Proposed Exemptions; Robert A. Benz & Co., P.A., Certified Public Accountants Employees Profit Sharing Plan (the Plan)

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Application No. D-10398, et al.]

Proposed Exemptions; Robert A. Benz & Co., P.A., Certified Public

Accountants Employees Profit Sharing Plan (the Plan)

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Notice of proposed exemptions.

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SUMMARY: This document contains notices of pendency before the

Department of Labor (the Department) of proposed exemptions from

certain of the prohibited transaction restriction of the Employee

Retirement Income Security Act of 1974 (the Act) and/or the Internal

Revenue Code of 1986 (the Code).

Written Comments and Hearing Requests

Unless otherwise stated in the Notice of Proposed Exemption, all

interested persons are invited to submit written comments, and with

respect to exemptions involving the fiduciary prohibitions of section

406(b) of the Act, requests for hearing within 45 days from the date of

publication of this Federal Register Notice. Comments and request for a

hearing should state: (1) the name, address, and telephone number of

the person making the comment or request, and (2) the nature of the

person's interest in the exemption and the manner in which the person

would be

[[Page 30617]]

adversely affected by the exemption. A request for a hearing must also

state the issues to be addressed and include a general description of

the evidence to be presented at the hearing. A request for a hearing

must also state the issues to be addressed and include a general

description of the evidence to be presented at the hearing.

ADDRESSES: All written comments and request for a hearing (at least

three copies) should be sent to the Pension and Welfare Benefits

Administration, Office of Exemption Determinations, Room N-5649, U.S.

Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C.

20210. Attention: Application No. stated in each Notice of Proposed

Exemption. The applications for exemption and the comments received

will be available for public inspection in the Public Documents Room of

Pension and Welfare Benefits Administration, U.S. Department of Labor,

Room N-5507, 200 Constitution Avenue, N.W., Washington, D.C. 20210.

Notice to Interested Persons

Notice of the proposed exemptions will be provided to all

interested persons in the manner agreed upon by the applicant and the

Department within 15 days of the date of publication in the Federal

Register. Such notice shall include a copy of the notice of proposed

exemption as published in the Federal Register and shall inform

interested persons of their right to comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The proposed exemptions were requested in

applications filed pursuant to section 408(a) of the Act and/or section

4975(c)(2) of the Code, and in accordance with procedures set forth in

29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990).

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 requested

to the Secretary of Labor. Therefore, these notices of proposed

exemption are issued solely by the Department.

The applications contain representations with regard to the

proposed exemptions which are summarized below. Interested persons are

referred to the applications on file with the Department for a complete

statement of the facts and representations.

Robert A. Benz & Co., P. A., Certified Public Accountants Employees

Profit Sharing Plan (The Plan) Located in Pensacola, Florida

[Application No. D-10398]

Proposed Exemption

The Department is considering granting an exemption under the

authority of section 408(a) of the Act and section 4975(c)(2) of the

Code and in accordance with the procedures set forth in 29 CFR Part

2570, Subpart B (55 FR 32836, 12847, August 10, 1990). If the exemption

is granted, the restrictions of sections 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 both (1) the proposed cash sale

(the Sale) of certain real property (the Property) to the Plan by

Robert A. Benz & Co., P.A., Certified Public Accountants (the

Employer), a party in interest with respect to the Plan, and (2) the

proposed lease-back (the Lease) of the Property by the Plan to the

Employer; provided:

(A) The terms and conditions of the transactions are at least as

favorable to the Plan as those obtainable from unrelated parties;

(B) The Plan is represented at all times and for all purposes with

respect to the Sale and the Lease by a qualified, independent

fiduciary;

(C) The Sale is a one-time transaction for a lump sum cash payment;

(D) The purchase price is the fair market value of the Property as

determined on the date of the Sale by a qualified, independent

appraiser;

(E) The monthly rents paid to the Plan will be adjusted every year

after the first 12 months of the Lease by an amount to reflect the

greater of either a 3 percent per year increase or the most recent

percentage increase in the U. S. Department of Labor Consumer Price

Index;

(F) In addition, the rents initially paid under the Lease are no

less than the fair market rental value of the Property as determined by

a qualified, independent appraiser, and thereafter are adjusted every

third year to be no less than the fair market rental value as then

determined by the independent appraiser;

(G) The Lease is a triple-net lease under which the Employer as the

lessee is obligated for all expenses incurred by the Property,

including all taxes and assessments, maintenance, insurance, utilities,

and any other expense;

(H) The qualified, independent fiduciary of the Plan monitors and

enforces compliance with the terms and conditions of the Lease and the

exemption herein proposed;

(I) At all times the qualified, independent fiduciary for the Plan

determines that the Lease is in the best interests of the Plan and its

participants and beneficiaries, and at all times determines that there

are adequate protections of the rights of the participants and

beneficiaries of the Plan, and takes all the necessary steps to protect

those rights;

(J) In the event the Plan sells the Property and the proceeds

received from the sale plus the net rentals received for the Property

are less than the Plan's cost of acquiring, holding, and maintaining

the Property plus a 5 per cent per annum compounded rate of return on

the cost to the Plan in acquiring, holding, and maintaining the

Property, the Employer, or its successors, shall pay in cash the

difference to the Plan within 45 days of the sale;

(K) No commissions, expenses, or costs shall be incurred by the

Plan from the Sale or the Lease; and

(L) At all times during the Sale and Lease, the fair market value

of the Property represents less than 25 percent of the total assets of

the Plan.

Summary of Facts and Representations

1. The Plan is a defined contribution plan that is a profit sharing

plan as described in section 401(a) of the Code, and is exempt from

taxation pursuant to section 501 of the Code. The Plan has seven

participants and beneficiaries and total assets of $2,300,000, as of

December 31, 1996. The fiduciary of the Plan is Mr. Robert A. Benz, who

is a certified public accountant and also is the president and director

as well as 90.79 percent stockholder of the Employer. The Employer is

being purchased under a long-term contract from Mr. Benz by other

Certified Public Accountants who are presently employed by the

Employer. The Employer has been in existence over thirty years as a

public accounting firm, and now is a registered professional

association under the statutes of Florida.

The independent fiduciary for the Plan in connection with the

proposed transactions is Mr. J. Thomas Fife (the Independent

Fiduciary), a resident of Pensacola, Florida, and a Vice President-

Investments, for Paine Webber, Incorporated in its Pensacola, Florida

office. When accepting his appointment with a written agreement, the

Independent Fiduciary was given discretionary authority by the Plan

with respect to the acquisition and the leasing of the Property and the

management, control, and disposition of

[[Page 30618]]

the Property. The Independent Fiduciary represents that after a review

the terms of the Plan and its portfolio and the terms and conditions of

the proposed Sale and the Lease of the Property he is able to render a

favorable opinion with respect to the proposed transactions. In

addition, the Independent Fiduciary represents that his qualifications,

background, and experience qualify him to act as the independent

fiduciary for the Plan in connection with the proposed Sale and Lease.

The Independent Fiduciary also represents that he has no interest in

the Employer or the Plan, and no interest or relationship with any

employee, shareholder, or director of the Employer. The Independent

Fiduciary has also acknowledged that he has knowledge and experience

with the responsibilities, duties, and liabilities of an independent

fiduciary under the Act; and that he has a net-worth in excess of the

appraised fair market value of the Property.

2. The Property, which the Employer proposes to sell to the Plan

and lease-back, is located at 1823 North 9th Avenue, Pensacola,

Florida, and consists of a tract of land, zoned commercial, with

improvements, totaling approximately 14,404 square feet in area. The

improvements on the Property consists of a one-story concrete office

building of approximately 4,463 square feet and adjoining asphalt

parking facilities. It is encumbered by a real estate mortgage with

current balance of $214,951.60, which is to be paid off at the closing

of the Sale, so that the Plan is to acquire the title to the Property

free and clear of the mortgage. The Property is used solely by the

Employer in its business of providing accounting services to the

public.

Mr. Richard H. Sherrill of Sherrill Appraisal Company located in

Pensacola, Florida, an independent MAI appraiser (the Independent

Appraiser) determined, as of November 11, 1996, that the Property has

fair market value of $395,000. As of January 27, 1997, the Independent

Fiduciary determined the fair market rental value of the Property is

$34,500 for the first year of the Lease, based upon a ten year lease

providing for a triple net rental terms whereby the lessee pays all

expenses. In addition, there is a provision for annual rent increases.

3. The applicant represents that the Sale of the Property to the

Plan by the Employer is for cash in an amount equal to the fair market

value as determined by an independent appraiser, which amount is less

than 17.5 percent of the total assets of the Plan.

The applicant represents the Sale is contingent upon the

simultaneous execution of the Lease by the Plan and the Employer. The

Lease is a triple-net lease under which the Employer, as the lessee,

will pay all expenses incurred by the Property during the term of the

Lease including taxes, insurance, maintenance, repairs, utilities, and

any other expense. The term of Lease is for a duration of ten years. If

the lessee has performed all the covenants contained in the Lease, the

lessee has an option to extend the Lease for an additional two years

under the same terms and conditions as the original Lease. Beginning in

the first year of the Lease, the annual rental is $34,500, and will be

adjusted every year thereafter to be the greater of either an increase

of 3 percent in the rent or an increase equal to the most recent

percentage increase of the Consumer Price Index as determined by the

U.S. Department of Labor. Also, the applicant represents that on every

third year of the Lease, the rent will be adjusted so as to be no less

than the fair market rental value of the Property as then determined by

an independent appraiser selected by the Independent Fiduciary, and in

no event will the amount of the rent be lowered.

In addition, the applicant represents that it will indemnify and

hold the Plan harmless from any liability arising from the Plan

purchasing and holding the Property, including, but not limited to,

hazardous material found on the Property, violation of zoning, land use

regulations or restrictions, and violation of federal, state, or local

environmental regulations or laws.

The applicant also represents that if the Independent Fiduciary

decides to sell the Property and the proceeds from the sale plus net

rentals received for the Property are less than the Plan's cost of

acquiring, holding, and maintaining the Property plus a 5 per cent per

annum compounded rate of return, the Employer, or its successors, shall

pay the difference in cash to the Plan within 45 days of the date of

the sale.

The applicant also represents that in order to ensure that the best

interests of the Plan are served and to protect the rights of all the

Plan participants and beneficiaries, the Independent Fiduciary has the

ultimate authority to make distribution of the Property. At the time of

distribution of benefits to Mr. Benz, the Independent Fiduciary will

determine whether or not the interests of the Plan and its participants

and beneficiaries are protected and better served by distributing the

Property in kind to Mr. Benz as part of his vested benefits in the

Plan, or whether or not the Plan will retain or dispose of the Property

in some other manner.

4. In summary, the applicant represents that the proposed

transactions satisfies the criteria for an exemption under section

408(a) of the Act because (a) the proposed transactions have been

reviewed and approved by the Independent Fiduciary of the Plan; (b) the

fair market value and the fair market rental value of the Property have

been determined by an Independent Appraiser; (c) the Plan will pay no

more than the fair market value for the Property and will receive the

fair market rental value from the Lease; (d) in the event the Plan

sells the Property and the proceeds received from the sale plus the net

rentals received for the Property are less than the Plan's cost of

acquiring, holding, and maintaining the Property plus a 5 per cent per

annum compounded rate of return on the cost to the Plan of acquiring,

holding, and maintaining the Property, the Employer, or its successors,

shall pay in cash the difference to the Plan within 45 days of the

sale; (e) the Independent Fiduciary will monitor and enforce the terms

and conditions of the Sale and the Lease on behalf of the Plan; (f) the

Independent Fiduciary will have exclusive authority with respect to the

management, control, and disposition of the Property; and (g) the

Independent Fiduciary has determined that the proposed Sale and Lease

are in the best interests and protective of the rights of the Plan and

its participants and beneficiaries.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department,

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

Gart Brothers Sporting Goods Company 401(k) Plan (the Plan) Located in

Denver, Colorado

[Application No. D-10403]

Proposed Exemption

The Department is considering granting an exemption under the

authority of section 408(a) of the Act and section 4975(c)(2) of the

Code and in accordance with the procedures set forth in 29 CFR Part

2570, Subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption

is granted, the restrictions of sections 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 proposed cash sale (the Sale)

by the Plan of a 5 per cent interest (the Interest) in the Hampden

Enterprises Limited Partnership (the Partnership) to the Gart Bros.

Sporting Goods Company, the

[[Page 30619]]

sponsor of the Plan (the Employer) and a party in interest with respect

to the Plan; provided (1) the terms and conditions of the transaction

are at least as favorable to the Plan as those obtainable from

unrelated parties, (2) the Sale is a one-time transaction for cash, (3)

the Plan pays no commissions nor incurs any other expenses in

connection with the proposed transaction, (4) the Plan receives as

consideration from the Sale the greater of either (a) the total funds

expended by the Plan in acquiring and holding the Interest, less any

return of capital realized from its investment in the Interest, or (b)

the fair market value of the Interest as determined on the date of the

Sale by an independent appraiser, and (5) if the Employer ever receives

more from the Interest than it pays the Plan when acquiring the

Interest, the Employer will pay the Plan the excess.

Summary of Facts and Representations

1. The Plan, effective April 1, 1995, and a successor by amendment

to a profit sharing plan that had been established on November 1, 1970,

is a defined contribution plan which features (a) employer-matching

funding and salary deferral contributions by Plan participants, and (b)

self-directed investments by Plan participants of their respective Plan

accounts. The Plan is intended to be qualified pursuant to the

requirements of sections 401(a) and 401(k) of the Code. The total

assets of the Plan are $3,251,355, as of September 30, 1996, and the

total participants in the Plan are approximately 747, as of January 17,

1997. The fiduciary of the Plan is the Advisory Committee (the

Fiduciary) appointed by the Employer to administer the Plan and to

direct the trustee of the Plan with respect to the investments of Plan

assets by the participants. Currently, the Fiduciary consists of three

employees all of whom are minority shareholders and two are officers of

the Employer. The trustee of the Plan is Wells Fargo Bank (Colorado),

N.A. (The Trustee) whose principal offices are located in San Franciso,

California.

2. The Employer, a Colorado corporation, is a wholly owned

subsidiary of Gart Sports Company, a Delaware corporation, which is

privately held by 78 shareholders. The Employer was originally founded

by the Gart family in 1928 as a family-operated, retail sporting goods

store located in Denver, Colorado. From 1971 to the present, the

Employer, through several changes in ownership, has expanded its retail

stores in size and location throughout six states in the Rocky Mountain

Region to include more than 60 stores and more than 1,700 employees.

3. The applicant represents that on November 16, 1987, the Plan,

with an investment of $206,000 acquired the Interest in the

Partnership, which had been established on March 20, 1970, from an

unrelated person, The Denver Sympathy Fountain, a Colorado non-profit

corporation.\1\ As of March 17, 1997, this investment in the

Partnership was determined to have a fair market value of $123,830 by

Hale Companies, Inc., a real estate firm, located in Parker, Colorado.

Hale Companies, Inc. represents that it is not related to the Plan, the

Plan sponsor, or to the Fiduciary of the Plan.

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\1\ The applicant represents that the individuals who were the

members of the Advisory Committee and Plan Fiduciaries at the time

the Plan acquired the Interest are no longer Fiduciaries of the Plan

or employed by the Employer.

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The applicant represents, that because the value of real estate

plummeted in Denver, Colorado during the late 1980s and early 1990s,

the Partnership, on November 30, 1994, sold an asset, which consisted

of real property, and distributed $70,500 to the Plan. During March

1995 the Partnership sold another parcel of real property to Mainstreet

Quincy, LLC (Mainstreet LLC), a Colorado limited liability company, for

a total sum of $5,010,000. At the closing of the sale of the second

parcel of real property, Mainstreet LLC tendered as payment to the

Partnership the sum of $760,000 in cash (of which $33,000 was

distributed to the Plan on March 22, 1995) and two promissory notes.

The first note is in the amount of $1,175,000, and promises to pay one-

half of the earned annual 6 percent interest on every March 15th and

September 15th, plus annual payments of $293,000 every March 15th on

the outstanding principal until the obligation becomes due and payable

in full on March 15, 2000. The second note is in the amount of

$3,075,000, and earns 6 per cent interest with no interest or principal

payable until the note matures on March 15, 2000. The applicant

represents that the two promissory notes and a reserve account of

approximately $11,000 are the only assets currently possessed by the

Partnership.

4. On March 31, 1994, the Fiduciary communicated to the Partnership

its desire to sell the Interest to other limited partners in the

Partnership and received no response to its communication. During 1996

the Fiduciary again attempted with no success to sell the Interest to

the other limited partners of the Partnership; and also, to a secondary

market-maker of limited partnership interests. Also during 1996, an

attempt was made by the Plan without success to sell its interest in

the Partnership to Mainstreet LLC.

The applicant represents that on March 15, 1997, Mainstream LLC

defaulted on the interest payment due on its first promissory note. On

April 1, 1997, the applicant received confirmation from the U.S.

Bankruptcy Court in Denver, Colorado that on December 30, 1996,

Mainstream LLC, d/b/a Main Street Homes had filed for reorganization

under Chapter 11 of the Bankruptcy Act and was assigned Case No. 96-

26283CEM.

5. The applicant requests an administrative exemption from the

prohibited transaction provisions of the Act to enable the Plan to sell

the Interest it holds to the Employer, so that not only will the

participants of the Plan be able to self-direct all the assets in their

individual accounts, but they will be able to unburden the Plan of its

investment in the Partnership. Also, the applicant represents that by

selling the Interest to the Employer the Plan will avoid selling the

Interest at a discounted price on the secondary market, and will avoid

any commissions or other expenses in connection with the transaction.

The applicant represents that the Employer will pay to the Plan as

consideration for the Sale of the Interest to the Employer the greater

of either (a) the total funds expended by the Plan in acquiring and

holding the Interest, less any return of capital from its investment in

the Interest, or (b) the fair market value of the Interest as

determined on the date of the Sale by an independent appraiser. The

Trustee represents in a letter dated April 4, 1997, that it will ensure

that the Plan will receive the consideration from the Sale as required

by the proposed exemption of the Department.

6. In summary, the applicant represents that the proposed

transaction will satisfy the criteria of section 408(a) of the Act

because (a) the terms and conditions of the transaction are at least as

favorable to the Plan as those obtainable from unrelated parties; (b)

the Sale of the Interest involves a one-time transaction for cash; (c)

the Plan will not incur the payment of any commissions nor any other

expenses; (d) the transaction will enable the participants of the Plan

to direct the investments of all the assets in their individual

accounts in the Plan; (e) the Trustee will ensure that the

consideration paid by the Employer is (i) the greater of either the

funds expended by the Plan from acquiring

[[Page 30620]]

and holding the Interest, less any return of capital from the Interest,

or (ii) the fair market value of the Interest as determined by an

independent, qualified appraiser; and (f) if the Employer ever receives

more from the Interest than it pays the Plan when acquiring the

Interest, the Employer will pay the Plan the excess.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department,

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

First Savings Bank, F.S.B. Profit Sharing and Employee Stock Ownership

Plan (the Plan) Located in Clovis, New Mexico

[Application No. D-10409]

Proposed Exemption

The Department is considering granting an exemption under the

authority of section 408(a) of the Act and section 4975(c)(2) of the

Code and in accordance with the procedures set forth in 29 C.F.R. Part

2570, Subpart B (55 F.R. 32836, 32847, August 10, 1990). If the

exemption is granted the restrictions of sections 406(a), 406 (b)(1)

and (b)(2), and 407 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

December 26, 1996 to (1) the acquisition by the Plan of certain stock

rights (the Rights) pursuant to a stock rights offering (the Offering)

by Access Anytime Bancorp, Inc. (the Parent), which is the parent

corporation of First Savings Bank, F.S.B. (the Employer), the sponsor

of the Plan; (2) the holding of the Rights by the Plan during the

subscription period of the Offering; and (3) the exercise of certain of

the Rights by the Plan; provided that the following conditions are

satisfied:

(A) The Plan's acquisition and holding of the Rights occurred in

connection with the Offering made available to all shareholders of

common stock of the Parent;

(B) All holders of the common stock of the Employer were treated in

the same manner with respect to the Offering, including the Plan;

(C) All decisions regarding the holding and potential exercise of

the Rights by the Plan were made in accordance with Plan provisions for

individually-directed investment of participant accounts by the

individual Plan participant whose account in the Plan received Rights

in the Offering; and

(D) With respect to any participants' accounts in the Plan for

which no valid instructions were timely filed regarding the Rights

during the Offering, such Rights expired unexercised in the same manner

as unexercised Rights issued to all other holders of the common stock

of the Parent, since the Rights were not transferable and could not be

sold.

EFFECTIVE DATE: This exemption, if granted, will be effective as of

December 26, 1996.

Summary of Facts and Representations

1. The Employer is a federal savings bank that conducts full

service banking operations from its main office in Clovis, New Mexico,

two branch locations in Clovis and Portales, New Mexico and a loan

production office in Rio Rancho, New Mexico. Access Anytime Bancorp,

Inc. (the Parent) is a Delaware public corporation \2\ which was

organized to become a holding company for the Employer. Pursuant to a

merger agreement (the Merger) between the Employer and the Parent, and

upon approval of the holders of the common stock of the Employer (the

Employer Stock) on October 18, 1996, all outstanding shares of Employer

Stock were converted into and exchanged for an equal number of shares

of common stock of the Parent (Parent Stock). The Employer continues

its banking operations as a wholly-owned subsidiary of the Parent.

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\2\ The common stock of Access Anytime Bancorp, Inc. is publicly

traded on the National Association of Securities Dealers Automated

Quotation Small-Cap Market System under the symbol, ``AABC''.

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2. The Employer maintains the Plan as a defined contribution plan

combining a profit sharing component (the PSP) with an employee stock

ownership component (the ESOP) for the benefit of employees of the

Employer and each of the employers which are members of a controlled

group with the Employer. As of October 31, 1996, the Plan had

approximately 54 participants and total assets of $319,659. The trustee

of the Plan is Roddy Pearce (the Trustee), who is an officer of the

Employer. The Plan provides for individual participant accounts (the

Accounts) in both the ESOP and the PSP, and participant-directed

investment of the PSP Accounts. The Trustee acts as custodian of Plan

assets, holding legal title to the assets and executing investment

directions in accordance with the participants' directions. A committee

appointed by the Employer's board of directors (the Committee) reviews

all investment direction forms filed by Plan participants to check for

possible errors, such as the failure of a participant to enter a

signature or to specify clear instructions. The Plan assets in the ESOP

are invested primarily in Parent Stock under the direction of the

Trustee, and the assets in the PSP are invested pursuant to participant

directions among nine different investment options. As of October 31,

1996, the ESOP component of 35 Accounts in the Plan held a total of

9,798 shares of Parent Stock comprising approximately 18 percent of

total Plan assets.

3. Following the Merger and the conversion of Employer Stock to

Parent Stock, the Parent commenced on December 26, 1996 (the Opening

Date) an offering (the Offering) of new shares of Parent Stock to all

holders of record (the Shareholders) of Parent Stock as of December 20,

1996 (the Record Date) pursuant to nontransferable subscription rights

(the Rights) \3\ issued to all of the Shareholders, including the Plan.

One Right was issued for each share of Parent Stock held by the

Shareholders, and each Right conferred upon its holder an entitlement

to purchase one new share of Parent Stock at a stated subscription

price of $5.25 per share (the Subscription Price) during the Offering,

prior to close of business on the date of the Offering's expiration

(the Expiration Date). The original Expiration Date was January 31,

1997, but the directors of the Parent extended the Offering to April 8,

1997. Under the terms of the Offering, each Right was non-transferable

and was required to expire if not exercised prior to the close of the

Expiration Date. As of the Opening Date, 732,198 shares of Parent stock

were issued and outstanding, held by 450 Shareholders, including the

Plan Accounts' investments in 9,798 shares, which constituted about

1.33 percent of all issued and outstanding Parent Stock. The Employer

and the Parent are requesting an exemption for the Plan's acquisition

and holding of 9,798 Rights pursuant to the Offering and, to the extent

the Rights were exercised, for the exercise of the Rights, under the

terms and conditions described herein.

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\3\ The Department notes that the Rights do not constitute

``qualifying employer securities'' within the meaning of section

407(d)(5) of the Act.

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4. In anticipation of the Offering, the Plan and its related trust

agreement were amended with respect to all Plan participants with an

Account invested in the Parent Stock (Invested Participants). Prior to

this amendment and restatement of the Plan, participants had no

authority to direct any investments of the ESOP portion of their

Accounts. With the amendment, the Plan document enabled Invested

Participants to determine the disposition of all Rights allocated to

their Accounts. Pursuant to these

[[Page 30621]]

amended Plan provisions, each Invested Participant was permitted to

direct the Trustee to exercise any or all of the Rights attributable to

his or her Account. The Employer represents that the amendment and

restatement of the Plan to provide pass-through elections to Plan

participants was intended to place the Invested Participants in a like

position with other Shareholders for purposes of the Offering. Since

all shares of Parent Stock held by the Plan were allocated to

participant Accounts, all decisions with respect to the Rights acquired

by the Plan were made by individual Invested Participants. In order to

exercise the Rights, the Invested Participants were required to file

valid instructions with the Trustee no later than the close of the

Expiration Date and to liquidate a sufficient portion of the non-Parent

Stock assets in their Accounts to cover the Subscription Price. Those

Rights with respect to which the Invested Participant failed to file

with the Trustee valid exercise instructions before close of business

on the Expiration Date expired in the same manner as the Rights held by

non-Plan Shareholders. The Employer represents that 5,000 Rights were

exercised by Invested Participants, that the remaining 4,798 Rights

expired on the Expiration Date, and that no expenses were incurred by

the Invested Participants or the Plan in connection with the Offering.

5. The Employer represents that upon commencement of the Offering,

all Invested Participants were notified of the Offering and the

procedure for filing instructions with the Trustee with respect to the

Rights. The Employer states that all instructions timely filed by the

Invested Participants were properly executed. The Employer represents

that the Plan was necessarily involved in the Offering because the

Parent accorded equal treatment to all Shareholders with respect to

issuance of the Rights, and that the Plan was entitled to all rights

and benefits available to other Shareholders. The Employer maintains

that all actions by the Trustee with respect to the Offering were taken

pursuant to express instructions of Invested Participants except when

an Invested Participant failed to file timely, valid instructions, in

which case the Rights were allowed to expire unexercised, since the

Rights were non-transferable and could not be sold. The Employer

represents that the Plan procedures requiring Invested Participants to

file written instructions with the Trustee in order to exercise the

Rights, and the expiration of the Rights upon the failure to do so,

were fully disclosed in the advance notice to Invested Participants.

6. In summary, the applicant represents that the transactions

satisfied the criteria of section 408(a) of the Act for the following

reasons: (A) The Plan's acquisition of the Rights resulted from an

independent act of the Parent; (B) With respect to all aspect of the

Offering, all Shareholders were treated in the same manner, including

the Plan; (C) All decisions with respect to the Plan's acquisition,

holding and control of the Rights were made by the individual Invested

Participants whose Accounts held Parent Stock, except for those

Invested Participants who failed to file timely and valid instructions,

in which case the Rights expired unexercised; and (D) The acquisition

and holding of Rights affected 35 of the Plan's 54 participants whose

accounts held only about 1.33 percent of the Parent Stock issued and

outstanding as of the Record Date of the Offering.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

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

BP America Inc. Retirement Trust (the BP Trust), Located in Cleveland,

Ohio; IBM Retirement Plan Trust (the IBM Trust), Located in Armonk, New

York; United States Steel Corporation Plan (the US Steel Plan), Located

in Pittsburgh, Pennsylvania; and Retirement Plan of Marathon Oil

Company (the Marathon Plan), Located in Findlay, Ohio; (collectively,

the Plans)

[Application Nos. D-10441 through D-10444]

Proposed Exemption

The Department is considering granting an exemption under the

authority of section 408(a) of the Act and section 4975(c)(2) of the

Code and in accordance with the procedures set forth in 29 CFR Part

2570, Subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption

is granted, the restrictions of section 406(a) 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 (D) of the Code, shall not

apply to (1) the proposed granting to The Industrial Bank of Japan,

Limited, New York Branch (IBJ), as the representative of lenders (the

Lenders) participating in a credit facility (the Facility), of security

interests in limited partnership interests in The Westbrook Real Estate

Fund II, L.P. (the Partnership) owned by the Plans with respect to

which some of the Lenders are parties in interest; and (2) the proposed

agreements by the Plans to honor capital calls made by IBJ in lieu of

the Partnership's general partner; provided that (a) the proposed

grants and agreements are on terms no less favorable to the Plans than

those which the Plans could obtain in arm's-length transactions with

unrelated parties; (b) the decisions on behalf of each Plan to invest

in the Partnership and to execute such grants and agreements in favor

of IBJ are made by a fiduciary which is not included among, and is

independent of, the Lenders and IBJ; and (c) with respect to plans that

may invest in the Partnership in the future, such plans will have

assets of not less than $100 million and not more than 5% of the assets

of such plans will be invested in the Partnership.

Summary of Facts and Representations

1. The Partnership is a Delaware limited partnership the general

partner of which is Westbrook Real Estate Partners Management II,

L.L.C. (the General Partner), a Delaware limited liability company. The

Partnership has an eight-year term from the initial closing date,

expiring on February 24, 2005, and will be self-liquidating. The

Partnership has been organized to make investments, including leveraged

equity investments, in undervalued or inappropriately capitalized real

estate assets and portfolios, and corporate real estate. Proceeds from

the sale or refinancing of properties generally will not be reinvested,

but will be distributed to the limited partners, so that the

Partnership will be self-liquidating.

2. After execution of the Partnership Agreement (the Agreement),

the General Partner sought capital commitments through private

placement and has obtained, as a result, irrevocable, unconditional

capital commitments in excess of at least $410,000,000 from

approximately 17 current and prospective purchasers of limited

partnership units (the Limited Partners). The Agreement requires

Limited Partners to make capital contributions upon receipt of notice

from the General Partner. Under the Agreement, the General Partner may

make a call for cash contributions, also known as a ``drawdown'', up to

the total amount of the Limited Partner's capital commitment upon 15

business days' notice, with some limitations. The Partners' capital

commitments are structured as irrevocable, unconditional and binding

commitments to contribute equity when capital calls are made by the

General Partner. The obligation of each Limited Partner to contribute

the full amount of its capital commitment is secured by a security

interest granted to

[[Page 30622]]

the Partnership in the Limited Partner's partnership interest.

3. In the ordinary course of its business operations, it is

contemplated that the Partnership will incur indebtedness in connection

with many of its investments. This on-going need for credit will be

provided by the Facility, a two-year, eleven month arrangement for

revolving credit with restricted availability levels, which will enable

the Partnership to consummate investments quickly without the delay of

separate arrangements for interim or permanent financing for each

investment. The Facility is funded by the Lenders, represented by IBJ

and NationsBank, N.A. (NationsBank) which will also be participating

lenders. IBJ and NationsBank will serve as administrative agents for

the Facility. The Facility will be a non-recourse obligation of the

Partnership which matures in the year 2000 and which is secured by a

security interest in the Limited Partners' capital commitments, the

General Partner's right to make drawdowns and the Partnership's lien

and security interest in each Limited Partner's partnership interest.

As additional security, the Facility will require each Limited Partner

to execute an agreement (the Security Agreement) granting to IBJ, for

the benefit of each Lender, a security interest and lien in the Limited

Partner's partnership interest, and covenanting with IBJ, for the

benefit of the Lenders, that such Limited Partner will unconditionally

honor any drawdown made by IBJ in accordance with the Agreement in lieu

of the General Partner to the full extent of the Limited Partner's

unfunded capital commitment.

4. The trusts which hold assets of the Plans (the Trusts) own

limited partnership interests as Limited Partners in the Partnership.

Some of the Lenders may be parties in interest with respect to some of

the Plans in the Trusts by virtue of such Lenders' (or their

affiliates') provisions of fiduciary services to such Plans with

respect to Trust assets other than the Partnership interests. IBJ is

requesting an exemption to permit the Trusts to enter into the Security

Agreements under the terms and conditions described herein. The Plans

and the other Limited Partners with the largest interests in the

Partnership and the extent of their respective capital commitments to

the Partnership are described as follows:

(a) The BP Trust holds the assets of the following Plans: BP

America Master Hourly Plan for Represented Employees, a defined benefit

plan with 16,165 participants as of December 31, 1995, and BP America

Retirement Accumulation Plan, a defined benefit plan with 25,636

participants as of that date. The BP Trust also holds assets from some

smaller Plans (together with two above-described Plans, the BP Plans).

The approximate fair market value of the total assets of the BP Plans

held in the BP Trust is $1.6 billion. The fiduciary of the BP Plans

generally responsible for investment decisions is S.W. Percy, Chief

Executive Officer, BP America, Inc. Mr. Percy is also the fiduciary

responsible for reviewing and authorizing the investment in the

Partnership to which the exemption proposed herein relates. The BP

Trust has undertaken a total capital commitment of $10,000,000 in the

Partnership.

(b) The IBM Trust holds the assets of the IBM Retirement Plan (the

IBM Plan), a defined benefit pension plan with 289,934 participants as

of December 31, 1995, and assets with a total value of approximately 31

billion dollars as of that date. The fiduciary of the IBM Plan

generally responsible for investment decisions is the IBM Investment

Committee, which is the fiduciary responsible for reviewing and

authorizing the IBM Plan's investment in the Partnership. The IBM Trust

has undertaken a total capital commitment of $75,000,000 in the

Partnership.

(c) The USS Special Investments Group Trust holds assets of the US

Steel Plan, a defined benefit pension plan with 139,082 participants as

of December 31, 1995, and with assets of approximately 8.5 billion

dollars as of that date. The fiduciary responsible for reviewing and

authorizing the investment in the Partnership by the US Steel Plan is

United States Steel and Carnegie Pension Fund, Trustee, which is the

fiduciary of the US Steel Plan generally responsible for investment

decisions. This Trust has undertaken a total capital commitment of

$20,000,000 in the Partnership.

(d) The MRO Special Investments Group Trust holds assets of the

Marathon Plan and the Petroleum Marketing Retirement Plan (the PMR

Plan). The Marathon Plan is a defined benefit plan with 10,519

participants and approximately $881 million in total assets as of

December 31, 1995. The PMR Plan is a defined benefit plan with 6,608

participants and approximately $15.9 million in total assets as of

December 31, 1995. The fiduciary of the Marathon Plan and the PMR Plan

generally responsible for investment decisions is United States Steel

and Carnegie Pension Fund, Trustee, which is also the fiduciary

responsible for reviewing and authorizing the investment in the

Partnership to which the exemption proposed herein relates. This Trust

has undertaken a total capital commitment of $5,000,000 in the

Partnership.

(e) The applicant represents that it is possible that one or more

other Plans may become Limited Partners at some time in the future, and

requests relief for any such Plan under the exemption proposed herein,

provided the Plan meets the standards and conditions set forth herein.

The applicant further represents that any such Plan will have assets of

at least $100 million, and that no more than 5% of the assets of such

Plan will be invested in the Partnership.

(f) Limited Partners which are not ERISA-covered plans include:

(i) Arkansas Teacher Retirement System, which has undertaken a

total capital commitment of $50,000,000.

(ii) Allstate Insurance Company, which has undertaken a total

capital commitment of $20,000,000.

(iii) Atlantic Equity Corporation, which has undertaken a total

capital commitment of $20,000,000.

(iv) The Trustees of Columbia University, which has undertaken a

total capital commitment of $20,000,000.

(v) The Trustees of Dartmouth College, which has undertaken a total

capital commitment of $10,000,000.

(vi) New York State Common Retirement Fund, which has undertaken a

total capital commitment of $25,000,000.

(vii) Commonwealth of Pennsylvania State Employees' Retirement

System, which has undertaken a total capital commitment of $56,000,000.

(viii) J.H. Pew Freedom Trust, which has undertaken a total capital

commitment of $4,200,000.

(ix) J.N. Pew, Jr. Trust, which has undertaken a capital commitment

of $2,100,000.

(x) Mabel Pew Myrin Trust, which has undertaken a total capital

commitment of $2,700,000.

(xi) Pew Memorial Trust, which has undertaken a total capital

commitment of $21,000,000.

(xii) State of Wisconsin Investment Board, which has undertaken a

total capital commitment of $75,000,000.

(xiii) The General Partner, which has undertaken a total capital

commitment of $4,151,515.

5. IBJ represents that the Partnership will obtain an opinion of

counsel that the Partnership will constitute an ``operating company''

under the Department's plan asset regulations [29 CFR 2510.3-101(c)] if

the Partnership is operated in accordance with the Agreement and the

offering memorandum (the Offering) distributed

[[Page 30623]]

in connection with the private placement of the limited partnership

interests.4

---------------------------------------------------------------------------

\4\ The Department expresses no opinion herein as to whether the

Partnership will constitute an operating company under the

regulations at 29 CFR 2510.3-101.

---------------------------------------------------------------------------

6. IBJ represents that the Security Agreement constitutes a form of

credit security which is customary among financing arrangements for

real estate limited partnerships, wherein the financing institutions do

not obtain security interests in the real property assets of the

partnership. IBJ also represents that the obligatory execution of the

Security Agreement by the Limited Partners for the benefit of the

Lenders was fully disclosed in the Offering as a requisite condition of

investment in the Partnership during the private placement of the

limited partnership interests. IBJ represents that with respect to the

Partnership and its activities, the only direct relationship between

any of the Limited Partners and any of the Lenders is the execution of

the Security Agreements. All other aspects of the transaction,

including the negotiation of all terms of the Credit Facility, are

exclusively between the Lenders and the Partnership. IBJ represents

that the proposed executions of the Security Agreements will not affect

the abilities of the Trusts to withdraw from investment and

participation in the Partnership. The only Plan assets to be affected

by the proposed transaction are each Plan's limited partnership

interests in the Partnership and the related Plan obligations as

Limited Partners to respond to drawdowns up to the total amount of each

Plan's capital commitment to the Partnership.

7. IBJ represents that neither it nor any Lender acts or has acted

in any fiduciary capacity with respect to any Trust's investment in the

Partnership and that IBJ is independent of and unrelated to those

fiduciaries (the Trust Fiduciaries) responsible for authorizing and

overseeing the Trusts' investments in the Partnership. Each Trust

Fiduciary represents independently that its authorization of Trust

investment in the Partnership was free of any influence, authority or

control by the Lenders. The Trust Fiduciaries represent that the

Trust's investments in and capital commitments to the Partnership were

made with the knowledge that each Limited Partner would be required

subsequently to grant a security interest in the Partnership to the

Lenders and to honor drawdowns made on behalf of the Lenders without

recourse to any defenses against the General Partner. Each Trust

Fiduciary individually represents that it is independent of and

unrelated to IBJ and the Lenders and that the investment by the Trust

for which that Trust Fiduciary is responsible continues to constitute a

favorable investment for the Plans participating in that Trust and that

the execution of the Security Agreement is in the best interests and

protective of the participants and beneficiaries of such Plans.

8. In summary, the applicants represent that the proposed

transactions satisfy the criteria of section 408(a) of the Act for the

following reasons: (1) The Plans' investments in the Partnership were

authorized and are overseen by the Trust Fiduciaries, which are

independent of the Lenders; (2) None of the Lenders have any influence,

authority or control with respect to the Plans' investments in the

Partnership or the Plans' executions of the Security Agreements; and

(3) The Trust Fiduciaries invested in the Partnership on behalf of the

Plans with the knowledge that the Security Agreements are required of

all Limited Partners investing in the Partnership.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,

telephone (202) 219-8881. (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 of disqualified

person from certain other provisions of the Act and/or the Code,

including any prohibited transaction provisions to which the exemption

does 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) Before an exemption may be granted under section 408(a) of the

Act and/or section 4975(c)(2) of the Code, the Department must find

that the exemption is administratively feasible, in the interests of

the plan and of its participants and beneficiaries and protective of

the rights of participants and beneficiaries of the plan;

(3) The proposed exemptions, if granted, will be supplemental to,

and not in derogation of, any other provisions of the Act and/or the

Code, including statutory or administrative exemptions and transitional

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

(4) The proposed exemptions, if granted, will be 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 30th day of May, 1997.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 97-14559 Filed 6-3-97; 8:45 am]

BILLING CODE 4510-29-P