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Secretary of Labor Thomas E. Perez
Proposed Exemptions; Beall Corporation [Notices] [10/25/1996]

EBSA (Formerly PWBA) Federal Register Notice

Proposed Exemptions; Beall Corporation [10/25/1996]

[PDF Version]

Volume 61, Number 208, Page 55321-55325

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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Application No. D-10240, et al.]

 
Proposed Exemptions; Beall Corporation

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

    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 
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 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.

Beall Corporation 401(k) Profit Sharing Plan (the Plan) Located in 
Portland, OR

[Application No. D-10240]

[[Page 55322]]

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 sections 4975(c)(1)(A) through 
(E) of the Code shall not apply to the proposed cash sale (the Sale) by 
the Plan of four acres of unimproved real property (the Land) to the 
Diamond Beall Development Corporation, an Oregon general partnership 
and 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 experiences no losses nor incurs any 
expenses as a result of the Sale; (3) the Plan receives in cash the 
greater of $479,160, or the fair market value of the Land as determined 
at the time of the Sale; and (4) the terms of the Sale are no less 
favorable to the Plan than those it would have received in similar 
circumstances when negotiated at arm's length with unrelated third 
parties.

Summary of Facts and Representations

    1. The Plan is a defined contribution profit sharing plan which is 
intended to satisfy the qualification requirements of sections 401(a) 
and 401(k) of the Code. The Employer may make discretionary matching 
contributions and/or profit sharing contributions. The Plan has 
approximately 136 participants and beneficiaries who would be affected 
by the transaction. As of October 31, 1995, the fair market value of 
the net assets of the Plan was $6,457,677.
    2. St. Johns Corporation (SJC) is a holding company and the sole 
owner of Beall Corporation (the Employer), employer of a portion of 
Plan participants. Beall Corporation is the sole owner of several 
subsidiaries that employ the balance of Plan participants.
    The applicant is Jerry E. Beall, acting as General Partner of the 
Diamond Beall Development Company. Mr. Beall is the principal owner of 
SJC, which owns property adjacent to the Land. Mr. Beall is also a 
trustee of the Plan.
    3. On February 10, 1975, the Land was purchased for the Plan as a 
long-term real estate investment for $92,000 from the Port of Portland, 
an unrelated third party.<SUP>1 The property is located in the 
Rivergate Industrial District in Portland, Oregon. The Land consists of 
4 acres of vacant land and is located adjacent to property where SJC 
conducts its operations. Mr. Beall represents that the Land has not 
been leased or used by any parties since the time of the purchase.
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    \1\ The Department expresses no opinion as to whether the Plan's 
acquisition and holding of the Land violated any relevant provision 
of Part 4, Subtitle B, of Title 1 of the Act, and no exemption from 
such provisions is proposed herein.
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    The aggregate real estate taxes and maintenance fees for 1975 
through 1996 were $90,284.09. The applicant further represents that 
these were the only costs incurred by the Plan in carrying the 
property.
    4. The Land was appraised as of January 1, 1996 (the Appraisal) by 
Karl L. Lucke (Mr. Lucke), an independent real estate appraiser 
certified in the State of Oregon. Mr. Lucke relied on the Direct Sales 
Comparison (Market) Approach exclusively and estimated that as of 
January 1, 1996, the fair market value of the Land was $2.50 per square 
foot, for a total of $436,000. The Appraisal includes the following 
description of the Land and its surrounding neighborhood: ``* * * the 
streets and railroad system are being expanded and construction 
activity has increased lately. The Rivergate Industrial District is a 
growing industrial area * * * the location and available land make this 
a desirable place for industrial development and demand is growing for 
sites * * * the subject property lies in the path of growth.'' The 
Appraisal also states that the Rivergate District has experienced 
significant recent activity, and that prices for Rivergate sites have 
increased over the last few years.
    Because the Land is located on the lot adjacent to SJC's business 
facilities, Mr. Lucke was asked to determine whether there should be 
any premium value associated with the Land. In this regard, Mr. Lucke 
states that there was insufficient market data to support a premium for 
an adjacent landowner or related company with respect to the proposed 
transaction.
    5. The applicant provided information received from the Port of 
Portland in August, 1996, regarding the Port's recent list prices for 
the remainder of the undeveloped Rivergate Industrial District. Current 
list prices, and the prices of sales closing subsequent to the January 
1996 Appraisal, reflect that prices for parcels similar to the Land 
have increased 20 to 25% within the past year, after several years of 
nominal appreciation.
    In addition, the Port's information shows that the three sales of 
comparable parcels that have closed subsequent to the Appraisal were 
for $2.75 to $2.86 per square foot. Accordingly, the applicant proposes 
to pay $2.75 per square foot for the Land, for a total of $479,160.
    The applicant represents that the Land will be revalued at the time 
of the proposed transaction, in order to establish its fair market 
value.
    7. Mr. Beall, as General Partner of Diamond Beall Development 
Corporation, proposes to purchase the Land from the Plan in a one-time 
cash transaction. The Plan will pay no real estate commissions or other 
costs associated with the sale of the Land. As of October 31, 1995, the 
Land represented 6.7% of the Plan's total assets. The applicant 
represents that considering the cost basis of the property, the 
investment has not performed well in that the Plan has received an 
annual return of approximately 4.3%, based on its initial purchase 
price, subsequent annual cash outlays, and appraised value of $436,000. 
Carrying costs have recently totalled $5,000 to $7,000 per year. The 
Plan has actively attempted to lease the property in the past but has 
been unable to do so.
    It is represented by the applicant that the proposed transaction is 
in the best interest and protective of the Plan because it will allow 
the Plan to increase its liquidity and diversify its assets.
    8. In summary, the applicant represents that the transaction 
satisfies the statutory criteria of section 408(a) of the Act because: 
(1) the proposed sale will be a one-time cash transaction; (2) the Plan 
will experience no losses nor incur any expenses from the Sale; (3) the 
Plan will receive in cash as consideration for the Sale the greater of 
$479,160, or the fair market value of the Land as determined at the 
time of the Sale; and (4) the terms of the Sale are no less favorable 
to the Plan than those it would have received in similar circumstances 
when negotiated at arm's-length with unrelated third parties.

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

Wayne Obstetrical Group, P.A. Money Purchase Retirement Plan (the 
Wayne Plan); Pediatric Professional Associates, P.A. Profit Sharing 
Plan (the Pediatric Plan); Physicians for Women, P.A. Profit-
Sharing Plan and Trust (the Physicians Plan; collectively, the 
Plans) Located in Wayne, New Jersey

[Application Nos. D-10262, D-10263, and D-10264]

[[Page 55323]]

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 loans totalling $530,000 by the 
Plans to S & D Associates (S & D), provided that the following 
conditions are satisfied:
    (a) The terms and conditions of the loans are at least as favorable 
to the Plans as those the Plans could obtain in comparable arm's length 
transactions with unrelated parties;
    (b) At all times, the loans are secured by a first mortgage on 
certain real property (the Property), which is duly recorded under New 
Jersey State law;
    (c) At all times, the fair market value of the Property, as 
established by a qualified, independent appraiser, equals at least 150% 
of the total outstanding balances of the loans;
    (d) At all times, no more than 25% of the assets of each lending 
Plan are invested in the loans;
    (e) A qualified, independent fiduciary has determined that the 
loans are in the best interests of the Plans; and
    (f) At all times, the independent fiduciary enforces compliance 
with the terms and conditions of the loans and of the exemption, 
including foreclosure on the Property in the event of default.

Summary of Facts and Representations

    1. Wayne Obstetrical Group, P.A. is a New Jersey corporation owned 
by Seymour Eisner, Bernard Simon, Barry Cohen, and Steven Domnitz (each 
a 25% shareholder). As of December 31, 1994, the Wayne Plan, a money 
purchase pension plan, had approximately nine participants and total 
assets of $2,975,100. The trustees of the Wayne Plan are Seymour 
Eisner, Bernard Simon, and Barry Cohen.
    Pediatric Professional Associates, P.A. is a New Jersey corporation 
owned by Alvin Edelstein, Abraham H. Topchik, Herbert L. Cole, Israel 
I. Rayman, and Geraldine Nelson (each a 20% shareholder). As of July 
31, 1995, the Pediatric Plan, a profit sharing plan, had approximately 
18 participants and total assets of $4,934,064. The trustees of the 
Pediatric Plan are the five owners, above.
    Physicians for Women, P.A. is a New Jersey corporation owned by Les 
A. Burns, Kenneth Garrett, Leonard T. Nicosia, and Arthur Suffin (each 
a 25% shareholder). As of December 31, 1994, the Physicians Plan, a 
profit sharing plan, had approximately 15 participants and total assets 
of Sec. 3,384,784. The trustees of the Pediatric Plan are the four 
owners, above, and Edwin J. Pear.
    2. An administrative exemption is requested to permit the Plans to 
make loans totalling $530,000 to S & D, a New Jersey partnership. The 
partners of S & D are as follows: Bernard Simon (a 19% partner), 
Seymour J. Eisner (19%), Barry Cohen (19%), Robert Natusch (12.5%), 
Lawrence May (12.5%) and a partnership known as 7 Oak Ridge Partners 
(18%). The partners of 7 Oak Ridge Partners are as follows: Les Burns, 
Kenneth Garrett, Leonard Nicosia, Edward Pear, Alvin Edelstein, Herbert 
Cole, Geraldine Nelson, Ian Rayman, and Abraham Topchik (all equal 
partners).
    Specifically, the Wayne Plan will lend $230,000, the Pediatric Plan 
will lend $100,000, and the Physicians Plan will lend $200,000. At all 
times, no more than 25% of the assets of each lending Plan may be 
invested in the loans. It is intended that S & D use the proceeds of 
the proposed loans to retire an outstanding first mortgage held by 
Lakeland State Bank (Lakeland) on the Property, which S & D owns and 
which S & D currently leases to the sponsors of the aforementioned 
Plans, among other tenants. As of November 30, 1995, the outstanding 
balance on this mortgage was approximately $536,000, which amount 
becomes due and payable on January 1, 1997.
    3. The loans will be secured by a first mortgage on the Property, 
to be duly recorded under New Jersey State law. The Property, which 
consists of a two-story mixed-use building of 9936 sq. ft. on 1.34 
acres, is located at 7 Oak Ridge Road, West Milford, New Jersey. The 
Property has office space on the first floor that is currently being 
leased to the Plans' sponsors and to other professionals, as well as 
eight one-bedroom residential apartments on the second floor. S & D 
will assign these leases and the excess net rentals collectible 
thereunder to the Plans as additional collateral for the loans.
    The Property was appraised by Mr. Robert D. Clifford, MAI, RM of 
Value Analysis Incorporated, an independent general real estate 
appraiser certified in the State of New Jersey. Relying on the income 
approach to valuation, Mr. Clifford concluded that the fair market 
value of the leased fee interest of the Property was $800,000, as of 
December 11, 1995. Thus the fair market value of the Property equals at 
least 150% of the total outstanding balances of the loans, which will 
be a continuing requirement for the duration of the loans. The Property 
will also be insured against casualty loss in an amount not less than 
the total principal amounts of the loans (plus accrued but unpaid 
interest), with the Plans as the named beneficiaries of the policy.
    4. The loans will each provide for an interest rate of 11% per 
annum and a term of 10 years, as evidenced by a promissory note. The 
notes will require S & D to make monthly payments of principal and 
interest on the loans, to be fully amortized over the 10-year term. The 
Plans will pay no fees nor other expenses relating to the loans.
    Lakeland, an unrelated lender, has held the current mortgage on the 
Property for almost 10 years. The mortgage has a balloon every five 
years, which requires renegotiation. The last mortgage extension and 
modification agreement will expire on January 1, 1997. In keeping with 
the commercial practices of other area banks, Lakeland will not grant a 
``permanent mortgage'' on such commercial property. In a letter dated 
November 30, 1995, Lakeland states that if it were their policy to 
grant S & D a permanent mortgage, they would, under the then current 
financial conditions, seek an interest rate of 11%.
    5. Naskret, Selzer & Associates, P.A., Certified Public Accountants 
(Naskret, Selzer) represents in a letter from Harold S. Selzer dated 
August 14, 1996 that they will serve as an independent fiduciary to 
represent the interests of the Plans with respect to the proposed 
loans. Naskret, Selzerit represents that it is unrelated to and 
independent of S & D and the Plans' sponsors and derives less than 1% 
of its annual income from S & D. Naskret, Selzer represents that it has 
extensive experience as a fiduciary under the Act, that it is 
knowledgeable as to the subject loan transactions, and that it 
acknowledges and accepts its duties, responsibilities, and liabilities 
in acting as a fiduciary with respect to the Plans.
    6. Naskret, Selzer has reviewed the terms and conditions of the 
loans and determined that such terms and conditions are at least as 
favorable to the Plans as those the Plans could obtain in comparable 
arm's length transactions with unrelated parties, as evidenced by the 
terms required by Lakeland in their letter dated November 30, 1995. The 
loans will be secured by a first mortgage on the Property, which has 
been independently appraised to insure that its fair market value 
equals at least 150% of the total outstanding balances of the loans. 
The leases of office and apartment units in the Property and the

[[Page 55324]]

excess net rentals collectible thereunder will serve as additional 
collateral for the loans.
    Naskret, Selzer represents that it believes the proposed loans are 
in the best interest of the Plans and their respective participants and 
beneficiaries. Naskret, Selzer has determined that the proposed loans 
are appropriate for the Plans in light of the Plans' overall investment 
portfolios because the loans will add a degree of stability and 
liquidity to the Plans. Naskret, Selzer has also examined the financial 
viability of S & D, based upon S & D's tax returns for years 1994 and 
1995, and concluded that S & D has the ability to repay the loans. S & 
D has timely made all monthly payments during the approximately 10 
years Lakeland has held the current mortgage on the Property.
    Finally, Naskret, Selzer will, at all times, monitor and enforce S 
& D's compliance with the terms and conditions of the loans and of the 
exemption, including foreclosure on the Property in the event of 
default.
    7. In summary, the applicants represent that the proposed 
transactions satisfy the statutory criteria for an exemption under 
section 408(a) of the Act for the following reasons: (a) the terms and 
conditions of the loans will be at least as favorable to the Plans as 
those the Plans could obtain in comparable arm's length transactions 
with unrelated parties; (b) at all times, the loans will be secured by 
a first mortgage on the Property, which is duly recorded under New 
Jersey State law; (c) at all times, the fair market value of the 
Property, as established by a qualified, independent appraiser, will 
equal at least 150% of the total outstanding balances of the loans; (d) 
at all times, no more than 25% of the assets of each lending Plan will 
be invested in the loans; (e) Naskret, Selzer, acting as an independent 
fiduciary for the Plans, has determined that the loans are in the best 
interests of the Plans; and (f) at all times, the independent fiduciary 
will enforce compliance with the terms and conditions of the loans and 
of the exemption, including foreclosure on the Property in the event of 
default.

Notice to Interested Persons

    Notice of the proposed exemption shall be given to all interested 
persons by personal delivery or first-class mail within 10 days of the 
date of publication of the notice of pendency 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/or to request a hearing with respect to 
the proposed exemption. Comments and requests for a hearing are due 
within 40 days of the date of publication of this notice in the Federal 
Register.

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

National Baptist Publishing Board Pension Plan (the Plan) Located in 
Nashville, TN

[Application No. D-10283]

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 sections 4975(c)(1)(A) through (E) of 
the Code shall not apply to the proposed cash sale (the Sale) of common 
stock of Citizens Savings Bank and Trust Company (the Stock) located in 
Nashville, Tennessee, by the Plan to AmeriStar Investments and Trust, a 
division of First American National Bank (AmeriStar Investments), 
Trustee of the Plan and 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 loss nor incurs any expenses from the Sale; and (3) 
the Plan receives as consideration from the Sale the greater of the 
following amounts: (a) the fair market value of the Stock as of the 
date of the Sale plus interest at 6% for the period March 31, 1993 
through the date the Stock is sold by the Plan; or (b) the total cost 
of the investment, $100,000, plus interest at 6% for the period March 
31, 1993 through the date the Stock is sold by the Plan.

Summary of Facts and Representations

    1. The Plan is a defined benefit plan sponsored by the National 
Baptist Publishing Board (the Sponsor). As of March 31, 1996, the 
estimated number of Plan participants and beneficiaries was 93. As of 
July 31, 1995, total assets of the Plan equaled $1,387,496, with 
approximately .35% of total Plan assets as of that date invested in the 
Stock, based on the fair market value conclusion of an appraisal 
conducted as of July 21, 1994.
    2. On or about May 27, 1986, Dr. T.B. Boyd III, President and CEO 
of the Sponsor, used his authority to act on behalf of the Sponsor and 
directed AmeriStar Investments, a division of First American National 
Bank (the Bank), to purchase a seven year, six percent convertible 
subordinated debenture issued by Citizens Bank for $100,000 (the 
Debenture). At the time Dr. Boyd was also the Chairman of the Board of 
Citizens Bank. AmeriStar Investments, as applicant for this exemption, 
represents that at that time, Dr. Boyd owned approximately 42 percent 
of the outstanding common stock of Citizens Bank. Various family 
members owned an additional 11 percent of Citizens Bank's outstanding 
common stock.
    The applicant further represents that a representative of the Bank 
initially advised against the investment, but indicated that the 
Sponsor could direct the Bank in writing to make the investment on 
behalf of the Plan.
    Pursuant to Dr. Boyd's written instructions, AmeriStar Investments 
purchased the Debenture on behalf of the Plan in June of 1986. In 1991, 
the Bank discovered that Dr. Boyd had a significant ownership interest 
in Citizens Bank at the time of the Plan's purchase of the Debenture, 
and consequently that the purchase of the Debenture may have been a 
prohibited transaction.<SUP>2 As of 1991, the Debenture's market value 
was approximately $37,000, and AmeriStar Investments determined it was 
in the Plan's best interest to hold the Debenture until its value 
increased, rather than sell the Debenture immediately for a loss.
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     <SUP>2 The Department notes that the decision to purchase the 
Debenture is governed by the fiduciary responsibility requirements 
of Part 4, Subtitle B, Title I of the Act. The Department is not 
proposing relief herein for any violations of Part 4 of Title I of 
the Act which may have arisen as a result of the acquisition and 
holding by the Plan of the Debenture, and subsequently, the Stock.
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    The Debenture paid interest at six percent in accordance with its 
terms until March 31, 1993 when it was converted into Citizens Bank 
common stock. Under its original terms, the Debenture was to be 
converted into 1,100 shares of stock in June, 1993. Citizens Bank 
offered to convert the Debenture earlier than June, with a conversion 
bonus of 110 shares. Accordingly, as of March 31, 1993, the Debenture 
was converted into 1,210 shares of Stock.
    3. The applicant represents that an active market does not 
currently exist for the Stock and no dividends have been paid on the 
Stock. According to a valuation as of December 31, 1993, prepared on 
July 21, 1994, by Mercer Capital, an independent valuation firm,

[[Page 55325]]

the fair market value of the Stock was $5.60 per share. Based on that 
valuation, the Plan's total investment in the Stock was worth $6,776.
    4. The Bank desires to enter into the proposed transaction in order 
to protect the participants in the Plan from the risks of investment 
loss associated with the Stock. The applicant represents that the best 
interest of the plan and its participants and beneficiaries are 
protected by disposing of the Stock for a sales price in excess of its 
fair market value and by restoring certain lost earnings to the Plan. 
In this regard, AmeriStar proposes to purchase the Stock <SUP>3 for the 
greater of the following amounts: (a) the fair market value of the 
Stock as of the date of the Sale, plus interest at 6% for the period 
March 31, 1993 through the date the Stock is sold by the Plan; or (b) 
the total cost of the investment, $100,000, plus interest at 6% for the 
period March 31, 1993 through the date the Stock is sold by the Plan.
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     <SUP>3 AmeriStar is also attempting to sell the Stock to an 
unrelated third party. If the sales price is less than $100,000 plus 
interest at 6% from March 31, 1993 to the date of the Sale, 
AmeriStar will make up the difference to the Plan.
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    5. In summary, the applicant represents that the proposed 
transaction will satisfy the criteria for an exemption under section 
408(a) of the Act for the following reasons: (1) the Sale is a one-time 
transaction for cash; (2) the Plan experiences no loss nor incurs any 
expenses from the Sale; and (3) the Plan receives as consideration from 
the Sale the greater of the fair market value of the Stock as of the 
date of the Sale, plus interest at 6% for the period March 31, 1993 
through the date the Stock is sold by the Plan; or the total cost of 
the investment, $100,000, plus interest at 6% for the period March 31, 
1993 through the date the Stock is sold by the Plan.

NOTICE TO INTERESTED PERSONS: Notice will be distributed to interested 
persons within 30 days of the date of publication of this Notice in the 
Federal Register. Comments and requests for a hearing are due within 60 
days of the publication date of this Notice.

FOR FURTHER INFORMATION CONTACT: Mr. 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 that each application 
accurately describes all material terms of the transaction which is the 
subject of the exemption.

    Signed at Washington, DC, this 22nd day of October, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 96-27441 Filed 10-24-96; 8:45 am]
BILLING CODE 4510-29-P