55436 Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Notices

For more information, contact Mr.

Paul W. Harris, Project Manger, NonPower Reactors and Decommissioning

Project Directorate, Division of Reactor

Program Management, Office of Nuclear

Reactor Regulation, U.S. Nuclear

Regulatory Commission, Washington

DC, 20555–0001, telephone number at

(301) 415–1169.

Dated at Rockville, Maryland, this 17th day

of October 1997.

For the Nuclear Regulatory Commission.

Marvin M. Mendonca,

Acting Director Non-Power Reactors and

Decommissioning Project Directorate,

Division of Reactor Program Management

Office of Nuclear Reactor Regulation.

[FR Doc. 97–28262 Filed 10–23–97; 8:45 am]

BILLING CODE 7590–01–P

POSTAL SERVICE BOARD OF

GOVERNORS

Sunshine Act Meeting

TIMES AND DATES: 1:00 p.m., Monday,

November 3, 1997; 8:30 a.m., Tuesday,

November 4, 1997.

PLACE: Washington, D.C., at U.S. Postal

Service Headquarters, 475 L’Enfant

Plaza, S.W., in the Benjamin Franklin

Room.

STATUS: November 3 (Closed);

November 4 (Open).

MATTERS TO BE CONSIDERED:

Monday, November 3–1:00 p.m.

(Closed)

1. FY 1997 EVA Performance Awards.

2. Compensation issues.

Tuesday, November 4–8:30 a.m. (Open)

1. Minutes of the Previous Meeting,

October 6–7, 1997.

2. Remarks of the Postmaster General/

Chief Executive Officer.

3. Quarterly Report on Service

Performance.

4. Fiscal Year 1998 Financing Plan.

5. Capital Investments.

a. Associate Office Infrastructure,

Phase 2.

b. Church Street Station, New York,

Renovation Project, Phase 2.

6. Tentative Agenda for the December

8–9, 1997, meeting in Costa Mesa,

California.

CONTACT PERSON FOR MORE INFORMATION:

Thomas J. Koerber, Secretary of the

Board, U.S. Postal Service, 475 L’Enfant

Plaza, S.W., Washington, D.C. 20260–

1000. Telephone (202) 268–4800.

Thomas J. Koerber,

Secretary.

[FR Doc. 97–28433 Filed 10–22–97, 3:29 pm]

BILLING CODE 7710–12–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22861; 812–10656]

Emerald Funds; Notice of Application

October 20, 1997.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’).

ACTION: Notice of application under

section 17(b) of the Investment

Company Act of 1940 (the ‘‘Act’’) for an

exemption from section 17(a) of the Act.

SUMMARY OF APPLICATION: Applicant

Emerald Funds (the ‘‘Trust’’) seeks an

order to permit an in-kind redemption

of Trust shares held by an affiliated

person of the Trust.

FILING DATES: The application was filed

on May 12, 1997. Applicants have

agreed to file an amendment to the

application during the notice period, the

substance of which is included in this

notice.

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 14, 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 may request notification of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 5th

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

Applicant, 3435 Stelzer Road,

Columbus, Ohio 43219–3035.

FOR FURTHER INFORMATION CONTACT:

Joseph B. McDonald, Jr., Senior

Counsel, at (202) 942–0533, 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. The Trust, an open-end

management investment company

organized as a Massachusetts business

trust, currently offers fourteen

portfolios, including the Equity Fund

and the Small Capitalization Fund

(collectively, the ‘‘Funds’’). The board of

trustees of the Trust (the ‘‘Board’’) is

comprised of six trustees, three of whom

are not ‘‘interested persons’’ (as defined

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

‘‘Independent Trustees’’) of the Trust.

Barnett Capital Advisors, Inc.

(‘‘Barnett’’) is the Trust’s investment

adviser. Each of the Funds seeks longterm capital appreciation by investing

primarily in common stocks.

2. The Retirement Plan and Trust of

Barnett Banks, Inc., and Its Affiliates

(the ‘‘Affiliated Shareholder’’) is a

qualified retirement plan and trust

maintained by Barnett Banks, Inc. and

its affiliates. Barnett Bank N.A., a

wholly-owned subsidiary of Barnett

Banks, Inc., serves as trustee of the

Affiliated Shareholder. Assets of the

Affiliated Shareholder are held in

several investment accounts, each with

a separate investment objective. As of

April 1, 1997, two of the accounts of the

Affiliated Shareholder (the ‘‘Accounts’’)

owned beneficially 12.9% of the

outstanding shares of the Equity Fund

and 32.4% of the outstanding shares of

the Small Capitalization Fund.

3. Barnett Bank N.A., acting pursuant

to its fiduciary obligations under the

Employee Retirement Income Security

Act of 1974, as amended, has concluded

that the shares of the Funds owned by

the Affiliated Shareholder should be

redeemed and the proceeds placed in

the Accounts, which thereafter will be

separately managed by Barnett.

Consequently, the Affiliated

Shareholder, on behalf of the Accounts,

has advised the Trust that it expects to

redeem all of its shares of the Funds and

reinvest the proceeds in the Accounts.

4. The Funds’ prospectus and

statement of additional information

provide that shares may be redeemed at

the net asset value per share next

determined after receipt of a proper

redemption request. If, however, the

Board determines that conditions exist

which make payment of redemption

proceeds wholly in cash unwise or

undesirable, the Funds may satisfy all or

part of a redemption request by

delivering readily marketable portfolio

securities to a redeeming shareholder.

The Board, including all of the

Independent Trustees, has determined

that it would be in the best interests of

the Funds and their shareholders to
Federal Register / Vol. 62, No. 206 / Friday, October 24, 1997 / Notices 55437

redeem the shares of the Affiliated

Shareholder in-kind as described below.

5. Applicant proposes to redeem the

shares of the Affiliated Shareholder in

the form of a pro rata distribution of

each portfolio security held by the

Funds after excluding: (a) securities

which, if distributed, would be required

to be registered under the Securities Act

of 1933; and (b) certain portfolio assets

(such as futures and options contracts

and repurchase agreements) that,

although they may be liquid and

marketable, must be traded through the

marketplace or with the counterparty to

the transaction in order to effect a

change in beneficial ownership.

6. Securities to be distributed to the

Affiliated Shareholder through the inkind redemption will be further limited

to securities which are traded on a

public securities market or for which

quoted bid prices are available. Cash

will be paid for that portion of the

Fund’s assets represented by cash

equivalents (such as certificates of

deposit, commercial paper and

repurchase agreements) and other assets

which are not readily distributable

(including receivables and prepaid

expenses), net of all liabilities

(including accounts payable). In

addition, the Funds will distribute cash

in lieu of securities held in their

portfolios not amounting to round lots

(or which would not amount to round

lots if included in the in-kind

distribution), fractional shares and

accruals on such securities.

Applicant’s Legal Analysis

1. Section 17(a)(2) of the Act prohibits

affiliated persons of a registered

investment company from knowingly

purchasing any security from the

company. Section 2(a)(3)(A) of the Act

defines ‘‘affiliated person’’ of another

person to include any person owning

5% or more of the outstanding voting

securities of the other person. The

Affiliated Shareholder is an affiliated

person of each Fund under section

2(a)(3)(A) of the Act because it owns

beneficially in excess of 5% of each

Fund’s shares. In addition, the Affiliated

Shareholder may be deemed to be an

affiliated person of each Fund under

section 2(a)(3)(C) of the Act because the

Affiliated Shareholder and the Funds

may be deemed to be under the common

control of Barnett Bank, N.A., which

serves as trustee of the Affiliated

Shareholder and whose wholly-owned

subsidiary serves as investment adviser

of the Funds. Finally, the Affiliated

Shareholder may be deemed to be an

affiliated person of the Small

Capitalization Fund under section

2(a)(3)(C) of the Act because it owns

beneficially in excess of 25% of the

outstanding shares of that Fund. To the

extent that the proposed in-kind

redemptions would be considered to

involve the ‘‘purchase’’ of portfolio

securities (of which the Funds are not

the issuer) by the Affiliated

Shareholder, the proposed in-kind

redemptions would be prohibited by

section 17(a)(2) of the Act.

2. Section 17(b) of the Act provides

that the SEC shall exempt a proposed

transaction from section 17(a) if

evidence establishes that: (a) the terms

of the proposed transaction are

reasonable and fair and do not involve

overreaching; (b) the proposed

transaction is consistent with the policy

of each registered investment company

involved; and (c) the proposed

transaction is consistent with the

general purposes of the Act.

3. Applicant submits that the terms of

the proposed in-kind redemption by the

Affiliated Shareholder meet the

standards set forth in section 17(b).

Applicant believes that the terms of the

proposed in-kind redemption do not

involve overreaching on the part of any

person and are reasonable and fair to the

Funds, their shareholders and the

Affiliated Shareholder. The Affiliated

Shareholder will have no choice as to

the type of consideration to be received

in connection with its redemption

request, and neither the Adviser nor the

Affiliated Shareholder will have any

opportunity to select the specific

portfolio securities to be distributed. In

addition, the Funds will use an

objective, verifiable standard to value

any security to be distributed pursuant

to the proposed in-kind redemption. In

addition, the proposed in-kind

redemption is consistent with the

investment policies of the Funds, as set

forth in their prospectus, which

expressly discloses the Funds’ ability to

redeem shares in-kind. Finally,

applicant believes that the proposed inkind redemption is consistent with the

general purposes of the Act to protect

shareholders of the investment

companies from self-dealing on the part

of investment company affiliates to the

detriment of other shareholders because

the Affiliated Shareholder would not

receive any advantage not available to

other shareholders if the proposed inkind redemption is permitted.

Applicant’s Conditions

Applicant agrees that any order

granting the requested relief will be

subject to the following conditions:

1. The portfolio securities of the

Funds distributed to the Affiliated

Shareholder pursuant to the redemption

in-kind (the ‘‘In-Kind Securities’’) will

be limited to securities that are traded

on a public securities market or for

which quoted bid prices are available.

2. The In-Kind Securities will be

distributed by the Funds on a pro rata

basis after excluding: (a) securities

which, if distributed, would be required

to be registered under the Securities Act

of 1933; and (b) certain portfolio assets

(such as futures and options contracts

and repurchase agreements) that,

although they may be liquid and

marketable, must be traded through the

marketplace or with the counterparty to

the transaction in order to effect a

change in beneficial ownership. Cash

will be paid for that portion of the

Funds’ assets represented by cash

equivalents (such as certificates of

deposit, commercial paper, and

repurchase agreements) and other assets

which are not readily distributable

(including receivables and prepaid

expenses), net of all liabilities

(including accounts payable). In

addition, the Funds will distribute cash

in lieu of securities held in their

portfolios not amounting to round lots

(or which would not amount to round

lots if included in the in-kind

distribution), fractional shares, and

accruals on such securities.

3. The In-Kind Securities distributed

to an Affiliated Shareholder will be

valued in the same manner as they

would be valued for purposes of

computing the Funds’ net asset values,

which, in the case of securities traded

on a public securities market for which

quotations are available, is their last

reported sales price on the exchange on

which the securities are primarily

traded or at the last sales price on the

national securities market, or, if the

securities are not listed on an exchange

or the national securities market or if

there is no such reported price, the

average of the most recent bid and asked

prices (or, if no asked price is available,

the last quoted bid price).

4. The Funds will maintain and

preserve for a period of not less than six

years from the end of the fiscal year in

which a proposed in-kind redemption

occurs, the first two years in an easily

accessible place, a written record of

each such redemption setting forth a

description of each security distributed,

the terms of the distribution, and the

information or materials upon which

the valuation was made.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–28237 Filed 10–23–97; 8:45 am]

BILLING CODE 8010–01–M