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SIGNATURE EDWARD FACKENTHAL
TITLE ASSISTANT SECRETARY
<PAGE> PAGE 7
ATTACHMENT TO SUB-ITEM 77C
The matters submitted to the security holders at the annual meeting of
December 23, 1999 included the selection or approval of auditors, the
continuation of the current advisory contract and the election of directors. In
respect to the election of directors there was no solicitation of proxies and
the board of directors as previously reported to the Commission was re-elected
in its entirety.
A matter submitted to the shareholders and rejected was to change the
investment objectives of the fund.
ATTACHMENT TO SUB-ITEM 77E
The following reports the continuation of proceedings previously reported.
Before amending its charter in 1979 to become an investment company, the
Fund was a steel processing plant generating industrial wastes which licensed
haulers transported to landfills. Heretofore the United States Environmental
Protection Agency ("EPA") named the Fund as a potentially responsible party
("PRP:") in respect to a landfill requiring environmental remediation. Allegedly
the transporter the steel processor contracted with took waste to an unregulated
site in Bucks County, Pennsylvania known as "Boarhead."
Counsel to the Fund regards the Boarhead matter as ongoing, unresolved and
material. In November 1998 EPA issued a Record of Decision ("ROD") relative to
estimated future cleanup costs. Those together with EPA's remedial costs already
incurred total $26,000,000.
To date there are six named PRPs sharing in a defense group ("the Group")
and the Fund's share, should it remain in the Group (see below), is one half of
one share. (The Fund and one other of the six owned the steel processor at
different times and are considered one member.) The Group's investigation has
identified approximately 23 others who are arguably PRPs. The Group will attempt
to bring in as many of the 23 as possible to share expenses and liability, and
otherwise resolve or try the matter.
After the ROD was distributed, EPA gave certain PRPs special notices to
remediate. The Company was not among them. The Company's interpretation of this
circumstance is that the EPA, based upon evidence available to it at the time,
determined that the Company was not sufficiently linked to the site to warrant a
cleanup directive. Nevertheless other PRPs who did receive special notices have
pointed out evidence which may lead to a link between the Company and the
Boarhead site. The Company will continue to examine whatever evidence is
presented that may create such a link. Based thereon it will make a decision
whether it will remain a member of the Group. If at any time it declines to
participate further with the Group, it will be exposed to contribution claims
from those remaining and will lose contribution protection afforded under CERCLA
(The Superfund Act).
The Company is contractually committed to pay a one half per capita share
of the first phase of the Boarhead cleanup. The total cost for this phase is
approximately $1 million, of which the Company's share is approximately
$100,000. During the first phase cleanup and pending the determination of
responsibilities for later phases of the program, the Group will engage in
allocation taking into account existing and what is expected to be later
discovered evidence. Based thereon, the $100,000 commitment may be increased,
decreased or remain static. By the same means, the Company will judge its cost
exposure for the later and larger cleanup phases.
Counsel expects the least the Company may expect to incur in regard to this
project is the approximate $100,000 presently committed and accrued. However, at
this time in light of the unknown number of participants, the uncertainty of the
ROD's estimates for future operation costs and related cleanup expense, the
issue of linkage, the absence of knowledge of evidence to be presented to the
Group's allocator, counsel is unable to predict an amount or range of liability
beyond $100,000. The Fund will resist all claims vigorously.
<TABLE> <S> <C>
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<LEGEND>
This schedule contains summary financial information extracted from
the 2/29/00 N-SAR and is qualified in its entirety by reference to such N-SAR.
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