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Secretary of Labor Thomas E. Perez
Grant of Individual Exemptions; First Hawaiian Bank, et al. [Notices] [01/31/1996]

EBSA (Formerly PWBA) Federal Register Notice

Grant of Individual Exemptions; First Hawaiian Bank, et al. [01/31/1996]

[PDF Version]

Volume 61, Number 21, Page 3478-3483

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DEPARTMENT OF LABOR
[Prohibited Transaction Exemption 96-1; Exemption Application No. D-
09877, et al.]

 
Grant of Individual Exemptions; First Hawaiian Bank, 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. 

[[Page 3479]]

    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.

First Hawaiian Bank Located Honolulu, HI

[Prohibited Transaction Exemption 96-1; Exemption Application No. D-
09877]

Exemption

Section I. Exemption for In-Kind Transfer of Assets

    The restrictions of section 406(a) and section 406(b) 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 (F) of the Code, shall 
not apply to the in-kind transfer to any opened investment company (the 
Fund or Funds) registered under the Investment Company Act of 1940 (the 
'40 Act) to which First Hawaiian Bank or any of its affiliates 
(collectively, the Bank) serves as investment adviser and may provide 
other services, of the assets of various employee investment funds (the 
CIF or CIFs) maintained by the Bank or otherwise held by the Bank as 
trustee, investment manager, or in any other capacity as fiduciary on 
behalf of the Plans, in exchange for shares of such Funds, providing 
the following conditions are met:
    (a) A fiduciary (the Second Fiduciary) who is acting on behalf of 
each affected Plan and who is independent of and unrelated to the Bank, 
as defined in paragraph (g) of Section III below, receives advance 
written notice of the in-kind transfer of assets of the Plans or the 
CIFs in exchange for shares of the Fund and the disclosure described in 
paragraph (g) of Section II below.
    (b) On the basis of the information described in paragraph (g) of 
Section II below, the Second Fiduciary authorizes in writing the in-
kind transfer of assets of the Plans in exchange for shares of the 
Funds, the investment of such assets in corresponding portfolios of the 
Funds, and the fees received by the Bank in connection with its 
services to the Fund. Such authorization by the Second Fiduciary to be 
consistent with the responsibilities, obligations, and duties imposed 
on fiduciaries by Part 4 of Title I of the Act.
    (c) No sales commission are paid by the Plans in connection with 
the in-kind transfers of asset of the Plans or the CIFs in exchange for 
shares of the Funds.
    (d) All or a pro rata portion of the assets of the Plans held in 
the CIFs or all or a pro rata portion of the assets of the Plans held 
by the Bank in any capacities as fiduciary on behalf of such Plans are 
transferred in-kind to the Funds in exchange for shares of such Funds.
    (e) The Plans or the CIFs receive shares of the Funds that have a 
total net asset value equal in value to the assets of the Plans or the 
CIFs exchanged for such shares on the date of transfer.
    (f) The current market value of the assets of the Plans or the CIFs 
to be transferred in-kind in exchange for shares is determined in a 
single valuation performed in the same manner and at the close of 
business on the same day, using independent sources in accordance with 
the procedures set forth in Rule 17a-7b (Rule 17a-7) under the '40 Act, 
as amended from time to time or any successor rule, regulation, or 
similar pronouncement and the procedures established by the Funds 
pursuant to Rule 17a-7 for the valuation of such assets. Such 
procedures must require that all securities for which a current market 
price cannot be obtained by reference to the last sale price for 
transactions reported on a recognized securities exchange or NASDAQ be 
valued based on an average of the highest current independent bid and 
lowest current independent offer, as of the close of business on the 
last business day preceding the date of the Plan or CIF transfers 
determined on the basis of reasonable inquiry from at least three 
sources that are broker-dealers of pricing services independent of the 
Bank.
    (g) Not later than 30 business days after completion of each in-
kind transfer of assets of the Plans or the CIFs in exchange for shares 
of the Funds, the Bank sends by regular mail to the Second Fiduciary, 
who is acting on behalf of each affected Plan and who is independent of 
and unrelated to the Bank, as defined in paragraph (g) of Section III 
below, a written confirmation that contains the following information:
    (1) The identity of each of the assets that was valued for purposes 
of the transaction in accordance with Rule 17a-7(b)(4) under the '40 
Act;
    (2) The price of each of the assets involved in the transaction; 
and
    (3) The identity of each pricing service or market maker consulted 
in determining the value of such assets; and
    (h) No later than 90 days after completion of each in-kind transfer 
of assets of the plans or the CIFs in exchange for shares of the Funds, 
the Bank sends by regular mail to the Second Fiduciary, who is acting 
on behalf of each affected Plan and who is independent of and unrelated 
to the Bank, as defined in paragraph (g) of Section III below, a 
written confirmation that contains the following information:
    (1) The number of CIF units held by each affected Plan immediately 
before the conversion (and the related per unit value and the aggregate 
dollar value of the units transferred); and
    (2) The number of shares in the Funds that are held by each 
affected Plan following the conversion (and the related per share net 
asset value and the aggregate dollar value of the shares received).
    (i) The conditions set forth in paragraphs (d), (e), (f), (o), (p), 
(q), and (r) of Section II below are satisfied.

Section II. Exemption for Receipt of Fees from Funds

    The restrictions of section 406(a) and section 406(b) of the Act 
and the sanctions resulting from the application of section 4975 of the 
Code, by reason of section 4975(c)(1) (D) through (F) of the Code shall 
not apply to the receipt of fees by the Bank from the Funds for acting 
as the investment adviser, custodian, sub-administrator, and other 
service provider for the Funds in connection with the investment in the 
Funds by the Plans for which the Bank acts as a fiduciary provided 
that:
    (a) No sales commissions are paid by the Plans in connection with 
purchases or sales of shares of the funds and no redemption fees are 
paid in connection with the sale of such shares by the Plans to the 
Funds.
    (b) The price paid or received by the Plans for shares in the Funds 
is the net asset value per share, as defined in paragraph (e) of 
Section III, at the time of the transaction and is the same price which 
would have been paid or received for the shares by any other investor 
at that time.

[[Page 3480]]

    (c) Neither the Bank nor an affiliate, including any officer or 
director purchases from or sells to any of the Plans shares of any of 
the Funds.
    (d) As to each individual Plan, the combined total of all fees 
received by the Bank for the provision of services to the Plan, and in 
connection with the provision of services to any of the Funds in which 
the Plan may invest, is not in excess of ``reasonable compensation'' 
within the meaning of section 408(b)(2) of the Act.
    (e) The Bank does not receive any fees payable, pursuant to Rule 
12b-1 under the '40 Act in connection with the transactions.
    (f) The Plans are not sponsored by the Bank.
    (g) A Second Fiduciary who is acting on behalf of each Plan and who 
is independent of and unrelated to the Bank, as defined in paragraph 
(g) of Section III below, receives in advance of the investment by the 
Plan in any of the Funds a full and detailed written disclosure of 
information concerning such Fund (including, but not limited to, a 
current prospectus for each portfolio of each of the Funds in which 
such Plan is considering investing and a statement describing the fee 
structure).
    (h) On the basis of the information described in paragraph (g) of 
this Section II, the Second Fiduciary authorizes in writing the 
investment of assets of the Plans in shares of the Funds and the fees 
received by the Bank in connection with its services to the Funds. Such 
authorization by the Second Fiduciary is consistent with the 
responsibilities obligations, and duties imposed on fiduciaries by Part 
4 of Title I of the Act.
    (i) The authorization, described in paragraph (h) of this Section 
II, is terminable at will by the Second Fiduciary of a Plan, without 
penalty to such Plan. Such termination will be effected by the Bank 
selling the shares of the Fund held by the affected Plan within one 
business day following receipt by the Bank, either by mail, hand 
delivery, facsimile, or other available means at the option of the 
Second Fiduciary, of the termination form (the Termination Form), as 
defined in paragraph (i) of Section III below, or any other written 
notice of termination; provided that if, due to circumstances beyond 
the control of the Bank, the sale cannot be executed within one 
business day, the Bank shall have one additional business day to 
complete such redemption.
    (j) Plans do not pay any Plan-level investment management fees, 
investment advisory fees, or similar fees to the Bank with respect to 
any of the assets of such Plans which are invested in shares of any of 
the Funds. This condition does not preclude the payment of investment 
advisory fees or similar fees by the Funds to the Bank under the terms 
of an investment advisory agreement adopted in accordance with section 
15 of the '40 Act or other agreement between the Bank and the Funds.
    (k) In the event of an increase in the rate of any fees paid by the 
Funds to the Bank regarding any investment management services, 
investment advisory services, or fees for similar services that the 
Bank provides to the Funds over an existing rate for such services that 
had been authorized by a Second Fiduciary, in accordance with paragraph 
(h) of this Section II, the Bank will, at least 30 days in advance of 
the implementation of such increase, provide a written notice (which 
may take the form of a proxy statement, letter, or similar 
communication that is separate from the prospectus of the Fund and 
which explains the nature and amount of the increase in fees) to the 
Second Fiduciary of each of the Plans invested in a Fund which is 
increasing such fees. Such notice shall be accomplained by the 
Termination Form, as defined in paragraph (i) of Section III below.
    (1) In the event of an addition of a Secondary Service, as defined 
in paragraph (h) of Section III below, provided by the Bank to the Fund 
for which a fee is charged or an increase in the rate of any fee paid 
by the Funds to the Bank for a Secondary Service, as defined in 
paragraph (h) of Section III below, that results either from an 
increase in the rate of such fee or from the decrease in the number or 
kind of services performed by the Bank for such fee over an existing 
rate for such Secondary Service which had been authorized by the Second 
Fiduciary of a Plan, in accordance with paragraph (h) of this Section 
II, the Bank will at least 30 days in advance of the implementation of 
such additional service for which a fee is charged or fee increase, 
provide a written notice (which may take the form of a proxy statement, 
letter, or similar communication that is separate from the prospectus 
of the Fund and which explains the nature and amount of the additional 
service for which a fee is charged or the nature and amount of the 
increase in fees) to the Second Fiduciary of each of the Plans invested 
in a Fund which is adding a service or increasing fees. Such notice 
shall be accompanied by the Termination Form, as defined in paragraph 
(i) of Section III below.
    (m) The Second Fiduciary is supplied with a Termination Form at the 
times specified in paragraphs (k), (l), and (n) of this Section II, 
which expressly provides an election to terminate the authorization, 
described above in paragraph (h) of this Section II, with instructions 
regarding the use of such Termination Form including statements that:
    (1) The authorization is terminable at will by any of the Plans, 
without penalty to such Plans. Such termination will be effected by the 
Bank redeeming shares of the Fund held by the Plans requesting 
termination within one business day following receipt by the Bank, 
either by mail, hand delivery, facsimile, or other available means at 
the option of the Second Fiduciary, of the Termination Form or any 
other written notice of termination; provided that if, due to 
circumstances beyond the control of the Bank, the redemption of shares 
of such Plans cannot be executed within one business day, the Bank 
shall have one additional business day to complete such redemption; and
    (2) Failure by the Second Fiduciary to return the Termination Form 
on behalf of a Plan will be deemed to be an approval of the additional 
Secondary Service for which a fee is charged or increase in the rate of 
any fees, if such Termination Form is supplied pursuant to paragraphs 
(k) and (l) of this Section II, and will result in the continuation of 
the authorization, as described in paragraph (h) of this Section II, of 
the Bank to engage in the transactions on behalf of such Plan.
    (n) The Second fiduciary is supplied with a Termination Form, 
annually during the first quarter of each calendar year, beginning with 
the first quarter of the calendar year that begins after the date this 
exemption is published in the Federal Register and continuing for each 
calendar year thereafter; provided that the Termination Form need not 
be supplied to the Second Fiduciary, pursuant to paragraph (n) of this 
Section II, sooner than six months after such Termination Form is 
supplied pursuant to paragraphs (k) and (l) of this Section II, except 
to the extent required by said paragraphs (k) and (l) of this Section 
II to disclose an additional Secondary Service for which a fee is 
charged or an increase in fees.
    (o)(1) With respect to each of the Funds in which a Plan invests, 
the Bank will provide the Second Fiduciary of such Plan:
    (A) At least annually with a copy of an updated prospectus of such 
Fund;
    (B) Upon the request of such Second Fiduciary, with a report or 
statement (which may take the form of the most 

[[Page 3481]]
recent financial report, the current statement of additional 
information, or some other written statement) which contains a 
description of all fees paid by the Fund to the Bank; and
    (2) With respect to each of the Funds in which a Plan invests, in 
the event such Fund places brokerage transactions with the Bank, the 
Bank will provide the Second Fiduciary of such Plan at least annually 
with a statement specifying:
    (A) The total, expressed in dollars, brokerage commissions of each 
Fund's investment portfolio that are paid to the Bank by such Fund;
    (B) The total, expressed in dollars, of brokerage commissions of 
each Fund's investment portfolio that are paid by such Fund to 
brokerage firms unrelated to the Bank;
    (C) The average brokerage commissions per share, expressed as cents 
per share, paid to the Bank by each portfolio of a Fund; and
    (D) The average brokerage commissions per share, expressed as cents 
per share, paid by each portfolio of a Fund to brokerage firms 
unrelated to the Bank.
    (p) All dealings between the Plans and any of the Funds are on a 
basis no less favorable to such Plans than dealings between the Funds 
and other shareholders holding the same class of shares as the Plans.
    (q) The Bank maintains for a period of 6 years the records 
necessary to enable the persons, as described in paragraph (r) of 
Section II below, to determine whether the conditions of this proposed 
exemption have been met, except that:
    (1) A prohibited transaction will not be considered to have 
occurred if, due to circumstances beyond the control of the Bank, the 
records are lost or destroyed prior to the end of the 6 year period; 
and
    (2) No party in interest, other than the Bank, shall be subject to 
the civil penalty that may be assessed under section 502(i) of the Act, 
or to the taxes imposed by section 4975 (a) and (b) of the Code, if the 
records are not maintained, or are not available for examination as 
required by paragraph (r) of Section II below;
    (r)(1) Except as provided in paragraph (r)(2) of this Section II 
and notwithstanding any provisions of subsection (a)(2) and (b) of 
section 504 of the Act, the records referred to in paragraph (q) of 
Section II above are unconditionally available at their customary 
location for examination during normal business hours by--
    (i) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service (the Service) or the 
Securities and Exchange Commission (the SEC);
    (ii) Any fiduciary of each of the Plans who has authority to 
acquire or dispose of shares of any of the Funds owned by such a Plan, 
or any duly authorized employee or representative of such fiduciary; 
and
    (iii) Any participant or beneficiary of the Plans or duly 
authorized employee or representative of such participant or 
beneficiary;
    (2) None of the persons described in paragraph (r)(1)(ii) and 
(r)(1)(iii) of Section II shall be authorized to examine trade secrets 
of the Bank, or commercial or financial information which is privileged 
or confidential.

Section III. Definitions

    For purposes of this exemption,
    (a) The term ``Bank'' means First Hawaiian Bank and any affiliate 
of the Bank, as defined in paragraph (b) of this Section III.
    (b) An ``affiliate'' of a person includes:
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person.
    (2) Any officer, director, employee, relative, or partner in any 
such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee.
    (c) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (d) The term ``Fund or Funds'' means any diversified open-end 
investment company or companies registered under the '40 Act for which 
the Bank serves as investment adviser, and may also provide custodial 
or other services as approved by such Funds.
    (e) The term ``net asset value'' means the amount for purposes of 
pricing all purchases and sales calculated by dividing the value of all 
securities, determined by a method as set forth in a Fund's prospectus 
and statement of additional information, and other assets belonging to 
each of the portfolios in such Fund, less the liabilities charged to 
each portfolio, by the number of outstanding shares.
    (f) The term ``relative'' means a ``relative'' as that term is 
defined in section 3(15) of the Act (or a ``member of the family'' as 
that term is defined in section 4975(e)(6) of the Code), or a brother, 
a sister, or a spouse of a brother or a sister.
    (g) The term ``Second Fiduciary'' means a fiduciary of a plan who 
is independent of and unrelated to the Bank. For purposes of this 
exemption, the Second Fiduciary will not be deemed to be independent of 
and unrelated to the Bank if:
    (1) Such Second Fiduciary directly or indirectly controls, is 
controlled by, or is under common control with the Bank;
    (2) Such Second Fiduciary, or any officer, director, partner, 
employee, or relative of such Second Fiduciary is an officer, director, 
partner, or employee of the Bank (or is a relative of such persons);
    (3) Such Second Fiduciary directly or indirectly receives any 
compensation or other consideration for his or her own personal account 
in connection with any transaction described in this proposed 
exemption.
    If an officer, director, partner, or employee of the Bank (or a 
relative of such persons), is a director of such Second Fiduciary, and 
if he or she abstains from participation in (i) the choice of the 
Plan's investment manager/adviser, (ii) the approval of any purchase or 
redemption by the Plan of shares of the Funds, and (iii) the approval 
of any change of fees charged to or paid by the Plan, in connection 
with any of the transactions described in Sections I and II above, then 
paragraph (g)(2) of Section III above, shall not apply.
    (h) The term ``Secondary Service'' means a service, other than an 
investment management, investment advisory, or similar service, which 
is provided by the Bank to the Funds, including but not limited to 
custodial, accounting, brokerage, administrative, or any other service.
    (i) The term ``Termination Form'' means the form supplied to the 
Second Fiduciary, at the times specified in paragraphs (k), (l), and 
(n) of Section II above, which expressly provides an election to the 
Second Fiduciary to terminate on behalf of the Plans the authorization, 
described in paragraph (h) of Section II. Such Termination Form may be 
used at will by the Second fiduciary to terminate such authorization 
without penalty to the Plans and to notify the Bank in writing to 
effect such termination by redeeming the shares of the Fund held by the 
Plans requesting termination within one business day following receipt 
by the Bank, either by mail, hand delivery, facsimile, or other 
available means at the option of the Second Fiduciary, of written 
notice of such request for termination; provided that if, due to 
circumstances beyond the control of the Bank, the redemption cannot be 
executed within one business day, the Bank shall have one additional 
business day to complete such redemption. 

[[Page 3482]]


Written Comments

    The Department received two written comments with respect to the 
proposed exemption and no requests for a public hearing. The comments 
were submitted by the Bank and concerned clarifications to the Summary 
of Facts and Representations of the proposed exemption and notification 
of interested persons. Following is a discussion of the applicant's 
comments.
1. Clarifications to the Proposed Exemption
    a. The Bank notes that the word ``Pooled'' should be inserted in 
Representation #1c. before the words ``Equity Fund'' in the last line 
of the middle column of page 47601.
    b. The Bank explains that in Representation #3, the word ``close,'' 
appearing in the fourth line of the last paragraph of the right column 
on page 47602, should be replaced with the word ``opening.'' As 
described in Representation #3 of the proposed exemption (see page 
47603, the last paragraph of the left column, carrying over to the top 
of the middle column, and the last paragraph of the middle column), the 
Bank asserts that the transferred assets are valued as of the ``CIF 
Valuation Date,'' which is the close of business on the last business 
day prior to the date of transfer to the Funds. The transfer of the 
assets so valued is made to the Funds before the opening of business on 
the transfer date. Before the opening of business, the Bank further 
explains that the assets will have the same value as determined at the 
CIF Valuation Date, and the shares of the corresponding Funds will have 
the same value as the assets transferred. By the close of business on 
the transfer date, the Bank points out that the assets transferred in-
kind to a Fund may change in value (i.e., increase or decrease) from 
the CIF Valuation Date, and thus the aggregate value of the 
corresponding fund may also change between opening and closing of 
business on the transaction date.
    c. The Bank explains that the following language should be added 
after the words ``Bishop Street Funds'' in the eight line of 
Representation #4 on page 47603: ``in exchange for an appropriate 
number of shares of certain portfolios of the Bishop Street Funds.''
2. Notification of Interested Persons
    Due to unavoidable delays and an error in the dates specified in 
its first notice, the Bank explains that it renotified all interested 
persons on or before November 13, 1995. In the second notice, the Bank 
indicates that it gave interested persons an extension of the comment 
period until December 15, 1995 which was more than 30 days from the 
mailing date of the second notice. As a result of the extended comment 
period, no further comments were received by the Department.
    After giving full consideration to the entire record, including the 
written comments, the Department has decided to grant the exemption as 
clarified and modified above. The comment letters 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, is made available for public inspection in the Public 
Documents Room of the Pension and Welfare Benefits Administration, Room 
N-5638, 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 September 13, 1995 at 60 
FR 47598.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

The Chase Manhattan Bank (National Association) Pooled Investment Trust 
for Employee Benefit Plans (the Trust) Located in New York, New York

[Prohibited Transaction Exemption 96-2; Exemption Application No. D-
9983]

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 past cash sale of certain commercial paper notes 
(the Notes) for $25,129,748 by two collective investment funds in the 
Trust known as VAN 1 and VAN 18 (the VANs) to The Chase Manhattan Bank, 
N.A. (the Bank), a party in interest with respect to the employee 
benefit plans invested in the VANs at the time of the transaction; 
provided the following conditions were met:
    (a) The sale of each of the Notes was a one-time cash transaction;
    (b) The terms and conditions of the sale were at least as favorable 
to the VANs as those obtainable in an arm's-length transaction with an 
unrelated party;
    (c) The VANs received an amount for the Notes that was equal to the 
greater of: (i) In the case of a Note that had a scheduled maturity 
after the date of the transaction, the original purchase price paid by 
the particular VAN for the Note plus interest at the imputed yield to 
maturity up to the date of sale, as calculated by the Bank; (ii) in the 
case of a Note that had a scheduled maturity on or before the date of 
the transaction, the value at maturity plus additional interest to the 
date of sale at the daily rates earned by the related VAN (exclusive of 
its holdings of the Notes) from the maturity date to the date of sale; 
or (iii) the fair market value of each Note as of the time of sale as 
determined by an independent, qualified appraiser;
    (d) The VANs did not pay any commissions, costs or other expenses 
in connection with the sale of the Notes;
    (e) If the exercise of any of the Bank's rights, claims or causes 
of action in connection with its ownership of the Notes results in the 
Bank recovering from the issuer of the Notes, or any third party, an 
aggregate amount that is more than the purchase price paid to the VANs 
by the Bank for the Notes (i.e. $25,129,748), the Bank will pay such 
excess amounts to the respective VANs within thirty (30) days of the 
receipt of such recovery amounts; and
    (f) Each employee benefit plan with interests in the VANs received 
its proportionate share of the proceeds of the sale of the Notes to the 
Bank and receives its proportionate share of any recovery amounts 
obtained on the Notes in excess of the purchase price received by the 
VANs, as described in condition (e) above.

EFFECTIVE DATE: This exemption is effective as of December 19, 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 October 17, 1995, at 60 
FR 53806.

FOR FURTHER INFORMATION CONTACT: Mr. E. F. Williams of the Department, 
telephone (202) 219-8194. (This is not a toll-free number.)

Retirement Plan for Employees of Concord Hospital Capital Region 
Healthcare Corp. (the Plan) Located in Concord, New Hampshire

[Prohibited Transaction Exemption 96-3; Exemption Application No. D-
10027]

Exemption

    The restrictions of section 406 (b)(1) and (b)(2) of the Act and 
the sanctions resulting from application of section 4975 of the Code, 
by reason of section 4975(a)(1) (A) through (E) of the Code, shall not 
apply to: (1) The July 7, July 13, July 18, August 19, and August 22, 
1994, transfers to the Plan of $7,376,039 

[[Page 3483]]
of publicly--traded securities from non-ERISA accounts (the Accounts) 
of Concord Hospital, Inc. and its parent corporation, Capital Region 
Health Care Corporation; (2) the transfer of $3,761,319 of publicly-
traded securities from the Plan to the Accounts in August of 1994; and 
(3) the proposed transfer of approximately $3.6 million from the Plan 
to the Accounts, provided the following conditions are satisfied: (a) 
The decision for the Plan to enter the subject transactions was made at 
the recommendation of the Plan's independent investment advisor; (b) 
the Plan has not paid and will not pay commissions or other fees in 
connection with the subject transactions; (c) the transactions involve 
publicly-traded securities, the fair market values of which were based 
upon published prices on established markets; and (d) the Plan's 
independent fiduciary has reviewed the transactions and has determined 
that the transactions were in the best interest of the Plan and 
protective of the rights of the participants and beneficiaries of the 
Plan.
    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 3, 1995 at 60 FR 
55857.

EFFECTIVE DATE: This exemption is effective July 7, 1994.

FOR FURTHER INFORMATION CONTACT:
Gary H. Lefkowitz of the Department, telephone (202) 219-8881. (This is 
not a toll-free number.)

Larson Distributing Co. Profit Sharing Plan (the Plan) Located in 
Denver, Colorado

[Prohibited Transaction Exemption 96-4; Exemption Application No. D-
10083]

Exemption

    The restrictions of section 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 (1) the extension of credit to the Plan (the Loan) 
by Larson Distributing Co., Inc. (the Employer), the sponsor of the 
Plan, with respect to the Plan's investments in annuity accounts 
maintained with USG Annuity and Life Co. and All American Life 
Insurance Company (the Annuities), and (2) the Plan's potential 
repayment of the Loan (the Repayments); provided the following 
conditions are satisfied:
    (A) The Plan does not pay any interest or incur any expenses with 
respect to the Loan;
    (B) The Repayments are restricted solely to the amounts recovered 
by the Employer on behalf of the Plan (the Recovery Amounts) in 
litigation concerning the Annuities; and
    (C) To the extent that Loan exceeds the total Recovery Amounts, the 
Repayments shall be waived.
    For a more complete statement of the facts and representations 
supporting the exemption, refer to the notice of proposed exemption 
published on November 3, 1995 at 60 FR 55881.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department, 
telephone (202) 219-8881. (This is not a toll-free number.)

Retirement Savings Plan and Trust for Employees of the J.H. Heafner 
Company, Inc. (the Plan) Located in Lincolnton, North Carolina

[Prohibited Transaction Exemption 96-5; Exemption Application No. D-
10125]

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 to the sale of the Plan of certain limited partnerships 
units (the Units) in two limited partnerships to the J.H. Heafner 
Company, Inc. (Heafner), provided the following conditions are 
satisfied: (a) The sale is a one-time transaction for cash; (b) the 
Plans pays no commissions or other expenses in connection with the 
transaction; and (c) the Plan receives no less than the greater of: (1) 
Its cost for the Units; or (2) the fair market value of the Units on 
the date of the sale.
    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 3, 1995 at 60 FR 
55862.

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 or disqualified 
person from certain other provisions to which the exemptions 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) 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 accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed at Washington, D.C., this 25th day of January 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration.
[FR Doc. 96-1777 Filed 1-30-96; 8:45 am]
BILLING CODE 4510-29-M