Federal Register / Vol. 62, No. 202 / Monday, October 20, 1997 / Notices 54481

Dated: October 14, 1997.

Alan M. Ladwig,

Advisory Committee Management Officer,

National Aeronautics and Space

Administration.

[FR Doc. 97–27723 Filed 10–17–97; 8:45 am]

BILLING CODE 7510–01–M

NATIONAL CREDIT UNION

ADMINISTRATION

Sunshine Act Meetings

TIME AND DATE: 10:00 a.m., Wednesday,

October 22, 1997.

PLACE: Board Room, 7th Floor, Room

7047, 1775 Duke Street, Alexandria, VA

22314–3428.

STATUS: Open.

MATTERS TO BE CONSIDERED:

1. Request from a Federal Credit

Union to Convert to a Community

Charter.

2. Requests from Two (2) Federal

Credit Unions to Convert to Low-Income

Community Charters.

3. Request from a Credit Union to

Convert to Private Insurance.

4. Appeal from a Federal Credit Union

of the Regional Director’s Denial of a

Field of Membership Expansion

Request.

5. Delegations of Authority.

6. Request from a Federal Credit

Union to Merge and Convert Insurance.

7. Request from a Federal Credit

Union to Convert and Merge into a

Federal Mutual Savings Association.

8. Request from a Corporate Federal

Credit Union for a Field of Membership

Amendment.

9. Notice of Proposed Rulemaking:

Amendments to Part 792, Subpart A,

NCUA’s Rules and Regulations,

Procedures for Processing Freedom of

Information Act Requests for NCUA

Records.

10. Final Rule: Amendments to Part

792, Subpart C, and Section 792.4,

NCUA’s Rules and Regulations,

Production of Nonpublic Records and

Testimony of NCUA Employees in Legal

Proceedings.

11. Proposed Amendments to

Interpretative Ruling and Policy

Statement (IRPS) 94–1, Chartering

Manual.

12. Overhead Transfer Rate.

13. National Credit Union Share

Insurance Fund (NCUSIF) Dividend for

1997 and NCUSIF Insurance Premium

for 1998.

RECESS: 12:00 Noon.

TIME AND DATE: 1:00 p.m., Wednesday,

October 22, 1997.

PLACE: Board Room, 7th Floor, Room

7047, 1775 Duke Street, Alexandria, VA

22314–3428.

STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Two (2) Administrative Actions

under Sections 125, 205 and 206 of the

Federal Credit Union Act. Closed

pursuant to exemption (8).

2. Three (3) Administrative Actions

under Section 206 of the Federal Credit

Union Act. Closed pursuant to

exemptions (5), (7), (8) and (10).

3. One (1) Personnel Action. Closed

pursuant to exemptions (2) and (6).

FOR FURTHER INFORMATION CONTACT:

Becky Baker, Secretary of the Board,

Telephone (703) 518–6304.

Becky Baker,

Secretary of the Board.

[FR Doc. 97–27781 Filed 10–16–97; 1:10 pm]

BILLING CODE 7535–01–M

NATIONAL EDUCATION GOALS

PANEL

Notice of a Meeting

AGENCY: National Education Goals

Panel.

ACTION: Notice of meeting.

SUMMARY: This notice sets forth the date

and location of a forthcoming meeting of

the National Education Goals Panel.

This notice also describes the functions

of the Panel.

DATES AND TIMES: Wednesday, November

5, 1997 from 9:00 a.m. to 11:00 a.m.

ADDRESSES: Hyatt Regency Washington

on Capitol Hill, 400 New Jersey Avenue,

NW, Columbia Ballroom B, Washington,

DC 20001.

FOR FURTHER INFORMATION:

Ken Nelson, Executive Director, 1255

22nd Street, NW, Suite 502,

Washington, DC 20037. Telephone:

(202) 724–0015.

SUMMARY: National Education Goals

Panel was established to monitor,

measure and report state and national

progress toward achieving the eight

National Education Goals, and report to

the states and the Nation on that

progress.

AGENDA ITEMS: The meeting of the Panel

is open to the public. The first item on

the agenda is the release of the 1997

National Education Goals Report. The

theme of this year’s report is

‘‘Mathematics and Science Achievement

for the 21st Century.’’ The report

highlights student achievement in math

and science, with a special emphasis on

the Third International Math and

Science Study (TIMSS). It provides

national data on 26 indicators and state

data on 33 indicators for the eight

National Education Goals.

The second item on the agenda will

have the Panel receive and discuss the

policy recommendations of its Goals 3/

4/5 Standards Implementation Advisory

Group.

Dated: October 15, 1997.

Ken Nelson,

Executive Director, National Education Goals

Panel.

[FR Doc. 97–27717 Filed 10–17–97; 8:45 am]

BILLING CODE 4010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22855; File No. 812–10622]

Acacia National Life Insurance

Company, Inc., et al.

October 10, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’).

ACTION: Notice of Application for an

Order under Section 26(b) of the

Investment Company Act of 1940 (the

‘‘Act’’) approving proposed

substitutions of securities.

SUMMARY OF APPLICATION: Applicants

seek an order to permit the substitution

of shares of the Neuberger & Berman

Advisors Management Trust Limited

Maturity Bond Portfolio (‘‘N&B Bond

Portfolio’’) for shares of the Strong

Advantage Fund II (‘‘Strong

Advantage’’) and the substitution of

shares of Acacia Capital Corporation

Calvert Responsibly Invested Balanced

Portfolio (‘‘Calvert Balanced Portfolio’’)

for shares of the Strong Asset Allocation

Fund II (‘‘Strong Asset Allocation’’ and,

collectively with Strong Advantage, the

‘‘Strong Funds’’).

APPLICANTS: Acacia National Life

Insurance Company (‘‘Acacia

National’’), Acacia National Life

Insurance Company Variable Life

Separate Account I (‘‘Separate Account

I’’), Acacia National Life Insurance

Company Variable Annuity Separate

Account II (‘‘Separate Account II’’,

together with Separate Account I, the

‘‘Separate Accounts’’).

FILING DATES: The application was filed

on April 17, 1997, and amended on

September 25, 1997.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the Commission orders a

hearing. Interested persons may request

a hearing on the application by writing

to the Secretary of the SEC and serving
54482 Federal Register / Vol. 62, No. 202 / Monday, October 20, 1997 / Notices

the Applicants with a copy of the

request, in person or by mail. Hearing

requests must be received by the

Commission by 5:30 pm., on November

4, 1997, and accompanied by proof of

service on the Applicants in the form of

an affidavit or, for lawyers, a certificate

of service. Hearing requests should state

the nature of the writer’s interest, the

reason for the request and the issues

contested. Persons who wish to be

notified of a hearing may request

notification by writing to the Secretary

of the SEC.

ADDRESSES: Secretary, Securities and

Exchange Commission, 450 Fifth Street,

N.W., Washington, D.C. 20549.

Applicants, c/o Ellen Jane Abromson,

Esq., Acacia National Life Insurance

Company, 7315 Wisconsin Avenue,

Bethesda, Maryland 20814.

FOR FURTHER INFORMATION CONTACT:

Joyce Merrick Pickholz, Senior Counsel,

or Kevin M. Kirchoff, Branch Chief,

Office of Insurance Products, Division of

Investment Management, at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application is

available for a fee from the SEC’s Public

Reference Branch, 450 Fifth Street,

N.W., Washington D.C. (tel. (202) 942–

8090).

Applicants’ Representations

1. Acacia National is a stock life

insurance company organized under the

laws of Virginia. Acacia National is a

wholly owned subsidiary of Acacia

Mutual Life Insurance Company, a

mutual life insurance company

chartered by special act of Congress and

subject to the laws of the District of

Columbia. The Separate Accounts were

established by Acacia National under

the insurance laws of Virginia to fund,

in the case of Separate Account I,

variable life insurance policies and, in

the case of Separate Account II, variable

annuity policies (together, the

‘‘Policies’’). The Separate Accounts are

registered with the Commission under

the 1940 Act as unit investment trusts.

2. Each Separate Account currently

consisted of twenty-one sub-accounts.

Each sub-account invests its assets in

the shares of one of twenty-one

designated investment portfolios of

seven open-end management

investment companies. Strong

Advantage, Strong Asset Allocation,

N&B Bond Portfolio, and Calvert

Balanced Portfolio are four of the

twenty-one existing portfolios.

3. Strong Advantage is a series of

Strong Variable Insurance Funds, Inc.

(‘‘Strong Variable Funds’’) for which

Strong Capital Management, Inc.

(‘‘SCM’’) is the investment adviser.

Strong Advantage seeks to provide

current income with a low degree of

share-price fluctuation by investing in

ultra short term, investment grade debt

obligations; its average effective

portfolio maturity is normally less than

one year. Strong Advantage is designed

for investors who seek higher yields

than money market funds and who are

willing to accept some modest principal

fluctuation in order to achieve that

objective. Under normal market

conditions, at least 75% of its net assets

are invested in investment grade debt

obligations. Strong Advantage may also

invest up to 25% of its net assets in noninvestment grade debt obligations that

are rated in the fifth-highest rating

category or in unrated securities of

comparable quality.

4. Strong Asset Allocation is also a

series of Strong Variable Funds for

which SCM is the advisor. Strong Asset

Allocation seeks high total return

consistent with reasonable risk over the

long term by allocating its assets among

a diversified portfolio of equity

securities, bonds and short-term fixedincome securities with benchmark

allocations of 60% stock, 35% bonds

and 5% cash.

5. N&B Bond Portfolio is a portfolio of

the Neuberger & Berman Advisors

Management Trust. As a feeder fund in

a ‘‘master-feeder’’ arrangement, the fund

invests its assets in a corresponding

series, AMT Limited Maturity Bond

Investments (‘‘AMT Series’’), of

Advisors Management Trust, an openend management investment company

registered under the 1940 Act. The

investment objective of the N&B Bond

Portfolio and the AMT Series is to

provide the highest current income

consistent with low risk to principal

and liquidity and, secondarily, total

return. The AMT Series invests in shortto-intermediate term fixed and variable

debt securities and seeks to increase

income and preserve or enhance total

return by actively managing average

portfolio duration. The AMT Series

invests primarily in investment grade

securities but may invest up to 10% of

its pet assets, measured at the time of

investment, in debt securities rated

below investment grade or in unrated

securities determined by its adviser to

be of comparable quality.

6. The Calvert Balanced Portfolio, a

series of Acacia Capital Corporation, is

advised by Calvert Asset Management

Company, Inc. It seeks to achieve a total

return above the rate of inflation

through an actively managed portfolio

of common and preferred stocks, bonds,

and money market instruments. For its

fixed-income investments, the Calvert

Balanced Portfolio normally invests in

investment grade bonds but may invest

up to 20% of its assets in obligations

rated lower than B. No more than 10%

of assets may be invested in privately

placed instruments. Each investment of

the Calvert Balanced Portfolio is

selected with a concern for its social

impact.

7. On November 1, 1996, SCM

notified Acacia National that Strong

Variable Funds intended to cease

offering shares of the Strong Funds for

inclusion in variable polices due to the

small amount of assets in the two

portfolios and the corresponding

absence of economies of scale. New

allocations to the Strong Funds are no

longer permitted.

8. Acacia National proposes to

provide policyowners with the option to

transfer into any of the other portfolios

offered under the Policies. However,

because some policyowners will not

voluntarily transfer from the affected

sub-accounts, Acacia National proposes

to substitute shares of the N&B Bond

Portfolio for shares of Strong Advantage

and Calvert Balanced Portfolio shares

for shares of Strong Asset Allocation in

the sub-accounts.

9. The Policies give Acacia National

the right to eliminate or add subaccounts, combine two or more subaccounts, or substitute one or more new

underlying mutual funds or portfolios

for others in which one or more subaccounts are invested. These contractual

provisions are disclosed in the

prospectuses or statements of additional

information relating to the Policies.

10. Acacia National will schedule the

substitutions to occur as soon as

practicable following the issuance of an

exemptive order. As of the effective date

of the substitutions, Acacia National

will redeem shares of the Strong Funds.

Simultaneously, Acacia National will

use the proceeds of the redemptions to

purchase the appropriate number of

shares of N&B Bond Portfolio and

Calvert Balanced Portfolio. The

substitution will take place at the

relative net asset values of the portfolios

with no change in the amount of any

policyowner’s account values.

11. Acacia National will pay all

expenses and transaction costs of the

substitutions. SCM may reimburse

Acacia National for some or all of those

costs but none will be borne by

policyowners. Affected policyowners

will not incur any fees or charges as a

result of the substitutions, nor will the

rights or obligations of Acacia National

under the Policies be altered in any

way.
Federal Register / Vol. 62, No. 202 / Monday, October 20, 1997 / Notices 54483

12. The substitutions were first

described to policyowners in a

prospectus supplement dated November

25, 1996, and again in correspondence

to policyowners dated May 1, 1997, or

May 16, 1997, depending on the state in

which the Policy was issued. The

prospectus supplement advised

policyowners that the Strong Funds

would cease offering shares under the

Policies effective May 1, 1997, and,

consequently, deposits would no longer

be accepted into the Strong Funds after

that time. Policyowners were also

notified that if the substitutions were

approved by the SEC, the substitutions

would be effected at the net asset value

of the relevant portfolios, that

policyowners would be given the

opportunity to transfer into any other

available portfolio, and that no costs for

any substitution would be borne by

policyowners.

13. Within five days after the

substitutions, Acacia National will send

to policyowners written notice stating

that the substitutions have occurred.

Acacia National will include in the

mailing a supplement to the prospectus

which discloses the completion of the

substitutions. Affected policyowners

will be advised that for a period of 30

days from the mailing of the notice, they

may transfer all assets, as substituted, to

any other available sub-account without

limitation and without charge, and no

such transfer will be counted as a

transfer under any contractual provision

that may limit the number of transfer in

any year. No transfer charge is currently

in effect and none will be imposed prior

to the expiration of the 30 day period.

Following the substitutions,

policyowners will be afforded the same

rights, including surrender and other

transfer rights with regard to amounts

invested under the Policies as they

currently have. Thus policyowners may

choose simply to withdraw amounts

credited to them following the

substitutions under the conditions that

currently exists, subject to any

applicable surrender charge.

14. The investment advisory fee for

Strong Advantage is, on an annual basis,

.60% of the average daily net asset value

of the portfolio. As a result of an

expense limitation agreement, the

expense ratio for Strong Advantage for

the year ending December 31, 1996, was

2.00%. in the absence of this agreement,

the expense ratio would have been

2.85%.

15. The investment advisory fee for

Strong Asset Allocation is, on an annual

basis, .85% of the average daily net asset

value of the portfolio up to a value of

$35 million in assets and .80% of the

portfolio’s assets in excess of $35

million. As a result of an expense

limitation agreement, the expense ratio

for Strong Asset Allocation for the year

ending December 31, 1996, was 2.00%.

In the absence of this agreement, the

expense ratio would have been 4.29%.

16. The investment advisory fee for

the N&B Bond Portfolio equals a

percentage of the average daily net asset

value of the portfolio, on an annual

basis, as follows: .65% for the first $500

million; .615% for the next $500

million; .60% for the next $500 million;

.575 for the next $500 million; and .55%

thereafter. The expense ratio for the

N&B Bond Portfolio for the year ending

December 31, 1996, was .80%.

17. The investment advisory fee for

the Calvert Balanced Portfolio is, on an

annual basis, .70% of the average daily

net asset value of the portfolio. Its

expense ratio for the year ending

December 31, 1996, was .81%.

Applicants’ Legal Analysis

1. Section 26(b) of the 1940 Act

provides in pertinent part that ‘‘[i]t shall

be unlawful for any depositor or trustee

of a registered unit investment trust

holding the security of a single issuer to

substitute another security for such

security unless the Commission shall

have approved such substitution.’’

Section 26(b) provides that the

Commission will approve a substitution

if it is consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act. The purpose of Section

26(b) is to protect the expectation of

investors in a unit investment trust that

the unit investment trust will

accumulate the shares of a particular

issuer, and to prevent unscrutinized

substitutions which might, in effect,

force shareholders dissatisfied with the

substituted security to redeem their

shares, thereby incurring either a loss of

the sales load deducted from initial

proceeds, an additional sales load upon

reinvestment of the redemption

proceeds, or both. Section 26(b) affords

protection to investors by preventing a

depositor or trustee of a unit investment

trust holding shares of one issuer from

substituting for those shares the shares

of another issuer, unless the

Commission approves that substitution.

2. Applicants submit that the

purposes, terms and conditions of the

substitutions are consistent with the

principals and purposes of Section 26(b)

and do not entail any of the abuses that

Section 26(b) is designed to prevent.

Applicants believe that the N&B Bond

and Calvert Balanced portfolios will

better serve policyowner interests

because the expenses of each portfolio

have been significantly lower than, and

the performance of each has been

essentially equivalent to or better than,

the expenses and performance of the

funds to be eliminated. Also, Applicants

submit that Policyowners may transfer

their assets to any of seventeen

additional portfolios currently available

under the Policies.

3. Applicants believe that Calvert

Balanced is an appropriate replacement

for Strong Asset Allocation

notwithstanding the fact that Calvert

Balanced seeks to invest in

organizations that: (a) Deliver safe

products and services; (b) are managed

with participation throughout the

organization in defining and achieving

objectives; (c) negotiate fairly with their

workers and provide a supportive

working environment; and (d) foster

awareness of a commitment to human

goals within the organization and the

word. Applicants submit that each

portfolio invests a percentage of its

assets in stocks, bonds and money

market instruments. Also, Calvert

Balanced can be expected to outperform

Strong Asset Allocation, were the latter

to remain in existence, because Calvert

Balanced has much lower expenses than

Strong Asset Allocation, and, as Strong

Asset Allocation’s assets continue to

decrease and its expenses remain the

same, its performance will necessarily

decline. Further, Applicant’s assert that

even though Strong Asset Allocation has

slightly outperformed Calvert Balanced

since each portfolio’s inception, Calvert

Balanced has gone through many market

cycles during its more than ten years of

existence whereas Strong Asset

Allocation, which commenced

operations in late 1995, has a briefer

history characterized by a rising market.

For the past year, the two Portfolios’

total returns were identical (20.67%).

4. Applicants state that Acacia

National has reserved the right to

substitute securities held by the SubAccounts of the Separate Accounts and

this right is disclosed in the

prospectuses or statements of additional

information for the Separate Accounts.

5. Finally, Applicants represent that

the substitutions will not result in the

type of costly forced redemption that

Section 26(b) was intended to guard

against and, for the following reasons,

are consistent with the protection of

investors and the purposes fairly

intended by the Act:

a. The N&B Bond Portfolio and

Calvert Balanced Portfolio have

objectives, policies and restrictions that

are substantially similar to the

objectives, policies and restrictions of

the funds being replaced.

b. The expense ratio of the N&B Bond

and Calvert Balanced Portfolios are
54484 Federal Register / Vol. 62, No. 202 / Monday, October 20, 1997 / Notices

1Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the

purpose of making investments in securities

described in sections 55(a)(1) through 55(a)(3) of the

Act and makes available significant managerial

assistance with respect to the issuers of such

securities.

significantly lower than those of the

Strong funds.

c. The performance of the N&B Bond

and Calvert Balanced Portfolios has

been essentially equivalent to or better

than the performance of the portfolios

that will be eliminated.

d. The substitutions will, in all cases,

be at the net asset value of the

respective portfolios without the

imposition of any transfer or similar

charge.

e. The costs of the substitutions will

be borne by Acacia National and SCM

and will not be borne by policyowners.

No charges will be assessed to effect the

substitutions.

f. Within 5 days after the

substitutions, Acacia National will send

to policyowners written notice of the

substitutions that identifies the shares

that were substituted and discloses the

shares which replaced them. Included

in the mailing will be a supplement to

the prospectus that discloses

completion of the substitutions.

g. For 30 days following the mailing

of the notice of substitutions,

policyowners may transfer substituted

assets without any charge. No such

transfer will be counted as a transfer

under any contractual provision which

limits the number of transfers in any

year.

h. The substitutions will in no way

alter the insurance benefits to

policyholders or the contractual

obligations of Acacia National.

i. The substitutions will in no way

alter the tax benefits to policyowners.

Counsel for Acacia National has advised

that the substitutions will not give rise

to any tax consequences to the

policyowners.

Applicants’ Conclusions

Applicants assert that, for the reasons

and upon the facts set forth in the

application, the requested order

approving the proposed substitution

meets the standards set forth in Section

26(b) of the 1940 Act and should be

granted.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–27697 Filed 10–17–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22853; 812–10574]

Equus II Incorporated; Notice of

Application

October 10, 1997.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of application for an

order under section 61(a)(3)(B) of the

Investment Company Act of 1940 (the

‘‘Act’’).

SUMMARY OF APPLICATION: Applicant

Equus II Incorporated seeks an order

approving its 1997 Stock Incentive Plan

(the ‘‘Plan’’) for certain of its directors,

and the grant of certain stock options

under the Plan.

FILING DATES: The application was filed

on March 11, 1997. Applicant has

agreed to file an amendment, the

substance of which is incorporated in

this notice, during the notice period.

HEARING OR NOTIFICATION OF HEARING: An

order granting the application will be

issued unless the SEC orders a hearing.

Interested persons may request a

hearing by writing to the SEC’s

Secretary and serving applicant with a

copy of the request, personally or by

mail. Hearing requests should be

received by the SEC by 5:30 p.m. on

November 3, 1997, and should be

accompanied by proof of service on

applicant, in the form of an affidavit or,

for lawyers, a certificate of service.

Hearing requests should state the nature

of the writer’s interest, the reason for the

request, and the issues contested.

Persons who wish to be notified of a

hearing may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 5th

Street, N.W., Washington, D.C. 20549.

Applicant, 2929 Allen Parkway, Suite

2500, Houston, Texas 77019.

FOR FURTHER INFORMATION CONTACT:

Lawrence W. Pisto, Senior Counsel, at

(202) 942–0527, or Christine Y.

Greenlees, Branch Chief, at (202) 942–

0564 (Division of Investment

Management, Office of Investment

Company Regulation).

SUPPLEMENTARY INFORMATION: The

following is a summary of the

application. The complete application

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 5th Street,

N.W., Washington, D.C. 20549 (tel. (202)

942–8090).

Applicant’s Representations

1. Applicant is a business

development company (‘‘BDC’’) within

the meaning of section 2(a)(48) of the

Act.1 Applicant requests an order

pursuant to section 61(a)(3)(B) of the

Act approving the Plan as it applies to

each director of the applicant who is

neither an officer nor an employee of

the applicant (‘‘Non-employee

Director’’) and to each new Nonemployee Director who may be elected

in the future to applicant’s board of

directors. The order also would approve

the automatic grant of options, pursuant

to the Plan, to purchase shares of

applicant’s common stock to each

current and future Non-employee

Director.

2. Applicant’s board of directors (the

‘‘Board’’) consists of eight members.

Five members of the Board are persons

who are not ‘‘interested persons’’ (as

defined in section 2(a)(19) of the Act) of

the applicant. The Plan was approved

by the Board on February 7, 1997, and

by the applicant’s shareholders on April

9, 1997, at a special meeting of

shareholders. Officers, employees, and

directors of the applicant are eligible to

participate in the Plan. Applicant seeks

approval of the Plan as it applies to

Non-employee Directors. On May 15,

1997, the Board implemented part of the

Plan. The portion of the Plan applicable

to Non-employee Directors will not be

implemented until an order is received

from the Commission approving that

portion of the Plan.

3. Each Non-employee Director of the

applicant receives an annual director’s

fee of $20,000, a fee of $2,000 for each

meeting of the Board attended in

person, a fee of $1,000 for participation

in each telephonic meeting and for each

committee meeting attended, and

reimbursement of all out-of-pocket

expenses relating to attendance at

meetings.

4. Equus Capital Management

Corporation (‘‘ECMC’’) is an investment

adviser registered under the Investment

Advisers Act of 1940 (the ‘‘Advisers

Act’’) and serves as the applicant’s

management company. ECMC receives

no compensation from the applicant

under section 205(1) of the Advisers

Act. Other than stock options issued to

officers of the applicant under the Plan,

the applicant does not currently have

outstanding any warrants, options or

rights to purchase its voting securities.

5. The Plan provides that each Nonemployee Director serving on the Board

as of the later of the date of approval of