65832 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Notices

1Mentor Funds is comprised of eleven portfolios:

Mentor Growth Portfolio, Mentor Capital Growth

Portfolio, Mentor Strategy Portfolio, Mentor Income

and Growth Portfolio, Mentor Perpetual Global

Portfolio, Mentor Quality Income Portfolio, Mentor

Municipal Income Portfolio, Mentor Short-Duration

Income Portfolio, Mentor Balanced Portfolio,

Mentor Institutional Money Market Portfolio, and

Mentor Institutional U.S. Government Money

Market Portfolio. Mentor Institutional Trust is

comprised of five portfolios: Mentor U.S.

Government Cash Management Portfolio, Mentor

Intermediate Duration Portfolio, Mentor FixedIncome Portfolio, Mentor Perpetual International

Portfolio, and SNAP Fund. Cash Resource Trust is

comprised of five funds: Cash Resource Money

Market Fund, Cash Resource U.S. Government

Money Market Fund, Cash Resource Tax-Exempt

Money Market Fund, Cash Resource California TaxExempt Money Market Fund, and Cash Resource

New York Tax-Exempt Money Market Fund. Each

of America’s Utility Fund, Inc. and Mentor Income

Fund, Inc. constitutes a single portfolio.

2 In each of the foregoing cases, whether acting as

investment adviser or subadviser, each Advisor and

Sub-Advisor is acting as an investment adviser

within the meaning of section 2(a)(20) of the Act.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32775 Filed 12–15–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act Release No.

22936; 812–10882]

Mentor Funds, et al.; Notice of

Application

December 10, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) from section 15(a) of the Act.

SUMMARY OF APPLICATION: Applicants

seek an order to permit the

implementation, without shareholder

approval, of new investment advisory

agreements (‘‘New Agreements’’)

between Mentor Funds, Mentor

Institutional Trust, Cash Resource Trust

(collectively, the ‘‘Trusts’’), America’s

Utility Fund, Inc., and Mentor Income

Fund, Inc. (collectively with the Trusts,

the ‘‘Funds’’); and one or more of

Mentor Investment Advisors, LLC

(‘‘Mentor Advisors’’), Mentor Perpetual

Advisors, LLC (‘‘Mentor Perpetual’’)

(each, an ‘‘Advisor’’); Van Kampen

American Capital Management, Inc.

(‘‘Van Kampen’’), and Wellington,

Management Company, LLP

(‘‘Wellington’’) (each, a ‘‘Sub-advisor’’),

for a period of up to 60 days following

the date of consummation of a merger

(but in no event later than March 31,

1998) (the ‘‘Interim Period’’). The order

also would permit the Advisors and

Sub-advisors to receive all fees earned

under the New Agreements following

shareholder approval.

Applicants: Funds, Advisors, and

Sub-advisors.

FILING DATES: The application was filed

on November 20, 1997. Applicants have

agreed to file an amendment 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 applicants with a

copy of the request, personally or by

mail. Hearing requests should be

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

December 30, 1997, and should be

accompanied by proof of service on

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 SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants: Mentor Funds, Mentor

Institutional Trust, Cash Resource Trust,

America’s Utility Fund, Inc., Mentor

Income Fund, Inc., Mentor Advisors,

and Mentor Perpetual, 901 East Byrd

Street, Richmond, VA 23219; Van

Kampen, One Parkview Plaza, Oakbrook

Terrace, IL 60181; Wellington, 75 State

Street, Boston, MA 02109.

FOR FURTHER INFORMATION CONTACT:

John K. Forst, Attorney Advisor, at (202)

942–0569, or Christine Y. Greenlees,

Branch Chief, at (202) 942–0564 (Office

of Investment Company Regulation,

Division of Investment Management).

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 Fifth

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

(tel. 202–942–8090).

Applicants’ Representations

1. The Trusts, each a Massachusetts

business trust, are registered under the

Act as open-end management

investment companies. America’s

Utility Fund, Inc., a Maryland

corporation, is registered under the Act

as an open-end management investment

company. Mentor Income Fund, Inc., a

Virginia corporation, is registered under

the Act as a closed-end management

investment company. The Funds

currently offer twenty-three portfolios.1

2. The Advisors, investment advisers

registered under the Investment

Advisers Act of 1940 (the ‘‘Advisers

Act’’), serve as investment adviser for

the Funds pursuant to existing

investment advisory agreements that

comply with section 15 of the Act (with

existing sub-advisory agreements, the

‘‘Existing Agreements’’). Mentor

Perpetual serves as investment adviser

to Mentor Perpetual Global Portfolio

and Mentor Perpetual International

Portfolio. Mentor Advisors serves as

investment adviser to each of the other

Funds. The Sub-advisors, investment

advisers registered under the Advisers

Act, serve as sub-advisers for certain of

the Funds pursuant to the Existing

Agreements. Van Kampen serves as Subadvisor to the Mentor Municipal Income

Portfolio. Wellington serves as Subadvisor to the Mentor Income and

Growth Portfolio.2

3. On August 20, 1997, Wheat First

Butcher Singer, Inc. (‘‘Wheat First’’), the

Advisors’ parent, entered into an

agreement and plan of merger with First

Union Corporation (‘‘First Union’’),

under which Wheat First will be merged

into First Union (the ‘‘Merger’’). Upon

consummation of the Merger (expected

to occur on December 31, 1997), First

Union will become the owner of a

majority of the beneficial interest in

Mentor Advisors and of one-half of the

beneficial interest in Mentor Perpetual.

4. Applicants believe that the Merger

will result in an assignment of the

Existing Agreements. Applicants request

an exemption to permit: (a) The

implementation during the Interim

Period, prior to obtaining shareholder

approval, of the New Agreements; and

(b) the Advisors and Sub-advisors to

receive from each Fund, upon approval

of that Fund’s shareholders of the

relevant New Agreement, any and all

fees earned under the New Agreement

during the applicable Interim Period.

Applicants state that the New

Agreements will have substantially the

same terms and conditions as the

respective Existing Agreements, except

in each case for the effective date,

termination date, and escrow

provisions.

5. The boards of trustees of the Trusts

and the boards of directors of Mentor

Income Fund, Inc. and America’s Utility

Fund, Inc. (collectively, the ‘‘Boards’’),

met on October 14, 1997, September 10,

1997, and November 19, 1997,

respectively, to discuss the Merger and

its implications for the Funds. At the

meetings, the Boards, including a

majority of the members who are not

‘‘interested persons’’ of any Fund, as
Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Notices 65833

that term is defined in section 2(a)(19)

of the Act (the ‘‘Independent Board

Members’’), voted in accordance with

section 15(c) of the Act to approve the

New Agreements and to submit the New

Agreements to the shareholders of each

of the Funds at a meeting to be held on

December 22, 1997 (the ‘‘Meeting’’). On

December 8, 1997, the Boards of the

Trusts met in person and approved the

escrow provisions of each of the New

Agreements in accordance with section

15(c) of the Act. The Boards of Mentor

Income Fund, Inc. and America’s Utility

Fund, Inc. will meet in person prior to

the commencement of the Interim

Period to approve the escrow provisions

of each of the New Agreements in

accordance with section 15(c) of the

Act.

6. Applicants state that proxy

materials were mailed to the Funds’

shareholders on or about November 25,

1997. Applicants submit that, while it is

possible that shareholders of each of the

Funds will approve the New

Agreements at the Meeting, it also is

possible that an insufficient number of

votes will have been received by the

date of the Meeting to act upon the New

Agreements in respect of one or more

Funds, and that it may be necessary to

adjourn the Meeting to permit

additional shareholders to vote their

shares by proxy. Applicants believe that

the requested relief is necessary to

permit continuity of investment

management of the Funds during the

Interim Period so that services to each

Fund would not be disrupted if the

Meeting is adjourned as to that Fund.

7. Applicants propose to enter into an

escrow arrangement with an unaffiliated

financial institution. The fees payable to

the Advisors and Sub-advisors during

the Interim Period under the New

Agreements will be paid into an

interest-bearing escrow account

maintained by the escrow agent. The

escrow agent will release the amounts

held in the escrow account (including

any interest earned): (a) To the relevant

Advisors or Sub-advisor only upon

approval of the relevant New Agreement

by the shareholders of the relevant

Fund; or (b) to the relevant Fund if the

Interim Period has ended and its New

Agreement has not received the

requisite shareholder approval. Before

any such release is made, the Boards

will be notified.

Applicants’ Legal Analysis

1. Section 15(a) of the Act provides,

in pertinent part, that it is unlawful for

any person to serve as an investment

adviser to a registered investment

company, except pursuant to a written

contract that has been approved by the

vote of a majority of the outstanding

voting securities of the investment

company. Section 15(a) further requires

the written contract to provide for its

automatic termination in the event of its

‘‘assignment.’’ Section 2(a)(4) of the Act

defines the term ‘‘assignment’’ to

include any direct or indirect transfer of

a contract by the assignor, or of a

controlling block of the assignor’s

outstanding voting securities by a

security holder of the assignor.

2. Applicants state that, following the

Merger, First Union will own 100% of

the voting securities of Wheat First.

Applicants believe, therefore, that the

Merger will result in an assignment of

the Existing Agreements, and that the

Existing Agreements will terminate by

their terms upon consummation of the

Merger.

3. Rule 15a–4 provides, in pertinent

part, that if an investment advisory

contract with a registered investment

company is terminated by an

assignment, the adviser may continue to

serve for 120 days under a written

contract that has not been approved by

the company’s shareholders, provided

that (a) the new contract is approved by

the company’s board of directors

(including a majority of the noninterested directors); (b) the

compensation to be paid under the new

contract does not exceed the

compensation that would have been

paid under the contract most recently

approved by the company’s

shareholders; and (c) neither the adviser

nor any controlling person of the

adviser ‘‘directly or indirectly receives

money or other benefit’’ in connection

with the assignment. Applicants state

that because the Advisors and their

affiliates may be deemed to receive a

benefit in connection with the Merger,

applicants may not be entitled to rely on

rule 15a–4.

4. Section 6(c) provides that the SEC

may exempt any person, security, or

transaction from any provision of the

Act, if and to the extent that such

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policy

and provisions of the Act. Applicants

believe that the requested relief meets

this standard.

5. Applicants note that the terms and

timing of the Merger were determined

by Wheat First and First Union in

response to a number of factors beyond

the scope of the Act and unrelated to the

Funds and the Advisors. Applicants

believe that allowing the Advisors and

Sub-advisors to continue to provide

investment advisory services to the

Funds during the Interim Period is in

the best interests of the Funds and their

shareholders to avoid any interruption

in services to the Funds and is in

keeping with the spirit of the provisions

of rule 15a–4 and with the purposes of

section 15 of the Act.

6. Applicants submit that the scope

and quality of services provided to the

Funds during the Interim Period will

not be diminished. During the Interim

Period, the Advisors and Sub-advisors

would operate under the New

Agreements, which would be

substantially the same as the Existing

Agreements, except for their effective

dates, termination dates, and escrow

provisions. The Advisors have advised

the Boards that they are not aware of

any material changes in the personnel

who will provide investment

management services during the Interim

Period. Accordingly, the Funds should

receive, during the Interim Period, the

same advisory services, provided in the

same manner, at the same fee levels, and

by substantially the same personnel as

they received before the Merger.

7. Applicants contend that the best

interests of shareholders of the Funds

would be served if the Advisors and

Sub-advisors receive fees for their

services during the Interim Period.

Applicants submit that to deprive the

Advisors and Sub-advisors of their

customary fees during the Interim

Period for no reason, other than the fact

that the Merger may be deemed to result

in an assignment of the Existing

Agreements, would be an unduly harsh

and unreasonable penalty. Applicants

note that the fees to be paid during the

Interim Period will be at the same rate

as the fees that currently are being paid

under the Existing Agreements, which

have been approved by the Board and

the shareholders of each Fund.

Applicants’ Conditions

Applicants agree as conditions to the

issuance of the exemptive order

requested by the application that:

1. Each New Agreement will have

substantially the same terms and

conditions as the respective Existing

Agreement, except for the effective date,

termination date, and escrow

provisions.

2. Advisory fees earned by an Advisor

or Sub-advisor, as the case may be,

during the Interim Period will be

maintained in an interest-bearing

escrow account, and amounts in the

account (including interest earned on

such amounts) will be paid (a) to the

Advisor or Sub-advisor, as the case may

be, in accordance with the relevant New

Agreement, after the requisite

shareholder approval is obtained, or (b)
65834 Federal Register / Vol. 62, No. 241 / Tuesday, December 16, 1997 / Notices

to the Fund, in the absence of such

approval.

3. Each of the Funds will hold a

meeting of shareholders to vote on

approval of the New Agreements on

December 22, 1997, or within the 60 day

period following the consummation of

the Merger (but in no event later than

March 31, 1998).

4. First Union or Mentor Advisors

will bear the costs of preparing and

filing the application, and First Union

will bear any costs relating to the

solicitation of shareholder approval

necessitated by the Merger.

5. The Advisors and Sub-advisors will

take all appropriate actions to ensure

that the scope and quality of advisory

and other services provided to the

Funds during the Interim Period will be

at least equivalent, in the judgment of

the Boards, including a majority of the

Independent Board Members, to the

scope and quality of services previously

provided. In the event of any material

change in personnel providing services

pursuant to the New Agreements caused

by the Merger, the Advisors will apprise

and consult with the Boards to assure

that the Boards, including a majority of

the Independent Board Members, are

satisfied that the services provided will

not be diminished in scope or quality.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32755 Filed 12–15–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26792]

Filings Under the Public Utility Holding

Company Act of 1935, as Amended

(‘‘Act’’)

December 10, 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

January 5, 1998, 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 the

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.

Northeast Utilities, et al.

(70–8875)

Northeast Utilities (‘‘Northeast’’), 174

Brush Hill Avenue, West Springfield,

Massachusetts 01090–0010, a registered

holding company, and its electric utility

subsidiary companies, Western

Massachusetts Electric Company, 174

Brush Hill Avenue, West Springfield,

Massachusetts 01090–0010, The

Connecticut Light and Power Company,

107 Selden Street, Berlin, Connecticut

06037, Holyoke Water Power Company,

Canal Street, Holyoke, Massachusetts

01040, and Public Service Company of

New Hampshire and North Atlantic

Energy Corporation, both of 1000 Elm

Street, Manchester, New Hampshire

03015, (collectively, ‘‘Applicants’’) have

filed a post-effective amendment to their

application-declaration filed under

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

Act and rules 43, 45, and 54 under the

Act.

By orders (‘‘Orders’’) dated February

11, 1997 and March 25, 1997 (HCAR

Nos. 26665 and 26692), Applicants were

authorized to, among other things, enter

into an unsecured revolving credit

facility (‘‘Existing Facility’’) with

various lending institutions permitting

borrowings aggregating up to $313.75

million. Among other Applicants,

Northeast was authorized pursuant to

the Orders to make short-term

borrowings through December 31, 2000,

evidenced by short-term notes issued to

lending institutions through formal and

informal lines of credit, including the

Existing Facility. Under the Existing

Facility, Northeast has a maximum

borrowing limit of $150 million.

Applicants state that Northeast is

currently unable to borrow under the

Existing Facility.

Northeast now proposes to issue and

sell notes (‘‘Notes’’) through December

31, 2000 under a supplementary

revolving credit facility

(‘‘Supplementary Revolver’’) in the

aggregate principal amount of up to $25

million. Under the Supplementary

Revolver, the interest rate applicable to

the Notes will be increased to an

amount not to exceed the greater of (i)

four percentage points over the London

Interbank Offered Rate or (ii) three

percentage points over the lender’s base

rate. In addition, the maximum annual

fee payment for the issuance of the

notes will be increased from 0.30% per

annum to 1% per annum. Advances

from the Supplementary Revolver will

be used to meet Northeast’s debt service

requirements under its Employee Stock

Option Plan and to support its other

financial requirements until such time

as Northeast begins to receive dividends

from its subsidiaries again.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–32722 Filed 12–15–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–22934; International Series

Release No. 1108/812–10646]

Toronto Dominion Holdings, Inc.;

Notice of Application

December 10, 1997.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

exemption under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) from all provisions of the Act.

SUMMARY OF APPLICATION: Applicant

Toronto Dominion Holdings (U.S.A.),

Inc. (‘‘Toronto Dominion’’) requests an

order that would permit it to sell certain

debt securities and use the proceeds to

finance the business activities of its

parent company, The Toronto-Dominion

Bank (‘‘TD’’) and other companies

controlled by TD.

FILING DATES: The application was filed

on May 9, 1997, and amended on

November 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