Proposed Exemptions; Jack Mayesh Wholesale Florist, Inc.

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Application No. D-10524, et al.]

Proposed Exemptions; Jack Mayesh Wholesale Florist, Inc.

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 restrictions 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

All interested persons are invited to submit written comments or

request for a hearing on the pending exemptions, unless otherwise

stated in the Notice of Proposed Exemption, within 45 days from the

date of publication of this Federal Register Notice. Comments and

requests 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 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.

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.

Jack Mayesh Wholesale Florist, Inc., Profit Sharing Plan (the

Plan), Located in Los Angeles, California

[Application No. D-10524]

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), 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 sale by the Plan of certain

unimproved real property (the Property) to Roy Dahlson, a party in

interest with respect to the Plan, provided that the following

conditions are satisfied: (1) the sale is a one-time transaction for

cash; (2) the Plan pays no commissions nor other

[[Page 19951]]

expenses relating to the sale; and (3) the Plan receives an amount

which is the greater of either (a) the fair market value of the

Property as of the date of the sale, as determined by a qualified,

independent appraiser, or (b) the original acquisition cost of the

Property to the Plan, plus lost opportunity costs attributable to the

Property.

Summary of Facts and Representations

1. The Plan is a defined contribution plan sponsored by Jack Mayesh

Wholesale Florist, Inc. (the Employer) and has approximately 58

participants. Mr. Dahlson is an owner of the Employer and one of the

trustees of the Plan. The assets of the Plan, and of the Money Purchase

Plan also sponsored by the Employer, are held in a combined trust. As

of December 31, 1996, the fair market value of the assets of both plans

was $1,062,124.34.

2. The Property consists of two adjoining parcels of unimproved

real property located at Sunland Blvd., Los Angeles, California (mail

address at 12901 Harding St., Sylmar, California). The two parcels are

known as Parcel # 2544-010-002 (Lot 2) and Parcel # 2544-101-003 (Lot

3). Lot 2 consists of an area of 37,900 sq. ft., while Lot 3 consists

of an area of approximately 50,530 sq. ft. The other parcels adjacent

to Lot 2 and Lot 3 are owned by persons unrelated to the Plan, the

Employer, and Mr. Dahlson.

3. The Property was acquired by the Plan from Shadow Hills

Development Corp., an unrelated party, in March, 1993, for a total

purchase price of $101,808. The purchase was paid by the Plan in four

installments, as follows.

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

Date of payment Amount paid

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

1. March 12, 1993.......................................... $25,000.00

2. August 27, 1993......................................... 6,808.38

3. March 5, 1994........................................... 20,000.00

4. September 14, 1994...................................... 50,000.00

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

101,808.38

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The applicant represents that all expenses relating to the Property

since its acquisition by the Plan, including taxes, insurance, and

fees, have been paid by Mr. Dahlson. However, the applicant states that

the Property has not been leased to, nor used by, any party in interest

with respect to the Plan, at any time since its acquisition by the

Plan. The Property has produced no income for the Plan.1

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\1\ The Department expresses no opinion herein as to whether the

acquisition and holding of the Property by the Plan violated any of

the provisions of Part 4 of Title I in the Act. However, the

Department notes that section 404(a) of the Act requires, among

other things, that a plan fiduciary act prudently and solely in the

interest of the plan and its participants and beneficiaries when

making investment decisions on behalf of the plan.

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4. The applicant has obtained two appraisals of the Property by

qualified, independent appraisers, both certified in the State of

California. The first appraiser, William G. Dyess, relying on the

market approach to valuation, concluded that the fair market value of

the Property (both parcels combined) was $44,000, as of June 8, 1997

(the Dyess Appraisal). The second appraiser, Terry T. Komatsu, of

Suburban Appraisal Service, also relying on the market approach,

estimated that the fair market value of the Property (both parcels

combined) was $30,000, as of July 7, 1997 (the Komatsu Appraisal).

Each appraiser examined three recent sales of comparable properties

in the local real estate area in making his determination of the fair

market value of the Property. The zoning of the Property is Ra-1&K--

Residential/agricultural. The Dyess Appraisal noted that Lot 2, which

has street frontage on Sunland Blvd., is land that rises up sharply

from the street and has value only to an adjoining lot. The Komatsu

Appraisal noted that Lot 3 has no street frontage or other direct

access from the street except through other parcels. Thus, by itself,

it would have no apparent value unless vehicular ingress/egress

easements could be obtained from adjoining parcels.

5. The applicant represents that the Plan has attempted to sell the

Property on the open market for several years, without success. Mr.

Dahlson therefore proposes to purchase the Property from the Plan for

an amount which is the greater of either (a) the fair market value of

the Property as of the date of the sale, based on an updated

independent appraisal, or (b) the original acquisition cost of the

Property to the Plan, plus lost opportunity costs attributable to the

Property. Since the Property has declined in value, based on the

conclusions of the Dyess Appraisal and the Komatsu Appraisal, Mr.

Dahlson will pay the Plan the latter amount.

Specifically, Mr. Dahlson will pay the Plan a total purchase price

of $145,922.64, which amount includes the Plan's original acquisition

cost of $101,803.38, as well as lost opportunity costs calculated at a

rate of 9%, compounded annually, or $44,114.27. As stated above, the

Plan paid for the Property in four installments, and the appropriate

purchase price to be paid by Mr. Dahlson was determined as follows.

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

Interest

compounded

Date of payment Amount paid annually at

9% through

4/30/98

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

March 12, 1993.................................................. $25,000.00 $13,898.34

August 27, 1993................................................. 6,808.38 3,378.84

March 5, 1994................................................... 20,000.00 8,443.37

September 14, 1994.............................................. 50,000.00 18,393.72

101,808.38 + 44,114.27 = $145,922.64

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

The Plan will pay no commissions nor other expenses relating to the

sale.

The applicant represents that the exemption will be in the best

interests of the Plan because Mr. Dahlson is willing to pay more than

the Plan could receive for the Property on the open market based on the

current fair market value of the Property. In addition, the sale will

convert a non-income producing, illiquid asset that continues to

decline in value into more liquid assets that will achieve a higher

rate of return for the Plan. All costs relating to this exemption

application are being borne by the Employer.

6. In summary, the applicant represents that the proposed

transaction satisfies the statutory criteria for an exemption under

section 408(a) of the Act for the following reasons: (1) the sale will

be a one-time transaction for cash; (2) the Plan will pay no

commissions nor other expenses relating to the sale; (3) the Plan will

receive an amount which is the greater

[[Page 19952]]

of either (a) the fair market value of the Property as of the date of

the sale, as determined by a qualified, independent appraiser, or (b)

the original acquisition cost of the Property to the Plan, plus lost

opportunity costs attributable to the Property; and (4) the sale will

divest the Plan of a non-income producing, illiquid asset that

continues to decline in value and will allow the Plan to reinvest the

sale proceeds in assets that will achieve a higher rate of return.

For Further Information Contact: Ms. Karin Weng of the Department,

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

James E. Jordan, Sr. Individual Retirement Account (the IRA)

Located in Phoenix, Arizona

[Application No. D-10550]

Proposed Exemption

The Department is considering granting an exemption under the

authority of 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 FR 32836,

32847, August 10, 1990.) If the exemption is granted, 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 purchase by the IRA of a certain promissory note

issued by unrelated parties (the Martin Note) which is secured by a

first mortgage on certain residential property (the Property) from the

James E. Jordan Revocable Trust Agreement (the Trust), a disqualified

person with respect to the IRA; 2 provided that the

following conditions are met:

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\2\ Pursuant to CFR 2510.3-2(d), the Department has no

jurisdiction with respect to the IRA under Title I of the Act.

However, there is jurisdiction under Title II of the Act pursuant to

section 4975 of the Code.

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1. The purchase of the Martin Note will be a one-time cash

transaction;

2. The IRA will pay no commissions or other expenses associated

with the purchase;

3. The amount paid by the IRA for the Martin Note will be the

lesser of (i) $63,108.97, which is the current fair market value of the

Martin Note as determined by an independent, qualified appraiser, or

(ii) the fair market value of the Martin Note, as determined at the

time of the purchase by an independent, qualified appraiser;

4. Both the amount paid by the IRA for the Martin Note and the

outstanding principal balance on such Note will involve less than 25%

of the IRA's total assets;

5. Mr. Jordan, as the sole participant of the IRA, will be the only

individual affected by the proposed transaction; and

6. On the date the IRA purchases the Martin Note from the Trust,

the IRA will be named as loss payee under the homeowners insurance

policy on the Property.

Summary of Facts and Representations

1. The IRA is a self-directed individual retirement account. The

current custodian for the IRA is Fidelity National Bank located in

Atlanta, Georgia. James E. Jordan, Sr. (Mr. Jordan) is the sole

participant, a fiduciary and the owner of the IRA. As of January 31,

1998, the fair market value of the IRA's assets was $324,240.87. Thus,

the proposed purchase of the Martin Note would involve approximately 19

percent (19%) of the IRA's assets.

Both the amount paid by the IRA for the Martin Note and the

outstanding principal balance on such Note will involve less than 25%

of the IRA's total assets.

2. The Trust is the Jordan Revocable Trust Agreement dated August

18, 1993.3 The trustees of the Trust are Mr. Jordan and

Sheree G. D'Amico. Mr. Jordan is also the grantor and the primary

beneficial owner of the Trust. The Trust was created by Mr. Jordan as a

will substitute for the purpose of implementing Mr. Jordan's estate

plan. During his lifetime, Mr. Jordan is the primary beneficiary, and

after his death, the beneficiaries will be Sheree G. D'Amico, Lori D.

Jordan, James E. Jordan Jr. and Jay Jordan. The Trust is considered a

disqualified person, as defined in section 4975(e)(2) of the Code, due

to Mr. Jordan's relationship to both the IRA and the Trust.4

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\3\ The Trust is not an employee benefit plan or other plan

subject to the provisions of the Act or the Code.

\4\ In this regard, section 4975(e)(2)(G) of the Code states, in

relevant part, that a ``disqualified person'' includes a trust of

which (or in which) 50 percent or more of the beneficial interest of

such trust is owned, or held by, a person who is a fiduciary of a

plan.

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3. The Martin Note is currently between the Trust, as the original

lender, and John William Martin and Andreina Martin (the Martins), as

the original borrowers. The Martin Note and the accompanying mortgage

were created as seller financing when Mr. Jordan sold an investment

property to the Martins to be used as their primary residence. It is

represented that the Martins have no other relationship to Mr. Jordan,

the Trust and the IRA.

4. The Martin Note was appraised March 12, 1998, by F. Gregory

Rhodes (Mr. Rhodes), an independent qualified appraiser with the

Valuation Advisory Group, Inc. (the Appraisal) in Atlanta, Georgia. The

Appraisal stated that the original amount of the Martin Note, dated

December 28, 1994, was $66,000. The Martin Note has a fixed interest

rate of 8.75% per annum until maturity. The Martin Note has a 30-year

term and is scheduled to mature in December, 2024. However, the Martin

Note is subject to prepayment by the Martins prior to maturity. The

terms of the Martin Note call for monthly payments of principal and

interest, beginning January 29, 1995, equal to $519.23, with a final

payment of $268.89 at maturity.

The Martin Note is secured by a first mortgage on a residence

located in Volusia County, Florida (the Property). A recent appraisal

of the Property was performed by Michael F. Beckman (Mr. Beckman) of

Family Realty of Central Florida, Inc., which stated that the value of

the Property is between $72,000 and $74,000. In determining the fair

market value of the Martin Note, Mr. Rhodes reviewed Mr. Beckman's

appraisal of the Property. Mr. Rhodes states that this appraisal of the

Property indicates that the outstanding principal amount of the Martin

Note is adequately secured by the Property.

5. With respect to the fair market value of the Martin Note, the

Appraisal considered the following factors:

(a) The Martin Note is secured by a first mortgage on the Property;

(b) appraisal of the underlying property indicates that the Martin

Note is adequately secured;

(c) from the 1994 execution of the Martin Note, it appears that all

payments have been made in accordance with the terms of such Note; and

(d) there is a lack of marketability for the Martin Note.

The Appraisal states that because no organized market exists for an

instrument of this sort, a typical buyer of the Martin Note would

demand a rate of return in excess of what would be available for fixed

income securities of comparable duration in the public marketplace at

the time of the transaction. Therefore, the Appraisal applies an

appropriate discount rate to the remaining stream of payments of

principal and interest on the Martin Note to arrive at a required yield

of 8.86% per annum to account for the inherent lack of marketability of

the Martin Note. Therefore, based on this analysis, the Appraisal

concluded that the fair market value of the Martin Note was

approximately $63,108.97 as of March 12, 1998.

[[Page 19953]]

6. The applicant represents that the proposed transaction presents

a desirable investment opportunity for the IRA. For reasons discussed

above, the appraiser discounts (the Discount) the Martin Note. This

Discount of the Note in effect produces an enhanced yield to the IRA.

The transaction will be a one-time cash purchase by the IRA. The amount

paid by the IRA for the Martin Note will be the lesser of (i)

$63,108.97, which is the current fair market value of the Martin Note

as determined by an independent, qualified appraiser, or (ii) the fair

market value of the Martin Note, as determined at the time of the

purchase by an independent, qualified appraiser. The IRA will not bear

any commissions or expenses associated with the transaction.

In addition, the applicant represents that the acquisition of the

Martin Note will be consistent with the liquidity needs and investment

objectives of the IRA, which is currently heavily invested in equities.

The interests of the IRA will be protected because the Note is

adequately secured by the first mortgage on the Property. In a letter

of February 12, 1998, Fidelity National Bank, the IRA custodian, stated

that it would retain the Property as an IRA asset in the event the IRA

forecloses on the Property. Furthermore, the applicant states that on

the date the IRA purchases the Martin Note, the IRA will be named as

the loss payee under the homeowners insurance policy on the Property.

Thus, if the IRA becomes the owner of the Property, the IRA's

investment interests will be protected in the event that payments are

made to the loss payee on this insurance policy.

7. In summary, the applicant represents that the transaction

satisfies the statutory criteria of section 4975(c)(2) of the Code

because:

a. The purchase of the Martin Note will be a one-time cash

transaction;

b. The IRA will pay no commissions or other expenses associated

with the purchase;

c. The amount paid by the IRA for the Martin Note will be the

lesser of (i) $63,108.97, which is the current fair market value of the

Martin Note as determined by an independent, qualified appraiser, or

(ii) the fair market value of the Martin Note, as determined at the

time of the purchase by an independent, qualified appraiser;

d. Both the amount paid by the IRA for the Martin Note and the

outstanding principal balance on such Note will involve less than 25%

of the IRA's total assets;

e. On the date the IRA purchases the Martin Note, the IRA will be

named as loss payee under the homeowners insurance policy on the

Property; and

f. Mr. Jordan, as the sole participant of the IRA, will be the only

individual affected by the proposed transaction.

Notice to Interested Persons

Because Mr. Jordan is the sole participant of the IRA, it has been

determined that there is no need to distribute this notice of proposed

exemption to interested persons. Comments and requests for a hearing

are due 30 days from the date of publication of this notice in the

Federal Register.

FOR FURTHER INFORMATION CONTACT: Ekaterina A. Uzlyan of the Department

at (202) 219-8883. (This is not a toll-free number.)

Pipefitters Local Union No. 537 Pension Fund (the Plan) Located in

Boston, Massachusetts

[Application No. D-10577]

Proposed Exemption

The Department of Labor 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 sale (the Sale) of certain real

property (the Property) to the Plan by Local Union 537 (the Union) of

the United Association of Journeymen and Apprentices of the Plumbing

and Pipefitting Industry of the United States and Canada, a party in

interest with respect to the Plan; provided the following conditions

are satisfied:

(A) The terms and conditions of the transaction are no less

favorable to the Plan than those which the Plan would receive in an

arm's-length transaction with an unrelated party;

(B) The Sale is a one-time transaction for cash;

(C) The Plan incurs no expenses from the Sale;

(D) The Plan pays as consideration for the Property no more than

the fair market value of the Property as determined by a qualified,

independent appraiser on the date of the Sale; and

(E) The independent fiduciary for the Plan will undertake to

monitor and enforce the terms of the proposed exemption, if granted.

Summary of Facts and Representations

1. Two employer associations represent the contributing employers

to the Plan and serve as their collective bargaining agents with the

Union. These two associations are the Air Conditioning and

Refrigeration Contractors of Boston, Inc. (ARCA) and the New England

Mechanical Contractors Association, Inc. (NEMCA). ARCA represents

employers in eastern Massachusetts and surrounding areas who erect,

install, and service all types of food cases, refrigeration, and air

conditioning equipment. NEMCA represents employers throughout most of

New England who erect, service, and install and maintain all types of

heating, pipe laying, piping, refrigeration and air conditioning

systems and equipment.

The Union is the sole collective bargaining agency for employees

covered by applicable collective bargaining agreements who are employed

by members of ARCA and NEMCA.

2. The Plan is a jointly administered Taft-Hartley trust fund

established pursuant section 302(c)(5) of the Labor Management

Relations Act that maintains a defined benefit plan which is intended

to qualify under section 401(a) of the Code. The Plan is for employees

covered by collective bargaining agreements between the participating

employers and the Union, and for certain employees of the Plan and the

Union.

The Plan is administered by a six member Board of Trustees (the

Trustees) of whom three members are appointed by the two employers'

associations, ARCA and NEMCA, and three members are appointed by the

Union. The Trustees of the Plan, who have investment discretion over

the assets of the Plan, are represented by the applicant to include

Messrs. Leo Reed, Charles L. Grinnell, and Ron Ledoux, who were

appointed by the employers associations and Messrs. Michael Benullo,

President of the Union, Robert O'Toole, Business Manager of the Union,

and Thomas MacKay, Business for the Union, who are appointed by the

Union.

The applicant represents that, as of January 30, 1998, the Plan had

approximately total assets of $237,300,000, and approximately 1990

participants.

3. The Property is a condominium unit, designated as Unit 1,

consisting of 2,536 square feet of floor area located in the lower

(basement) level of a two story office building, with a non-exclusive

right to use parking spaces at the site location. The Property is 47.5

percent of

[[Page 19954]]

the total condominium area in the office building, and the remaining

condominium area in the office building, designated as Unit 2, is

occupied and used by the Union, the owner of the office building since

December 17, 1996. The office building has approximately 6,560 square

feet of gross building area situated on a 21,090 square foot parcel of

land located at 35 Travis Street, Boston (Allston), Massachusetts.

The Property was appraised by Peter L. Lane, Certified Gen. R. E.

Appraiser, with the Robert P. Wood & Co., Inc., located in Milton,

Massachusetts, who determined that the Property had a fair market value

of $151,000, as of November 28, 1997.

4. The Union proposes to sell the Property to the Plan for cash in

a one-time transaction with no expenses incurred by the Plan. The

applicant represents that the Union will receive, as consideration from

the Sale, no more than the fair market value of the Property as

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

appraiser.

The Plan is prompted to take this action because of the need for an

improved location and increased office space and storage facilities

that will provide more and better facilities than its current location

of 1,400 square feet floor area on the fourth floor of an office

building located in an undesirable neighborhood. The applicant

represents that the current location of the Plan's offices fails to

provide parking facilities, accessibility for handicapped persons, and

lacks cleanliness and security.

The applicant represents that the Trustees for the Plan have

determined that the proposed acquisition of the Property will be in the

best interests of the Plan and the rights of its participants and

beneficiaries will be protected because the Property will provide the

Plan with a desirable combination of improved and increased office and

storage facilities, handicapped accessibility, on-site parking space,

increased security, and a proximity to major thoroughfares and public

transportation. Also, the applicant represents that the Property will

provide the Plan and its participants and beneficiaries with a close

proximity to the offices of the Union, and thus facilitate the

processing of applications for benefits from the Plan, minimizing

inconveniences to participants and beneficiaries and personnel of the

Plan and enhancing administrative efficiencies. 5

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\5\ The applicant represents that it is contemplated that the

Pipefitters Local Union No. 537 Health and Welfare Fund and the

Pipefitters Local Union No. 537 Deferred Income Annuity Fund will

occupy a portion of the Property; and these two Funds will share

space and reimburse the Plan for reasonable costs and expenses in

accordance PTE 76-1 and PTE 77-10 (41 FR 12740, March 26, 1976 and

42 FR 33918, respectively). The Department expresses no opinion

herein as to whether or not the occupancy of a portion of the

Property by the two Funds as described satisfies the terms and

conditions of PTE 76-1 and PTE 77-10.

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The applicant also represents that compliance with the terms and

conditions of the requested exemption will be monitored and enforced by

an independent fiduciary, Edward K. Wadsworth, MAI, president of The

Boston Valuation Group, Inc. located in Weymouth, Massachusetts. Mr.

Wadsworth represents that he has extensive experience in the field of

market, financial, and real estate analysis, serving as a leader of

professional organizations in these fields and serving as a qualified

expert witness in a number of court proceedings. In addition, Mr.

Wadsworth represents that he is on the teaching faculty of the

Appraisal Institute and has instructed courses in the Standards of

Professional Practice and Income Capitalization.

Mr. Wadsworth represents that the proposed Sale is in the best

interests of the Plan and is protective of the rights of the

participants and beneficiaries of the Plan; and that he has the power,

authority, and responsibility to take the necessary action in the

proposed transaction so that the Plan will not pay more than the fair

market value as determined by the independent appraiser, Peter L. Lane

of Robert Wood & Co., Inc., on the date of the Sale.

5. In summary, the applicant represents that the proposed

transaction satisfies the criteria of section 408(a) of the Act because

(a) the Sale is a one-time transaction for cash; (b) the Plan will not

incur any expenses from the transaction; (c) the Plan will pay no more

than the fair market value of the Property as determined on the date of

the Sale by a qualified, independent appraiser; and (d) the proposed

transaction will be monitored and enforced by a qualified, independent

fiduciary.

For Further Information Contact: Mr. C. E. Beaver 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 that each application

accurately describes all material terms of the transaction which is the

subject of the exemption.

Signed at Washington, DC, this 17th day of April 1998.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 98-10692 Filed 4-21-98; 8:45 am]

BILLING CODE 4510-29-P