage-related securities. Zero
coupon securities are described in more detail in "Zero Coupon Securities"
below, and stripped mortgage-related securities and principal-only securities
are described in more detail in "Mortgage-Related Securities-Stripped
Mortgage-Related Securities" above. In addition, other U.S. Government agencies
and instrumentalities have issued stripped securities that are similar to SMRS.

          Inflation-protected securities, or IPS, such as Treasury
Inflation-Protected Securities, or TIPS, are fixed-income securities whose
principal value is periodically adjusted according to the rate of inflation. If
the index measuring inflation falls, the principal value of these securities
will be adjusted downward, and consequently the interest payable on these
securities (calculated with respect to a smaller principal amount) will be
reduced. Repayment of the original bond principal upon maturity (as adjusted for
inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds.
For bonds that do not provide a similar guarantee, the adjusted principal value
of the bond repaid at maturity may be less than the original principal.

          Inflation-protected securities tend to react to changes in real
interest rates. In general, the price of an inflation-protected debt security
can fall when real interest rates rise, and can rise when real interest rates
fall. Interest payments on inflation-protected debt securities can be
unpredictable and will vary as the principal and/or interest is adjusted for
inflation.

          TIPS, which are issued by the U.S Treasury, use the Consumer Price
Index for Urban Consumers, or the CPI, as the inflation measure. The principal
of a TIPS increases with inflation and decreases with deflation, as measured by
the CPI. When a TIPS matures, the holder is paid the adjusted principal or
original principal, whichever is greater. TIPS pay interest twice a year, at a
fixed rate, which is determined by auction at the time the TIPS are issued. The
rate is applied to the adjusted principal; so, like the principal, interest
payments rise with inflation and fall with deflation. TIPS are issued in terms
of 5, 10, and 20 years.

          Guarantees of securities by the U.S. Government or its agencies or
instrumentalities guarantee only the payment of principal and interest on the
securities, and do not guarantee the securities' yield or value or the yield or
value of the shares of the Portfolio that holds the securities.

          U.S. Government securities are considered among the safest of
fixed-income investments. As a result, however, their yields are generally lower
than the yields available from other fixed-income securities.

          See Appendix A for a description of obligations issued or guaranteed
by U.S. Government agencies or instrumentalities.

          Zero Coupon Treasury Securities. Zero coupon Treasury securities are
U.S. Treasury bills, notes and bonds which have been stripped of their unmatured
interest coupons and receipts or certificates representing interests in such
stripped debt obligations and coupons. A zero coupon security is a debt
obligation that does not entitle the holder to any periodic payments prior to
maturity but, instead, is issued and traded at a discount from its face amount.
The discount varies depending on the time remaining until maturity, prevailing
interest rates, liquidity of the security and perceived credit quality of the
issuer. The market prices of zero coupon securities are generally more volatile
than those of interest-bearing securities, and are likely to respond to changes
in interest rates to a greater degree than otherwise comparable securities that
do pay periodic interest. Current federal tax law requires that a holder (such
as a Portfolio) of a zero coupon security accrue a portion of the discount at
which the security was purchased as income each year, even though the holder
receives no interest payment on the security during the year. As a result, in
order to make the distributions necessary for a Portfolio not to be subject to
federal income or excise taxes, the Portfolio might be required to pay out as an
income distribution each year an amount, obtained by liquidation of portfolio
securities if necessary, greater than the total amount of cash that the
Portfolio has actually received as interest during the year. The Adviser
believes, however, that it is highly unlikely that it would be necessary to
liquidate any portfolio securities for this purpose.

          Currently the only U.S. Treasury security issued without coupons is
the Treasury bill. Although the U.S. Treasury does not itself issue treasury
notes and bonds without coupons, under the U.S. Treasury STRIPS program interest
and principal on certain long term treasury securities may be maintained
separately in the Federal Reserve book entry system and may be separately traded
and owned. However, in the last few years a number of banks and brokerage firms
have separated ("stripped") the principal portions ("corpus") from the coupon
portions of the U.S. Treasury bonds and notes and sold them separately in the
form of receipts or certificates representing undivided interests in these
instruments (which instruments are generally held by a bank in a custodial or
trust account).

Variable, Floating and Inverse Floating Rate Securities
- -------------------------------------------------------

          These securities have interest rates that are reset at periodic
intervals, usually by reference to some interest rate index or market interest
rate. Some of these securities are backed by pools of mortgage loans. Although
the rate adjustment feature may act as a buffer to reduce sharp changes in the
value of these securities, they are still subject to changes in value based on
changes in market interest rates or changes in the issuer's creditworthiness.
Because the interest rate is reset only periodically, changes in the interest
rate on these securities may lag behind changes in prevailing market interest
rates. Also, some of these securities (or the underlying mortgages) are subject
to caps or floors that limit the maximum change in the interest rate during a
specified period or over the life of the security.

Variable Notes
- --------------

          Variable amount master demand notes and variable amount floating rate
notes are obligations that permit the investment of fluctuating amounts by a
Portfolio at varying rates of interest pursuant to direct arrangements between
the Portfolio, as lender, and the borrower. Master demand notes permit daily
fluctuations in the interest rate while the interest rate under variable amount
floating rate notes fluctuate on a weekly basis. These notes permit daily
changes in the amounts borrowed. A Portfolio has the right to increase the
amount under these notes at any time up to the full amount provided by the note
agreement, or to decrease the amount, and the borrower may repay up to the full
amount of the notes without penalty. Because these types of notes are direct
lending arrangements between the lender and the borrower, it is not generally
contemplated that such instruments will be traded and there is no secondary
market for these notes. Master demand notes are redeemable (and, thus,
immediately repayable by the borrower) at face value plus accrued interest at
any time. Variable amount floating rate notes are subject to next-day redemption
for 14 days after the initial investment therein. With both types of notes,
therefore, a Portfolio's right to redeem depends on the ability of the borrower
to pay principal and interest on demand. In connection with both types of note
arrangements, the Portfolio considers earning power, cash flow and other
liquidity ratios of the issuer. These notes, as such, are not typically rated by
credit rating agencies. Unless they are so rated, a Portfolio may invest in them
only if, at the time of an investment, the issuer has an outstanding issue of
unsecured debt rated Aa3 or better by Moody's or AA- or better by S&P or Fitch.

Yankee Debt Securities
- ----------------------

          Yankee debt securities are U.S. Dollar denominated bonds typically
issued in the United States by foreign governments and their agencies, foreign
banks and foreign corporations. Investments in Yankee debt securities are
affected by interest rates in the United States and by the economic, political
and other forces that impact the issuer locally, such as adverse political and
economic developments, possible seizure, nationalization or expropriation of
foreign investments, less stringent disclosure requirements, foreign withholding
taxes and other foreign governmental restrictions.

General
- -------

          The Fund has voluntarily agreed that each Portfolio with the ability
to invest in foreign issuers will adhere to the foreign security diversification
guidelines promulgated by certain State Insurance Departments. Pursuant to these
guidelines, each such Portfolio will invest in issuers from a minimum of five
different foreign countries. This minimum will be reduced to four different
foreign countries when securities of foreign issuers comprise less than 80% of
the Portfolio's NAV, three different foreign countries when securities of
foreign issuers comprise less than 60% of the Portfolio's NAV, two different
foreign countries when securities of foreign issuers comprise less than 40% of
the Portfolio's NAV and one foreign country when securities of foreign issuers
comprise less than 20% of the Portfolio's NAV. The Fund has also voluntarily
agreed that each Portfolio that may invest in securities of foreign issuers will
limit its investment in the securities of issuers located in any one country to
20% of the Portfolio's NAV, except that the Portfolio may have an additional 15%
of its NAV invested in securities of issuers located in Australia, Canada,
France, Japan, the United Kingdom or Germany.

          In addition, the Fund has adopted an investment policy, which is not
designated a "fundamental policy" within the meaning of the 1940 Act, of
intending to have each Portfolio comply at all times with the diversification
requirements prescribed in Section 817(h) of the Code or any successor thereto
and the applicable Treasury Regulations thereunder. This policy may be changed
upon notice to shareholders of the Fund, but without their approval.

Other 1940 Act Restrictions
- ---------------------------

          Under the 1940 Act, a Portfolio is not permitted to borrow unless
immediately after such borrowing there is "asset coverage," as that term is
defined and used in the 1940 Act, of at least 300% for all borrowings of that
Portfolio. In addition, under the 1940 Act, in the event asset coverage falls
below 300%, a Portfolio must within three days reduce the amount of its
borrowing to such an extent that the asset coverage of its borrowings is at
least 300%. Assuming, for example, outstanding borrowings representing not more
than one-third of a Portfolio's total assets less liabilities (other than such
borrowings), the asset coverage of that Portfolio's portfolio would be 300%;
while outstanding borrowings representing 25% of the total assets less
liabilities (other than such borrowings), the asset coverage of the Portfolio's
portfolio would be 400%. Each Portfolio will maintain asset coverage of
outstanding borrowings of at least 300% and if necessary will, to the extent
possible, reduce the amounts borrowed by making repayments from time to time in
order to do so. Such repayments could require a Portfolio to sell portfolio
securities at times considered disadvantageous by the Adviser and such sales
could cause a Portfolio to incur related transaction costs and to realize
taxable gains.



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

                             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
                              PRINCIPAL                                COMPLEX       DIRECTORSHIPS
NAME, ADDRESS*, AGE AND       OCCUPATIONS(S)                           OVERSEEN      HELD
(YEAR ELECTED**)              DURING PAST 5 YEARS                      BY DIRECTOR   BY DIRECTOR
- ----------------              -------------------                      -----------   -----------
                                                                            
INTERESTED DIRECTOR

Marc O. Mayer, ***            Executive Vice President of the          102           SCB Partners, Inc.
1345 Avenue of the Americas   Adviser since 2001 and Executive                       and SCB Inc.
New York, NY  10105           Managing Director of AllianceBernstein
50                            Investments, Inc. ("ABI") since 2003;
(2003)                        prior thereto, he was head of
                              AllianceBernstein Institutional
                              Investments, a unit of the Adviser,
                              from 2001-2003.  Prior thereto, Chief
                              Executive Officer of Sanford C.
                              Bernstein & Co., LLC (institutional
                              research and brokerage arm of
                              Bernstein & Co. LLC) ("SCB & Co.") and
                              its predecessor since prior to 2003.

DISINTERESTED DIRECTORS

Chairman of the Board
William H. Foulk, Jr., # +    Registered Investment Adviser and an     104           None
75                            Independent Consultant.  He was
(1990)                        formerly Senior Manager of Barrett
                              Associates, Inc., a registered
                              investment adviser, with which he had
                              been associated since prior to 2003.
                              He was formerly Deputy Comptroller and
                              Chief Investment Officer of the State
                              of New York and, prior thereto, Chief
                              Investment Officer of the New York
                              Bank for Savings.

David H. Dievler, #           Independent Consultant.  Until           103           None
78                            December 1994 he was Senior Vice
(1990)                        President of AllianceBernstein
                              Corporation ("AB Corp.") (formerly,
                              Alliance Capital Management
                              Corporation) responsible for mutual
                              fund administration.  Prior to joining
                              AB Corp. in 1984, he was Chief
                              Financial Officer of Eberstadt Asset
                              Management since 1968.  Prior to that,
                              he was a Senior Manager at Price
                              Waterhouse & Co.  Member of American
                              Institute of Certified Public
                              Accountants since 1953.

John H. Dobkin, #             Consultant.  Formerly, President of      102           None
66                            Save Venice, Inc. (preservation
(1992)                        organization) from 2001-2002, Senior
                              Advisor from June 1999-June 2000 and
                              President of Historic Hudson Valley
                              (historic preservation) from December
                              1989-May 1999. Previously, Director
                              of the National Academy of Design and
                              during 1988-1992, Director and
                              Chairman of the Audit Committee of AB
                              Corp.

Michael J. Downey, #          Private Investor since January 2004.     102           Asia Pacific Fund,
64                            Formerly, managing partner of                          Inc.,The Merger
(2005)                        Lexington Capital, LLC (investment                     Fund and Prospect
                              advisory firm) from December 1997                      Acquisition Corp.
                              until December 2003. Prior                             (financial services)
                              thereto, Chairman and CEO of
                              Prudential Mutual Fund Management
                              from 1987 to 1993.

D. James Guzy, #              Chairman of the Board of PLX             102           Intel Corporation
72                            Technology (semi-conductors) and of                    (semi-conductors)
(2005)                        SRC Computers Inc., with which he has                  and Cirrus Logic
                              been associated since prior to 2003.                   Corporation (semi-
                                                                                     conductors)

Nancy P. Jacklin, #           Formerly, U.S. Executive Director of     102           None
59                            the International Monetary Fund
(2006)                        (December 2002-May 2006); Partner,
                              Clifford Chance (1992-2002); Sector
                              Counsel, International Banking and
                              Finance, and Associate General
                              Counsel, Citicorp (1985-1992);
                              Assistant General Counsel
                              (International), Federal Reserve
                              Board of Governors (1982-1985); and
                              Attorney Advisor, U.S. Department of
                              the Treasury (1973-1982). Member of
                              the Bar of the District of Columbia
                              and New York; and member of the
                              Council on Foreign Relations.

Garry L. Moody, #             Formerly, Partner, Deloitte & Touche     101           None
56                            LLP, Vice Chairman, and U.S. and
(2008)                        Global Managing Partner, Investment
                              Management Services Group 1995-2008.
                              President, Fidelity Accounting and
                              Custody Services Company from
                              1993-1995. Partner, Ernst & Young
                              LLP, partner in charge of the Chicago
                              Office's Tax Department, National
                              Director of Investment Management Tax
                              Services from 1975-1993.

Marshall C. Turner, Jr., #    Consultant. Formerly, President and      102           Xilinx, Inc. (semi-
66                            CEO, Toppan Photomasks, Inc.                           conductors) and
(2005)                        (semi-conductor manufacturing                          MEMC Electronic
                              services) 2005-2006, and Chairman and                  Materials, Inc. (semi-
                              CEO from 2003 until 2005, when the                     conductor
                              company was acquired and renamed from                  substrates)
                              Dupont Photomasks, Inc. Principal,
                              Turner Venture Associates (venture
                              capital and consulting) 1993-2003.

Earl D. Weiner, #             Of Counsel, and Partner prior to         102           None
68                            January 2007, of the law firm Sullivan
(2007)                        & Cromwell LLP; member of ABA Federal
                              Regulation of Securities Committee
                              Task Force on Fund Director's
                              Guidebook; member of Advisory Board of
                              Sustainable Forestry Management
                              Limited.


- ----------
*    The address for each of the Fund's disinterested Directors is c/o
     AllianceBernstein L.P., Attn: Philip Kirstein, 1345 Avenue of the Americas,
     New York, NY 10105.
**   There is no stated term of office for the Fund's Directors.
***  Mr. Mayer is an "interested person," as defined in the 1940 Act, due to his
     position as an Executive Vice President of the Adviser.
#    Member of the Audit Committee, the Governance and Nominating Committee and
     the Independent Directors Committee.
+    Member of the Fair Value Pricing Committee.

          The Fund's Board has four standing committees of the Board -- an Audit
Committee, a Governance and Nominating Committee, a Fair Value Pricing Committee
and an Independent Directors Committee. The members of the Audit, Governance and
Nominating, Fair Value Pricing, and Independent Directors Committees are
identified above.

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

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

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

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

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

          The Governance and Nominating Committee will consider only one
candidate submitted by such a shareholder or group for nomination for election
at an annual meeting of shareholders. The Governance and Nominating Committee
will not consider self-nominated candidates. The Governance and Nominating
Committee will consider and evaluate candidates submitted by shareholders on the
basis of the same criteria as those used to consider and evaluate candidates
submitted from other sources. These criteria include the candidate's relevant
knowledge, experience, and expertise, the candidate's ability to carry out his
or her duties in the best interests of the Fund, the candidate's ability to
qualify as a disinterested Director and such other criteria as the Governance
and Nominating Committee determines to be relevant in light of the existing
composition of the Board and any anticipated vacancies or other factors.

          The function of the Fair Value Pricing Committee is to consider, in
advance if possible, any fair valuation decision of the Adviser's Valuation
Committee relating to a security held by the Fund made under unique or highly
unusual circumstances not previously addressed by the Valuation Committee that
would result in a change in the Fund's NAV by more than $0.01 per share. The
Fair Value Pricing Committee did not meet during the Fund's most recently
completed fiscal year.

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

          The dollar range of the Fund's securities owned by each Director and
the aggregate dollar range of securities of all of the registered investment
companies to which the Adviser provides investment advisory services
(collectively, the "AllianceBernstein Fund Complex") owned by each Director are
set forth below.

                                                     AGGREGATE DOLLAR RANGE OF
                          DOLLAR RANGE OF            EQUITY SECURITIES IN THE
                          EQUITY SECURITIES          ALLIANCEBERNSTEIN FUND
                          IN THE FUND AS OF          COMPLEX AS OF
                          DECEMBER 31, 2007*         DECEMBER 31, 2007
                          ------------------         -----------------

Marc O. Mayer                   None                 Over $100,000
David H. Dievler                None                 Over $100,000
John H. Dobkin                  None                 Over $100,000
Michael J. Downey               None                 Over $100,000
William H. Foulk, Jr.           None                 Over $100,000
D. James Guzy                   None                 $50,001 - $100,000
Nancy P. Jacklin                None                 Over $100,000
Garry L. Moody**                None                 None
Marshall C. Turner, Jr.         None                 Over $100,000
Earl D. Weiner                  None                 Over $100,000

- ----------
*    The Directors cannot directly invest in the Fund's Portfolios, because
     direct investments in the Portfolios may be made only by variable annuity
     and variable life insurance separate accounts.

**   Mr. Moody was elected as a Director of the Fund on February 1, 2008.

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

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

NAME, ADDRESS* AND        POSITION(S)                PRINCIPAL OCCUPATION
AGE                       HELD WITH FUND             DURING PAST 5 YEARS
- ------------------        --------------             -------------------

Marc O. Mayer,            President and Chief        See biography above.
50                        Executive Officer

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

Hiromitsu Agata,          Vice President             Senior Vice President of
45                                                   AllianceBernstein Japan
                                                     Ltd. ("ABJL"),** with which
                                                     he has been associated
                                                     since prior to 2003.

Bruce K. Aronow,          Vice President             Senior Vice President of
41                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

William D. Baird,         Vice President             Senior Vice President of
39                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Stephen Beinhacker,       Vice President             Senior Vice President of
43                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Isabel Buccellati,        Vice President             Vice President of
39                                                   AllianceBernstein Limited
                                                     ("ABL"),** with which she
                                                     has been associated since
                                                     prior to 2003.

Frank V. Caruso,          Vice President             Senior Vice President of
51                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Maria R. Cona,            Vice President             Vice President of the
53                                                   Adviser,** with which she
                                                     has been associated since
                                                     prior to 2003.

Michael P. Curcio,        Vice President             Senior Vice President of
42                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Henry S. D'Auria,         Vice President             Senior Vice President of
46                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003. Chief
                                                     Investment Officer of
                                                     Emerging Markets Value
                                                     Equities since 2003 and
                                                     Co-Chief Investment Officer
                                                     of International Value
                                                     Equities of the Adviser
                                                     since June 2003.

Gregory Eckersley,        Vice President             Vice President of the
43                                                   Adviser,** with which he
                                                     has been associated since
                                                     prior to 2003

Sharon E. Fay,            Vice President             Executive Vice President
47                                                   of the Adviser,** with
                                                     which she has been
                                                     associated since prior to
                                                     2003, Chief Investment
                                                     Officer of Global Value
                                                     Equities (since June
                                                     2003). Until January
                                                     2006, Ms. Fay was Co-CIO
                                                     of  U.K. and European
                                                     Value Equities.  She has
                                                     chaired the Global
                                                     European and UK Value
                                                     Investment Policy Groups
                                                     since prior to 2003.

Marilyn G. Fedak,         Vice President             Executive Vice President
61                                                   of the Adviser,** with
                                                     which she has been
                                                     associated since prior to
                                                     2003.  She is head of
                                                     Sanford C. Bernstein &
                                                     Co., Inc.'s**  Value
                                                     Equities Business and
                                                     Co-Chief Investment
                                                     Officer of U.S. Value
                                                     Equities.

Norman M. Fidel,***       Vice President             Senior Vice President of
62                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Eric J. Franco,           Vice President             Senior Vice President of
48                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

John Giaquinta,           Vice President             Assistant Vice President of
44                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Robert Ginsberg,          Vice President             Senior Vice President of
35                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Aryeh Glatter,            Vice President             Senior Vice President of
41                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Daniel T. Grasman,        Vice President             Vice President of the
43                                                   Adviser since 2004.
                                                     Prior thereto, he was
                                                     co-founder and CCO of
                                                     Xelector since prior to
                                                     2003.

Mark A. Hamilton,         Vice President             Senior Vice President of
43                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

David P. Handke, Jr.,     Vice President             Senior Vice President of
58                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Eric Hewitt,              Vice President             Senior Vice President of
37                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

William Johnston,         Vice President             Senior Vice President of
47                                                   ABL,** with which he has
                                                     been associated since
                                                     prior to 2003.

Shawn E. Keegan,          Vice President             Vice President of the
36                                                   Adviser,** with which he
                                                     has been associated since
                                                     prior to 2003.

N. Kumar Kirpalani,       Vice President             Senior Vice President of
54                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Ian Kirwan,               Vice President             Vice President of the
32                                                   Adviser since 2003.
                                                     Prior thereto, he was a
                                                     research analyst at
                                                     Schroder Investment
                                                     Management where he covered
                                                     Pan-European Capital Goods,
                                                     as well as being Team
                                                     Leader for the Global
                                                     Industrials Research Team
                                                     since prior to 2003.

Joran Laird,              Vice President             Vice President of the
33                                                   Adviser,** with which he
                                                     has been associated since
                                                     prior to 2003.

Samantha Lau,             Vice President             Senior Vice President of
35                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Alan E. Levi,             Vice President             Senior Vice President of
58                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003, team
                                                     leader of the U.S.
                                                     Disciplined Growth and U.S.
                                                     Growth team since 2003 and
                                                     head of growth research at
                                                     the Adviser.

Michael J. Levy,          Vice President             Senior Vice President of
38                                                   ABL,** with which he has
                                                     been associated since
                                                     prior to 2003.

Joshua Lisser,            Vice President             Senior Vice President of
41                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

James W. MacGregor,       Vice President             Senior Vice President of
40                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003, and
                                                     Director of Research for
                                                     Small- and Mid-Cap Value
                                                     Equities.

John Mahedy,              Vice President             Senior Vice President of
44                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003,
                                                     Co-Chief Investment Officer
                                                     of U.S. Value Equities
                                                     since 2003 and Director of
                                                     Research for U.S. Value
                                                     Equities since prior to
                                                     2003.

Alison M. Martier,        Vice President             Senior Vice President of
51                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Christopher W. Marx,      Vice President             Senior Vice President of
40                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Teresa Marziano,          Vice President             Senior Vice President of
53                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003 and
                                                     Co-Chief Investment
                                                     Officer of Global Real
                                                     Estate Investments since
                                                     July 2004.  Prior
                                                     thereto, she was a Senior
                                                     Analyst of investment
                                                     research at Sanford C.
                                                     Bernstein & Co., Inc.
                                                     ("SCB") since prior to
                                                     2003.

Seth J. Masters,          Vice President             Executive Vice President
48                                                   of the Adviser,** with
                                                     which he has been
                                                     associated since prior to
                                                     2003.

Melanie A. May,           Vice President             Vice President of the
38                                                   Adviser,** with which she
                                                     has been associated since
                                                     prior to 2003.

Siobhan F. McManus,       Vice President             Senior Vice President of
46                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Christopher H. Nikolich,  Vice President             Senior Vice President of
38                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Raymond J. Papera,        Vice President             Senior Vice President of
52                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Michele Patri,            Vice President             Senior Vice President of
44                                                   ABL,** and a Non-U.S.
                                                     Sector Head since prior to
                                                     2003.

Joseph G. Paul,           Vice President             Senior Vice President of
48                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003, Chief
                                                     Investment Officer of
                                                     Small- and Mid-Cap Value
                                                     Equities (since 2003) and
                                                     Advanced Value (since prior
                                                     to 2003) and Co-Chief
                                                     Investment Officer of Real
                                                     Estate Investments since
                                                     July 2004. He has also
                                                     served as Chief Investment
                                                     Officer of Advanced Value
                                                     and held the same position
                                                     at SCB since prior to 2003.

Douglas J. Peebles,       Vice President             Executive Vice President
42                                                   of the Adviser,** with
                                                     which he has been
                                                     associated since prior to
                                                     2003.

John D. Phillips,         Vice President             Senior Vice President of
61                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Jeffrey S. Phlegar,       Vice President             Executive Vice President
41                                                   of the Adviser,** with
                                                     which he has been
                                                     associated since prior to
                                                     2003.

Jack E. Plym,             Vice President             Senior Vice President of
42                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

James G. Reilly,          Vice President             Executive Vice President
46                                                   of the Adviser,** with
                                                     which he has been
                                                     associated since prior to
                                                     2003.

Michael J. Reilly,        Vice President             Senior Vice President of
43                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

David Robinson,           Vice President             Vice President of
37                                                   AllianceBernstein
                                                     Australia Ltd., with
                                                     which he has been
                                                     associated since March
                                                     2003.

Steve C. Scanlon,         Vice President             Senior Vice President of
38                                                   ABI,** with which he has
                                                     been associated since
                                                     September 2003. In addition
                                                     to his position as Senior
                                                     Vice President of the
                                                     Adviser, he assumed his new
                                                     position as National Sales
                                                     Director for Insurance
                                                     Products in August 2004.
                                                     Prior thereto, he was a
                                                     Senior Vice President at
                                                     Manulife Financial since
                                                     prior to 2003.

Robert W. Scheetz,        Vice President             Senior Vice President of
42                                                   the Adviser, with which
                                                     he has been associated
                                                     since prior to 2003.

Jane E. Schneirov,        Vice President             Senior Vice President of
38                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Kevin F. Simms,           Vice President             Senior Vice President of
42                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003, and
                                                     Co-Chief Investment Officer
                                                     of International Value
                                                     Equities since 2003. He
                                                     also has been Director of
                                                     Research for Global and
                                                     International Value
                                                     Equities since prior to
                                                     2003.

Valli Srikanthapalan,     Vice President             Senior Vice President of
34                                                   ABL,** with which she has
                                                     been associated since
                                                     prior to 2003.

Francis X. Suozzo,        Vice President             Senior Vice President of
51                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Christopher M. Toub,      Vice President             Executive Vice President
48                                                   of the Adviser,** with
                                                     which he has been
                                                     associated since prior to
                                                     2003.

Annie C. Tsao,            Vice President             Senior Vice President of
55                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Wen-Tse Tseng,            Vice President             Vice President of the
42                                                   Adviser,** with which he
                                                     has been associated since
                                                     March 2006. Prior thereto,
                                                     he was the
                                                     healthcare-sector portfolio
                                                     manager for the small-cap
                                                     growth team at William D.
                                                     Witter from August 2003 to
                                                     February 2006. He also
                                                     worked at Weiss, Peck &
                                                     Greer, managing the
                                                     healthcare sector with the
                                                     same team with which he
                                                     worked at William D. Witter
                                                     from April 2002 to August
                                                     2003. Prior thereto, he was
                                                     a senior healthcare analyst
                                                     at JP Morgan Fleming Asset
                                                     Management since prior to
                                                     2003.

Jean Van De Walle,        Vice President             Senior Vice President of
49                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Paul Vogel,               Vice President             Senior Vice President of
35                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

P. Scott Wallace,         Vice President             Senior Vice President of
43                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Janet A. Walsh,           Vice President             Senior Vice President of
46                                                   the Adviser,** with which
                                                     she has been associated
                                                     since prior to 2003.

Andrew J. Weiner,         Vice President             Senior Vice President of
39                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Greg J. Wilensky,         Vice President             Senior Vice President of
41                                                   the Adviser,** and
                                                     Director of Stable Value
                                                     Investments, with which he
                                                     has been associated since
                                                     prior to 2003.

David Yuen,               Vice President             Senior Vice President of
43                                                   the Adviser,** with which
                                                     he has been associated
                                                     since prior to 2003.

Joseph J. Mantineo,       Treasurer and              Senior Vice President of
49                        Chief Financial            ABIS,**  with which he
                          Officer                    has been associated since
                                                     prior to 2003.

Emilie D. Wrapp,          Secretary                  Senior Vice President,
52                                                   Assistant General Counsel
                                                     and Assistant Secretary of
                                                     ABI,** with which she has
                                                     been associated since prior
                                                     to 2003.

Thomas R. Manley,         Controller                 Vice President of the
56                                                   Adviser,** with which he
                                                     has been associated since
                                                     prior to 2003.

- ----------
*    The address for each of the Fund's officers is 1345 Avenue of the Americas,
     New York, NY 10105.
**   The Adviser, AllianceBernstein Investments, Inc., ABIS, ABL, ABJL, and SCB
     & Co. are affiliates of the Fund.
***  Effective June 30, 2008, Steven Mussbaum, M.D. will replace Norman M.
     Fidel.

          The Fund does not pay any fees to, or reimburse expenses of, its
Directors who are considered "interested persons" of the Fund. The aggregate
compensation paid by the Fund to each of the Directors during the Fund's fiscal
year ended December 31, 2007, the aggregate compensation paid to each of the
Directors during calendar year 2007 by the AllianceBernstein Fund Complex, and
the total number of registered investment companies (and separate investment
portfolios within those companies) in the AllianceBernstein Fund Complex with
respect to which each of the Directors serves as a director or trustee, are set
forth below. Neither the Fund nor any other registered investment company in the
AllianceBernstein Fund Complex provides compensation in the form of pension or
retirement benefits to any of its directors or trustees.



                                                                                          Total Number of
                                                               Total Number of            Investment Portfolios
                                                               Registered Investment      in the
                                                               Companies in the           AllianceBernstein
                                          Total Compensation   AllianceBernstein          Fund Complex
                                          From the             Fund Complex,              Including the Fund
                          Aggregate       AllianceBernstein    Including the Fund as      as to which the
                          Compensation    Fund Complex,        to which the Director is   Director is a Director
Name of Trustee           from the Fund   Including the Fund   a Director or Trustee      or Trustee
- ---------------           ------------    ---------            ------------------------   ----------------------
                                                                                  
Marc O. Mayer             $0              $0                             35                   102
David H. Dievler          $4,015          $216,700                       36                   103
John H. Dobkin            $4,417          $241,700                       35                   102
Michael J. Downey         $4,279          $226,300                       35                   102
William H. Foulk, Jr.     $7,977          $443,600                       37                   104
D. James Guzy             $4,279          $226,300                       35                   102
Nancy P. Jacklin          $4,279          $226,300                       35                   102
Garry L. Moody*           $0              $0                             34                   101
Marshall C. Turner, Jr.   $4,279          $225,700                       35                   102
Earl D. Weiner            $4,331          $226,900                       35                   102


- ----------
*    Mr. Moody was elected as a Director of the Fund to be effective February 1,
     2008.

          As of April 5, 2008, the Directors and officers of the Fund as a group
owned less than 1% of the shares of the Fund.

Adviser
- -------

          The Adviser, a Delaware limited partnership with principal offices at
1345 Avenue of the Americas, New York, New York 10105, has been retained under
an investment advisory agreement (the "Advisory Agreement") to provide
investment advice and, in general, to conduct the management and investment
program of the Fund under the supervision of the Board (see "Management of the
Fund" in the Prospectuses).

          The Adviser is a leading global investment management firm supervising
client accounts with assets as of December 31, 2007, totaling approximately $800
billion. The Adviser provides management services for many of the largest U.S.
public and private employee benefit plans, endowments, foundations, public
employee retirement funds, banks, insurance companies and high net worth
individuals worldwide. The Adviser is also one of the largest mutual fund
sponsors, with a diverse family of globally distributed mutual fund portfolios.
As one of the world's leading global investment management organizations, the
Adviser is able to compete for virtually any portfolio assignment in any
developed capital market in the world.

          The Adviser is a registered investment adviser under the Investment
Advisers Act of 1940, as amended. As of December 31, 2007, AllianceBernstein
Holding, L.P. ("Holding"), a Delaware limited partnership, owned approximately
33.4% of the issued and outstanding units of limited partnership interest in the
Adviser ("AllianceBernstein Units"). Units representing assignments of
beneficial ownership of limited partnership interests in Holding ("Holding
Units") trade publicly on the Exchange under the ticker symbol "AB".
AllianceBernstein Units do not trade publicly and are subject to significant
restrictions on transfer. AB Corp. is the general partner of both the Adviser
and Holding. AB Corp. owns 100,000 general partnership units in Holding and a 1%
general partnership interest in the Adviser. AB Corp. is an indirect
wholly-owned subsidiary of AXA Financial, Inc. ("AXA Financial"), a Delaware
corporation.

          As of December 31, 2007, AXA, AXA Financial, AXA Equitable Life
Insurance Company ("AXA Equitable") and certain subsidiaries of AXA Equitable
beneficially owned approximately 62.8% of the issued and outstanding
AllianceBernstein Units and approximately 1.7% of the issued and outstanding
Holding Units which, including the general partnership interests in the Adviser
and Holding, represent an economic interest of approximately 63.2% in the
Adviser. As of December 31, 2007, SCB Partners, Inc., a wholly-owned subsidiary
of SCB, Inc., beneficially owned approximately 3.1% of the issued and
outstanding AllianceBernstein Units.

          AXA, a French company, is the holding company for an international
group of companies and a worldwide leader in financial protection and wealth
management. AXA operates primarily in Western Europe, North America and the
Asia/Pacific region and, to a lesser extent, in other regions including the
Middle East, Africa and South America. AXA has five operating business segments:
life and savings, property and casualty insurance, international insurance
(including reinsurance), asset management and other financial services. AXA
Financial is a wholly-owned subsidiary of AXA. Equitable is an indirect
wholly-owned subsidiary of AXA Financial.

          The Advisory Agreement became effective on July 22, 1992. The Advisory
Agreement was approved by the unanimous vote, cast in person, of the Fund's
Directors including the Directors who are not parties to the Advisory Agreement
or "interested persons" as defined in the 1940 Act, of any such party, at a
meeting called for the purpose and held on September 10, 1991. At a meeting held
on June 11, 1992, a majority of the outstanding voting securities of the Fund
approved the Advisory Agreement.

          The Advisory Agreement was amended as of June 2, 1994 to provide for
the addition of the AllianceBernstein Americas Government Income Portfolio, the
AllianceBernstein Global Dollar Government Portfolio and the AllianceBernstein
Utility Income Portfolio. The amendment to the Advisory Agreement was approved
by the unanimous vote, cast in person, of the disinterested Directors at a
meeting called for that purpose and held on December 7, 1993.

          The Advisory Agreement was amended as of October 24, 1994 to provide
for the addition of the AllianceBernstein Growth Portfolio and the
AllianceBernstein International Growth Portfolio. The amendment to the Advisory
Agreement was approved by the unanimous vote, cast in person of the
disinterested Directors at a meeting called for that purpose and held on June
14, 1994.

          The Advisory Agreement was amended as of February 1, 1996 to provide
for the addition of the AllianceBernstein Global Technology Portfolio. The
amendment to the Advisory Agreement was approved by the unanimous vote, cast in
person, of the disinterested Directors at a meeting called for that purpose and
held on November 28, 1995.

          The Advisory Agreement was amended as of July 22, 1996 to provide for
the addition of the AllianceBernstein Small Cap Growth Portfolio. The amendment
to the Advisory Agreement was approved by the unanimous vote, cast in person, of
the disinterested Directors at a meeting called for that purpose and held on
June 4, 1996.

          The Advisory Agreement was amended as of December 31, 1996 to provide
for the addition of the AllianceBernstein Real Estate Investment Portfolio. The
amendment to the Advisory Agreement was approved by the unanimous vote, cast in
person, of the disinterested Directors at a meeting called for that purpose and
held on September 10, 1996.

          The Advisory Agreement was amended as of May 1, 1997 to provide for
the addition of the AllianceBernstein High Yield Portfolio. The amendment to the
Advisory Agreement was approved by the unanimous vote, cast in person, of the
disinterested Directors at a meeting called for that purpose and held on April
12, 1997.

          The Advisory Agreement was amended as of May 1, 2001 to provide for
the addition of the AllianceBernstein Small/Mid Cap Value Portfolio, the
AllianceBernstein Value Portfolio and the AllianceBernstein International Value
Portfolio. The amendment to the Advisory Agreement was approved by the unanimous
vote, cast in person, of the disinterested Directors at a meeting called for
that purpose and held on January 31, 2001.

          The Advisory Agreement was amended as of May 1, 2003 to provide for
the addition of the AllianceBernstein U.S. Large Cap Blended Style Portfolio.
The amendment to the Advisory Agreement was approved by the unanimous vote, cast
in person, of the disinterested Directors at a meeting called for that purpose
and held on April 15-17, 2003.

          The Advisory Agreement was amended as of May 1, 2004 to provide for
the addition of the AllianceBernstein Wealth Appreciation Strategy Portfolio and
the AllianceBernstein Balanced Wealth Strategy Portfolio. The amendment to the
Advisory Agreement was approved by the unanimous vote, cast in person, of the
disinterested Directors at a meeting called for that purpose and held on March
16-18, 2004.

          The Advisory Agreement was amended as of May 1, 2005 to provide for
the addition of the AllianceBernstein Global Research Growth Portfolio. The
amendment to the Advisory Agreement was approved by the unanimous vote, cast in
person, of the disinterested Directors at a meeting called for that purpose and
held on February 8-10, 2005.

          The Adviser provides investment advisory services and order placement
facilities for each of the Fund's Portfolios and pays all compensation of
Directors and officers of the Fund who are affiliated persons of the Adviser.
The Adviser or its affiliates also furnish the Fund, without charge, management
supervision and assistance and office facilities and provide persons
satisfactory to the Board to serve as the Fund's officers.

          The Fund has, under the Advisory Agreement, assumed obligation to pay
for all other expenses. As to the obtaining of services other than those
specifically provided to the Fund by the Adviser, the Fund may employ its own
personnel. For such services, the Fund may also utilize personnel employed by
the Adviser or its affiliates and, in such event, the services will be provided
to the Fund at cost and the payments therefore must be specifically approved by
the Board. The following table shows, for the Portfolios listed, the amounts the
Adviser received for such services during the fiscal year ended December 31,
2007.

PORTFOLIO                                                  AMOUNT RECEIVED
- ---------                                                  ---------------

AllianceBernstein Money Market Portfolio                       $94,000
AllianceBernstein Large Cap Growth Portfolio                   $94,000
AllianceBernstein Growth and Income Portfolio                  $94,000
AllianceBernstein Balanced Shares Portfolio                    $94,000
AllianceBernstein Utility Income Portfolio                     $94,000
AllianceBernstein Growth Portfolio                             $94,000
AllianceBernstein International Growth Portfolio               $94,000
AllianceBernstein Global Technology Portfolio                  $94,000
AllianceBernstein Small Cap Growth Portfolio                   $94,000
AllianceBernstein Real Estate Investment Portfolio             $94,000
AllianceBernstein International Value Portfolio                $94,000
AllianceBernstein Small/Mid Cap Value Portfolio                $94,000
AllianceBernstein Value Portfolio                              $94,000
AllianceBernstein U.S. Large Cap Blended Style Portfolio           $0
AllianceBernstein Wealth Appreciation Strategy Portfolio           $0
AllianceBernstein Balanced Wealth Strategy Portfolio               $0
AllianceBernstein Global Research Growth Portfolio                 $0

          For services rendered by the Adviser under the Advisory Agreements,
the Portfolios paid the Adviser, effective September 7, 2004, the annual
percentage rates of the average daily NAV as listed below (for the year 2004,
the Portfolios' previously effective advisory fees were waived to this amount by
the Adviser after January 1, 2004).

                                           CONTRACTUAL FEE, AS A PERCENTAGE OF
                                                THE PORTFOLIO'S AGGREGATE
PORTFOLIO                                              NET ASSETS
- ---------                                              ----------

AllianceBernstein Money Market Portfolio  .45 of 1% of the first $2.5 billion,
                                          .40 of 1% of the excess over
                                          $2.5 billion up to $5 billion and .35
                                          of 1% of the excess over $5 billion

AllianceBernstein Large Cap Growth        .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Growth and Income       .55 of 1% of the first $2.5 billion,
Portfolio                                 .45 of 1% of the excess over $2.5
                                          billion up to $5 billion and .40 of
                                          1% of the excess over $5 billion

AllianceBernstein Balanced Shares         .55 of 1% of the first $2.5 billion,
Portfolio                                 .45 of 1% of the excess over $2.5
                                          billion up to $5 billion and .40 of
                                          1% of the excess over $5 billion

AllianceBernstein Utility Income          .55 of 1% of the first $2.5 billion,
Portfolio                                 .45 of 1% of the excess over $2.5
                                          billion up to $5 billion and .40 of
                                          1% of the excess over $5 billion

AllianceBernstein International Growth    .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Growth Portfolio        .75 of 1% of the first $2.5 billion,
                                          .65 of 1% of the excess over
                                          $2.5 billion up to $5 billion
                                          and .60 of 1% of the excess
                                          over $5 billion

AllianceBernstein Global Technology       .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Small Cap Growth        .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Real Estate             .55 of 1% of the first $2.5 billion,
Investment Portfolio                      .45 of 1% of the excess over $2.5
                                          billion up to $5 billion and .40 of
                                          1% of the excess over $5 billion

AllianceBernstein International Value     .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Small/Mid Cap Value     .75 of 1% of the first $2.5 billion,
Portfolio                                 .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

AllianceBernstein Value Portfolio         .55 of 1% of the first $2.5 billion,
                                          .45 of 1% of the excess over
                                          $2.5 billion up to $5 billion and
                                          .40 of 1% of the excess over $5
                                          billion

AllianceBernstein U.S. Large Cap          .65 of 1% of the first $2.5 billion,
Blended Style Portfolio                   .55 of 1% of the excess over $2.5
                                          billion up to $5 billion and .50 of
                                          1% of the excess over $5 billion

AllianceBernstein Wealth Appreciation     .65 of 1% of the first $2.5 billion,
Strategy Portfolio                        .55 of 1% of the excess over $2.5
                                          billion up to $5 billion and .50 of
                                          1% of the excess over $5 billion

AllianceBernstein Balanced Wealth         .55 of 1% of the first $2.5 billion,
Strategy Portfolio                        .45 of 1% of the excess over $2.5
                                          billion up to $5 billion and .40 of
                                          1% of the excess over $5 billion

AllianceBernstein Global Research         .75 of 1% of the first $2.5 billion,
Growth Portfolio                          .65 of 1% of the excess over $2.5
                                          billion up to $5 billion and .60 of
                                          1% of the excess over $5 billion

          These fees are accrued daily and paid monthly. The Adviser has
contractually agreed to waive its fee and bear certain expenses so that total
expenses do not, on an annual basis, exceed the amount indicated for the class
and Portfolio listed below:

                    Portfolios                                     Expense Caps
                    ----------                                     ------------

AllianceBernstein Global Research Growth Portfolio                Class A  1.20%
                                                                  Class B  1.45%

AllianceBernstein International Value Portfolio                   Class A  1.20%
                                                                  Class B  1.45%

AllianceBernstein Small/Mid Cap Value Portfolio                   Class A  1.20%
                                                                  Class B  1.45%

AllianceBernstein U.S. Large Cap Blended Style Portfolio          Class A  1.20%
                                                                  Class B  1.45%

AllianceBernstein Value Portfolio                                 Class A  1.20%
                                                                  Class B  1.45%

AllianceBernstein Wealth Appreciation Strategy Portfolio          Class A  .90%
                                                                  Class B  1.15%

AllianceBernstein Balanced Wealth Strategy Portfolio              Class A  .75%
                                                                  Class B  1.00%

          This waiver extends through the current fiscal year for the
AllianceBernstein Global Research Growth Portfolio, the AllianceBernstein
International Value Portfolio, the AllianceBernstein Small/Mid Cap Value
Portfolio, the AllianceBernstein U.S. Large Cap Blended Style Portfolio, the
AllianceBernstein Value Portfolio, the AllianceBernstein Wealth Appreciation
Strategy Portfolio and the AllianceBernstein Balanced Wealth Strategy Portfolio,
and may be extended by the Adviser for additional one-year terms.

          The following table shows, for each Portfolio, the amounts the Adviser
received for such services for the last three fiscal years (or since
commencement of operations).

                                     FISCAL YEAR END
PORTFOLIO                              DECEMBER 31          AMOUNT RECEIVED
- ---------                              -----------          ---------------

AllianceBernstein Money Market
Portfolio
                                          2005              $    284,954
                                          2006              $    262,247
                                          2007              $    230,975

AllianceBernstein Large Cap
Growth Portfolio
                                          2005              $  8,781,605
                                          2006              $  7,856,903
                                          2007              $  6,355,448

AllianceBernstein Growth and
Income Portfolio
                                          2005              $ 14,516,438
                                          2006              $ 13,752,138
                                          2007              $ 13,297,832

AllianceBernstein Balanced
Shares Portfolio
                                          2005              $  1,265,133
                                          2006              $  1,154,081
                                          2007              $  1,059,633

AllianceBernstein Utility Income
Portfolio
                                          2005              $    356,552
                                          2006              $    388,916
                                          2007              $    458,412

AllianceBernstein Growth
Portfolio
                                          2005              $  2,076,979
                                          2006              $  1,883,490
                                          2007              $  1,602,853

AllianceBernstein International
Growth Portfolio
                                          2005              $    482,777
                                          2006              $    771,112
                                          2007              $  1,011,102

AllianceBernstein Global
Technology Portfolio
                                          2005              $  1,840,660
                                          2006              $  1,889,748
                                          2007              $  2,028,928

AllianceBernstein Small Cap
Growth Portfolio
                                          2005              $    557,481
                                          2006              $    553,548
                                          2007              $    504,142

AllianceBernstein Real Estate
Investment Portfolio
                                          2005              $    596,608
                                          2006              $    566,189
                                          2007              $    535,331

AllianceBernstein Small/Mid Cap
Value Portfolio
                                          2005              $  2,118,599
                                          2006              $  2,727,761
                                          2007              $  3,472,328

AllianceBernstein Value Portfolio
                                          2005              $    902,805
                                          2006              $  1,339,967
                                          2007              $  1,831,675

AllianceBernstein International
Value Portfolio
                                          2005              $  4,131,454
                                          2006              $ 10,410,605
                                          2007              $ 19,529,247

AllianceBernstein U.S. Large Cap
Blended Style Portfolio
                                          2005              $          0*
                                          2006              $     16,238*
                                          2007              $     15,238*

AllianceBernstein Wealth
Appreciation Strategy Portfolio
                                          2005              $          0*
                                          2006              $     35,992*
                                          2007              $          0*

AllianceBernstein Balanced
Wealth Strategy Portfolio
                                          2005              $    191,530*
                                          2006              $    563,936
                                          2007              $    916,995*

AllianceBernstein Global
Research Growth Portfolio
                                          2005              $          0*
                                          2006              $          0*
                                          2007              $          0*

- ----------
*    Amounts received are net of the amounts the Adviser waived under a
     contractual fee waiver or otherwise. Amounts waived were:

                                                          AMOUNT WAIVED UNDER
                                                       CONTRACTUAL FEE WAIVER OR
                                                               OTHERWISE
                                                               ---------

AllianceBernstein Money Market Portfolio                    2007  $          0

AllianceBernstein Large Cap Growth Portfolio                2007  $          0

AllianceBernstein Growth and Income Portfolio               2007  $          0

AllianceBernstein Balanced Shares Portfolio                 2007  $          0

AllianceBernstein Utility Income Portfolio                  2007  $          0

AllianceBernstein International Growth Portfolio            2007  $          0

AllianceBernstein Global Technology Portfolio               2007  $          0

AllianceBernstein Small Cap Growth Portfolio                2007  $          0

AllianceBernstein Real Estate Investment Portfolio          2007  $          0

AllianceBernstein International Value Portfolio             2007  $          0

AllianceBernstein Small/Mid Cap Value Portfolio             2007  $          0

AllianceBernstein Value Portfolio                           2007  $          0

AllianceBernstein U.S. Large Cap Blended Style Portfolio    2005  $    106,596
                                                            2006  $     90,927
                                                            2007  $     94,428

AllianceBernstein Wealth Appreciation Strategy Portfolio    2005  $    166,503
                                                            2006  $    191,660
                                                            2007  $    223,382

AllianceBernstein Balanced Wealth Strategy Portfolio        2005  $     91,206
                                                            2006  $          0
                                                            2007  $     22,796

AllianceBernstein Global Research Growth Portfolio          2005  $     29,587
                                                            2006  $     72,351
                                                            2007  $     86,902

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

          The Advisory Agreement is terminable with respect to any Portfolio
without penalty on 60 days' written notice by a vote of a majority of the
outstanding voting securities of such Portfolio or by a vote of a majority of
the Fund's Directors, or by the Adviser on 60 days' written notice, and will
automatically terminate in the event of its assignment. The Advisory Agreement
provides that in the absence of willful misfeasance, bad faith or gross
negligence on the part of the Adviser, or of reckless disregard of its
obligations thereunder, the Adviser shall not be liable for any action or
failure to act in accordance with its duties thereunder.

          The Advisory Agreement continues in effect, provided that such
continuance is specifically approved at least annually by a vote of a majority
of the Fund's outstanding voting securities or by the Board, including in either
case approval by a majority of the Directors who are not parties to the Advisory
Agreement or "interested persons" of such parties, as defined by the 1940 Act.
Most recently, continuance of the Agreement was approved for an additional
annual term by the Board, including a majority of the Directors who are not
parties to the Advisory Agreement or interested persons of any such party, at a
meeting held on September 25, 2007.

          The Adviser may act as an investment adviser to other persons, firms
or corporations, including investment companies, and is investment adviser to
the following registered investment companies: AllianceBernstein Balanced
Shares, Inc., AllianceBernstein Blended Style Series, Inc., AllianceBernstein
Bond Fund, Inc., AllianceBernstein Cap Fund, Inc., AllianceBernstein Corporate
Shares, AllianceBernstein Diversified Yield Fund, Inc., AllianceBernstein
Exchange Reserves, AllianceBernstein Fixed-Income Shares, Inc.,
AllianceBernstein Focused Growth & Income Fund, Inc., AllianceBernstein Global
Bond Fund, Inc., AllianceBernstein Global Health Care Fund, Inc.,
AllianceBernstein Global Real Estate Investment Fund, Inc., AllianceBernstein
Global Research Growth Fund, Inc., AllianceBernstein Global Technology Fund,
Inc., AllianceBernstein Greater China '97 Fund, Inc., AllianceBernstein Growth
and Income Fund, Inc., AllianceBernstein High Yield Fund, Inc.,
AllianceBernstein Institutional Funds, Inc., AllianceBernstein International
Growth Fund, Inc., AllianceBernstein International Research Growth Fund, Inc.,
AllianceBernstein Large Cap Growth Fund, Inc., AllianceBernstein Mid-Cap Growth
Fund, Inc., AllianceBernstein Multi-Market Strategy Trust, Inc.,
AllianceBernstein Municipal Income Fund, Inc., AllianceBernstein Municipal
Income Fund II, AllianceBernstein Trust, AllianceBernstein Utility Income Fund,
Inc., The AllianceBernstein Pooling Portfolios, The AllianceBernstein
Portfolios, Sanford C. Bernstein Fund, Inc. and Sanford C. Bernstein Fund II,
Inc., all registered open-end investment companies; and to AllianceBernstein
Global High Income Fund, Inc., AllianceBernstein Income Fund, Inc., ACM Managed
Dollar Income Fund, Inc., AllianceBernstein National Municipal Income Fund,
Inc., Alliance California Municipal Income Fund, Inc., Alliance New York
Municipal Income Fund, Inc., and The Spain Fund, Inc., all registered closed-end
investment companies.

ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS' PORTFOLIO MANAGERS

          Additional information regarding the investment professional(s)(3)
primarily responsible for the day-to-day management of each Portfolio's
portfolio may be found below. For additional information about the portfolio
management of each Portfolio, see "Management of the Portfolios - Portfolio
Managers" in the Portfolio's prospectus.

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

          None of the investment professionals identified below owned any equity
securities of the Portfolio directly or indirectly because shares of the
Portfolio are held through the separate accounts of certain life insurance
companies (the "Insurers").

ALLIANCEBERNSTEIN LARGE CAP GROWTH PORTFOLIO

          The management of and investment decisions for the Fund's portfolio
are made by the Adviser's U.S. Large Cap Growth Investment Team. Mr. James G.
Reilly, Mr. David P. Handke, Jr., P. Scott Wallace and Mr. Michael J. Reilly are
the investment professionals with the most significant responsibility for the
day-to-day management of the Portfolio. For additional information about the
portfolio management of the Fund, see "Management of the Fund - Portfolio
Managers" in the Fund's prospectus.

          The following tables provide information regarding registered
investment companies other than the Portfolio, other pooled investment vehicles
and other accounts over which Mr. James G. Reilly, Mr. David P. Handke, Jr., P.
Scott Wallace and Mr. Michael J. Reilly also have day-to-day management
responsibilities. The tables provide the numbers of such accounts, the total
assets in such accounts and the number of accounts and total assets whose fees
are based on performance. The information is provided as of December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
James G. Reilly        14          $9,885,000,000      1            $50,000,000
- --------------------------------------------------------------------------------
David P. Handke, Jr.   13          $9,346,000,000      1            $50,000,000
- --------------------------------------------------------------------------------
P. Scott Wallace       13          $9,346,000,000      1            $50,000,000
- --------------------------------------------------------------------------------
Michael J. Reilly      13          $9,346,000,000      1            $50,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets      Investment     Investment
                      Pooled       of Pooled         Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
James G. Reilly         18         $1,275,000,000       None           None
- --------------------------------------------------------------------------------
David P. Handke, Jr.    18         $1,275,000,000       None           None
- --------------------------------------------------------------------------------
P. Scott Wallace        18         $1,275,000,000       None           None
- --------------------------------------------------------------------------------
Michael J. Reilly       18         $1,275,000,000       None           None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
James G. Reilly       39,277      $37,108,000,000     11          $3,586,000,000
- --------------------------------------------------------------------------------
David P. Handke, Jr.  39,276      $35,456,000,000     10          $1,934,000,000
- --------------------------------------------------------------------------------
P. Scott Wallace      39,276      $35,456,000,000     10          $1,934,000,000
- --------------------------------------------------------------------------------
Michael J. Reilly     39,276      $35,456,000,000     10          $1,934,000,000
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN GROWTH AND INCOME PORTFOLIO

          Mr. Frank Caruso is the investment professional primarily responsible
for the day-to-day management of the Portfolio's portfolio. The following tables
provide information regarding registered investment companies other than the
Portfolio, other pooled investment vehicles and other accounts over which Mr.
Caruso also has day-to-day management responsibilities. The tables provide the
numbers of such accounts, the total assets in such accounts and the number of
accounts and total assets whose fees are based on performance. The information
is provided as of the Portfolio's fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Registered               Registered
Number of            Assets of            Investment               Investment
Registered           Registered           Companies                Companies
Investment           Investment           Managed with             Managed with
Companies            Companies            Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
   3                 $7,641,000,000           None               None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Pooled                   Pooled
Number of            Assets of            Investment               Investment
Pooled               Pooled               Vehicles                 Vehicles
Investment           Investment           Managed with             Managed with
Vehicles             Vehicles             Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
   None                None                  None                     None
- --------------------------------------------------------------------------------

- -------------------------------------------------------------------------------
                                OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                            Number of             Total
Total                 Total                 Other                 Assets of
Number of             Assets of             Accounts              Other
Other                 Other                 Managed with          Accounts with
Accounts              Accounts              Performance-          Performance-
Managed               Managed               based Fees            based Fees
- --------------------------------------------------------------------------------
   6                  $2,653,000,000             1                $2,182,000,000
- -------------------------------------------------------------------------------

ALLIANCEBERNSTEIN BALANCED SHARES PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the Balanced Shares Investment Team, comprised of senior
members of the Relative Value Investment Team and senior members of the U.S.
Core Investment Grade: Core Fixed-Income Investment Team. Each Team relies
heavily on the fundamental analysis and research of the Adviser's large internal
research staff.

          While the members of the Balanced Shares Investment Team work jointly
to determine the investment strategy, as of April 1, 2007, Mr. Frank Caruso,
CFA, who is the CIO of the Relative Value Investment Team, and Mr. Aryeh
Glatter, a member of the Relative Value Investment Team, are responsible for the
day-to-day management of the equity component of the Portfolio's portfolio. Mr.
Caruso, a Senior Vice President of the Adviser, has been a member of the
Relative Value Investment Team since prior to 2003 and has collaborated with
other members of the Relative Value Investment Team on the Portfolio's
investments since prior to 2003. Mr. Glatter, a Senior Vice President of the
Adviser, has been a member of the Relative Value Investment Team since prior to
2003 and has collaborated with other members of the Relative Value Investment
Team on the Portfolio's investments since prior to 2003.

          As of April 1, 2007, the U.S. Core Investment Grade: Core Fixed-Income
Investment Team is responsible for day-to-day management of the debt component
of the Portfolio's portfolio.

          The following tables provide information regarding registered
investment companies other than the Portfolio, other pooled investment vehicles
and other accounts over which the Portfolio's portfolio managers also have
day-to-day management responsibilities. The tables provide the numbers of such
accounts, the total assets in such accounts and the number of accounts and total
assets whose fees are based on performance. The information is provided as of
the Portfolio's fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Frank Caruso              4        $9,848,000,000      None            None
- --------------------------------------------------------------------------------
Aryeh Glatter             1        $1,071,000,000      None            None
- --------------------------------------------------------------------------------
Douglas J. Peebles       31        $21,686,000,000       1          $20,000,000
- --------------------------------------------------------------------------------
Jeffrey S. Phlegar       32        $20,805,000,000       1          $20,000,000
- --------------------------------------------------------------------------------
Alison M. Martier         6        $12,663,000,000     None            None
- --------------------------------------------------------------------------------
Greg J. Wilensky         21        $17,144,000,000       1          $20,000,000
- --------------------------------------------------------------------------------
Shawn E. Keegan           6        $12,663,000,000     None            None
- --------------------------------------------------------------------------------
Joran Laird               6        $12,663,000,000     None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Frank Caruso            None          None             None             None
- --------------------------------------------------------------------------------
Aryeh Glatter           None          None             None             None
- --------------------------------------------------------------------------------
Douglas J. Peebles       54        $29,723,000,000       2        $3,090,000,000
- --------------------------------------------------------------------------------
Jeffrey S. Phlegar       66        $28,536,000,000       4        $3,341,000,000
- --------------------------------------------------------------------------------
Alison M. Martier         7        $306,000,000        None             None
- --------------------------------------------------------------------------------
Greg J. Wilensky         34        $6,742,000,000        3        $479,000,000
- --------------------------------------------------------------------------------
Shawn E. Keegan           7        $306,000,000        None             None
- --------------------------------------------------------------------------------
Joran Laird               7        $306,000,000        None             None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Frank Caruso             6        $2,653,000,000       1          $2,182,000,000
- --------------------------------------------------------------------------------
Aryeh Glatter            11       $288,000,000        None             None
- --------------------------------------------------------------------------------
Douglas J. Peebles      495       $94,067,000,000      15         $5,450,000,000
- --------------------------------------------------------------------------------
Jeffrey S. Phlegar     1,328      $93,631,000,000      19         $6,033,000,000
- --------------------------------------------------------------------------------
Alison M. Martier       226       $11,525,000,000      4          $563,000,000
- --------------------------------------------------------------------------------
Greg J. Wilensky       1,103      $17,192,000,000      10         $1,271,000,000
- --------------------------------------------------------------------------------
Shawn E. Keegan         232       $11,536,000,000      4          $563,000,000
- --------------------------------------------------------------------------------
Joran Laird             226       $11,525,000,000      4          $563,000,000
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN UTILITY INCOME PORTFOLIO

          Ms. Annie Tsao is the investment professional primarily responsible
for the day-to-day management of the Portfolio's portfolio. The following tables
provide information regarding registered investment companies other than the
Portfolio, other pooled investment vehicles and other accounts over which Ms.
Tsao also has day-to-day management responsibilities. The tables provide the
numbers of such accounts, the total assets in such accounts and the number of
accounts and total assets whose fees are based on performance. The information
is provided as of the Portfolio's fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Registered               Registered
Number of            Assets of            Investment               Investment
Registered           Registered           Companies                Companies
Investment           Investment           Managed with             Managed with
Companies            Companies            Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
   1                 $308,000,000           None                      None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Pooled                   Pooled
Number of            Assets of            Investment               Investment
Pooled               Pooled               Vehicles                 Vehicles
Investment           Investment           Managed with             Managed with
Vehicles             Vehicles             Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
  None                 None                   None                    None
- -------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                            Number of              Total
Total                 Total                 Other                  Assets of
Number of             Assets of             Accounts               Other
Other                 Other                 Managed with           Accounts with
Accounts              Accounts              Performance-           Performance-
Managed               Managed               based Fees             based Fees
- --------------------------------------------------------------------------------
   None                  None                  None                   None
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN GROWTH PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the U.S. Growth Team. Mr. Alan E. Levi, Mr. Jack E. Plym,
Mr. William D. Baird, and Mr. Robert H. Ginsberg are the investment
professionals with the most significant responsibility for the day-to-day
management of the Portfolio's portfolio. The following tables provide
information regarding registered investment companies other than the Portfolio,
other pooled investment vehicles and other accounts over which the Portfolio's
portfolio managers also have day-to-day management responsibilities. The tables
provide the numbers of such accounts, the total assets in such accounts and the
number of accounts and total assets whose fees are based on performance. The
information is provided as of the Portfolio's fiscal year ended December 31,
2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
- --------------------------------------------------------------------------------
                                                                  Total
                                                    Number of     Assets of
                      Total        Total            Registered    Registered
                      Number of    Assets of        Investment    Investment
                      Registered   Registered       Companies     Companies
                      Investment   Investment       Managed with  Managed with
                      Companies    Companies        Performance-  Performance-
Portfolio Manager     Managed      Managed          based Fees    based Fees
- --------------------------------------------------------------------------------
Alan E. Levi             4         $5,459,000,000         2       $4,125,000,000
- --------------------------------------------------------------------------------
Jack E. Plym             4         $5,459,000,000         2       $4,125,000,000
- --------------------------------------------------------------------------------
William D. Baird         4         $5,459,000,000         2       $4,125,000,000
- --------------------------------------------------------------------------------
Robert H. Ginsberg       4         $5,459,000,000         2       $4,125,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Alan E. Levi             5         $549,000,000        None            None
- --------------------------------------------------------------------------------
Jack E. Plym             5         $549,000,000        None            None
- --------------------------------------------------------------------------------
William D. Baird         5         $549,000,000        None            None
- --------------------------------------------------------------------------------
Robert H. Ginsberg       5         $549,000,000        None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Alan E. Levi            24        $1,912,000,000       None            None
- --------------------------------------------------------------------------------
Jack E. Plym            24        $1,912,000,000       None            None
- --------------------------------------------------------------------------------
William D. Baird        24        $1,912,000,000       None            None
- --------------------------------------------------------------------------------
Robert H. Ginsberg      24        $1,912,000,000       None            None
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY PORTFOLIO

          Ms. Janet Walsh is the investment professional primarily responsible
for the day-to-day management of the Portfolio's portfolio. The following tables
provide information regarding registered investment companies other than the
Portfolio, other pooled investment vehicles and other accounts over which Ms.
Walsh also has day-to-day management responsibilities. The tables provide the
numbers of such accounts, the total assets in such accounts and the number of
accounts and total assets whose fees are based on performance. The information
is provided as of the Portfolio's fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Registered               Registered
Number of            Assets of            Investment               Investment
Registered           Registered           Companies                Companies
Investment           Investment           Managed with             Managed with
Companies            Companies            Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
    21               $5,113,000,000          None                     None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                   Total
                                          Number of                Assets of
Total                Total                Pooled                   Pooled
Number of            Assets of            Investment               Investment
Pooled               Pooled               Vehicles                 Vehicles
Investment           Investment           Managed with             Managed with
Vehicles             Vehicles             Performance-             Performance-
Managed              Managed              based Fees               based Fees
- --------------------------------------------------------------------------------
  30                 $13,935,000,000           4                   $506,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                            Number of             Total
Total                 Total                 Other                 Assets of
Number of             Assets of             Accounts              Other
Other                 Other                 Managed with          Accounts with
Accounts              Accounts              Performance-          Performance-
Managed               Managed               based Fees            based Fees
- --------------------------------------------------------------------------------
   290                $47,526,000,000           58                $7,223,000,000
- -------------------------------------------------------------------------------

ALLIANCEBERNSTEIN U.S. LARGE CAP BLENDED STYLE PORTFOLIO
ALLIANCEBERNSTEIN WEALTH APPRECIATION STRATEGY PORTFOLIO
ALLIANCEBERNSTEIN BALANCED WEALTH STRATEGY PORTFOLIO

          The management of and investment decisions for each of the Portfolio's
portfolios are made by the Blend Investment Policy Team, comprised of senior
Blend portfolio managers. Mr. Daniel T. Grasman, Mr. Mark A. Hamilton, Mr.
Joshua Lisser, Mr. Seth J. Masters and Mr. Christopher H. Nikolich are the
investment professionals with the most significant responsibility for the
day-to-day management of each Portfolio's portfolio. The following tables
provide information regarding registered investment companies other than the
Portfolios, other pooled investment vehicles and other accounts over which the
Portfolios' portfolio managers also have day-to-day responsibilities for
coordinating investments. The tables provide the numbers of such accounts, the
total assets in such accounts and the number of accounts and total assets whose
fees are based on performance. The information is provided as of the Portfolio's
fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                      (excluding the referenced Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
AllianceBernstein U.S. Large Cap Blended Style Portfolio
- --------------------------------------------------------------------------------
Mr. Daniel T.
Grasman              None          None                 None           None
- --------------------------------------------------------------------------------
Mr. Mark A.
Hamilton             14            $21,322,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Joshua
Lisser               44            $53,525,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Seth J.
Masters              44            $53,525,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Christopher
H. Nikolich          44            $53,525,000,000      None           None
- --------------------------------------------------------------------------------
AllianceBernstein Wealth Appreciation Strategy Portfolio
- --------------------------------------------------------------------------------
Mr. Daniel T.        None          None                 None           None
Grasman
- --------------------------------------------------------------------------------
Mr. Mark A.
Hamilton             15            $21,338,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Joshua
Lisser               44            $53,513,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Seth J.
Masters              44            $53,513,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Christopher
H. Nikolich          44            $53,513,000,000      None           None
- --------------------------------------------------------------------------------
AllianceBernstein Balanced Wealth Strategy Portfolio
- --------------------------------------------------------------------------------
Mr. Daniel T.        None          None                 None           None
Grasman
- --------------------------------------------------------------------------------
Mr. Mark A.
Hamilton             14            $21,128,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Joshua
Lisser               44            $53,332,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Seth J.
Masters              44            $53,332,000,000      None           None
- --------------------------------------------------------------------------------
Mr. Christopher
H. Nikolich          44            $53,332,000,000      None           None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Daniel T.
Grasman               None         None                 None        None
- --------------------------------------------------------------------------------
Mr. Mark A. Hamilton     7         $7,891,000,000       None        None
- --------------------------------------------------------------------------------
Mr. Joshua Lisser       44         $22,057,000,000         1        $862,000,000
- --------------------------------------------------------------------------------
Mr. Seth J. Masters     44         $22,057,000,000         1        $862,000,000
- --------------------------------------------------------------------------------
Mr. Christopher H.
Nikolich                44         $22,057,000,000         1        $862,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                   Number of
                      Total       Total            Other         Total Assets
                      Number of   Assets of        Accounts      of Other
                      Other       Other            Managed with  Accounts with
                      Accounts    Accounts         Performance-  Performance-
Portfolio Manager     Managed     Managed          based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Daniel T.
Grasman               None        None                 None      None
- --------------------------------------------------------------------------------
Mr. Mark A.
Hamilton              230         $54,842,000,000      43        $10,470,000,000
- --------------------------------------------------------------------------------
Mr. Joshua Lisser     394         $94,260,000,000      55        $14,052,000,000
- --------------------------------------------------------------------------------
Mr. Seth J. Masters   394         $94,260,000,000      55        $14,052,000,000
- --------------------------------------------------------------------------------
Mr. Christopher H.
Nikolich              394         $94,260,000,000      55        $14,502,000,000
- --------------------------------------------------------------------------------

- ----------
*    The Pooled Investment Vehicles and Other Accounts tables above provide
     information regarding Messrs. Fontaine, Hamilton, Lisser, Masters, and
     Nikolich for AllianceBernstein U.S. Large Cap Blended Style Portfolio,
     AllianceBernstein Wealth Appreciation Strategy Portfolio, and
     AllianceBernstein Balanced Wealth Strategy Portfolio.

ALLIANCEBERNSTEIN GLOBAL RESEARCH GROWTH PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the Adviser's Global Research Growth research sector heads
with oversight by the Adviser's Global Research Growth Portfolio Oversight
Group. Mr. Norman M. Fidel, Ms. Jane E. Schneirov, Mr. Eric Hewitt, Mr. Paul
Vogel, Ms. Janet A. Walsh and Mr. Francis X. Suozzo are the research sector
heads with the most significant responsibility for the day-to-day management of
the Portfolio's portfolio.

          The following tables provide information regarding registered
investment companies other than the Portfolio, other pooled investment vehicles
and other accounts over which the Portfolio's portfolio managers also have
day-to-day management responsibilities. The tables provide the numbers of such
accounts, the total assets in such accounts and the number of accounts and total
assets whose fees are based on performance. The information is provided as of
December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Mr. Norman M. Fidel   21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------
Ms. Jane E.
Schneirov             21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------
Mr. Eric Hewitt       21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------
Mr. Paul Vogel        21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------
Ms. Janet A. Walsh    21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------
Mr. Francis
X. Suozzo             21           $5,386,000,000       None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Norman M. Fidel   30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------
Ms. Jane E.
Schneirov             30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------
Mr. Eric Hewitt       30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------
Mr. Paul Vogel        30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------
Ms. Janet A. Walsh    30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------
Mr. Francis
X. Suozzo             30           $13,935,000,000      4           $506,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Norman M. Fidel   290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------
Ms. Jane E.
Schneirov             290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------
Mr. Eric Hewitt       290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------
Mr. Paul Vogel        290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------
Ms. Janet A. Walsh    290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------
Mr. Francis
X. Suozzo             290          $47,526,000,000      58        $7,223,000,000
- --------------------------------------------------------------------------------


ALLIANCEBERNSTEIN MONEY MARKET PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the Money Market Investment Team. Mr. Raymond J. Papera
and Ms. Maria R. Cona are the investment professionals with the most significant
responsibility for the day-to-day management of the Portfolio's portfolio. The
following tables provide information regarding registered investment companies
other than the Portfolio, other pooled investment vehicles and other accounts
over which the Portfolio's portfolio managers also have day-to-day management
responsibilities. The tables provide the numbers of such accounts, the total
assets in such accounts and the number of accounts and total assets whose fees
are based on performance. The information is provided as of the Portfolio's
fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                              (excluding the Fund)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Raymond J. Papera       12         $4,314,000,000       None            None
- --------------------------------------------------------------------------------
Maria R. Cona           12         $4,314,000,000       None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Raymond J. Papera       17         $5,560,000,000       2           $250,000,000
- --------------------------------------------------------------------------------
Maria R. Cona           17         $5,560,000,000       2           $250,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Raymond J. Papera       868        $4,516,000,000       4         $582,000,000
- --------------------------------------------------------------------------------
Maria R. Cona           868         $4,516,000,000      4         $582,000,000
- --------------------------------------------------------------------------------


ALLIANCEBERNSTEIN INTERNATIONAL GROWTH PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the International Growth Portfolio Oversight Group, which
is comprised of senior members of the Global Emerging Growth Investment Team and
the International Large Cap Growth Investment Team. Mr. Hiromitsu Agata, Ms.
Isabel Buccellati, Mr. Gregory Eckersley, Mr. William Johnston, Mr. Ian Kirwan,
Mr. Michael Levy, Mr. Michele Patri, Mr. David Robinson, Mr. Robert Scheetz, Ms.
Valli Srikanthapalan and Mr. Christopher M. Toub are the investment
professionals with the most significant responsibility for the day-to-day
management of the Portfolio's portfolio. The following tables provide
information regarding registered investment companies other than the Portfolio,
other pooled investment vehicles and other accounts over which the Portfolio's
portfolio managers also have day-to-day management responsibilities. The tables
provide the numbers of such accounts, the total assets in such accounts and the
number of accounts and total assets whose fees are based on performance. The
information is provided as of the Portfolio's fiscal year ended December 31,
2007.

- --------------------------------------------------------------------------------
                       REGISTERED INVESTMENT COMPANIES
                          (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Mr. Hiromitsu Agata       3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Ms. Isabel
Buccellati                3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Gregory
Eckersley                32        $19,890,000,000      None           None
- --------------------------------------------------------------------------------
Mr. William
Johnston                  3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Ian Kirwan            3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Michael Levy         15        $2,561,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Michele Patri         3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. David Robinson        3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Robert Scheetz       33        $19,891,000,000      None           None
- --------------------------------------------------------------------------------
Ms. Valli
Srikanthapalan            3        $3,724,000,000       None           None
- --------------------------------------------------------------------------------
Mr. Christopher
Toub                     33        $19,898,000,000      None           None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Hiromitsu Agata      6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Ms. Isabel
Buccellati               6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. Gregory
Eckersley               56         $17,889,000,000      5           $862,000,000
- --------------------------------------------------------------------------------
Mr. William
Johnston                 6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. Ian Kirwan           6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. Michael Levy         8         $4,601,000,000       None              None
- --------------------------------------------------------------------------------
Mr. Michele Patri        6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. David Robinson       6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. Robert Scheetz      87         $24,482,000,000      5           $862,000,000
- --------------------------------------------------------------------------------
Ms. Valli
Srikanthapalan           6         $480,000,000         None              None
- --------------------------------------------------------------------------------
Mr. Christopher
Toub                    61         $18,134,000,000      5           $862,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                   Number of
                      Total                        Other         Total Assets
                      Number of                    Accounts      of Other
                      Other      Total Assets of   Managed with  Accounts with
                      Accounts   Other Accounts    Performance-  Performance-
Portfolio Manager     Managed    Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Hiromitsu Agata      1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Ms. Isabel
Buccellati               1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. Gregory
Eckersley              349       $61,570,000,000        64       $10,052,000,000
- --------------------------------------------------------------------------------
Mr. William
Johnston                 1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. Ian Kirwan           1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. Michael Levy        54       $4,019,000,000         16       $1,457,000,000
- --------------------------------------------------------------------------------
Mr. Michele Patri        1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. David Robinson       1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. Robert Scheetz     670       $63,546,000,000        64       $10,052,000,000
- --------------------------------------------------------------------------------
Ms. Valli
Srikanthapalan           1       $113,000,000           None           None
- --------------------------------------------------------------------------------
Mr. Christopher
Toub                   366       $62,784,000,000        68       $10,192,000,000
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN SMALL CAP GROWTH PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the Small Cap Growth Investment Team. Mr. Bruce K. Aronow,
Mr. N. Kumar Kirpalani, Ms. Samantha Lau and Mr. Wen-Tse Tseng are the
investment professionals with the most significant responsibility for the
day-to-day management of the Portfolio's portfolio. The following tables provide
information regarding registered investment companies other than the Portfolio,
other pooled investment vehicles and other accounts over which the Portfolio's
portfolio managers also have day-to-day management responsibilities. The tables
provide the numbers of such accounts, the total assets in such accounts and the
number of accounts and total assets whose fees are based on performance. The
information is provided as of the Portfolio's fiscal year ended December 31,
2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Mr. Bruce K. Aronow      5         $2,894,000,000       None            None
- --------------------------------------------------------------------------------
Mr. N. Kumar
Kirpalani                5         $2,894,000,000       None            None
- --------------------------------------------------------------------------------
Ms. Samantha Lau         5         $2,894,000,000       None            None
- --------------------------------------------------------------------------------
Mr. Wen-Tse Tseng        5         $2,894,000,000       None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total                          Pooled         Pooled
                      Number of    Total Assets of   Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Bruce K. Aronow      2         $71,000,000          None            None
- --------------------------------------------------------------------------------
Mr. N. Kumar
Kirpalani                2         $71,000,000          None            None
- --------------------------------------------------------------------------------
Ms. Samantha Lau         2         $71,000,000          None            None
- --------------------------------------------------------------------------------
Mr. Wen-Tse Tseng        2         $71,000,000          None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Bruce K. Aronow      26       $2,045,000,000        4         $347,000,000
- --------------------------------------------------------------------------------
Mr. N. Kumar
Kirpalani                26       $2,045,000,000        4         $347,000,000
- --------------------------------------------------------------------------------
Ms. Samantha Lau         26       $2,045,000,000        4         $347,000,000
- --------------------------------------------------------------------------------
Mr. Wen-Tse Tseng        26       $2,045,000,000        4         $347,000,000
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN REAL ESTATE INVESTMENT PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the REIT Investment Policy Group. Mr. Joseph G. Paul and
Ms. Teresa Marziano are the investment professionals with the most significant
responsibility for the day-to-day management of the Portfolio's portfolio. The
following tables provide information regarding registered investment companies
other than the Portfolio, other pooled investment vehicles and other accounts
over which the Portfolio's portfolio managers also have day-to-day management
responsibilities. The tables provide the numbers of such accounts, the total
assets in such accounts and the number of accounts and total assets whose fees
are based on performance. The information is provided as of the Portfolio's
fiscal year ended December 31, 2007.

- --------------------------------------------------------------------------------
                       REGISTERED INVESTMENT COMPANIES
                          (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul       48        $6,082,000,000       None            None
- --------------------------------------------------------------------------------
Ms. Teresa Marziano      39        $2,794,000,000       None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                           OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                  Total
                                                   Number of      Assets of
                      Total        Total           Pooled         Pooled
                      Number of    Assets of       Investment     Investment
                      Pooled       Pooled          Vehicles       Vehicles
                      Investment   Investment      Managed with   Managed with
                      Vehicles     Vehicles        Performance-   Performance-
Portfolio Manager     Managed      Managed         based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul       50        $9,321,000,000     2           $1,155,000,000
- --------------------------------------------------------------------------------
Ms. Teresa Marziano      28        $67,000,000        None              None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul      57         $2,256,000,000     None            None
- --------------------------------------------------------------------------------
Ms. Teresa Marziano      5         $914,000,000       None            None
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN INTERNATIONAL VALUE PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the International Value Investment Policy Group. Ms.
Sharon E. Fay, Mr. Kevin F. Simms, Mr. Henry S. D'Auria and Mr. Eric J. Franco
are the investment professionals with the most significant responsibility for
the day-to-day management of the Portfolio's portfolio. The following tables
provide information regarding registered investment companies other than the
Portfolio, other pooled investment vehicles and other accounts over which the
Portfolio's portfolio managers also have day-to-day management
responsibilities(4). The tables provide the numbers of such accounts, the total
assets in such accounts and the number of accounts and total assets whose fees
are based on performance. The information is provided as of the Portfolio's
fiscal year ended December 31, 2007.

- ----------
(4)  Each investment vehicle or account represented in the chart, for which the
     investment professionals have portfolio management responsibility, is based
     upon one of eleven model portfolios. Each vehicle or account differs from
     its respective model portfolio only to a limited extent based on specific
     client requirements relating to tax considerations, cash flows due to the
     frequency and amount of investments, the client's country of residence and
     currency strategies related thereto, and/or client-imposed investment
     restrictions regarding particular types of companies or industries.

- --------------------------------------------------------------------------------
                       REGISTERED INVESTMENT COMPANIES
                          (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                 Total
                                                  Number of      Assets of
                      Total        Total          Registered     Registered
                      Number of    Assets of      Investment     Investment
                      Registered   Registered     Companies      Companies
                      Investment   Investment     Managed with   Managed with
                      Companies    Companies      Performance-   Performance-
Portfolio Manager     Managed      Managed        based Fees     based Fees
- --------------------------------------------------------------------------------
Ms. Sharon E. Fay        160       $89,761,000,000    3          $12,345,000,000
- --------------------------------------------------------------------------------
Mr. Kevin F. Simms       160       $89,761,000,000    3          $12,345,000,000
- --------------------------------------------------------------------------------
Mr. Henry S. D'Auria     89        $53,813,000,000    2          $5,639,000,000
- --------------------------------------------------------------------------------
Mr. Eric J. Franco       2         $1,033,000,000     None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                  Total
                                                   Number of      Assets of
                      Total        Total           Pooled         Pooled
                      Number of    Assets of       Investment     Investment
                      Pooled       Pooled          Vehicles       Vehicles
                      Investment   Investment      Managed with   Managed with
                      Vehicles     Vehicles        Performance-   Performance-
Portfolio Manager     Managed      Managed         based Fees     based Fees
- --------------------------------------------------------------------------------
Ms. Sharon E. Fay      154         $44,312,000,000     10         $1,506,000,000
- --------------------------------------------------------------------------------
Mr. Kevin F. Simms     166         $50,391,000,000     11         $2,661,000,000
- --------------------------------------------------------------------------------
Mr. Henry S. D'Auria   104         $38,934,000,000      9         $1,505,000,000
- --------------------------------------------------------------------------------
Mr. Eric J. Franco       1         $191,000,000        None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                   Number of
                      Total       Total            Other         Total Assets
                      Number of   Assets of        Accounts      of Other
                      Other       Other            Managed with  Accounts with
                      Accounts    Accounts         Performance-  Performance-
Portfolio Manager     Managed     Managed          based Fees    based Fees
- --------------------------------------------------------------------------------
Ms. Sharon E. Fay     44,767      $217,805,000,000     140       $28,882,000,000
- --------------------------------------------------------------------------------
Mr. Kevin F. Simms    44,767      $217,805,000,000     140       $28,882,000,000
- --------------------------------------------------------------------------------
Mr. Henry S. D'Auria  878         $163,171,000,000     128       $26,339,000,000
- --------------------------------------------------------------------------------
Mr. Eric J. Franco    21          $3,216,000,000       4         $661,000,000
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN SMALL/MID CAP VALUE PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the Small/Mid Cap Value Investment Policy Group. Mr.
Joseph G. Paul, Mr. James W. MacGregor and Mr. Andrew J. Weiner are the
investment professionals with the most significant responsibility for the
day-to-day management of the Portfolio's portfolio. The following tables provide
information regarding registered investment companies other than the Portfolio,
other pooled investment vehicles and other accounts over which the Portfolio's
portfolio managers also have day-to-day management responsibilities. The tables
provide the numbers of such accounts, the total assets in such accounts and the
number of accounts and total assets whose fees are based on performance. The
information is provided as of the Portfolio's fiscal year ended December 31,
2007.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                    Total
                                                    Number of       Assets of
                      Total        Total            Registered      Registered
                      Number of    Assets of        Investment      Investment
                      Registered   Registered       Companies       Companies
                      Investment   Investment       Managed with    Managed with
                      Companies    Companies        Performance-    Performance-
Portfolio Manager     Managed      Managed          based Fees      based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul       48        $5,713,000,000      None             None
- --------------------------------------------------------------------------------
Mr. James W.
MacGregor                 9        $3,288,00,000       None             None
- --------------------------------------------------------------------------------
Mr. Andrew J. Weiner      8        $2,847,000,000      None             None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                  Total
                                                   Number of      Assets of
                      Total        Total           Pooled         Pooled
                      Number of    Assets of       Investment     Investment
                      Pooled       Pooled          Vehicles       Vehicles
                      Investment   Investment      Managed with   Managed with
                      Vehicles     Vehicles        Performance-   Performance-
Portfolio Manager     Managed      Managed         based Fees     based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul       50        $9,321,000,000      2          $1,155,000,000
- --------------------------------------------------------------------------------
Mr. James W.
MacGregor                 5        $249,000,000        None            None
- --------------------------------------------------------------------------------
Mr. Andrew J. Weiner      5        $249,000,000        None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                    Number of
                      Total                         Other         Total Assets
                      Number of                     Accounts      of Other
                      Other       Total Assets of   Managed with  Accounts with
                      Accounts    Other Accounts    Performance-  Performance-
Portfolio Manager     Managed     Managed           based Fees    based Fees
- --------------------------------------------------------------------------------
Mr. Joseph G. Paul        57      $2,256,000,000        None          None
- --------------------------------------------------------------------------------
Mr. James W.
MacGregor                 52      $1,342,000,000        None          None
- --------------------------------------------------------------------------------
Mr. Andrew J. Weiner      52      $1,342,000,000        None          None
- --------------------------------------------------------------------------------

ALLIANCEBERNSTEIN VALUE PORTFOLIO

          The management of and investment decisions for the Portfolio's
portfolio are made by the U.S. Value Investment Policy Group. Ms. Marilyn G.
Fedak, Mr. John Mahedy, Mr. Christopher W. Marx and Mr. John D. Phillips are the
investment professionals with the most significant responsibility for the
day-to-day management of the Portfolio's portfolio. The following tables provide
information regarding registered investment companies other than the Portfolio,
other pooled investment vehicles and other accounts over which the Portfolio's
portfolio managers also have day-to-day management responsibilities.(5) The
tables provide the numbers of such accounts, the total assets in such accounts
and the number of accounts and total assets whose fees are based on performance.
The information is provided as of the Portfolio's fiscal year ended December 31,
2007.

- ----------
(5)  Each investment vehicle or account represented in the chart, for which the
     investment professionals have portfolio management responsibility, is based
     upon one of three model portfolios. Each vehicle or account differs from
     its respective model portfolio only to a limited extent based on specific
     client requirements relating to tax considerations, cash flows due to the
     frequency and amount of investments, the client's country of residence and
     currency strategies related thereto, and/or client-imposed investment
     restrictions regarding particular types of companies or industries.

- --------------------------------------------------------------------------------
                         REGISTERED INVESTMENT COMPANIES
                            (excluding the Portfolio)
- --------------------------------------------------------------------------------
                                                                 Total
                                                   Number of     Assets of
                      Total        Total           Registered    Registered
                      Number of    Assets of       Investment    Investment
                      Registered   Registered      Companies     Companies
                      Investment   Investment      Managed with  Managed with
                      Companies    Companies       Performance-  Performance-
Portfolio Manager     Managed      Managed         based Fees    based Fees
- --------------------------------------------------------------------------------
Ms. Marilyn G. Fedak    149        $89,539,000,000      3        $12,345,000,000
- --------------------------------------------------------------------------------
Mr. John Mahedy         147        $88,506,000,000      3        $12,345,000,000
- --------------------------------------------------------------------------------
Mr. Christopher
W. Marx                  30        $32,751,000,000      1        $6,706,000,000
- --------------------------------------------------------------------------------
Mr. John D.
Phillips                 30        $32,751,000,000      1        $6,706,000,000
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                        OTHER POOLED INVESTMENT VEHICLES
- --------------------------------------------------------------------------------
                                                                    Total
                                                     Number of      Assets of
                      Total        Total             Pooled         Pooled
                      Number of    Assets of         Investment     Investment
                      Pooled       Pooled            Vehicles       Vehicles
                      Investment   Investment        Managed with   Managed with
                      Vehicles     Vehicles          Performance-   Performance-
Portfolio Manager     Managed      Managed           based Fees     based Fees
- --------------------------------------------------------------------------------
Ms. Marilyn G. Fedak    139        $34,433,000,000      5           $762,000,000
- --------------------------------------------------------------------------------
Mr. John Mahedy         138        $34,242,000,000      5           $762,000,000
- --------------------------------------------------------------------------------
Mr. Christopher
W. Marx                  19        $3,505,000,000       None            None
- --------------------------------------------------------------------------------
Mr. John D.
Phillips                 19        $3,505,000,000       None            None
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
                                 OTHER ACCOUNTS
- --------------------------------------------------------------------------------
                                                   Number of
                      Total                        Other         Total Assets
                      Number of   Total            Accounts      of Other
                      Other       Assets of        Managed with  Accounts with
                      Accounts    Other Accounts   Performance-  Performance-
Portfolio Manager     Managed     Managed          based Fees    based Fees
- --------------------------------------------------------------------------------
Ms. Marilyn G. Fedak  44,668      $181,312,000,000     103       $17,446,000,000
- --------------------------------------------------------------------------------
Mr. John Mahedy       44,647      $178,096,000,000      99       $16,786,000,000
- --------------------------------------------------------------------------------
Mr. Christopher
W. Marx               43,884      $53,720,000,000       12       $2,543,000,000
- --------------------------------------------------------------------------------
Mr. John D. Phillips  43,884      $53,720,000,000       12       $2,543,000,000
- --------------------------------------------------------------------------------

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

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

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

          Managing Multiple Accounts for Multiple Clients. The Adviser has
compliance policies and oversight monitoring in place to address conflicts of
interest relating to the management of multiple accounts for multiple clients.
Conflicts of interest may arise when an investment professional has
responsibilities for the investments of more than one account because the
investment professional may be unable to devote equal time and attention to each
account. The investment professional or investment professional teams for each
client may have responsibilities for managing all or a portion of the
investments of multiple accounts with a common investment strategy, including
other registered investment companies, unregistered investment vehicles, such as
hedge funds, pension plans, separate accounts, collective trusts and charitable
foundations. Among other things, the Adviser's policies and procedures provide
for the prompt dissemination to investment professionals of initial or changed
investment recommendations by analysts so that investment professionals are
better able to develop investment strategies for all accounts they manage. In
addition, investment decisions by investment professionals are reviewed for the
purpose of maintaining uniformity among similar accounts and ensuring that
accounts are treated equitably. No investment professional that manages client
accounts carrying performance fees is compensated directly or specifically for
the performance of those accounts. Investment professional compensation reflects
a broad contribution in multiple dimensions to long-term investment success for
our clients and is not tied specifically to the performance of any particular
client's account, nor is it directly tied to the level or change in level of
assets under management.

          Allocating Investment Opportunities. The Adviser has policies and
procedures intended to address conflicts of interest relating to the allocation
of investment opportunities. These policies and procedures are designed to
ensure that information relevant to investment decisions is disseminated
promptly within its portfolio management teams and investment opportunities are
allocated equitably among different clients. The investment professionals at the
Adviser routinely are required to select and allocate investment opportunities
among accounts. Portfolio holdings, position sizes, and industry and sector
exposures tend to be similar across similar accounts, which minimizes the
potential for conflicts of interest relating to the allocation of investment
opportunities. Nevertheless, investment opportunities may be allocated
differently among accounts due to the particular characteristics of an account,
such as size of the account, cash position, tax status, risk tolerance and
investment restrictions or for other reasons.

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

          To address these conflicts of interest, the Adviser's policies and
procedures require, among other things, the prompt dissemination to investment
professionals of any initial or changed investment recommendations by analysts;
the aggregation of orders to facilitate best execution for all accounts; price
averaging for all aggregated orders; objective allocation for limited investment
opportunities (e.g., on a rotational basis) to ensure fair and equitable
allocation among accounts; and limitations on short sales of securities. These
procedures also require documentation and review of justifications for any
decisions to make investments only for select accounts or in a manner
disproportionate to the size of the account.

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

          The Adviser's compensation program for investment professionals is
designed to be competitive and effective in order to attract and retain the
highest caliber employees. The compensation program for investment professionals
is designed to reflect their ability to generate long-term investment success
for our clients, including shareholders of the AllianceBernstein Mutual Funds.
Investment professionals do not receive any direct compensation based upon the
investment returns of any individual client account, nor is compensation tied
directly to the level or change in level of assets under management. Investment
professionals' annual compensation is comprised of the following:

          (i) Fixed base salary: This is generally the smallest portion of
compensation. The base salary is a relatively low, fixed salary within a similar
range for all investment professionals. The base salary is determined at the
outset of employment based on level of experience, does not change significantly
from year-to-year and hence, is not particularly sensitive to performance.

          (ii) Discretionary incentive compensation in the form of an annual
cash bonus: The Adviser's overall profitability determines the total amount of
incentive compensation available to investment professionals. This portion of
compensation is determined subjectively based on qualitative and quantitative
factors. In evaluating this component of an investment professional's
compensation, the Adviser considers the contribution to his/her team or
discipline as it relates to that team's overall contribution to the long-term
investment success, business results and strategy of the Adviser. Quantitative
factors considered include, among other things, relative investment performance
(e.g., by comparison to competitor or peer group funds or similar styles of
investments, and appropriate, broad-based or specific market indices), and
consistency of performance. There are no specific formulas used to determine
this part of an investment professional's compensation and the compensation is
not tied to any pre-determined or specified level of performance. The Adviser
also considers qualitative factors such as the complexity and risk of investment
strategies involved in the style or type of assets managed by the investment
professional; success of marketing/business development efforts and client
servicing; seniority/length of service with the firm; management and supervisory
responsibilities; and fulfillment of the Adviser's leadership criteria.

          (iii) Discretionary incentive compensation in the form of awards under
the Adviser's Partners Compensation Plan ("deferred awards"): The Adviser's
overall profitability determines the total amount of deferred awards available
to investment professionals. The deferred awards are allocated among investment
professionals based on criteria similar to those used to determine the annual
cash bonus. There is no fixed formula for determining these amounts. Deferred
awards, for which there are various investment options, vest over a four-year
period and are generally forfeited if the employee resigns or the Adviser
terminates his/her employment. Investment options under the deferred awards plan
include many of the same AllianceBernstein Mutual Funds offered to mutual fund
investors, thereby creating a close alignment between the financial interests of
the investment professionals and those of the Adviser's clients and mutual fund
shareholders with respect to the performance of those mutual funds. The Adviser
also permits deferred award recipients to allocate up to 50% of their award to
investments in the Adviser's publicly traded equity securities.(6)

- ----------
(6)  Prior to 2002, investment professional compensation also included
     discretionary long-term incentive in the form of restricted grants of the
     Adviser's Master Limited Partnership Units.

          (iv) Contributions under the Adviser's Profit Sharing/401(k) Plan: The
contributions are based on the Adviser's overall profitability. The amount and
allocation of the contributions are determined at the sole discretion of the
Adviser.

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

          The Fund has entered into a Distribution Services Agreement (the
"Agreement") with AllianceBernstein Investments, Inc. ("ABI"), the Fund's
principal underwriter, to permit ABI to distribute the Fund's shares and to
permit the Fund to pay distribution services fees to defray expenses associated
with distribution of its Class B shares in accordance with a plan of
distribution which has been duly adopted and approved in accordance with Rule
12b-1 adopted by the Commission under the 1940 Act (the "Rule 12b-1 Plan").

          Distribution services fees are accrued daily and paid monthly and
charged as expenses of the Fund as accrued. Under the Agreement, the Treasurer
of the Fund reports the amounts expended under the Rule 12b-1 Plan and the
purposes for which such expenditures were made to the Directors of the Fund on a
quarterly basis. Also, the Agreement provides that the selection and nomination
of Directors who are not "interested persons" of the Fund, as defined in the
1940 Act, are committed to the discretion of such disinterested Directors then
in office. The Agreement was initially approved by the Directors of the Fund at
a meeting held on January 6, 1999. Most recently, continuance of the Agreement
was approved for an additional annual term by the Board, including a majority of
the Directors who are not parties to the Agreement or interested persons of such
party, at a meeting held on September 25, 2007.

          The Agreement continues in effect from year to year, provided that
such continuance is specifically approved at least annually by the Directors of
the Fund or by vote of the holders of a majority of the outstanding Class B
shares (as defined in the 1940 Act) and, in either case, by a majority of the
Directors of the Fund who are not parties to the Agreement or interested
persons, as defined in the 1940 Act, of any such party (other than as directors
of the Fund) and who have no direct or indirect financial interest in the
operation of the Rule 12b-1 Plan or any agreement related thereto.

          The Adviser may from time to time and from its own funds or such other
resources as may be permitted by rules of the Commission make payments for
distribution services to ABI; the latter may in turn pay part or all of such
compensation to brokers or other persons for their distribution assistance. ABI
will pay for printing and distributing prospectuses or reports prepared for its
use in connection with the offering of the Class B shares to the public and
preparing, printing and mailing any other literature or advertising in
connection with the offering of the Class B shares to the public. ABI will pay
all fees and expenses in connection with its qualification and registration as a
broker or dealer under federal and state laws and of any activity which is
primarily intended to result in the sale of Class B shares issued by the Fund,
unless the plan of distribution in effect for Class B shares provides that the
Fund shall bear some or all of such expenses.

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

          During the fiscal year ended December 31, 2007, the AllianceBernstein
Money Market Portfolio, AllianceBernstein Large Cap Growth Portfolio,
AllianceBernstein Growth and Income Portfolio, AllianceBernstein Growth
Portfolio, AllianceBernstein International Growth Portfolio, AllianceBernstein
Global Technology Portfolio, AllianceBernstein Small Cap Growth Portfolio,
AllianceBernstein Real Estate Investment Portfolio, AllianceBernstein Balanced
Shares Portfolio, AllianceBernstein Utility Income Portfolio, AllianceBernstein
International Value Portfolio, AllianceBernstein Small/Mid Cap Value Portfolio,
AllianceBernstein Value Portfolio, AllianceBernstein U.S. Large Cap Blended
Style Portfolio, AllianceBernstein Wealth Appreciation Strategy Portfolio,
AllianceBernstein Balanced Wealth Strategy Portfolio and AllianceBernstein
Global Research Growth Portfolio paid distribution services fees for
expenditures under the Agreement, with respect to Class B shares, in amounts
aggregating, $61,512, $1,040,105, $4,811,927, $320,421, $101,122, $457,877,
$55,818, $73,972, $105,170, $39,985, $6,083,687, $738,258, $825,695, $42,157,
$74,017, $409,112 and $28,598, respectively, which constituted approximately
..25% of each Portfolio's aggregate average daily net assets attributable to
Class B shares during the period. The Adviser made payments from its own
resources as described above aggregating $104, $508,552, $1,621,722, $292,023,
$528,334, $549,893, $434,976, $154,379, $537,703, $85,306, $2,702,577, $549,986,
$703,976, $192,361, $182,867, $270,919 and $372,276 for the AllianceBernstein
Money Market Portfolio, AllianceBernstein Large Cap Growth Portfolio,
AllianceBernstein Growth and Income Portfolio, AllianceBernstein Growth
Portfolio, AllianceBernstein International Growth Portfolio, AllianceBernstein
Global Technology Portfolio, AllianceBernstein Small Cap Growth Portfolio,
AllianceBernstein Real Estate Investment Portfolio, AllianceBernstein Balanced
Shares Portfolio, AllianceBernstein Utility Income Portfolio, AllianceBernstein
International Value Portfolio, AllianceBernstein Small/Mid Cap Value Portfolio,
AllianceBernstein Value Portfolio, AllianceBernstein U.S. Large Cap Blended
Style Portfolio, AllianceBernstein Wealth Appreciation Strategy Portfolio,
AllianceBernstein Balanced Wealth Strategy Portfolio and AllianceBernstein
Global Research Growth Portfolio, respectively.

          For the fiscal year ended December 31, 2007, expenses incurred by each
Portfolio and costs allocated to each Portfolio in connection with activities
primarily intended to result in the sale of Class B shares were as follows:



                    AllianceBernstein   AllianceBernstein   AllianceBernstein
Category of         Money Market        Large Cap Growth    Growth and Income   AllianceBernstein
Expense             Portfolio           Portfolio           Portfolio           Growth Portfolio
- -----------------   -----------------   -----------------   -----------------   -----------------
                                                                    
Advertising/
Marketing                          $0              $1,389              $1,450                $300

Printing and
Mailing of
Prospectuses
and
Semi-Annual
and Annual
Reports to
Other Than
Current
Shareholders                  $61,615          $1,263,914          $5,528,253            $449,809

Compensation
to Underwriters                    $0             $99,461            $315,273             $56,529

Compensation
to Dealers                         $0             $97,658            $309,249             $55,007

Compensation
to Sales
Personnel                          $0                  $0                  $0                  $0

Interest,
Carrying or
Other
Financing
Charges                            $0                  $0                  $0                  $0

Other
(includes
personnel
costs of those
home office
employees
involved in
the distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)                          $0             $86,235            $279,424             $50,799

Totals                        $61,615          $1,548,657          $6,433,649            $612,444
                    =================   =================   =================   =================




                                                                                AllianceBernstein
                    AllianceBernstein   AllianceBernstein   AllianceBernstein   Real Estate
Category of         International       Global Technology   Small Cap Growth    Investment
Expense             Growth Portfolio    Portfolio           Portfolio           Portfolio
- -----------------   -----------------   -----------------   -----------------   -----------------
                                                                    
Advertising/
Marketing                        $262                $317                $256                $131

Printing and
Mailing of
Prospectuses
and
Semi-Annual
and Annual
Reports to
Other than
Current
Shareholders                 $333,474            $700,529            $248,472            $142,006

Compensation
to Underwriters              $103,137            $106,890             $84,324             $30,009

Compensation
to Dealers                   $102,997            $104,735             $82,641             $29,511

Compensation
to Sales
Personnel                          $0                  $0                  $0                  $0

Interest,
Carrying or
Other
Financing
Charges                            $0                  $0                  $0                  $0

Other
(includes
personnel
costs of those
home office
employees
involved in the
distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)                     $90,078             $95,299             $75,101             $26,694

Totals                       $629,948          $1,007,770            $490,794            $228,351
                    =================   =================   =================   =================




                                        AllianceBernstein   AllianceBernstein   AllianceBernstein
Category of         AllianceBernstein   Utility Income      International       Small/Mid Cap
Expense             Balanced Shares     Portfolio           Value Portfolio     Value Portfolio
- -----------------   -----------------   -----------------   -----------------   -----------------
                                                                    
Advertising/
Marketing                        $344                 $45                $647                 $13

Printing and
Mailing of
Prospectuses
and
Semi-Annual
and Annual
Reports to
Other than
Current
Shareholders                 $343,206             $77,725          $7,296,441            $982,637

Compensation
to Underwriters              $104,289             $16,597            $519,044            $106,413

Compensation
to Dealers                   $102,382             $16,130            $506,251            $104,142

Compensation
to Sales
Personnel                          $0                  $0                  $0                  $0

Interest,
Carrying or
Other
Financing
Charges                            $0                  $0                  $0                  $0

Other
(includes
personnel
costs of those
home office
employees
involved in the
distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)                     $92,652             $14,793            $463,881             $95,039

Totals                       $642,873            $125,290          $8,786,264          $1,288,244
                    =================   =================   =================   =================




                                                            AllianceBernstein
                                        AllianceBernstein   Wealth              AllianceBernstein
                                        U.S. Large Cap      Appreciation        Balanced Wealth
Category of         AllianceBernstein   Blended Style       Strategy            Strategy
Expense             Value Portfolio     Portfolio           Portfolio           Portfolio
- -----------------   -----------------   -----------------   -----------------   -----------------
                                                                    
Advertising/
Marketing                        $384                $110                $119                $120

Printing and
Mailing of
Prospectuses
and
Semi-Annual
and Annual
Reports to
Other than
Current
Shareholders               $1,138,028            $127,369            $144,777            $529,943

Compensation
to Underwriters              $136,307             $37,291             $39,010             $52,241

Compensation
to Dealers                   $133,414             $36,543             $38,240             $51,165

Compensation
to Sales
Personnel                          $0                  $0                  $0                  $0

Interest,
Carrying or
Other
Financing
Charges                            $0                  $0                  $0                  $0

Other
(includes
personnel
costs of those
home office
employees
involved in the
distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)                    $121,538             $33,205             $34,738             $46,562

Totals                     $1,529,671            $234,518            $256,884            $680,031
                    =================   =================   =================   =================


                    AllianceBernstein
Category of         Global Research
Expense             Growth Portfolio
- -----------------   -----------------

Advertising/
Marketing                        $214

Printing and
Mailing of
Prospectuses
and
Semi-Annual
and Annual
Reports to
Other than
Current
Shareholders                 $189,552

Compensation
to Underwriters               $73,545

Compensation
to Dealers                    $72,085

Compensation
to Sales
Personnel                          $0

Interest,
Carrying or
Other
Financing
Charges                            $0

Other
(includes
personnel
costs of those
home office
employees
involved in the
distribution
effort and the
travel-related
expenses incurred
by the marketing
personnel
conducting
seminars)                     $65,478
                    -----------------

Totals                       $400,874
                    =================

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

                        PURCHASE AND REDEMPTION OF SHARES

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

          The following information supplements that set forth in the
Portfolios' Prospectuses under the heading "Investing in the Portfolios."

          Shares of each Portfolio are offered at NAV on a continuous basis to
the separate accounts of the Insurers without any sales or other charge. The
separate accounts of insurance companies place orders to purchase shares based
on, among other things, the amount of premium payments to be invested and
surrendered and transfer requests to be effected pursuant to variable contracts
funded by shares of the Portfolio. The Fund reserves the right to suspend the
sale of its shares in response to conditions in the securities markets or for
other reasons. See the prospectus of the separate account of the participating
insurance company for more information on the purchase of shares.

          The Insurers maintain omnibus account arrangements with the Fund in
respect of one or more Portfolios and place aggregate purchase, redemption and
exchange orders for shares of a Portfolio corresponding to orders placed by the
Insurer's customers ("Contractholders") who have purchased contracts from the
Insurers, in each case, in accordance with the terms and conditions of the
relevant contract. Omnibus account arrangements maintained by the Insurers are
discussed below under "Limitations on Ability to Detect and Curtail Excessive
Trading Practices."

          The Board has adopted polices and procedures designed to detect and
deter frequent purchases and redemptions of Portfolio shares or excessive or
short-term trading that might disadvantage long-term Contractholders. These
policies are described below. Each Portfolio reserves the right to restrict,
reject or cancel, without any notice, any purchase or exchange order for any
reason, including any purchase or exchange order accepted by any Insurer or a
Contractholder's financial intermediary.

          Risks Associated with Excessive or Short-term Trading Generally. While
the Fund will try to prevent market timing by utilizing the procedures described
below, these procedures may not be successful in identifying or stopping
excessive or short-term trading attributable to particular Contractholders in
all circumstances. By realizing profits through short-term trading,
Contractholders that engage in rapid purchases and sales or exchanges of a
Portfolio's shares dilute the value of shares held by long-term Contractholders.
Volatility resulting from excessive purchases and sales or exchanges of shares
of a Portfolio, especially involving large dollar amounts, may disrupt efficient
portfolio management. In particular, a Portfolio may have difficulty
implementing its long-term investment strategies if it is forced to maintain a
higher level of its assets in cash to accommodate significant short-term trading
activity. Excessive purchases and sales or exchanges of shares of a Portfolio
may force the Portfolio to sell portfolio securities at inopportune times to
raise cash to accommodate short-term trading activity. In addition, a Portfolio
may incur increased expenses if one or more Contractholders engage in excessive
or short-term trading. For example, a Portfolio may be forced to liquidate
investments as a result of short-term trading attributable to one or more
Contractholders and incur increased brokerage costs without attaining any
investment advantage. Similarly, a Portfolio may bear increased administrative
costs due to asset level and investment volatility that accompanies patterns of
short-term trading activity. All of these factors may adversely affect a
Portfolio's performance.

          Investments in securities of foreign issuers may be particularly
susceptible to short-term trading strategies. This is because securities of
foreign issuers are typically traded on markets that close well before the time
a fund calculates its NAV at 4:00 p.m., Eastern time, which gives rise to the
possibility that developments may have occurred in the interim that would affect
the value of these securities. The time zone differences among international
stock markets can allow a Contractholder engaging in a short-term trading
strategy to exploit differences in share prices that are based on closing prices
of securities of foreign issuers established some time before the Fund
calculates its own share price (referred to as "time zone arbitrage").

          Contractholders engaging in a short-term trading strategy may also
target a Portfolio that does not invest primarily in securities of foreign
issuers. Any Portfolio that invests in securities that are, among other things,
thinly traded, traded infrequently, or relatively illiquid has the risk that the
current market price for the securities may not accurately reflect current
market values. Contractholders may seek to engage in short-term trading to take
advantage of these pricing differences (referred to as "price arbitrage").
Portfolios that may be adversely affected by price arbitrage include, in
particular, those Portfolios that significantly invest in small cap securities,
technology and other specific industry sector securities, and in certain
fixed-income securities, such as high yield bonds, asset-backed securities, or
municipal bonds.

          Money market funds generally are not effective vehicles for short-term
trading activity, and therefore the risks relating to short-term trading
activity are correspondingly lower for the Money Market Portfolio.

          Policy Regarding Short-term Trading. Purchases and exchanges of shares
of the Portfolios should be made for investment purposes only. The Fund seeks to
prevent patterns of excessive purchases and sales or exchanges of shares of the
Portfolios. The Fund will seek to prevent such practices to the extent they are
detected by the procedures described below, subject to the Fund's ability to
monitor purchase, sale and exchange activity, and subject to such limitations as
may result from the terms and conditions contained in certain of the contracts
described below. The Fund reserves the right to modify this policy, including
any surveillance or account blocking procedures established from time to time to
effectuate this policy, at any time without notice.

o    Transaction Surveillance Procedures. The Fund, through its agents, ABI and
     ABIS, maintains surveillance procedures to detect excessive or short-term
     trading in Portfolio shares. This surveillance process involves several
     factors, which include scrutinizing individual Insurers' omnibus
     transaction activity in Portfolio shares in order to seek to ascertain
     whether any such activity attributable to one or more Contractholders might
     constitute excessive or short-term trading. Insurers' omnibus transaction
     activity identified by these surveillance procedures, or as a result of any
     other information actually available at the time, will be evaluated to
     determine whether such activity might indicate excessive or short-term
     trading activity attributable to one or more Contractholders. These
     surveillance procedures may be modified from time to time, as necessary or
     appropriate to improve the detection of excessive or short-term trading or
     to address specific circumstances.

o    Account Blocking Procedures. If the Fund determines, in its sole
     discretion, that a particular transaction or pattern of transactions
     identified by the transaction surveillance procedures described above is
     excessive or short-term trading in nature, the relevant Insurers' omnibus
     account(s) will be immediately "blocked" and no future purchase or exchange
     activity will be permitted, except to the extent the Fund, ABI or ABIS has
     been informed in writing that the terms and conditions of a particular
     contract may limit the Fund's ability to apply its short-term trading
     policy to Contractholder activity as discussed below. As a result, any
     Contractholder seeking to engage through an Insurer in purchase or exchange
     activity in shares of one or more Portfolios under a particular contract
     will be prevented from doing so. However, sales of Portfolio shares back to
     the Portfolio or redemptions will continue to be permitted in accordance
     with the terms of the Portfolio's current Prospectus. In the event an
     account is blocked, certain account-related privileges, such as the ability
     to place purchase, sale and exchange orders over the internet or by phone,
     may also be suspended. An Insurer's omnibus account that is blocked will
     generally remain blocked unless and until the Insurer provides evidence or
     assurance acceptable to the Fund that one or more Contractholders did not
     or will not in the future engage in excessive or short-term trading.

o    Applications of Surveillance Procedures and Restrictions to Omnibus
     Accounts. Omnibus account arrangements are common forms of holding shares
     of the Portfolios, particularly among certain financial intermediaries,
     including sponsors of retirement plans and variable insurance products. The
     Fund applies it surveillance procedures to these omnibus account
     arrangements. As required by Commission rules, the Fund has entered into
     agreements with all of its financial intermediaries that require the
     financial intermediaries to provide the Fund, upon the request of the Fund
     or its agents, with individual account level information about their
     transactions. If the Fund detects excessive trading through its monitoring
     of omnibus accounts, including trading at the individual account level, the
     financial intermediaries will also execute instructions from the Fund to
     take actions to curtail the activity, which may include applying blocks to
     accounts to prohibit future purchases and exchanges of Fund shares. For
     certain retirement plan accounts, the Fund may request that the retirement
     plan or other intermediary revoke the relevant participant's privilege to
     effect transactions in Fund shares via the internet or telephone, in which
     case the relevant participant must submit future transaction orders via the
     U.S. Postal Service (i.e., regular mail).

          Risks to Contractholders Resulting From Imposition of Account Blocks
in Response to Excessive Short-term Trading Activity. A Contractholder
identified as having engaged in excessive or short-term trading activity whose
account is "blocked" and who may not otherwise wish to redeem his or her shares
effectively may be "locked" into an investment in shares of one or more of the
Portfolios that the Contractholder did not intend to hold on a long-term basis
or that may not be appropriate for the Contractholder's risk profile. To rectify
this situation, a Contractholder with a "blocked" account may be forced to
redeem Portfolio shares, which could be costly if, for example, these shares
have declined in value, the Contractholder recently paid a front-end sales
charge or the shares are subject to a CDSC, or the sale results in adverse tax
consequences to the shareholder. To avoid this risk, a Contractholder should
carefully monitor the purchases, sales, and exchanges of Portfolio shares and
avoid frequent trading in Portfolio shares.

Limitations on Ability to Detect and Curtail Excessive Trading Practices.
- ------------------------------------------------------------------------

          Insurers utilizing omnibus account arrangements may not identify to
the Fund, ABI or ABIS Contractholders' transaction activity relating to shares
of a particular Portfolio on an individual basis. Consequently, the Fund, ABI
and ABIS may not be able to detect excessive or short-term trading in shares of
a Portfolio attributable to a particular Contractholder who effects purchase and
redemption and/or exchange activity in shares of the Portfolio through an
Insurer acting in an omnibus capacity. In seeking to prevent excessive or
short-term trading in shares of the Portfolios, including the maintenance of any
transaction surveillance or account blocking procedures, the Fund, ABI and ABIS
consider the information actually available to them at the time.

          Contractholders should be aware that, even if the Fund, ABI or ABIS,
in its sole discretion, determines that a particular Insurer's omnibus
transaction activity in shares of a Portfolio attributable to one or more other
Contractholders may constitute excessive or short-term trading, the terms and
conditions of the relevant contract may limit the ability of the Fund, ABI or
ABIS, or the Insurer to curtail the Contractholder's activity. This means that
even after the detection of such possible Contractholder activity, the affected
Portfolio may continue to suffer the effects of excessive or short-term trading.

Redemption of Shares
- --------------------

          An insurance company separate account may redeem all or any portion of
the shares in its account at any time at the NAV next determined after a
redemption request in the proper form is furnished to the Fund. Any certificates
representing shares being redeemed must be submitted with the redemption
request. Shares do not earn dividends on the day they are redeemed, regardless
of whether the redemption request is received before or after the time of
computation of NAV that day. There is no redemption charge. The redemption
proceeds will normally be sent within seven days.

          The right of redemption may be suspended or the date or payment may be
postponed for any period during which the Exchange is closed (other than
customary weekend and holiday closings) or during which the Commission
determines that trading thereon is restricted, or for any period during which an
emergency (as determined by the Commission) exists as a result of which disposal
by the Fund of securities owned by a Portfolio is not reasonably practicable or
as a result of which it is not reasonably practicable for the Fund fairly to
determine the value of a Portfolio's net assets, or for such other periods as
the Commission may by order permit for the protection of security holders of the
Portfolios. For information regarding how to redeem shares in the Portfolios,
please see your insurance company's separate account prospectus.

          The value of a shareholder's shares on redemption or repurchase may be
more or less than the cost of such shares to the shareholder, depending upon the
market value of the Portfolio's securities at the time of such redemption or
repurchase. Payment either in cash or in portfolio securities received by a
shareholder upon redemption or repurchase of his shares, assuming the shares
constitute capital assets in his hands, will result in long-term or short-term
capital gains (or loss) depending upon the shareholder's holding period and
basis in respect of the shares redeemed.

Payments to Financial Intermediaries
- ------------------------------------

          Financial intermediaries, such as the Insurers, market and sell shares
of the Portfolios and typically receive compensation for selling shares of the
Portfolios. This compensation is paid from various sources, including any Rule
12b-1 fee that you or the Portfolios may pay.

          In the case of Class B shares, up to 100% of the Rule 12b-1 fee
applicable to Class B shares each year may be paid to the financial intermediary
that sells Class B shares.

          Insurers or your financial intermediary receives compensation from the
Portfolios, ABI and/or the Adviser in several ways from various sources, which
include some or all of the following:

          o    Rule 12b-1 fees;

          o    defrayal of costs for educational seminars and training;

          o    additional distribution support; and

          o    payments related to providing Contractholder record-keeping
               and/or administrative services.

          Please read your Portfolio's Prospectus carefully for information on
this compensation.

          ABI and/or the Adviser may pay Insurers or other financial
intermediaries to perform record-keeping and administrative services in
connection with the Portfolios. Such payments will generally not exceed 0.35% of
the average daily net assets of each Portfolio attributable to the Insurer.

          Other Payments for Educational Support and Distribution Assistance. In
addition to the fees described above, ABI, at its expense, currently provides
additional payments to the Insurers. These sums include payments to reimburse
directly or indirectly the costs incurred by the Insurers and their employees in
connection with educational seminars and training efforts about the Portfolios
for the Insurers' employees and/or their clients and potential clients. The
costs and expenses associated with these efforts may include travel, lodging,
entertainment and meals.

          For 2008, ABI's additional payments to these firms for educational
support and distribution assistance related to the Portfolios is expected to be
approximately $1.5 million. In 2007, ABI paid additional payments of
approximately $1.2 million for the Portfolios.

          If one mutual fund sponsor that offers shares to separate accounts of
an Insurer makes greater distribution assistance payments than another, the
Insurer may have an incentive to recommend or offer the shares of funds of one
fund sponsor over another.

          Please speak with your financial intermediary to learn more about the
total amounts paid to your financial intermediary by the Funds, the Adviser, ABI
and by other mutual fund sponsors that offer shares to Insurers that may be
recommended to you. You should also consult disclosures made by your financial
intermediary at the time of purchase.

          ABI anticipates that the Insurers or their affiliates that will
receive additional payments for educational support include:

     AIG SunAmerica
     Ameriprise Financial
     Genworth Financial
     ING
     ING USA Life and Annuity Company
     Lincoln Financial Distributors
     Merrill Lynch
     Prudential Financial
     RiverSource Distributors
     Transamerica Capital
     Principal Financial Group
     Reliaster Life Insurance Co.
     Hartford Life Insurance
     Great West Life & Annuity Co.

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

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

                                 NET ASSET VALUE

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

          For all of the Portfolios, with the exception of AllianceBernstein
Money Market Portfolio, the NAV is computed at the next close of regular trading
on the Exchange (ordinarily 4:00 p.m., Eastern time) following receipt of a
purchase or redemption order by a Portfolio on each Portfolio business day on
which such an order is received and on such other days as the Board deems
appropriate or necessary in order to comply with Rule 22c-1 under the 1940 Act.
Each Portfolio's NAV is calculated by dividing the value of a Portfolio's total
assets, less its liabilities, by the total number of its shares then
outstanding. A Portfolio business day is any weekday on which the Exchange is
open for trading.

          In accordance with applicable rules under the 1940 Act and the
Portfolio's pricing policies and procedures adopted by the Board (the "Pricing
Policies"), portfolio securities are valued at current market value or at fair
value. The Board has delegated to the Adviser, subject to the Board's continuing
oversight, certain of its duties with respect to the following Pricing Policies.

          With respect to securities for which market quotations are readily
available, the market value of a security will be determined as follows:

          (a) securities listed on the Exchange, on other national securities
exchanges (other than securities listed on The Nasdaq Stock Market, Inc.
("NASDAQ")) or on a foreign securities exchange are valued at the last sale
price reflected on the consolidated tape at the close of the Exchange or foreign
securities exchange on the business day as of which such value is being
determined. 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 fair
value by, or in accordance with procedures established by, the Board;

          (b) securities traded on NASDAQ are valued in accordance with the
NASDAQ Official Closing Price;

          (c) securities traded on the Exchange or on a foreign securities
exchange and on one or more other national or foreign securities exchanges, and
securities not traded on the Exchange but traded on one or more other national
or foreign securities exchanges, are valued in accordance with paragraph (a)
above by reference to the principal exchange on which the securities are traded;

          (d) listed put or call options purchased by a Portfolio 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;

          (e) open futures contracts and options thereon will be 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 will be used;

          (f) securities traded in the over-the-counter market, including
securities listed on a national securities exchange whose primary market is
believed to be over-the-counter, are valued at the mean of the current bid and
asked prices as reported by the National Quotation Bureau or other comparable
sources;

          (g) 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 (unless in either case it is determined, in accordance with procedures
established by the Board, that this method does not represent fair value);

          (h) fixed-income securities may be valued on the basis of prices
provided by a pricing service when such prices are believed to reflect the fair
market value of such securities. The prices provided by a pricing service take
into account many factors, including institutional size, trading in similar
groups of securities and any developments related to specific securities. For
securities where the Adviser has determined that an appropriate pricing service
does not exist, such securities may be valued on the basis of a quoted bid price
or spread from a major broker-dealer in such security;

          (i) mortgage-backed and asset-backed securities may be valued at
prices obtained from a bond pricing service or at a price obtained from one or
more of the major broker-dealers in such securities when such prices are
believed to reflect the fair market value of such securities. In cases where
broker-dealer quotes are obtained, the Adviser may establish procedures whereby
changes in market yields or spreads are used to adjust, on a daily basis, a
recently obtained quoted bid price on a security;

          (j) OTC and other derivatives are valued on the basis of a quoted bid
price or spread from a major broker-dealer in such security; and

          (k) all other securities will be valued in accordance with readily
available market quotations as determined in accordance with procedures
established by the Board.

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

          The Portfolios expect to use fair value pricing for securities
primarily traded on U.S. exchanges only under very limited circumstances, such
as the early closing of the exchange on which a security is traded or suspension
of trading in the security. Securities for which market quotations are not
readily available or deemed unreliable (including restricted securities) are
valued at fair market value. Factors considered in making this determination may
include, but not limited to, information obtained by contacting the issuer or
analysts, or by analysis of the issuer's financial statements. The Portfolios
may use fair value pricing more frequently for foreign securities or securities
primarily traded in non-U.S. markets because, among other things, most foreign
markets close well before the Portfolio values its securities at 4:00 p.m.,
Eastern Time. The earlier close of these foreign markets gives rise to the
possibility that significant events, including broad market moves, may have
occurred in the interim. For example, the Portfolios believe that foreign
security values may be affected by events that occur after the close of foreign
securities markets. To account for this, the Portfolios may frequently value
many of their foreign equity or other securities using fair value prices based
on independent pricing services or third party vendor modeling tools to the
extent available.

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

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

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

          The assets attributable to the Class A shares and Class B shares will
be invested together in a single portfolio. The NAV of each class will be
determined separately by subtracting the liabilities allocated to that class
from the assets belonging to that class in conformance with the provisions of a
plan adopted by each Portfolio in accordance with Rule 18f-3 under the 1940 Act
(the "18f-3 Plan").

          The AllianceBernstein Money Market Portfolio utilizes the amortized
cost method of valuation of portfolio securities in accordance with the
provisions of Rule 2a-7 under the Act. The amortized cost method involves
valuing an instrument at its cost and thereafter applying a constant
amortization to maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. The Fund
maintains procedures designed to stabilize, to the extent reasonably possible,
the price per share of the Portfolio as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the Portfolio's
investment portfolio holdings by the Directors at such intervals as they deem
appropriate to determine whether and to what extent the NAV of the Portfolio
calculated by using available market quotations or market equivalents deviates
from NAV based on amortized cost. If such deviation as to the Portfolio exceeds
1/2 of 1%, the Directors will promptly consider what action, if any, should be
initiated. In the event the Directors determine that such a deviation may result
in material dilution or other unfair results to new investors or existing
shareholders, they will consider corrective action which might include (1)
selling instruments held by the Portfolio prior to maturity to realize capital
gains or losses or to shorten average portfolio maturity; (2) withholding
dividends of net income on shares of the Portfolio; or (3) establishing a NAV
per share of the Portfolio by using available market quotations or equivalents.
The NAV of the shares of the Portfolio is determined as of the close of business
each Fund business day (generally 4:00 p.m., Eastern Time).

          The assets attributable to the Class A shares and Class B shares of
the Portfolio, will be invested together in a single portfolio. The NAV of each
class will be determined separately by subtracting the liabilities allocated to
that class from the assets belonging to that class in conformance with the
provisions of the 18f-3 Plan.

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

                             PORTFOLIO TRANSACTIONS

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

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

          Neither the Fund nor the Adviser has entered into agreements or
understandings with any brokers or dealers regarding the placement of securities
transactions because of research or statistical services they provide. To the
extent that such persons or firms supply investment information to the Adviser
for use in rendering investment advice to the Fund, such information may be
supplied at no cost to the Adviser and, therefore, may have the effect of
reducing the expenses of the Adviser in rendering advice to the Fund. While it
is impossible to place an actual dollar value on such investment information,
its receipt by the Adviser probably does not reduce the overall expenses of the
Adviser to any material extent.

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

          The Fund will deal in some instances in equity securities which are
not listed on a national stock exchange but are traded in the over-the-counter
market. In addition, most transactions for the AllianceBernstein U.S.
Government/High-Grade Securities Portfolio and the AllianceBernstein Money
Market Portfolio are executed in the over-the-counter market. Where transactions
are executed in the over-the-counter market, the Fund will seek to deal with the
primary market makers, but when necessary in order to obtain the best price and
execution, it will utilize the services of others. In all cases, the Fund will
attempt to negotiate best execution.

          The Fund may from time to time place orders for the purchase or sale
of securities (including listed call options) with SCB & Co., an affiliate of
the Adviser and the Fund's distributor, for which SCB & Co. may receive a
portion of the brokerage commission. With respect to orders placed with SCB &
Co. for execution on a national securities exchange, commissions received must
conform to Section 17(e)(2)(A) of the 1940 Act and Rule 17e-1 thereunder, which
permit an affiliated person of a registered investment company (such as the
Fund), or any affiliated person of such person, to receive a brokerage
commission from such registered investment company provided that such commission
is reasonable and fair compared to the commissions received by other brokers in
connection with comparable transactions involving similar securities during a
comparable period of time.

          The following table shows the brokerage commission paid on investment
transactions for the last three fiscal years:

                                                              BROKERAGE
                              FISCAL         AGGREGATE        COMMISSION
                            YEAR ENDED       BROKERAGE         PAID TO
PORTFOLIO                  DECEMBER 31     COMMISSION PAID     SCB & CO.
- ---------                  -----------     ---------------     ---------

AllianceBernstein Growth
Portfolio                      2005           $  278,647       $    207
                               2006           $  293,443       $  3,316
                               2007           $  171,183       $    200

AllianceBernstein Growth
and Income Portfolio           2005           $3,874,322       $437,638
                               2006           $3,410,798       $301,099
                               2007           $2,466,325       $ 93,488

AllianceBernstein Money
Market Portfolio               2005           $        0       $      0
                               2006           $        0       $      0
                               2007           $        0       $      0

AllianceBernstein Large
Cap Growth Portfolio           2005           $1,203,563       $ 29,959
                               2006           $1,377,980       $ 12,172
                               2007           $  966,522       $ 10,669

AllianceBernstein Small
Cap Growth Portfolio           2005           $  221,770       $      0
                               2006           $  137,940       $     10
                               2007           $  128,888       $     28

AllianceBernstein Real
Estate Investment
Portfolio                      2005           $   85,737       $ 29,582
                               2006           $   36,739       $      0
                               2007           $   51,714       $      0

AllianceBernstein Global
Technology Portfolio           2005           $  735,465       $ 27,598
                               2006           $  736,541       $  4,731
                               2007           $  729,464       $    812

AllianceBernstein
Balanced Shares Portfolio      2005           $  155,724       $      0
                               2006           $  107,725       $      0
                               2007           $   88,028       $      0

AllianceBernstein
Utility Income Portfolio       2005           $   74,864       $  6,691
                               2006           $   74,228       $  5,901
                               2007           $   57,048       $ 13,490

AllianceBernstein
International Growth
Portfolio                      2005           $  163,157       $      0
                               2006           $  298,515       $      0
                               2007           $  420,927       $      0

AllianceBernstein
Small/Mid Cap Value
Portfolio                      2005           $  222,960       $ 63,134
                               2006           $  244,022       $      0
                               2007           $  223,370       $      0

AllianceBernstein Value
Portfolio                      2005           $   75,013       $ 39,393
                               2006           $   66,878       $      0
                               2007           $   78,756       $      0

AllianceBernstein
International Value
Portfolio                      2005           $  797,760       $ 32,230
                               2006           $1,881,180       $ 10,444
                               2007           $2,107,040       $ 32,024

AllianceBernstein U.S.
Large Cap Blended Style
Portfolio                      2005           $   16,256       $  3,991
                               2006           $   12,126       $      8
                               2007           $   12,364       $      0

AllianceBernstein Wealth
Appreciation Strategy
Portfolio                      2005           $   48,958       $  3,457
                               2006           $   41,847       $     74
                               2007           $   33,432       $    118

AllianceBernstein
Balanced Wealth Strategy
Portfolio                      2005           $   62,300       $  3,643
                               2006           $   87,637       $      0
                               2007           $  105,020       $    204

AllianceBernstein Global
Research Growth Portfolio      2005           $   11,806       $      0
                               2006           $   17,405       $      0
                               2007           $   20,489       $      0

          During the most recent fiscal year, the percentage of the aggregate
brokerage commission, stated above, paid by each Portfolio to SCB & Co. and the
percentage of each Portfolio's aggregate dollar amount of transactions involving
the payment of commissions through SCB & Co. was as follows:



                                                                          % OF AGGREGATE
                                                                         DOLLAR AMOUNT OF
                                                              % OF         TRANSACTIONS
                                                           AGGREGATE      INVOLVING THE
                                                           BROKERAGE        PAYMENT OF
                                                           COMMISSION      COMMISSIONS
                                                            PAID TO          THROUGH
PORTFOLIO                                                  SCB & CO.        SCB & CO.
- ---------                                                  ---------        ---------
                                                                      
AllianceBernstein Growth Portfolio                             0.12%         0.07%
AllianceBernstein Growth and Income Portfolio                  3.79%         2.95%
AllianceBernstein Money Market Portfolio                       0.00%         0.00%
AllianceBernstein Large Cap Growth Portfolio                   1.10%         0.50%
AllianceBernstein Small Cap Growth Portfolio                   0.02%         0.01%
AllianceBernstein Real Estate Investment Portfolio             0.00%         0.00%
AllianceBernstein Global Technology Portfolio                  0.11%         0.04%
AllianceBernstein Balanced Shares Portfolio                    0.00%         0.00%
AllianceBernstein Utility Income Portfolio                    23.65%        15.15%
AllianceBernstein International Growth Portfolio               0.00%         0.00%
AllianceBernstein Small/Mid Cap Value Portfolio                0.00%         0.00%
AllianceBernstein Value Portfolio                              0.00%         0.00%
AllianceBernstein International Value Portfolio                1.52%         0.97%
AllianceBernstein U.S. Large Cap Blended Style Portfolio       0.00%         0.00%
AllianceBernstein Wealth Appreciation Strategy Portfolio       0.35%         0.17%
AllianceBernstein Balanced Wealth Strategy Portfolio           0.19%         0.20%
AllianceBernstein Global Research Growth Portfolio             0.00%         0.00%


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

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

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

          The Portfolios include portfolio holdings information as required in
regulatory filings and shareholder reports, disclose portfolio holdings
information as required by federal or state securities laws and may disclose
portfolio holdings information in response to requests by governmental
authorities. In addition, the Adviser may post portfolio holdings information on
the Adviser's website (www.AllianceBernstein.com). For each portfolio security,
the posted information includes its name, the number of shares held by a
Portfolio, the market value of the Portfolio's holdings, and the percentage of
the Portfolio's assets represented by the portfolio security. The day after
portfolio holdings information is publicly available on the website, it may be
mailed, e-mailed or otherwise transmitted to any person.

          The Adviser may distribute or authorize the distribution of
information about a Portfolio's portfolio holdings that is not publicly
available, on the website or otherwise, to the Adviser's employees and
affiliates that provide services to the Fund. In addition, the Adviser may
distribute or authorize distribution of information about a Portfolio's
portfolio holdings that is not publicly available, on the website or otherwise,
to the Fund's service providers who require access to the information in order
to fulfill their contractual duties relating to the Portfolios, to facilitate
the review of the Portfolios by rating agencies, for the purpose of due
diligence regarding a merger or acquisition, or for the purpose of effecting
in-kind redemption of securities to facilitate orderly redemption of portfolio
assets and minimal impact on remaining Portfolio shareholders. The Adviser does
not expect to disclose information about a Portfolio's portfolio holdings that
is not publicly available to the Portfolio's individual or institutional
investors or to intermediaries that distribute the Portfolio's shares.
Information may be disclosed with any frequency and any lag, as appropriate.

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

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

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

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

                       DIVIDENDS, DISTRIBUTIONS AND TAXES

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

          Each Portfolio of the Fund qualified and intends to continue to
qualify to be taxed as a regulated investment company under the Code. If so
qualified, each Portfolio will not be subject to federal income and excise taxes
on its investment company taxable income and net capital gain to the extent such
investment company taxable income and net capital gain are distributed to the
separate accounts of insurance companies which hold its shares. Under current
tax law, capital gains or dividends from any Portfolio are not currently taxable
to the holder of a variable annuity or variable life insurance contract when
left to accumulate within such variable annuity or variable life insurance
contract. Distributions of net investment income and net short-term capital
gains will be treated as ordinary income and distributions of net long-term
capital gains will be treated as long-term capital gain in the hands of the
insurance companies.

          Investment income received by a Portfolio from sources within foreign
countries may be subject to foreign income taxes withheld at the source. If more
than 50% of the value of a Portfolio's total assets at the close of its taxable
year consists of stocks or securities of foreign corporations (which for this
purpose should include obligations issued by foreign governments), such
Portfolio will be eligible to file an election with the Internal Revenue Service
to pass through to its shareholders the amount of foreign taxes paid by the
Portfolio. If eligible, each such Portfolio intends to file such an election,
although there can be no assurance that such Portfolio will be able to do so.

          Section 817(h) of the Code requires that the investments of a
segregated asset account of an insurance company be adequately diversified, in
accordance with Treasury Regulations promulgated thereunder, in order for the
holders of the variable annuity contracts or variable life insurance policies
underlying the account to receive the tax-deferred or tax-free treatment
generally afforded holders of annuities or life insurance policies under the
Code. The Department of the Treasury has issued Regulations under section 817(h)
that, among other things, provide the manner in which a segregated asset account
will treat investments in a regulated investment company for purposes of the
applicable diversification requirements. Under the Regulations, if a regulated
investment company satisfies certain conditions, a segregated asset account
owning shares of the regulated investment company will not be treated as a
single investment for these purposes, but rather the account will be treated as
owning its proportionate share of each of the assets of the regulated investment
company. Each Portfolio plans to satisfy these conditions at all times so that
the shares of such Portfolio owned by a segregated asset account of a life
insurance company will be subject to this treatment under the Code.

          For information concerning the federal income tax consequences for the
holders of variable annuity contracts and variable life insurance policies, such
holders should consult the prospectus used in connection with the issuance of
their particular contracts or policies.

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

                               GENERAL INFORMATION

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

CAPITALIZATION

          The Fund was organized as a Maryland corporation in 1987 under the
name "Alliance Variable Products Series Fund, Inc." The name of the Fund became
"AllianceBernstein Variable Products Series Fund, Inc." on May 1, 2003. Each
Portfolio's name was changed on May 1, 2003. Prior thereto, the Portfolios were
known as: Alliance Money Market Portfolio, Alliance Premier Growth Portfolio,
Alliance Growth and Income Portfolio, Alliance U.S. Government/High Grade
Securities Portfolio, Alliance High Yield Portfolio, Alliance Balanced Shares
Portfolio, Alliance International Research Growth Portfolio, Alliance Global
Bond Portfolio, Alliance Americas Government Income Portfolio, Alliance Global
Dollar Government Portfolio, Alliance Utility Income Portfolio, Alliance Growth
Portfolio, Alliance International Growth Portfolio, Alliance Technology
Portfolio, Alliance Quasar Portfolio and Alliance Real Estate Investment
Portfolio. The AllianceBernstein Quasar Portfolio's name was changed again on
May 3, 2004 to the AllianceBernstein Small Cap Growth Portfolio. On May 2, 2005,
the AllianceBernstein Premier Growth Portfolio's name was changed to the
AllianceBernstein Large Cap Growth Portfolio, the AllianceBernstein Technology
Portfolio's name was changed to the AllianceBernstein Global Technology
Portfolio and the AllianceBernstein Small Cap Value Portfolio's name was changed
to the AllianceBernstein Small/Mid Cap Value Portfolio. On February 1, 2006, the
AllianceBernstein Total Return Portfolio's name was changed to AllianceBernstein
Balanced Shares Portfolio, the AllianceBernstein International Portfolio's name
was changed to AllianceBernstein International Research Growth Portfolio and the
AllianceBernstein Worldwide Privatization Portfolio's name was changed to
AllianceBernstein International Growth Portfolio.

          The Fund's shares have non-cumulative voting rights, which means that
the holders of more than 50% of the shares voting for the election of Directors
can elect 100% of the Directors if they choose to do so, and in such election of
Directors will not be able to elect any person or persons to the Board.

          Pursuant to an order received from the Commission, the Fund maintains
participation agreements with insurance company separate accounts that obligate
the insurance companies to pass any proxy solicitations through to underlying
contractholders who in turn are asked to designate voting instructions. In the
event that an insurance company does not receive voting instructions from
contractholders, it is obligated to vote the shares that correspond to such
contractholders in the same proportion as instructions received from all other
applicable contractholders.

          All shares of the Fund when duly issued will be fully paid and
nonassessable. The Board is authorized to reclassify any unissued shares into
any number of additional series and classes without shareholder approval.
Accordingly, the Board in the future, for reasons such as the desire to
establish one or more additional Portfolio's with different investment
objectives, policies or restrictions or to establish additional channels of
distribution, may create additional series and classes of shares. Any issuance
of shares of such additional series and classes would be governed by the 1940
Act and the laws of the State of Maryland.

          If shares of another series were issued in connection with the
creation of the new portfolio, each share of any of the Fund's Portfolios would
normally be entitled to one vote for all purposes. Generally, shares of each
Portfolio would vote as a single series for the election of directors and on any
other matter that affected each Portfolio in substantially the same manner. As
to matters affecting each Portfolio differently, such as approval of the
Advisory Agreement and changes in investment policy, shares of each Portfolio
would vote as separate series. Moreover, the Class B shares of each Portfolio
will vote separately with respect to matters relating to the 12b-1 Plan(s)
adopted in accordance with Rule 12b-1 under the 1940 Act. Meetings of
shareholders may be called by 10% of the Fund's outstanding shareholders.

          The outstanding voting shares of each outstanding Portfolio of the
Fund as of April 5, 2008 consisted of the following numbers of Class A common
stock and Class B common stock, respectively: AllianceBernstein Money Market
Portfolio, 24,529,874 and 24,795,387; AllianceBernstein Large Cap Growth
Portfolio, 12,402,463 and 12,605,900; AllianceBernstein Growth and Income
Portfolio, 15,750,398 and 64,472,148; AllianceBernstein Balanced Shares
Portfolio, 6,179,685 and 1,894,939; AllianceBernstein Utility Income Portfolio,
2,177,986 and 549,009; AllianceBernstein Growth Portfolio, 3,047,033 and
5,057,856; AllianceBernstein International Growth Portfolio, 6,332,033 and
2,570,813; AllianceBernstein Global Technology Portfolio, 4,221,090 and
8,906,974; AllianceBernstein Small Cap Growth Portfolio, 2,449,536 and
1,396,060; AllianceBernstein Real Estate Investment Portfolio, 2,752,445 and
1,204,412; AllianceBernstein International Value Portfolio, 9,714,919 and
117,175,731; AllianceBernstein Small/Mid Cap Value Portfolio, 8,006,743 and
16,805,677; AllianceBernstein Value Portfolio, 207,573 and 24,902,709;
AllianceBernstein U.S. Large Cap Blended Style Portfolio, 887 and 1,207,773;
AllianceBernstein Wealth Appreciation Strategy Portfolio, 770 and 2,282,339;
AllianceBernstein Balanced Wealth Strategy Portfolio, 765 and 18,259,709; and
AllianceBernstein Global Research Growth Portfolio, 9,771 and 951,589. To the
knowledge of the Fund, the following persons owned of record or beneficially 5%
or more of the outstanding Class A and Class B shares of the Fund's Portfolios
as of April 4, 2008.



CLASS A SHARES
                                                                                NUMBER OF                % OF CLASS A
PORTFOLIO                       NAME AND ADDRESS                                CLASS A SHARES           SHARES
- ---------                       ----------------                                --------------           -------------
                                                                                                
AllianceBernstein               AIG Life Insurance Company ("AIG")
Money Market                    Attn: Ed Bacon
                                600 N. King Street
                                Wilmington, DE 19801-3722                          14,683,077                59.86%

                                American International Life Insurance
                                Company of New York ("American")
                                Attn: Ed Bacon
                                2727 A-Allen Parkway
                                Houston, TX 77019-2115                              3,035,153                12.37%

                                Union Security Insurance Company
                                Separate Account
                                Attn:  Bruce Fiedler
                                P.O. Box 64284
                                St. Paul, MN 55164-0284                             5,330,232                21.73%

AllianceBernstein
Large Cap Growth                AIG                                                 2,687,392                21.67%

                                Merrill Lynch, Pierce, Fenner
                                & Smith, Inc. ("Merrill Lynch")
                                For the Sole Benefit of Its Customers
                                4800 Deer Lake Dr., E.
                                Jacksonville, FL 32246-6484                         7,053,534                56.87%

                                Allmerica Financial Life Insurance &
                                Annuity Company ("Allmerica")
                                One Security Benefit Place
                                Topeka, KS  66636-1000                                811,137                 6.54%

                                Lincoln Life Variable Annuity
                                ("Lincoln Life")
                                1300 S. Clinton Street
                                Fort Wayne, IN 46802-3506                             712,899                 5.75%

AllianceBernstein Growth
and Income                      AIG                                                 4,552,043                28.91%

                                Lincoln Life                                        4,260,762                27.06%

                                Merrill Lynch                                         854,928                 5.43%

                                ING Life Insurance and
                                Annuity Company ("ING")
                                151 Farmington Avenue #TN41
                                Hartford, CT 06156-0001                             2,076,095                13.18%

AllianceBernstein
Balanced Shares                 AIG                                                 5,570,448                90.18%

                                American                                              328,762                 5.32%

AllianceBernstein
Utility Income                  AIG                                                 1,522,450                69.90%

                                American                                              130,945                 6.01%

                                Great West Life & Annuity
                                Insurance Company ("Great West")
                                8515 E. Orchard Road
                                Greenwood Village, CO  80111-5002                     174,192                 8.00%

                                Great West Life & Annuity Insurance
                                Company
                                ("Great West/Schwab")
                                FBO Schwab Annuities
                                8515 E. Orchard Rd.
                                Englewood, CO  80111-5002                             293,456                13.47%

AllianceBernstein Growth        AIG                                                 1,978,143                64.92%

                                American                                              353,838                11.61%

                                Great West/Schwab                                     166,525                 5.47%

AllianceBernstein
International Growth            AIG                                                 3,720,465                58.76%

                                American                                              392,749                 6.20%

                                Great West                                            453,777                 7.17%

                                Great West/Schwab                                   1,360,558                21.49%

AllianceBernstein Global
Technology                      AIG                                                 1,743,071                41.29%

                                American                                              324,591                 7.69%

                                Lincoln Life                                        1,595,985                37.81%

                                Merrill Lynch                                         305,818                 7.24%

AllianceBernstein
Small Cap Growth                AIG                                                 1,969,794                80.41%

                                American                                              170,271                 6.95%

                                Principal Life Ins Co Va 2004
                                Attn: Life Accounting
                                711 High Street
                                Des Moines, IA 50392-0001                             134,339                 5.48%

AllianceBernstein
Real Estate                     AIG                                                 1,603,757                58.27%

                                American                                              173,886                 6.32%

                                Great West /Schwab                                    811,957                29.50%

AllianceBernstein
International Value             AIG                                                 1,863,277                19.18%

                                Lincoln Life                                          712,866                 7.34%

                                Great West /Schwab                                    794,056                 8.17%

                                Nationwide Insurance Co.
                                ("Nationwide")
                                C/O IPO Portfolio Accounting
                                P.O. Box 182029
                                Columbus, OH 43218-2029                             1,988,524                 20.4%

                                Nationwide                                            488,329                 5.03%

                                Nationwide                                          1,594,747                16.42%

                                Sun Life Financial
                                Large Case Vul Separate
                                Attn:  Howard Harding
                                One Sun Life Executive Park
                                Wellesley Hills, MA  02481                            847,780                 8.73%

AllianceBernstein
Small/Mid Cap Value             Lincoln Life                                        3,723,119                46.50%

                                AIG                                                 2,375,080                29.66%

                                Merrill Lynch                                         627,412                 7.84%

AllianceBernstein
Value                           Merrill Lynch                                         207,573               100.00%

                                AllianceBernstein L.P.
                                ("AllianceBernstein")
                                Attn:  Controller
AllianceBernstein U.S.          1345 Avenue of the Americas
Large Cap Blended Style         New York, New York  10105-0302                            887               100.00%

AllianceBernstein Wealth
Appreciation Strategy           AllianceBernstein                                         770               100.00%

AllianceBernstein Balanced
Wealth Strategy                 AllianceBernstein                                         765               100.00%

AllianceBernstein Global
Research Growth                 AllianceBernstein                                       9,771               100.00%

CLASS B SHARES

                                                                                NUMBER OF             % OF CLASS B
PORTFOLIO                       NAME AND ADDRESS                                CLASS B SHARES        SHARES
- ---------                       ----------------                                --------------        -------------

AllianceBernstein
Money Market                   AIG                                                 14,649,330                59.08%

                               Anchor National Life Insurance Co.
                               ("Anchor National")
                               Attn:  Variable Annuity Accounting
                               21650 Oxnard St.
                               Woodland Hills, CA  91367-4901                       8,709,762                35.13%

AllianceBernstein
Large Cap Growth               AIG                                                  1,924,859                15.27%

                               Transamerica Life Ins. Co.
                               FMD Operational Accounting
                               4333 Edgewood Road NE
                               Cedar Rapids, IA  52449-0001                           699,489                 5.55%

                               Anchor National                                        670,190                 5.32%

                               Allmerica                                            2,229,923                17.69%

                               Allstate Life Insurance Company
                               ("Allstate")
                               N. Plaza 2775 Sanders Road
                               Northbrook, IL 60062                                 1,244,819                 9.87%

                               Lincoln Life                                           921,383                 7.31%

                               GE Life and Annuity
                               Assurance Company ("GE Life")
                               6610 W. Broad St.
                               BLDG 3 5th Floor
                               Attn: Variable Accounting
                               Richmond, VA  23230-1702                               968,058                 7.68%

                               Horace Mann Life Insurance Co.
                               Separate Account
                               Horace Mann
                               Springfield, IL  62715-0001                          1,113,830                 8.84%

AllianceBernstein Growth
and Income                     Lincoln Life                                        10,799,840                17.30%

                               Allmerica                                            4,559,252                 7.30%

                               AIG                                                  5,487,285                 8.79%

                               IDS Life Insurance Corporation
                               ("IDS Corp.")
                               1438 AXP Financial Ctr.
                               Minneapolis, MN  55474-0014                         14,911,053                23.88%

                               GE Life                                              5,491,940                 8.80%

                               Allstate Life Insurance Co.
                               544 Lakeview Parkway
                               Suite L3G
                               Vernon Hills, IL 60061-1826                          5,749,419                 9.21%

AllianceBernstein
Balanced Shares                Anchor National                                      1,716,949                90.71%

                               American Enterprise                                    124,289                 6.57%

AllianceBernstein
Utility Income                 Anchor National                                        254,438                46.34%

                               Allstate                                               284,175                51.76%

AllianceBernstein Growth       AIG                                                  1,634,570                32.32%

                               Allstate                                             2,323,625                45.94%

                               Anchor National                                        527,088                10.42%

AllianceBernstein
International Growth           Sun Life Assurance Company of
                               Canada (US) ("Sun Life Assurance")
                               Attn: James Joseph
                               PO Box 9133
                               Wellesley Hills, MA 02481-9133                         277,646                10.80%

                               Hartford Life and Annuity
                               ("Hartford Life")
                               200 Hopmedow Street
                               PO Box 2999
                               Hartford, CT 06104-2999                                542,740                21.11%

                               Sun Life Financial Futurity Retirement
                               Products & Services ("Sun Life")
                               P.O. Box 9134
                               Wellesley Hills, MA 02481-9134                         731,460                28.45%

                               Anchor National                                        721,581                28.07%

AllianceBernstein
Global Technology              AIG                                                    870,285                 9.77%

                               Sun Life Assurance                                     501,649                 5.63%

                               Lincoln Life                                         3,788,424                42.53%

                               Allmerica                                              481,037                 5.40%

                               IDS Life Insurance Co. ("IDS Co.")
                               222 AXP Financial Center
                               Minneapolis, MN  55474-0014                            734,530                 8.25%

AllianceBernstein Small Cap
Growth                         GE Life                                                550,418                39.43%

                               Sun Life                                               147,435                10.56%

                               Anchor National                                        628,530                45.02%

AllianceBernstein Real
Estate Investment              Anchor National                                        475,625                39.49%

                               Guardian Ins & Annuity Co. Inc.
                               ("Guardian")
                               3900 Burgess Place
                               Bethlehem, PA  18017-9097                              243,988                20.26%

                               Guardian                                               464,439                38.56%

AllianceBernstein
International Value            IDS Corp.                                           61,789,421                52.73%

                               American Enterprise                                  8,494,428                 7.25%

                               GE Life                                              8,684,411                 7.41%

                               Hartford Life                                       16,522,630                14.10%

                               Hartford Life Separate Account
                               ("Hartford Separate Account")
                               200 Hopmeadow Street
                               PO Box 2999
                               Hartford, CT 06104-2999                              6,732,246                 5.75%

                               Lincoln Life                                         6,687,284                 5.71%

AllianceBernstein Small/Mid
Cap Value                      Lincoln Life                                         6,611,227                39.34%

                               Allstate                                             2,357,988                14.03%

                               Allmerica                                              941,992                 5.61%

                               Anchor National                                      1,040,888                 6.19%

                               Hartford Life                                        2,821,132                16.79%

                               Hartford Separate Account                            1,175,524                 6.99%

AllianceBernstein Value        Anchor National                                      1,614,087                 6.48%

                               AIG                                                  3,881,267                15.59%

                               Hartford Life                                       11,505,154                46.20%

                               Hartford Separate Account                            5,204,671                20.90%

AllianceBernstein U.S. Large
Cap Blended Style              AIG                                                    222,942                18.46%

                               Anchor National                                        979,916                81.13%

AllianceBernstein Wealth
Appreciation Strategy          Anchor National                                      2,224,549                97.47%

AllianceBernstein Balanced
Wealth Strategy                Anchor National                                      3,438,149                18.83%

                               Hartford Life                                        9,538,500                52.24%

                               Hartford Separate Account                            3,841,147                21.04%

                               GE Life                                              1,044,145                 5.72%

Alliance Bernstein Global
Research Growth                Hartford Life                                          633,667                68.69%

                               Hartford Separate Account                              195,635                20.56%

                               AllianceBernstein                                      78,563                  8.26%


Code Of Ethics And Proxy Voting Policies And Procedures
- -------------------------------------------------------

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

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

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

Custodian
- ---------

          The Bank of New York, 1 Wall Street, New York, New York 10286, acts as
custodian for the securities and cash of the Fund but plays no part in deciding
the purchase or sale of portfolio securities. Subject to the supervision of the
Board, The Bank of New York may enter into sub-custodial agreements for the
holding of the Fund's securities of foreign issuers.

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

          AllianceBernstein Investments, Inc., 1345 Avenue of the Americas, New
York, New York 10105, serves as the Fund's principal underwriter.

Counsel
- -------

          Legal matters in connection with the issuance of the shares of the
Fund offered hereby will be passed upon by Seward & Kissel LLP, New York, New
York.

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

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



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

        FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT REGISTERED PUBLIC
                                ACCOUNTING FIRM

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

          The financial statements of AllianceBernstein Variable Products Series
Fund, Inc. for the fiscal year ended December 31, 2007 and the report of Ernst &
Young LLP, the independent registered public accounting firm, are incorporated
herein by reference to the Fund's annual report. The annual report was filed
with the Commission on Form N-CSR on February 25, 2008. It is available without
charge upon request by calling ABIS at (800) 227-4618.



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

                                   APPENDIX A:

       DESCRIPTION OF OBLIGATIONS ISSUED OR GUARANTEED BY U.S. GOVERNMENT
                         AGENCIES OR INSTRUMENTALITIES

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

          FEDERAL FARM CREDIT SYSTEM NOTES AND BONDS--are bonds issued by a
cooperatively owned nationwide system of banks and associations supervised by
the Farm Credit Administration, an independent agency of the U.S. Government.
These bonds are not guaranteed by the U.S. Government.

          MARITIME ADMINISTRATION BONDS--are bonds issued and provided by the
Department of Transportation of the U.S. Government and are guaranteed by the
U.S. Government.

          FHA DEBENTURES--are debentures issued by the Federal Housing
Administration of the U.S. Government and are guaranteed by the U.S. Government.

          GNMA CERTIFICATES--are mortgage-backed securities that represent a
partial ownership interest in a pool of mortgage loans issued by lenders such as
mortgage bankers, commercial banks and savings and loan associations. Each
mortgage loan included in the pool is either insured by the Federal Housing
Administration or guaranteed by the Veterans Administration.

          FHLMC BONDS--are bonds issued and guaranteed by the Federal Home Loan
Mortgage Corporation.

          FNMA BONDS--are bonds issued and guaranteed by the Federal National
Mortgage Association.

          FEDERAL HOME LOAN BANK NOTES AND BONDS--are notes and bonds issued by
the Federal Home Loan Bank System and are not guaranteed by the U.S. Government.

          STUDENT LOAN MARKETING ASSOCIATION (SALLIE MAE) NOTES AND BONDS--are
notes and bonds issued by the Student Loan Marketing Association.

          Although this list includes a description of the primary types of U.S.
Government agency or instrumentality obligations in which certain Portfolios of
the Fund intend to invest, Portfolios may invest in obligations of U.S.
Government agencies or instrumentalities other than those listed above.



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

                                   APPENDIX B:

             STATEMENT OF POLICIES AND PROCEDURES FOR VOTING PROXIES

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

1.   Introduction

     As a registered investment adviser, AllianceBernstein L.P.
     ("AllianceBernstein", "we" or "us") has a fiduciary duty to act solely in
     the best interests of our clients. We recognize that this duty requires us
     to vote client securities in a timely manner and make voting decisions that
     are in the best interests of our clients. Consistent with these
     obligations, we will disclose our clients' voting records only to them and
     as required by mutual fund vote disclosure regulations. In addition, the
     proxy committees may, after careful consideration, choose to respond to
     surveys regarding past votes.

     This statement is intended to comply with Rule 206(4)-6 of the Investment
     Advisers Act of 1940. It sets forth our policies and procedures for voting
     proxies for our discretionary investment advisory clients, including
     investment companies registered under the Investment Company Act of 1940.
     This statement applies to AllianceBernstein's growth, value and blend
     investment groups investing on behalf of clients in both US and non-US
     securities.

2.   Proxy Policies

     This statement is designed to be responsive to the wide range of proxy
     voting subjects that can have a significant effect on the investment value
     of the securities held in our clients' accounts. These policies are not
     exhaustive due to the variety of proxy voting issues that we may be
     required to consider. AllianceBernstein reserves the right to depart from
     these guidelines in order to avoid voting decisions that we believe may be
     contrary to our clients' best interests. In reviewing proxy issues, we will
     apply the following general policies:

     2.1.  Corporate Governance

          AllianceBernstein's proxy voting policies recognize the importance of
          good corporate governance in ensuring that management and the Board
          fulfill their obligations to the shareholders. We favor proposals
          promoting transparency and accountability within a company. We will
          vote for proposals providing for equal access to the proxy materials
          so that shareholders can express their views on various proxy issues.
          We also support the appointment of a majority of independent directors
          on key committees and separating the positions of chairman and chief
          executive officer. Finally, because we believe that good corporate
          governance requires shareholders to have a meaningful voice in the
          affairs of the company, we will support shareholder proposals that
          request that companies amend their by-laws to provide that director
          nominees be elected by an affirmative vote of a majority of the votes
          cast.

     2.2.  Elections of Directors

          Unless there is a proxy fight for seats on the Board or we determine
          that there are other compelling reasons for withholding votes for
          directors, we will vote in favor of the management proposed slate of
          directors. That said, we believe that directors have a duty to respond
          to shareholder actions that have received significant shareholder
          support. We may withhold votes for directors (or vote against in
          non-US markets) that fail to act on key issues such as failure to
          implement proposals to declassify boards, failure to implement a
          majority vote requirement, failure to submit a rights plan to a
          shareholder vote or failure to act on tender offers where a majority
          of shareholders have tendered their shares. In addition, we will
          withhold votes for directors who fail to attend at least seventy-five
          percent of board meetings within a given year without a reasonable
          excuse. Finally, we may abstain or vote against directors of non-U.S.
          issuers where there is insufficient information about the nominees
          disclosed in the proxy statement.

     2.3.  Appointment of Auditors

          AllianceBernstein believes that the company remains in the best
          position to choose the auditors and will generally support
          management's recommendation. However, we recognize that there may be
          inherent conflicts when a company's independent auditor performs
          substantial non-audit related services for the company. The
          Sarbanes-Oxley Act of 2002 prohibited certain categories of services
          by auditors to US issuers, making this issue less prevalent in the US.
          Nevertheless, in reviewing a proposed auditor, we will consider the
          fees paid for non-audit services relative to total fees as well as if
          there are other reasons to question the independence of the auditors.

     2.4.  Changes In Legal and Capital Structure

          Changes in a company's charter, articles of incorporation or by-laws
          are often technical and administrative in nature. Absent a compelling
          reason to the contrary, AllianceBernstein will cast its votes in
          accordance with the company's management on such proposals. However,
          we will review and analyze on a case-by-case basis any non-routine
          proposals that are likely to affect the structure and operation of the
          company or have a material economic effect on the company. For
          example, we will generally support proposals to increase authorized
          common stock when it is necessary to implement a stock split, aid in a
          restructuring or acquisition or provide a sufficient number of shares
          for an employee savings plan, stock option or executive compensation
          plan. However, a satisfactory explanation of a company's intentions
          must be disclosed in the proxy statement for proposals requesting an
          increase of greater than one hundred percent of the shares
          outstanding. We will oppose increases in authorized common stock where
          there is evidence that the shares will be used to implement a poison
          pill or another form of anti-takeover device. We will support
          shareholder proposals that seek to eliminate dual class voting
          structures.

     2.5. Corporate Restructurings, Mergers and Acquisitions

          AllianceBernstein believes proxy votes dealing with corporate
          reorganizations are an extension of the investment decision.
          Accordingly, we will analyze such proposals on a case-by-case basis,
          weighing heavily the views of our research analysts that cover the
          company and our investment professionals managing the portfolios in
          which the stock is held.

     2.6.  Proposals Affecting Shareholder Rights

          AllianceBernstein believes that certain fundamental rights of
          shareholders must be protected. We will generally vote in favor of
          proposals that give shareholders a greater voice in the affairs of the
          company and oppose any measure that seeks to limit those rights.
          However, when analyzing such proposals we will weigh the financial
          impact of the proposal against the impairment of shareholder rights.

     2.7. Anti-Takeover Measures

          AllianceBernstein believes that measures that impede corporate
          transactions such as takeovers or entrench management not only
          infringe on the rights of shareholders but may also have a detrimental
          effect on the value of the company. We will generally oppose
          proposals, regardless of whether they are advanced by management or
          shareholders, the purpose or effect of which is to entrench management
          or excessively or inappropriately dilute shareholder ownership.
          Conversely, we support proposals that would restrict or otherwise
          eliminate anti-takeover or anti-shareholder measures that have already
          been adopted by corporate issuers. For example, we will support
          shareholder proposals that seek to require the company to submit a
          shareholder rights plan to a shareholder vote. We will evaluate, on a
          case-by-case basis, proposals to completely redeem or eliminate such
          plans. Furthermore, we will generally oppose proposals put forward by
          management (including the authorization of blank check preferred
          stock, classified boards and supermajority vote requirements) that
          appear to be anti-shareholder or intended as management entrenchment
          mechanisms.

     2.8.  Executive Compensation

          AllianceBernstein believes that company management and the
          compensation committee of the Board should, within reason, be given
          latitude to determine the types and mix of compensation and benefit
          awards offered to company employees. Whether proposed by a shareholder
          or management, we will review proposals relating to executive
          compensation plans on a case-by-case basis to ensure that the
          long-term interests of management and shareholders are properly
          aligned. In general, we will analyze the proposed plan to ensure that
          shareholder equity will not be excessively diluted taking into account
          shares available for grant under the proposed plan as well as other
          existing plans. We generally will oppose plans that have below market
          value grant or exercise prices on the date of issuance or permit
          repricing of underwater stock options without shareholder approval.
          Other factors such as the company's performance and industry practice
          will generally be factored into our analysis. We generally will
          support shareholder proposals seeking additional disclosure of
          executive and director compensation. This policy includes proposals
          that seek to specify the measurement of performance based
          compensation. In addition, we will support proposals requiring
          managements to submit severance packages that exceed 2.99 times the
          sum of an executive officer's base salary plus bonus that are
          triggered by a change in control to a shareholder vote. Finally, we
          will support shareholder proposals requiring companies to expense
          stock options because we view them as a large corporate expense that
          should be appropriately accounted for.

     2.9.  Social and Corporate Responsibility

          AllianceBernstein will review and analyze on a case-by-case basis
          proposals relating to social, political and environmental issues to
          determine whether they will have a financial impact on shareholder
          value. We will vote against proposals that are unduly burdensome or
          result in unnecessary and excessive costs to the company. We may
          abstain from voting on social proposals that do not have a readily
          determinable financial impact on shareholder value.

3.    Proxy Voting Procedures

     3.1.  Proxy Voting Committees

          Our growth and value investment groups have formed separate proxy
          voting committees to establish general proxy policies for
          AllianceBernstein and consider specific proxy voting matters as
          necessary. These committees periodically review these policies and new
          types of corporate governance issues, and decide how we should vote on
          proposals not covered by these policies. When a proxy vote cannot be
          clearly decided by an application of our stated policy, the proxy
          committee will evaluate the proposal. In addition, the committees, in
          conjunction with the analyst that covers the company, may contact
          corporate management and interested shareholder groups and others as
          necessary to discuss proxy issues. Members of the committee include
          senior investment personnel and representatives of the Legal and
          Compliance Department. The committees may also evaluate proxies where
          we face a potential conflict of interest (as discussed below).
          Finally, the committees monitor adherence to these policies.

     3.2.   Conflicts of Interest

          AllianceBernstein recognizes that there may be a potential conflict of
          interest when we vote a proxy solicited by an issuer whose retirement
          plan we manage, or we administer, who distributes AllianceBernstein
          sponsored mutual funds, or with whom we or an employee has another
          business or personal relationship that may affect how we vote on the
          issuer's proxy. Similarly, AllianceBernstein may have a potential
          material conflict of interest when deciding how to vote on a proposal
          sponsored or supported by a shareholder group that is a client. We
          believe that centralized management of proxy voting, oversight by the
          proxy voting committees and adherence to these policies ensures that
          proxies are voted with only our clients' best interests in mind.
          Additionally, we have implemented procedures to ensure that our votes
          are not the product of a material conflict of interests, including:
          (i) on an annual basis, the proxy committees will take reasonable
          steps to evaluate the nature of AllianceBernstein's and our employees'
          material business and personal relationships (and those of our
          affiliates) with any company whose equity securities are held in
          client accounts and any client that has sponsored or has material
          interest in a proposal upon which we will be eligible to vote; (ii)
          requiring anyone involved in the decision making process to disclose
          to the chairman of the appropriate proxy committee any potential
          conflict that they are aware of (including personal relationships) and
          any contact that they have had with any interested party regarding a
          proxy vote; (iii) prohibiting employees involved in the decision
          making process or vote administration from revealing how we intend to
          vote on a proposal in order to reduce any attempted influence from
          interested parties; and (iv) where a material conflict of interests
          exists, reviewing our proposed vote by applying a series of objective
          tests and, where necessary, considering the views of third party
          research services to ensure that our voting decision is consistent
          with our clients' best interests.

          Because under certain circumstances AllianceBernstein considers the
          recommendation of third party research services, the proxy committees
          will take reasonable steps to verify that any third party research
          service is in fact independent based on all of the relevant facts and
          circumstances. This includes reviewing the third party research
          service's conflict management procedures and ascertaining, among other
          things, whether the third party research service (i) has the capacity
          and competency to adequately analyze proxy issues; and (ii) can make
          such recommendations in an impartial manner and in the best interests
          of our clients.

     3.3.  Proxies of Certain Non-Us Issuers

          Proxy voting in certain countries requires "share blocking."
          Shareholders wishing to vote their proxies must deposit their shares
          shortly before the date of the meeting with a designated depositary.
          During this blocking period, shares that will be voted at the meeting
          cannot be sold until the meeting has taken place and the shares are
          returned to the clients' custodian banks. Absent compelling reasons to
          the contrary, AllianceBernstein believes that the benefit to the
          client of exercising the vote does not outweigh the cost of voting
          (i.e. not being able to sell the shares during this period).
          Accordingly, if share blocking is required we generally abstain from
          voting those shares.

          In addition, voting proxies of issuers in non-US markets may give rise
          to a number of administrative issues that may prevent
          AllianceBernstein from voting such proxies. For example,
          AllianceBernstein may receive meeting notices without enough time to
          fully consider the proxy or after the cut-off date for voting. Other
          markets require AllianceBernstein to provide local agents with power
          of attorney prior to implementing AllianceBernstein's voting
          instructions. Although it is AllianceBernstein's policy to seek to
          vote all proxies for securities held in client accounts for which we
          have proxy voting authority, in the case of non-US issuers, we vote
          proxies on a best efforts basis.

     3.4.  Loaned Securities

          Many clients of AllianceBernstein have entered into securities lending
          arrangements with agent lenders to generate additional revenue.
          AllianceBernstein will not be able to vote securities that are on loan
          under these types of arrangements. However, under rare circumstances,
          for voting issues that may have a significant impact on the
          investment, we may request that clients recall securities that are on
          loan if we determine that the benefit of voting outweighs the costs
          and lost revenue to the client or fund and the administrative burden
          of retrieving the securities.

     3.5.  Proxy Voting Records

          You may obtain information regarding how the Fund voted proxies
          relating to portfolio securities during the most recent 12-month
          period ended June 30, without charge. Simply visit AllianceBernstein's
          web site at www.AllianceBernstein.com, go to the Securities and
          Exchange Commission's web site at www.sec.gov or call
          AllianceBernstein at (800) 227-4618.

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