Grant of Individual Exemptions; Jacobs Corporation Profit Sharing Plan and Trust, et al.

DEPARTMENT OF LABOR

[Prohibited Transaction Exemption 94-24; Exemption Application No. D-

9561, et al.]

Grant of Individual Exemptions; Jacobs Corporation Profit Sharing

Plan and Trust, et al.

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of

Labor (the Department) from certain of the prohibited transaction

restrictions of the Employee Retirement Income Security Act of 1974

(the Act) and/or the Internal Revenue Code of 1986 (the Code).

Notices were published in the Federal Register of the pendency

before the Department of proposals to grant such exemptions. The

notices set forth a summary of facts and representations contained in

each application for exemption and referred interested persons to the

respective applications for a complete statement of the facts and

representations. The applications have been available for public

inspection at the Department in Washington, DC. The notices also

invited interested persons to submit comments on the requested

exemptions to the Department. In addition the notices stated that any

interested person might submit a written request that a public hearing

be held (where appropriate). The applicants have represented that they

have complied with the requirements of the notification to interested

persons. No public comments and no requests for a hearing, unless

otherwise stated, were received by the Department.

The notices of proposed exemption were issued and the exemptions

are being granted solely by the Department because, effective December

31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR

47713, October 17, 1978) transferred the authority of the Secretary of

the Treasury to issue exemptions of the type proposed to the Secretary

of Labor.

Statutory Findings

In accordance with section 408(a) of the Act and/or section

4975(c)(2) of the Code and the procedures set forth in 29 CFR part

2570, subpart B (55 FR 32836, 32847, August 10, 1990) and based upon

the entire record, the Department makes the following findings:

(a) The exemptions are administratively feasible;

(b) They are in the interests of the plans and their participants

and beneficiaries; and

(c) They are protective of the rights of the participants and

beneficiaries of the plans.

Jacobs Corporation Profit Sharing Plan and Trust (the Plan) Located

in Harlan, IA

[Prohibited Transaction Exemption No. 94-24; Application No. D-9561]

Exemption

The restrictions of section 406(a) and 406 (b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

the Code, by reason of section 4975(c)(1) (A) through (E) of the Code

shall not apply to the cash sale of certain assets of the Plan (the

Assets), to occur over two (2) consecutive years, by the Plan to the

Jacobs Corporation (the Employer), a party in interest with respect to

the Plan; provided that: (1) The aggregate purchase price paid by the

Employer for all of the Assets is no less than $683,384; (2) the

purchase price paid by the Employer in each of the two consecutive

years will be at least $341,692; (3) the purchase price paid by the

Employer in each of the two consecutive years upon execution of the

sale of such Assets is not less than the fair market value of such

Assets on the date of each sale; (4) the terms of each of the sales are

no less favorable to the Plan than those negotiated in similar

circumstances with unrelated third parties; and (5) the Plan will incur

no fees, commissions, or expenses as a result of either of the sales.

Temporary Nature of Exemption

The exemption is temporary and is effective on the date of

publication of the grant of this exemption in the Federal Register and

will expire upon the earlier to occur of the date which is two years

from the grant of this exemption or the date when the Plan no longer

owns any of the Assets which are the subject of this exemption.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption refer to

the notice of proposed exemption published on January 18, 1994, at 59

FR 2625.

FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the

Department, telephone (202) 219-8883. (This is not a toll-free number.)

Bangs, McCullen, Butler, Foye & Simmons Employees' Retirement Plan (the

Plan) Located in Rapid City, SD

[Prohibited Transaction Exemption 94-25; Exemption Application No. D-

9598]

Exemption

The restrictions of sections 406(a), 406 (b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

the Code, by reason of section 4975(c)(1) (A) through (E) of the Code,

shall not apply, effective January 1, 1994, to the lease by the Plan

(the Lease) of certain improved real property located in Rapid City,

South Dakota (the Property) to Bangs, McCullen, Butler, Foye & Simmons

(the Employer), the sponsor of the Plan; provided that the following

conditions are satisfied:

(A) All terms and conditions of the Lease are at least as favorable

to the Plan as those which the Plan could obtain in an arm's-length

transaction with an unrelated party;

(B) The Lease is a triple net lease under which the Employer is

obligated for all costs of maintenance and repair, and all taxes,

related to the Property;

(C) The interests of the Plan for all purposes under the Lease are

represented by an independent fiduciary, Norwest Bank South Dakota,

N.A.; and

(D) The rent paid by the Employer under the Lease is no less than

the fair market rental value of the Property.

EFFECTIVE DATE: This exemption is effective as of January 1, 1994.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption published on January 18, 1994 at 59 FR

2627.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

Donohoe Restated Profit Sharing Plan and Trust (the Plan) Located

in Washington, DC

[Prohibited Transaction Exemption 94-26; Exemption Application No. D-

9442]

Exemption

The restrictions of sections 406(a), 406(b)(1), and 406(b)(2) of

the Act and the sanctions resulting from the application of section

4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of

the Code, effective December 28, 1993, shall not apply to the cash sale

by the Plan of shares of common stock (the Shares) of the Federal

Center Plaza Corporation (FCPC) to FCPC; provided that: (1) As the

result of the sale, the Plan received in cash the greater of $25.00 per

share or the fair market value of the Shares of FCPC, as determined by

an independent, qualified appraiser, as of December 28, 1993, the date

of the sale; (2) the Plan paid no commissions or fees in regard to the

transaction; and (3) the terms of the sale were no less favorable to

the Plan than those it would have received in similar circumstances

when negotiated at arm's length with unrelated third parties.

EFFECTIVE DATE: This exemption is effective on December 28, 1993.

Written Comments

In the Notice of Proposed Exemption (the Notice), the Department

invited all interested persons to submit written comments and requests

for a hearing on the proposed exemption within forty-five (45) days of

the date of the publication of the Notice in the Federal Register. All

comments and requests for hearing were due by December 27, 1993.

During the comment period, the Department received no requests for

a hearing. However, the Department did receive a comment letter from

the applicant, dated December 27, 1993. In its letter the applicant

informed the Department that prior to receiving a granted exemption,

the trustees of the Plan (the Trustees) intended on December 28, 1993,

to sell to FCPC the Shares owned by the Plan. It was represented that

the Trustees proposed to enter the transaction on that date, because

FCPC planned to elect on January 1, 1994, to become a subchapter S

Corporation under section 1361 of the Code. It was represented that

FCPC will elect subchapter S Corporation status in order to reduce its

administrative expenses, in the hope that by doing so it can continue

in business without taking the step of discharging employees.

In its December 27 letter the applicant represented that the Plan

would receive from the sale of the Shares to FCPC sales proceeds in

cash in an amount equal to the greater of $25.00 per share or the fair

market value of the Shares, as of the date of the sale, as determined

by an independent appraiser. In this regard, an independent, qualified

appraiser, Arthur Andersen & Co. SC (Arthur Andersen), prepared an

appraisal report, dated February 9, 1994. In its report Arthur Andersen

estimated that, as of December 28, 1993, the fair market value of the

Shares of FCPC was $19.00 per share.

After giving full consideration to the entire record, including the

written comment from the applicant, the Department has decided to grant

the exemption retroactively. In this regard, the comment by the

applicant and the appraisal report of Arthur Andersen submitted to the

Department have been included as part of the public record of the

exemption application. The complete application file, including all

supplemental submissions received by the Department, are made available

for public inspection in the Public Documents Room of the Pension

Welfare Benefits Administration, room N-5507, U.S. Department of Labor,

200 Constitution Avenue NW., Washington, DC 20210.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption refer to

the notice of proposed exemption published on November 24, 1993, at 58

FR 62142.

FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the

Department, telephone (202) 219-8883. (This is not a toll-free number.)

Linton Industries, Inc. Retirement Plan (the Plan) Located in

Edmonds, WA

[Prohibited Transaction Exemption 94-27; Exemption Application No. D-

9496]

Exemption

The restrictions of sections 406(a), 406(b)(1), and 406(b)(2) of

the Act and the sanctions resulting from the application of section

4975 of the Code, by reason of section 4975(c)(1) (A) through (E) of

the Code, shall not apply to the loan (the New Loan) of $485,000 from

the Plan to Linton Industries, Inc. (the Employer), a party in interest

with respect to the Plan.

This exemption is conditioned upon the following requirements: (a)

The terms of the New Loan are at least as favorable to the Plan as

those obtainable in an arm's-length transaction with an unrelated

party; (b) the New Loan will not exceed twenty-five percent of the

assets of the Plan at any time during the duration of the New Loan; (c)

the New Loan is secured by a first lien interest on certain equipment

(the Equipment), which has been appraised by a qualified, independent

appraiser to ensure that the fair market value of the Equipment is at

least 200 percent of the amount of the New Loan; (d) the fair market

value of the Equipment remains at least equal to 200 percent of the

outstanding balance of the New Loan throughout the duration of the New

Loan; (e) an independent, qualified fiduciary determines on behalf of

the Plan that the New Loan is in the best interests of the Plan and

protective of the Plan and its participants and beneficiaries; and (f)

the independent, qualified fiduciary monitors compliance by the

Employer with the terms and conditions of the New Loan and the

exemption throughout the duration of the transaction, taking any action

necessary to safeguard the Plan's interest, including foreclosure on

the Equipment in the event of default.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption published on January 18, 1994 at 59 FR

2624.

FOR FURTHER INFORMATION CONTACT:

Kathryn Parr of the Department, telephone (202) 219-8971. (This is not

a toll-free number.)

General Information

The attention of interested persons is directed to the following:

(1) The fact that a transaction is the subject of an exemption

under section 408(a) of the Act and/or section 4975(c)(2) of the Code

does not relieve a fiduciary or other party in interest or disqualified

person from certain other provisions to which the exemptions do not

apply and the general fiduciary responsibility provisions of section

404 of the Act, which among other things require a fiduciary to

discharge his duties respecting the plan solely in the interest of the

participants and beneficiaries of the plan and in a prudent fashion in

accordance with section 404(a)(1)(B) of the Act; nor does it affect the

requirement of section 401(a) of the Code that the plan must operate

for the exclusive benefit of the employees of the employer maintaining

the plan and their beneficiaries;

(2) These exemptions are supplemental to and not in derogation of,

any other provisions of the Act and/or the Code, including statutory or

administrative exemptions and transactional rules. Furthermore, the

fact that a transaction is subject to an administrative or statutory

exemption is not dispositive of whether the transaction is in fact a

prohibited transaction; and

(3) The availability of these exemptions is subject to the express

condition that the material facts and representations contained in each

application are true and complete and accurately describe all material

terms of the transaction which is the subject of the exemption. In the

case of continuing exemption transactions, if any of the material facts

or representations described in the application change after the

exemption is granted, the exemption will cease to apply as of the date

of such change. In the event of any such change, application for a new

exemption may be made to the Department.

Signed at Washington, DC, this 10th day of March, 1994.

Ivan Strasfeld,

Director of Exemption Determinations; Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 94-6015 Filed 3-15-94; 8:45 am]

BILLING CODE 4510-29-P