No-Action Letter: Karpus Management, Inc. Shareholder Proposal (Alliance Bernstein Income Fund, Inc.), February 18, 2015

Re: AllianceBernstein Income Fund, Inc. – Omission of Shareholder Proposal
Submitted by Karpus Management, Inc. Pursuant to Rule 14a-8

In a letter dated December 17, 2014, on behalf of AllianceBernstein Income Fund, Inc., (the “Fund”) you requested confirmation from the staff of the Division of Investment Management that it would not recommend enforcement action to the Securities and Exchange Commission (the “Commission”) if a shareholder proposal and supporting statement (the “Proposal”) submitted by Karpus Management, Inc., (the “Proponent”) is omitted from the proxy materials for the Fund’s Annual Meeting of Stockholders, which is expected to take place on or about April 26, 2015.1 The Proposal provides:

You argue that the Proposal may be excluded: (1) pursuant to Rule 14a-8(i)(2) under the Securities Exchange Act of 1934, as amended, because the Proposal would, if implemented, require the Fund to violate state and federal law; (2) pursuant to Rule 14a-8(i)(6), because the Fund does not have the power and authority to liquidate, merge or convert into an open-end or exchange-traded fund to implement the Proposal; and (3) pursuant to Rule 14a-8(i)(3), because the Proposal contains materially false and misleading statements regarding the context in which the Proposal is made, including statements that impugn the integrity of the Fund’s directors through questioning their adherence to their fiduciary duties and makes charges concerning improper and illegal activity without factual foundation, contrary to Rule 14a-9.

There appears to be some basis for your view that the Proposal may be excluded under Rules 14a-8(i)(2) and 14a-8(i)(6). We note that, in the opinion of the Fund’s counsel, the Board lacks the authority to liquidate, merge, or convert the Fund into an open-end or exchange-traded fund and that implementation of these aspects of the Proposal would violate state law. It appears that this defect in the Proposal could be cured, however, if the Proposal were revised to state that the Board should take the steps necessary to liquidate, merge, or convert the Fund. Accordingly, unless the Proponent provides the Fund with a Proposal revised in this manner, within seven calendar days after receiving this letter, we will not recommend enforcement action to the Commission if the Fund omits the Proposal from its proxy materials in reliance on Rules 14a-8(i)(2) and 14a-8(i)(6).

We are unable to concur in your view that the Fund may exclude the entire Proposal or portions of the supporting statement under Rule 14a-8(i)(3). We are unable to conclude that you have demonstrated objectively that the portions of the supporting statement you reference are materially false or misleading or impugn the character, integrity, or personal reputation of the Fund’s directors without factual foundation in violation of Rule 14a-9. Accordingly, we cannot assure the Fund that we would not recommend enforcement action if the Fund omits the Proposal or portions of the supporting statement from its proxy materials in reliance on Rule 14a-8(i)(3).

Attached is a description of the informal procedures the Division follows in responding to shareholder proposals. If you have any questions or comments concerning this matter, please call me at (202) 551-6907.

cc: Brett D. Gardner
Senior Corporate Governance Analyst
Karpus Investment Management

DIVISION OF INVESTMENT MANAGEMENT

INFORMAL PROCEDURES REGARDING SHAREHOLDER PROPOSALS

The Division of Investment Management believes that its responsibility with respect to matters arising under Rule 14a-8 [17 CFR 240.14a-8], as with other matters under the proxy rules, is to aid those who must comply with the rule by offering informal advice and suggestions and to determine, initially, whether or not it may be appropriate in a particular matter to recommend enforcement action to the Commission. In connection with a shareholder proposal under Rule 14a-8, the Division's staff considers the information furnished to it by an investment company in support of its intention to exclude the proposals from the investment company's proxy material, as well as any information furnished by the proponent's representative.

The staff will always consider information concerning alleged violations of the statutes administered by the Commission, including argument as to whether or not activities proposed to be taken would be violative of the statute or rule involved. The receipt by the staff of such information, however, should not be construed as changing the staff's informal procedures and proxy review into a formal or adversary procedure.

The determination reached by the staff in connection with a shareholder proposal submitted to the Division under Rule 14a-8 does not and cannot purport to “adjudicate” the merits of an investment company's position with respect to the proposal. Only a court, such as a U.S. District Court, can decide whether an investment company is obligated to include shareholder proposals in its proxy material. Accordingly, a discretionary determination not to recommend or take Commission enforcement actions, does not preclude a proponent, or any shareholder of an investment company, from pursuing any rights he or she may have against the investment company in court, should the management omit the proposal from the investment company's proxy material.

1 We also received a letter from the Proponent dated December 23, 2014.

Incoming Letter

The Incoming Letter and Response Letter is in Acrobat format.

http://www.sec.gov/divisions/investment/noaction/2015/karpus-management-021815-14a8.htm

Securities Exchange Act of 1934 - Rule 14a-8

Incoming Letter

Modified: 02/20/2015