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–
38684 Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 / Notices

1Applicants request that the relief also apply to

future Portfolios, and to any registered open-end

management investment company that in the future

is advised by the Adviser, or any person

controlling, controlled by, or under common

control with the Adviser (‘‘Future Fund’’). All

existing investment companies that currently

intend to rely on the order have been named as

applicants, and any Future Fund that relies on the

order will comply with the terms and conditions in

the application.

2The Adviser is a direct, wholly-owned

subsidiary of Western Reserve, which, in turn, is

wholly-owned by First AUSA. First AUSA is

wholly-owned by AEGON USA, Inc., a financial

services holding company, which, in turn, is a

wholly-owned indirect subsidiary of AEGON nv, a

Netherlands corporation.

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).

Applicants’ Representations

1. The Fund, a Maryland corporation,

is an open-end management investment

company registered under the Act. The

Fund currently consists of seventeen

separate series (each a ‘‘Portfolio’’), each

of which has its own investment

objective and policies.1 Shares of the

Fund currently are sold only to separate

accounts of Western Reserve Life

Assurance Co. of Ohio (‘‘Western

Reserve’’), PFL Life Insurance Company,

and First AUSA Life Insurance

Company, Inc. (‘‘First AUSA’’) to fund

benefits under certain variable life

insurance policies and variable annuity

contracts.

2. The Adviser, registered under the

Investment Advisers Act of 1940 (the

‘‘Advisers Act’’), serves as investment

adviser to the Fund pursuant to an

investment advisory agreement

(‘‘Advisory Agreement’’).2 Under the

Advisory Agreement, the Adviser,

subject to the supervision of the board

of directors of the Fund (the ‘‘Board’’),

selects and contracts with sub-advisers

(‘‘Sub-Advisers’’) to provide each

Portfolio with portfolio management.

The Adviser also monitors and

evaluates each Sub-Adviser’s

performance, and may recommend its

termination. Each Sub-Adviser

recommended by the Adviser is

approved by the Board, including a

majority of the directors who are not

‘‘interested persons’’ of the Fund, as

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

(‘‘Independent Directors’’). The Adviser

also provides the Fund and the

Portfolios with overall administrative

services. The Fund pays the Adviser a

fee for its services with respect to each

Portfolio.

3. The Adviser has entered into

contracts (‘‘Sub-Advisory Agreements’’)

with fourteen Sub-Advisers, each of

which is registered as an investment

adviser under the Advisers Act.

Currently, sixteen Portfolios are advised

by one Sub-Adviser and one Portfolio is

advised by two Sub-Advisers. Subject to

the general supervision of the Adviser

and the Board, each Sub-Adviser makes

the specific investment decisions for the

Portfolio it advises and places orders to

purchase or sell securities on behalf of

that Portfolio. None of the Sub-Advisers

has broader supervisory, management or

administrative responsibilities with

respect to a Portfolio or the Fund. The

Adviser pays each Sub-Adviser out of

the advisory fees it receives from each

Portfolio.

4. Applicants request an order to

permit the Adviser to enter into and

materially amend Sub-Advisory

Agreements without obtaining

shareholder approval. The requested

relief will not extend to a Sub-Adviser

that is an ‘‘affiliated person’’ of either

the Fund or the Adviser, as defined in

section 2(a)(3) of the Act, other than by

reason of serving as a Sub-Adviser to

one or more of the Portfolios (‘‘Affiliated

Sub-Adviser’’).

Applicants’ Legal Analysis

1. Section 15(a) of the Act makes it

unlawful for any person to act as an

investment adviser to a registered

investment company except pursuant to

a written contract that has been

approved by a majority of the

investment company’s outstanding

voting securities. Rule 18f–2 under the

Act provides that each series or class of

stock in a series company affected by a

matter must approve the matter if the

Act requires shareholder approval.

2. Section 6(c) of the Act authorizes

the Commission to exempt person or

transactions from the provisions of the

Act 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

request relief under section 6(c) from

section 15(a) of the Act and rule 18f–2

under the Act. For the reasons discussed

below, applicants believe the requested

relief meets the standard of section 6(c).

3. Applicants assert that the Fund’s

investors rely on the Adviser for

investment management, and except the

Adviser to select and monitor one or

more Sub-Advisers best suited to

achieve a Portfolio’s investment

objective. Applicants represent that the

Adviser has substantial experience in

performing these functions for the Fund.

Applicants submit that, consequently,

from the perspective of an investor, the

role of the Sub-Advisers is comparable

to that of individual portfolio managers

employed by other investment company

advisory firms. Applicants thus contend

that, without the requested relief, the

Fund may be precluded from promptly

and effectively employing Sub-Advisers

best suited to the needs of the Portfolios.

Applicants also that the Advisory

Agreement will remain fully subject to

the requirements of section 15 of the Act

and rule 18f–2 under the Act, including

the requirements for shareholder

approval.

Applicants’ Conditions

Applicants agree that any order

granting the requested relief will be

subject to the following conditions:

1. The Adviser will not enter into a

Sub-Advisory Agreement with any

Affiliated Sub-Adviser without the SubAdviser Agreement with any Affiliated

Sub-Adviser without the Sub-Advisory

Agreement, including the compensation

to be paid under the Agreement, being

approved by the variable contract

owners with assets allocated to any subaccount of a registered separate account

for which the Portfolio serves as a

funding medium.

2. At all times, a majority of the Board

will be Independent Directors, and the

nomination of new or additional

Independent Directors will be within

the discretion of the then-existing

Independent Directors.

3. When a Sub-Adviser change is

proposed for a Portfolio with an

Affiliated Sub-Adviser, the Board,

including a majority of the Independent

Directors, will make a separate finding,

reelected in the Board’s minutes, that

the change is in the best interests of the

Portfolio and the variable contract

owners with assets allocated to any subaccount of a registered separate account

for which the Portfolio serves as a

funding medium, and does not involve

a conflict of interest from which the

Adviser or the Affiliated Sub-Adviser

derives an inappropriate advantage.

4. The Adviser will provide general

management and administrative

services to the Fund and the Portfolios,

including overall supervisory

responsibility for the general

management and investment of the

Fund’s securities portfolios, and, subject

to review and approval by the Board,

will: (i) Set each Portfolio’s overall

investment strategies, (ii) select SubAdvisers, (iii) monitor and evaluate the

performance of Sub-Advisers, (iv)

allocate and, when appropriate,
Federal Register / Vol. 63, No. 137 / Friday, July 17, 1998 / Notices 38685

reallocate a Portfolio’s assets among its

Sub-Advisers in those cases where a

Portfolio has more than one SubAdviser, and (v) implement procedures

reasonably designed to ensure that the

Sub-Advisers comply with the

Portfolio’s investment objectives,

policies, and restrictions.

5. Within 90 days of the hiring of any

new Sub-Adviser, the Adviser will

furnish the variable contract owners

with assets allocated to any sub-account

of a registered separate account for

which the Portfolio serves as a funding

medium with all information about the

new Sub-Adviser that would be

included in a proxy statement. The

information will include any change in

the disclosure caused by the addition of

a new Sub-Adviser. The Adviser will

meet this condition by providing the

variable contract owners with an

information statement meeting the

requirement of Regulation 14C,

Schedule 14C, and item 22 of Schedule

14A under the Securities Exchange Act

of 1934.

6. The Fund will disclose in its

prospectus the existence, substance, and

effect of any order granted pursuant to

the application. In addition, the Fund

will hold itself out to the public as

employing the management structure

described in the application. The Fund’s

prospectus will prominently disclose

that the Adviser has ultimate

responsibility for the investment

performance of the Portfolios due to its

responsibility to oversee Sub-Advisers

and recommend their hiring,

termination, and replacement.

7. Before the Fund may rely on the

requested order, the operations of each

Portfolio as described in the application

will be approved by a majority of the

Portfolio’s outstanding voting securities,

as defined in the Act, pursuant to voting

instructions provided by the variable

contract owners with assets allocated to

any sub-account of a registered separate

account for which the Portfolio serves as

a funding medium, or, in the case of a

Future Fund whose shareholders

purchased shares on the basis of a

prospectus containing the disclosure

contemplated by condition 6 above, by

the sole shareholder before offering

shares of the Future Fund to the variable

contract owners through a separate

account.

8. No director or officer of the Fund

or of the Adviser will own directly or

indirectly (other than through a pooled

investment vehicle that is not controlled

by the director or officer) any interest in

a Sub-Adviser, except for: (i) Ownership

of interests in the Adviser or any entity

that controls, is controlled by, or is

under common control with the

Adviser, or (ii) ownership of less than

1% of the outstanding securities of any

class of equity or debt securities of a

publicly traded company that is either

a Sub-Adviser or an entity that controls,

is controlled by, or is under common

control with a Sub-Adviser.

For the Commission, by the Division of

Investment Management, under delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 98–19052 Filed 7–16–98; 8:45 am]

BILLING CODE 8010–01–M

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #3103]

State of Iowa

As a result of the President’s major

disaster declaration on July 2, 1998, and

amendments thereto, I find that the

following counties in the State of Iowa

constitute a disaster area due to

damages caused by severe storms,

tornadoes, and flooding beginning on

June 13, 1998, and continuing:

Audubon, Boone, Carroll, Cass,

Chickasaw, Dallas, Fremont, Grundy,

Guthrie, Hamilton, Hardin, Howard,

Iowa, Jasper, Johnson, Keokuk, Louisa,

Marion, Marshall, Mills, Montgomery,

Muscatine, Page, Polk, Pottawattamie,

Poweshiek, Shelby, Taylor, Wapello,

and Washington. Applications for loans

for physical damages as a result of this

disaster may be filed until the close of

business on August 31, 1998, and for

loans for economic injury until the close

of business on April 2, 1999 at the

address listed below or other locally

announced locations: U.S. Small

Business Administration, Disaster Area

3 Office, 4400 Amon Carter Blvd., Suite

102, Fort Worth, TX 76155.

In addition, applications for economic

injury loans from small businesses

located in the following contiguous

counties may be filed until the specified

date at the above location: Adair,

Adams, Appanoose, Benton, Black

Hawk, Bremer, Butler, Calhoun, Cedar,

Crawford, Davis, Des Moines, Fayette,

Floyd, Franklin, Greene, Harrison,

Henry, Jefferson, Linn, Lucas, Madison,

Mahaska, Mitchell, Monroe, Ringgold,

Sac, Scott, Story, Tama, Union, Van

Buren, Warren, Webster, Winneshiek,

and Wright Counties in Iowa; Cass,

Douglas, Otoe, Sarpy, and Washington

Counties in Nebraska; Atchison,

Nodaway, and Worth Counties in

Missouri; Fillmore and Mower Counties

in Minnesota; and Henderson, Mercer,

and Rock Island Counties in Illinois.

The interest rates are:

Percent

Physical Damage:

Homeowners with credit available elsewhere ...................... 7.000

Homeowners without credit

available elsewhere ............... 3.500

Businesses with credit available

elsewhere .............................. 8.000

Businesses and non-profit organizations without credit available elsewhere ...................... 4.000

Others (including non-profit organizations) with credit available elsewhere ...................... 7.125

For Economic Injury:

Businesses and small agricultural cooperatives without

credit available elsewhere ..... 4.000

The number assigned to this disaster

for physical damage is 310311. For

economic injury the numbers are

992800 for Iowa; 992900 for Nebraska;

993000 for Missouri; 993400 for

Minnesota; and 993500 for Illinois.

(Catalog of Federal Domestic Assistance

Program Nos. 59002 and 59008)

Dated: July 9, 1998.

Bernard Kulik,

Associate Administrator for Disaster

Assistance.

[FR Doc. 98–19095 Filed 7–16–98; 8:45 am]

BILLING CODE 8025–01–P

SMALL BUSINESS ADMINISTRATION

[Declaration of Disaster #3100]

State of Ohio

As a result of the President’s major

disaster declaration on June 30, 1998,

and amendments thereto, I find that the

following counties in the State of Ohio

constitute a disaster area due to

damages caused by severe storms,

flooding, and tornadoes beginning on

June 24, 1998 and continuing: Athens,

Belmont, Coshocton, Franklin,

Guernsey, Harrison, Jackson, Jefferson,

Knox, Meigs, Monroe, Morgan,

Muskingum, Noble, Ottawa, Perry,

Pickaway, Richland, Sandusky,

Tuscarawas, and Washington.

Applications for loans for physical

damages as a result of this disaster may

be filed until the close of business on

August 29, 1998, and for loans for

economic injury until the close of

business on March 30, 1999 at the

address listed below or other locally

announced locations: U.S. Small

Business Administration, Disaster Area

2 Office, One Baltimore Place, Suite

300, Atlanta, GA 30308.

In addition, applications for economic

injury loans from small businesses

located in the following contiguous

counties may be filed until the specified