[Federal Register Volume 61, Number 21 (Wednesday, January 31, 1996)]
[Notices]
[Pages 3467-3478]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-1778]



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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Application No. D-0948, et al.]


Proposed Exemptions; Associated Hospital Service of Maine d/b/a 
Blue Cross and Blue Shield of Maine) and Blue Alliance Mutual Insurance 
Company, et al.

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, NW., Washington, DC 
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, NW., Washington, DC 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.

Associated Hospital Service of Maine, (d/b/a Blue Cross and Blue Shield 
of Maine) and Blue Alliance Mutual Insurance Company, Located in 
Portland, Maine

[Application No. D-09848]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Act and section 4975(c)(2) of the 
Code and in accordance with the procedures set forth in 29 CFR part 
2570, subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption 
is granted, the restrictions of section 406(a) and (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 

[[Page 3468]]
4975(c)(1) (A) through (E) of the Code \1\ shall not apply, effective 
August 18, 1993, to the past sales of certain securities (the 
Securities) by the Associated Hospital Service of Maine Retirement Plan 
(the Plan) to the Associated Hospital Service of Maine (d/b/a Blue 
Cross and Blue Shield of Maine) (BCBSME) and Blue Alliance Mutual 
Insurance Company (Blue Alliance) (collectively, the Applicants), 
parties in interest with respect to the Plan; provided that the 
following conditions were met: (a) The sales of the Securities were 
one-time transactions for cash; (b) the purchase price paid by BCBSME 
and Blue Alliance was no less than the fair market value of the 
Securities on the date of the sales; (c) the fair market value of the 
Securities were determined by reference to an objective third party 
pricing service, as of the date of the sales; (d) the terms of the 
transactions were no less favorable to the Plan than those obtainable 
in similar transactions negotiated at arm's length with unrelated third 
parties; and (e) the Plan paid no costs, fees, or commissions 
associated with the transactions, nor other expenses associated with 
the application for exemption.

    \1\ For purposes of this exemption, references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.

EFFECTIVE DATE: If this proposed exemption is granted, it will be 
effective on August 18, 1993, the date of the sales of the Securities 
to BCBSME and Blue Alliance.

Summary of Facts and Representations

    1. The Plan, established in 1953, is an individually designed, tax-
qualified non-contributory defined benefit pension plan. As of July 8, 
1994, the Plan had 1,009 participants including current retirees, 
terminated vested employees, and their beneficiaries. It is represented 
that the Plan has been fully funded since 1991 and no contribution was 
required for 1994. As of December 31, 1993, the fair market value of 
the assets of the Plan was $26,692,805.
    The Plan provides for pension, disability retirement, and death 
benefits. Plan benefits are funded through the Associated Hospital 
Service of Maine Retirement Trust (the Trust). The Board of Directors 
of BCBSME appoints the Board of Trustees for the Trust (the Trustees). 
In this regard, in 1993 when the transaction occurred, two of the five 
(5) Trustees were former employees of BCBSME, two (2) individuals were 
officers of BCBSME, and one of the Trustees was also a member of the 
Board of Directors of BCBSME. It is represented that the Trustees have 
exclusive authority and discretion to manage and control the Plan's 
assets in accordance with the provisions of the Trust, including the 
power to appoint one or more investment managers.
    The Plan covers employees of BCBSME, salaried employees of 
Machigonne, Inc. (Machigonne), and employees of HRS Maine, Inc., a 
corporation in which Machigonne holds a 45 percent (45%) ownership 
interest.
    2. BCBSME is organized under the laws of the State of Maine as a 
non-profit hospital, medical, and health care service corporation. 
BCBSME underwrites prepaid hospital, medical, and health care service 
plans by providing hospital, medical and health care coverage and 
Medicare supplemental coverage. BCBSME is the sponsor of the Plan and a 
party in interest with respect to the Plan, as an employer any of whose 
employees are covered by the plan, pursuant to section 3(14)(C) of the 
Act.
    3. Blue Alliance, an affiliate of BCBSME, is organized under the 
laws of the State of Maine as a mutual insurance company. Blue Alliance 
underwrites major medical and dental insurance coverage that is 
intended to complement the health care coverage offered to subscribers 
of BCBSME by covering services that are not covered under the BCBSME 
contracts. With some exceptions, Blue Alliance and BCBSME insurance 
products are offered only jointly to subscribers. As a mutual insurance 
company owned by its policyholders, Blue Alliance is not directly or 
indirectly owned in whole or in part by BCBSME. However, BCBSME 
controls the management and policies of Blue Alliance. In this regard, 
the most recent by-laws of Blue Alliance provide that all of the 
directors of Blue Alliance must be directors or employees of BCBSME. At 
the time the transactions were entered on August 18, 1993, it is 
represented that at least seven (7) out of twelve (12) of the directors 
of Blue Alliance were directors or employees of BCBSME.
    Blue Alliance is not an employer of employees covered by the Plan, 
as all of its business functions are performed by employees of BCBSME. 
However, Blue alliance and BCBSME own, respectively, 15 percent (15%) 
and 85 percent (85%) of the stock of Machigonne which is an employer of 
employees covered by the Plan. Accordingly, Blue Alliance is party in 
interest with respect to the Plan, as an 10 percent (10%) or more owner 
of a participating employer in the Plan, pursuant to section 3(14)(H) 
of the Act.
    4. The sales of the Securities for which exemptive relief is 
requested was part of a larger, integrated transaction that resulted in 
a complete restructuring of the Plan's investment program. Prior to the 
sales of the Securities, the investment responsibilities for the Plan 
were divided between an external investment advisor and the Trustees. 
The professional investment firm of David L. Babson & Company, Inc. was 
retained to invest approximately 55 to 60 percent (55% to 60%) of the 
assets of the Plan in domestic equity securities. The balance of the 
Plan's assets were invested by the Trustees in fixed income securities 
consisting of United States Treasury and agency notes and bonds and 
investment-grade corporate notes and bonds.
    At the Trustees' meeting of November 18, 1991, the Trustees decided 
to engage an independent professional pension consulting firm. 
Following interviews with several firms, on April 23, 1992, the 
Trustees selected New England Pension Consultants (NEPC), located in 
Cambridge, Massachusetts. NEPC assists corporations, endowments, 
foundations, public funds, and Taft-Hartley accounts in pension plan 
investment policy development, asset allocation analysis, investment 
manager searches, and monitoring and performance analysis of plan asset 
investments. NEPC's responsibilities with respect to the Plan included 
a complete review and analysis of the Plan's investment structure, 
investment policy, asset allocation, investment performance, choice of 
investment managers, and manager guidelines. After conducting an in-
depth study of the Plan's investment performance over the previous five 
(5) years, NEPC proposed that the Trustees no longer manage any of the 
Plan's assets. Further, NEPC suggested that the asset classes in the 
Plan's portfolio be expanded to include international equity, global 
fixed income, and real estate asset classes, as well as the existing 
domestic equity and fixed income classes. The Trustees adopted NEPC's 
proposal, with minor modifications, at their February 18, 1993, 
meeting.
    At the same meeting, NEPC also advised the Trustees to appoint five 
(5) new investment managers by December 31, 1994, with the first two 
such managers to be in place by the end of 1993. Further, NEPC 
expressed a preference for having each new manager liquidate the 
securities, if necessary, after the assets of the Plan had been 
transferred to them for investment purposes, rather than have the 
Trustees do so. It is represented that this recommendation was made 
because 

[[Page 3469]]
NEPC believed that in many cases a direct transfer served to minimize 
transaction costs. Further, NEPC believed that particularly in 
circumstances where plan assets are being transferred for investment 
from a former investment manager to a new manager, sale of such plan 
assets by the new manager (whose performance will be monitored on an 
ongoing basis) tends to maximize the return on the existing investments 
to such plan. It is represented that the Trustees approved NEPC's 
recommendations, and engaged NEPC to conduct a search for investment 
management candidates.
    In this regard, except for the selection of a real estate 
investment manager which will be undertaken at the appropriate time, 
the restructuring of the Plan's investment program was completed by 
approximately May 4, 1994. Four new investment managers, Invesco 
Capital Management, Inc. (Invesco), Pacific Investment Management 
Company (PIMCO), Templeton Investment Counsel, Inc. (Templeton), and 
Scudder, Stevens & Clark (Scudder), were selected in 1993 and 1994 by 
the Trustees from a number of candidates.
    With respect to the transfer of assets to Invesco, approximately 20 
percent (20%) of the total assets of the Plan were transferred for 
purposes of active management to Invesco by June 30, 1993. It is 
represented that the Trustees were not required to liquidate any plan 
assets, because Invesco was able to accept in-kind the securities held 
by the Plan.
    With respect to the transfer for purposes of active management of 
assets of the Plan to Templeton and Scudder, because these managers 
specialize in foreign investments, neither would accept in-kind 
transfers of assets from the Plan. Accordingly, the Trustees liquidated 
portions of the Plan's portfolio through sales to unrelated parties and 
instead transferred the cash proceeds to the new managers.
    With respect to the transfer for purposes of active management to 
PIMCO of assets of the Plan, PIMCO replaced the Trustees as manager of 
the Plan's fixed income assets on July 22, 1993. PIMCO is a subsidiary 
of Pacific Financial Asset Management Corporation (PFAMCO) and manages 
the Managed Bond and Income Portfolio of the PFAMCO Funds, a non-load, 
open-end management investment company. However, as the securities 
owned by the Plan did not match the investment characteristics of the 
bonds then held in the Managed Bond and Income Portfolio, for 
administrative convenience, PIMCO requested that the Plan assets be 
transferred in cash. As of August 31, 1993, approximately 35 percent 
(35% of the total assets of the Plan were transferred to the Managed 
Bond and Income Portfolio, an investment-grade, commingled bond fund 
for institutional investors managed by PIMCO in cash.
    5. It is represented that prior to the transfer of cash to PIMCO, 
the Trustees inquired of NEPC whether the securities that the Plan was 
required to sell in order to effectuate the transfer of assets for 
investment to PIMCO could be ``bundled'' and sold as a package. In this 
regard, NEPC advised the Trustees that either: (1) The portfolio could 
be liquidated in a program trade where all the securities would be sold 
as a group to a broker who would typically receive a premium paid by 
the seller to assume the market risk of subsequently liquidating such 
securities; or (2) the Trustees could avoid paying a premium to the 
broker by liquidating the securities in a series of individual 
transactions as market opportunities presented themselves. It is 
represented that after advising the Trustees of their options, NEPC did 
not render any advice with respect to, had no knowledge with regard to, 
and no further involvement with the execution of the sales of the 
Securities by the Plan, including the transactions with parties in 
interest.
    The Trustees, in order to effect the transfer for purposes of 
active management of the assets of the Plan to PIMCO, on four (4) 
separate dates liquidated sixty-nine (69) different securities held by 
the Plan worth approximately $8.8 million. In this regard, on August 11 
and August 15, 1993, the Plan sold fourteen (14) corporate bonds for 
approximately $1.5 million. On August 20, 1993, seventeen (17) 
government-backed mortgage securities and three (3) Treasury notes were 
sold for approximately $1.8 million. It is represented that the sales 
of these thirty-four (34) securities were made by the Plan on the open 
market to unrelated parties on the days specified.
    The transactions for which retroactive relief is requested occurred 
on August 18, 1993, and involved one-time cash sales by the Plan of the 
Securities to each of the Applicants. The Securities consisted of 
publicly-traded United States Treasury and agency securities for which 
there was a readily ascertainable market price. It is represented that 
the Plan sold a total of twenty-six (26) securities (fourteen Treasury 
notes and twelve agency obligations) to BCBSME for a price of 
$4,470,773 and a total of nine (9) securities (five Treasury notes and 
four agency obligations) to Blue Alliance for a price of $1,031,516. 
The Securities constituted approximately 20 percent (20%) of the total 
Plan assets which as of July 31, 1993, were worth approximately 
$26,487,645. It is represented that the sales of the Securities were 
executed at fair market value.
    6. With respect to the fair market value of the Securities, it is 
represented that, as of approximately 11:50 A.M. Eastern Daylight Time 
on August 18, 1993, the day of the sales, the Securities were worth 
approximately $5.4 million. In this regard, M.G.S.I. Securities, Inc., 
an independent brokerage firm located in Houston, Texas, supplied the 
fair market value contemporaneous with the actual sale of the 
Securities by facsimile transmission of printouts generated by The 
Bloomberg, a computerized, real-time independent financial reporting 
service. It is represented that the Trustees executed the transactions 
at the bid price for each of the Securities involved. Further, the 
application contains a schedule that compares the prices paid by the 
Applicants for the Securities and the prices for the Securities quoted 
on August 19, 1993, in the Wall Street Journal (WSJ), which reflect the 
market prices of the Securities, as of August 18, 1993, the day of the 
sales. It is represented that there was a total favorable variance to 
the Plan of $2,437.55 between the prices paid by the Applicants and the 
prices quoted in the WSJ for the Securities.
    7. Subsequent to the sales of the Securities to the Applicants, 
PIMCO received in cash, on August 26, and August 30, 1993, $7.5 million 
and $1.5 million, respectively, for reinvestment in the Managed Bond 
and Income Portfolio. It is represented that the second transfer for 
management purposes included approximately $84,000 of the Plan's cash 
reserves in addition to the balance of cash realized from sales of the 
Securities to the Applicants and from sales of other securities to 
unrelated parties.
    8. It is represented that none of the Trustees was aware that the 
sales of the Securities to the Applicants violated the prohibited 
transaction provisions of the Act until May 1994, when Ernst & Young 
conducted the annual independent audit of the Plan. In this regard, it 
is represented that the transactions were fully disclosed in the Plan's 
audited financial statements for the Plan Year ending December 31, 
1993. It is represented that the Trustees acted entirely in good faith 
in believing that the transactions were not prohibited and acted to 
protect the Plan from abuse and unnecessary risk by 

[[Page 3470]]
obtaining current price quotations on the date of the sales from 
objective third party sources to ensure that the Plan received the fair 
market value for the Securities. Immediately upon becoming aware that 
the sales to the Applicants were prohibited, the Trustees consulted 
legal counsel, and subsequently, filed an application for retroactive 
exemption, based on the applicable provisions of the Act, the 
Department's regulations, and ERISA Technical Release 85-1.
    The Applicants submit that undoing the transactions is not possible 
without, at best, creating an undue risk of loss to the Plan through a 
series of transactions required to liquidate Plan investments with 
PIMCO, repurchase the Securities from the Applicants, resell those 
Securities to unrelated parties, and reinvest the proceeds with PIMCO. 
In addition, were these steps taken the Plan would be subject to 
brokerage fees and other transactions costs.
    9. The Applicants maintain that the transactions were in the 
interest of the Plan in that the Trustees sought to liquidate the 
Securities as expeditiously as possible. In addition, although certain 
of the Securities were sold at a loss, the sales took place at fair 
market value, and such loss would not have been avoided by sales to 
unrelated parties. Moreover, it is represented that in the aggregate 
the Plan realized a substantial gain. In this regard, the Plan obtained 
a slightly better price for the Securities sold to the Applicants by 
not having to pay a premium to a broker for the liquidation of the 
fixed income assets and by avoiding brokerage fees (or dealer margins) 
and ``odd lot'' discounts. It is represented that the total sales price 
of the Securities aggregated $5.4 million, and the Plan gained 
approximately $317,000 on the sales to the Applicants.
    10. It is represented that the transactions were feasible in that 
the sales of the Securities to the Applicants were one-time 
transactions in which the Plan received only cash. In addition, it is 
represented that the Plan was not required to pay any commissions, 
costs, premiums or expenses in connection with the sales. Further, the 
costs of filing the exemption application and of notifying interested 
persons will be borne by BCBSME.
    11. It is represented that at the time the transactions were 
entered there were sufficient safeguards in place to protect the 
interests of the Plan and its participants and beneficiaries. In this 
regard, it is represented that the sales were an integral part of a 
comprehensive restructuring of the Plan's investment program and asset 
management that the Trustees had undertaken and were carrying out, 
pursuant to the expert advice of NEPC, an independent pension 
consultant. Further, the Applicants maintain that all terms and 
conditions of the sales were at least as favorable to the Plan as those 
obtainable in an arm's length transaction with an unrelated party. In 
this regard, the Securities are publicly traded on an established 
market, and the Plan received a sales price equal to at least the fair 
market value of the Securities on the date of the sales. In addition, 
the sales price for such Securities was determined by an independent 
brokerage firm, using a well-established pricing service and based on 
current market quotations on the date of the sales.
    12. In summary, the Applicants represent that the proposed 
transactions meet the statutory criteria of section 408(a) of the Act 
because:
    (a) The sales of the Securities to the Applicants were one-time 
transactions for cash;
    (b) The purchase price paid by BCBSME and Blue Alliance was no less 
than the fair market value of the Securities on the date of the sales;
    (c) The fair market value of the Securities were determined by 
reference to an objective third party pricing service, as of the date 
of the sales;
    (d) The terms of the transactions were no less favorable to the 
Plan than those obtainable in similar transactions negotiated at arm's 
length with unrelated third parties; and
    (e) The Plan paid no costs, fees, or commissions associated with 
the transactions, nor other expenses associated with the application 
for exemption.

FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the 
Department, telephone (202) 219-8883. (This is not a toll-free number.)

Spreckels Industries, Inc. Employee Stock Ownership Plan (the ESOP); 
Spreckels Industries, Inc. Incentive Savings Plan for Union Hourly 
Employees (the Hourly Plan); and Spreckels Industries, Inc. Employees' 
Incentive Savings Plan (the Incentive Plan; collectively, the Plans) 
Located in Pleasanton, California,

[Application Nos. D-09999 through D-10001

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)(1)(A), 406(a)(1)(E), 
406(a)(2), 407(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) and (E) of the Code,\2\ shall not 
apply to the proposed acquisition, holding or exercise by the Plans of 
certain warrants (the Warrants) for the purchase of Class A new common 
stock (the New Common Stock) of Spreckels Industries, Inc. (the 
Employer), a party in interest with respect to the Plans; provided that 
the following conditions are satisfied:

    \2\ For purposes of this exemption, references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
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    (a) An independent fiduciary (the I/F) will manage the Warrants and 
monitor the value of the Warrants at all times and will be empowered to 
assign, transfer, sell, and exercise the Warrants in order to serve the 
best interest of the Plans and their participants and beneficiaries;
    (b) The fair market value of the Warrants will at no time exceed 
twenty-five percent (25%) of the value of the total assets of the 
Hourly Plan or the Incentive Plan;
    (c) The Warrants that the Plans will acquire resulted from a 
bankruptcy proceeding, in which all holders of the Class A old common 
stock (the Old Common Stock) in Spreckels Industries, Inc. (Old 
Spreckels) were treated in a like manner, including the Plans;
    (d) The Plans will not incur any expenses or fees in connection 
with the proposed transactions;
    (e) Any assignment, sale, or other transfer of the Warrants will 
not involve a party in interest with respect to the Plans, as defined 
in section 3(14) of the Act, unless such transfer is to the Employer, 
pursuant to an exercise of the Warrants; and
    (f) The I/F will determine the fair market value of the Warrants 
upon acquisition by the Plans, and an independent qualified appraiser 
will determine the fair market value of the Warrants on a periodic 
basis (but not less frequently than annually).

Summary of Facts and Representations

    1. The Employer, a Delaware corporation with offices in Pleasanton 
California, is a holding company that operates through ten (10) wholly-
owned subsidiaries. Through these subsidiaries, the Employer engages in 
three principal businesses: (a) The production and marketing of sugar 
products in the United States; (b) the production and marketing of 
electrical 

[[Page 3471]]
and manual hoists, actuators, rotating joints, jacks, and other 
materials-handling equipment; and (c) the production and sale of a wide 
range of speciality industrial products, including circuit breakers, 
hydraulic scissors-lifts, and machine parts.
    2. The Plans are defined contribution plans created for its 
employees by Old Spreckels. Pursuant to the reorganization in 
bankruptcy of Old Spreckels, as more fully discussed below, the 
Employer became the sponsor of the ESOP, the Hourly Plan, and the 
Incentive Plan.
    The ESOP was designed to compensate employees for services rendered 
by giving them an equity interest in Old Spreckels. In this regard, all 
of the ESOP's stock in Old Spreckels was acquired in a leveraged 
transaction in January of 1988. It is represented that such stock in 
Old Spreckels was allocated to the accounts of the participants in the 
ESOP, over a five (5) year period ending in 1992.\3\ As of April 14, 
1995, the ESOP had 947 participants and beneficiaries. The assets of 
the ESOP totalled $1,344,599, as of December 31, 1994.

    \3\ The Department expresses no opinion herein, as to whether 
the described transactions relating to the ESOP satisfy the 
conditions set forth under section 408(b)(3) of the Act.
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    A committee of five (5) individuals serves as named co-fiduciary 
with the Employer, with respect to the administration, operation, 
control, and management of the ESOP. The trustee for the ESOP is the 
Business Trust Department of First Interstate Bank in San Francisco, 
California. It is represented that the trustee's fees and other 
administrative expenses of the ESOP are paid by the Employer.
    The Hourly Plan is intended to qualify as a profit-sharing plan 
under section 401(a) of the Code and contains a salary deferral 
agreement that is intended to qualify under section 401(k) of the Code. 
As of April 14, 1995, the Hourly Plan had 1084 participants and 
beneficiaries. The assets of the Hourly Plan totalled $1,251,916, as of 
December 31, 1994.
    The Hourly Plan was established by Old Spreckels, as of July 1, 
1991, to assist eligible employees in accumulating funds for retirement 
by providing a regular means of savings. Eligible employees include 
union hourly employees of the Employer or any participating subsidiary. 
Enrollment in the Hourly Plan is voluntary, and employees are eligible 
to become participants after the completion of thirty (30) days of 
employment. It is represented that the Hourly Plan is an eligible 
individual account plan, as defined under section 407(d)(3) of the Act. 
Employee contributions are directed by participants in the Hourly Plan 
into two investment fund options. The first option is a common stock 
and short-term investment fund that invests primarily in the common 
stock of the Employer. The second option is a guaranteed income fund 
that invests in contracts issued primarily by insurance companies. 
Participants may also elect to make after-tax and tax-deferred 
contributions to the Hourly Plan. The Employer's matching contributions 
to the Hourly Plan are based on the attainment of financial targets by 
the Employer and each of its operating subsidiaries.
    The Incentive Plan was established by Old Spreckels to assist 
eligible employees in accumulating funds for retirement by providing a 
regular means of savings. Eligible employees include any salaried or 
non-union hourly employee who is employed on a regular full-time basis 
by the Employer or a participating subsidiary. Such employee is 
eligible to become a participant on the first day of the month 
following the completion of a month of continuous service. It is 
represented that the Incentive Plan is an eligible individual account 
plan, as defined under section 407(d)(3) of the Act. Participants in 
the Incentive Plan may direct their contributions (and earnings 
thereon) into various investment funds offered by the Incentive Plan, 
including a common stock and short-term investment fund that invests 
primarily in the common stock of the Employer. The Employer may elect 
to make matching contributions to the Incentive Plan, based on total 
eligible tax-deferred and after-tax employee contributions. As of April 
14, 1995, the Incentive Plan had 1006 participants and beneficiaries. 
The assets of the Incentive Plan totalled $35,207,827, as of December 
31, 1994.
    All of the assets of the Hourly Plan and the Incentive Plan are 
held in trust by the same trustee. Effective January 1, 1995: (a) The 
trustee of the Hourly Plan and the Incentive Plan changed from Bank of 
America to Harris Bank & Trust; (b) the recordkeeper of the Hourly Plan 
and the Incentive Plan changed from Buck Consultants to William M. 
Mercer, Inc.; and (c) the Hourly Plan and the Incentive Plan became 
responsible for paying the trustee's fees, instead of the Employer.
    3. On October 14, 1992, Old Spreckels filed a voluntary petition 
for bankruptcy with the United States Bankruptcy Court for the Northern 
District of California (Case No. 92-47497-J), pursuant to Chapter 11 of 
the Bankruptcy Code. It is represented that the bankruptcy filing was 
made as a result of the inability of Old Spreckels to meet scheduled 
payments of principal and interest on long-term debt in the amount of 
approximately $140 million dollars. At the time the bankruptcy petition 
was filed, Old Spreckels was a holding company with ten (10) wholly-
owned operating subsidiaries. It is represented that none of the 
operating subsidiaries of Old Spreckels were part of the Chapter 11 
filing.
    On June 22, 1993, the Bankruptcy Court held a hearing on the Third 
Amended Plan of Reorganization (the Reorganization Plan) of Old 
Spreckels. The Reorganization Plan was confirmed by the Bankruptcy 
Court on August 4, 1993. Subsequently, on September 2, 1993, Old 
Spreckels emerged from Chapter 11 of the federal bankruptcy law, 
reorganized as the Employer.
    4. Prior to its reorganization, the authorized capital stock of Old 
Spreckels consisted of 15 million shares of Class A voting Old Common 
Stock, 15 million shares of Class B non-voting Old Common Stock, and 
one million shares of preferred stock. Pursuant to the Reorganization 
Plan of Old Spreckels, all of the shares of outstanding Old Common 
Stock were cancelled and exchanged for shares of the New Common Stock 
of the Employer, and approximately $75 million dollars worth of the 
long term debt of Old Spreckels was converted into equity of the 
Employer. The effect of such conversion was to significantly reduce the 
debt of the Employer in comparison to Old Spreckels. It is represented 
that the exchange ratio of 9.9088387 shares of Old Common Stock for one 
share of New Common Stock was the same for all equity holders.
    Old Spreckels was required prior to the hearing on August 4, 1993, 
which confirmed the Reorganization Plan to file with the Bankruptcy 
Court a new certificate of incorporation and new by-laws for the 
Employer. The certificate of incorporation of the Employer authorized 
the issuance of 15 million shares of New Common Stock, but did not 
authorize the issuance of preferred or other non-voting stock. As 
provided in the Reorganization Plan, 6 million shares of New Common 
Stock were issued along with Warrants to purchase New Common Stock. On 
September 3, 1993, it is represented that the par value of the New 
Common Stock was $.01 per share. On January 6, 1994, the New Common 
Stock was listed on the National Association of Security Dealers 
Automated Quotations System (NASDAQ). It is represented that on 

[[Page 3472]]
September 14, 1995, the closing price of the New Common Stock on the 
NASDAQ National Market was $9.00 per share.
    5. Prior to confirmation on August 4, 1993, of the reorganization 
of Old Spreckels, it is represented that the ESOP, the Hourly Plan, and 
the Incentive Plan held, respectively, 2,054,250 shares, 39,586 shares, 
and 419,064 shares of Class A Old Common Stock, which constituted 
approximately 41%, .8%, and 8.3% of the Old Common Stock then issued. 
As of June 30, 1993, the fair market value of the old Common Stock held 
by the ESOP, the Hourly Plan, and the Incentive Plan, respectively, was 
approximately $1,705,028, $32,856, and $347,823. As of June 30, 1993, 
the Old Common Stock represented approximately 100%, 4.8% and 1%, 
respectively, of the total assets of the ESOP, the Hourly Plan, and the 
Incentive Plan.
    It is represented that post-confirmation, the Plans, like all other 
similarly situated shareholders of Old Common Stock, received their pro 
rata share of the New Common Stock in exchange for Old Common Stock. 
The ESOP, the Hourly Plan, and the Incentive Plan, respectively, were 
issued 207,315 shares, 3,995 shares, and 42,292 shares of New Common 
Stock, which constituted approximately 3.5%, .1%, and .7% of the then 
issued shares of New Common Stock. As of October 31, 1993, the New 
Common Stock constituted 100 percent (100%) of the assets of the ESOP. 
As of November 30, 1993, the New Common Stock held by the Hourly Plan 
and the Incentive Plan represented approximately 4.1% and 1% of the 
total assets of those two plans, respectively. It is represented that 
the Old Common Stock and the New Common Stock are ``qualifying employer 
securities,'' as defined in section 407(d)(5) of the Act.\4\

    \4\ The Department, herein, expresses no opinion as to whether 
the Old Common Stock or the New Common Stock constitute ``qualifying 
employer securities,'' as defined in section 407(d)(5) of the Act, 
or whether the acquisition and holding by the Plans of such 
securities satisfied the conditions, as set forth under section 
408(e) of the Act. Further, the Department, herein, is offering no 
relief for transactions other than those proposed.
---------------------------------------------------------------------------

    On April 14, 1995, the ESOP, the Hourly, and the Incentive Plan, 
respectively, held 186,680 shares, 18,735 shares, and 11,252 shares 
which constituted approximately 3.11%, .31% and .187% of the then 
issued shares of New Common Stock. Subsequently, as of September 20, 
1995, the percentage of shares of New Common Stock in the ESOP, the 
Hourly Plan, and the Incentive Plan when compared to the approximately 
5,599,900 shares of New Common Stock then issued and outstanding was, 
respectively, 2.5% (151,352 shares), .74% (44,412 shares) and 3.9% 
(233,252 shares).
    6. Pursuant to the reorganization, the Plans, like all other 
similarly situated shareholders of Old Common Stock, in addition to 
receiving New Common Stock were also entitled to receive a pro rata 
share of Warrants to purchase additional shares of New Common Stock. 
The Warrants are not registered with the Securities and Exchange 
Commission, and are not freely transferrable or marketable. Holders of 
the Warrants are not generally entitled to vote, to receive dividends, 
or to be deemed holders of New Common Stock. It is represented that the 
Warrants will expire on September 2, 2001, and are subject to all 
applicable federal and state securities laws. The Plans will receive 
the Warrants following the grant of this exemption.
    Once acquired the Warrants must be held, by the Plans and all other 
similarly situated shareholders of Old Common Stock, until such time as 
the Warrants may be exercised, transferred, or assigned pursuant to 
their terms. The Warrants to be received by the Plans are divided into 
three classes as follows: (a) The First Old Equity Warrants--Series B 
(the First Old Equity Warrants); (b) the Second Old Equity Warrants; 
and (c) the Third Old Equity Warrants. Generally, each of the First Old 
Equity Warrants and each of the Second Old Equity Warrants are 
exercisable for one share of New Common Stock by the holder at the 
price discussed in the paragraph below, at any time or from time to 
time, during the term of such Warrants, in whole or in part (but, if in 
part, in multiples of 1,000 shares). Each of the Third Old Equity 
Warrants are exercisable, at the price discussed in the paragraph 
below, for one share of New Common Stock, but not until the closing 
price of the New Common Stock shall have equaled or exceeded $17.50 for 
twenty (20) consecutive days, and thereafter, regardless of whether or 
not the closing price of such stock shall be above or below $17.50, may 
be exercisable by the holder in whole or in part (but, if in part, in 
multiples of 1,000 shares).
    The terms of the Warrants provide for the adjustment of the 
exercise price and the number of shares of New Common Stock purchasable 
under the Warrants upon the occurrence of certain events, such as a 
change in the corporate structure of the Employer and changes in the 
form and/or value of New Common Stock. Subject to adjustment under 
certain circumstances, the exercise price for the First Old Equity 
Warrants, the Second Old Equity Warrants, and the Third Old Equity 
Warrants is, respectively $11.67, $15.00, and $1.00.
    7. The applicant represents that it believes that the Warrants are 
securities under federal securities law but are not ``qualifying 
employer securities,'' as defined in section 407(d)(5) of the Act. 
Accordingly, the ESOP, the Hourly Plan, and the Incentive Plan seek 
exemptive relief to acquire and hold, in the aggregate, 132,189 First 
Old Equity Warrants, 462,664 Second Old Equity Warrants, and 132,189 
Third Old Equity Warrants. The Employer represents that the Plans will 
be amended in all necessary respects to provide for, among other 
things, the acquisition, retention, exercise, transfer, assignment, and 
distribution of the Warrants. It is represented that the Warrants will 
not be issued to the Plans, unless this proposed exemption is granted.
    8. The applicant points out that the transactions do not arise from 
the ordinary course of business, but arise as a result of an 
extraordinary event (i.e. the issuance of the Warrants to stockholders 
of Old Common Stock under the terms of the Reorganization Plan of Old 
Spreckels approved by the Bankruptcy Court). It is represented that the 
Bankruptcy Court has approved the Reorganization Plans as the best 
means of providing creditors and equity holders, including the Plans, 
with a fair opportunity to recover from the reorganization of Old 
Spreckels and to profit from the success of the Employer. It is 
represented that the Warrants which the Plans will acquire resulted 
from the bankruptcy proceeding, in which all holders of the Class A Old 
Common Stock were treated in like manner, including the Plans. It is 
further represented that during the bankruptcy proceeding, the ESOP was 
represented by the law firm of Wendel, Rosen, Black, Dean, and Levitan, 
an independent fiduciary appointed by the Bankruptcy Court. In this 
regard, the applicant maintains that the interests of the Hourly Plan 
and the Incentive Plan were substantially similar to those of the ESOP 
and that thus such plans were well protected during the bankruptcy 
proceeding.\5\

    \5\ The relief provided in this exemption is limited to the 
acquisition, holding or exercise by the Plans of the Warrants. The 
Department, herein, expresses no opinion as to whether any of the 
relevant provisions of part 4, subpart B, of Title I of the Act have 
been violated regarding the representation of the Plans' interest in 
the bankruptcy proceeding or the ultimate outcome of such 
proceeding, and no exemption from such provisions is proposed 
herein.
---------------------------------------------------------------------------

    The applicant maintains that the transactions are in the interest 
of the 

[[Page 3473]]
Plans. In this regard, it is represented that the acquisition of the 
Warrants offers an opportunity for economic gain to the Plans, in that 
the Plans could exercise the Warrants and purchase New Common Stock at 
a favorable price, if the price of such stock rises above the exercise 
price. Further, the Plans would experience a loss if they, unlike all 
other similarly situated shareholders of Old Common Stock, were not 
permitted to receive the full value under the terms of the 
Reorganization Plan. The applicant maintains that the Plans should not 
be made to suffer a detriment relative to such other shareholders of 
Old Common Stock.
    The applicant maintains that the Plans and their participants and 
beneficiaries were protected during the bankruptcy proceedings, in that 
the process afforded the Plans the same opportunity pursuant to the 
terms of the Reorganization Plan to acquire the New Common Stock and 
the Warrants. In this regard, it is represented that the terms of the 
Reorganization Plan apply in the same manner to all shareholders of the 
Class A Old Common Stock, including the Plans.
    It is represented that the Plans will not incur any expenses or 
fees in connection with the proposed transactions. Further, the costs 
of filing the exemption application and of notifying interested persons 
will be borne by the Employer.
    9. If this proposed exemption is approved, the Employer will issue 
in the aggregate approximately 594,343 Warrants to the ESOP. 
Specifically, the ESOP will receive 108,062 First Old Equity Warrants, 
378,219 Second Old Equity Warrants, and 108,062 Third Old Equity 
Warrants. With regard to the allocation of the Warrants, it is 
represented that each participant will receive a pro rata share of the 
Warrants issued to the ESOP based on the number of shares of Old Common 
Stock in such participant's account just prior to the conversion to New 
Common Stock. It is represented that this allocation of the Warrants to 
the ESOP participants will be made in whole numbers of Warrants, and 
any fractional interest will be rounded to the nearest whole number. If 
a participant in the ESOP terminates employment and requests a 
distribution when unexercised and unsold Warrants still remain 
allocated to this account, the Warrants will be distributed to the 
participant in-kind, in the same manner and at the same time as any New 
Common Stock in such account is distributed to such participant.
    Provided this proposed exemption is granted, the Employer will also 
issue approximately 11,452 Warrants to the Hourly Plan. Specifically, 
the Hourly Plan will receive 2,082 First Old Equity Warrants, 7,288 
Second Old Equity Warrants, and 2,082 Third Old Equity Warrants. With 
respect to the Hourly Plan, the Warrants will be allocated to and held 
in a fund which currently holds the New Common Stock and investments 
with up to 360 days' maturity. Once the Warrants are allocated to the 
fund, the value of the Warrants in such fund, as determined by the I/F, 
will be reflected in the units received by each participant of the 
Hourly Plan invested in such fund.
    If the Department grants this proposed exemption, the Employer will 
issue approximately 121,247 Warrants to the Incentive Plan. 
Specifically, the Incentive Plan will receive 22,045 First Old Equity 
Warrants, 77,157 Second Old Equity Warrants, and 22,045 Third Old 
Equity Warrants. With respect to the Incentive Plan, the Warrants will 
be allocated to an investment fund which holds New Common Stock and 
investments with up to 360 days' maturity. Each participant in the 
Incentive Plan invested in such fund will receive units based on his 
investments in the fund and on the addition of the value of the 
Warrants, as determined by the I/F, to such fund. It is represented 
that the Incentive Plan will manage the Warrants in exactly the same 
manner as the Hourly Plan.
    10. Pursuant to the terms of an agreement signed January 17, 1995, 
L. Scott Maclise (Mr. Maclise), a registered investment advisor with 
Linsco/Private Ledger Financial Services (LPL), in San Rafael, 
California, has accepted the appointment to serve as the I/F on behalf 
of the Plans for purposes of this exemption, and except in the event of 
his discharge or resignation, as described below, will serve throughout 
the duration of the transactions which are the subject of this 
exemption. In this regard, Mr. Maclise states that he understands his 
duties as I/F under the Act and shall assume all duties, 
responsibilities, and obligations imposed upon him as I/F of the Plans 
in connection with the proposed transactions, pursuant to the 
provisions of the Act and the Code.
    Mr. Maclise represents that he is qualified to serve as I/F with 
respect to the Plans. In this regard, Mr. Maclise states that he is 
experienced in representing clients as a fiduciary in stock 
transactions. Mr. Maclise is a graduate of California State University 
in San Francisco. Before joining LPL in 1992, Mr. Maclise had sixteen 
(16) years of investment experience with other firms, including Dean 
Witter, Merrill Lynch, and Shearson Lehman Brothers.
    Mr. Maclise represents that he is independent of the Employer and 
its officers, directors, shareholders, agents, and representatives. In 
this regard, Mr. Maclise represents that he is not affiliated with the 
Employer and that his income from the Employer represents less that 1 
percent (1%) of his income annually. It is further represented that Mr. 
Maclise shall have the power to negotiate and act independently of the 
Employer, and its officers, directors, shareholders, agents, and 
representatives with respect to the proposed transactions.
    In fulfilling his responsibility as I/F to the Plans, Mr. Maclise 
represents that he will take whatever acts are necessary to review, 
analyze, negotiate, monitor, and approve or disapprove the proposed 
transactions, and will be responsible for the Plans' acquisition and 
holding of the Warrants. Bearing in mind his fiduciary duties under the 
Act, Mr. Maclise represents that he shall determine whether the 
proposed transactions: (a) Are prudent and for the exclusive purpose of 
providing benefits to participants; (b) are fair to the Plans from a 
financial point of view; and (c) are in accordance with terms and 
conditions, as set forth in this proposed exemption.
    With respect to the acquisition of the Warrants by the Plans, Mr. 
Maclise represents that he will conduct due diligence to evaluate 
whether the Plans should enter into the proposed transactions. In this 
regard, Mr. Maclise will decide on behalf of the Plans (a) whether or 
not the Plans should acquire and hold the Warrants; and (b) when, if at 
all, the Warrants should be exercised to acquire New Common Stock, or 
sold and the proceeds used to acquire such stock.
    With respect to the holding of the Warrants by the Plans, Mr. 
Maclise has determined that the Plans' holding of the Warrants will not 
impair diversification, prudence, or liquidity as mandated by the Act. 
In this regard, Mr. Maclise represents that he retains full power to 
manage and monitor the value of the Warrants at all times and is 
empowered to assign, transfer, sell, and exercise the Warrants in order 
to serve the best interests of the participants and beneficiaries of 
the Plans.
    Mr. Maclise may resign his appointment as I/F at any time upon six 
(6) months prior written notice, unless the Employer and Mr. Maclise 
mutually agree to a shorter period of time. In addition, it is 
represented that the Employer can remove Mr. Maclise as I/F ``for 
cause,'' upon thirty (30) days' prior written notice, unless the 
Employer and Mr. Maclise mutually 

[[Page 3474]]
agree to a shorter period of time. It is represented that ``for cause'' 
means a breach of the agreement between the Employer and Mr. Maclise, 
or the I/F's negligence, gross negligence, willful misconduct or lack 
of good faith in the execution of his duties, or in the event Mr. 
Maclise's fee for the services is being renegotiated, the inability of 
the Employer and Mr. Maclise to agree upon the fee under such 
agreement.
    11. It is represented that the I/F will determine the fair market 
value of the Warrants upon acquisition by the Plan. It is further 
represented that, as appropriate, the Warrants will be appraised by an 
independent appraiser. Such appraisals will be done on a periodic basis 
(but not less frequently than annually).
    12. In summary, the applicant represents that the proposed 
transactions meet the statutory critiera of section 408(a) of the Act 
because:
    (a) The I/F will manage the Warrants and monitor the value of the 
Warrants at all times and will be empowered to assign, transfer, sell, 
and exercise the Warrants in order to serve the best interest of the 
Plans and their participants and beneficiaries;
    (b) The fair market value of the Warrants will at no time exceed 
twenty-five percent (25%) of the value of the total assets of the 
Hourly Plan or the Incentive Plan;
    (c) The Warrants that the Plans will acquire resulted from a 
bankruptcy proceeding, in which all holders of the Class A Old Common 
Stock in Old Spreckels were treated in a like manner, including the 
Plans;
    (d) The Plans will not incur any expenses or fees in connection 
with the proposed transactions;
    (e) Any assignment, sale, or other transfer of the Warrants will 
not be to a party in interest with respect to the Plans, as defined in 
section 3(14) of the Act, unless such transfer is to the Employer, 
pursuant to an exercise of the Warrants; and
    (f) The I/F will determine the fair market value of the Warrants 
upon acquisition by the Plans, and an independent qualified appraiser 
will determine the fair market value of the Warrants on a periodic 
basis (but not less frequently than annually).

Notice to Interested Persons

    Included among those persons who may be interested in the pendency 
of the proposed exemption are all fiduciaries, all active participants, 
and all inactive participants of the Plans. It is represented that 
these various classes of interested persons will be provided with a 
copy of the Notice of Proposed Exemption (the Notice), plus a copy of 
the supplemental statement (Supplemental Statement), as required, 
pursuant to 29 CFR 2570.43(b)(2) within fifteen (15) calendar days of 
publication of the Notice in the Federal Register. Notification will be 
provided to all fiduciaries and all inactive participants of the Plans 
either by mailing first class or overnight express delivery of a copy 
of the Notice, plus a copy of the Supplemental Statement. Notification 
will be provided to active participants by posting a copy of the 
Notice, plus a copy of the Supplemental Statement at those locations 
within the principal places of employment of the Employer which are 
customarily used for notices regarding labor-management matters for 
review.

FOR FURTHER INFORMATION CONTACT: Angelena C. Le Blanc of the 
Department, telephone (202) 219-8883 (This is not a toll-free number.)

H.E.B. Investment and Retirement Plan (the Plan), Located in San 
Antonio, Texas

[Application No. D-10035]

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 
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 proposed cash sale by the Plan 
to H.E. Butt Grocery Company (the Company), a party in interest with 
respect to the Plan, of an interest in a certain parcel of improved 
real property (the Property) known as the South Congress Shopping 
Center in Austin, Texas, provided that the following conditions are 
met:
    (a) The sale is a one-time transaction for cash;
    (b) The Plan will receive an amount equal to the greater of either: 
(1) $2,975,666, or (2) the fair market value of the Property at the 
time of the transaction, as determined by a qualified, independent 
appraiser;
    (c) The Plan will not pay any commissions or other expenses with 
respect to the sale; and
    (d) The Plan's trustees determine that the sale of the Property to 
the Company is appropriate for the Plan and in the best interests of 
the Plan and its participants and beneficiaries at the time of 
transaction.

Summary of Facts and Representations

    1. The Company is a Texas corporation engaged primarily in the 
retail grocery business in Texas. The Company has sponsored the Plan 
since 1956. The Plan has also been adopted by the following entities 
which are affiliated with the Company: HEBCO Partners, Ltd., Parkway 
Distributors, Inc., Parkway Transport, Inc., C.C. Butt Grocery Company 
and High-Tech Commercial Services, Inc. Parkway Distributors, Inc. and 
Parkway Transport, Inc., are engaged in the business of intrastate and 
interstate trucking.
    2. The Plan is a defined contribution plan incorporating a 
qualified cash or deferred arrangement and had approximately 20,773 
participants as of December 31, 1994. As of that date, the Plan had 
total assets with a fair market value of approximately $386,537,043, of 
which approximately 8.7% reflect direct real estate investments.
    The trustees of the Plan are John C. Broulliard, James F. Clingman, 
Jr., Richard M. Ellwood, Bea Weicker Irvin, Louis M. Laguardia, Allen 
B. Market, Robert A. Neslund, Wesley D. Nelson, Todd A. Piland, Charles 
W. Sapp, and Edward C. Gotthordt (collectively, the Trustees). The 
Trustees are all either current or former officers and/or employees of 
the Company or its affiliates.
    3. The Plan and the Company currently own interests in a tract of 
realty known as the South Congress Shopping Center (the Shopping Center 
Property), located at 2400 South Congress Avenue in the City of Austin, 
County of Travis, State of Texas.\6\

    \6\ The Department is providing no opinion in this proposed 
exemption as to whether the joint ownership by the Plan and the 
Company of interests in the Shopping Center Property resulted in any 
Plan fiduciary violating his fiduciary responsibilities under Part 4 
of Title 1 of the Act. However, the Department notes that section 
404(a) of the Act requires, among other things, that a fiduciary of 
a plan act prudently, solely in the interest of the plan's 
participants and beneficiaries, and for the exclusive purpose of 
providing benefits to participants and beneficiaries when making 
investment decisions on behalf of a plan. In addition, section 
406(b) of the Act, in pertinent part, prohibits a fiduciary of a 
plan from dealing with the assets of a plan in his own interest or 
for his own account or from acting in any transaction on behalf of a 
party whose interests are adverse to the interests of the plan.
---------------------------------------------------------------------------

    The Shopping Center Property consists of approximately 6.21 acres 
of land (the Land) and a single-story masonry, multi-tenant building 
with approximately 98,918 square feet (the Building). The Land is 
described as a 

[[Page 3475]]
nearly rectangular corner site with 420 feet of frontage on South 
Congress Avenue, 620 feet along Oltorf Avenue, and 53 feet along Euclid 
Avenue. The Company owns the eastern 29,638 square feet of the Land, 
and the portions of the Building related thereto, and an additional 
55x135 foot strip of the Land (i.e., 7425 square feet) at the southwest 
corner of the Shopping Center Property. The Plan owns the remaining 
portions of the Building, the Land related thereto, and a three-quarter 
(\3/4\) undivided interest in the Land used for the parking lot. (The 
portions of the Land and the Building owned by the Plan are referred to 
herein as ``the Property''.) The Company owns the remaining one-quarter 
(\1/4\) interest in the Land used for the parking lot.
    The Plan acquired the Property in 1960 from the Company as an 
employer contribution to the Plan.\7\ The Property has generated a 
cash-on-cash return, based on its current appraised value, of 9.1 
percent, 9.5 percent, and 12.4 percent for the years 1992, 1993, and 
1994, respectively. The applicant represents that the Property's total 
net income to the Plan has produced a reasonable rate of return as an 
investment for the Plan since 1960, but that there is no assurance that 
the current income stream from the existing leases (as noted below) 
will continue.

    \7\ The applicant represents that the acquisition preceded the 
effective date of the Act, but that it met the requirements of the 
Code which governed such transactions at that time. However, the 
Department expresses no opinion in this proposed exemption as to 
whether the Plan's acquisition of the Property satisfied the 
requirements of the Code.
---------------------------------------------------------------------------

    The Property is currently subdivided into separate leasehold 
parcels. These leasehold parcels are subject to existing leases (the 
Existing Leases) to the following tenants:
    (i) Tandy Corporation (lease expiring December 7, 1997 with no 
renewal options);
    (ii) Texas State Optical, Inc. (lease expiring August 31, 1996 with 
no renewal options);
    (iii) Gregory J. Tomczyk (Mother Nature's Health Foods) (lease on a 
month-to-month tenancy);
    (iv) Walgreen Company (lease expiring June 30, 1996 with no renewal 
options);
    (v) Western Auto Supply Company (lease expiring January 31, 1996 
with no renewal options); and
    (vi) H.E. Butt Grocery Company (lease expiring June 14, 2001 with 
four renewal options of five years each).
    The applicant states that the Plan's lease to the Company of a 
portion of the Property, as noted in item (vi) above, constitutes 
``qualifying employer real property'' (QERP) within the meaning of 
section 407(d)(4) of the Act. In this regard, the applicant represents 
that the leasing of such parcel of the Property to the Company is and 
has been statutorily exempt under section 408(e) of the Act.\8\

    \8\ The applicant states that the parcel of the Property leased 
to the Company is one of several such parcels of real property 
leased by the Plan to the Company. The applicant maintains that such 
leasehold parcels are located throughout the State of Texas and that 
these parcels are suitable or adaptable without excessive cost for 
more than one use, as required by section 407(d)(4) of the Act. In 
addition, the applicant states that these leases did not involve the 
payment of any commissions and were entered into for adequate 
consideration, as required by section 408(e) of the Act.
    In this regard, the Department is expressing no opinion as to 
whether the Property constitutes QERP, within the meaning of section 
407(d)(4) of the Act, or whether the Plan's leasing transactions 
with the Company meet the conditions of section 408(e) of the Act 
and the regulations thereunder (see 29 CFR 2550.408e).
---------------------------------------------------------------------------

    The applicant requests an exemption for the proposed sale of the 
Property by the Plan to the Company. The applicant states that because 
the Property encompasses leasehold parcels which are not leased to the 
Company, the proposed sale of the Property to the Company would not 
meet the statutory requirements for an exempt sale of QERP under 
section 403(e) of the Act.
    4. With respect to the reasons for the proposed transaction, the 
applicant states that the Property is in excess of 30 years old, is 
antiquated in appearance, and needs both interior and exterior 
refurbishing to compete with more modern shopping center facilities. In 
addition, in order to be competitive in the retail grocery market, the 
Company desires to expand its existing grocery store beyond the current 
portion of the Property which it leases from the Plan.\9\ In order to 
effect such expansion, the applicant represents that it will be 
necessary to demolish other portions of the Building on the Property 
that are currently leased to third parties and to effect significant 
construction. The Company believes that it would be in a better 
position to effect such demolition and construction activities without 
the participation of the Plan and that, in fact, entering into such 
activities with the Plan would be inappropriate.

    \9\ The Company owns and occupies the eastern 29,638 square feet 
of the existing grocery store and leases the western 19,100 square 
feet of the grocery store from the Plan.
---------------------------------------------------------------------------

    5. The Trustees have determined that it would be in the best 
interests of the Plan and its participants and beneficiaries to sell 
the Property to the Company for a number of reasons.
    First, retail shopping centers have a certain ``life cycle'' (i.e., 
a period of time over which they are commercially viable without 
significant renovation and updating). The trustees believe that the 
Property has reached the end of its ``life cycle'' and needs a 
substantial amount of capital to renew itself and go forward on a 
commercially competitive basis in the future. Second, the Trustees have 
determined that it is not in the Plan's best interest to undertake the 
type of demolition and construction activities, as well as the 
additional interior and exterior cosmetic refurbishing, which will be 
necessary for the Property in order to maintain its commercial 
viability for the future. Third, after reviewing a current appraisal of 
the Property, the Trustees have concluded that it would be in the best 
interests of the Plan to liquidate such investment and reinvest the 
cash in assets which would not require the oversight, updating, 
construction and expenditure that will be necessary for the Property in 
the future.
    In sum, the Trustees believe that the sale of the Property to the 
Company at the present time would enable the Plan to convert an 
existing illiquid real estate investment, which will require 
significant expenditures to preserve and maintain, into more liquid and 
potentially more profitable investments.
    6. The applicant represents that the sale of the Property to the 
Company will be a one-time transaction for cash at a price which is no 
less than the fair market value of the Property as determined by an 
independent, qualified appraiser.
    7. The Property has been appraised by Russell T. Thurman (Mr. 
Thurman) of Sayers & Associates, Inc., an independent, qualified real 
estate appraiser in Austin, Texas, as of July 31, 1995 (the Appraisal).
    Mr. Thurman states that the Appraisal relied primarily on the 
income approach (the Income Approach) to value the Property, taking 
into consideration the present value of the income stream on the 
Existing Leases. The Income Approach was based on actual contract rents 
for occupied space (approximately 88% of the leasable space) and 
current economic market rents for vacant space (approximately 12% of 
the leasable space) on the Property as of July 31, 1995. In addition, 
the Appraisal considered the market approach (the Market Approach) to 
value the Property, with an analysis of recent sales of similar 
properties in the area. Finally, the Appraisal considered the cost 
approach (the Cost Approach) to value the Property, with an estimation 
of the reproduction cost for the improvements, minus accrued 
depreciation, added to the value of the Land obtained from a sales 
comparison approach. 

[[Page 3476]]

    Based on this analysis, the Appraisal concluded that the fair 
market value of the Property, as of July 31, 1995, was $2,825,000, 
based on the Income Approach. However, the data provided by the 
Appraisal indicated that the current market value of the Property, as 
of such date, was approximately $3,178,000, based on the Market 
Approach, and $2,924,000, based on the Cost Approach. The Appraisal 
also concluded that the fair market value of the Shopping Center 
Property as of such date, including the portions of the Land and the 
Building owned by the Company, was $4,541,000, based on the Market 
Approach, and $4,287,000, based on the Cost Approach.
    After reviewing the results of the Appraisal, the Company agreed to 
pay the Plan at least $2,975,666 for the Property, an amount determined 
based on the average of values provided by the Income Approach, the 
Market Approach, and the Cost Approach.\10\

    \10\ In this regard, please note that 
$2,825,000+$3,178,000+$2,924,000=$8,927,000 divided by 3=$2,975,666.
---------------------------------------------------------------------------

    The applicant states that the Appraisal will be updated by Mr. 
Thurman at the time of the proposed transaction to establish the 
current fair market value of the Plan's leased fee interest in the 
Property. For purposes of establishing the fair market value of the 
Property under the Income Approach, Mr. Thurman will determine the 
value of the Company's leasehold interest based on the greater of 
either (i) the actual contract rent under the Existing Lease,\11\ or 
(ii) the fair market rental value of the leased space currently 
occupied by the Company.

    \11\ The Appraisal states that the Company pays the Plan a base 
rental rate of $4,628.41 per month plus a percentage rent of 40% of 
the increase on gross sales over the base year (1991) for the entire 
premises.
---------------------------------------------------------------------------

    Finally, the applicant represents that the Plan will not pay any 
commissions or other expenses in connection with the proposed sale.
    8. In summary, the applicant represents that the proposed 
transaction will satisfy the statutory requirements of section 408(a) 
of the Act because: (a) The sale of the Property will be a one-time 
transaction for cash; (b) the Plan will receive a sale price for the 
Property which is equal to the greater of either (i) $2,975,666, or 
(ii) the fair market value of the Plan's leased fee interest in the 
Property at the time of the transaction, as determined by an 
independent, qualified appraiser; (c) the transaction will enable the 
Plan to divest itself of an illiquid real estate asset and invest the 
proceeds of the sale in more profitable, liquid investments; (d) the 
Plan will not pay any commissions or other expenses in connection with 
the transaction; and (3) the Trustees have determined that the sale of 
the Property to the Company would be appropriate for and in the best 
interest of the Plan and its participants and beneficiaries.

Notice of Interested Persons

    The applicant states that notice of the proposed exemption shall be 
made to all interested persons by first class mail, except that persons 
who are participants in the Plan and who are actively employed by the 
Company, or an affiliate thereof, may be provided such notice by 
posting upon bulletin boards customarily used for the provision of 
information required to be provided to employees or by publication in 
one or more general employee communications.
    Notice to interested persons shall be made within thirty (3) days 
following the publication of the proposed exemption in the Federal 
Register. This notice shall include a copy of the notice of proposed 
exemption as published in the Federal Register and a supplemental 
statement (see 29 CFR 2570.43(b)(2)) which informs interested persons 
of their right to comment on and/or request a hearing with respect to 
the proposed exemption. Comments and requests for a public hearing are 
due within sixty (60) days following the publication of the proposed 
exemption in the Federal Register.

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

Aircon Energy, Inc. 401(k) Profit Sharing Plan (the Plan), Located in 
Sacramento, California

[Application No. D-10073]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Act and section 4975(c)(2) of the 
Code and in accordance with the procedures set forth in 29 CFR part 
2570, subpart B (55 FR 32836, 32847, August 10, 1990). If the exemption 
is granted, the restrictions of section 406(a), 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 
office equipment (the Workstations) to Aircon Energy, Inc. (Aircon), 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 any other expenses relating 
to the sale; (3) the purchase price is the greater of: (a) The fair 
market value of the Workstations as determined by a qualified, 
independent appraiser, or (b) the Plan's initial acquisition cost plus 
opportunity costs attributable to the Workstations while in storage; 
(4) Aircon reimburses the Plan for the fair market rental value with 
respect to the prohibited use of certain of the Workstations; (5) 
Aircon reimburses the Plan for losses and opportunity costs assocaited 
with the sale of certain of the Workstations to an unrelated third 
party; and (6) within 90 days of the publication in the Federal 
Register of the grant of this notice of proposed exemption, Aircon 
files Form 5330 with the Internal Revenue Service (the Service) and 
pays all applicable additional excise taxes that are due by reason of 
the prohibited use transactions.

Summary of Facts and Representations

    1. The Plan is a profit sharing plan sponsored by Aircon. As of 
December 31, 1994, the Plan had approximately 43 participants and total 
assets of approximately $1,638,373. The trustees of the Plan are 
officers, employees, or shareholders of Aircon as follows: Scott 
Slavensky, President; Atlthea Slavensky, Administrative Clerk; Frank 
Slavensky, Service Consultant; and Chris Costi, Shareholder. Aircon, a 
California corporation, is engaged in the business of installing and 
repairing residential and commercial heating and air conditioning 
systems and is located in Sacramento, California.
    2. Among the assets of the Plan are 45 Workstations. The Plan 
originally purchased 48 used mahogany Workstations on December 8, 1989 
for a total of $41,125 ($856.77 per unit), including shipping and 
handling costs, from an unrelated third party, R&M Office Furniture of 
Sacramento, California. Scott Slavensky, a Plan trustee, made the 
decision to invest in the Workstations after determining that the 
purchase price was well below the then prevailing market rate.\12\ On 
September 30, 1993, three of the Workstations owned by the Plan were 
sold to an unrelated third party for $3,600 ($1,200 per unit) through 
Innovators Office Furniture, a broker of used office furniture. Net of 
commissions and other expenses of sale, the Plan received a total of 
$2,160 ($720 per unit).

    \12\ The Department expresses no opinion herein on whether the 
acquisition and holding of the Workstations by the Plan violated any 
of the provisions of Part 4 of Title I in the Act.

[[Page 3477]]

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

    Of the remaining 45 Workstations, 25 Workstations are being held in 
storage, while 20 Workstations are currently being used by Aircon. The 
applicant represents that various Workstations were set up in Aircon's 
offices at various times. Initially, the Plan trustees set up four 
Workstations in January 1990 for demonstration purposes. Subsequently, 
additional Workstations came into use as follows: Six in May 1990, 
three in December 1992, and seven in September 1994. Aircon has paid 
all storage costs associated with the Workstations.
    3. The applicant obtained an independent appraisal of 18 of the 
Workstations currently being used by Aircon from Alex Sabbadini, 
F.A.S.A., of Alex Sabbadini, Inc., a professional personal property 
appraiser in Sacramento, California. Using the sales comparison 
valuation method, Mr. Sabbadini estimated that the aggregate fair 
market value of the 18 Workstations as of March 17, 1995 was $7,245 
($402.50 per unit).
    4. The applicant represents that despite diligent marketing efforts 
paid for by Aircon, the Plan trustees have been unable to sell the 
remaining Workstations and have concluded that there is no current 
market for the Workstations. In order to divest the Plan of non-income 
producing, illiquid assets, and to correct the ongoing prohibited 
transactions resulting from the use of 20 of the Workstations, Aircon 
proposes to purchase all 45 Workstations from the Plan for the greater 
of: (a) The fair market value of the Workstations as determined by a 
qualified, independent appriaser, or (b) the Plan's initial acquisition 
cost plus opportunity costs attributable to the Workstations. Because 
the fair market value of the Workstations is less than their 
acquisition cost, Aircon will purchase the Workstations from the Plan 
for the amount specified under (b) above. Accordingly, Aircon wil pay 
the Plan a purchase price of $51,770.34. The purchase price was 
calculated by taking the Workstations' acquisition cost ($38,564.65) 
and adding to that amount an assumed eight percent annual return \13\ 
for each of the years the Plan has held the Workstations in storage 
since December 1989 ($13,205.69). Accordingly, the total opportunity 
costs attritutable to the Workstations while in storage was calculated 
as follows: [(Unit cost x No. Units x .08)/(12 Mos.)] x (No. Mos.).

    \13\ The Department notes the applicant's representation that 
the eight percent figure is 105% of the five-year average of the 
Applicable Federal Funds Rate (AFR). The AFR is calculated by the 
Service and is used for determining reasonable rates of interest. 
The applicant represents that the AFR is thus an appopriate measure 
to calculate opportunity costs attributable to the Workstations.

----------------------------------------------------------------------------------------------------------------
               Period                     Unit cost          No. units          Mos. @ 8%         Opp'ty cost   
----------------------------------------------------------------------------------------------------------------
12/89-4/90..........................            $856.77                 41                  5          $1,170.90
5/90-11/92..........................             856.77                 35                 31           6,197.21
12/92-8/94..........................             856.77                 32                 21           3,838.38
9/94-10/95..........................             856,77                 25                 14           1,999.20
                                                                                              ------------------
      Subtotal......................  .................  .................  .................          13,205.69
----------------------------------------------------------------------------------------------------------------

The Plan will pay no commissions nor any other expenses relating to the 
sale.
    5. The applicant acknowledges that Aircon's ongoing use of 20 
Workstations without paying any compensation to the Plan constitutes a 
violation of the prohibited transaction provisions of the Act. Aircon 
proposes to make the Plan whole by paying the fair market rental value 
with respect to the prohibited use of these Workstations. The applicant 
represents that because the custom for the industry is a lease-to-own 
arrangement (rather than a pure rental), and because the total rent 
paid under a lease-to-own arrangement would greatly exceed the purchase 
price of the Workstations within a short time, a rental rate of $20 per 
month per unit is an appropriate rate of compensation to the Plan, a 
total of $17,580. This rate is at least as favorable to the Plan as 
that obtainable in an arm's length transaction because it is based on 
the average of quotes received from various local office furniture 
rental companies with respect to the rental value of a new executive 
desk with a retail price of $500. The applicant represents that the 
three companies contacted provided the following rental rates for such 
an office desk, based on a one-year contract: Evans Furniture Rental 
($21 per month); Globe Furniture Rental ($19 per month); and Brook 
Furniture Rental ($21 per month). Moreover, a rental rate of $20 per 
month represents a 28 percent annual return on the initial cost per 
Workstation paid by the Plan. The rent is to be assessed from the time 
that each Workstation came into use through October 31, 1995, as 
follows:

----------------------------------------------------------------------------------------------------------------
               Period                     No. units             Mos.             Rent/mo.            Amount     
----------------------------------------------------------------------------------------------------------------
01/90-10/95.........................                  4                 70                $20          $5,600.00
05/90-10/95.........................                  6                 66                 20           7,920.00
12/92-10/95.........................                  3                 35                 20           2,100.00
09/94-10/95.........................                  7                 14                 20           1,960.00
                                                                                              ------------------
      Subtotal......................  .................  .................  .................          17,580.00
----------------------------------------------------------------------------------------------------------------

    The applicant represents that within 90 days of the publication in 
the Federal Register of the grant of this notice of proposed exemption, 
Aircon will file Form 5330 with the Service and pay all applicable 
additional excise taxes that are due by reason of the prohibited use 
transactions.
    6. Aircon will also reimburse the Plan $1,267.25 for losses and 
opportunity costs associated with the sale of three of the Workstations 
to an unrelated third party on September 30, 1993. This amount was 
calculated as follows. Aircon will restore to the Plan $410.31, which 
represents the difference between the three Workstations' acquisition 
cost ($2,570.31) and the net sales price ($2,160). In addition, Aircon 
will pay the Plan $788.44, which represents an assumed eight percent 
annual return on the acquisition cost of the three Workstations while 
in storage for the period from December 1989 to 

[[Page 3478]]
September 30, 1993. Finally, Aircon will pay the Plan $68.50, which 
represents an assumed eight percent annual return for the period from 
October 1993 to October 31, 1995 on the $410.31 loss the Plan incurred 
on the sale of the three Workstations.
    7. Aircon's total obligation to the Plan will thus be $70,617.59 
and was calculated as follows:

------------------------------------------------------------------------
                                                                        
------------------------------------------------------------------------
Acquisition cost of 45 Workstations........................   $38,564.65
Opp'ty costs on 45 Workstations in storage.................    13,205.69
Fair market rental value of 20 Workstations................    17,580.00
Loss and opp'ty costs on 3 Workstations sold...............     1,267.25
                                                            ------------
      Total................................................    70,617.59
------------------------------------------------------------------------

    The applicant represents that the proposed transaction is in the 
interests of the Plan because if the Plan is forced to attempt a sale 
of the Workstations on the open market, the Plan will receive 
substantially less than the amount the applicant is willing to pay. In 
addition, the sale will convert non-income producing, illiquid assets 
into liquid assets that could then be redirected into more productive 
investments.
    8. 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 any other expenses relating to the sale; 
(3) the sale will enhance the liquidity of the assets of the Plan; (4) 
the sale will enable Aircon to correct ongoing prohibited transactions; 
(5) the purchase price will be the greater of: (a) The fair market 
value of the Workstations as determined by a qualified, independent 
appraiser, or (b) the Plan's initial acquisition cost plus opportunity 
costs attributable to the Workstations while in storage; (6) Aircon 
will reimburse the Plan for the fair market rental value with respect 
to the prohibited use of 20 of the Workstations; (7) Aircon will 
reimburse the Plan for losses and opportunity costs associated with the 
sale of three of the Workstations; and (8) within 90 days of the 
publication in the Federal Register of the grant of this notice of 
proposed exemption, Aircon will file Form 5330 with the Service and pay 
all applicable additional excise taxes that are due by reason of the 
prohibited use transactions.

Tax Consequences of Transaction

    The Department of the Treasury has determined that if a transaction 
between a qualified employee benefit plan and its sponsoring employer 
(or affiliate thereof) results in the plan either paying less than or 
receiving more than fair market value, such excess may be considered to 
be a contribution by the sponsoring employer to the plan and therefore 
must be examined under applicable provisions of the Code, including 
sections 401(a)(4), 404 and 415.

Notice to Interested Persons

    Notice of the proposed exemption shall be given to all interested 
persons by personal delivery and by first-class mail within 15 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 45 days of the date of publication of this 
notice in the Federal Register.

FOR FURTHER INFORMATION CONTACT: Karin Weng 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 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 25th day of January, 1996.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits 
Administration, Department of Labor.
[FR Doc. 96-1778 Filed 1-30-96; 8:45 am]
BILLING CODE 4510-29-M