Federal Register / Vol. 62, No. 232 / Wednesday, December 3, 1997 / Notices 63993

and received for these shares by any

other shareholder.

10. Section 17(d) and rule 17d–1

prohibit an affiliated person of a

registered investment company, acting

as principal, from participating in any

joint arrangement with the investment

company unless the SEC has issued an

order authorizing the arrangement. In

determining whether to grant an

exemption under rule 17d–1, the SEC

considers whether the investment

company’s participation in the joint

enterprise is consistent with the

provisions, policies and purposes of the

Act, and the extent to which such

participation is on a basis different

from, or less advantageous than, that of

other participants. Applicants state that

each Investment Fund, by purchasing

shares of the Money Market Funds, each

Investment Adviser, by managing the

assets of the Investing Funds, and each

of the Money Market Funds, by selling

shares to the Investing Funds, could be

deemed to be participants in a joint

enterprise. Applicants assert that

investments by the Investing Funds in

shares of the Money Market Funds will

be on the same basis and will be

indistinguishable from that of any other

participant or shareholder and that the

transactions will be consistent with the

Act. In addition, applicants state that

the proposed transactions may result in

cost savings for the Investing Funds.

Applicants’ Conditions

Applicants agree that the order

granting the requested relief will be

subject to the following conditions:

1. Shares of the Money Market Funds

sold to and redeemed from the Investing

Funds will not be subject to a sales load,

redemption fee, distribution fee under a

plan adopted in accordance with rule

12b–1, or service fee (as defined in rule

2830(b)(9) of the National Association of

Securities Dealer’s Rules of Conduct).

2. No Money Market Fund will

acquire securities of any other

investment company in excess of the

limits contained in section 12(d)(1) of

the Act.

3. Each of the Investing Funds will be

permitted to invest Uninvested Cash in,

and hold shares of, a Money Market

Fund only to the extent that the

Investing Fund’s aggregate investment

in all Money Market Funds taken as a

group does not exceed 25% of the

Investing Fund’s total assets.

4. Each Fund shall be advised by U.S.

Bank or a person controlling, controlled

by, or under common control with U.S.

Bank.

5. Investment by an Investing Fund in

shares of a Money Market Fund will be

consistent with each Investing Fund’s

respective investment restrictions and

policies as set forth in its prospectuses

and statements of additional

information.

6. The applicants will cause the

Investment Advisers, in their capacities

as advisers for the Money Market Funds,

to remit to the respective Investing

Fund, or waive, an amount equal to all

investment advisory fees received by

them under their respective advisory

agreements with the Money Market

Funds to the extent such fees are based

upon the Investing Fund’s assets

invested in shares of the Money Market

Funds. Any of these fees remitted or

waived will not be subject to

recoupment by the Funds’ Investment

Advisers at a later date.

7. FASF may continue to rely on the

Funds of Funds Order, subject to

compliance with the conditions it

contains, except for conditions 3 and 6,

which are deleted. Condition 2 to the

Fund of Funds Order is amended to

read as follows: ‘‘No Underlying

Portfolio will acquire securities of any

other investment company in excess of

the limits contained in section

12(d)(1)(A) of the Act, except to the

extent that the Underlying Portfolio

other than a Money Market Fund

acquires securities of another

investment company under exemptive

relief from the Commission permitting

the Underlying Portfolio to purchase

securities of an affiliated money market

fund for short-term cash management

purposes.’’

For the SEC, by the Division of Investment

Management, under delegated authority.

Margareet H. McFarland,

Deputy Secretary.

[FR Doc. 97–31619 Filed 12–2–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22906; File No. 812–10752]

Fortis Benefits Insurance Company, et

al.; Notice of Application

November 24, 1997.

AGENCY: Securities and Exchange

Commission (the ‘‘SEC’’ or the

‘‘Commission’’).

ACTION: Notice of Application for an

order pursuant to Section 26(b) of the

Investment Company Act of 1940 (the

‘‘1940 Act’’).

SUMMARY OF APPLICATION: Applicants

seek an order approving the substitution

of shares of the Limited Maturity Bond

Portfolio of the Neuberger & Berman

Advisers Management Trust (‘‘N & B

Bond Portfolio’’) for shares of the Strong

Advantage Fund II series (‘‘Strong

Advantage Portfolio’’) of the Strong

Variable Insurance Funds, Inc. (‘‘Strong

Funds’’) and the substitution of shares

of the Federated Fund for U.S.

Government Securities II portfolio of

Federated Insurance Series (‘‘Federated

Government Portfolio’’) for shares of the

Strong Government Securities Fund II

series of the Strong Funds (‘‘Strong

Government Portfolio’’).

Applicants: Fortis Benefits Insurance

Company (‘‘Fortis Benefits’’) and

Variable Account D of Fortis Benefits

Insurance Company (the ‘‘Variable

Account’’).

Filing Date: The application was filed

on August 11, 1997, and amended on

October 31, 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 this application by writing

to the Secretary of the SEC and serving

Applicants with a copy of the request,

in person or by mail. Hearing requests

must be received by the Commission by

5:30 p.m. on December 19, 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 requester’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, SEC, 450 Fifth

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

Applicants, 500 Bielenberg Drive,

Woodbury, Minnesota 55125.

FOR FURTHER INFORMATION CONTACT:

Susan M. Olson, Attorney, or Kevin M.

Kirchoff, Branch Chief, Office of

Insurance Products, Division of

Investment Management, at (202) 942–

0670.

SUPPLEMENTARY INFORMATION: Following

is a summary of the application. The

complete application is available for a

fee from the Public Reference Branch of

the SEC, 450 Fifth Street, N.W.,

Washington, D.C. 20549 (tel. (202) 942–

8090).

Applicants’ Representations

1. Fortis Benefits, a stock life

insurance company organized under the

laws of Minnesota, is qualified to sell

life insurance contracts in the District of

Columbia and all states except New

York. Fortis Benefits is an indirect

wholly-owned subsidiary of Fortis, Inc.,

which is owned, indirectly, 50% by

Fortis AMEV and 50% by Fortis AG.

Fortis AMEV is a diversified financial
63994 Federal Register / Vol. 62, No. 232 / Wednesday, December 3, 1997 / Notices

services company headquartered in

Utrecht, the Netherlands. Fortis AG is a

diversified financial services company

headquartered in Brussels, Belgium.

Fortis AMEV and Fortis AG have

merged their operating companies under

the trade name of Fortis. Fortis Benefits

is the depositor and sponsor of the

Variable Account.

2. The Variable Account is a

segregated investment account of Fortis

Benefits and was established under the

insurance laws of Minnesota. The

Variable Account is registered with the

Commission as a unit investment trust

under the 1940 Act. The Variable

Account issues flexible premium

deferred combination variable and fixed

annuity contracts on either a group basis

or as individual contracts (‘‘Contracts’’,

and owners of which are referred to as

‘‘Holders’’). Interests in the Variable

Account are offered through the sale of

the Contracts and are registered under

the Securities Act of 1933 (‘‘1933 Act’’).

The Contracts are structured to allow

Holders to elect an interest

accumulation option through a fixed

account (the ‘‘Fixed Account’’) or a

variable return accumulation option

through the Variable Account, or a

combination of these two options.

3. The Variable Account is divided

into subaccounts (‘‘Subaccounts’’).

Assets held in each Subaccount

pursuant to the Contracts are invested

exclusively in one of the funds or

portfolios available for investment. The

portfolios are registered investment

companies available for purchase only

as a funding vehicle for variable life

insurance and variable annuities issued

by Fortis Benefits and other insurance

companies (the ‘‘Portfolios’’). For

Holders who were issued Contracts on

or after December 1, 1996, there are 22

Subaccounts available for investment.

The Strong Advantage Portfolio and the

Strong Government Portfolio are not

available for investment to Holders

issued Contracts on or after December 1,

1996. For Holders issued Contracts

before December 1, 1996, there are 30

Subaccounts available for investment,

including the Strong Advantage

Portfolio and the Strong Government

Portfolio.

4. Strong Funds is registered under

the 1940 Act as a diversified, open-end

management investment company and

currently issues seven series of shares,

each of which is a separate open-end

diversified investment management

company. Each series of the Strong

Funds is managed by Strong Capital

Management.

5. Neuberger & Berman Advisers

Management Trust is registered under

the 1940 Act as a diversified, open-end

management investment company and

currently is comprised of seven

portfolios, each of which is a separate

open-end diversified management

investment company. Each portfolio

invests all of its net assets in its

corresponding series of Advisers

Managers Trust, an open end

management investment company, in

each case receiving a beneficial interest

in that series. The corresponding series

for the N & B Bond Portfolio is AMT

Limited Maturity Bond Investment.

AMT Limited Maturity Bond

Investments invests in securities in

accordance with an investment

objective, policies and limitations

identical to those of the N & B Bond

Portfolio. The investment performance

of the N & B Bond Portfolio will directly

correspond with the investment

performance of AMT Limited Maturity

Bond Investments. This master/feeder

fund structure is different from that of

many investment companies which

directly acquire and manage their own

portfolio of securities. AMT Limited

Maturity Bond Investment is managed

by Neuberger & Berman Management

Incorporated.

6. Federated Insurance Series is

registered under the 1940 Act as a

diversified management investment

company. The Federated Government

Portfolio is a diversified investment

portfolio of the Federated Insurance

Series.

7. Applicants are seeking to substitute

shares of the N & B Bond Portfolio for

shares of the Strong Advantage Portfolio

and to substitute shares of the Federated

Government Portfolio for shares of the

Strong Government Portfolio.

8. Applicants represent that as of June

30, 1997, the assets attributable to

Holders of the Subaccounts holding

shares of the Strong Advantage Portfolio

and the Strong Government Portfolio

were relatively small, $152,580 and

$96,408, respectively.

9. Applicants represent that as of June

30, 1997, the total net asset value of the

Strong Advantage Portfolio and Strong

Government Portfolio were relatively

small, $192,723 and $96,453 ,

respectively.

10. Applicants represent that there

has been a decrease in net asset value

during 1997, as of June 30, 1997. From

December 31, 1996 to June 30, 1997, the

Strong Advantage Portfolio has

decreased in size from $587,615 to

$192,723 and the Strong Government

Portfolio has decreased from $199,328

to $96,453.

11. The investment objective of the

Strong Advantage Portfolio is to seek

current income with a very low degree

of share price fluctuation, which is

pursued by investing in very short term,

investment grade debt obligations. The

investment objective of the Strong

Government Portfolio is to seek total

return by investing for a high level of

current income with a moderate degree

of share price fluctuation, which is

pursued by normally investing at least

80% of total assets in U.S. government

securities.

12. The investment objective of the N

& B Bond Portfolio is to seek the highest

current income consistent with low risk

to principal and liquidity and

secondarily, total return. The

investment objective of the N & B Bond

Portfolio is pursued by investing in a

diversified portfolio of short to

intermediate term U.S. government and

agency securities and debt securities

issued by financial institutions,

corporations and others, primarily

investment grade. The investment

objective of the Federated Government

Portfolio is to seek current income,

which is pursued by normally investing

at least 65% of total assets in securities

issued or guaranteed as to payment of

principal and interest by the U.S.

government, its agencies or

instrumentalities.

13. For several reasons, Applicants

believe that it is not in the best interests

of the Holders to continue to utilize the

Strong Advantage Portfolio and Strong

Government Portfolio (collectively, the

‘‘Replaced Portfolios’’) as investment

options and further believe that the

Applicants can better serve the interest

of the Holders by utilizing investment

alternative that may be better suited to

their needs and interests.

14. Applicants represent that the

proposed substitution of shares of the N

& B Bond Portfolio for shares of the

Strong Advantage Portfolio and the

proposed substitution of shares of the

Federated Government Portfolio for

shares of the Strong Government

Portfolio involve the substitution of

Portfolios whose objectives, policies and

restrictions are sufficiently similar to

those of the Replaced Portfolios so as to

continue fulfilling Holders’ objectives

and risk expectations.

15. Applicants represent that the

performance of each Portfolio in which

Holders will be invested following the

proposed substituon is comparable or

superior to the investment performance

of the replaced Portfolios. The following

chart sets forth the comparative average

annual total returns for the periods

listed below for the Replaced Portfolios

and the N & B Bond Portfolio and the

Federated Government Portfolio.
Federal Register / Vol. 62, No. 232 / Wednesday, December 3, 1997 / Notices 63995

AVERAGE ANNUAL TOTAL RETURN FOR SPECIFIED PERIODS

[In percent]

Portfolios For 6 months,

ending 6/30/97

For year ending 12/30/96

For five years,

ending

12/30/96

Since

inception**

through

12/30/96

Strong Advantage Portfolio .............................................................................. *2.30 4.92 N/A 5.24

N & B Bond Portfolio ........................................................................................ *2.96 4.31 5.32 N/A

Strong Government Portfolio ............................................................................ *2.60 N/A N/A ¥0.41

Federated Government Portfolio ...................................................................... *3.01 4.20 N/A 5.62

* Not Annualized.

**Strong Advantage Portfolio, inception date 11/30/95. Strong Government Portfolio, inception date 1/31/96. Federated Government Portfolio,

inception date 3/28/94.

16. Applicants represent that the ratio

of expenses to net assets for the

Subaccounts in which Holders will be

invested after the substitution will be no

greater than the ratio of expenses to net

assets, after reimbursements and

waivers, for the Subaccounts proposed

to be eliminated. Therefore Holders will

not be exposed to higher expenses

following the substitution. The

investment advisers to the Strong

Advantage Portfolio, the Strong

Government Portfolio and the Federated

Government Portfolio have

arrangements under which each may

voluntarily waive a portion of their fees

or reimburse the Portfolios for certain

operating expenses. The investment

adviser to the N & B Bond Portfolio has

contractually agreed, subject to

termination on 60 days prior written

notice, to limit certain of the N & B

Bond Portfolio’s operating expenses by

reimbursing certain expenses that

exceed 1% of the average daily net asset

value of the N & B Bond Portfolio. The

following chart summarizes the ratio of

expenses to net assets for the Portfolios

for the year ended December 31, 1996

before and after reimbursements and

waivers.

RATIO OF EXPENSES TO NET ASSETS

FOR THE YEAR ENDED DECEMBER

31, 1996

[In percent]

Portfolio

Total expenses

after reimbursements

and waivers

Total expenses

before reimbursements

and waivers

Strong Advantage

Portfolio ................. 2.00 2.87

N & B Bond Portfolio 0.78 0.78

Strong Government

Portfolio ................. *1.70 *3.90

Federated Government Portfolio ........ 0.80 1.81

* Calculated on an annualized basis (commenced operations on January 31, 1996).

17. Applicant states that the small

amount of assets attributable to Holders

of the Subaccounts holding shares of the

Replaced Portfolios, the relatively small

total net asset values of the Replaced

Portfolios, the relatively small overall

size of the Replaced Portfolios with the

decrease in net asset value during the

first 6 months of 1997 and the fact that

the Replaced Portfolios are not available

as investment options to Holders of

Contracts issued after December 1, 1996,

will tend to strain the ability of the

Replaced Portfolios to maintain an

acceptable expense ratio compared to

the larger N & B Bond Portfolio and the

Federated Government Portfolio

(collectively, the ‘‘Substitute

Portfolios’’). Accordingly, the proposed

substitution is expected to confer

economic benefits to Holders by virtue

of the enhanced asset size and the

reduced expense ratios of the Substitute

Portfolios.

18. The comparative total net assets as

of June 30, 1997 were $252,284,067 for

the N & B Bond Portfolio, compared to

$192,723 for the Strong Advantage

Portfolio, and $44,369,652 for the

Federated Government Portfolio,

compared to $96,453 for the Strong

Government Portfolio.

19. Applicants state that since the N

& B Bond Portfolio and the Federated

Government Portfolio are available for

investment under the Contracts, all of

the affected Holders have received a

current prospectus relating to the N & B

Bond Portfolio and the Federated

Government Portfolio.

20. Applicants state that notice will

be sent to Holders 30 days prior to the

proposed substitution which informs

them that Fortis Benefits has filed an

application for an order allowing

Applicants to undertake the substitution

described in their application and that

they may elect at any time prior to the

close of business on the closing date of

the transactions to transfer their interest

in either or both of the two current

Subaccounts to any other Subaccount or

to the Fixed Account, without charge.

The notice will also inform Holders of

the approximate date of the substitution.

Once the substitution is completed, a

confirmation will be mailed to the

Holders reflecting the transfer of the

Contract value from the Subaccount

investing in the Strong Advantage

Portfolio to the Subaccount investing in

the N & B Bond Portfolio and/or the

transfer of Contract value from the

Subaccount investing in the Strong

Government Portfolio to the Subaccount

investing in the Federated Government

Portfolio. The confirmation will be sent

within 5 days of the substitution.

21. Applicants represent that the

substitution will be effected by

redeeming all shares held by the

Variable Account in the Strong

Advantage Portfolio and the Strong

Government Portfolio and an equivalent

purchase of shares in the N & B Bond

Portfolio and the Federated Government

Portfolio, respectively, at net asset value

on the same date. The values under each

Contract will be identical immediately

before and after the transactions. All

administrative and other costs of the

transactions will be borne by Fortis

Benefits. There will be no tax

consequences to Holders and no adverse

tax consequences to the Variable

Account or Fortis Benefits relating to

the transactions. The proposed

substitution will not be counted as a

transfer for the purpose of any

restrictions on the number of transfers

that may now or in the future apply to

Holders. The proposed substitution will

not alter the insurance benefits or other

rights or benefits of Holders or the

contractual obligations of Fortis

Benefits.

Applicants’ Legal Analysis

1. Section 26(b) 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) of the 1940
63996 Federal Register / Vol. 62, No. 232 / Wednesday, December 3, 1997 / Notices

1CSW also has numerous nonutility subsidiaries,

including CSW Energy, Inc., which develops and

operates independent power and cogeneration

projects; CSW International, Inc., which pursues

investments in energy ventures internationally, and

which, indirectly, owns all the outstanding share

capital of SEEBOARD p.l.c., one of 12 regional

electricity companies in the United Kingdom; CSW

Credit, Inc., which purchases the accounts

receivable of the Operating Companies and certain

non-affiliated electric utilities; CSW

Communications, Inc., which provides

communication services to the Operating

Companies and certain non-affiliates; CSW Leasing,

Inc., which invests in leveraged leases; EnerShop,

Inc., which provides energy management services;

and CSW Services, which performs, at cost, various

accounting, engineering, tax, legal, financial

electronic data processing, centralized economic

dispatching of electric power and other services to

CSW and its subsidiaries.

2As of June 30, 1997 there were 212,235,310

shares of Common Stock outstanding.

3The services of CSW Services, as Rights Agent,

will be provided at cost. CSW expects that such

charges, if any, will be de minimis. As Rights Agent,

CSW Services practically has no active duties

unless the Rights become, if ever, exercisable, at

which time the Rights Agent performs or causes to

be performed services similar to a stock transfer

agent. CSW Services is the transfer agent for the

Common Stock.

4The Purchase price payable, and the number of

shares of Common Stock (or other securities or

property, as the case may be) issuable upon exercise

of the Rights are subject to adjustment from time to

time to prevent dilution. Prior to the date on which

the Rights become exercisable, the Board may make

such equitable adjustments as it deems appropriate

in the circumstances in lieu of any adjustment

otherwise required by the foregoing. No adjustment

in the Purchase Price will be required until the time

at which cumulative adjustments require an

adjustment of at least 1% in the Purchase Price. No

fractional shares of Common Stock will be issued

and, in lieu thereof, a cash payment will be made

based on the market price of the Common Stock on

the last trading day prior to the date of exercise.

Act also provides that the Commission

shall issue an order approving such

substitution if the evidence establishes

that the substitution is consistent with

the protection of investors and the

purposes fairly intended by the policies

and provisions of the 1940 Act.

2. Applicants request an order

pursuant to Section 26(b) of the 1940

Act approving the substitution of the

Replaced Portfolios with the Substitute

Portfolios.

3. The Contracts provide that Fortis

Benefits retains the right to make certain

changes, if, in its judgment, they would

best serve the interests of the Holders or

would be appropriate in carrying out the

purposes of the Contracts. Examples of

the changes Fortis Benefits may make

are to transfer assets in any Subaccount

to another Subaccount, or to one or

more separate accounts, or to add,

combine or remove Subaccounts in the

Variable Account or to substitute, for

the Portfolio shares held in any

Subaccount, the shares of another

Portfolio or the shares of another

investment company or any other

investment permitted by law.

4. Applicants submit that the

proposed substitution will meet the

requirements of Section 26(b) for the

following reasons:

(a) The investment objectives of the

Replaced Portfolios are sufficiently similar to

those of the Substitute Portfolios,

respectively, to be appropriate for

substitution.

(b) The investment performance of the

Substitute Portfolios is comparable or

superior to the investment performance of

the Replaced Funds.

(c) The comparative ratio of expenses to

net assets (following reimbursement) for the

Substitute Portfolios will be no greater than

that of the Replaced Portfolios.

(d) The proposed substitution will result in

the investment of assets, currently in

Portfolios which have not increased to a level

which would make each investment

alternative viable for Holders, into

substantially larger and more stable

underlying Portfolios.

Conclusion

For the reasons stated above,

Applicants submit that the proposed

substitution is consistent with the

protection of investors and the purposes

fairly intended by the policy and the

provisions of the 1940 Act.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–31622 Filed 12–2–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26785]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

November 25, 1997.

Notice is hereby given that the

following filing(s) has/have been made

with the Commission pursuant to

provisions of the Act and rules

promulgated thereunder. All interested

persons are referred to the application(s)

and/or declaration(s) for complete

statements of the proposed

transaction(s) summarized below. The

application(s) and/or declaration(s) and

any amendments thereto is/are available

for public inspection through the

Commission’s Office of Public

Reference.

Interested persons wishing to

comment or request a hearing on the

application(s) and/or declaration(s)

should submit their views in writing by

December 18, 1997, to the Secretary,

Securities and Exchange Commission,

Washington, D.C. 20549, and serve a

copy on the relevant applicant(s) and/or

declarant(s) at the address(es) specified

below. Proof of service (by affidavit or,

in case of an attorney at law, by

certificate) should be filed with request.

Any request for hearing shall identify

specifically the issues of fact or law that

are disputed. A person who so requests

will be notified of any hearing, if

ordered, and will receive a copy of any

notice or order issued in the matter.

After said date, the application(s) and/

or declaration(s), as filed or as amended,

may be granted and/or permitted to

become effective.

Central and South West Corporation, et

al.

[70–9113]

Central and South West Corporation

(‘‘CSW’’), a registered holding company,

1616 Woodall Rodgers Freeway, Dallas,

Texas 75202, and its wholly-owned

service company subsidiary, Central and

South West Services, Inc. (‘‘CSW

Services’’), 212 East 6th Street, Tulsa,

Oklahoma 74119, have filed an

application-declaration under sections

6(a), 7, 9(a), 10, 12(c) and 13(b) of the

Act and rules 42, 54 and 87–91

thereunder.

CSW owns all of the outstanding

shares of common stock of four public

utility subsidiaries (collectively,

‘‘Operating Companies’’): Central Power

and Light Company, Public Service

Company of Oklahoma, Southwestern

Electric Power Company, and West

Texas Utilities Company. Together,

these Operating Companies provide

electric service to approximately 1.7

million customers in a widely

diversified area covering 152,000 square

miles in portions of Arkansas,

Louisiana, Oklahoma and Texas.1

CSW requests authorization to adopt

and implement a stockholder rights plan

(‘‘Rights Plan’’) under which CSW’s

Board of Directors (‘‘Board’’) would

declare a dividend of one right (‘‘Right’’)

for each outstanding share of CSW

Common Stock, par value $3.50 per

share (‘‘Common Stock’’), payable to

stockholders of record on a date to be

established (‘‘Record Date’’).2 The

Rights will be created by and issued

under a rights agreement (‘‘Rights

Agreement’’) to be entered into by CSW

and CSW Services, as Rights Agent.3

The Rights created under the proposed

Rights Agreement would entitle the

holders to purchase one-tenth of a share

of Common Stock at a price of $50 per

whole share of Common Stock, subject

to adjustment (Purchase Price’’).4 This is

equivalent to $5 per one-tenth of one

share of Common Stock. CSW states that