[Federal Register Volume 61, Number 197 (Wednesday, October 9, 1996)]
[Notices]
[Pages 52979-52980]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-25827]
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SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Rel. No. 22261; 811-7936]
Hercules Funds Inc.; Notice of Application
October 2, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Deregistration under the Investment
Company Act of 1940 (``Act'').
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APPLICANT: Hercules Funds Inc.
RELEVANT ACT SECTIONS: Section 8(f).
SUMMARY OF APPLICATION: Applicant seeks an order declaring that it has
ceased to be an investment company.
FILING DATES: The application was filed on July 25, 1996, and amended
on September 13, 1996.
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
applicant with a copy of the request, personally or by mail. Hearing
requests should be received by the SEC by 5:30 p.m. on October 28,
1996, 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 such notification by writing to
the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 Fifth Street, NW., Washington, DC 20549.
Applicant, 222 South Ninth Street, Minneapolis, Minnesota 55402.
FOR FURTHER INFORMATION CONTACT: Courtney S. Thornton, Senior Counsel,
at (202) 942-0583, or Alison E. Baur, 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.
Applicant's Representations
1. Applicant, a Minnesota corporation, is an open-end non-
diversified management investment company consisting of six series:
North American Growth and Income Fund (``North American Fund''),
Pacific Basin Value Fund (``Pacific Basin Fund''), European Value Fund
(``European Fund''), Latin American Value Fund (``Latin American
Fund'') (collectively, the ``Acquired Funds''), World Bond Fund (``Bond
Fund''), and Money Market Fund. On August 4, 1993, applicant filed a
notification of registration on Form N-8A under section 8(a) of the Act
and registered under section 8(b) of the Act and the Securities Act of
1933 by filing a registration statement on Form N-1A. The registration
statement became effective on November 1, 1993, and the initial public
offering commenced on November 9, 1993.
2. At a meeting held on March 29, 1996, applicant's board of
directors (the ``Board'') approved the following plans by written
action pursuant to Minnesota law; (a) a plan or reorganization between
North American Fund and Growth and Income Fund, a series of Piper Funds
Inc.; (b) a plan of reorganization between Pacific Basin Fund and
Pacific-European Growth Fund (``Pacific-European Fund''), a series of
Piper Global Funds Inc. (``Piper Global''); (c) a plan of
reorganization between European Fund and Pacific-European Fund; (d) a
plan of reorganization between Latin American Fund and Emerging Markets
Growth Fund (with Growth and Income Fund and Pacific-European Fund, the
``Acquiring Funds''), a series of Piper-Global (collectively, the
``Plans''); and (e) a plan of liquidation of Bond Fund (the
``Liquidation Plan''). In approving the Plans and the Liquidation Plan,
the Board considered, among other things: (a) the belief of Piper
Capital Management Incorporated (the ``Manager''), applicant's
investment adviser, that applicant's assets were unlikely to grow to an
economically viable size; (b) the Manager's intent to cease waiving and
absorbing expenses relating to any of applicant's series after June 30,
1996; (c) the Manager's agreement to incur all direct expenses
associated with the Plans and the Liquidation Plan; and (d) the
Manager's expectation that the Plans would not result in any Federal
taxable income to the applicable funds or their shareholders.
3. Applicant and the Acquiring Fund may be deemed affiliated
persons of each other because they share a common investment adviser,
common directors, and common officers. Accordingly, applicant relied on
the exemption provided in rule 17a-8 to effect the Plans.\1\ The Board
determined, in accordance with rule 17a-8, that the sale of each
Acquired Fund's assets to the applicable Acquiring Fund was in the best
interests of the Acquired Fund and its shareholders, and that the
interests of the existing shareholders would not be diluted as a result
of such transaction.
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\1\ Rule 17a-8 provides relief from the affiliated transaction
prohibition of section 17(a) of the Act for a merger of investment
companies that may be affiliated persons of each other solely by
reason of having a common investment adviser, common directors, and/
or common officers.
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4. To solicit approval of each Plan by shareholders, applicant
distributed to each Acquired Fund's shareholders a combined proxy
statement and prospectus dated May 17, 1996. To solicit approval of the
Liquidation Plan, applicant distributed to Bond Fund's shareholders a
proxy statement dated
[[Page 52980]]
May 17, 1996. On June 18, 1996, the holders of a majority of
outstanding shares of each Acquired Fund and Bond Fund voted to approve
each Plan and the Liquidation Plan, respectively. There was no formal
plan to liquidate Money Market Fund, nor was there a shareholder vote
or consent to a liquidation. However, shareholders of Money Market Fund
were informed of the Manager's intention to cease waiving and absorbing
the Fund's expenses effective July 1, 1996 in a supplement to
applicant's prospectus filed on February 7, 1996 and in applicant's
semi-annual report for the period ended January 31, 1996. Shareholders
of Money Market Fund subsequently began voluntarily redeeming their
shares at an increased rate, and had redeemed all of their shares by
the close of business on June 21, 1996 (the ``Closing Date'').
5. As of the Closing Date, North American Fund had 660,209 shares
outstanding at a net asset value (``NAV'') of $11.11 per share and an
aggregate NAV of $7,333,807, Pacific Basin Fund had 1,983,812 shares
outstanding at a NAV of $9.29 per share and an aggregate NAV of
$18,426,580, European fund had 984,469 shares outstanding at a NAV of
$10.31 per share and an aggregate NAV of $10,146,588, Latin American
fund had 1,617,505 shares outstanding at a NAV of $8.77 per share and
an aggregate NAV of $14,191,312, and Bond Fund had 833,326 shares
outstanding at a NAV of $10.34 per share and an aggregate NAV of
$5,516,964. As of June 20, 1996, Money Market Fund had an aggregate NAV
of $1,050,236, but by the close of business on the Closing Date, the
Fund had an aggregate NAV of $0 as a result of shareholders' voluntary
redemption of their shares in complete liquidation of the fund.
Accordingly, as of the Closing Date, applicant had an aggregate NAV of
$55,931,299.
6. On the Closing Date, the assets and state liabilities of each
Acquired Fund were transferred to the relevant Acquiring Fund in
exchange for shares of the Acquiring Fund. These shares, which had an
aggregate NAV equal to the value of Acquired Fund assets transferred to
the Acquiring Fund, less the Acquired Fund liabilities assumed by the
Acquiring Fund, subsequently were distributed pro rata to each
Acquired Fund shareholder. Also on the Closing Date, the portfolio
securities and other assets of Bond Fund were sold, creditors were paid
or reserves for such payments established, and the net proceeds of such
sales were distributed to Bond Fund's shareholders in cash, pro rata,
in accordance with their shareholdings.
7. All expenses incurred in soliciting proxies from applicant's
shareholders for approval of each of the Plans and the Liquidation
Plan, including the cost of preparing and mailing proxy statements and
other materials, were borne by the Manager. Such expenses were
approximately $750,000. Total brokerage fees paid by applicant in
connection with the Plans and the Liquidation Plan amounted to $11,534
(with respect to North American Fund).
8. At the time of the application, applicant had no shareholders,
assets, or liabilities, nor was applicant a party to any litigation or
administrative proceeding. Applicant is not engaged, nor does it
propose to engage, in any business activities other than those
necessary for the winding-up of its affairs.
9. Applicant intends to file articles of dissolution with the
Secretary of State of Minnesota upon receipt of the order requested by
this application.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-25827 Filed 10-8-96; 8:45 am]
BILLING CODE 8010-01-M