[Federal Register Volume 61, Number 241 (Friday, December 13, 1996)]
[Notices]
[Pages 65608-65613]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31617]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. IC-22377; 812-10344]
Bessemer Securities LLC et al.; Notice of Application
December 6, 1996.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Company Act of 1940 (the ``Act'').
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APPLICANTS: Bessemer Securities LLC, Bessec Holdings, L.P., Bessemer
Securities Corporation, Bessemer Capital Partners, L.P., Bessemer
Ventures, Inc., Bessemer-Bradford Ventures, Inc., Bessemer Interstate
Corp., Bessemer Properties, Inc., Bessemer Holdings, L.P., Bessemer
Venture Partners L.P., Bessemer Venture Partners II L.P., Bessemer
Venture Partners III L.P., Bessemer Venture Partners IV L.P., Bradford
Venture Partners, L.P., Bradford Investors L.P.
RELEVANT ACT SECTION: Order requested under section 6(c) of the Act for
an exemption from all provisions of the Act.
SUMMARY OF APPLICATION: The Applicants, private family-controlled
special purpose investment vehicles whose interests are owned by the
family and certain other persons, seek an exemption from all provisions
of the
[[Page 65609]]
Act. The order would amend a prior order (the ``1992 Bessemer
Order'').\1\
\1\ Bessemer Securities Corporation, Investment Company Act
Release Nos. 18529 (Feb. 5, 1992) (notice) and 18594 (March 3, 1992)
(order).
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FILING DATE: The application was filed on September 13, 1996 and
amended on November 20, 1996. Applicants have agreed to file an
additional amendment, the substance of which is incorporated herein,
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
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 December 27,
1996, and should be accompanied by proof of service on the 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, c/o Bessemer Securities LLC, 630 Fifth Avenue, New
York, NY 10111-0333.
FOR FURTHER INFORMATION CONTACT: Kathleen L. Knisely, Law Clerk, at
(202) 942-0517, 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 at the
SEC's Public Reference Branch.
Applicants' Representations
1. Bessemer Securities Corporation (``Bessemer''), incorporated
under Delaware law in 1924, is a private investment company which has
one class of securities outstanding. All of the outstanding securities
of Bessemer is owned by trusts established for the benefit of
descendants of Henry Phipps (``Phipps Family Members'') and charitable
trusts or charitable foundations established by Phipps Family Members
(collectively, the ``Trust''). There are currently 89 trusts and one
charitable foundation; the number of Trusts is increasing with each
generation of the Phipps family, as most Trusts permit the creation of
subtrusts or the transfer in further trust upon the death of an income
beneficiary.
2. Bessemer's shares are subject to a shareholders agreement that
contains restrictions on share transfers. Each shareholder is bound not
to sell, pledge or otherwise dispose of its Bessemer shares to third
parties without first offering such shares to the other shareholders,
except that dispositions are permitted (a) to or in trust for Phipps
Family Members, their spouses, or charitable trusts established by
Phipps Family Members, and (b) to the executors or administrators of
the estate of a Phipps Family Member. Since 1934, substantially all of
Bessemer's outstanding common stock has been held by the Trusts,
predecessor trusts, charitable trusts or foundations established by
Phipps Family Members. At no time has there been a public offering of
Bessemer stock, nor has Bessemer stock been registered under any of the
Federal securities laws. In fact, other than the charitable trusts and
the charitable foundation, no one other than Phipps Family Members has
ever had a beneficial interest in Bessemer's stock.
3. Bessemer's investments include, among other assets, private
investments.\2\ In general, the private investments segment of
Bessemer's portfolio consists of substantial illiquid majority and
minority interests in selected companies with growth potential, often
in closely held or privately held companies. These investments are
sometimes made directly by Bessemer, but in the majority of cases are
made by partnerships, of which Bessemer or a wholly-owned subsidiary of
Bessemer is the primary or only limited partner. Each of these
partnerships is a limited partnership, in which Bessemer's interest as
a limited partner exceeds 50%, and which is owned 90% or more by
Bessemer and related persons. These partnerships are described more
fully in paragraph 4 below.
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\2\ See Id.
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4. Bessemer Capital Partners, L.P. (``BCP''), Bessemer Holdings,
L.P., Bessemer Venture Partners L.P. (``Venture Partners''), Bessemer
Venture Partners II L.P. (``Venture Partners II''), Bessemer Venture
Partners III L.P. (``Venture Partners III''), Bessemer Venture Partners
IV L.P. (``Venture Partners IV''), and Bradford Investors L.P.
(``BILP'') are all Delaware partnerships. Bradford Venture Partners,
L.P. (``Bradford Partners'') is a New Jersey Partnership (collectively,
the ``Existing Partnerships''). The Existing Partnerships were formed
in 1992 to serve as vehicles for Bessemer's investment activity.
5. Bessemer has four wholly-owned subsidiary corporations, Bessemer
Ventures, Inc., Bessemer-Bradford Ventures, Inc., Bessemer Interstate
Corp. and Bessemer Properties, Inc. (collectively, the ``Existing
Subsidiaries''). Each of the Existing Subsidiaries is a corporation
under Delaware law formed specifically to hold certain investments. The
first two subsidiaries listed above are limited to partners of one or
more of the partnerships discussed in paragraph 4 above. The latter two
subsidiaries own interests in real estate partnerships or direct
investments in real estate.
6. In the 1992 Bessemer Order, the SEC exempted Bessemer under
section 6(c) from all provisions of the Act. Applicants seek an amended
order to permit them to duplicate the basic structure of the investment
vehicles exempted in the 1992 Bessemer Order, but with the top tier
entities (Bessemer Securities LLC (``BSLLC'') and future Family
Securities Companies, as defined in paragraph 15) in a form that will
be treated as a partnership for tax purposes. If the requested order is
granted, the current owners of Bessemer plan to contribute their shares
of Bessemer to BSLLC. That contribution has been approved by the
corporate trustees of the shareholder trusts (subject to receipt of the
exemptive order requested herein), and will require approval by the
individual trustee of the shareholders. When that transaction occurs,
Bessemer will become a wholly-owned subsidiary of BSLLC. All of the
outstanding interests of BSLLC will be owned by the Trusts in the same
proportion as the Trusts hold outstanding common stock of Bessemer.
7. BSLLC is a Delaware limited liability company organized in 1996.
It is intended to qualify as a partnership for federal tax purposes.
All of the outstanding common membership interests in BSLLC are
currently owned by the Trusts. Each Trust currently owns less than 10%
of BSLLC's outstanding common interests and that will remain the case
after the contribution of Bessemer shares to BSLLC. When the current
owners of Bessemer contribute their shares to BSLLC, most or all of the
capital of each Trust will be invested in BSLLC.
8. If the requested order is granted and the current owners of
Bessemer contribute their shares to BSLLC, Bessemer and BSLLC will both
be limited partners in the Partnership. Bessemer will have a limited
partnership interest in the Partnership (representing approximately 74%
of total equity of the Partnership) with a preferred rate of return and
BSLLC will
[[Page 65610]]
have a limited partnership interest in the Partnership (representing
approximately 25% of total equity of the Partnership) subordinate to
the return on Bessemer's limited partnership interest.
9. Approximately 70.6% of BSLLC's common membership interests is
held by Trusts of which the trustees are Bessemer Trust Company
(``BTC''), a New Jersey chartered bank, and one or more Phipps Family
Members, and approximately 22.0% is held by Trusts of which BTC is the
sole trustee. Approximately 7.4% is held by Trusts of which the
trustees are Bessemer Trust Company, N.A. (``BTNA''), a national bank,
and one or more Phipps Family Members. BTC and BTNA are wholly owned
subsidiaries of The Bessemer Group, Inc. (``Bessemer Group''), a
Delaware corporation registered under the Federal Bank Holding Company
Act. All of the outstanding stock of Bessemer Group (except for
director's qualifying shares) is owned by Phipps Family Members or by
the Trusts, substantially all of the trustees of which are also BTC,
BTNA and Phipps Family Members.
10. The initial officers and members of the board of managers of
BSLLC are identical to the officers and board of directors of Bessemer,
although that may change from time to time in the future. The common
members of BSLLC have voting rights similar to the shareholders of a
Delaware corporation (such as Bessemer), and could (if they chose to do
so) elect a board of managers with members different than the members
of the board of directors of Bessemer.
11. At no time has there been a public offering of BSLLC's shares,
nor has BSLLC's shares been registered under any of the federal
securities laws. Pursuant to the terms of BSLLC's limited liability
company agreement (the ``LLC Agreement''), transfers of common
interests in BSLLC are restricted. The LLC Agreement permits transfers
to descendants of the same child of Henry Phipps as the transferor, or
a trust the beneficial ownership of which is limited to descendants of
the same child of Henry Phipps as the transferor and/or a qualifying
charity, and transfers with the approval of 80% or more of the common
interests. All other transfers require prior notice to BSLLC and other
common members. That notice triggers a right to purchase the securities
by related entities.
12. Bessec Holdings, L.P. (the ``Partnership'') is a newly formed
Delaware limited partnership. Its purpose is to serve as a vehicle
through which BSLLC and Bessemer will make private equity investments.
The Partnership's portfolio will consist of illiquid interests in
selected companies with growth potential, generally in closely held or
privately held companies. The Partnership may co-invest in issuers with
Bessemer Holdings, L.P., or other private investment vehicles formed by
Bessemer, BSLLC or the Family Securities Companies. BSLLC and Bessemer
will be the sole limited partners in the Partnership, and their
interests will represent approximately 99% of its initial equity
capital. The Partnership's sole general partner is Kylix Holdings,
L.L.C. (``Kylix'').
13. Kylix is a New York limited liability company that is
controlled directly by the president of Bessemer and BSLLC and two
other persons who are involved directly in the management of the
investments of partnerships formed by Bessemer and BSLLC. Kylix is also
indirectly owned by each of these three persons and family trusts and
family partnerships established by each of them (the interests in which
are owned exclusively by or for the benefit of such person, his wife
and direct lineal descendants and spouses of such descendants) and four
other senior employees of Bessemer Partners & Co. involved in the
management of the assets of the partnerships.
14. Kylix (or its affiliate Bessemer Partners & Co, a general
partnership under common control with Kylix) will identify and analyze
potential investments, request funding from BSLLC and Bessemer for
investments, and manage investments made by the Partnership.
15. Under the Partnership's partnership agreement, Kylix may not
dispose of its partnership interest without BSLLC's consent, nor may
BSLLC or Bessemer dispose of their partnership interests without
Kylix's consent, except that BSLLC may transfer its interest in
connection with a merger, reorganization, sale or similar transaction
without obtaining such consent. No additional general partners may be
admitted without the approval of a majority in interest of the limited
partners. The admission of new limited partners must be consented to by
BSLLC.
16. It is possible that in the future other entities substantially
similar to BSLLC (``Family Securities Companies'') and the Partnership
(``Family Investment Vehicles'') (although possibly in corporate
partnership, business trust, or limited liability company form) will be
formed as vehicles for investment by the Phipps Family Members and the
Trusts (i) for making investments in the manner in which BSLLC or the
Partnership makes investments, (ii) making specifically identified new
investments, (iii) to make other types of investments, or (iv) to
succeed to BSLLC or the Partnership. The structure of each Family
Securities Company will be similar to BSLLC and the structure of each
Family Investment Vehicle will be similar to the Partnership in terms
of its management and method of operation.
Applicants' Legal Analysis
1. Section 3(c)(1) of the Act excepts from the definition of
``investment company'' any issuer whose outstanding securities are
beneficially owned by not more than 100 persons and which is not
making, and does not presently propose to make, a public offering of
its securities.
2. BSLLC and the Partnership are currently exempt from registration
as an investment company under section 3(c)(1) the Act. Each of the
applicants is also exempt from registration under the Act because they
are currently operating within the terms of the 1992 Bessemer Order.
One of the conditions to the 1992 Bessemer Order, however, is that
Bessemer own at least 50% of the equity of the Phipps family investment
vehicle. Because BSLLC will not be owned by Bessemer, applicants seek
an amended order.
3. Applicants argue that section 3(c)(1) was intended to exclude
``private'' investment companies from the purview of the Act and that
the SEC has authority under section 6(c) to exempt private companies
that have more than 100 beneficial owners. Maritime Corporation, 9 SEC
906 (1941). Applicants cite a series of orders where the Commission has
granted exemptions in a number of circumstances in which the applicant
was a family-related private investment vehicle, notwithstanding the
fact that in each instance it had more than 100 shareholders. Each of
the orders was conditioned upon undertakings by the applicant designed
to ensure that the investment vehicle would remain family controlled
and private. See, e.g., Heber J. Grant & Company, Investment Company
Act Release Nos. 20040 (January 27, 1994) (notice) and 20091 (February
23, 1994) (order); Pitcairn Group L.P., Investment Company Act Release
Nos. 21525 (November 20, 1995) (notice) and 21616 (December 20, 1995)
(order); and THC Partners, Investment Company Act Release Nos. 21980
(May 23, 1996) and 22023 (June 18, 1996) (order).
4. Applicants submit that each of the applicants is, and the Family
Securities Companies and the Family Investment
[[Page 65611]]
Vehicles will be, privately owned and family-controlled special purpose
entities to which the Act was not intended to apply. Each of the
applicants possesses the characteristics of a private company shared by
the applicants in the previous exemptive orders. Applicants' investors
share a close relationship to the Phipps family. BSLLC is being
established by the Trusts that own Bessemer to pursue new investments.
Bessemer itself is, and has been since 1924, owned entirely by Phipps
Family Members and Trusts. Applicants argue that unlike the investment
companies the Act was designed to regulate, BSLLC, the Partnership, the
Family Securities Companies, and the Family Investment Vehicles will be
operated as a private family enterprise.
5. Applicants state that all or a substantial percentage of each
applicant is owned, directly or indirectly, by or for the benefit of
Phipps Family Members and Trusts, except such portions owned by persons
related to Bessemer who are managing the assets. They further state
that no effort has been made to sell participations in the Partnership
to persons other than BSLLC and Bessemer. The only investor in the
Partnership (other than BSLLC and Bessemer) is Kylix. There is no
public market for interests in the applicants, and there have been no
transfers of such interests. Applicants state they have not sought and
will not seek other investors in the applicants, the Family Securities
Companies or the Family Investment Vehicles (other than Bessemer
Investors, as defined below), either public or private. There has been
no market for interests in applicants, Family Securities Companies and
the Family Investment Vehicles, and there will not be any such market.
6. Applicants submit that the requested 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
provision of the 1940 Act, within the meaning of section 6(c) of the
1940 Act
Applicants' Conditions
Applicants agree that the Order granting the requested relief shall
be subject to the following conditions:
1. The requested exemption with respect to BSLLC shall be
conditioned on the observance by it of the following conditions:
a. BSLLC will hold annual meetings of its members for the purpose
of electing the members of the Board of Managers, ratifying the
appointment of the independent accountants engaged by BSLLC, and
transacting such other business as may properly come before such
meetings.
b. BSLLC will furnish annually to its members its financial
statements audited by an accounting firm of recognized national
standing.
c. BSLLC will be at least 80% owned directly or indirectly by or
for the benefit of Phipps Family Members and their spouses, and Trusts;
and any part of BSLLC that is not owned directly or indirectly by or
for the benefit of such persons will be beneficially owned (as the term
is used in section 3(c)(1) of the Act) by not more than 35 persons and
will not have been publicly offered.
d. BSLLC will not knowingly make available to any broker or dealer
registered under the Securities Exchange Act of 1934 any financial
information concerning BSLLC for the purpose of knowingly enabling that
broker or dealer to initiate any regular trading market for BSLLC's
membership interests.
2. The requested exemption with respect to the Partnership shall be
conditioned on the observance by the Partnership of the following
conditions:
a. The Partnership will furnish annually to each partner its
financial statements audited by an accounting firm of recognized
national standing.
b. The Partnership will neither admit as a new partner, nor permit
the assignment or transfer of any interest in the Partnership to, any
individual or entity if that admission, assignment or transfer would
cause the Partnership to fail to have the following characteristics:
(1) The Partnership will be at least 90% owned directly or indirectly
by or for the benefit of the following persons (``Bessemer
Investors''): (i) BSLLC or one or more of its subsidiaries, (ii)
Bessemer or one or more of its subsidiaries, (iii) Existing
Partnerships; (iv) Family Securities Companies, (v) Family Investment
Vehicles, (vi) Phipps Family members and their spouses, (vii) Trusts,
(viii) natural persons who, at the time of their admission to the
Partnership, are directors, managers or retired former directors or
managers of BSLLC, Bessemer, a Family Securities Company, or an
affiliate of BSLLC, Bessemer or a Family Securities Company, or are
employees or retired former employees of BSLLC, Bessemer, a Family
Securities Company or an affiliate of BSLLC, Bessemer, or a Family
Securities Company who have (or had, in the case of retired former
employees) a high level of executive, investment management, investment
analysis or administrative responsibility, and any family trust, family
partnership or comparable family entity established by such a natural
person the interests in which are owned exclusively by or for the
benefit of such natural person, his or her spouse and direct lineal
descendants and spouses of such descendants, and charitable
organizations, and (ix) natural persons who, although not employees of
BSLLC or any affiliate of BSLLC, directly or indirectly actually manage
the Partnership's, and Existing Partnership's or a Family Investment
Vehicle's investments, and any family trust, family partnership or
comparable family entity established by such a natural person the
interests in which are owned exclusively by or for the benefit of such
natural person, his or her spouse and direct lineal descendants and
spouses of such descendants, and charitable organizations; (2) it will
be at least 50% owned directly or indirectly by or for the benefit of
Bessemer, BSLLC or a Family Securities Company; and (3) any part of the
Partnership that is not held directly or indirectly by or for the
benefit of Bessemer Investors will be beneficially owned (as the term
is used in section 3(c)(1) of the Act) by not more than 35 persons and
will not have been publicly offered.
c. The Partnership will not (1) admit any new general partner
without the approval of the owners of majority in interest in the
Partnership, or (2) have as an investment adviser to that vehicle any
investment adviser to that vehicle other than (i) Bessemer, BSLLC, a
Family Securities Company or one of their affiliates, (ii) one or more
employees of Bessemer, BSLLC, a Family Securities Company, or one of
their affiliates, (iii) an investment manager or a general partner (or
one or more of its affiliates or employees) approved by the owners of a
majority in interest of the Partnership, or (iv) a bank or trust
company subsidiary of Bessemer Group.
d. The Partnership will not knowingly make available to any broker
or dealer registered under the Securities Exchange Act of 1934 any
financial information concerning the Partnership for the purpose of
knowingly enabling that broker or dealer to initiate any regular
trading market in any partnership interest in the Partnership.
3. The requested exemption with respect to Bessemer shall be
conditioned on the observance by it of the following conditions:
a. Bessemer will hold annual meetings of its shareholder or
shareholders for the purpose of electing the members of the Board of
Directors, ratifying the appointment of the independent accountants
engaged by Bessemer, and transacting such other
[[Page 65612]]
business as may properly come before such meetings.
b. Bessemer will furnish annually to its shareholder or
shareholders its financial statements which may be part of the
consolidated financial statements of BSLLC, audited by an accounting
firm of recognized national standing.
c. Bessemer will be at least 80% owned directly or indirectly by or
for the benefit of BSLLC, a Family Securities Company, Phipps Family
Members and their spouses, and Trusts; and any part of Bessemer that is
not owned directly or indirectly by or for the benefit of such persons
will be beneficially owned (as the term is used in section 3(c)(1) of
the Act) by not more than 35 persons and will not have been publicly
offered.
d. Bessemer will not knowingly make available to any broker or
dealer registered under the Securities Exchange Act of 1934 any
financial information concerning Bessemer for the purpose of knowingly
enabling that broker or dealer to initiate any regular trading market
for Bessemer's common stock.
4. The requested exemption with respect to each Existing
Partnership shall be conditioned on the observance by that Existing
Partnership of the following conditions:
a. The Existing Partnership will furnish annually to each partner
its financial statements audited by an accounting firm of recognized
national standing.
b. The Existing Partnership will neither admit as a new partner,
nor permit the assignment or transfer of any interest in the Existing
Partnership to, any individual or entity if that admission, assignment
or transfer would cause the Existing Partnership to fail to have the
following characteristics: (1) the Existing Partnership will be at
least 90% owned directly or indirectly by or for the benefit of
Bessemer, BSLLC or a Family Securities Company; and (2) any part of the
Existing Partnership that is not held directly or indirectly by or for
the benefit of Bessemer Investors will be beneficially owned (as the
term is used in section 3(c)(1) of the Act) by not more than 35 persons
and will not have been publicly offered.
c. The Existing Partnership will not (1) admit any new general
partner without the approval of the owners of majority in interest in
the Existing Partnership, or (2) have as an investment adviser to that
vehicle any investment adviser other than (i) Bessemer, BSLLC, a Family
Securities Company or one of their affiliates, (ii) one or more
employees of Bessemer, BSLLC, a Family Securities Company, or one of
their affiliates, (iii) an investment manager or a general partner (or
one or more of its affiliates or employees) approved by the owners of a
majority in interest of the Existing Partnership, or (iv) a bank or
trust company subsidiary of Bessemer Group.
d. The Existing Partnership will not knowingly make available to
any broker or dealer registered under the Securities Exchange Act of
1934 any financial information concerning the Existing Partnership for
the purpose of knowingly enabling that broker or dealer to initiate any
regular trading market in any partnership interest in the Existing
Partnership.
5. The requested exemption with respect to each of Bessemer
Ventures, Inc., Bessemer-Bradford Ventures, Inc., Bessemer Interstate
Corp. and Bessemer Properties, Inc. (the ``Existing Subsidiaries'')
shall be conditioned on the observance by that Existing Subsidiary of
the following conditions:
a. All of the securities of the Existing Subsidiary will be owned
directly or indirectly by or for the benefit of Bessemer, BSLLC or a
Family Securities Company.
b. the Existing Subsidiary will not knowingly make available to any
broker or dealer registered under the Securities Exchange Act of 1934
any financial information concerning the Existing Subsidiary for the
purpose of knowingly enabling that broker or dealer to initiate any
regular trading market in any partnership interest in the Existing
Subsidiary.
6. The requested exemption with respect to each Family Securities
Company shall be conditioned on the observance by that Family
Securities Company of the following conditions:
a. The Family Securities Company will hold annual meetings of its
members for the purpose of electing the members of its board of
managers, board of directors or persons serving a similar function,
ratifying the appointment of the independent accountants engaged by the
Family Securities Company, and transacting such other business as may
properly come before such meetings.
b. The Family Securities Company will furnish annually to its
members its financial statements audited by an accounting firm of
recognized national standing.
c. The Family Securities Company will be at least 80% owned
directly or indirectly by or for the benefit of Bessemer, Phipps Family
Members and their spouses, and Trusts; and any part of the Family
Securities Company that is not owned directly or indirectly by or for
the benefit of such persons will be beneficially owned (as the term is
used in section 3(c)(1) of the Act) by not more than 35 persons and
will not have been publicly offered.
d. The Family Securities Company will not knowingly make available
to any broker or dealer registered under the Securities Exchange Act of
1934 any financial information concerning the Family Securities Company
for the purpose of knowingly enabling that broker or dealer to initiate
any regular trading market for securities issued by the Family
Securities Company.
7. The requested exemption with respect to each Family Investment
Vehicle may be conditioned on the observance by that Family Investment
Vehicle of the following conditions:
a. The Family Investment Vehicle will furnish annually to each
member, shareholder, partner or investor its financial statements
audited by an accounting firm of recognized national standing.
b. The Family Investment Vehicle will neither admit as a new
investor, nor permit the assignment or transfer of any interest in that
Family Investment Vehicle to, any individual or entity if that
admission, assignment or transfer would cause that Family Investment
Vehicle to fail to have the following characteristics: (1) that Family
Investment Vehicle will be at least 90% owned directly or indirectly by
or for the benefit of Bessemer Investors; (2) it will be at least 50%
owned directly or indirectly by or for the benefit of Bessemer, BSLLC
or a Family Securities Company; and (3) any part of that Family
Investment Vehicle that is not held directly or indirectly by or for
the benefit of Bessemer Investors will be beneficially owned (as the
term is used in section 3(c)(1) of the Act) by not more than 35 persons
and will not have been publicly offered.
c. The Family Investment Vehicle will not (1) admit any new general
partner (in the case of a limited partnership) or manager without the
approval of the owners of a majority in interest of it, or (2) have as
an investment adviser to that vehicle any investment adviser other than
(i) Bessemer, BSLLC, a Family Securities Company or one or more of
their affiliates, (ii) one or more employees of Bessemer, BSLLC, a
Family Securities Company, or one of their affiliates, (iii) an
investment manager or a general partner (or one or more of its
affiliates or employees) approved by the owners of a majority in
interest of the Family Investment Vehicle, or (iv) a bank or trust
company subsidiary of the Bessemer Group.
d. The Family Investment Vehicle will not knowingly make available
to any broker or dealer registered under
[[Page 65613]]
the Securities Exchange Act of 1934 any financial information
concerning that Family Investment Vehicle for the purpose of knowingly
enabling that broker or dealer to initiate any regular trading market
in any interest in that Family Investment Vehicle.
For the SEC, by the Division of Investment Management, pursuant
to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31617 Filed 12-12-96; 8:45 am]
BILLING CODE 8010-01-M