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001 C000000 2127131074
002 A000000 1285 AVENUE OF THE AMERICAS
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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE JULIAN SLUYTERS
TITLE SENIOR VP-TREASURER
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City of Boston
Office of the City Clerk
Approval Date Nov 21 1995
City Clerk
AMENDMENT TO DECLARATION OF TRUST
MITCHELL HUTCHINS/KIDDER, PEABODY INVESTMENT TRUST III
(formerly, Kidder, Peabody Investment Trust III)
ESTABLISHMENT AND DESIGNATION OF CLASSES
WHEREAS, Section 5.11 of the Declaration of Trust of the
Mitchell Hutchins/Kidder, Peabody Investment Trust III (the
"Trust"), dated the 8th day of April 1993 (as amended from time to
time, the "Declaration"), provides that the Trustees may classify
or reclassify an unlimited number of shares of beneficial interest,
$.001 per share, of any series of the Trust into one or more
classes of such series;
WHEREAS, pursuant to Section 5.11(f) of such Declaration,
such establishment and designation may be effective upon the
execution of an instrument in writing by an officer of the Trust,
pursuant to a vote of a majority of the Trustees;
NOW, THEREFORE, the undersigned, being a Trustee of the
Trust, does hereby certify, pursuant to Section 5.11(f) of the
Declaration of the Trust, the following,
(A) that the Trustees of the Trust, by approving by
majority vote the Choice Pricing System, duly designated, at the
meeting of the Board of Trustees of the Trust held on August 25,
1993, the following classes of shares with respect to the
PaineWebber Small Cap Growth Fund (formerly, Mitchell
Hutchins/Kidder, Peabody Small Cap Growth Fund):
Class A Shares
Class B Shares
Class C Shares
and that the purchase price of the Class A, Class B, Class C
shares, the price, terms and manner of redemption, and
determination and the net asset value of the such shares be
established by the Trustees of the Trust in accordance with the
Declaration and be set forth in the then currently effective
Prospectus and Statement of Additional Information of the Trust
relating to the Fund as amended from time to time under the
Securities Act of 1933, as amended; and
(B) that the Trustees of the Trust, at a meeting
held on August 30, 1995, duly resolved, by majority vote, to
rename, effective November 10, 1995, currently issued and
outstanding Class B shares as Class C shares, to rename, effective
November 10, 1995, currently issued and outstanding Class C shares
as Class Y shares without thereby changing the relative rights and
preferences of such shares and to further divide an unlimited
number of unissued shares or previously issued and reacquired
shares of beneficial interest of the Fund into a new class of Class
B shares;
and that, all currently issued and outstanding Class B
shares are hereby denominated as Class C shares and shall continue
to be entitled to have the relative rights and preferences accorded
to such shares prior to such denomination;
and that, all currently issued and outstanding Class C
shares are hereby denominated as Class Y shares and shall continue
to be entitled to have the relative rights and preferences accorded
to such shares prior to such denomination;
and that, an unlimited number of unissued shares and
previously issued and reacquired shares of beneficial interest of
the Fund are hereby established and designated as PaineWebber Small
Cap Growth Fund Class B Shares (the "Class B shares") which Class
B shares shall be entitled to have the relative rights and
preferences accorded to Shares under the Declaration, and shall
have further rights and preferences as are set forth below:
(1) The proceeds of the redemption of a Class B share
(including a fractional share) shall be reduced by the amount of
any applicable contingent deferred sales charge payable on such
redemption to the distributor of the Class B shares pursuant to the
terms of the issuance of the shares (to the extent consistent with
the Investment Company Act of 1940, as amended, or regulations or
exemptions thereunder) and the Trust shall promptly pay to such
distributor the amount of such contingent deferred sales charge.
(2)(a) 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, 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 Fund's 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 Fund's Class B shares
(the "Conversion Date").
(b) 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 Fund 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. 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.
(c) The number of Class A shares into which a Class B
share is converted pursuant to paragraphs (2)(a) and (2)(b) 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 redemption thereof at the time of the
calculation of the net asset value on the Conversion Date.
(d) 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).
(e) For purposes of Paragraph (2)(a)(ii) 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 Fund's Class B
shares.
(3)(a) The purchase price of the Class B shares, (b) the
price, additional terms and manner of redemption of the Class B
shares, (c) the determination of the net asset value of the Class
B shares, and (d) the relative dividend rights of holders of Class
B shares shall be established by the Trustees of the Trust in
accordance with the Declaration and shall be set forth in the then
currently effective prospectus and statement of additional
information of the Trust relating to the Fund, as amended from time
to time, under the Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the undersigned, being a Trustee of
the Trust, has hereunto set his hand this 20th day of November,
1995.
/s/ Norman R. Jordan
Trustee
For the period ended January 31, 1996 Exhibit 77I(b)
File Number 811-7630
PaineWebber Small Cap Growth Fund
The Fund has taken actions during the period covered by this report
in an attempt to conform the nomenclature used for its share classes
with the uniform nomenclature system suggested by the Investment
Company Institute.
Shares of the Fund outstanding prior to November 10, 1995, that had
been designated Class B shares were redesignated Class C shares as of
that date. The Fund continues to offer a class of shares having
characteristics substantially similar to those which were previously
designated Class B shares prior to November 10, 1995, but these shares
are now named Class C shares.
In addition, shares of the Fund outstanding prior to November 10,
1995, that had been designated Class C shares were redesignated Class Y
shares as of that date. The Fund continues to offer a class of shares having
characteristics substantially similar to those which were previously
designated Class C shares prior to November 10, 1995, but these shares are
now named Class Y shares.
On December 1, 1995, the Fund commenced offering a new class of
shares. These new shares carry the designation Class B shares and may be
subject to a contingent deferred sales charge if redeemed within a certain
number of years of purchase.
The current Prospectuses and Statements of Additional Information of
the Fund contain a complete description of the above referenced share
classes and are hereby incorporated by reference in response to this Item
77I of Form N-SAR as follows:
The Prospectus and Statement of Additional Information included in
the Registrant's Registration Statement on Form 497 filed with the Securities
and Exchange Commission through EDGAR on December 11, 1995,
(Accession No. : 0000950117-95-000494), is incorporated herein by reference
in response to this Sub-Item.
