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Secretary of Labor Thomas E. Perez
Grant of Individual Exemptions; San Diego National Bank [Notices] [07/12/1996]

EBSA (Formerly PWBA) Federal Register Notice

Grant of Individual Exemptions; San Diego National Bank [07/12/1996]

[PDF Version]

Volume 61, Number 135, Page 36766-36768

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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Prohibited Transaction Exemption 96-50; Exemption Application No. D-
10039, et al.]

 
Grant of Individual Exemptions; San Diego National Bank

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, D.C. The notices also 
invited interested persons to submit comments on the requested 
exemptions to the Department. In addition the notices stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). The applicants have represented that they 
have complied with the requirements of the notification to interested 
persons. No public comments and no requests for a hearing, unless 
otherwise stated, were received by the Department.
    The notices of proposed exemption were issued and the exemptions 
are being granted solely by the Department because, effective December 
31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR 
47713, October 17, 1978) transferred the authority of the Secretary of 
the Treasury to issue exemptions of the type proposed to the Secretary 
of Labor.

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR Part 
2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon 
the entire record, the Department makes the following findings:
    (a) The exemptions are administratively feasible;
    (b) They are in the interests of the plans and their participants 
and beneficiaries; and
    (c) They are protective of the rights of the participants and 
beneficiaries of the plans.

San Diego National Bank Deferred Savings Plan (the Plan) Located in San 
Diego, California

[Prohibited Transaction Exemption 96-50; Exemption Application No. D-
10039]

Exemption

    The restrictions of sections 406(a), 406(b)(1) and (b)(2), and 
407(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 
(E) of the Code, shall not apply to (1) the past acquisition by the 
Plan of certain stock rights (the Rights) pursuant to a stock rights 
offering (the Offering) by SDNB Financial Corp., a California 
corporation (the Parent), which wholly-owns and is the parent company 
of the San Diego National Bank (the Employer), the sponsor of the Plan 
and a party in interest with respect to the Plan; (2) the past holding 
of the Rights during the subscription period of the Offering; and (3) 
the disposition or exercise of the Rights by the Plan; provided the 
following conditions are satisfied: (a) The acquisition and holding of 
the Rights by the Plan occurred in connection with the Offering made 
available to all shareholders of the common stock of the Parent; (b) 
all holders of the common stock of the Parent were treated in a like 
manner, with respect to the Offering, including the Plan; and (c) all 
decisions regarding holding and disposing of the Rights by the Plan 
were made in accordance with Plan provisions for individually-directed 
investment of participant accounts by the individual participant whose 
account in the Plan received Rights in the Offering, and if no 
instructions were received the Rights were sold.

EFFECTIVE DATE: The effective date of this exemption is May 30, 1995.

FOR FURTHER INFORMATION CONTACT: Mr. C.E. Beaver of the Department, 
telephone (202) 219-8881. (This is a toll-free number.)

Puckett Machinery Company Profit Sharing Plan (the Plan), Located in 
Jackson, Mississippi

[Prohibited Transaction Exemption 96-51; Exemption Application No. D-
10149]

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 sale (the Sale) of improved real property (the 
Property) by the Plan to Richard H. Puckett, a party in interest with 
respect to the Plan provided that: (a) The Sale is a one time 
transaction for cash; (b) the Plan will receive the greater of $315,000 
or the fair market value of the Property at the time of the Sale; (c) 
the Property has been appraised by an independent and qualified real 
estate appraiser; (d) the Plan will pay no fees or commissions 
associated with the Sale; and (e) the terms and conditions of the Sale 
are at least as favorable as those obtainable with an unrelated third 
party.
    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 April 4, 1996 at 61 FR 
15143.

For further information contact: Allison Padams of the Department, 
telephone (202) 219-8971. (This is not a toll-free number.)

[[Page 36767]]

First Virginia Banks, Inc. Located in Falls Church, Virginia

[Prohibited Transaction Exemption 96-52; Application Nos. D-10175 thru 
D-10177]

Exemption

Section I--Transactions

    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 following transactions provided that all of the 
conditions set forth in Section II below are met:
    (a) The cash sale on December 23, 1994 of certain variable rate 
certificates of deposit (CDs) issued by Merrill Lynch National Bank, 
Salt Lake City, Utah (the Merrill Lynch CDs) by forty (40) employee 
benefit plans, Keogh plans and individual retirement accounts (IRAs), 
for which First Knoxville Bank in Knoxville, Tennessee (the Bank) 
serves as a fiduciary, to First Virginia Banks, Inc. (First Virginia), 
a party in interest or disqualified person with respect to such plans 
and IRAs;
    (b) The cash sale on various dates during 1995 of certain fixed 
rate CDs issued by various unrelated financial institutions (the Fixed 
Rate CDs) by eighteen (18) employee benefit plans, Keogh plans and 
IRAs, for which the Bank serves as a fiduciary to First Virginia, a 
party in interest or disqualified person with respect to such plans and 
IRAs; and
    (c) The proposed cash sale of certain additional fixed rate CDs 
issued by various unrelated financial institutions (the Additional 
Fixed Rate CDs) by approximately twenty-one (21) employee benefit 
plans, Keogh plans and IRAs, for which the Bank serves as a fiduciary, 
to First Virginia, a party in interest or disqualified person with 
respect to such plans and IRAs.

Section II--Conditions

    (a) Each sale is a one-time transaction for cash;
    (b) Each plan or IRA (hereafter referred to as ``Plan'') receives 
an amount which is equal to the greater of (i) the face amount of the 
CDs owned by the Plan, plus accrued but unpaid interest, at the time of 
sale, or (ii) the fair market value of the CDs owned by the Plan as 
determined by an independent, qualified appraiser at the time of the 
sale;
    (c) The Plans do not pay any commissions or other expenses with 
respect to the sale of such CDs;
    (d) The Bank, as trustee of the Plans, determines that the sale of 
the CDs is in the best interests of each Plan and its participants and 
beneficiaries at the time of the transaction;
    (e) The Bank takes all appropriate actions necessary to safeguard 
the interests of the Plans and their participants and beneficiaries in 
connection with the transactions;
    (f) Each Plan receives a reasonable rate of interest on the CDs 
during the period of time such CDs are held by the Plan;
    (g) The Bank or an affiliate maintains for a period of six years 
the records necessary to enable the persons described below in 
paragraph (h) to determine whether the conditions of this 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 or affiliate, the records are lost or destroyed prior to 
the end of the six-year period, and (2) no party in interest other than 
the Bank or affiliate 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 (h) 
below; and
    (h)(1) Except as provided below in paragraph (h)(2) and 
notwithstanding any provisions of section 504(a)(2) of the Act, the 
records referred to in paragraph (g) are unconditionally available at 
their customary location for examination during normal business hours 
by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service,
    (ii) Any fiduciary of the Client Plans who has authority to acquire 
or dispose of shares of the Funds owned by the Client Plans, or any 
duly authorized employee or representative of such fiduciary, and
    (iii) Any participant or beneficiary of the Client Plans or duly 
authorized employee or representative of such participant or 
beneficiary;
    (2) None of the persons described in paragraph (h)(1) (ii) and 
(iii) shall be authorized to examine trade secrets of the Bank, or 
commercial or financial information which is privileged or 
confidential.

EFFECTIVE DATE: This exemption is effective as of December 23, 1994, 
for the transactions described in Section I(a) above, and the various 
appropriate sale dates in 1995 for the transactions described above in 
Section I(b).
    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 April 25, 1996, at 61 FR 
18430.

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

AmSouth Bancorporation Thrift Plan (the Plan) Located in Birmingham, 
Alabama

[Prohibited Transaction Exemption 96-53; Exemption Application No. D-
10185]

Exemption

    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 cash sale (the Sale) of Guaranteed 
Investment Contract No. 62531 and Guaranteed Investment Contract No. 
62651 (collectively, GICs), both issued by Confederation Life Insurance 
of Atlanta, Georgia, by the Plan to AmSouth Bancorporation, a Delaware 
corporation, the sponsor of the Plan and a party in interest with 
respect to the Plan; provided that (1) The Sale is a one-time 
transaction for cash; (2) the Plan experiences no losses nor incurs any 
expenses from the Sale; and (3) the Plan receives as consideration from 
the Sale an amount, as expressed in paragraph No. 4 of the Notice of 
Proposed Exemption, that is equal to the total amount expended by the 
Plan when acquiring the GICs plus all interest earnings occurring under 
the terms of the GICs until 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 May 6, 1996, at 61 FR 
20283.

COMMENTS: The Department received two written comments, both of which 
were in favor of granting the proposed exemption. Accordingly, after 
giving full consideration to the entire record, the Department has 
determined to grant the exemption.

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 or

[[Page 36768]]

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, DC, this 9th day of July, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 96-17806 Filed 7-11-96; 8:45 am]
BILLING CODE 4510-29-P