[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Notices]
[Pages 65615-65616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31615]


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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 22379; 811-4332]


Mitchell Hutchins/Kidder, Peabody Equity Income Fund, Inc.; 
Notice of Application

December 6, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').


[[Page 65616]]


ACTION: Notice of application for deregistration under the Investment 
Company Act of 1940 (the ``Act'').

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APPLICANT: Mitchell Hutchins/Kidder, Peabody Equity Income Fund, Inc.

RELEVANT ACT SECTION: Section 8(f).

SUMMARY OF APPLICATION: Applicant requests an order declaring that it 
has ceased to be an investment company.

FILING DATE: The application was filed on October 15, 1996.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicant with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on December 31, 
1996, and should be accompanied by proof of service on the applicant, 
in the form of an affidavit or, for lawyers, a certificate of service. 
Hearing requests should state the nature of the writer's interest, the 
reason for the request, and the issues contested. Persons may request 
notification of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicant, c/o Dianne E. O'Donnell, Legal Department, Mitchell 
Hutchins Asset Management Inc., 1285 Avenue of the Americas, 18th 
Floor, New York, New York 10019.

FOR FURTHER INFORMATION CONTACT:
Diane L. Titus, Paralegal Specialist, at (202) 942-0564, or Mary Kay 
Frech, Branch Chief, at (202) 942-0584, (Division of Investment 
Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant is an open-end, diversified management investment 
company organized as a corporation under the laws of the State of 
Maryland. On June 21, 1985, applicant registered under section 8(a) of 
the Act and filed a registration statement on Form N-1A pursuant to 
section 8(b) of the Act and the Securities Act of 1933, covering an 
indefinite number of shares of common stock. The registration statement 
was declared effective on October 8, 1985, and the initial public 
offering of common stock commenced thereafter.
    2. On April 26, 1995 and July 20, 1995, applicant's Board of 
Directors approved an Agreement and Plan of Reorganization and 
Liquidation (``Plan'') between applicant and PaineWebber America Fund 
on behalf of its series, PaineWebber Growth and Income Fund (``PW 
Fund''), whereby PW Fund was to acquire all the assets of applicant in 
exchange solely for shares of beneficial interest in PW Fund and the 
assumption by PW Fund of all of applicant's liabilities. In accordance 
with rule 17a-8 of the Act, applicant's directors determined that the 
reorganization was in the best interests of applicant and that the 
interests of applicant's existing shareholders would not be diluted as 
a result.1
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    \1\ Applicant and PW Fund may be deemed to be affiliated persons 
of each other by reason of having a common investment adviser, 
common directors, and/or common officers. Although purchases and 
sales between affiliated persons generally are prohibited by section 
17(a) of the Act, rule 17a-8 provides an exemption for certain 
purchases and sales among investment companies that are affiliated 
persons of each other solely by reason of having a common investment 
adviser, common directors, and/or common officers.
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    3. According to applicant's proxy statement, the directors 
considered a number of factors in approving the Plan, including, (a) 
the compatibility of the investment objectives, policies, and 
restrictions of the funds, (b) the effect of the reorganization on 
expected investment performance, (c) the effect of the reorganization 
on the expense ration of the PW Fund relative to its current expense 
ratio, and (d) possible alternatives to the reorganization, including 
continuing to operate on a stand-alone basis or liquidation.
    4. Proxy materials relating to the Plan and the transactions 
contemplated thereby and a combined prospectus relating to the shares 
of PW Fund to be issued were mailed to applicant's shareholder on or 
about September 8, 1995. At a special meeting held on October 6, 1995, 
applicant's shareholders approved the Plan.
    5. On October 13, 1995 (the ``Closing Date''), applicant had 
2,816,986.797 of Class A shares, 75,614.434 of Class B shares, and 
153,428.676 of Class C shares of common stock outstanding, having an 
aggregate net asset value of $55,983,774.35 for Class A shares, 
$1,493,700.44 for Class B shares, and $3,044,662.68 for Class C shares, 
and a per share net asset value of $19.87 for Class A shares, $19.75 
for Class B shares, and $19.84 for Class C shares. Pursuant to the 
Plan, applicant transferred to PW Fund all rights, title, and interest 
in and to applicant's assets. In exchange, therefor, PW Fund assumed 
all liabilities, debts, obligations, and duties of applicant, and 
issued to applicant the number of shares of PW Fund determined by 
dividing the net asset value of a share of applicant by the net asset 
value of a share of PW Fund, in each case as of the close of regular 
trading on the New York Stock Exchange, Inc. on the Closing Date.
    6. On the Closing Date, applicant liquidated and distributed pro 
rata to its shareholders of record, determined as of the close of 
business on the Closing Date, the shares of PW Fund received by 
applicant in the reorganization, in exchange for such shareholders' 
shares of applicant.
    7. The expenses incurred in connection with the reorganization 
consisted primarily of legal expenses, expenses of printing and mailing 
communications to shareholders, registration fees, and miscellaneous 
accounting and administrative expenses. These expenses totalled 
approximately $250,000 and were borne by applicant and PW Fund in 
proportion to their respective net assets.
    8. As of the date of the application, applicant has no assets, 
debts or liabilities, and has no securityholders. Applicant is not a 
party to any litigation or administrative proceedings. Applicant is not 
now engaged, and does not propose to engage, in any business activities 
other than those necessary for winding-up of its affairs.
    9. On January 30, 1996, applicant and PW Fund filed Articles of 
Transfer with the Maryland State Department of Assessments and 
Taxation. Applicant intends to file Articles of Dissolution with the 
State of Maryland.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-31615 Filed 12-12-96; 8:45 am]
BILLING CODE 8010-01-M