57310 Federal Register / Vol. 75, No. 181 / Monday, September 20, 2010 / Notices 

5 17 CFR 200.30–3(a)(27). 

CQ Plan’’), and reflects changes 

unanimously adopted by the 

Participants. The Sixteenth Amendment 

to the CTA Plan and the Twelfth 

Amendment to the CQ Plan 

(‘‘Amendments’’) propose to add EDGA 

Exchange, Inc. and EDGX Exchange, Inc. 

to the Plans. The Commission is 

publishing this notice to solicit 

comments from interested persons on 

the proposed Amendments. 

I. Rule 608(a) 

A. Purpose of the Amendments 

The amendment proposes to add 

EDGA Exchange, Inc. and EDGX 

Exchange, Inc. as new Participants to 

each Plan. 

B. Governing or Constituent Documents 

Not applicable. 

C. Implementation of the Amendments 

Because the Amendments constitute 

‘‘Ministerial Amendments’’ under both 

clause (1) of Section IV(b) of the CTA 

Plan and clause (1) of Section IV(c) of 

the CQ Plan, the Chairman of the CTA 

Plan and the CQ Plan’s Operating 

Committee may submit these 

amendments to the Commission on 

behalf of the Participants in the CTA 

Plan and the CQ Plan. Because the 

Participants designate the amendments 

as concerned solely with the 

administration of the Plans, the 

amendments become effective upon 

filing with the Commission. 

D. Development and Implementation 

Phases 

Not applicable. 

E. Analysis of Impact on Competition 

The proposed amendment does not 

impose any burden on competition that 

is not necessary or appropriate in 

furtherance of the purposes of the 

Exchange Act. The Participants do not 

believe that the proposed plan 

amendment introduces terms that are 

unreasonably discriminatory for the 

purposes of Section 11A(c)(1)(D) of the 

Exchange Act. 

F. Written Understanding or Agreements 

relating to Interpretation of, or 

Participation in, Plan 

Not applicable. 

G. Approval by Sponsors in Accordance 

with Plan 

See Item I(C) above. 

H. Description of Operation of Facility 

Contemplated by the Proposed 

Amendment 

Not applicable. 

I. Terms and Conditions of Access 

See Item I(A) above. 

J. Method of Determination and 

Imposition, and Amount of, Fees and 

Charges 

See Item I(A) above. 

K. Method and Frequency of Processor 

Evaluation 

Not applicable. 

L. Dispute Resolution 

Not applicable. 

II. Rule 601(a) (Solely in its Application 

to the Amendments to the CTA Plan) 

A. Reporting Requirements 

Not applicable. 

B. Manner of Collecting, Processing, 

Sequencing, Making Available and 

Disseminating Last Sale Information 

Not applicable. 

C. Manner of Consolidation 

Not applicable. 

D. Standards and Methods Ensuring 

Promptness, Accuracy and 

Completeness of Transaction Reports 

Not applicable. 

E. Rules and Procedures Addressed to 

Fraudulent or Manipulative 

Dissemination 

Not applicable. 

F. Terms of Access to Transaction 

Reports 

Not applicable. 

G. Identification of Marketplace of 

Execution 

Not Applicable. 

III. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed 

Amendments are consistent with the 

Act. Comments may be submitted by 

any of the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–CTA/CQ–2010–03 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–CTA/CQ–2010–03. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the Amendments that 

are filed with the Commission, and all 

written communications relating to the 

Amendments between the Commission 

and any person, other than those that 

may be withheld from the public in 

accordance with the provisions of 

5 U.S.C. 552, will be available for 

website viewing and printing in the 

Commission’s Public Reference Room, 

100 F Street, NE., Washington, DC 

20549, on official business days 

between the hours of 10 a.m. and 3 p.m. 

Copies of the Amendments also will be 

available for inspection and copying at 

the principal office of the CTA. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–CTA/CQ–2010–03 and 

should be submitted on or before 

October 12, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.5

Florence E. Harmon, 

Deputy Secretary. 

[FR Doc. 2010–23360 Filed 9–17–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Investment Company Act Release No. 

29416; File No. 812–13714] 

American Capital, Ltd.; Notice of 

Application 

September 14, 2010. 

AGENCY: Securities and Exchange 

Commission (the ‘‘Commission’’). 

ACTION: Notice of an application for an 

order under section 61(a)(3)(B) of the 

Investment Company Act of 1940 (the 

‘‘Act’’). 

SUMMARY: Summary of Application: 

Applicant, American Capital, Ltd. 

requests an order approving a proposal 

to grant certain stock options to 


jdjones on DSK8KYBLC1PROD with NOTICES
Federal Register / Vol. 75, No. 181 / Monday, September 20, 2010 / Notices 57311 

1Section 2(a)(48) defines a BDC to be any closedend investment company that operates for the 

purpose of making investments in securities 

described in sections 55(a)(1) through 55(a)(3) of the 

Act and makes available significant managerial 

assistance with respect to the issuers of such 

securities. 

2The Non-employee Directors receive a $100,000 

per year retainer payment and $3,000 for each 

Board or committee meeting or other designated 

Board-related meeting attended, and reimbursement 

for related expenses. Non-employee Directors who 

chair a committee of the Board receive an 

additional $10,000 retainer per year. Non-employee 

Directors who serve as directors on the boards of 

portfolio companies also receive an annual retainer 

from applicant set at $30,000 per board, in lieu of 

any payment from the portfolio company. 

3At a Board meeting held on January 14, 2010, 

the Board approved an amendment to the Plan. At 

such meeting, the Board determined that the 

amendment did not require stockholder approval 

under Section 10 of the Plan or applicable law or 

NASDAQ listing requirements. The Company 

acknowledges that the Commission is not taking a 

position as to whether the Company is required to 

seek stockholder approval for the amendment. 

4Under the Plan, ‘‘Fair Market Value’’ is defined 

as follows: (a) if applicant’s common stock is listed 

on any established exchange or traded on the 

NASDAQ Global Select Market, the closing sales 

price of the common stock as quoted on such 

exchange or market (or if the common stock is 

traded on multiple exchanges or markets, the 

exchange or market with the greatest volume of 

trading in the common stock) on the date on which 

an option is granted under the Plan, as reported in 

The Wall Street Journal or such other source as the 

Board deems reliable; or (b) in the absence of 

closing sales prices on such exchanges or markets 

for the common stock, the Fair Market Value will 

be determined in good faith by the Board, but in 

no event shall be less than the current NAV per 

share of common stock. 

directors who are not also employees or 

officers of the applicant (the ‘‘Nonemployee Directors’’) under its 2009 

Stock Option Plan (the ‘‘Plan’’). 

DATES: Filing Dates: The application was 

filed on November 5, 2009, and 

amended on January 25, 2010, and 

September 7, 2010. Applicants have 

agreed to file an amendment during the 

notice period, the substance of which is 

reflected in this notice. 

Hearing or Notification of Hearing: An 

order granting the application will be 

issued unless the Commission orders a 

hearing. Interested persons may request 

a hearing by writing to the 

Commission’s Secretary and serving 

applicant with a copy of the request, 

personally or by mail. Hearing requests 

should be received by the Commission 

by 5:30 p.m. on October 7, 2010, and 

should be accompanied by proof of 

service on applicant, 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 

Commission’s Secretary. 

ADDRESSES: Secretary, U.S. Securities 

and Commission, 100 F Street, NE., 

Washington, DC 20549–1090; 

Applicant, 2 Bethesda Metro Center, 

14th Floor, Bethesda, Maryland 20814. 

FOR FURTHER INFORMATION CONTACT: 

Deepak T. Pai, Senior Counsel, at (202) 

551–6876, or Michael W. Mundt, 

Assistant Director, at (202) 551–6821 

(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 via the Commission’s 

Web site by searching for the file 

number, or for an applicant using the 

Company name box, at http:// 

www.sec.gov/search/search.htm, or by 

calling (202) 551–8090. 

Applicant’s Representations 

1. Applicant, a Delaware corporation, 

is a business development company 

(‘‘BDC’’) within the meaning of section 

2(a)(48) of the Act.1 Applicant’s primary 

business objectives are to increase its 

net operating income and net asset 

value by investing its assets in senior 

debt, subordinated debt, with and 

without detachable warrants, and equity 

of small to medium sized businesses 

with attractive current yields and 

potential for equity appreciation. 

Applicant’s investment decisions are 

made either by its board of directors (the 

‘‘Board’’), based on recommendations of 

the executive officers of applicant, or, 

for investments that meet certain 

objective criteria established by the 

Board, by the executive officers of 

applicant, under authority delegated by 

the Board. Applicant does not have an 

external investment adviser within the 

meaning of section 2(a)(20) of the Act. 

2. Applicant requests an order under 

section 61(a)(3)(B) of the Act approving 

its proposal to grant certain stock 

options under the Plan to its Nonemployee Directors.2 Applicant has a 

nine member Board with one current 

vacancy. Seven of the eight current 

members of the Board are not 

‘‘interested persons’’ (as defined in 

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

applicant (‘‘Disinterested Directors’’). All 

of the current Non-employee Directors 

are Disinterested Directors. The Board 

approved the Plan at a meeting of the 

Board held on April 6, 2009 and 

applicant’s stockholders approved the 

Plan at the annual meeting of 

stockholders held on June 11, 2009.3

3. Applicant’s officers, employees, 

and Non-employee Directors are eligible 

to receive options under the Plan. Under 

the Plan, a maximum of 750,000 shares 

of applicant’s common stock, in the 

aggregate, may be issued to Nonemployee Directors and options to 

purchase 93,750 shares of applicant’s 

common stock may be issued to any one 

Non-employee Director. On the date that 

the Commission issues an order on the 

application (‘‘Order Date’’), each of the 

seven Non-employee Directors serving 

on the Board as of June 11, 2009 will be 

granted options to purchase 93,750 

shares of applicant’s common stock (the 

‘‘Initial Grants’’), provided that the Nonemployee Director is a member of the 

Board on the Order Date. The options 

issued under the Initial Grants will vest 

in three equal parts on each of the first 

three anniversaries of June 11, 2009. 

Any person who becomes a Nonemployee Director after June 11, 2009 

will be entitled to receive options to 

purchase 93,750 shares of applicant’s 

common stock (the ‘‘Other Grants’’), if 

and to the extent that there are options 

available for grant to Non-employee 

Directors under the Plan. Each Other 

Grant will be effective on the later of the 

date such person becomes a Nonemployee Director and the Order Date. 

The options issued under the Other 

Grants will vest in three equal parts on 

each of the first three anniversaries of 

the date such person becomes a Nonemployee Director. 

4. Under the terms of the Plan, the 

exercise price of an option will not be 

less than 100% of the current market 

value, or if no such market value exists, 

the current net asset value (‘‘NAV’’) per 

share of applicant’s common stock on 

the date of the issuance of the option 

(‘‘Fair Market Value’’).4 The Initial 

Grants will expire on June 11, 2019, and 

the Other Grants will expire on the 

tenth anniversary of the date the person 

becomes a Non-employee Director. 

Options granted under the Plan may not 

be assigned or transferred other than by 

will or the laws of descent and 

distribution. In the event of the death or 

disability (as defined in the Plan) of a 

Non-employee Director during such 

director’s service, all such director’s 

unexercised options will immediately 

become exercisable and may be 

exercised for a period of three years 

following the date of death (by such 

director’s personal representative) or 

one year following the date of disability, 

but in no event after the respective 

expiration dates of such options. In the 

event of the termination of a Nonemployee Director for cause, any 

unexercised options will terminate 

immediately. If a Non-employee 

Director’s service is terminated for any 

reason other than by death, disability, or 


jdjones on DSK8KYBLC1PROD with NOTICES
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