<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1996
SECURITIES ACT FILE NO. 33-63413
INVESTMENT COMPANY ACT FILE NO. 811-5576
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
[_] PRE-EFFECTIVE AMENDMENT NO. [X] POST-EFFECTIVE AMENDMENT NO. 1
(CHECK APPROPRIATE BOX OR BOXES)
----------------
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
----------------
(609) 282-2800
(AREA CODE AND TELEPHONE NUMBER)
----------------
800 SCUDDERS MILL ROAD
PLAINSBORO, NEW JERSEY 08536
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES:
NUMBER, STREET, CITY, STATE, ZIP CODE)
----------------
ARTHUR ZEIKEL
MERRILL LYNCH GLOBAL ALLOCATION FUND, INC.
800 SCUDDERS MILL ROAD, PLAINSBORO, NEW JERSEY 08536
MAILING ADDRESS: BOX 9011, PRINCETON, NEW JERSEY 08543-9011
(NAME AND ADDRESS OF AGENT FOR SERVICE)
----------------
COPIES TO:
THOMAS R. SMITH, JR., ESQ. MICHAEL J. HENNEWINKEL, ESQ.
BROWN & WOOD MERRILL LYNCH ASSET MANAGEMENT
ONE WORLD TRADE CENTER 800 SCUDDERS MILL ROAD
NEW YORK, NEW YORK 10048-0557 PLAINSBORO, NJ 08543-9011
----------------
No filing fee is required because an indefinite number of shares have
previously been registered pursuant to Rule 24f-2 under the Investment Company
Act of 1940 pursuant to a registration statement on Form N-1A (File No. 33-
22462). The notice required for such Rule for the Registrant's most recent
fiscal year end was filed on December 26, 1995. Pursuant to Rule 429, this
Registration Statement relates to shares previously registered on Form N-1A
(File No. 33-22462).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment consists of the following:
(1) Facing Sheet of the Registration Statement.
(2) Part C to the Registration Statement (including signature page).
Parts A and B are incorporated by reference from Pre-Effective Amendment No.1
to this Registration Statement (File No. 33-63413) filed on November 21, 1995.
This Amendment is being filed solely to file as Exhibit No.12 to this
Registration Statement the private letter ruling received from the Internal
Revenue Service.
1
<PAGE>
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Reference is made to Article VI of Registrant's Articles of Incorporation,
Article VI of Registrant's By-Laws, Section 2-418 of the Maryland General
Corporation Law and Section 9 of the Distribution Agreements.
Article VI of the By-Laws provides that each officer and director of the
Registrant shall be indemnified by the Registrant to the full extent permitted
under the General Laws of the State of Maryland, except that such indemnity
shall not protect any such person against any liability to the Registrant or
any stockholder thereof to which such person 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. Absent a court
determination that an officer or director seeking indemnification was not
liable on the merits or guilty of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office, the decision by the Registrant to indemnify such person must be based
upon the reasonable determination of independent counsel or the vote of a
majority of a quorum of the directors who are neither "interested persons," as
defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended,
nor parties to the proceeding ("the non-party independent directors"), after
review of the facts, that such officer or director is not guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his office.
Article VI of the By-Laws further provides that the Registrant may purchase
insurance on behalf of an officer or director protecting such person to the
full extent permitted under the General Laws of the State of Maryland from
liability arising from his activities as officer or director of the Registrant.
The Registrant, however, may not purchase insurance on behalf of any officer or
director of the Registrant that protects or purports to protect such person
from liability to the Registrant or to its stockholders to which such officer
or director 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.
Each officer and director of the Registrant claiming indemnification within
the scope of Article VI of Registrant's By-Laws shall be entitled to advances
from the Registrant for payment of the reasonable expenses incurred by him in
connection with proceedings to which he is a party in the manner and to the
full extent permitted under the General Laws of the State of Maryland;
provided, however, that the person seeking indemnification shall provide to the
Registrant a written affirmation of his good faith belief that the standard of
conduct necessary for indemnification by the Registrant has been met and a
written undertaking to repay any such advance, if it should ultimately be
determined that the standard of conduct has not been met, and provided further
that at least one of the following additional conditions is met: (a) the person
seeking indemnification shall provide a security in form and amount acceptable
to the Registrant for his undertaking; (b) the Registrant is insured against
losses arising by reason of the advance; or (c) a majority of a quorum of non-
party independent directors, or legal counsel in a written opinion, shall
determine, based on a review of facts readily available to the Registrant at
the time the advance is proposed to be made, that there is reason to believe
that the person seeking indemnification will ultimately be found to be entitled
to indemnification.
The Registrant has purchased an insurance policy insuring its officers and
directors against liabilities, and certain costs of defending claims against
such officers and directors, to the extent such officers and directors are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties.
Article IV of the Management Agreement between Registrant and Merrill Lynch
Asset Management, Inc. (now called Merrill Lynch Asset Management L.P.)
("MLAM") (Exhibit 5(a) to Registrant's Registration Statement on Form N-1A) and
Article IV of the Sub-Advisory Agreement between MLAM and Merrill Lynch Asset
Management U.K., Limited ("MLAM U.K.") (Exhibit 5(b) to Registrant's
Registration Statement on Form N-1A) limits the liability of MLAM and MLAM
U.K., respectively, to liabilities arising
C-1
<PAGE>
from willful misfeasance, bad faith or gross negligence in the performance of
their respective duties or from reckless disregard of their respective duties
and obligations.
In Section 9 of the Distribution Agreements relating to the securities being
offered hereby, the Registrant agrees to indemnify the Distributor and each
person, if any, who controls the Distributor within the meaning of the
Securities Act of 1933 (the "Act"), against certain types of civil liabilities
arising in connection with the Registration Statement or Prospectus and
Statement of Additional Information.
Insofar as indemnification for liabilities arising under the Act may be
permitted to Directors, officers and controlling persons of the Registrant and
the principal underwriter pursuant to the foregoing provisions or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Director, officer, or controlling
person of the Registrant and the principal underwriter in connection with the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person or the principal underwriter in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
1.(a) Articles of Incorporation of the Registrant. (c)
(b) Articles of Amendment to Articles of Incorporation of the Registrant.
(c)
(c) Articles Supplementary to Articles of Incorporation of the Registrant.
(c)
(d) Articles of Amendment to the Articles of Incorporation dated October
19, 1994. (f)
(e) Articles Supplementary to the Articles of Incorporation dated October
21, 1994. (f)
2. By-Laws of the Registrant. (a)
3. Not Applicable.
4. Form of Agreement and Plan of Reorganization between Merrill Lynch
Balanced Fund for Investment and Retirement, Inc. and the Registrant.
(g)
5. Copies of instruments defining the rights of shareholders, including
the relevant portions of the Articles of Incorporation, as amended,
and By-Laws of Registrant. (b)
6.(a) Management Agreement between Registrant and Merrill Lynch Asset
Management, Inc. (a)
(b) Sub-Advisory Agreement between Merrill Lynch Asset Management, Inc.
and Merrill Lynch Asset Management U.K., Limited. (a)
(c) Supplement to Management Agreement between Registrant and Merrill
Lynch Asset Management L.P., dated January 3, 1994. (d)
7.(a) Class A Shares Distribution Agreement between Registrant and Merrill
Lynch Funds Distributor, Inc. (d)
(b) Class B Shares Distribution Agreement between Registrant and Merrill
Lynch Funds Distributor, Inc. (a)
(c) Letter Agreement between the Registrant and Merrill Lynch Funds
Distributor, Inc. with respect to the Merrill Lynch Mutual Fund
Advisor Program. (c)
(d) Class C Shares Distribution Agreement between Registrant and Merrill
Lynch Funds Distributor, Inc. (d)
(e) Class D Shares Distribution Agreement between Registrant and Merrill
Lynch Funds Distributor, Inc. (d)
</TABLE>
C-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
<S> <C>
8. None
9. Custodian Agreement between Registrant and Brown Brothers Harriman & Co. (a)
10.(a) Amended and Restated Class B Shares Distribution Plan and Class B Shares
Distribution Plan Sub-Agreement of the Registrant. (c)
(b) Form of Class C Shares Distribution Plan and Class C Shares Distribution Plan Sub-
Agreement of the Registrant. (d)
(c) Form of Class D Shares Distribution Plan and Class D Shares Distribution Plan Sub-
Agreement of the Registrant. (d)
11. Opinion of Brown & Wood as to legality (including consent of such firm). (h)
12. Private Letter Ruling from the Internal Revenue Service.
13. Not Applicable.
14.(a) Consent of Deloitte & Touche LLP, Independent Auditors for the Registrant. (i)
(b) Consent of Deloitte & Touche LLP, Independent Auditors for Merrill Lynch Balanced
Fund for Investment and Retirement, Inc. (i)
15. Not Applicable.
16. Powers of Attorney. (h)
17.(a) Declaration pursuant to Rule 24f-2 under the Investment Company Act of 1940 of the
Registrant. (e)
(b) Prospectus dated February 27, 1995, and Statement of Additional Information dated
February 27, 1995, of the Registrant. (h)
(c) Prospectus dated January 31, 1995, and Statement of Additional Information dated
January 31, 1995, of Merrill Lynch Balanced Fund for Investment and Retirement,
Inc. (h)
(d) Letter to shareholders of Balanced Fund. (i)
</TABLE>
- --------
(a) Incorporated by reference to an exhibit to Pre-Effective Amendment No. 2 to
Registrant's Registration Statement under the Securities Act of 1933 on
Form N-1A filed on December 15, 1988 (File No. 33-22462) (the "Registration
Statement").
(b) Reference is made to Article III (Sections 3 and 4), Article V, Article VI
(Section 3), Article VII, Article VIII and Article X of the Registrant's
Articles of Incorporation, filed as Exhibit (1)(a) to the Registration
Statement; amended and restated Article VI (Sections 2, 3, 5 and 6)
contained in the Articles of Amendment filed as Exhibit (1)(b) to the
Registration Statement; the Articles Supplementary filed as Exhibit (1)(c)
to the Registration Statement; Article V (Section 9) contained in the
Articles of Amendment filed as Exhibit (1)(d) to the Registration
Statement; the Articles Supplementary filed as Exhibit (1)(e) to the
Registration Statement; and Article II, Article III (Sections 1, 3, 5, 6
and 17), Article IV (Section 1), Article V (Section 7), Article VI, Article
VII, Article XII, Article XIII, and Article XIV of the Registrant's By-Laws
filed as Exhibit (2) to the Registration Statement.
(c) Filed on February 24, 1994, as an exhibit to Post-Effective Amendment No. 7
to the Registration Statement.
(d) Filed on October 18, 1994, as an exhibit to Post-Effective Amendment No. 8
to the Registration Statement.
(e) Incorporated by reference to Pre-Effective Amendment No. 2 to Registrant's
Registration Statement.
(f) Incorporated by reference to Post-Effective Amendment No. 9 to Registrant's
Registration Statement, filed on February 25, 1995.
(g) Filed herewith as Exhibit I to the Proxy Statement and Prospectus.
(h) Incorporated by reference to Registrant's initial Registration Statement
under the Securities Act of 1933 on Form N-14 filed on October 13, 1995
(File No. 33-63413) (the "N-14 Registration Statement").
(i) Incorporated by reference to Pre-Effective Amendment No. 1 filed on
November 21, 1995 to N-14 Registration Statement .
C-3
<PAGE>
ITEM 17. UNDERTAKINGS
(1) The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through use of a prospectus which is part of this
Registration Statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, as
amended, the reoffering prospectus will contain information called for by the
applicable registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by other items of the
applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the Securities Act of 1933, as
amended, each post-effective amendment shall be deemed to be a new registration
statement for the securities offered thereon, and the offering of securities at
that time shall be deemed to be the initial bona fide offering of them.
C-4
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED ON BEHALF OF
THE REGISTRANT, IN THE TOWNSHIP OF PLAINSBORO, AND THE STATE OF NEW JERSEY, ON
THE 6TH DAY OF MARCH 1996.
MERRILL LYNCH GLOBAL ALLOCATION FUND,
INC.
(Registrant)
/s/ Terry K. Glenn
By ___________________________________
(TERRY K. GLENN, EXECUTIVE VICE
PRESIDENT)
AS REQUIRED BY THE SECURITIES ACT OF 1933, THIS POST-EFFECTIVE AMENDMENT TO
THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURE TITLE DATE
Arthur Zeikel* President and
- ------------------------------------ Director
(ARTHUR ZEIKEL) (Principal
Executive Officer)
Gerald M. Richard* Treasurer
- ------------------------------------ (Principal
(GERALD M. RICHARD) Financial and
Accounting Officer)
Donald Cecil* Director
- ------------------------------------
(DONALD CECIL)
Edward H. Meyer* Director
- ------------------------------------
(EDWARD H. MEYER)
Charles C. Reilly* Director
- ------------------------------------
(CHARLES C. REILLY)
Richard R. West* Director
- ------------------------------------
(RICHARD R. WEST)
Edward D. Zinbarg* Director
- ------------------------------------
(EDWARD D. ZINBARG)
/s/ Terry K. Glenn
*By ________________________________ March 6, 1996
(TERRY K. GLENN, ATTORNEY-IN-FACT)
C-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
-------
<C> <S>
12 --Private Letter Ruling dated February 9, 1996 from the Internal
Revenue Service to Registrant and Merrill Lynch Balanced Fund for
Investment and Retirement, Inc.
</TABLE>
<PAGE>
EXHIBIT 99.12
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Index Numbers: 0368.03-00 Washington, D.C. 20204
0368.13-00
Person to Contact:
Donald C. Burke, Andrew M. Eisenberg
Vice President Telephone Number:
Merrill Lynch Global (202) 622-7790
Allocation Fund, Inc. Refer Reply in:
800 Scudders Mill Road CC:DOM:CORP:3 TR-31-2454-95
Plainsboro, New Jersey 08536 Date: February 9, 1996
Acquiring = Merrill Lynch Global Allocation
Fund, Inc. EIN: 22-2937779
Target = Merrill Lynch Balanced Fund for
Investment and Retirement, Inc.
EIN: 22-2636012
State A = Maryland
-
b = 5.25
- -
c = 0.25
- -
d = 0.75
- -
e = 4.00
- -
f = 1.00
- -
Dear Mr. Burke:
This letter responds to your request dated October 13, 1995, for rulings
on the federal income tax consequences of a proposed transaction. Additional
letters were submitted on December 4, 1995 and February 7, 1996. The
information submitted for consideration is summarized below.
Acquiring, a State A corporation, is a non-diversified open-end management
-
company and has elected to be taxed as a regulated investment company ("RIC")
under (S)(S) 851-855 of the Internal Revenue Code. Acquiring has engaged in
business as a RIC since 1985. Acquiring's investment objective is to seek high
total investment return, consistent with prudent risk.
<PAGE>
Target, a State A corporation, is a diversified open-end management
-
company and has elected to be taxed as a RIC. Target has engaged in business
as a RIC since 1989. No shareholder owns five percent or more of the Target
stock. Target's investment objective is to provide shareholders with as high a
level of total investment return as is consistent with a reasonable and
relatively low level of risk.
Acquiring and Target each offer four classes of stock each of which is
voting stock. The class A shares, offered to only a limited group of investors,
have a maximum initial sales charge of b percent. The class B shares have no
-
initial sales charge, but are subject to a maintenance fee of c percent, a
-
distribution fee of d percent, and a contingent deferred sales charge ranging
-
from e to f percent if redeemed within four years from purchase. The class B
- -
shares have a feature whereby the class B shares automatically convert to class
D shares eight years from initial purchase. The class C shares have no initial
sales charge, but are subject to a maintenance fee of c percent , a distribution
-
fee of d percent, and a contingent deferred sales charge of f percent if
- -
redeemed within one year from purchase. The class D shares have a maximum
initial sales charge of b percent and are subject to a maintenance fee of c
- -
percent.
For what has been represented to be a valid business reason, the directors
of Acquiring and Target propose the following transaction:
(i) Target will transfer its assets to Acquiring in exchange for an equal
value of newly issued Acquiring class A, B, C, and D voting stock and
Acquiring's assumption of Target's liabilities, if any.
(ii) Target will distribute the Acquiring stock received to its shareholders in
complete liquidation. Each Target shareholder will receive shares of
Acquiring stock in proportion to the amount of stock and of the particular
class of stock previously owned.
(iii) Target will dissolve in accordance with the laws of State A and will
-
terminate its registration under the Investment Company Act of 1940.
Acquiring and Target have made the following representations with respect
to the proposed transaction:
(a) The fair market value of the Acquiring stock received by each Target
shareholder will approximately equal the fair market value of the Target
stock surrendered in the exchange.
2
<PAGE>
(b) To the best of the knowledge of Target, there is no plan or intention on
the part of any shareholder of Target to sell, exchange, or otherwise
dispose of a number of shares of Acquiring stock received in the
transaction that would reduce Target shareholders' ownership of Acquiring
stock to a number of shares having a value, as of the date of the
transaction, of less than 50 percent of the value of all of the formerly
outstanding stock of Target as of the same date. For purposes of this
representation, shares of Target stock exchanged for cash or other
property, surrendered by dissenters, if any, or exchanged for cash in lieu
of fractional shares of Acquiring stock will be treated as outstanding
Target stock on the date of the transaction. Moreover, shares of Target
stock and shares of Acquiring stock held by Target shareholders and
otherwise sold, redeemed, or disposed of prior or subsequent to the
transaction will be considered in making this representation (except for
shares which are required to be redeemed at the demand of the shareholders
in the ordinary course of business).
(c) Acquiring will acquire at least 90 percent of the fair market value of the
net assets and at least 70 percent of the fair market value of the gross
assets held by Target immediately before the transaction. For purposes of
this representation, amounts used by Target to pay its reorganization
expenses, amounts paid by Target to shareholders who receive cash or other
property, and all redemption and distributions (except for redemptions
pursuant to a demand of a shareholder in the ordinary course of Target's
business and regular, normal dividends) made by Target immediately
preceding the transfer will be included as assets of Target held
immediately prior to the transaction.
(d) Acquiring has no plan or intention to reacquire any of its stock issued in
the transaction except in connection with its legal obligation to redeem
shares pursuant to a demand of a shareholder in the ordinary course of
Target's business.
(e) Acquiring has no plan or intention to sell or otherwise dispose of any of
the assets of Target acquired in the transaction, except dispositions made
in the ordinary course of business.
(f) Target will distribute to its shareholders the voting stock of Acquiring
it receives pursuant to the transaction.
(g) The liabilities of Target assumed by Acquiring, if any, and any
liabilities to which the transferred assets are subject
3
<PAGE>
were incurred by Target in the ordinary course of its business.
(h) Following the transaction, Acquiring will continue the historic business
of Target or use a significant portion of Target's historic business
assets in a business.
(i) Acquiring, Target, and the shareholders of Target will pay their
respective expenses, if any, incurred in connection with the transaction.
(j) There is no intercorporate indebtedness existing between Acquiring and
Target that was issued, acquired, or will be settled at a discount.
(k) Target and Acquiring each satisfy the requirements applicable to regulated
investment companies under (S) 851 of the Code, and, therefore, the two
funds satisfy the requirements of (S) 368(a)(2)(F)(i) and (ii).
(l) Acquiring does not own, directly or indirectly, nor has it owned during
the past five years, directly or indirectly, any stock of Target.
(m) The fair market value of the assets of Target transferred to Acquiring
will equal or exceed the sum of the liabilities assumed by Acquiring, plus
the amount of liabilities, if any, to which the transferred assets are
subject.
(n) Target is not under the jurisdiction of a court in a Title 11 or similar
case within the meaning of (S) 68(a)(3)(A).
(o) Acquiring and Target have elected to be taxed as RICs under (S)851 and,
for all their taxable periods (including the last short taxable period
ending on the date of the transaction for Target) have qualified for the
special tax treatment afforded RICs under the Code, and after the
transaction, Acquiring intends to continue to so qualify.
Based solely upon the information submitted, we hold as follows:
(1) The acquisition by Acquiring of substantially all of the assets of Target,
solely in exchange for shares of Acquiring voting stock and Acquiring's
assumption of Target's liabilities, if any, will qualify as a
reorganization within the meaning of (S) 368(a)(1)(C); Acquiring and
Target will each be treated as a "party to reorganization" within the
meaning of (S)368(b).
4
<PAGE>
(2) Target will not recognize any gain or loss on the transfer of its assets
to Acquiring in exchange solely for voting shares of Acquiring or on the
distribution of such Acquiring shares to its shareholders ((S) 361(a) and
(c)).
(3) Acquiring will not reorganize any gain or loss on the receipt of the
Target assets in exchange for voting shares of Acquiring ((S) 1032).
(4) Acquiring's basis in the assets received from Target will equal the basis
of such assets in the hands of Target immediately prior to the transaction
((S) 362(b)).
(5) Acquiring's holding period of the Target assets will include the period
during which Target held such assets
((S) 1223(2)).
(6) The tax year of Target will end and Acquiring will succeed to take into
account the items of Target described in
(S) 381(c) of the Code, subject to the provisions and limitations
specified in (S)(S) 381, 382, 383, and 384 of the Code and the regulations
thereunder (section 381(a) and
(S) 1.381(a)-1 of the Income Tax Regulations).
(7) The Target shareholders will not reorganize any gain or loss on the
receipt of voting shares of Acquiring (including fractional shares to
which they may be entitled) solely in exchange for their shares in Target
((S)354(a)).
(8) The basis of the Acquiring shares received by the Target shareholders
(including fractional shares to which they may be entitled) will equal the
basis of the Target shares surrendered in the exchange ((S) 358(a)).
(9) The holding period of the Acquiring shares received by Target shareholders
in exchange for their Target shares (including fractional shares to which
they may be entitled) will include the period during which the exchanged
Target shares were held, provided that the Target shares were held as a
capital asset on the date of the exchange ((S) 1223(1)).
We express no opinion about the federal income tax treatment of the
proposed transaction under other provisions of the Code and regulations or about
the tax treatment of any conditions existing at the time of, or effects
resulting from, the transaction that are not specifically covered by the above
rulings. Specifically, no opinion was requested, and none is expressed, about
whether Acquiring or Target qualifies as a RIC that is taxable under Subchapter
M, Part I of the Code.
5
<PAGE>
This ruling is directed only to the taxpayer who requested it. Section
6110(j)(3) of the Code provides that it may not be used or cited as precedent.
Each affected taxpayer must attach a copy of this letter to the federal
income tax return for the taxable year in which the transaction covered by this
ruling letter is consummated.
In accordance with the power of attorney on file in this office, we have
sent copies of this letter to your authorized representative.
Sincerely yours,
Acting Assistant Chief Counsel
(Corporate)
By/s/ John N. Geracinos
----------------------------
John N. Geracinos
Assistant to the Chief,
Branch 3
6
