38682 Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 / Notices

1 Morgan Stanley & Co. Incorporated, Investment

Company Act Release Nos. 2235 (Sept. 20, 1996)

(notice) and 22284 (Oct. 16, 1996) (order).

ACTION: Notice of application for an

order under section 12(d)(1)(J) of the

Investment Company Act of 1940 (the

‘‘Act’’) for an exemption from section

12(d)(1) of the Act.

SUMMARY OF APPLICATION: Morgan

Stanley & Co. Incorporated (‘‘Morgan

Stanley’’) requests an order to amend a

prior order that, among other things,

permits registered investment

companies to own a greater percentage

of the total outstanding voting stock of

the AJL PEPS Trusts for which Morgan

Stanley serves, or will serve, as a

principal underwriter (collectively, the

‘‘Trusts’’) than that permitted by section

12(d)(1) of the Act (‘‘Prior Order’’).1 The

requested order would permit

companies that are excepted from the

defintion of investment company under

section 3(c)(1) or 3(c)(7) of the Act to

own a greater percentage of the total

outstanding voting stock of a Trust than

that permitted by section 12(d)(1)(A) of

the Act.

FILING DATES: The application was filed

on May 5, 1998. 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 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

August 3, 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 of a

hearing by writing to the SEC’s

Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

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

Applicant, 1585 Broadway, New York,

New York 10036.

FOR FURTHER INFORMATION CONTACT:

Brian T. Hourihan, Senior Counsel, at

(202) 942–0526, or Mary Kay Frech,

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 from the SEC’s

Public Reference Branch, 450 Fifth

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

(tel. (202) 942–8090).

Applicant’s Representations

1. The Trusts are limited-life, grantor

trusts registered under the Act as

nondiversified, closed-end management

investment companies. Morgan Stanley

serves, or will serve, as the principal

underwriter for each Trust.

2. On October 16, 1996, the

Commission issued the Prior Order. The

Prior Order, among other things, permits

registered investment companies to own

a greater percentage of the total

outstanding voting stock of the Trusts

than that permitted by section 12(d)(1)

of the Act.

Applicant’s Legal Analysis

1. Section 12(d)(1)(A)(i) of the Act

prohibits any registered investment

company from owning more than 3

percent of the total outstanding voting

stock of any other investment company,

and any investment company from

owning in the aggregate more than 3

percent of the total outstanding voting

stock of any registered investment

company. A company that is excepted

from the definition of investment

company under section 3(c)(1) or 3(c)(7)

of the Act is deemed to be an

investment company for purposes of

section 12(d)(1)(A)(i) of the Act under

sections 3(c)(1) and 3(c)(7)(D) of the Act.

2. Section 12(d)(1)(J) of the Act

provides that the Commission may

exempt persons or transactions from any

provision of section 12(d)(1), if, and to

the extend that, the exemption is

consistent with the public interest and

the protection of investors. Applicant

requests that the Prior Order be

amended to permit companies excepted

from the definition of investment

company under section 3(c)(1) and

3(c)(7) of the Act to rely on the

exemption from section 12(d)(1)(A) of

the Act provided by the Prior Order.

3. Applicant asserts that investment

in the Trusts by companies relying on

section 3(c)(1) or 3(c)(7) of the Act will

not raise concerns under section

12(d)(1) of the Act for the same reasons

as those given in the application for the

Prior Order with respect to registered

fund’s investment in the Trusts.

Applicant agrees that any company

relying on section 3(c)(1) or 3(c)(7) of

the Act that invests in the Trusts may

not rely on this order unless it complies

with the terms and conditions of the

Prior Order. For these reasons, applicant

believes that the requested relief meets

the standards of section 12(d)(1)(J).

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–19051 Filed 7–16–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 35–26895; 70–9189]

Entergy Corporation; Order

Authorizing the Issuance and Sale of

Common Stock in Connection With the

Adoption of the 1998 Equity Ownership

Plan

July 10, 1998.

Entergy Corporation (‘‘Entergy’’), a

registered holding company, located in

New Orleans, Louisiana, has filed with

this Commission an applicationdeclaration under sections 6(a), 7 and

12(e) of the Public Utility Holding

Company Act of 1935, as amended

(‘‘Act’’), and rules 54, 62 and 65 under

the Act. The Commission issued a

notice of the filing on March 27, 1998

(HCAR No. 26852).

The Entergy Board of Directors

(‘‘Board’’) has adopted the 1998 Equity

Ownership Plan of Entergy Corporation

and Subsidiaries (‘‘Equity Plan’’),

subject to shareholder approval. The

Equity Plan will be an amendment and

restatement of Entergy’s current Equity

Ownership Plan which was approved by

its stockholders in 1991. Awards

granted under the Equity Plan are

intended to qualify as performance

based compensation under section

162(m) of the Internal Revenue Code of

1986, as amended.

Entergy proposes, through December

31, 2008, to grant Options, Restricted

Shares, Performance Shares and Equity

Awards, all as defined in the Equity

Plan, and to issue or sell up to 12

million shares of its common stock,

$0.01 par value (‘‘Common’’), under the

Equity Plan. The purpose of the Equity

Plan is to give certain designated

officers and executive personnel (‘‘Key

Employees’’) and outside directors an

opportunity to acquire shares of

Common to tie more closely their

interests with those of Entergy’s

shareholders and to reward effective

corporate leadership.

The Common will be available for

awards under the Equity Plan, subject to

adjustment for stock dividends, stock

splits, recapitalizations, mergers,

consolidations or other reorganizations.

Shares of Common awarded under the

Equity Plan may be either authorized

but unissued shares or shares acquired
Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 / Notices 38683

1Entergy notes that the credit rating assigned to

debt issued by one of its utility subsidiaries,

Entergy Gulf States Utilities, Inc. (‘‘GSU’’), other

than its senior secured debt, is below investment

grade. In March of 1995, Standard & Poors (‘‘S&P’’)

lowered the ratings of GSU as follows: senior

secured debt to triple ‘B’ minus from triple ‘B’;

senior unsecured debt and preferred stock to double

‘B’ from triple ‘B’ minus; and, preference stock to

double ‘B’ from double ‘B’ plus. Thereafter,

Moody’s Investors Service (‘‘Moody’s’’)

downgraded GSU’s First Mortgage Bonds to Baa3

from Baa2; debentures and senior unsecured

pollution control bonds to Ba1 from Baa3; and

preferred stock to Ba1 from Baa3. Both S&P and

Moody’s cited the River Bend Nuclear facility and

the decision of the Texas Public Utilities

Commission to reduce rates by $52.9 million along

with the then pending legal uncertainties

surrounding the Cajun bankruptcy, potential

Riverbend writedowns, merger costs, and,

regulatory proceeding costs.’’

in the open market. Shares of Common

covered by awards which are not

earned, or which are forfeited for any

reason, and Options which expire

unexercised, will again be available for

subsequent awards under the Equity

Plan. To the extent that shares of

Common previously held in a

participant’s name are surrendered

upon the exercise of an Option or shares

relating to an award are used to pay

withholding taxes, the shares will

become available for subsequent awards

under the Equity Plan.

The Equity Plan will be administered

by the Board’s Personnel Committee, or

any other committee designated by the

Board (‘‘Committee’’), to the extent

required to comply with rule 16b–3

under the Securities Exchange Act of

1934, as amended. The Committee will

have the exclusive authority to interpret

the Equity Plan. The Committee also

will have the authority to select, from

among Key Employees and outside

directors of Entergy and its subsidiaries,

those individuals to whom awards will

be granted, to grant any combination of

awards to any participants and to

determine the specific terms and

conditions of each award.

Entergy was authorized to solicit

proxies from its stockholders for use at

the 1998 annual shareholders meeting

(‘‘Meeting’’) with respect to the approval

of the Equity Plan, effective, as provided

in rule 62(d) of the Act, on March 27,

1998 (HCAR No. 26852). The Equity

Plan was approved by Entergy’s

shareholders at the Meeting, held on

May 15, 1998.

Entergy represents that, except for

rule 53(a)(1), the requirements of rule 53

are satisfied regarding Entergy’s

investments in exempt wholesale

generators (‘‘EWGs’’) and foreign utility

companies (‘‘FUCOs’’), as defined in

sections 32 and 33 of the Act. Entergy

states that its aggregate investment in

EWGs and FUCOs was equal to

approximately 54% of its consolidated

retained earnings, as defined in rule

53(a)(1), for the four quarters ended

March 31, 1998 and, therefore, exceeds

the 50% limitation contained in the

rule. Entergy states that this is due to a

decline in consolidated retained

earnings, resulting primarily from a onetime windfall profits tax of $234 million

imposed in 1997 by the government of

Great Britain on London Electricity, a

FUCO partially owned by Entergy.

Entergy states that, as of September

30, 1992, before Entergy commenced its

investments in EWGs or FUCOs,

Entergy’s consolidated equity (including

mandatorily redeemable preferred

securities) to total capital ratio was

45.4%. Entergy states that, as of March

31, 1998, Entergy’s consolidated

capitalization consisted of 42.9%

equity. On a pro forma basis, taking into

consideration the transactions

contemplated in this filing, this ratio

would be 42.2%. In addition, Entergy

further states that, with one exception,

the credit ratings of debt issued by its

subsidiaries remain at investment

grade.1 Entergy further notes that

earnings from its investments in FUCOs

and EWGs would have been positive in

1997 but for the one time windfall

profits tax described above.

The Commission has considered the

effect of the capitalization and earnings

of Entergy’s EWGs and FUCOs on the

Entergy system, together with the

impact of the proposed transactions.

The facts and representations described

above are sufficient, for purposes of

granting the authority requested in this

filing, to support a finding that the

proposed transactions satisfy the

standards of section 6(a) and 7

Fees and expenses in the estimated

amount of $175,000 are expected to be

incurred in connection with these

transactions. It is stated that no state or

federal commission, other than this

Commission, has jurisdiction over the

proposed transactions.

Due notice of the filing of the

declaration has been given in the

manner prescribed in rule 23 under the

Act, and no hearing has been requested

of or ordered by the Commission. On

the basis of the facts in the record, it is

found that the applicable standards of

the Act and rules are satisfied and that

no adverse findings are necessary.

It is ordered, under the applicable

provisions of the Act and rules under

the Act, that the amended declaration be

permitted to become effective

immediately, subject to the terms and

conditions prescribed in rule 24 under

the Act.

For the Commission, by the Division of

Investment, under delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–19050 Filed 7–16–98; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Rel. No. IC–23313; 812–10664]

WRL Series Fund, Inc. and WRL

Investment Management, Inc. Notice of

Application

July 10, 1998.

AGENCY: Securities and Exchange

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

ACTION: Notice of application for an

order under section 6(c) of the

Investment Company Act of 1940 (the

‘‘Act’’) for an exemption from section

15(a) of the Act and rule 18f–2 under

the Act.

SUMMARY OF APPLICATION: The order

would permit applicants to enter into

and materially amend subadvisory

agreements without obtaining

shareholder approval.

shareholders approval.

APPLICANTS: WRL Series Fund, Inc. (the

‘‘Fund’’) and WRL Investment

Management, Inc. (the ‘‘Adviser’’).

FILING DATES: The application was filed

on May 13, 1997, and amended on April

2, 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 be 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

August 4, 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, N.W., Washington, D.C. 20549;

Applicants, 201 Highland Avenue,

Largo, Florida 33770–2597.

FOR FURTHER INFORMATION CONTACT:

Brian T. Hourihan, Senior Counsel, at

(202) 942–0526, or Christine Y.

Greenless, Branch Chief, at (202) 942–