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Global Small Cap Fund Continues to Ignore Deep Discount Proxy

A proposal to merge the open-ended Global Small Cap Fund of New York with the open-ended PaineWebber Global Equity Fund, won approval Jan. 14, despite efforts by shareholder activists to delay the vote until their own opposing proxy was considered.

Deep Discount Advisors of Asheville, N.C. filed the opposing proxy seeking to have a new slate of directors elected to the fund, which has been managed by Mitchell Hutchins Asset Management of New York. Ron Olin, chairman and CEO of Deep Discount and a fund director, succeeded in having a Dec. 30 special meeting of the fund adjourned because the fund would not allow the opposing proxy.

But, when the meeting was reconvened on Jan. 14, shareholders voted in favor of the fund's proposal to merge it into the PaineWebber Global Equity Fund, the fund announced. But shareholders were still not allowed to vote on the opposing proxy, said Ralph Bradshaw, Deep Discount's secretary. Deep Discount believes that the fund's unwillingness to hold the proxy is a violation of its by-laws.

At the special meeting, over 67 percent of the fund's shares were voted in favor of the merger proposal, according to PaineWebber. The reorganization is expected to take place Jan. 28, the company said.

Deep Discount is not taking any further action now to have its opposing proxy considered, Bradshaw said.