23482 Federal Register / Vol. 63, No. 82 /Wednesday, April 29, 1998 / Notices

JWCFS would be the surviving

corporation in the Merger.

5. Prior to the Merger, AGRO’s

minority shareholders will receive a

prospectus with respect to the shares of

JWCFS common stock being offered in

connection with the Merger (the

‘‘Prospectus’’) which discloses the terms

and the effective date of the Merger and

the consideration to be paid by JWCFS.

In addition, the Prospectus will inform

AGRO’s minority shareholders of their

appraisal rights under Maryland law.

The appraisal rights would entitle the

shareholders to dissent from the Merger

and receive the fair value of their shares

of AGRO in cash.

6. The Merger will constitute a

reorganization pursuant to section

368(a) of the Internal Revenue Code of

1986, as amended. Any AGRO minority

shareholder receiving solely shares of

JWCFS in the Merger will not recognize

any gain or loss for federal income tax

purposes. In addition, the Merger will

have no material tax consequences for

AGRO or JWCFS.

Applicants’ Legal Analysis

1. Section 57(a) generally prohibits,

with certain exceptions, sales or

purchases of securities or other property

between a BDC and certain of its

affiliated persons as described in section

57(b) of the Act, including a person

controlling the BDC. JWCFS owns

approximately 91 per cent of AGRO’s

shares and, thus, controls AGRO under

section 2(a)(9) of the Act. Because the

Merger may involve the purchase of the

property of AGRO by JWCFS, applicants

are requesting relief from section 57(a)

to complete the Merger.

2. Section 57(c) of the Act provides

that the SEC will exempt a proposed

transaction from section 57(a) if the

terms of the proposed transaction,

including the consideration to be paid

or received, are reasonable and fair and

do not involve overreaching on the part

of any person concerned; and the

proposed transaction is consistent with

the policy of the BDC concerned and

with the general purposes of the Act.

Applicants believe that the requested

relief from section 57(a) meets these

standards for the reasons discussed

below.

3. Applicants state that the Board has

determined that the Exchange Ratio is

fair consideration for the minority

shareholders of AGRO to receive in the

Merger. Applicants state that a

comparison of the closing sales price of

JWCFS common stock on April 13, 1998

($1115⁄16) to AGRO’s NAV of $3.46 on

December 31, 1997 (the most recent date

on which AGRO’s Board determined

AGRO’s NAV) indicates that the

Exchange Ratio would represent a

premium to AGRO’s minority

shareholders of approximately 48.7%.

4. Applicants state that the Board also

considered, in addition to other factors:

that AGRO has never paid dividends on

its common stock and has no plans to

pay any dividends in the future; that

there are no possible alternative

transactions similar to the Merger with

unaffiliated third parties; that, if the

Merger is not consummated, it is

unlikely that the minority shareholders

of AGRO will realize any return on their

holdings in the foreseeable future; that

the Merger would provide AGRO’s

minority shareholders with a way of

disposing of their shares and obtaining

a return on their investment that would

not otherwise be available; that

following the Merger, AGRO’s assets

could be redirected into the existing

business of JWCFS for the benefit of

JWCFS shareholders (which would

include all of AGRO’s minority

shareholders who do not choose to

exercise appraisal rights under

Maryland law to receive cash); and that

the AGRO minority shareholders have

available appraisal rights under

Maryland law. In addition, the boards of

directors of both AGRO and JWCFS

have reserved the right to abandon the

Merger at any time if the boards

determine that it would not be in the

best interests of the respective company

to consummate the Merger.

For the Commission, by the Division of

Investment Management, under delegated

authority.

[FR Doc. 98–11394 Filed 4–28–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–23125; 812–11080]

Freedom Mutual Fund, et al.; Notice of

Application

April 23, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application under

section 6(c) of the Investment Company

Act of 1940 (the ‘‘Act’’) for an

exemption from section 15(a) of the Act.

SUMMARY OF APPLICATION: The requested

order would permit the implementation,

without prior shareholder approval, of

new investment advisory agreements,

for a period of up to 150 days following

the later of: (i) the date the assignment

of the existing investment advisory

agreements is deemed to have occurred,

or (ii) the date the requested order is

issued (but in no event later than

October 31, 1998), and to permit the

investment adviser to certain registered

management investment companies to

receive all fees earned under the new

agreements during this interim period.

APPLICANTS: Freedom Mutual Fund

(‘‘Freedom Mutual’’), on behalf of

Freedom Cash Management Fund and

Freedom Government Securities Fund

(‘‘Freedom Funds’’), Freedom Group of

Tax Exempt Funds (‘‘Freedom Group’’),

on behalf of Freedom Tax Exempt

Money Fund and Freedom California

Tax Exempt Money Fund (‘‘Group

Funds’’), FundManager Portfolios

(together with Freedom Mutual and

Freedom Group, ‘‘Trusts’’), on behalf of

FundManager Aggressive Growth

Portfolio, FundManager Growth

Portfolio, FundManager Growth with

Income Portfolio, FundManager Bond

Portfolio, FundManager Managed Total

Return Portfolio, FundManager

International Portfolio (together with the

Freedom Funds and the Group Funds,

‘‘Funds’’), and Freedom Capital

Management Corporation (the

‘‘Adviser’’).

FILING DATES: The application was filed

on March 20, 1998, and amended on

April 14, 1998. 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

May 14, 1998, 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, NW., Washington, DC 20549.

Applicants, Freedom Capital

Management Corporation, One Beacon

Street, Boston, MA 02108.

FOR FURTHER INFORMATION CONTACT:

Lisa McCrea, Attorney Adviser (202)

942–0562, or Edward P. Macdonald,

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
Federal Register / Vol. 63, No. 82 /Wednesday, April 29, 1998 / Notices 23483

1Applicants state that if the Transaction precedes

the issuance of the requested order, the Adviser will

continue to serve as investment adviser after the

Transaction (and prior to the issuance of the order)

in a manner consistent with its fiduciary duty to

continue to provide advisory services to the Funds

even though approval of the new arrangements has

not yet been secured from the Funds’ shareholders.

Applicants also state that the Funds may be

required to pay, with respect to the period until

receipt of the order, no more than the actual outof-pocket cost to the Adviser for providing advisory

services.

may be obtained for a fee at the SEC’s

Public Reference Branch, 450 5th Street,

NW., Washington, DC 20549 (tel. 202–

942–8090).

Applicants’ Representations

1. The Trusts are registered under the

Act as open-end management

investment companies. The Advisers, an

investment adviser registered under the

Investment Advisers Act of 1940, is an

indirect wholly-owned subsidiary of

Freedom Securities Corporation (the

‘‘Parent’’). The Adviser manages the

Funds’ assets under investment

advisory agreements with the Trusts

(the ‘‘Existing Agreements’’). Thomas H.

Lee Equity Fund III, L.P., Thomas H. Lee

Foreign Fund III, L.P., and THL–CCI,

L.P. (the ‘‘Thomas Lee Entities’’) own

more than 25% of the outstanding

voting securities of the Parent.

2. The Parent currently is involved in

a series of transactions which will result

in its issuing a significant number of

additional shares of its common stock,

and pursuant to which the Thomas Lee

Entities will be selling their shares of

the Parent’s common stock to the

public. Upon the issuance of additional

shares of the Parent’s common stock

pursuant to these transactions, the

Thomas Lee Entities will own less than

25% of the outstanding voting securities

of the Parent. In addition, a stockholder

agreement between the Thomas Lee

Entities and certain other shareholders

of the Parent with respect to the exercise

of certain shareholder voting rights held

by the shareholders (the ‘‘Stockholders

Agreement’’) is expected to terminate 45

days following the closing of the

Parent’s public offering of its common

stock. As a result of the occurrence of

these events, the Thomas Lee Entities

may no longer be deemed to control the

Parent, and an indirect change in

control of the Adviser may be deemed

to have occurred.

3. The indirect change in control of

the Adviser will result in an assignment,

and thus automatic termination, of the

Existing Agreements. Applicants request

an exemption to permit the Adviser and

the Trusts to enter into new advisory

agreements (‘‘New Agreements’’)

without prior shareholder approval. The

requested exemption would cover an

interim period of not more than 150

days beginning on the later of (a) the

earliest date on which either (i) the

stock ownership of the Thomas Lee

Entities in the parent falls below 25%,

or (ii) the Stockholders Agreement

terminates (either event, the

‘‘Transaction’’), or (b) the date on which

the requested order is issued, and

continuing with respect to each Fund

through the date the New Agreements

are approved or disapproved by the

shareholders of the respective Funds

(but in no event later than October 31,

1998) (the ‘‘Interim Period’’). The

Transaction is expected to occur in May

1998.1

4. The Trusts’ boards of trustees (the

‘‘Boards’’ or the ‘‘Boards of Trustees’’),

including a majority of the Trustees who

are not ‘‘interested persons’’ of the Trust

(‘‘Independent Trustees’’), met on

March 17, 1998, and voted unanimously

to approve the preparation and filing of

preliminary proxy materials for a

special meeting of shareholders of each

Fund to consider the New Agreements.

The Boards also met in person on March

30, 1998, to consider and act upon the

approval of the New Agreements in

accordance with section 15(c) of the

Act, and to evaluate whether the terms

of the New Agreements are in the best

interests of the Funds and their

shareholders. The Trustees, including a

majority of the Independent Trustees,

unanimously approved the New

Agreements, and recommended their

approval to the shareholders of the

Funds.

5. The fees payable to the Adviser

during the Interim Period under the

New Agreements will be paid into an

interest-bearing escrow account with an

unaffiliated bank. The escrow agent will

release the amounts held in the escrow

account (including interest earned on

paid fees) to: (i) The Adviser if

shareholders of the Funds approve the

relevant New Agreement; or (ii) the

relevant Fund, in the absence of

approval by shareholders. Before

amounts are released from the escrow

accounts, the Boards will be notified.

Applicants’ Legal Analysis

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

in pertinent part, that it shall be

unlawful for any person to serve or act

as investment adviser of 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 such

registered investment company. Section

15(a) further requires that such written

contract provide for automatic

termination in the event of its

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

defines ‘‘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, when the

Transaction occurs, the Thomas Lee

Entities may no longer be deemed to

control the Parent, and an indirect

change in control of the Adviser may be

deemed to have occurred. The

Transaction thus may be deemed to

result in an assignment of the Existing

Agreements within the meaning of

section 2(a)(4) of the Act, and a

termination of the Existing Agreements

according to their terms.

3. Rule 15a–4 provides, in pertinent

part, that if any investment advisory

contract with an investment company is

terminated by assignment, the adviser

may continue to act as such for 120 days

under a written contract that has not

been approved by the investment

company’s shareholders, provided that:

(a) The new contract is approved by the

board of directors (including a majority

of trustees that are not ‘‘interested

persons’’ of the investment company);

(b) the compensation to be paid under

the new contract does not exceed the

compensation which would have been

paid under the contract most recently

approved by shareholders of the

investment company; and (c) neither the

adviser nor any controlling person of

the investment adviser ‘‘directly or

indirectly receives money or other

benefit’’ in connection with the

assignment. Applicants state that they

may not rely on rule 15a–4 because the

Parent or the Thomas Lee Entities may

be deemed to receive a benefit in

connection with the Transaction.

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 the

exemption is necessary or appropriate

in the public interest and consistent

with the protection of investors and the

purposes fairly intended by the policies

and provisions of the Act. Applicants

believe that the requested relief satisfies

this standard.

5. Applicants state that, without an

exemption, there may not be an

adequate period to obtain approval of

the New Agreements by the

shareholders of each Fund prior to the

Transaction. Applicants state that they

mailed proxy materials to shareholders

on April 15, 1998, and April 16, 1998,

and the requisite shareholder meetings

to consider approval of the New

Agreements are expected to be held on

or about May 20, 1998.
23484 Federal Register / Vol. 63, No. 82 /Wednesday, April 29, 1998 / Notices

1Registration statements for the two shell

Acquiring Funds were declared effective on April

6, 1998, and April 7, 1998. These funds are

expected to commence operations upon the

consummation of the Reorganizations (as defined

below).

6. Applicants state that, given the

frequency of the failure of shareholders

to return proxies, and the large number

of beneficial owners of shares of the

Funds, 150 days is necessary to obtain

shareholder approval of the New

Agreements. Applicants state that

during the Interim Period, each Fund

would operate under the New

Agreements, which are substantially

identical to the Existing Agreements,

except for the effective dates,

termination dates and the updated

names of the Funds. Applicants also

state that no changes are anticipated in

the personnel providing investment

management services to the Funds

during the Interim Period. Applicants

therefore submit that each Fund should

receive, during the Interim Period, the

same investment advisory services,

provided in the same manner, at the

same fee levels, and by substantially the

same personnel as before the

Transaction.

Applicants’ Conditions

Applicants agree that the requested

order will be subject to the following

conditions:

1. The New Agreements will have the

same terms and conditions as the

Existing Agreements, except for the

effective dates, termination dates, and

the updated names of the Funds.

2. Fees earned by the Adviser in

respect of the New Agreements during

the Interim Period will be maintained in

an interest-bearing escrow account, and

amounts in the account, (including

interest earned on such paid fees), will

be paid (a) to the Adviser, after the

requisite approval of shareholders are

obtained, or (b) to the respective Fund,

in the absence of such approvals.

3. The Funds will hold meetings of

shareholders to vote on approval of the

New Agreements on or before the 150th

day following the termination of the

Existing Agreements (but in no event

later than October 31, 1998).

4. The Advisor and/or Parent will

bear the costs of preparing and filing the

application and the costs relating to the

solicitation of shareholder approval of

the New Agreements.

5. The Adviser will take all

appropriate steps 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 Trustees, to the scope and

quality of services previously provided

under the Existing Agreements. If

personnel providing material services

during the Interim Period change

materially, the Adviser will apprise and

consult with the Board of the affected

Funds to assure that they, including a

majority of the Independent Trustees,

are satisfied that the services provided

will not be diminished in scope or

quality.

For the SEC, by the Division of Investment

Management, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–11288 Filed 4–28–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Investment Company Act, Release No.

23124; 812–11022]

Nations Fund Trust, et al.; Notice of

Application

April 22, 1998.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of an application under

section 17(b) of the Investment

Company Act of 1940 (‘‘Act’’) for an

exemption from section 17(a) of the Act.

SUMMARY OF THE APPLICATION:

Applicants request an order to permit

certain series of Nations Fund Trust

(‘‘NFT’’), Nations Fund, Inc. (‘‘NFI’’),

and Nations Institutional Reserves

(‘‘NIR’’) to acquire all of the assets and

liabilities of all of the series of Emerald

Funds (‘‘Emerald’’).

APPLICANTS: NFT, NFI, NIR,

NationsBanc Advisors, Inc. (‘‘NBAI’’),

Emerald, and Barnett Capital Advisors,

Inc. (‘‘Barnett’’).

FILING DATES: The application was filed

on February 23, 1998. Applicants have

agreed to file an amendment, the

substance of which is included 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 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

May 13, 1998 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 may request notification by

writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicants: NFT, NFI, NIR, and NBAI,

One NationsBank Plaza, Charlotte, NC

28255; Emerald, 3435 Stelzer Road,

Columbus, OH 43219; and Barnett, 9000

Southside Boulevard, Building 100,

Jacksonville, FL 32256.

FOR FURTHER INFORMATION CONTACT:

Rachel H. Graham, Senior Counsel,

(202) 942–0583, or Christine Y.

Greenlees, Branch Chief, (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 from the SEC’s

Public Reference Branch, 450 Fifth

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

(telephone (202) 942–8090).

Applicants’ Representations

1. Emerald, a Massachusetts business

trust, is an open-end management

investment company registered under

the Act. Emerald currently offers shares

in fourteen series (the ‘‘Acquired

Funds’’).

2. NFT and NIR, each a Massachusetts

business trust, and NFI, a Maryland

corporation, are open-end management

investment companies registered under

the Act. Each company offers shares in

certain series, some of which constitute

the ‘‘Acquiring Funds’’ (together with

the Acquired Funds, the ‘‘Funds’’). NFT

offers shares in thirty-nine series, seven

of which are Acquiring Funds. NFI

offers shares in eight series, four of

which are Acquiring Funds. NIR offers

shares in four series, one of which is an

Acquiring Fund. Each of NFI and NIR is

organizing a new shell series, which

also will be Acquiring Funds.1

3. Barnett is registered under the

Investment Advisers Act of 1940

(‘‘Advisers Act’’) and is the investment

adviser to the Acquired Funds. Barnett

is a wholly-owned subsidiary of Barnett

Bank, N.A., which, in turn, is a whollyowned subsidiary of Barnett Banks, Inc.

As of the date of the application, Barnett

and its affiliates, all of which are part of

a common control group (the ‘‘Barnett

Group’’), held of record, in their name

and in the names of their nominees,

more than 25% of the outstanding

voting shares of certain classes of shares

of the Acquired Funds. All of these

securities are held for the benefit of

others in a trust, agency, custodial, or

other fiduciary or representative

capacity, except that Barnett Bank, N.A.