Company Name: Alliance World Dollar Government Fund, Inc.
Public Availability Date: October 19, 2006
Document Sections:
INQUIRY LETTER
INQUIRY LETTER
APPENDIX
STAFF REPLY LETTER
[INQUIRY LETTER]
October 5, 2006
Office of Chief Counsel
Division of Investment Management
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
Re: Alliance World Dollar Government Fund, Inc.
Ladies and Gentlemen:
This letter is to inform you that our client, Alliance World Dollar Government
Fund, Inc. (the "Fund"), intends to omit from the proxy statement and form of
proxy (collectively, the "Proxy Materials") to be mailed to its stockholders in
connection with the special meeting of its stockholders (the "Special Meeting")
a stockholder proposal (the "Proposal") received from Mr. Walter S. Baer (the
"Proponent"). The Proponent's letter dated September 25, 2006 setting forth the
Proposal (the "Proposal Letter") is attached hereto as Attachment 1. On behalf
of the Fund, pursuant to Rule 14a-8(j) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), we hereby request that the Staff of the
Division of Investment Management (the "Staff") concur with the Fund's view
that, for the reasons stated below, the Proposal may properly be omitted from
the Proxy Materials for the Special Meeting.
1. Background
The Fund is a Maryland corporation that is registered as a closed-end investment
company under the Investment Company Act of 1940 (the "1940 Act") and its shares
are traded on the New York Stock Exchange ("NYSE"). The Special Meeting is
called in connection with the Fund's proposed acquisition (the "Acquisition") by
Alliance World Dollar Government Fund II, Inc. ("AWDGF II") pursuant to an
Agreement and Plan of Acquisition and Liquidation dated as of September 20,
2006. The sole purpose of the meeting is for the Fund's stockholders to consider
and vote on the proposed Acquisition. Under applicable state law requirements,
the Fund must obtain the approval of its stockholders to complete the
Acquisition.
AWDGF II filed the Prospectus/Proxy Statement (the "Registration Statement"), of
which the Proxy Materials constitute a part, with the Securities and Exchange
Commission (the "Commission") on September 22, 2006, with a delaying amendment
pursuant to Section 8(a) of the Securities Act of 1933, and intends to file and
mail definitive Proxy Materials as soon as the Registration Statement for the
shares of AWDGF II common stock to be issued in connection with the Acquisition
is declared effective. We anticipate that the Registration Statement would have
an effective date of October 23, 2006.
The Fund's current timetable contemplates that the Proxy Materials will be
mailed to stockholders shortly after the Registration Statement becomes
effective. The date of the Special Meeting is December 12, 2006, and the record
date is October 13, 2006. The Fund disclosed in a press release dated September
13, 2006 that the Fund's Board of Directors had approved the Acquisition and set
the Special Meeting date and record date.
Because the Proponent is seeking to have the Proposal included in a proxy
statement for a special meeting rather than for an annual meeting, the 120-day
period under Rule 14a-8(e) before which shareholder proposals must be submitted
does not apply to the Proposal. Rather, the deadline is a "reasonable time"
before a company prints and mails its proxy materials. As discussed below, the
Commission has in the past taken the position that a proposal submitted after a
company files its proxy materials with the Commission, as is the case here, is
properly excludable under Rule 14a-8(b) because it is not submitted in a
"reasonable time" and fails to satisfy the procedural requirements under Rule
14a-8(e). However, as also discussed below, we believe the Proposal is also
properly excludable under other provisions of Rule 14a-8.
In any event, because the Fund received the Proposal Letter on September 26,
2006 and intends to print and mail its Proxy Materials on or about October 26,
2006, the Fund believes that the 80-day period set forth in Rule 14a-8(j) for
notifying the Commission of the intent to omit a proposal prior to filing
definitive proxy materials should not be applied to the Fund's request set forth
in this letter. We respectfully request that the Staff waive the 80-day period
under Rule 14a-8(j) so as to permit the Fund to file and mail definitive copies
of the Proxy Materials shortly after the Registration Statement is declared
effective.1
Pursuant to Rule 14a-8(j)(2), enclosed herewith are six (6) additional copies of
this letter and the Proposal Letter. A copy of this letter is also being sent to
the Proponent as notice of the Fund's intent to omit the Proposal from the Proxy
Materials.
2. The Proposal
The Proposal is as follows: "RESOLVED: The shareholders ask the Board of
Directors to take the steps necessary to merge the Alliance World Dollar
Government Fund (AWG) into the AllianceBernstein Emerging Market Debt Fund, an
open-end fund, or otherwise permit shareholders to realize net asset value (NAV)
for their shares." The Proposal is expressly presented as an opposition and
alternative to the Fund's proposed Acquisition, and includes comparisons of the
Proposal with the Acquisition. The supporting statement urges stockholders of
the Fund to "[V]ote for a better deal for AWG shareholders by voting "NO" on the
proposed merger with AWF, and voting "YES" on this proposal to merge AWG with
the open-end Emerging Market Debt Fund."
3. Bases for Omission of the Proposal
We believe that the Proposal may be omitted from the Fund's Proxy Materials for
the following reasons:
Pursuant to Rule 14a-8(i)(9), because the Proposal would be in direct conflict
with the proposal the Fund intends to submit to its stockholders at the Special
Meeting, which is to approve the proposed Acquisition;
Pursuant to Rule 14a-8(e)(3), because the Proponent failed to submit the
Proposal a reasonable time before the Fund begins to print and mail its proxy
materials;
Pursuant to Rule 14a-8(i)(6), because the Fund lacks the power or authority to
implement the Proposal; and
Pursuant to Rule 14a-8(i)(3), because the Proposal is vague and indefinite and
therefore should be deemed to contain false and misleading statements in
violation of the Commission's proxy rules.
a. The Proposal may be omitted under Rule 14a-8(i)(9) because it would be in
direct conflict with the proposal the Fund intends to submit to the stockholders
at the Special Meeting.
Under Rule 14a-8(i)(9), a company may omit a shareholder proposal and supporting
statement from its proxy materials "if the proposal directly conflicts with one
of the company's own proposals to be submitted to shareholders at the same
meeting."
2 We believe that the Proposal may properly be omitted from the Proxy
Materials because it directly conflicts with the Fund's proposal seeking
approval of the Acquisition by the Fund's stockholders at the Special Meeting.
As noted above, the Proponent explicitly urges stockholders to vote against the
Fund's proposal, in direct opposition to the Acquisition.
Relying on Rule 14a-8(i)(9), the Staff has on several occasions explicitly
confirmed the propriety of the exclusion of a stockholder proposal where the
primary purpose of the proposal was to oppose a merger proposal by management.
For example, in Executive Industries, Inc. (June 26, 1981), regarding whether a
shareholder proposal to repurchase shares was properly omitted from proxy
materials seeking approval of a merger, the Staff's response letter to the
company stated that the stockholder proposal "would be in contradiction to
management's purpose in submitting its merger proposal" and that "there appears
to be some basis for the view that the primary purpose of the proposal is to
oppose stockholder approval of the merger." Similarly, in Scudder New Europe
Fund, Inc. (April 29, 1999) (the "Scudder Letter"), regarding a shareholder
proposal to conduct a no-fee in-kind tender offer for shares of a closed-end
mutual fund that was omitted from the company's proxy materials in which
shareholders were asked to approve proposals by management to open-end the fund
and to merge it with another fund, the Staff in its response letter, citing
Executive Industries, stated that "a shareholder proposal may be excluded if its
primary purpose is to counter shareholder approval of a management proposal."
3
The Staff consistently has found a proposal properly excludable not only because
it specifically opposes a management proposal, but because it conflicts, or is
inconsistent, with a management proposal. At the Special Meeting, the Fund's
stockholders will be asked to consider and vote upon the proposed Acquisition.
The Proposal seeks to put forth an alternative and contradictory merger proposal
in that it calls for the Fund to be merged with and into AllianceBernstein
Emerging Market Debt Fund Inc. ("EMD"). These transactions are mutually
exclusive because it would be impossible for the Fund to consummate both
transactions. Submitting both proposals to a stockholder vote could provide
inconsistent and ambiguous results in so far as the stockholders could approve
the Fund's proposal and thereby approve the Acquisition, while at the same time
approving the Proposal and thereby indicating stockholders' support for an
entirely inconsistent transaction. The Proposal directly conflicts with the
Fund's own proposal and is expressly an alternative to the Fund's own proposal.
The Proposal seeks a vote on the same issue as the vote sought on the
Acquisition, a proposal approved and deemed advisable by the Fund's Board of
Directors. It is for this reason that where, as here, a company's merger
proposal and a stockholder proposal seek inconsistent, inconclusive or opposing
results, the Staff has consistently affirmed that Rule 14a-8(i)(9) permits the
company to exclude the stockholder proposal from its proxy statement. See, e.g.,
the Scudder Letter and the INTERLINQ Letter.4
Because (i) the primary purpose of the Proposal is to oppose the proposed
Acquisition, (ii) the Proposal and the Fund's proposal for the Acquisition
require inconsistent and irreconcilable results, and (iii) submitting both
proposals to a vote of the Fund's stockholders at the Special Meeting would be
inherently confusing, the Fund believes that the Proposal may properly be
omitted from the Proxy Materials under Rule 14a-8(i)(9).
b. The Proposal may be omitted because the Proponent has not satisfied the
procedural requirement set forth in Rule 14a-8(e)(3).
Rule 14a-8(e)(3) requires that a proposal to be presented at any meeting other
than an annual meeting be received a "reasonable time" before the company begins
to print and mail its proxy materials. Although Rule 14a-8 does not define what
constitutes a "reasonable time" in the context of a special meeting, it is
noteworthy that this Rule requires that a proposal to be presented at an annual
meeting be received by the registrant a minimum of 120 days in advance of the
anticipated mailing of proxy materials to shareholders. The Fund respectfully
submits that there is good reason for the Rule to provide for a 120 day period.
Stockholder proposals that are not clearly excludable under a provision of Rule
14a-8 (unlike the Proposal) must be thoughtfully analyzed by a registrant and
would normally be discussed at a meeting of the registrant's Board of Directors,
which would also have an opportunity to review and discuss any statement in
opposition. None of this is possible for a stockholder proposal received a few
weeks before scheduled printing and mailing. Moreover, Rule 14a-9(m)(3)(ii)
requires a registrant to provide a proponent with a copy of its opposition
statement "no later than 30 calendar days before it files definitive copies of
its proxy statement and form of proxy under Rule 14a-6." The "reasonable time"
requirement is designed to prevent a proponent from hijacking a registrant's
printing and mailing schedule.
In determining whether a proposal is made within a reasonable time, the
fundamental consideration is whether the time of submission of the proposal
affords the registrant reasonable time to consider the proposal without causing
an excessive delay in the distribution of proxy materials to its shareholders.
See Greyhound Lines, Inc. (January 8, 1999) (granting no-action relief where the
registrant received a shareholder proposal 14 days after the filing of
preliminary proxy materials and approximately six weeks after the announcement
of the merger agreement and while it was in the final stages before commencing
its proxy solicitation) and Jefferson-Pilot Corp. (January 31, 2006) (granting
no-action relief where the registrant received a shareholder proposal 40 days
after the filing of preliminary proxy materials and approximately 100 days after
the announcement of the merger agreement).
Similarly, in other no-action correspondence, the Staff has consistently stated
that it would not recommend enforcement action against a registrant that
excluded a shareholder proposal received after the preliminary proxy materials
relating to that meeting had been filed with the Commission. See, e.g., Scudder
New Europe Fund, Inc. (November 10, 1998) (granting no-action relief where a
shareholder proposal was received the same day as the filing of preliminary
proxy materials); The United Kingdom Fund, Inc. (January 12, 1998) (granting
no-action relief where a shareholder proposal was received one week after the
filing of preliminary proxy materials); and Public Service Company of Colorado
(November 29, 1995) (granting no-acting relief where the registrant announced a
merger on August 23, filed preliminary proxy materials on October 6, and
received a shareholder proposal on November 8).
As noted above, on September 13, 2006, the Fund announced that the Board of
Directors had approved and deemed advisable the Acquisition and set the Special
Meeting date and the record date. On September 22, 2006, AWDGF II filed with the
Commission the Registration Statement, which included the preliminary
Prospectus/Proxy Statement stating the scheduled printing and mailing date of
the Proxy Materials. The Prospectus/Proxy Statement filed with the Commission
also specified the record date as October 13, 2006 and the date of the Special
Meeting as December 12, 2006.
Despite the Fund's and AWDGF II's public disclosure of the Acquisition, the
Proponent submitted the Proposal to the Fund on September 26, 2006 - 13 days
after the Fund announced the Acquisition and 4 days after the Fund's preliminary
Proxy Materials were filed with the Commission. The Fund expects to mail the
Proxy Materials to its stockholders in late October for the Special Meeting on
December 12, 2006, and in order to meet that deadline and otherwise provide the
Fund's stockholders sufficient time to consider the disclosures in the Proxy
Materials, the Fund and AWDGF II plan to print and mail the Proxy Materials
promptly following the effective date of the Registration Statement, which, as
indicated above, is expected to be on October 23, 2006.
Given the Proponent's delay in submitting the Proposal until after the filing of
AWDGF II's Registration Statement, the Fund would not have a reasonable amount
of time to consider any Staff comments and incorporate the Proposal in the
Registration Statement without causing a delay in the effectiveness of the
Registration Statement and printing and mailing the Proxy Materials related to
the Special Meeting. These delays would likely lead to a postponement of the
Special Meeting in order to allow the approximate six week solicitation period
that is typically the period necessary to obtain the required stockholder vote.
An adequate solicitation period is particularly important because, under NYSE
rules, a discretionary broker vote is not permitted on merger proposals, which
makes it more difficult to obtain a shareholder vote. In addition, a delay of
even a week for the Special Meeting date would mean the solicitation period
would extend into the holidays, which is a difficult time to seek a shareholder
vote and would probably require the Special Meeting date to be adjourned into
January of 2007. Under these circumstances, the Proposal cannot be considered to
have been submitted within a "reasonable time" in advance of the solicitation of
proxies in connection with the Special Meeting and, therefore, the Proposal may
properly be omitted from the Proxy Materials.
c. The Proposal may be omitted under Rule 14a-8(i)(6) because the Fund lacks the
power or authority to implement the Proposal.
Under Rule 14a-8(i)(6), a proposal may be excluded "if the company would lack
the power or authority to implement the proposal" and the Staff has permitted
the exclusion of shareholder proposals if it "deals with a matter beyond the
registrant's power to effectuate." International Business Machines Corp.
(January 14, 1992).
The first part of the Proposal calls for the Board of the Fund to "take the
steps necessary to merge" the Fund into EMD. Even if the Fund were to propose an
acquisition of the Fund by EMD, it has no reason to believe that EMD would
entertain such a proposition and would have no way to force EMD to acquire the
Fund. The Board of Directors of EMD, regardless of the fact that the members of
its Board of Directors are substantially the same as those of the Fund's, would
have to independently evaluate such a merger from the perspective of EMD and its
shareholders and make the findings under Commission Rule 17a-8, which are
required for mergers of affiliated funds, that participation in the merger is in
the best interests of EMD and the interests of EMD's shareholders will not be
diluted as a result of the merger. Even if the Fund knew precisely what measures
and actions the Proposal required, it does not have power or authority to
unilaterally effect a merger of the Fund with and into EMD.
For these reasons, the Fund believes that it lacks the authority to implement
the Proposal and that the Proposal may be omitted from the Proxy Materials under
Rule 14a-8(i)(6).
d. The Proposal may properly be omitted under Rule 14a-8(i)(3) because it is
vague and indefinite.
Rule 14a-8(i)(3) allows the exclusion of a shareholder proposal if the proposal
or supporting statement is contrary to any of the Commission's proxy rules or
regulations, including Rule 14a-9. We believe that the Proposal is so vague and
indefinite that it violates the Rule 14a-9 prohibition on materially false and
misleading statements.
The Staff has consistently taken the position that vague and indefinite
shareholder proposals are excludable under Rule 14a-8(i)(3) because "neither the
stockholders voting on the proposal, nor the company in implementing the
proposal (if adopted), would be able to determine with any reasonable certainty
exactly what actions or measures the proposal requires."
5 Moreover, a proposal
is sufficiently vague and indefinite so as to justify exclusion where a company
and its shareholders might interpret the proposal differently, such that "any
action ultimately taken by the company upon implementation of the proposal could
be significantly different from the actions envisioned by the shareholders
voting on the proposal." See Fuqua Industries, Inc. (March 12, 1991).
The second part of the Proposal is inherently vague and misleading. The Proposal
seeks to have the Board of the Fund "take the steps necessary to merge" the Fund
into EMD "or otherwise permit shareholders to realize net asset value (NAV) for
their shares" without providing a basis on which the Fund can determine exactly
what the Proponent expects it to do. The Proposal does not provide any
indication of the scope or means of execution intended by the Proponent. For
example, there are a variety of ways to offer stockholders of a closed-end fund
NAV (liquidation, tender offers at NAV, conversion to interval fund status,
etc.) but none are even identified in the Proposal. Accordingly, if adopted,
there would be no way for the Fund to determine whether or not it could, in
fact, comply with the Proposal.
The supporting statements in the Proposal fail to clarify these material
ambiguities. Accordingly, the Proposal may be omitted under Rule 14a-8(i)(3) as
misleading "because any action(s) ultimately taken by [the Fund] upon
implementation of the proposal could be significantly different from the
action(s) envisioned by shareholders voting on the proposal." See Occidental
Petroleum Corp. (February 11, 1991).
4. Conclusion
For the foregoing reasons, on behalf of the Fund, we respectfully request that
the Staff confirm that (i) the Proposal may be properly omitted from the Fund's
Proxy Materials, and (ii) the Staff will not recommend any enforcement action to
the Commission if the Proposal is omitted from the Proxy Materials. Should the
Staff disagree with the Fund's conclusions regarding the omission of the
Proposal from the Proxy Materials or the waiver of the 80-day requirement, or
should the Staff need any additional information in support of the Fund's
position, we would appreciate the opportunity to confer with the Staff
concerning these matters prior to the issuance of your response. We request that
the Staff forward a copy of any response that it may receive from the Proponent
by facsimile to the undersigned at (202)737-5184. In light of the time schedule
for finalization, printing and mailing of the Fund's Proxy Materials, the Fund
respectfully requests the Staff's expedited review of this matter.
In the event that you have any questions or comments concerning the subject
matter of this letter, please call the undersigned at (202)737-8833.
Sincerely,
/s/
Kathleen K. Clarke
-----FOOTNOTES-----
1 The Commission has frequently granted this relief in the case of special
meetings and similar circumstances where proposals are submitted outside the
normal annual meeting cycle. See, e.g., Jefferson-Pilot Corporation (January 31,
2006), Unicom Corporation (February 14, 2000); and BankBoston Corporation (June
7, 1999).
2 The Commission has stated that the use of the word "directly" in Rule
14a-8(i)(9) does not "imply that proposals must be identical in scope or focus
for the exclusion to be available." Amendments to Rules on Shareholder
Proposals, Exchange Act Release No. 34-40018, n. 27 (May 21, 1998).
3 See also Unicom Corporation (February 14, 2000) (regarding a stockholder
proposal to reject a merger that was omitted from the company's proxy materials
in which stockholders were asked to approve the same merger); INTERLINQ Software
Company (April 20, 1999) (the "INTERLINQ Letter") (regarding a shareholder
proposal seeking that the company effect a self-tender that was excluded from
the proxy material in which the shareholders were asked to approve a merger
proposal); Fitchburg Gas and Electric Light Company (July 30, 1991) (regarding a
proposal by shareholders requesting solicitation of third party offers to
purchase the company, or alternatively a share purchase, that was excluded from
the proxy materials in which the company was seeking shareholder approval of a
merger proposal); and Bluefield Supply Company (April 14, 1985) (stockholder
proposal mandating the appointment of an independent committee for the purpose
of recommending proposals for optimizing stockholder returns on investment was
excludable from proxy materials for a special meeting called for the purpose of
obtaining stockholder approval of a merger proposal).
4 See also BankBoston Corporation (June 7, 1999) (shareholder proposal
requesting the company to prepare a report on the effect of a merger on its
employees and the communities where it does business was omitted from the
company's proxy materials in which shareholders were asked to approve a merger
proposal); Pacific First Financial Corp. (September 25, 1989) (stockholder
proposal requiring the company to take all lawful action necessary to cancel and
terminate a merger agreement was omitted from the company's proxy materials in
which stockholders were asked to approve, among other things, a merger
proposal); The Firestone Tire & Rubber Company (February 21, 1979) (stockholder
proposal to negotiate merger with disinterested persons rather than insiders was
omitted from proxy materials in which stockholders were asked to approve a
merger proposal); and other letters cited in footnote 3, supra.
5 Staff Legal Bulletin No. 14B (September 15, 2004).
[INQUIRY LETTER]
September 25, 2006
Emilie D. Wrapp, Secretary
Alliance World Dollar Government Fund
AllianceBernstein, L.P.
1345 Avenue of the Americas
New York, NY 10105
Dear Ms. Wrapp:
I have been the beneficial owner of shares of Alliance World Dollar Government
Fund (AWG) continuously for at least one year with a market value of at least
$2000. I intend to hold these shares continuously until the next Special or
Annual Meeting of Stockholders.
Pursuant to Rule 14a-8 of the Securities Exchange Act of 1934, I hereby submit
the attached proposal and supporting statement for inclusion in the AWG proxy
statement for the next Special Meeting (now scheduled for December 12, 2006) or
Annual Meeting of Stockholders, whichever comes first. I intend to present this
proposal personally or through an authorized representative at that meeting.
Of course, it would be better for the shareholders if the AWG Board of Directors
recommended merging AWG into the open-end AllianceBernstein Emerging Market Debt
Fund, or otherwise acted to enhance shareholder value. If the Board were to so
act, I would be pleased to promptly withdraw this proposal.
Please feel free to contact me by email (wsbaer@yahoo.com), fax (310.395.3826),
or phone (310.488.3444) if you or other representatives of AllianceBernstein or
the AWG Board of Directors would like to discuss this proposal.
Yours very truly,
/s/
Walter S. Baer
[APPENDIX]
September 22, 2006
Proposal to Alliance World Dollar Government Fund
RESOLVED: The shareholders ask the Board of Directors to take the steps
necessary to merge the Alliance World Dollar Government Fund (AWG) into the
AllianceBernstein Emerging Market Debt Fund, an open-end fund, or otherwise
permit shareholders to realize net asset value (NAV) for their shares.
SUPPORTING STATEMENT: At this Special Meeting, Alliance is asking us to vote to
merge our fund (AWG) into the Alliance World Dollar Government Fund II (AWF),
another closed-end fund. The proposed merger with AWF will only perpetuate the
double digit discount below NAV at which our shares trade. As of September 22,
2006 (the date of this proposal), the AWG discount was 12.8 percent,
representing more than $16 million in value unayailable to shareholders.
There is a much better way to increase the value of our sharesby merging our
fund (AWG) into the open-end AllianceBernstein Emerging Market Debt Fund. The
two funds have similar objectives, the same portfolio managers, and essentially
the same Board of Directors. This merger will immediately eliminate the AWG
discount and let us realize full value for our shares. It will also have
long-term advantages (based on the most recent reports for these funds) of
greater liquidity, a lower expense ratio and a higher dividend rate than AWG has
now.
Vote for a better deal for AWG shareholders by voting "NO" on the proposed
merger with AWF, and voting "YES" on this proposal to merge AWG with the
open-end Emerging Market Debt Fund.
[STAFF REPLY LETTER]
October 19, 2006
BY FACSIMILE AND U.S. MAIL
Kathleen K. Clarke, Esquire
Seward & Kissel LLP
1200 G Street, N.W. Suite 350
Washington, D.C. 20005
Re: Alliance World Dollar Government Fund, Inc. File No. 811-7108 Shareholder
Proposal of Walter S. Baer
Dear Ms. Clarke:
In a letter dated October 5, 2006, you notified the staff of the Securities and
Exchange Commission that the Alliance World Dollar Government Fund, Inc. ("the
Fund") proposes to omit a shareholder proposal ("the Proposal") submitted by Mr.
Walter S. Baer (the "Proponent") from its proxy materials for its 2006 special
meeting of its shareholders. The Proposal provides:
RESOLVED: The shareholders ask the Board of Directors to take the steps
necessary to merge the Alliance World Dollar Government Fund (AWG) into the
AllianceBernstein Emerging Market Debt Fund, an open-end fund, or otherwise
permit shareholders to realize net asset value (NAV) for their shares.
You request our assurance that we would not recommend enforcement action if the
Fund omits the Proposal in reliance on Rules 14a-8(i)(3), (6) and (9) and Rule
14a-8(e)(3) under the Securities Exchange Act of 1934.
Omission of the Proposal Based on Rule 14a-8(i)(9)
You argue that the Fund may exclude the Proposal under the provision of Rule
14a-8(i)(9) which permits the omission of a proposal if the proposal directly
conflicts with one of the company's own proposals to be submitted to
shareholders at the same meeting. You state that the purpose of the special
meeting is to obtain shareholder approval of the merger of the Fund into the
Alliance World Dollar Government Fund II, Inc. (the "Acquisition"). You argue
that the Proposal is expressly presented as an opposition and alternative to the
Fund's proposed Acquisition.
We believe there is some basis for your view that the Proposal may be excluded
pursuant to Rule 14a-8(i)(9). The staff has taken the position that a proposal
may be excluded if its primary purpose is to counter shareholder approval of a
company proposal. See, e.g., Scudder New Europe Fund, Inc. (pub. avail. April
29, 1999); PECO Energy Co. (pub. avail. Jan. 31, 2000); INTERLINQ Software Corp.
(pub. avail. April 20, 1999); Unicom Corp. (pub. avail. Feb. 14, 2000); Scudder
Spain and Portugal Fund, Inc. (pub. avail. Oct. 6, 1998). Here, the Proposal
appears to be a counterproposal to the Acquisition proposed by the Fund. Indeed,
in his Supporting Statement, the Proponent criticizes the Acquisition and states
that his Proposal is the "better way." Thus, we would not recommend enforcement
action against the Fund if it omits the Proposal in reliance upon Rule
14a-8(i)(9).*
We note that the Fund did not file its statement of objections to including the
Proposal in its proxy materials at least 80 days before the date on which it
will file definitive proxy materials as required by Rule 14a-8(j)(1). Noting the
circumstances of the delay, we grant the Fund's request that the 80-day
requirement be waived.
Attached is a description of the informal procedures the Division follows in
responding to shareholder proposals. If you have any questions or comments
regarding this matter, please contact the undersigned at (202) 551-6941.
Sincerely,
/s/
Linda B. Stirling
Senior Counsel
cc: Walter S. Baer
-----FOOTNOTES-----
* In reaching this position, we have not found it necessary to address the
alternative bases for omission upon which the Fund relies.
|
