Federal Register / Vol. 60, No. 7 / Wednesday, January 11, 1995 / Notices 2803

same terms and conditions as the

existing Portfolios.

Applicants’ Conditions

Applicants agree that any order

granting the requested relief will be

subject to the following conditions:

1. The Account will be established as

one or more separate cash accounts on

behalf of the Portfolios with the

Custodian. The Portfolios may deposit

daily all or a portion of their uninvested

net cash balances into the Account. The

Account will not be distinguishable

from any other accounts maintained by

a Portfolio with the Custodian except

that monies from the various Portfolios

will be deposited in the Account on a

commingled basis. The Account will not

have any separate existence with indicia

of a separate legal entity. The sole

function of the account will be to

provide a convenient way of aggregating

individual transactions that would

otherwise require management by each

Portfolio of its cash balances.

2. Cash in the Account will be

invested solely in repurchase

agreements, ‘‘collateralized fully’’ as

defined in rule 2a–7 under the Act and

satisfying the uniform standards set by

the Portfolios for such investments.

3. All repurchase agreements entered

into by the Portfolios through the

Account will be valued on an amortized

cost basis. Each Portfolio relying upon

rule 2a–7 for valuation of its net assets

on the basis of amortized cost will use

the average maturity of the repurchase

agreements purchased by the Portfolios

participating in the account for the

purpose of computing the Portfolio’s

average portfolio maturity with respect

to the portion of its assets held in the

account on that day.

4. In order to assure that there will be

no opportunity for one Portfolio to use

any part of the balance of the Account

credited to another Portfolio, no

Portfolio will be allowed to create a

negative balance in the Account for any

reason, although each Portfolio will be

permitted to draw down its pro rata

share of the entire balance at any time.

Each Portfolio’s decision to invest

through the Account will be solely at

the Portfolio’s option, and no Portfolio

will be obligated to invest through, or to

maintain a minimum balance in, the

Account. In addition, each Portfolio will

retain the sole rights of ownership of

any of its assets invested in the

Account, including interest payable on

the assets. Each Portfolio’s investment

in the account will be documented daily

on the books of the Portfolio as well as

on the Custodian’s books.

5. Each Portfolio will participate in

the income earned or accrued in the

Account, including all investments held

by the Account, on the basis of the

percentage of the total amount in the

Account on any day represented by its

share of the Account.

6. The Adviser will administer,

manage, and invest the cash balance in

the Account in accordance with and as

part of its duties under the existing or

any future investment advisory

contracts with each Portfolio. The

Adviser will not collect any additional

or separate fee for the administration of

the Account.

7. The Portfolios and the Adviser will

enter into an agreement to govern the

arrangements in accordance with the

foregoing representations.

8. The administration of the Account

will be within the fidelity bond

coverage required by section 17(g) of the

Act and rule 17g–1 thereunder.

9. The Board of Directors of each

Portfolio participating in the Account

will evaluate the Account arrangements

annually and will authorize the

continued participation in the Account

only if it determines that there is a

reasonable likelihood that such

continued participation would benefit

the Portfolio and its shareholders.

10. Substantially all repurchase

transactions will have an overnight,

over-the-weekend or over-a-holiday

maturity, and in no event would a

transaction have a maturity of more than

seven days.

11. All joint repurchase transactions

will be effected in accordance with

Investment Company Act Release No.

13005 (Feb. 2, 1983) and with other

existing and future positions taken by

the SEC or its staff by rule, interpretive

release, no-action letter, any release

adopting any new rule, or any release

adopting any amendments to any

existing rule.

12. Any investment made through the

Account will satisfy the investment

policies or criteria of all Portfolios

participating in that investment.

For the SEC, by the Division of Investment

Management, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–605 Filed 1–10–95; 8:45 am]

BILLING CODE 8010–01–M

[Investment Company Act Rel. No. 20818;

812–9412]

Kidder, Peabody Investment Trust, et

al.; Notice of Application

January 4, 1995.

AGENCY: Securities and Exchange

Commission (‘‘SEC’’).

ACTION: Notice of application for

Exemption under the Investment

Company Act of 1940 (the ‘‘Act’’).

APPLICANTS: Kidder, Peabody

Investment Trust (‘‘KPIT’’); Kidder,

Peabody Investment Trust II (‘‘KPIT II’’);

Kidder, Peabody Investment Trust III

(‘‘KPIT III’’); Kidder, Peabody Municipal

Money Market Series; Kidder, Peabody

California Tax Exempt Money Fund;

Kidder, Peabody Premium Account

Fund; Kidder, Peabody Equity Income

Fund, Inc.; Kidder, Peabody

Government Income Fund, Inc.; Kidder,

Peabody Government Money Fund, Inc.;

Kidder, Peabody Cash Reserve Fund,

Inc.; Kidder, Peabody Tax Exempt

Money Fund, Inc.; Institutional Series

Trust; and Liquid Institutional Reserves

(the ‘‘Funds’’); Kidder, Peabody Asset

Management, Inc. (‘‘KPAM’’); Emerging

Markets Management (‘‘EMM’’); GE

Investment Management Incorporated

(‘‘GEIM’’); George D. Bjurman &

Associates (‘‘GDB&A’’); and Strategic

Fixed Income, L.P. (‘‘SFI’’) (EMM,

GEIM, GDB&A, and SFI together, the

‘‘Subadvisers’’); PaineWebber

Incorporated (‘‘PWI’’); Mitchell

Hutchins Asset Management Inc.

(‘‘MHAM’’); and Mitchell Hutchins

Institutional Investors Inc. (‘‘MHII,’’ and

together with MHAM, ‘‘Mitchell

Hutchins’’) (Mitchell Hutchins, together

with PWI, KPAM and the Subadvisers

are collectively referred to herein as the

‘‘Advisers’’).

RELEVANT ACT SECTIONS: Order requested

under section 6(c) for an exemption

from section 15(a).

SUMMARY OF APPLICATION: Paine Webber

Group Inc. (‘‘PaineWebber’’) has agreed

to purchase the investment advisory

business of Kidder, Peabody Group Inc.

The transaction will result in the

assignment, and thus the termination, of

existing investment advisory and

subadvisory contracts of the applicant

investment companies. Applicants seek

an order to permit the implementation,

without shareholder approval, of

interim investment advisory and

subadvisory contracts, during a period

of up to 120 days following the closing

of the transaction. The order also will

permit the applicant investment

advisers to receive from the applicant

investment companies fees earned

under the interim investment advisory

contracts following approval by the

investment companies’ shareholders.

FILING DATE: The application was filed

on January 4, 1995.

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
2804 Federal Register / Vol. 60, No. 7 / Wednesday, January 11, 1995 / Notices

1The Subadvisory Agreements relate to the

following Subadvisers and Funds: EMM, with

respect to the Kidder, Peabody Emerging Markets

Equity Fund series of KPIT II; GEIM, with respect

to Kidder, Peabody Global Equity Fund, the Kidder,

Peabody Municipal Bond Fund series of KPIT II,

and the Kidder, Peabody Intermediate Fixed Income

Fund series of KPIT; GDB&A, with respect to the

Kidder, Peabody Small Cap Equity Fund series of

KPIT III; AND SFI, with respect to the Kidder,

Peabody Global Fixed Income series of KPIT.

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

January 26, 1995, 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 such notification

by writing to the SEC’s Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth

Street, NW., Washington, DC 20549.

Applicants, Mitchell Hutchins Asset

Management Inc., 14th Floor, 1285

Avenue of the Americas, New York,

New York 10019; all other applicants,

c/o Arthur J. Brown, Esq., Kirkpatrick &

Lockhart, South Lobby—9th Floor, 1800

M Street, NW., Washington, D.C. 20036–

5891.

FOR FURTHER INFORMATION CONTACT:

Marc Duffy, Senior Attorney, at (202)

942–0565, or C. David Messman, 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.

Applicants’ Representations

1. The Funds are registered open-end

management investment companies.

The Advisers are registered as

investment advisers under the

Investment Advisers Act of 1940 (the

‘‘Advisers Act’’). The Funds each have

entered into an investment advisory

agreement with KPAM under which

KPAM provides advisory and

management services to the Funds (the

‘‘Advisory Agreements’’). Certain of the

Funds also have entered into

subadvisory agreements with the

Subadvisers and KPAM (the

‘‘Subadvisory Agreements,’’ and

together with the Advisory Agreements,

the ‘‘Prior Agreements’’).1

2. KPAM is a wholly-owned indirect

subsidiary of Kidder, Peabody Group

Inc. (‘‘Kidder’’). Kidder is a whollyowned indirect subsidiary of General

Electric Company (‘‘General Electric’’).

3. MHAM and MHII serve as

investment advisers to investment

companies and non-investment

company clients. MHAM and MHII are

wholly-owned subsidiaries of PWI. PWI

is a registered investment adviser under

the Advisers Act. PWI is wholly owned

subsidiary of PaineWebber, a publicly

held financial services holding

company.

4. On October 17, 1994, PaineWebber

entered into an asset purchase

agreement with General Electric and

Kidder (the ‘‘Asset Purchase

Agreement’’). PaineWebber agreed to

purchase certain assets of Kidder (the

‘‘Kidder Assets’’) for cash and other

consideration (the ‘‘Transaction’’).

PaineWebber has arranged for Mitchell

Hutchins to undertake the investment

advisory services now provided to the

Funds by KPAM. Applicants intend to

transfer the investment advisory

business concurrently with the transfer

of the retail operations and brokerage

staff on January 29, 1995.

5. At special meetings held on

November 1, 1994, November 2, 1994,

and December 16, 1994, the respective

Boards of Trustees/Directors of the

Funds (the ‘‘Boards’’) met to discuss the

Transaction. During those meetings, the

Boards, including a majority of the

Board members who are not ‘‘interested

persons,’’ as that term is defined in the

Act (the ‘‘Independent Directors’’), of

the respective Funds, with the advice

and assistance of counsel to the

Independent Directors, made a full

evaluation of the interim investment

advisory agreements between the Funds

and Mitchell Hutchins and the interim

subadvisory agreements among Mitchell

Hutchins, the Subadvisers, and certain

of the Funds (the ‘‘Interim

Agreements’’). In accordance with

section 15(c) of the Act, the Boards

voted to approve the Interim

Agreements. The Boards of each Fund

also voted to recommend that

shareholders of the Fund approve the

Interim Advisory and Subadvisory

Agreements, as well as a new advisory

agreement with PWI or Mitchell

Hutchins and, where applicable, new

subadvisory agreements with the

Subadvisers.

6. Applicants seek an exemption from

section 15(a) of the Act to permit the

implementation, without shareholder

approval, of the Interim Agreements.

The exemption would cover the period

commencing on the date of the transfer

of the existing investment advisory and

subadvisory agreements and continuing

through the date new advisory and

subadvisory agreements are approved or

disapproved by shareholders of the

respective Funds, which period shall be

no longer than 120 days (the ‘‘Interim

Period’’).

7. In approving the Interim

Agreements, the Boards, including a

majority of the Independent Directors,

concluded that payment of the advisory

and subadvisory fees during the Interim

Period would be appropriate and fair

because the fees to be paid are

unchanged from the fees paid under the

Prior Agreements, the fees would be

maintained in an interest-bearing

escrow account until payment is

approved or disapproved by

shareholders, and the nonpayment of

fees would be inequitable to

PaineWebber, Mitchell Hutchins, and

the Subadvisers in view of the

substantial services to be provided by

such companies to the Funds, and the

expenses incurred by such companies.

8. Applicants believe that delaying

the closing of the Transaction until

shareholders of all of the Funds could

vote on new advisory agreements would

result in substantial defections by

portfolio managers, advisory employees,

and supervisory personnel. These

defections could significantly impair the

value of the Kidder Assets and

significantly damage the Funds and

their shareholders. Thus, applicants

believe that the requested relief, which

will permit the Transaction to close

sooner than otherwise would be

possible, is in the best interests of the

Funds and their shareholders.

Applicants’ Legal Conclusions

1. Section 15(a) prohibits an

investment adviser from providing

investment advisory services to an

investment company except under a

written contract that has been approved

by a majority of the voting securities of

such investment company. Section 15(a)

further requires that such written

contract provide for its automatic

termination in the event of an

assignment. Under section 2(a)(4) of the

Act, an assignment includes any direct

or indirect transfer of a contract by the

assignor.

2. The transfer of Kidder’s investment

advisory business, as contemplated by

the Asset Purchase Agreement, will

result in an ‘‘assignment’’ within the

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

the Prior Agreements. Consistent with

section 15(a), therefore, each such

agreement will terminate by its terms.

3. Rule 15a–4 provides, among other

things, that if an investment adviser’s

investment advisory contract is

terminated by assignment, the

investment adviser may continue to act

as such for 120 days at the previous

compensation rate if a new contract is

approved by the board of directors of
Federal Register / Vol. 60, No. 7 / Wednesday, January 11, 1995 / Notices 2805

the investment company, and if the

investment adviser or a controlling

person of the investment adviser does

not directly or indirectly receive money

or other benefit in connection with the

assignment. Because General Electric

will receive a benefit in connection with

the assignment of the contracts,

applicants may not rely on rule 15a-4.

4. Applicant’s believe that the

requested relief will allow the Funds to

continue to operate on an orderly basis

until the shareholders have the

opportunity to consider new investment

advisory agreements. The 120 day

Interim Period will facilitate the orderly

and reasonable consideration of the new

agreements.

5. Section 6(c) of the Act 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.

Applicants’ Conditions

Applicants agree as conditions to the

requested exemptive relief that:

1. The Interim Agreements will have

the same terms and conditions as the

Prior Agreements.

2. Fees earned by the Mitchell

Hutchins and the Subadvisers and paid

by a Fund during the Interim Period in

accordance with the Interim Agreements

will be maintained in an interestbearing escrow account, and amounts in

such account (including interests earned

on such paid fees) will be paid to

Mitchell Hutchins and the Subadvisers

only upon approval of the Fund

shareholders or, in the absence of such

approval, to the respective Funds.

3. The Funds will hold meetings of

shareholders to vote on approval of new

investment advisory or sub-advisory

agreements, as the case may be, on or

before the 120th day following the

termination of the Prior Agreements.

4. General Electric or a subsidiary

thereof, and PWI or a subsidiary thereof,

will share equally the cost of preparing

and filing this application. General

Electric or a subsidiary thereof will pay

the costs relating to the solicitation of

the approvals of the Funds’

shareholders of the Interim Agreements

necessitated by the Transaction.

5. Mitchell Hutchins and the

Subadvisers will take all appropriate

actions to ensure that the scope and

quality of advisory and other services

provided to the Funds under the Interim

Agreements will be at least equivalent,

in the judgment of the respective

Boards, including a majority of the

Independent Directors, to the scope and

quality of services previously provided.

In the event of any material change in

personnel providing services under the

Interim Agreements, Mitchell Hutchins

and the Subadvisers will apprise and

consult the Boards of the affected Funds

to assure that such Boards, including a

majority of the Independent Directors,

are satisfied that the services provided

by Mitchell Hutchins and the

Subadvisers 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. 95–606 Filed 1–10–95; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

[Docket No. 27649]

Supplemental Draft Environmental

Impact Statement (SDEIS); Effects of

Changes of Aircraft Flight Patterns

Over the State of New Jersey;

Comment Period Extension and Public

Hearing

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of comment period

extension and public hearing.

SUMMARY: On September 30, 1994, the

FAA issued a Supplement to the Draft

Environmental Impact Statement (DEIS)

to afford the public an opportunity to

review and comment on (1) a proposed

mitigation measure, (2) analysis on the

proposal by the New Jersey Coalition

Against Aircraft Noise (NJCAAN) to

route aircraft departing Newark

International Airport over the ocean

twenty-four hours a day, and (3) other

new and updated information

developed in response to comments on

the DEIS.

In response to requests from Federal

State and local elected officials, FAA

reopened the comment period on the

SDEIS. On December 12, 1994, an

additional 60 days was added extending

the comment period through February 9,

1995.

In response to further requests, FAA

is again extending the comment period

through February 23, 1995.

Additionally, a public hearing will be

held in Toms River, New Jersey.

This additional hearing will facilitate

comments by citizens potentially

affected by the NJCAAN proposal, as

described in the analysis contained in

the SDEIS.

COMMENT PERIOD: The comment period

is extended until February 23, 1995. The

public hearing in Toms River will be

held:

Date Time/location

February

14.

1:00–4:00 pm, 7:00–10:00 pm,

Holiday Inn, route 37 East,

Toms River, NJ 08753.

Registration of speakers will begin

approximately 1⁄2 hour before the start of

each session. The afternoon and evening

session will begin at 1 PM and 7 PM,

respectively, and will continue until all

scheduled speakers have testified or

until 4 PM and 10 PM, respectively. All

persons wishing to make oral

presentations at the public hearing are

strongly urged to provide a written copy

of their statement at the hearing or at the

FAA address provided in the paragraph

below.

ADDRESSES: Written comments, in

triplicate, must be received at the

following address by February 23, 1955:

Federal Aviation Administration, Office

of the Chief Counsel: Docket Number

27649, 800 Independence Avenue S.W.,

Washington, DC 20591.

The FAA will consider and respond

to all comments directly related to the

scope of the SDEIA. The geographic

scope delineated by Congress for the EIS

is the environmental effects of the

Expanded East coast Plan over the State

of New Jersey and adjacent coastal

waters. Please note, however, that the

most useful comments are those which

provide facts and analyses to support

the reviewer’s recommendations or

conclusions on specific topics contained

in the document. The FAA will consider

comments received after the close of the

comment period to the extent practical.

The FAA will issue a final EIS that

will include corrections, clarifications

and responses to comments on the

SDEIS.

Issued in Washington, DC, on January 6,

1995.

John D. Canoles,

Acting Deputy Associate Administrator for

Air Traffic.

[FR Doc. 95–682 Filed 1–6–95; 8:45 am]

BILLING CODE 4910–13–M

Aviation Rulemaking Advisory

Committee Meetings

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of meetings.