57312 Federal Register / Vol. 75, No. 181 / Monday, September 20, 2010 / Notices 

5Applicant’s common stock constitutes the only 

voting security of applicant currently outstanding. 

for cause, the options may be exercised 

within one year immediately following 

the date of termination, but in no event 

later than the expiration date of such 

options. 

5. Applicant’s officers and employees 

are eligible or have been eligible to 

receive options under stock option 

plans that exclude Non-employee 

Directors as participants (the ‘‘Employee 

Plans’’), applicant’s 2006 stock option 

plan (the ‘‘2006 Option Plan’’), 

applicant’s 2007 stock option plan (the 

‘‘2007 Option Plan’’), and applicant’s 

2008 stock option plan (the ‘‘2008 

Option Plan’’). Non-employee Directors 

have been eligible to receive options 

under applicant’s two Disinterested 

Director stock option plans (the 

‘‘Disinterested Director Plans’’), the 2006 

Option Plan, the 2007 Option Plan and 

the 2008 Option Plan (collectively, the 

2008 Option Plan, the 2007 Option Plan, 

the 2006 Option Plan, the Disinterested 

Director Plans and the Employee Plans 

are the ‘‘Other Plans’’). As of August 18, 

2010, applicant had 350,309,123 shares 

of common stock outstanding.5 The 

750,000 shares of applicant’s common 

stock that may be issued to Nonemployee Directors under the Plan 

represent 0.2% of applicant’s 

outstanding voting securities as of 

August 18, 2010. As of August 18, 2010, 

the amount of voting securities that 

would result from the exercise of all 

outstanding options issued to 

applicant’s directors, officers, and 

employees under the Other Plans and 

the Plan would be 33,553,256 shares of 

applicant’s common stock, or 9.5% of 

applicant’s outstanding voting 

securities. As of August 18, 2010, 

applicant had no outstanding warrants, 

options, or rights to purchase its voting 

securities other than the outstanding 

options issued to applicant’s directors, 

officers, and employees under the Other 

Plans and the Plan. 

Applicant’s Legal Analysis 

1. Section 63(3) of the Act permits a 

BDC to sell its common stock at a price 

below current NAV upon the exercise of 

any option issued in accordance with 

section 61(a)(3). Section 61(a)(3)(B) 

provides, in pertinent part, that a BDC 

may issue to its non-employee directors 

options to purchase its voting securities 

pursuant to an executive compensation 

plan, provided that: (a) The options 

expire by their terms within ten years; 

(b) the exercise price of the options is 

not less than the current market value 

of the underlying voting securities at the 

date of the issuance of the options, or if 

no market value exists, the current NAV 

of the underlying voting securities; (c) 

the proposal to issue the options is 

authorized by the BDC’s shareholders, 

and is approved by order of the 

Commission upon application; (d) the 

options are not transferable except for 

disposition by gift, will or intestacy; (e) 

no investment adviser of the BDC 

receives any compensation described in 

section 205(a)(1) of the Investment 

Advisers Act of 1940, except to the 

extent permitted by clause (b)(1) or 

(b)(2) of that section; and (f) the BDC 

does not have a profit-sharing plan as 

described in section 57(n) of the Act. 

2. In addition, section 61(a)(3) 

provides that the amount of the BDC’s 

voting securities that would result from 

the exercise of all outstanding warrants, 

options, and rights at the time of 

issuance may not exceed 25% of the 

BDC’s outstanding voting securities, 

except that if the amount of voting 

securities that would result from the 

exercise of all outstanding warrants, 

options, and rights issued to the BDC’s 

directors, officers, and employees 

pursuant to any executive compensation 

plan would exceed 15% of the BDC’s 

outstanding voting securities, then the 

total amount of voting securities that 

would result from the exercise of all 

outstanding warrants, options, and 

rights at the time of issuance will not 

exceed 20% of the outstanding voting 

securities of the BDC. 

3. Applicant represents that its 

proposal to grant certain stock options 

to Non-employee Directors under the 

Plan meets all the requirements of 

section 61(a)(3)(B). Applicant states that 

the Board is actively involved in the 

oversight of applicant’s affairs and that 

it relies extensively on the judgment 

and experience of its Board. In addition 

to their duties as Board members 

generally, applicant states that the Nonemployee Directors provide guidance 

and advice on operational issues, 

underwriting policies, credit policies, 

asset valuation and strategic direction, 

as well as serving on committees. 

Applicant believes that the availability 

of options under the Plan will provide 

significant at-risk incentives to Nonemployee Directors to remain on the 

Board and devote their best efforts to 

ensure applicant’s success. Applicant 

states that the options will provide a 

means for the Non-employee Directors 

to increase their ownership interests in 

applicant, thereby ensuring close 

identification of their interests with 

those of applicant and its stockholders. 

Applicant asserts that by providing 

incentives such as options, applicant 

will be better able to maintain 

continuity in the Board’s membership 

and to attract and retain the highly 

experienced, successful and dedicated 

business and professional people who 

are critical to applicant’s success as a 

BDC. 

4. As noted above, applicant states 

that the amount of voting securities that 

would result from the exercise of all 

outstanding options issued to 

applicant’s directors, officers, and 

employees under the Other Plans and 

the Plan would be 33,553,256 shares of 

applicant’s common stock, or 9.5% of 

applicant’s outstanding voting 

securities, as of August 18, 2010. 

However, applicant represents that the 

maximum number of voting securities 

that would result from the exercise of all 

outstanding options issued and all 

options issuable to applicant’s directors, 

officers, and employees under the Plan 

and the Other Plans would be 

70,981,813 shares of applicant’s 

common stock, or 20.2% of applicant’s 

outstanding voting securities, as of 

August 18, 2010. Applicant states that to 

the extent the number of shares of 

common stock that would be issued 

upon the exercise of options issued 

under the Other Plans and the Plan 

exceeds 15% of applicant’s outstanding 

voting securities, applicant will comply 

with the 20% limit in section 61(a)(3) of 

the Act. 

5. Applicant asserts that, given the 

relatively small amount of common 

stock issuable to Non-employee 

Directors upon their exercise of options 

under the Plan, the exercise of such 

options would not, absent extraordinary 

circumstances, have a substantial 

dilutive effect on the NAV of applicant’s 

common stock. 

For the Commission, by the Division of 

Investment Management, pursuant to 

delegated authority. 

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23408 Filed 9–17–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

Sunshine Act Meeting 

Notice is hereby given, pursuant to 

the provisions of the Government in the 

Sunshine Act, Public Law 94–409, that 

the Securities and Exchange 

Commission will hold a Closed Meeting 

on Thursday, September 23, 2010 at 2 

p.m. 

Commissioners, Counsel to the 

Commissioners, the Secretary to the 

Commission, and recording secretaries 

will attend the Closed Meeting. Certain 


jdjones on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 181 / Monday, September 20, 2010 / Notices 57313 

1Transaction fees are currently waived for 

customer orders of 99 contracts or less in ETF, ETN 

and HOLDRs options. See CBOE Fees Schedule, 

footnote 9. 

2AIM is an electronic auction system that 

exposes certain orders electronically in an auction 

to provide such orders with the opportunity to 

receive an execution at an improved price. AIM is 

governed by CBOE Rule 6.74A. 

3 15 U.S.C. 78f(b). 

4 15 U.S.C. 78f(b)(4). 

5See CBOE Fees Schedule, Section 1. 

6NASDAQ OMX PHLX, Inc. categorizes its equity 

options transaction fees for Specialists, ROTs, 

SQTs, RSQTs and Broker-Dealers as either 

electronic or non-electronic. See NASDAQ OMX 

PHLX Fees Schedule, Equity Options Fees. NYSE 

Amex, Inc. categorizes its options transaction fees 

for Non-NYSE Amex Options Market Makers, 

Broker-Dealers, Professional Customers, Non BD 

Customers and Firms as either electronic or manual. 

See NYSE Amex Fees Schedule, Trade Related 

Charges. NYSE Arca, Inc. categorizes its options 

transaction fees for Customers, Firms and BrokerDealers as either electronic or manual. See NYSE 

Arca Fees Schedule, Trade Related Charges. 

staff members who have an interest in 

the matters also may be present. 

The General Counsel of the 

Commission, or his designee, has 

certified that, in his opinion, one or 

more of the exemptions set forth in 5 

U.S.C. 552b(c)(3), (5), (7), 9(B) and (10) 

and 17 CFR 200.402(a)(3), (5), (7), 9(ii) 

and (10), permit consideration of the 

scheduled matters at the Closed 

Meeting. 

Commissioner Aguilar, as duty 

officer, voted to consider the items 

listed for the Closed Meeting in a closed 

session. 

The subject matter of the Closed 

Meeting scheduled for Thursday, 

September 23, 2010 will be: 

Institution and settlement of injunctive 

actions; 

Institution and settlement of 

administrative proceedings; and 

Other matters relating to enforcement 

proceedings. 

At times, changes in Commission 

priorities require alterations in the 

scheduling of meeting items. 

For further information and to 

ascertain what, if any, matters have been 

added, deleted or postponed, please 

contact: 

The Office of the Secretary at (202) 

551–5400. 

Dated: September 16, 2010. 

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–23523 Filed 9–16–10; 4:15 pm] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–62902; File No. SR–CBOE– 

2010–081] 

Self-Regulatory Organizations; 

Chicago Board Options Exchange, 

Incorporated; Notice of Filing and 

Immediate Effectiveness of Proposed 

Rule Change Relating to Waiver of 

Transaction Fee for Public Customer 

Orders in SPDR Options Executed in 

Open Outcry or in the Automated 

Improvement Mechanism 

September 14, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934, 15 

U.S.C. 78s(b)(1), notice is hereby given 

that on September 3, 2010, Chicago 

Board Options Exchange, Incorporated 

(‘‘CBOE’’ or the ‘‘Exchange’’) filed with 

the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change as described in 

Items I and II below, which Items have 

been prepared by CBOE. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Chicago Board Options Exchange, 

Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) 

proposes to amend its Fees Schedule to 

waive the transaction fee for public 

customer orders in options on Standard 

& Poor’s Depositary Receipts that are 

executed in open outcry or in the 

Automated Improvement Mechanism. 

The text of the proposed rule change is 

available on the Exchange’s Web site 

(http://www.cboe.org/legal), at the 

Exchange’s Office of the Secretary and 

at the Commission. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, 

CBOE included statements concerning 

the purpose of and basis for the 

proposed rule change and discussed any 

comments it received on the proposed 

rule change. The text of these statements 

may be examined at the places specified 

in Item IV below. CBOE has prepared 

summaries, set forth in sections (A), (B), 

and (C) below, of the most significant 

aspects of such statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Public customer (‘‘C’’ origin code) 

orders in options on Standard & Poor’s 

Depositary Receipts (‘‘SPDR options’’) 

are charged a transaction fee of $.18 per 

contract, except for orders of 99 

contracts or less.1 The Exchange 

proposes to amend its Fees Schedule to 

waive the transaction fee for public 

customer orders in SPDR options that 

are executed in open outcry or in the 

Automated Improvement Mechanism 

(‘‘AIM’’) 2, effective September 7, 2010 

through November 30, 2010. The 

proposed fee waiver is intended to 

attract more customer volume on the 

Exchange in this product. 

2. Statutory Basis 

The Exchange believes the proposed 

rule change is consistent with Section 

6(b) of the Securities Exchange Act of 

1934 (‘‘Act’’) 3, in general, and furthers 

the objectives of Section 6(b)(4) 4 of the 

Act in particular, in that it is designed 

to provide for the equitable allocation of 

reasonable dues, fees, and other charges 

among its members and other persons 

using its facilities. The Exchange 

believes the proposed fee waiver is 

reasonable because it would result in 

cost savings during the waiver period 

for public customers trading SPDR 

options and is consistent with other fees 

assessed by the Exchange. The Exchange 

assesses manually executed brokerdealer orders a different rate ($.25 per 

contract) as compared to electronically 

executed broker-dealer orders ($.45 per 

contract), and a different rate ($.20 per 

contract) for broker-dealer orders 

executed on AIM as compared to other 

electronic executions and manual 

executions of broker-dealer orders.5

Other exchange fee schedules also 

distinguish between electronically and 

non-electronically executed orders.6

The Exchange believes the proposed fee 

waiver is equitable because it would 

apply uniformly to all public customers 

trading SPDR options. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

CBOE does not believe that the 

proposed rule change will impose any 

burden on competition that is not 

necessary or appropriate in furtherance 

of purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were solicited 

or received with respect to the proposed 

rule change. 


jdjones on DSK8KYBLC1PROD with NOTICES