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Report of Independent Auditors
To the Shareholders and Board of Trustees of
PaineWebber Mutual Fund Trust
In planning and performing our audit of the financial
statements of PaineWebber Mutual Fund Trust
(comprising, respectively, PaineWebber California Tax-Free
Income Fund and PaineWebber National Tax-Free Income Fund)
for the year ended February 28, 1998, we considered its
internal control, including control activities for
safeguarding securities, in order to determine our
auditing procedures for the purpose of expressing our opinion
on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance
on the internal control.
The management of PaineWebber Mutual Fund Trust is
responsible for establishing and maintaining internal
control. In fulfilling this responsibility, estimates
and judgments by management are required to assess
the expected benefits and related costs of controls.
Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing
financial statements for external purposes that
are fairly presented in conformity with generally
accepted accounting principles. Those controls
include the safeguarding of assets against unauthorized
acquisition, use or disposition.
Because of inherent limitations in internal control,
errors or fraud may occur and not be detected.
Also, projection of any evaluation of internal control
to future periods is subject to the risk that it may
become inadequate because of changes in conditions or
that the effectiveness of the design and operation
may deteriorate.
Our consideration of the internal control would not
necessarily disclose all matters in the internal control
that might be material weaknesses under standards
established by the American Institute of Certified Public
Accountants. A material weakness is a condition in which
the design or operation of one or more of the internal
control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would
be material in relation to the financial statements being
audited may occur and not be detected within a timely period
by employees in the normal course of performing their
assigned functions. However, we noted no matters involving
the internal control and its operation, including controls
for safeguarding securities, that we consider to be material
weaknesses as defined above at February 28, 1998.
This report is intended solely for the information and
use of the shareholders, board of trustees and management of
PaineWebber Mutual Fund Trust and the Securities and
Exchange Commission.
ERNST & YOUNG LLP
April 15, 1998
For period ending February 28, 1998
File number 811-4312
77. A. Is the Registrant filing any of the following
attachments with the current filing of Form
N-SAR? (ANSWER FOR ALL SERIES AS A GROUP) ___
Y/N
NOTE: If answer is Y (Yes), mark those items below being
filed as an attachment to this form or incorporated by
reference. __
Y/N
B. Accountant s report on internal control ___
C. Matters submitted to a vote of security holders N
D. Policies with respect to security investments N
E. Legal proceedings N
F. Changes insecurity for debt N
G. Defaults and arrears on senior securities N
H. Changes in control of Registrant N
I. Terms of new or amended securities N
J. Revaluation of assets or restatement of
capital share account N
K. Changes in Registrant s certifying accountant N
L. Changes in accounting principles and practices ____
M. Mergers N
N. Actions required to be reported pursuant to Rule 2a7 N
O. Transactions effected pursuant to Rule 10f-3 Y
P. Information required to be filed pursuant to existing
exemptive orders N
Attachment Information (Cont. On Screen 39)
<PAGE>
For period ending February 28, 1998
File number 811-4312
Attachment Information (Cont. from Screen 38)
77. Q. 1. Exhibits N
Y/N
2. Any information called for by
instructions to sub-item 77Q2 N
Y/N
3. Any information called for by
instructions to sub-item 77Q3 N
Y/N
SCREEN NUMBER: 39
__ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __ __
79. List the 811 numbers and names of
Registrant's wholly-owned investment
company subsidiaries consolidated in
this report.
811 Number Subsidiary Name
<PAGE>
For period ending February 28, 1998
File number 811-4312
ANNUAL SUPPLEMENT
Page 53 is to be filed only once each
year at the end of Registrant s fiscal
year.
105. Fidelity bond(s) in effect at the
end of the period:
A. Insurer Name: ICI Mutual Insurance Co.
B. Second Insurer:
C. Aggregate face amount of coverage for
Registrant on all bonds on which it is
named as an insured
($000 s omitted) $45,000
106. A. Is the bond part of ajoint fidelity
bond(s) shared with other investment companies
or other entities? Y
Y/N
B. If the answer to 106A is Y (Yes), how many
other investment companies or other entities
are covered by the bond? 66
NOTE: Count each series as a separate
investment company.
107. A. Does the mandatory coverage of the fidelity
bond have a deductible? N
Y/N
B. If the answer to 107A is Y (Yes), what is
the amount of the deductible? $______
108. A. Were any claims with respect to this
Registrant filed under the bond during the
period? N
Y/N
B. If the answer to 108A is "Y"(Yes), what was
the total amount of such claim(s)? $______
109. A. Were any losses incurred with respect to
this Registrant that could have been filed
as a claim under the fidelity bond but were
not? N
Y/N
B. If the answer to sub-item 109A is "Y"(Yes),
what was the total amount of such losses?
($000's omitted) $______
110. A. Are Registrant's officers and directors
covered as officers and directors of
Registrant under any errors and omissions
insurance policy owned by the Registrant
or anyone else? Y
Y/N
B. Were any claims filed under such policy
during the period with respect to
Registrant? N
Y/N
<PAGE>
For period ending February 28, 1998
Exhibit 77(Q)(1)
File number 811-4312
PAINEWEBBER MUTUAL FUND TRUST
AMENDED AND RESTATED DECLARATION OF TRUST
DECLARATION OF TRUST, made at Boston, Massachusetts, this 21st
day of November 1986 and amended and restated this 19th day of
November, 1997 by the Trustees:
WHEREAS, the Trustees desire to establish a trust
fund for the investment and reinvestment of funds contributed
thereto;
NOW, THEREFORE, the Trustees declare that all
money and property contributed to the trust fund hereunder
shall be held and managed in trust under this
Declaration of Trust as herein set forth below.
ARTICLE I
NAME AND DEFINITIONS
NAME
Section 1. This Trust shall be known as
"PaineWebber Mutual Fund Trust. The resident agent for the Trust
in Massachusetts shall be CT Corporation System, whose address
is 2 Oliver Street, Boston, Massachusetts, or such other person
as the Trustees may from time to time designate.
DEFINITIONS
Section 2. Wherever used herein, unless
otherwise required by the contextor specifically
provided:
(a) The Terms "Affiliated Person", "Assignment",
"Commission", "Interested Person", "Majority
Shareholder Vote" (the 67% or 50% requirement of
the third sentence of Section 2(a)(42) of the
1940 Act, whichever may be applicable) and
"Principal Underwriter" shall have the meanings
given them in the 1940 Act, as amended from time
to time;
(b) The "Trust" refers to PaineWebber Mutual Fund
Trust and reference to the Trust, when applicable
to one or more Series of the Trust, shall refer
to any such Series;
(c) "Net Asset Value" means the net asset value
of each Series of the Trust determined in the
manner provided in Article IX,Section 3;
(d) "Shareholder" means a record owner of Shares
of the Trust;
(e) The "Trustees" means the person who has
signed this Declaration of Trust so long as he
shall continue in office in accordance with the
terms hereof, and all other persons who may from
time to time be duly elected or appointed,
qualified and serving as Trustees in accordance
with the provisions of Article IV hereof, and
reference herein to a Trustee or the Trustees
shall refer to such person or persons in his
capacity or their capacities as trustees
hereunder.
(f) "Shares" means the equal proportionate
transferable units of interest into which the
beneficial interest of each Series or Class
thereof shall be divided from time to time and
includes fractions of shares as well as whole
shares (all of the ransferable units of a Series
or of a single Class may be eferred to as
"Shares" as the ontext may require);
(g) The "1940 Act" refers to the Investment
Company Act 1940, as amended from time to time;
(h) "Series" refers to series of Shares of the
Trust established in accordance with the
provisions of Article III;
(i) "Class" refers to the class of Shares of a
Series of the Trust established in accordance
with the Provisions of Article III.
ARTICLE II
PURPOSE OF TRUST
The purpose of this Trust is to provide investors a continuous
source of managed investment in securities.
ARTICLE III
BENEFICIAL INTEREST
SHARES OF BENEFICIAL INTEREST
Section 1. The beneficial interest in the Trust
shall be divided into such transferable Shares of one or more
separate and distinct Series or Classes thereof as the Trustees
shall from time to time create and establish. The number of
Shares is unlimited and each Share shall have a par value of
$0.001 per Share and upon issuance in accordance with the terms
hereof shall be fully paid and nonassessable. The Trustees shall
have full power and authority, in their sole discretion and
without obtaining any prior authorization or vote of the
Shareholders of the Trust, to create and establish (and to
change in any manner) Shares with such preferences, terms of
conversion, voting powers, rights and privileges as the
Trustees may from time to time determine, to divide or combine
the Shares into a greater or lesser number, to classify or
reclassify any unissued Shares into one or more Series
or Classes of Shares, to abolish any one or more Series or
Classes of Shares, and to take such other action with respect to
the Shares as the Trustees may deem desirable. The Trustees, in
their discretion without a vote of the Shareholders, may divide
the Shares of any Series into Classes. In such event, each
Class of a Series shall represent interests in the assets of
that Series and have identical voting, dividend,liquidation and
other rights and the same terms and conditions, except that
expenses allocated to a Class of a Series maybe borne solely by
such Class as shall be determined by the Trustees and a Class of
a Series may have exclusive voting rights with respect to
matters affecting only that Class. Without limiting the
authority of the Trustees set forth in this Section 1 to
establish and designate any further Series or Classes, the
Trustees have established and designated the Series of Shares
and Classes listed in Schedule A attached hereto and made a part
hereof.
ESTABLISHMENT OF SERIES OR CLASS
Section 2. The establishment of any Series or
Class in addition to those set forth in Section 1 shall be
effective upon the adoption of a resolution by a majority of
the then Trustees setting forth such establishment and
designation and the relative rights and preferences of the
Shares of such Series or Class thereof. At any time that
there are no Shares outstanding of any particular Series
previously established and designated, the Trustees may by a
majority vote abolish that Series and the establishment and
designation thereof. At any time that there are no shares
outstanding of any particular Class of a Series, the Trustees
may by a majority vote abolish that Class and the establishment
and designation thereof. The Trustees by a majority vote may
change the name of any Series or Class.
OWNERSHIP OF SHARES
Section 3. The ownership of Shares shall be
recorded in the books of the Trust. The Trustees may make such
rules as they consider appropriate for the transfer of Shares
and similar matters. The record books of the Trust shall be
conclusive as to who are the holders of Shares and as to the
number of Shares held from time to time by each Shareholder.
INVESTMENT IN THE TRUST
Section 4. The Trustees shall accept investments
in the Trust from such persons and on such terms as they may
from time to time authorize. Such investments may be in the form
of cash or securities in which the appropriate Series is
authorized to invest, valued as provided in Article IX, Section
3. After the date of the initial contribution of capital, the
number of Shares to represent the initial contribution may in
the Trustees' discretion be considered as outstanding and the
amount received by the Trustees on account of the contribution
shall be treated as an asset of the Trust or a Series thereof,
as appropriate. Subsequent investments in the Trust shall be
credited to each Shareholder's account in the form of full
Shares at the Net Asset Value per Share next determined after
the investment is received; provided, however, that the Trustees
may, in their sole discretion, (a) impose a sales charge upon
investments in the Trust or Series and (b) issue fractional
Shares. The Trustees shall have the right to refuse to accept
investments in the Trust or any Series at any time without any
cause or reason therefor whatsoever.
ASSETS AND LIABILITIES OF SERIES
Section 5. All consideration received by the Trust for the
issue or sale of Shares of a particular Series, together with
all assets in which such consideration is invested or reinvested
,all income, earnings, profits, and proceeds thereof, including
any proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be,
shall be referred to as "assets belonging to" that Series. In
addition, any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable
as belonging to any particular Series shall be allocated by
the Trustees between and among one or more of the Series in such
manner as they, in their sole discretion, deem fair and
equitable. Each such allocation shall be conclusive and binding
upon the Shareholders of all Series for all purposes, and shall
be referred to as assets belonging to that Series. The assets
belonging to a particular Series shall be so recorded upon the
books of the Trust, and shall be held by the Trustees in Trust
for the benefit of the holders of Shares of that Series. The
assets belonging to each particular Series shall be charged
with the liabilities of that Series and all expenses, costs,
charges and reserves attributable to that Series except that
liabilities and expenses allocated solely to a particular Class
shall be borne by that Class. Any general liabilities, expenses,
costs, charges or reserves of the Trust or Series which are not
readily identifiable as belonging to any particular Series or
Class shall be allocated and charged by the Trustees between or
among any one or more of the Series or Classes in such manner as
the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes. Any
creditor of any Series may look only to the assets of that
Series to satisfy such creditor's debt. See Article X, Section
1.
NO PREEMPTIVE RIGHTS
Section 6. Shareholders shall have no preemptive or other right
to subscribe to any additional Shares or other securities issued
by the Trust or the Trustees.
STATUS OF SHARES AND LIMITATION OF PERSONAL LIABILITY
Section 7. Shares shall be deemed to be personal property
giving only the rights provided in this Declaration of Trust.
Every Shareholder by virtue of having become a Shareholder
shall be held expressly to have assented and agreed to the terms
of this Declaration of Trust and to have become a party hereto.
The death of a Shareholder during the continuance of the Trust
shall not operate to terminate the Trust nor entitle the
representative of any deceased Shareholder to an accounting or
to take any action in court or elsewhere against the Trust
or the Trustees, but only to the rights of said decedent under
this Trust. Ownership of Shares shall not entitle the
Shareholder to any title in or to the whole or any part of
the Trust property or right to call for a partition or
division of the same or for an accounting,
nor shall the ownership of Shares constitute the
Shareholders partners. Neither
the Trust nor the Trustees
shall have any power to bind any Shareholder personally
or to call upon any Shareholder for the payment of any
sum of money or assessment whatsoever other than
such as the Shareholder may at any time personally agree
to pay by way of subscription for any Shares or otherwise.
ARTICLE IV
THE TRUSTEES
MANAGEMENT OF THE TRUST
Section 1. The business and affairs of the Trust shall be
managed by the Trustees, and they shall have all powers
necessary and desirable to carry out that responsibility.
A Trustee shall not be required to be a Shareholder of the
Trust.
ELECTION OF TRUSTEES AND APPOINTMENT OF
INITIAL TRUSTEE
Section 2. On a date fixed by the Trustees, the Shareholders
shall elect the Trustees. Until such election, the Trustees
shall be the initial Trustee and such other persons as
may be hereafter appointed pursuant to Section 4 of this
Article IV. The initial Trustee shall be Dianne E. O Donnell.
TERM OF OFFICE OF TRUSTEES
Section 3. The Trustees shall hold office during the
lifetime of this Trust, anduntil its termination as
hereinafter provided; except (a) that any Trustee
may resign histrust by written instrument signed
by him and delivered to the other Trustees or to any
officer of the Trust, which shall take effect upon such
delivery or upon such later date as is specified therein
; (b) that any Trustee may be removed with or without cause at
any time by written instrument, signed by at least
two-thirds of the number of Trustees prior to such
removal, specifying the date when such removal shall
become effective; (c) that any Trustee who requests in
writing to be retired or who has become incapacitated by
illness or injury may be retired by written instrument
signed by a majority of other Trustees, specifying the
date of his retirement; and (d) that any Trustee may
be removed at any Special Meeting of the Trust by a
vote of at least two-thirds of the outstanding Shares.
RESIGNATION AND APPOINTMENT OF TRUSTEES
Section 4. In case of the declination, death, resignation,
retirement, removal,incapacity, or inability of any of
the Trustees, or in case a vacancy shall exist by reason
of an increase in number or for any other reason, the
remaining Trustees shall fill such vacancy by
appointment of such other person as they in
their discretion shall see fit consistent with the
limitations under the 1940 Act. Such appointment shall be
evidenced by a written instrument signed by a majority of
the Trustees in office or by a recording in the records of
the Trust, whereupon the appointment shall take effect.
An appointment of a Trustee may be made by the Trustees
then in office as aforesaid in anticipation of a vacancy
to occur by reason of retirement, resignation or increase
in number of Trustees effective at a later date, provided
that said appointment shall become effective only at or
after the effective date of said retirement, resignation or
increase in number of Trustees. As soon as any Trustee
so appointed shall have accepted this trust, the
trust estate shall vest in the new Trustee or Trustees, together
with the continuing Trustees, without any further act or
conveyance, and he shall be deemed a Trustee hereunder.
The power of appointment is subject to the provisions
of Section 16(a) of the 1940 Act.
TEMPORARY ABSENCE OF TRUSTEE
Section 5. Any Trustee may, by power of attorney, delegate
his power for a period not exceeding six months at any one
time to any other Trustee or Trustees, provided that in no
case shall less than two Trustees personally exercise the other
powers hereunder except as herein otherwise expressly
provided.
NUMBER OF TRUSTEES
Section 6. The number of Trustees shall initially be one
(1) and thereafter shall be such number as shall be fixed
from time to time by a written instrument signed by a
majority of the Trustees (or by an officer of the
Trust pursuant to a vote of the majority of such Trustees)
; provided, however, that the number of Trustees serving
hereunder at any time shall in no event be less than one
(1) nor more than fifteen (15). Whenever a vacancy in the
Board of Trustees shall occur, until such vacancy
is filled, or while any Trustee is absent from his state of
domicile (unless said Trustee has made arrangements to be
informed about, and to participate in, the affairs of the
Trust during such absence), or is physically or mentally
incapacitated by reason of disease or otherwise, the other
Trustees shall have all the powers hereunder and the
certificate of the other Trustees of such vacancy, absence
or incapacity, shall be conclusive.
EFFECT OF DEATH, RESIGNATION, ETC. OF A TRUSTEE
Section 7. The death, declination, resignation,
retirement, removal,incapacity, or inability of
the Trustee, or any one of them, shall not operate
to annul the Trust or to revoke any existing agency
created pursuant to the terms of this Declaration
of Trust.
OWNERSHIP OF ASSETS OF THE TRUST
Section 8. The assets of the Trust shall be held separate
and apart from any assets now or hereafter held in any
capacity other than as Trustee hereunder by the
Trustees or any successor Trustees. All of the assets of
the Trust shall at all times be considered as vested in
the Trustees.
ARTICLE V
POWERS OF THE TRUSTEES
POWERS
Section 1. The Trustees in all instances shall act as
principals, and are and shall be free from the control
of the Shareholders. The Trustees shall have full power
and authority to do any and all acts and to make and
execute any and all contracts and instruments that they
may consider necessary or appropriate in connection with the
management of the Trust. The Trustees shall not in any
way be bound or limited by present or future laws or
customs in regard to trust investments, but shall have full
authority and power to make any and all investments
which they, in their uncontrolled discretion, shall
deem proper to accomplish the purposes of this Trust.
Subject to any applicable limitation in this
Declaration of Trust or the By-Laws of the Trust, the
Trustees shall have power and authority, without
limitation:
(a) To invest and reinvest cash and other property,
and to hold cash or other property uninvested,
without in any event being bound or limited by any present
or future law or custom in regard to investments by
trustees, and to sell, exchange, lend, pledge, mortgage,
hypothecate, write options on and lease any or all of the assets
of the Trust; to purchase and sell (or write) options on
securities, currencies, indices, futures contracts and
other financial instruments and enter into closing
transactions in connection therewith; to enter
into all types of commodities contracts, including
without limitation the purchase and sale of futures
contracts and forward contracts on securities,
indices, currencies, and other financial instruments;
to engage in forward commitment, "when issued"
and delayed delivery transactions; to enter into repurchase
agreements and reverse repurchase agreements; and to
employ all kinds of hedging techniques and
investment management strategies.
(b) To adopt By-Laws not inconsistent with this
Declaration of Trust providing for the conduct of
the business of the Trust and to amend and repeal them
to the extent that they do not reserve the right to the
Shareholders.
(c) To elect and remove such officers and appoint
and terminate such agents as they consider appropriate.
(d) To employ as custodian of any assets of the Trust
subject to any conditions set forth in this Declaration
of Trust or in the By-Laws, if any, a bank, trust
company, or other entity permitted by the Commission to
serve as such.
(e) To retain a transfer agent and Shareholder
servicing agent, or both.
(f) To provide for the distribution of interests of the
Trust either through a principal underwriter in the
manner hereinafter provided for or by the Trust
itself, or both.
(g) To set record dates in the manner hereinafter
provided for.
(h) To delegate such authority as they consider
desirable to any officers of the Trust and to any
agent, independent contractor, custodian or underwriter.
(i) To sell or exchange any or all of the assets of the
Trust, subject to the provisions of Article XI,
Section 4(b) hereof.
(j) To vote or give assent, or exercise any rights of
ownership, with respect to stock or other securities
or property; and to execute and deliver powers of
attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such
power and discretion with relation to securities or property as
the Trustees shall deem proper.
(k) To exercise powers and rights of subscription or
otherwise which in any manner arise out of ownership
of securities.
(l) To hold any security or property in a form not
indicating any trust, whether in bearer,
unregistered or other negotiable form;
or either in its own name or in the name of a
custodian or a nominee or nominees, subject in
either case to proper safeguards according to
the usual practice of Massachusetts trust companies or
investment companies.
(m) To establish separate and distinct Series with
separately defined investment objectives and policies
and distinct investment purposes in accordance
with the provisions of Article III and to establish separate
Classes thereof.
(n) To allocate assets, liabilities and expenses of the
Trust to a particular Series and liabilities and expenses to a
particular Class thereof or to apportion the same
between or among two or more Series or Classes, provided that
any liabilities or expenses incurred by a particular Series
or Class shall be payable solely out of the assets
belonging to that Series or Class as provided for in Article
III.
(o) To consent to or participate in any plan for the
reorganization, consolidation or merger of any
corporation or concern, any security of which is held
in the Trust; to consent to any contract, lease, mortgage,
purchase, or sale of property by such corporation or
concern, and to pay calls or subscriptions with respect to any
security held in the Trust.
(p) To compromise, arbitrate, or otherwise adjust claims in
favor of or against the Trust or any matter in controversy
including, but not limited to, claims for taxes.
(q) To make distributions of income and of capital gains to
Shareholders in the manner hereinafter provided for.
(r) To borrow money.
(s) To establish, from time to time, a minimum total
investment for Shareholders, and to require the
redemption of the Shares of any Shareholders whose
investment is less than such minimum upon giving notice
to such Shareholder.
No one dealing with the Trustees shall be under any
obligation to make any inquiry concerning the authority
of the Trustees, or to see to the application of any
payments made or property transferred to the Trustees or
upon their order.
TRUSTEES AND OFFICERS AS SHAREHOLDERS
Section 2. Any Trustee, officer, other agent or independent
contractor of the Trust may acquire, own and dispose of
Shares to the same extent as if he were not a Trustee,
officer, agent or independent contractor; and the Trustees
may issue and sell or cause to be issued and sold Shares
to and buy such Shares from any such person or
any firm or company in which he is interested, subject
only to the general limitations herein
contained as to the sale and purchase of such Shares;
and all subject to any restrictions which may be
contained in the By-Laws.
ACTION BY THE TRUSTEES
Section 3. The Trustees shall act by majority vote at
a meeting duly called or by unanimous written consent
without a meeting or by telephone consent provided
a quorum of Trustees participate in any such telephonic
meeting, unless the 1940 Act requires that a particular
action be taken only at a meeting in person of the Trustees.
At any meeting of the Trustees, a majority of the
Trustees shall constitute a quorum. Meetings of the
Trustees may be called orally or in writing by the Chairman
of the Trustees or by any two other Trustees. Notice of the
time, date and place of all meetings of the Trustees shall be
given by the party calling the meeting to each Trustee
by telephone or telegram sent to his home or business
address at least twenty-four hours in advance of the
meeting or by written notice mailed to his home or business
address at least seventy-two hours in advance of the
meeting. Notice need not be given to any Trustee who
attends the meeting without objecting to the lack of notice
or who executes a written waiver of notice with respect
to the meeting either before or after such meeting.
Subject to the requirements of the 1940 Act, the Trustees by
majority vote may delegate to any one of their number
their authority to approve particular matters or take
particular actions on behalf of the Trust.
CHAIRMAN OF THE TRUSTEES
Section 4. The Trustees may appoint one of their number
to be Chairman of the Board of Trustees. The Chairman
shall preside at all meetings of the Trustees, shall be
responsible for the execution of policies established by
the Trustees and the administration of the Trust, and may
be the chief executive, financial and/or accounting officer
of the Trust.
ARTICLE VI
EXPENSES OF THE TRUST
TRUSTEE REIMBURSEMENT
Section 1. Subject to the provisions of Article III,
Section 5, the Trustees shall be reimbursed from the
Trust estate or the assets belonging to the appropriate
Series for their expenses and disbursements, including,
without limitation, fees and expenses of Trustees who
are not Interested Persons of the Trust, interest expense,
taxes, fees and commissions of every kind, expenses of
pricing Trust portfolio securities, expenses of issue,
repurchase and redemption of Shares including expenses
attributable to a program of periodic repurchases or
redemptions, expenses of distributing its Shares and
providing services to Shareholders, expenses of registering
and qualifying the Trust and its Shares under Federal and
State laws and regulations, charges of investment
advisers, administrators, custodians, transfer agents, and
registrars, expenses of preparing and setting in type
prospectuses and statements of additional information,
expenses of printing and distributing prospectuses and
statements of additional information sent to existing
Shareholders, auditing and legal expenses, reports to
Shareholders, expenses of meetings of Shareholders and proxy
solicitations therefor, insurance expense, association
membership dues and for such non-recurring items as
may arise, including litigation to which the Trust is a party
(except those losses and expenses the indemnification of
which is not permitted under Article X hereof), and for
all losses and liabilities by them incurred in administering
the Trust; and for the payment of such expenses, disbursements,
losses and liabilities the Trustees shall have a lien on
the assets belonging to the appropriate Series prior
to any rights or interests of the Shareholders thereto.
This section shall not preclude the Trust from directly
paying any of the aforementioned fees and expenses.
ARTICLE VII
INVESTMENT ADVISER, PRINCIPAL
UNDERWRITER AND TRANSFER
AGENT
INVESTMENT ADVISER
Section 1. Subject to a Majority Shareholder Vote, the
Trustees may in their discretion from time to time
enter into an investment advisory or management
contract(s) with respect to the Trust or any Series thereof
whereby the other party(ies) to such contract(s) shall
undertake to furnish the Trustees such management,
investment advisory, statistical and research facilities and
services and such other facilities and services, if any,
and all upon such terms andconditions, as the Trustees
may in their discretion determine. Notwithstanding any
provisions of this Declaration of Trust, the Trustees
may authorize the investment adviser(s) (subject to such general
or specific instruments as the Trustees may from time to
time adopt) to effect purchases, sales or exchanges of
portfolio securities and other investment instruments
of the Trust on behalf of the Trustees or may authorize
any officer, agent, or Trustee to effect such purchases,
sales or exchanges pursuant to recommendations of the
investment adviser (and all without further action by the
Trustees). Any such purchases, sales and exchanges
shall be deemed to have been authorized by all of the
Trustees.
The Trustees may, subject to applicable requirements
of the 1940 Act, including those relating to Shareholder
approval, authorize the investment adviser to employ
one or more sub-advisers from time to time to perform
such of the acts and services of the investment adviser,
and upon such terms and conditions, as may be agreed
upon between the investment adviser and sub-adviser.
PRINCIPAL UNDERWRITER
Section 2. The Trustees may in their discretion from time
to time enter into one or more contract(s) providing for
the sale of the Shares, whereby the Trust may either
agree to sell the Shares to the other party to the contract
or appoint such other party its sales agent for such Shares.
In either case, the contract shall be on such terms
and conditions as may be prescribed in the By-Laws, if
any, and such further terms and conditions as the Trustees
may in their discretion determine not inconsistent with the
provisions of this Article VII, or of the By-Laws, if any;
and such contract may also provide for the repurchase or
sale of Shares by such other party as principal or as
agent of the Trust. The Trustees may in their discretion
adopt a plan or plans of distribution and enter into any
related agreements whereby the Trust finances directly
or indirectly any activity that is primarily intended to
result in sales of Shares. Such plan or plans of distribution
and any related agreements may contain such terms and
conditions as the Trustees may in their discretion
determine subject to the requirements of Section 12
of the 1940 Act, Rule 12b-1 thereunder and any other
applicable rules and regulations.
TRANSFER AGENT
Section 3. The Trustees may in their discretion from time
to time enter into a transfer agency and Shareholder service
contract whereby the other party shall undertake to furnish
the Trustees and Trust with transfer agency and shareholder
services. The contract shall be on such terms and conditions
as the Trustees may in their discretion determine not
inconsistent with the provisions of this Declaration of
Trust or of the By-Laws, if any. Such services may be provided
by one or more entities, including one or more agents of such
other party.
PARTIES TO CONTRACT
Section 4. Any contract of the character described in Sections
1, 2 and 3 of this Article VII or that relates to the provision
of custodian services to the Trust may be entered into with any
corporation, firm, partnership, trust or association, although
one more of the Trustees or officers of the Trust may be an
officer, director, trustee, shareholder, or member of such
other party to the contract, and no such contract shall
be invalidated or rendered voidable by reason of the
existence of any relationship, nor shall any person
holding such relationship be liable merely by reason of such
relationship for any loss or expense to the Trust under or
by reason of said contract or accountable for any profit
realized directly or indirectly therefrom, provided that the
contract when entered into was reasonable and fair and
not inconsistent with the provisions of this Article
VII or the By-Laws, if any. The same person (including a
firm, corporation, partnership, trust, or association) may
be the other party to contracts entered into pursuant to
Sections 1, 2 and 3 above or with respect to the provision of
custodian services to the Trust, and any individual may
be financially interested in or otherwise affiliated with
persons who are parties to any or all of the contracts
mentioned in this Section 4.
PROVISIONS AND AMENDMENTS
Section 5. Any contract entered into pursuant to
Sections 1 and 2 of this Article VII shall be consistent
with and subject to the applicable requirements of
Sections 12 and 15 of the 1940 Act and the rules and
orders thereunder (including any amendments thereto
or other applicable Act of Congress hereafter enacted) with
respect to its continuance in effect, its termination, and
the method of authorization and approval of such contract
or renewal thereof.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS ANDMEETINGS
VOTING POWERS
Section 1. The Shareholders shall have power to vote (i) for
the election of Trustees as provided in Article IV, Section
2, (ii) for theremoval of Trustees as provided in Article IV,
Section 3(d), (iii) with respect to any investment advisory or
management contract as provided in Article VII, Section
1, (iv) with respect to any termination or reorganization of
the Trust as provided in Article XI, Section 4, (v) with respect
to the amendment of this Declaration of Trust to
the extent and as provided in Article XI, Section 7, (vi)
to the same extent as the shareholders of a Massachusetts
business corporation, as to whether or not a court action,
proceeding or claim should be brought or maintained
derivatively or as a class action on behalf of the Trust
or the Shareholders, provided, however, that a Shareholder
of a particular Series shall not be entitled to
bring any derivative or class action on behalf of any other
Series of the Trust, and provided further that, within a
Series, a Shareholder of a particular Class shall not be
entitled to bring any derivative or class action on behalf
of any other Class except with respect to matters sharing
a common fact pattern with said Shareholder's own Class;
and (vii) with respect to such additional matters relating
to the Trust as may be required or authorized by law, by
this Declaration of Trust, or the By-Laws of the Trust,
if any, or any registration of the Trust with the Commission
or any State, or as the Trustees may consider desirable.
On any matter submitted to a vote of the Shareholders,
all Shares shall be voted by individual Series, except (i)
when required by the 1940 Act, Shares shall be voted in
the aggregate and not by individual Series; and (ii) when
the Trustees have determined that the matter affects
only the interests of one or more Classes, then only the
Shareholders of such Class or Classes shall be entitled
to vote thereon. Each whole Share shall be entitled to one
vote as to any matter on which it is entitled to vote, and
each fractional Share shall be entitled to a proportionate
fractional vote. There shall be no cumulative voting in the
election of Trustees. Shares may be voted in person or
by proxy. Until Shares are issued, the Trustees may
exercise all rights of Shareholders and may take any action
required or permitted by law, this Declaration of Trust or
any By-Laws of the Trust to be taken by Shareholders.
MEETINGS
Section 2. The first Shareholders' meeting shall be
held as specified in Section 2 of Article IV at the
principal office of the Trust or such other place as the
Trustees may designate. Special meetings of the
Shareholders or any Series or Class thereof may be called
by the Trustees and shall be called by the Trustees upon the
written request of Shareholders owning at least one-tenth
of the outstanding Shares entitled to vote. Whenever
ten or more Shareholders meeting the qualifications set
forth in Section 16(c) of the 1940 Act, as the same may
be amended from time to time, seek the opportunity of
furnishing materials to the other Shareholders with a view to
obtaining signatures on such a request for a meeting, the
Trustees shall comply with the provisions of said
Section 16(c) and any rules or orders thereunder with respect
to providing such Shareholders access to the list of the
Shareholders of record of the Trust or the mailing of
such materials to such Shareholders of record. Shareholders
shall be entitled to at least fifteen days' notice of any
meeting.
QUORUM AND REQUIRED VOTE
Section 3. A majority of Shares entitled to vote in
person or by proxy shall be a quorum for the transaction
of business at a Shareholders' meeting, except that
where any provision of law or of this Declaration of
Trust permits or requires that holders of any Series
or Class thereof shall vote as a Series or Class, then a
majority of the aggregate number of Shares of that Series
or Class thereof entitled to vote shall be necessary to
constitute a quorum for the transaction of business
by that Series or Class. Any lesser number shall be
sufficient for adjournments. Any adjourned session
or sessions may be held, within a reasonable time after
the date set for the original meeting, without the
necessity of further notice. Except when a larger vote is
required by any provision of this Declaration of Trust or the
By-Laws, a majority of the Shares voted in person or by
proxy shall decide any questions and a plurality shall elect a
Trustee, provided that where any provision of law or of
this Declaration of Trust permits or requires that the
holders of any Series or Class shall vote as a Series or
Class, then a majority of the Shares of that Series or
Class voted on the matter shall decide that matter insofar
as that Series or Class is concerned.
ARTICLE IX
DISTRIBUTIONS AND REDEMPTIONS
DISTRIBUTIONS
Section 1.
(a) The Trustees may from time to time declare and
pay dividends and other distributions. The amount
of such dividends and the payment of them shall be
wholly in the discretion of the Trustees.
(b) The Trustees shall have power, to the fullest
extent permitted by the laws of the Commonwealth
of Massachusetts, at any time to declare and cause to be
paid dividends on Shares of a particular Series, from the
assets belonging to that Series, which dividends and
other distributions, at the election of the Trustees, may be
paid daily or otherwise pursuant to a standing resolution
or resolutions adopted only once or with such frequency
as the Trustees may determine, and may be payable in
Shares of that Series or Class thereof, as appropriate, at
the election of each Shareholder of that Series or Class.
All dividends and distributions on Shares of a
particular Series shall be distributed pro rata to the
holders of that Series in proportion to the number of
Shares of that Series held by such holders at the date and
time of record established for the payment of such
dividends or distributions, except that such dividends
and distributions shall appropriately reflect expenses
allocated to a particular Class of such Series.
(c) Anything in this instrument to the contrary
notwithstanding, the Trustees may at any time declare
and distribute a "stock dividend" pro rata among the
Shareholders of a particular Series or of a Class thereof
as of the record date of that Series (fixed as provided
in Section 3 of Article XI hereof).
REDEMPTIONS
Section 2. In case any holder of record of Shares of a
particular Series or Class desires to dispose of his
Shares, he may deposit at the office of the transfer agent
or other authorized agent of that Series a written request
or such other form of request as the Trustees may from
time to time authorize, requesting that the Series purchase
the Shares in accordance with this Section 2; and the
Shareholder so requesting shall be entitled to require
the Series to purchase, and the Series or the principal
underwriter of the Series shall purchase his said Shares,
but only at the Net Asset Value of the Series or Class
held by the Shareholder (as described in Section 3 hereof)
minus any applicable sales charge or redemption or
repurchase fee. The Series shall make payment for any
such Shares to be redeemed, asaforesaid, in cash or property
from the assets of that Series and payment for such
Shares shall be made by the Series or the principal
underwriter of the Series to the Shareholder of record
within seven (7) days after the date upon which the request
is effective; provided, however, that if Shares being redeemed
have been purchased by check the Trust may postpone payment
until the Trust has assurance that good payment has been
collected for the purchase of the Shares. The Trust may require
Shareholders to pay a sales charge to the Trust, the
underwriter or any other person designated by the Trustees upon
redemption or repurchase of Shares of any Series or Class
thereof, in such amount as shall be determined from time to time
by the Trustees. The amount of such sales charge may but need
not vary depending on various factors, including without
limitation the holding period of the redeemed or repurchased
Shares. The Trustees may also charge a redemption or repurchase
fee in such amount as may be determined from time to time
by the Trustees.
DETERMINATION OF NET ASSET VALUE AND
VALUATION OF PORTFOLIO ASSETS
Section 3. The term "Net Asset Value" of any Series
shall mean that amount by which the assets of that
Series exceed its liabilities, all as determined by or under
the direction of the Trustees. Net Asset Value per Share
shall be determined separately for each Series of Shares
and shall bedetermined on such days and at such times as
the Trustees may determine. Such determination may be
made on a Series-by-Series or Class-by-Class basis,
as appropriate, and shall include any expenses
allocated to a specific Series or Class. The determination
shall be made with respect to securities for which
market quotations are readily available at the market value of
such securities; and with respect to other securities and
assets, at the fair value as determined in good faith
by the Trustees, provided, however, that the Trustees, without
Shareholder approval, may alter the method of appraising
portfolio securities insofar as permitted under the
1940 Act and the rules,regulations and interpretations thereof
promulgated or issued by the Commission or insofar as
permitted by any order of the Commission applicable to
the Series. The Trustees may delegate any of their powers
and duties under this Section 3 with respect to appraisal
of assets and liabilities. At any time the Trustees may
cause the Net Asset Value per Share last determined to be
determined again in a similar manner and may fix the time
when such redetermined values shall become effective.
SUSPENSION OF THE RIGHT OF REDEMPTION
Section 4. Notwithstanding Section 2 hereof, the Trustees may
declare a suspension of the right of redemption or postpone the
date of payment as permitted under the 1940 Act. Such
suspension shall take effect at such time as the Trustees
shall specify but not later than the close of business on
the business day next following the declaration of suspension,
and thereafter there shall be no right of redemption or
payment until the Trustees shall declare the suspension at
an end. In the case of a suspension of the right of
redemption, a Shareholder may either withdraw his request
for redemption or receive payment based on the Net
Asset Value per Share existing after the termination
of the suspension.
ARTICLE X
LIMITATION OF LIABILITY ANDINDEMNIFICATION
LIMITATION OF LIABILITY
Section 1. All persons extending credit to, contracting
with or having any claim against the Trust or a
particular Series shall look only to the assets of the Trust
or such Series, as the case may be, for payment under such
credit, contract or claim; and neither the Shareholders
nor the Trustees, nor any of the Trust's officers, employees
or agents, whether past, present or future, nor any other
Series shall be personally liable therefor.
Every note, bond, contract, instrument, certificate or
undertaking and every other act or thing whatsoever
executed or done by or on behalf of the Trust, any Series,
or the Trustees or any of them in connection with the
Trust shall be conclusively deemed to have been
executed or done only in or with respect to their or his
capacity as Trustees or Trustee and neither such Trustees or
Trustee nor the Shareholders shall be personally liable
thereon. Every note, bond, contract, instrument, certificate
or undertaking made or issued by the Trustees or by any
officers or officer shall give notice that the same was
executed or made by them on behalf of the Trust or by them
as Trustees or Trustee or as officers or officer and not
individually and that the obligations of such instrument
are not binding upon any of them or the Shareholders
individually but are binding only upon the assets and
property of the Trust or the particular Series in
question, as the case may be, but the omission thereof shall not
operate to bind any Trustees or Trustee or officers or
officer or Shareholders or Shareholder individually.
Section 2. Provided they have exercised reasonable
care and have acted under the reasonable belief that
their actions are in the best interest of the Trust, the
Trustees and officers of the Trust shall not be responsible
for or liable in any event for neglect or wrongdoing
of them or any officer, agent, employee, investment adviser or
independent contractor of the Trust, but nothing contained
in this Declaration of Trust shall protect any Trustee
or officer against any liability to which he would otherwise
be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties
involved in the conduct of his office.
INDEMNIFICATION
Section 3.
(a) Subject to the exceptions and limitations contained
in Section 3(b) below:
(i) every person who is, or has been a Trustee or officer of
the Trust (hereinafter referred to as "Covered Person") shall
be indemnified by the appropriate Series to the fullest
extent permitted by law against liability and against
all expenses reasonably incurred or paid by him in
connection with any claim, action,suit or proceeding
in which he becomes involved as a party or otherwise by
virtue of his being or having been a Trustee or
officer and against amounts paid or incurred by
him in the settlement thereof;(ii) the words "claim,"
"action," "suit," or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal
or other, including appeals), actual or threatened while in
office or thereafter, and the words "liability" and
"expenses" shall include, without limitation, attorneys'
fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.(b) No indemnification
shall be provided hereunder to a Covered Person:
(i) who shall have been adjudicated by a court or body before
which the proceeding was brought (A) to be liable to the
Trust or its Shareholders by reason of willful misfeasance,
bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office or (B) not to
have acted in good faith in the reasonable belief that
his action was in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has
been a determination that such Trustee or officer did not engage
in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of
his office, (A) by the court or other body approving the
settlement; (B) by at least a majority of those Trustees
who are neither interested persons of the Trust nor
are parties to the matter based upon a review of readily
available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to
a full trial-type inquiry);provided, however, that any
Shareholder may, by appropriate legal proceedings, challenge
any such determination by the Trustees, or by independent
counsel.
(c) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be
severable, shall not be exclusive of or affect any other
rights to which any Covered Person may now or hereafter be
entitled, shall continue as to a person who has ceased to
be such Trustee or officer and shall inure to the benefit
of the heirs, executors and administrators of such a person.
Nothing contained herein shall affect any rights to
indemnification to which Trust personnel, other than
Trustees and officers, and other persons may be entitled to by
contract or otherwise under law.
(d) Expenses in connection with the preparation and
presentation of a defense to any claim, action, suit or
proceeding of the character described in paragraph
(a) of this Section 3 may be paid by the applicable Series
from time to time prior to final disposition thereof
upon receipt of an undertaking by or on behalf of such
Covered Person that such amount will be paid over by
him to the applicable Series if it is ultimately
determined that he is not entitled to indemnification
under this Section 3; provided, however, that either (a)
such Covered Person shall have provided appropriate
security for such undertaking, (b) the Trust is insured
against losses arising out of any such advance payments
or (c) either a majority of the Trustees who are neither
interested persons of the Trust nor parties to the matter,
or independent legal counsel in a written opinion,
shall have determined, based upon a review of
readily available facts (as opposed to a trial-type inquiry
or full investigation), that there is reason to believe
that such Covered Person will not be disqualified from
indemnification under this Section 3.
SHAREHOLDERS
Section 4. In case any Shareholder or former Shareholder
of any Series of the Trust shall be held to be personally
liable solely by reason of his being or having been a
Shareholder and not because of his acts or omissions or
for some other reason, the Shareholder or former
Shareholder (or his heirs,executors, administrators or other
legal representatives or in the case of a corporation or
other entity, its corporate or other general successor)
shall be entitled out of the assets belonging to the applicable
Series to be held harmless from and indemnified against
all loss and expense arising from such liability.
The Series shall, upon request by the Shareholder, assume the
defense of any claim made against the Shareholder for
any act or obligation of the Series and satisfy any judgment
thereon.
ARTICLE XI
MISCELLANEOUS
TRUST NOT A PARTNERSHIP
Section 1. It is hereby expressly declared that a trust
and not a partnership is created hereby. No Trustee
hereunder shall have any power to bind personally
either the Trust's officers or any Shareholder.
TRUSTEE'S GOOD FAITH ACTION, EXPERT ADVICE, NO BOND OR SURETY
Section 2. The exercise by the Trustees of their powers and
discretion hereunder in good faith and with reasonable care
under the circumstances then prevailing, shall be binding
upon everyone interested. Subject to the provisions of
Article X, the Trustees shall not be liable for errors of
judgment or mistakes of fact or law. The Trustees may take
advice of counsel or other experts with respect to the meaning
and operation of this Declaration of Trust, and subject to
the provisions of Article X, shall be under no liability
for any act or omission in accordance with such advice or
for failing to follow such advice. The Trustees shall not
be required to give any bond as such, nor any surety if a
bond is obtained.
ESTABLISHMENT OF RECORD DATES
Section 3. The Trustees may close the stock transfer books of
the Trust for a period not exceeding sixty (60) days preceding
the date of any meeting of Shareholders, or the date for the
payment of any dividends, or the date for the allotment of
rights, or the date when any change or conversion or exchange
of Shares shall go into effect; or in lieu of closing the
stock transfer books as aforesaid, the Trustees may fix in
advance a date, not exceeding ninety (90) days preceding the
date of any meeting of Shareholders, or the date for payment
of any dividend, or the date for the allotment of rights, or
the date when any changeor conversion or exchange of
Shares shall go into effect, as a record date for the
determination of the Shareholders entitled to notice of,
and to vote at, any such meeting, or to receive payment of such
dividend, or to receive such allotment or rights, or to
exercise such rights in respect of any such change,
conversion or exchange of Shares,and in such case such
Shareholders and only such Shareholders as shall be
Shareholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting, or to
receive payment of such dividend, or to receive such
allotment of rights, or to exercise such rights, as the case
may be, notwithstanding any transfer of any Shares on the
books of the Trust after any such record date fixed or
aforesaid.
TERMINATION OF TRUST
Section 4.
a) This Trust shall continue without limitation of time but
subject to the provisions of sub-section (b) of this Section 4.
(b) Subject to a Majority Shareholder Vote of each Series
affected by the matter or, if applicable, to a Majority
Shareholder Vote of the Trust, the Trustees may (i) sell,
convey, merge and transfer all or substantially all of
the assets of the Trust or any affected Series to another
Series or to a trust, partnership,association or corporation
organized under the laws of any state which is an investment
company as defined in the 1940 Act, for adequate consideration
which may include the assumption of all outstanding obligations,
taxes and other liabilities,accrued or contingent, of the
Trust or any affected Series, and which may include shares of
beneficial interest or stock of such Series, trust,
partnership, association or corporation; or (ii) at any time
sell and convert into money all or substantially all of the
assets of the Trust or any affected Series. Upon making
provision for the payment of all known liabilities of the Trust
or any affected Series in either (i) or (ii), by such
assumption or otherwise, the Trustees shall distribute
the remaining proceeds or assets (as the case may be) ratably
among the holders of the Shares of the Trust or any
affected Series then outstanding; however, the payment to
any particular Class within such Series may be reduced by
any fees, expenses or charges allocated to that Class.
Nothing in this Declaration ofTrust shall preclude the
Trustees from distributing such remaining proceeds or assets
so that holders of the Shares of a particular Class of the
Trust or any affected Series receive as their ratable
distribution shares solely of an analogous class, as determined
by the Trustees, of such trust, partnership, association or
corporation. The Trustees may take any of the actions
specified in clauses (i) and (ii) above without obtaining a
Majority Shareholder Vote of any Series or the Trust if a
majority of the Trustees makes a determination that the
continuation of a Series or the Trust is not in the best
interests of such Series, the Trust or their respective
Shareholders as a result of factors or events adversely
affecting the ability of such Series or the Trust to conduct
its business and operations in an economically viable
manner. Such factors and events may include the inability
of a Series or the Trust to maintain its assets at an
appropriate size, changes in laws or regulations governing the
Series or Trust or affecting assets of the type in which
such Series or the Trust invests or economic developments or
trends having a significant adverse impact on the business
or operations of such Series or the Trust.(c) Upon completion
of the distribution of the remaining proceeds or the remaining
assets as provided in sub-section (b), the Trust or any
affected Series shall terminate and the Trustees shall be
discharged of any and all further liabilities and duties
hereunder with respect thereto and the right, title and
interest of all parties therein shall be canceled and
discharged.
FILING OF COPIES, REFERENCES, HEADINGS
Section 5. The original or a copy of this instrument
and of each amendment hereto shall be kept at the office
of the Trust where it may be inspected by any shareholder.
A copy of this instrument and of each amendment hereto shall
be filed by the Trustees with the Secretary of the Commonwealth
of Massachusetts and the Boston City Clerk, as well as any
other governmental office where such filing may from time to
time be required. Anyone dealing with the Trust may rely on a
certificate by an officer or Trustee of the Trust as to
whether or not any such amendments to this Declaration of
Trust have been made and as to any matters in connection with
the Trust hereunder, and with the same effect as if it were the
original, may rely on a copy certified by an officer or Trustee
of the Trust to be a copy of this instrument or of any such
amendments. In this instrument or in any such amendments,
references to this instrument, and all expressions like
"herein," "hereof" and "hereunder," shall be deemed to refer
to this instrument as amended from time to time. The masculine
gender shall include the feminine and neuter genders.
Headings are placed herein for convenience of reference only,
and in case of any conflict, the text of this instrument,
rather than the headings, shall control. This instrument
may be executed in any number of counterparts each of which
shall be deemed an original.
APPLICABLE LAW
Section 6. The Trust set forth in this instrument is
made in the Commonwealth of Massachusetts, and it is
created under and is to be governed by and construed
and administered according to the laws of said Commonwealth.
The Trust shall be of the type commonly called a Massachusetts
business trust, and, without limiting the provisions hereof,
the Trust may exercise all powers which are ordinarily
exercised by such a trust.
AMENDMENTS
Section 7. All rights granted to the Shareholders under this
Declaration ofTrust are granted subject to the reservation of
the right to amend this Declaration of Trust as herein
provided, except that no amendment shall repeal the limitations
on personal liability of any Shareholder or Trustee or repeal
the prohibition of assessment upon the Shareholders without
the express consent of each Shareholder or Trustee involved.
Subject to the foregoing, the provisions of this Declaration
of Trust (whether or not related to the rights of Shareholders)
may be amended at any time, so long as such amendment does
not adversely affect the rights of any Shareholder with
respect to which such amendment is or purports to be
applicable and so long as such amendment is not in
contravention of applicable law, including the 1940 Act, by an
instrument in writing signed by a majority of the then
Trustees (or by an officer of the Trust pursuant to the vote
of a majority of such Trustees). Except as provided in the
first sentence of this Section 7, any amendment to this
Declaration of Trust that adversely affects the rights of
Shareholders may be adopted at any time by an instrument
signed in writing by a majority of the then Trustees
(or by an officer of the Trust pursuant to the vote of a
majority of such Trustees) when authorized to do so by
Majority Shareholder Vote; provided, however, that an
amendment that shall affect the Shareholders of one or
more Series (or of one or more Classes), but not the
Shareholders of all outstanding Series (or Classes), shall
be authorized by a Majority Shareholder Vote of each Series
(or Class, as the case may be) affected, and no vote
of a Series (or Class) not affected shall be required.
Subject to the foregoing, any such amendment shall be
effective as provided in the instrument containing the terms of
such amendment or, if there is no provision therein with
respect to effectiveness, upon the execution of such instrument
and of a certificate (which may be a part of such instrument)
executed by a Trustee or officer to the effect that such
amendment has been duly adopted. Copies of the amendment to
this Declaration of Trust shall be filed as specified in
Section 5 of this Article XI. A restated Declaration of Trust,
integrating into a single instrument all of the provisions
of the Declaration of Trust which are then in effect and
operative, may be executed from time to time by a majority
of the Trustees and shall be effective upon filing as
specified in such Section 5.
FISCAL YEAR
Section 8. The fiscal year of the Trust shall be determined
by the Trustees in accordance with the By-Laws, provided,
however, that the Trustees may, without Shareholder approval,
change the fiscal year of the Trust.
<PAGE>
Schedule A
Series of the Trust
PaineWebber California Tax-Free Income Fund
PaineWebber National Tax-Free Income Fund
Classes of Shares of Each Series
An unlimited number of shares of beneficial interest have
been established by the Board as Class A shares,
Class B shares, Class C shares and Class Y shares of each
of the above Series. Each of the Class A shares, Class B
shares, Class C shares and Class Y shares of a Series
represents interests in the assets of only that Series and has
the same preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of
shares, except as provided in the Trust's Declaration of
Trust and as set forth below with respect to the Class B
shares of each Series: 1. Each Class B share, other than
a share purchased through the reinvestment of a dividend
or a distribution with respect to the Class B share, shall
be converted automatically,and without any action or
choice on the part of the holder thereof, into Class A shares
of the same Series, based on the relative net asset value of
each such class at the time of the calculation of the net asset
value of such class of shares on the date that is the first
Business Day (as defined in the Series' prospectus and/or
statement of additional information) of the month in which
the sixth anniversary of the issuance of such Class B
shares occurs (which, for the purpose of calculating the holding
period required for conversion, shall mean(i) the date on
which the issuance of such Class B shares occurred or (ii)
for Class B shares obtained through an exchange, the date on
which the issuance of the Class B shares of an eligible
PaineWebber fund occurred, if such shares were exchanged
directly, or through a series of exchanges for the Series
Class B shares (the "Conversion Date")). 2. Each Class B
share purchased through the reinvestment of a dividend
or a distribution with respect to the Class B shares and the
dividends and distributions on such shares shall be
segregated in a separate sub-account on the stock records of the
Series for each of the holders of record thereof. On any
Conversion Date,a number of the shares held in the
sub-account of the holder of record of the share or shares
being converted, calculated in accordance with the next
following sentence, shall be converted automatically,
and without any action or choice on the part of the
holder thereof, into Class A shares of the same Series.
The number of shares in the holder's sub-account so
converted shall bear the same relation to the
total number of shares maintained in the sub-account on the
Conversion Date as the number of shares of the holder
converted on the Conversion Date pursuant to Paragraph 2(a)
hereof bears to the total number of Class B shares of
the holder on the Conversion Date not purchased through the
automatic reinvestment of dividends or distributions with
respect to the Class B shares. 3. The number of Class A
shares into which a Class B share is converted pursuant to
paragraphs 1 and 2 hereof shall equal the number (including
for this purpose fractions of a share) obtained by dividing
the net asset value per share of the Class B shares for
purposes of sales and redemptions thereof at the time of the
calculation of the net asset value on the Conversion Date by
the net asset value per share of the Class A shares for
purposes of sales and redemptions thereof at the time of the
calculation of the net asset value on the Conversion Date.
4. On the Conversion Date, the Class B shares converted
into Class A shares will cease to accrue dividends and
will no longer be outstanding and the rights of the holders
thereof will cease (except the right to receive declared but
unpaid dividends to the Conversion Date).For purposes of
Paragraph 1 above, the term "eligible PaineWebber fund" includes
any and all mutual funds for which PaineWebber Incorporated
or Mitchell Hutchins Asset Management Inc. serves as
investment adviser that offer shares with a contingent
deferred sales charge imposed upon certain redemptions of
such shares and that are exchangeable with the Class
B shares of the Series.
[the next page of this Declaration of Trust also is
numbered page 22.]<PAGE>
IN WITNESS WHEREOF, the
undersigned, being the allthe Trustees of the
Trust, have executed this Amended and Restated
Declaration of Trust as of the day and year first above written.
/s/ Margo N. Alexander
Margo N. Alexander
/s/ Meyer Feldberg
Meyer Feldberg
/s/ E. Garrett Bewkes, Jr.
A. Garrett Bewkes, Jr.
/s/ George W. Gowen
George W. Gowen
/s/ Richard Q. Armstrong
Richard Q. Armstrong
/s/ Frederic V. Malek
Frederic V. Malek
/s/ Richard R. Burt
Richard R. Burt
/s/ Carl W. Schafer
Carl W. Schafer
/s/ Mary C. Farrell
Mary C. Farrell
<PAGE>
PaineWebber Mutual Fund Trust
Attachment 1
1. The principal place of business of PaineWebber
Mutual Fund ( Trust )is:
1285 Avenue of the Americas
New York, New York 10019
2. The Trustees of the Trust and their business
addresses* are:
Margo N. Alexander
Richard Q. Armstrong
78 West Brother Drive
Greenwich, CT 06830
E. Garrett Bewkes, Jr.
Richard R. Burt
1101 Connecticut Avenue, N.W.
Washington, D. C. 20036
Mary C. Farrell
Meyer Feldberg
Columbia University
101 Uris Hall
New York, New York 10027
George W. Gowen
666 Third Avenue
New York, New York 10017
Frederic V. Malek
1455 Pennsylvania Avenue, N.W.
Suite 350
Washington, D. C. 20004
Carl W. Schafer
P. O. Box 1164
Princeton, N. J. 08542
* Unless otherwise indicated, the business address of
each Trustee is
1285 Avenue of the Americas, New York,
New York 10019 <PAGE>
PAINEWEBBER MUTUAL FUND TRUST
A Massachusetts Business Trust
RESTATED BY-LAWS
November 19, 1997<PAGE>
BY-LAWS OF PAINEWEBBER MUTUAL FUND TRUST
ARTICLE I
DECLARATION OF TRUST,
LOCATION OF OFFICES AND SEAL
Section 1.01. Declaration of Trust: These
By-Laws shall be subject to the
Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), ofPaineWebber Mutual Fund Trust,
the Massachusetts business trust established by the
Declaration of Trust (the "Trust"). Section 1.02.
Principal Office of the Trust: Resident Agent: The principal
office of the Trust shall be located in the City of New York,
New York. Its resident agent in Massachusetts shall be
CT Corporation System, 2 Oliver Street, Boston,
Massachusetts, or such other person as the Trustees may
from time to time designate.The Trust may establish and
maintain such other offices and places of business as the
Trustees may, from time to time, determine. Section 1.03.
Seal: The seal of the Trust shall be circular in form
and shall bear the name of the Trust. The form of the
seal shall be subject to alteration by the Trustees and
the seal may be used by causing it or a facsimile to be
impressed or affixed or printed or otherwise reproduced.
Any officer or Trustee of the Trust shall have authority
to affix the seal of the Trust to any document, instrument
or other paper executed and delivered by or on behalf of
the Trust; however, unless otherwise required by the
Trustees, the seal shall not be necessary to be placed on
and its absence shall not impair the validity of any
document, instrument, or other paper executed by or
on behalf of the Trust. ARTICLE II SHAREHOLDERS Section
2.01. Shareholder Meetings: Meetings of the shareholders
may be called at any time by the Trustees or, if the
Trustees shall fail to call any meeting for a period of
30 days after written request of Shareholders owning
at least one-tenth of the outstanding shares entitled to
vote, then such Shareholders may call such meeting. Each
call of a meeting shall state the place, date, hour
and purposes of the meeting. Section 2.02. Place of
Meetings: All meetings of the Shareholders shall be held
at the principal office of the Trust, except that the
Trustees may designate a different place of meeting
within the United States. Section 2.03. Notice of Meeting:
The secretary or an assistant secretary or such other
officer as may be designated by the Trustees shall cause
notice of the place, date and hour, and purpose or
purposes for which the meeting is called, to be mailed,
not less than fifteen days before the date of the meeting,
to each Shareholder entitled to vote at such meeting,
at his address as it appears on the records of the
Trust at the time of such mailing. Notice of any
Shareholders' meeting need not be given to any
Shareholder if a written waiver of notice, executed before
or after such meeting, is filed with the records of such
meeting, or to any Shareholder who shall attend such
meeting in person or by proxy. Notice of adjournment of
a Shareholders' meeting to another time or place need not
be given, if such time and place are announced at the
meeting. Section 2.04. Ballots: The vote upon any question
shall be by ballot whenever requested by any person
entitled to vote, but, unless such a request is made,
voting may be conducted in any way approved by the
meeting. Section 2.05. Voting; Proxies: Shareholders
entitled to vote may vote either in person or by proxy,
provided that such proxy to act is authorized to act by
(1) a written instrument, dated not more than eleven months
before the meeting and executed either by the Shareholder
or by his or her duly authorized attorney in fact
(who may be so authorized by a writing or by any
non-written means permitted by the laws of the
Commonwealth of Massachusetts) or (2) such electronic,
telephonic, computerized or other alternative means as
may be approved by a resolution adopted by the Trustees.
Proxies shall be delivered to the secretary of the Trust
or other person responsible for recording the proceedings
before being voted. A proxy with respect to shares held
in the name of two or more persons shall be valid if
executed by one of them unless at or prior to
exercise of such proxy the Trust receives a specific written
notice to the contrary from any one of them. Unless
otherwise specifically limited by their terms, proxies
shall entitle the holder thereof to vote at any
adjournment of a meeting. A proxy purporting to be
exercised by or on behalf of a Shareholder shall
be deemed valid unless challenged at or prior to its
exercise and the burden of proving invalidity shall
rest on the challenger. At all meetings of the
Shareholders, unless the voting is conducted by
inspectors, all questions relating to the
qualifications of voters, the validity of proxies,
and the acceptance or rejection of votes shall be decided
by the chairman of the meeting. Section 2.06. Action
Without a Meeting: Any action to be taken by
Shareholders may be taken without a meeting if all
Shareholders entitled to vote on the matter consent
to the action in writing and the written consents
are filed with the records of meetings of Shareholders
of the Trust. Such consent shall be treated for all
purposes as a vote at a meeting.
ARTICLE III
TRUSTEES Section 3.01. Regular Meetings: Regular
meetings of the Trustees may be
held without further call or notice at such places and at
such times as the Trustees may from time to time determine,
provided that notice of the first regular meeting following
any such determination shall be given to absent Trustees.
A regular meeting of the Trustees may be held without
further call or notice immediately after and at the same
place as any meeting of the Shareholders. Section 3.02.
Special Meetings: Special meetings of the Trustees may be
held at any time and at any place designated in the call of
the meeting, when called by the chairman of the Trustees
or by two or more Trustees, provided that notice thereof
shall being given to each Trustee as set forth in the
Declaration of Trust. Section 3.03. Committees:
The Trustees, by vote of a majority of the Trustees then
in office, may elect from their number anexecutive
committee or other committees and may delegate thereto
some or all of their powers except those which by law,
by the Declaration of Trust, or by these By-Laws
may not be delegated. Except as the Trustees may otherwise
determine, any such committee may make rules for the
conduct of its business, but unless otherwise provided
by the Trustees or in such rules, its business shall
be conducted so far as possible in the same manner as is
provided by these By-Laws for the Trustees themselves.
All members of such committees shall hold such
offices at the pleasure of theTrustees. The Trustees may
abolish any such committee at any time. Any committee
to which the Trustees delegate any of their powers or
duties shall keep records of its meetings and shall
report its actions to the Trustees. The Trustees shall
have power to rescind any action of any committee,
but no such rescission shall have retroactive effect. Any
such committee may act by meeting in person, by unanimous
written consent, or by telephonic meeting provided a
quorum of members participates in any such telephonic
meeting. Section 3.04. Other Committees: The Trustees may
appoint other committees, each consisting of one or
more persons, who need not be Trustees. Each such
committee shall have such powers perform such
duties and abide by such procedures as may be
determined from time to time by the Trustees, but shall not
exercise any power which may lawfully be exercised only
by the Trustees or a committee of Trustees.
Section 3.05. Compensation: Each Trustee and each
committee member may receive such compensation
for his services and reimbursement for his expenses
as may be fixed from time to time by resolution of the
Trustees. ARTICLE IV OFFICERS Section 4.01. General:
The officers of the Trust shall be a president, a
treasurer, a secretary and such other officers, if any, as
the Trustees from time to time may in their discretion
elect or appoint. The Trust may also have such agents,
if any,as the Trustees from time to time may in their
discretion appoint. Any officer may be but need not be
a Trustee or shareholder. Any two or more offices may be
held by the same person. Section 4.02. Election and
Term of Office: The president, the treasurer and the
secretary shall be elected annually by the Trustees at
their first meeting in each calendar year or at such
later meeting in such year as the Trustees shall determine
("Annual Meeting"). Other officers or agents, if any,
may be elected or appointed by the Trustees at said
meeting or at any other time. The president, treasurer and
secretary shall hold office until the next Annual Meeting
and until their respective successors are chosen and
qualified, or in each case until he dies, resigns, is
removed or become disqualified. Each other officer
shall hold office and each agent shall retain his authority
at the pleasure of the Trustees. Section 4.03. Powers:
Subject to the other provisions of these By-Laws, each
officer shall have, in addition to the duties and powers
herein and in the Declaration of Trust set forth, such
duties and powers as are commonly incident to his office
as if the Trust were organized as a Massachusetts business
corporation and such other duties and powers as the
Trustees may from time to time designate.Section 4.04.
Chairman of the Board: The chairman of the Board of
Trustees, if one is so appointed, shall be chosen from
among the Trustees and may hold office only so long
as he continues to be a Trustee. Unless the Trustees
otherwise provide, the chairman, if any is so appointed,
shall preside at all meetings of the Shareholders and of
the Trustees at which he is present; may be ex officio a
member of all committees established by the Trustees; and
shall have such other duties and powers as specified
herein and as may be assigned to him by the Trustees.
Section 4.05. President: The president shall be the
chief executive officer of the Trust and, subject to
the supervision of the Trustees, shall have general charge
of the business, affairs and property of the Trust and
general supervision over its officers, employees and
agents. He shall exercise such other powers and perform
such other duties as from time to time may be assigned
to him by the Trustees. Section 4.06. Vice Presidents:
The Trustees may from time to time designate and elect
one or more vice presidents who shall have such powers and
perform such duties as from time to time may be assigned
to them by the Trustees or the president. At the request
or in the absence or disability of the president, the vice
president (or, if there are two or more vice presidents,
then the senior of the vice presidents present and able
to act) may perform all the duties of the president and,
when so acting, shall have all the powers of and be subject
to all the restrictions upon the president. Section 4.07.
Treasurer and Assistant Treasurers: The treasurer shall be
the principal financial and accounting officer of the Trust
and shall have general charge of the finances and books of
account of the Trust. Except as otherwise provided by the
Trustees, he shall have general supervision of the funds
and property of the Trust and of the performance by the
custodian of its duties with respect thereto. He shall
render to the Trustees, whenever directed by the Trustees,
an account of the financial condition of the Trust and
of all his transactions as treasurer; and as soon as
possible after the close of each financial year he
shall make and submit to the Trustees a like report
for such financial year. He shall perform all the
acts incidental to the office of treasurer, subject
to the control of the Trustees. Any assistant treasurer
may perform such duties of the treasurer as the treasurer
or the Trustees may assign, and, in the absence of the
treasurer, (or, if there are two or more assistant
treasurers, then the senior of the assistant treasurers
present and able to act) may perform all the duties of the
treasurer, subject to the control of the Trustees.
Section 4.08. Secretary and Assistant Secretaries:
The secretary shall attend to the giving and serving of
all notices of the Trust and shall record all proceedings
of the meetings of the Shareholders and Trustees in
books to be kept for that purpose. He shall keep in safe
custody the seal of the Trust, and shall have charge of
the records of the Trust, all of which shall at all
reasonable times be open to inspection by the
Trustees. He shall perform such other duties as
appertain to his office or as may be required by the
Trustees. Any assistant secretary may perform
such duties of the secretary as the secretary or
the Trustees may assign, and, in the absence of
the secretary, (or, if there are two or more assistant
secretaries. then the senior of the assistant secretaries
present and able to act) may perform all the duties of the
secretary. Section 4.09. Subordinate Officers: The Trustees
from time to time may appoint such other officers or
agents as they may deem advisable, each of whom shall
have such title, hold office for such period, have
such authority and perform such duties as the Trustees
may determine. The Trustees from time to time may delegate
to one or more officers or agents the power to appoint
any such subordinate officers or agents and to prescribe
their respective rights, terms of office, authorities and
duties. Section 4.10. Remuneration: The salaries or
other compensation of the officers of the Trust shall
be fixed from time to time by resolution of the Trustees,
except that the Trustees may by resolution delegate to
any person or group of persons the power to fix the
salaries or other compensation of any subordinate officers or
agents appointed in accordance with the provisions of Section
4.09 hereof.Section 4.11. Surety Bonds: The Trustees may
require any officer or agent of the Trust to execute a bond
(including, without limitation, any bond required by the
Investment Company Act of 1940, as amended, ("1940 Act")
and the rules and regulations of the Securities and
Exchange Commission ("Commission")) to the Trust in such
sum and with such surety or sureties as the Trustees may
determine, conditioned upon the faithful performance of his
duties to the Trust including responsibility for negligence
and for the accounting of any of the Trust's property, funds
or securities that may come into his hands. Section 4.12.
Resignation: Any officer may resign his office at any time by
delivering a written resignation to the Trustees, the
president, the secretary, or any assistant secretary.
Unless otherwise specified therein, such resignation shall
take effect upon delivery. Section 4.13. Removal:
Any officer may be removed from office whenever in
the judgment of the Trustees the best interest of the
Trust will be served thereby, by the vote of a
majority of the Trustees given at a regular meeting
or any special meeting of the Trustees called for
such purpose. In addition, any officer or agent
appointed in accordance with the provision of Section
4.09 hereof may be removed, either with or without
cause, by any officer upon whom such power of removal
shall have been conferred by the Trustees.Sectin 4.14.
Vacancies and Newly Created Offices: If any vacancy shall
occur in any office by reason of death, resignation,
removal, disqualification or other cause, or if
any new office shall be created, such vacancies or
newly created offices may be filled by the Trustees
at any regular or special meeting of the Trustees or, in
the case of any office created pursuant to Section
4.09 hereof, by any officer upon whom such power shall
have been conferred by the Trustees.
ARTICLE V
CUSTODIAN
Section 5.01. Employment of Custodian:
The Trustees shall at all times employ one or more banks
or trust companies organized under the laws of the U.S. or
one of the states thereof provided that each such
bank or trust company has capital, surplus and undivided
profits of at least two million dollars ($2,000,000) as
custodian with authority as the Trust's agent, but subject
to such restrictions, limitations and other requirements,
if any, as may be contained in these By-Laws: (1) to
hold the securities owned by the Trust and deliver the same
upon written order, or oral order if confirmed in writing,
or order delivered by such electromechanical or electronic
devices as are agreed to by the Trust and the custodian, if
such procedures have been authorized in writing by the Trust;
(2) to receive and give receipt for any moneys due to
the Trust and deposit the same in its own banking
department or elsewhere as the Trustees may direct;
and (3) to disburse such moneys upon orders or vouchers;
and the Trust may also enjoy such custodian as its agent:
(1) to keep the books and accounts of the Trust and
furnish clerical and accounting services; and (2) to compute,
if authorized to do so by the Trustees, the Net Asset Value
of any Series or Class (which terms are defined in the
Declaration of Trust) in accordance with the provisions
of the Declaration of Trust;all upon such basis of compensation
as may be agreed upon between the Trustees and the custodian.
If so directed by a vote of a majority of the outstanding
shares of the Trust entitled to vote, the custodian
shall deliver and pay over all property of the Trust
held by it as specified in such vote. The Trustees may also
authorize the custodian to employ one or more sub-custodians
from time to time to perform such of the acts and services
of the custodian, and upon such terms and conditions, as
may be agreed upon between the custodian and such
sub-custodian and approved by the Trustees, provided
that in every case such sub-custodian shall be a bank or
trust company organized under the laws of the United
States or one of the states thereof and having capital,
surplus and undivided profits of at least two million
dollars ($2,000,000) or such other person as may be
permitted by the Commission, or otherwise in accordance
with the 1940 Act. Section 5.02. Use of Central Securities
Handling System: Subject to such rules, regulations and
orders as the Commission may adopt, the Trustees may direct
the custodian to deposit any or all of the securities owned
by the Trust (1) in a system for the central handling of
securities established by a national securities exchange or
a national securities association registered with the
Commission under the Securities Exchange Act of 1934,
pursuant to which system all securities of any particular class
or series of any issuer deposited within the system are
treated as fungible and may be transferred or pledged
by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject
to withdrawal only upon the order of the Trust; or (2)
with such other person as may be permitted by the Commission,
or otherwise in accordance with the 1940 Act.
ARTICLE VI
EXECUTION OF PAPERS
Section 6.01. General: Except as the
Trustees may generally or in particular cases authorize
the execution thereof in some other manner, all deeds, leases,
transfers,contracts, bonds, notes, checks, drafts, and other
obligations made, accepted, or endorsed by the Trust shall be
executed by the president, any vice president, or the treasurer,
or by whomever else shall be designated for that purpose by
the Trustees, and need not bear the seal of the Trust.
ARTICLE VII SHARES OF BENEFICIAL INTEREST Section 7.01.
Share Certificates: No certificates certifying the ownership of
Shares shall be issued except as the Trustees may otherwise
authorize. In the event that the Trustees authorize the
issuance of Share certificates, subject to the provisions
of Section 7.03, each Shareholder shall be entitled to a
certificate stating the number of shares owned by him,
in such form as shall be prescribed from time to time by the
Trustees. Such certificate shall be signed by the president
or a vice president and by the treasurer, assistant treasurer,
secretary or assistant secretary. Such signatures may be
facsimiles if the certificate is signed by a transfer or
shareholder services agent or by a registrar, other than a
Trustee, officer or employee of the Trust. In case any officer
who has signed or whose facsimile signature has been placed
on such certificate shall have ceased to be such officer before
such certificate is issued, it may be issued by the Trust with
the same effect as if he were such officer at the time of its
issue.In lieu of issuing certificates for shares, the Trustees,
the transfer agent or shareholder services agent may either
issue receipts therefor or may keep accounts upon the
books of the Trust for the record holders of such shares,
who shall in either case be deemed, for all purposes
hereunder, to be the holders of certificates for such shares
as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
Section 7.02. Loss of Certificates: In the case of the alleged
loss or destruction or the mutilation of a Share certificate, a
duplicate certificate may be issued in place thereof, upon
such terms as the Trustees may prescribe.Section 7.03.
Discontinuance of Issuance ofCertificates: The Trustees may
at any time discontinue the issuance of Share certificates
and may, by written notice to each Shareholder, require
the surrender of Share certificates to the Trust for
cancellation. Such surrender and cancellation shall not
affect the ownership of Shares in the Trust. Section 7.04.
Equitable Interest Not Recognized: The Trust shall be entitled
to treat the holder of record of any Share or Shares of the
Trust as the holder in fact thereof, and shall not be
bound to recognize any equitable or other claim of interest in
such Share or Shares on the part of any other person except as
may be otherwise expressly provided by law. Section 7.05.
Transfer of Shares: The Shares of the Trust shall be
transferable only by transfer recorded on the books of the
Trust, in person or by attorney. ARTICLE VIII FISCAL YEAR;
ACCOUNTANT Section 8.01. Fiscal Year: The fiscal year
of the Trust shall end on such date in each year as
the Trustees shall from time to time determine. Section
8.02. Accountant: (a) The Trust shall employ an
independent public accountant or firm of independent
public accountants as its accountant to examine the
accounts of the Trust and to sign and certify the
financial statements of the Trust. The accountant's
certificates and reports shall be addressed both to the
Trustees and to the Shareholders of the Trust.
(b) Any vacancy occurring due to the death or
resignation of the accountant may be filled by a majority
vote of the Trustees who are not interested persons of the
Trust.
ARTICLE IX
INSURANCE
Section 9.01. Insurance of Officers,
Trustees, and Employees: The Trust may purchase and maintain
insurance on behalf of any person who is or was a Trustee,
officer or employee of the Trust, or is or was serving at
the request of the Trust as a Trustee, officer or employee
of a corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his
status as such, whether or not the Trust would have the
power to indemnify him against such liability. The Trust
may not acquire or obtain a contract for insurance that
protects or purports to protect any Trustee or officer of
the Trust against any liability to the Trust or its
Shareholders to which he would otherwise be subject by reason
of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct
of his office.
ARTICLE X
AMENDMENTS; REPORTS; MISCELLANEOUS
Section 10.1. Amendments: These By-Laws may be amended or
repealed, in whole or in part, by a majority of the Trustees
then in office at any meeting of the Trustees, or by one or
more writings signed by such majority.
Section 10.2. Reports: The Trustees shall at least
semiannually submit to the Shareholders a written report
of the transactions of the Trust, including financial
statements that shall at least annually be certified by
independent public accountants. Section 10.3. Gender: As
used in these By-Laws, the masculine gender shall
include the feminine and neuter genders.
Section 10.3. Headings: Headings are placed in these bylaws
for convenience of reference only and in case of any conflict,
the text of these By-Laws rather than the headings shall
control.
Section 10.4. Inspection of Books: The Trustees
shall from time to time determine whether and to what extent,
and at what times and places, and under what
conditions and regulations the accounts and books of the
Trust or any of them shall be open to the inspection of the
Shareholders, and no Shareholder shall have any right to
inspect any account or book or document of the Trust except
as conferred by law or otherwise by the Trustees.
<PAGE>
FORM 10f-3
FUND: National Tax-Free Income Fund
Record of Securities Purchased Under the Fund's Rule
10f-3 Procedures
1.Issuer: NYC TFA
2.Date of Purchase: 10-2-97
3.Date offering commenced: 10-1-97
4.Underwriters from whom purchased: Lehman Brothers
5."Affiliated Underwriter" managing or participating in
syndicate: PaineWebber
6.Aggregate principal amount of purchase: 1,500M
7.Aggregate principal amount of offering: 650MM
8.Purchase price (net of fees and expenses): 94.372
9.Initial public offering price: 94.372
10.Commission, spread or profit: % $ 5.00
11. Have the following conditions been
satisfied? YES NO
a. The securities are part of an issue registered
under the Securities Act of 1933 which is
being offered to the public or are "municipal
securities" as defined in Section 3(a)(29) of
the Securities Exchange Act of 1934. ___X___ _____
b. The securities were purchased prior to the
end of the end first full business day of
the offering at not more than the initial
offering price (or, if a rights offering,
the securities were purchased on or before
the fourth day preceding the day on which
the offering terminated. ____X__ _____
c. The underwriting was a firm commitment
underwriting. ___X___ _____
d. The commission, spread or profit was
reasonable and fair in relation to that
being received by others for underwriting
similar securities during the same period. ___X___ _____
e. (1) If securities are registered under
the Securities Act of 1933, the issuer of
the securities and its predecessor have
been in continuous operation for not less
than three years. ____X___ _____
(2) If securities are municipal
securities, the issue of securities has
received an investment grade rating from
a nationally recognized statistical rating
organization or, if the issuer or entity
supplying the revenues from which the issue
is to be paid shall have been in continuous
operation for less than three years
(including any predecessor), the issue has
received one of the three highest ratings
from at least one such rating organization.___X___ _____
f. The amount of such securities purchased
by all of the investment companies advised
by Mitchell Hutchins did not exceed 4% of
the principal amount of the offering or
$500,000 in principal amount, whichever is
greater, provided that in no event did
such amount exceed 10% of the principal
amount of the offering. __X___ _____
g. The purchase price was less than 3% of
the Fund's total assets. ___X___ _____
h. No Affiliated Underwriter was a direct
or indirect participant in or beneficiary
of the sale or, with respect to municipal
securities, no purchases were designated
as group sales or otherwise allocated
to the account of any Affiliated
Underwriter. ____X___ _____
Approved: Richard S. Murphy Date: October 7, 1997
<PAGE>
FORM 10f-3
FUND: California Tax-Free Income Fund
Record of Securities Purchased Under the Fund's Rule
10f-3 Procedures
1.Issuer: Aneheim Pus. Fin Authority
2.Date of Purchase: 2-6-97
3.Date offering commenced: 2-6-97
4.Underwriters from whom purchased: Smith Barney
5."Affiliated Underwriter" managing or participating in
syndicate: PaineWebber
6.Aggregate principal amount of purchase: 1,057,790
7.Aggregate principal amount of offering: 570,000,000
8.Purchase price (net of fees and expenses): 105.579
9.Initial public offering price: 105.579
10.Commission, spread or profit: % $ 3.75 /bond
11. Have the following conditions been
satisfied? YES NO
a. The securities are part of an issue
registered under the Securities Act
of 1933 which is being offered to the
public or are "municipal securities"
as defined in Section 3(a)(29) of
the Securities Exchange Act of 1934. ___X___ ______
b. The securities were purchased prior
to the end of the end first full
business day of the offering at not
more than the initial offering price
(or, if a rights offering, , the
securities were purchased on or before
the fourth day preceding the day on
which the offering terminated. ___X____ ______
c. The underwriting was a firm commitment
underwriting. ____X__ ____
d. The commission, spread or profit was
reasonable and fair in relation to that
being received by others for underwriting
similar securities during the same
period. ___X____ _______
e. (1) If securities are registered under
the Securities Act of 1933, the issuer
of the securities and its predecessor
have been in continuous operation for not
less than three years. __X___ _____
(2) If securities are municipal
securities, the issue of securities has
received an investment grade rating from
a nationally recognized statistical
rating organization or, if the issuer
or entity supplying the revenues
from which the issue is to be paid shall
have been in continuous operation for
less than three years (including any
predecessor), the issue has received one
of the three highest ratings from at
least one such rating organization. ____X___ _____
f. The amount of such securities purchased
by all of the investment companies
advised by Mitchell Hutchins did not
exceed 4% of the principal amount of
the offering or $500,000 in principal
amount, whichever is greater, provided
that in no event did such amount
exceed 10% of the principal amount of
the offering. ___X___ _____
g. The purchase price was less than 3%
of the Fund's total assets. ___X___ ____
h. No Affiliated Underwriter was a direct
or indirect participant in or
beneficiary of the sale or, with
respect to municipal securities, no
purchases were designated as group
sales or otherwise allocated to the
account of any Affiliated Underwriter. _X___ _____
Approved: Cynthia Bow Date: January 30, 1998