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MITCHELL HUTCHINS/KIDDER, PEABODY EQUITY INCOME FUND, INC.
Supplement to Prospectus Dated June 1, 1995
The board of directors of Mitchell Hutchins/Kidder, Peabody
Equity Income Fund, Inc. ("Fund") has approved a Plan of Reorganization
and Termination ("Reorganization") for submission to its shareholders, at
a special meeting to be held August 4, 1995. If the proposed
Reorganization is approved and implemented, all the Fund's assets will be
acquired and its liabilities assumed by PaineWebber Growth and Income Fund
("Growth and Income Fund") in a tax-free reorganization. As a result of
the Reorganization, the two funds' assets would be combined and each Fund
shareholder would, on the closing date of the transaction, receive a
number of full and fractional shares of the corresponding Class of shares
of Growth and Income Fund having an aggregate value equal to the value of
the shareholder's holdings in the Fund. Growth and Income Fund is a
series of PaineWebber America Fund, an open-end management investment
company organized as a Massachusetts business trust. There can be no
assurance that the Fund's shareholders will approve the Reorganization.
The meeting of Fund shareholders to consider the proposed
Reorganization will be held on August 4, 1995. If the Reorganization is
approved, sales of all Classes of Fund shares will cease on August 4,
1995, so that Fund shares will no longer be available for purchase or
exchange starting on August 4, 1995 through the closing date of the
Reorganization. Redemptions of Fund shares and exchanges of Fund shares
for shares of another PaineWebber or Mitchell Hutchins/Kidder, Peabody
mutual fund may be effected through the closing date of the
Reorganization.
Dated: June 5, 1995
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