47050 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

OR970013 (Feb. 14, 1997)

OR970014 (Feb. 14, 1997)

OR970016 (Feb. 14, 1997)

South Dakota

SD970007 (Feb. 14, 1997)

SD970009 (Feb. 14, 1997)

SD970011 (Feb. 14, 1997)

SD970012 (Feb. 14, 1997)

SD970015 (Feb. 14, 1997)

SD970016 (Feb. 14, 1997)

SD970018 (Feb. 14, 1997)

SD970020 (Feb. 14, 1997)

SD970022 (Feb. 14, 1997)

SD970025 (Feb. 14, 1997)

SD970026 (Feb. 14, 1997)

SD970027 (Feb. 14, 1997)

SD970028 (Feb. 14, 1997)

SD970029 (Feb. 14, 1997)

SD970030 (Feb. 14, 1997)

SD970031 (Feb. 14, 1997)

SD970032 (Feb. 14, 1997)

SD970033 (Feb. 14, 1997)

SD970034 (Feb. 14, 1997)

SD970035 (Feb. 14, 1997)

SD970036 (Feb. 14, 1997)

SD970037 (Feb. 14, 1997)

SD970038 (Feb. 14, 1997)

SD970039 (Feb. 14, 1997)

SD970040 (Feb. 14, 1997)

SD970042 (Feb. 14, 1997)

SD970043 (Feb. 14, 1997)

Utah

UT970001 (Feb. 14, 1997)

UT970004 (Feb. 14, 1997)

UT970006 (Feb. 14, 1997)

UT970007 (Feb. 14, 1997)

UT970008 (Feb. 14, 1997)

UT970009 (Feb. 14, 1997)

UT970011 (Feb. 14, 1997)

UT970012 (Feb. 14, 1997)

UT970013 (Feb. 14, 1997)

UT970015 (Feb. 14, 1997)

UT970018 (Feb. 14, 1997)

UT970019 (Feb. 14, 1997)

UT970023 (Feb. 14, 1997)

UT970024 (Feb. 14, 1997)

UT970025 (Feb. 14, 1997)

UT970026 (Feb. 14, 1997)

UT970028 (Feb. 14, 1997)

UT970029 (Feb. 14, 1997)

UT970031 (Feb. 14, 1997)

UT970034 (Feb. 14, 1997)

UT970035 (Feb. 14, 1997)

UT970036 (Feb. 14, 1997)

Washington

WA970001 (Feb. 14, 1997)

WA970002 (Feb. 14, 1997)

Wyoming

WY970004 (Feb. 14, 1997)

WY970008 (Feb. 14, 1997)

WY970011 (Feb. 14, 1997)

WY970014 (Feb. 14, 1997)

WY970015 (Feb. 14, 1997)

WY970019 (Feb. 14, 1997)

WY970023 (Feb. 14, 1997)

Volume VII

Arizona

AZ970001 (Feb. 14, 1997)

AZ970002 (Feb. 14, 1997)

AZ970003 (Feb. 14, 1997)

AZ970004 (Feb. 14, 1997)

AZ970005 (Feb. 14, 1997)

AZ970006 (Feb. 14, 1997)

AZ970007 (Feb. 14, 1997)

AZ970010 (Feb. 14, 1997)

AZ970011 (Feb. 14, 1997)

AZ970013 (Feb. 14, 1997)

AZ970014 (Feb. 14, 1997)

AZ970016 (Feb. 14, 1997)

AZ970017 (Feb. 14, 1997)

AZ970018 (Feb. 14, 1997)

AZ970020 (Feb. 14, 1997)

California

CA970001 (Feb. 14, 1997)

CA970002 (Feb. 14, 1997)

CA970004 (Feb. 14, 1997)

CA970005 (Feb. 14, 1997)

CA970007 (Feb. 14, 1997)

CA970017 (Feb. 14, 1997)

CA970022 (Feb. 14, 1997)

CA970024 (Feb. 14, 1997)

CA970028 (Feb. 14, 1997)

CA970029 (Feb. 14, 1997)

CA970030 (Feb. 14, 1997)

CA970031 (Feb. 14, 1997)

CA970032 (Feb. 14, 1997)

CA970033 (Feb. 14, 1997)

CA970034 (Feb. 14, 1997)

CA970035 (Feb. 14, 1997)

CA970036 (Feb. 14, 1997)

CA970037 (Feb. 14, 1997)

CA970038 (Feb. 14, 1997)

CA970039 (Feb. 14, 1997)

CA970040 (Feb. 14, 1997)

CA970041 (Feb. 14, 1997)

CA970042 (Feb. 14, 1997)

CA970043 (Feb. 14, 1997)

CA970044 (Feb. 14, 1997)

CA970045 (Feb. 14, 1997)

CA970046 (Feb. 14, 1997)

CA970047 (Feb. 14, 1997)

CA970048 (Feb. 14, 1997)

Nevada

NV970005 (Feb. 14, 1997)

NV970006 (Feb. 14, 1997)

NV970007 (Feb. 14, 1997)

General Wage Determination

Publication

General wage determinations issued

under the Davis-Bacon and related Acts,

including those noted above, may be

found in the Government Printing Office

(GPO) document entitled ‘‘General Wage

Determinations Issued Under The DavisBacon and Related Acts’’. This

publication is available at each of the 50

Regional Government Depository

Libraries and many of the 1,400

Government Depository Libraries across

the country.

The general wage determinations

issued under the Davis-Bacon and

related Acts are available electronically

by subscription to the FedWorld

Bulletin Board System of the National

Technical Information Service (NTIS) of

the U.S. Department of Commerce at

(703) 487–4630.

Hard-copy subscriptions may be

purchased from: Superintendent of

Documents, U.S. Government Printing

Office, Washington, D.C. 20402, (202)

512–1800.

When ordering hard-copy

subscription(s), be sure to specify the

State(s) of interest, since subscriptions

may be ordered for any or all of the

seven separate volumes, arranged by

State. Subscriptions include an annual

edition (issued in January or February)

which includes all current general wage

determinations for the States covered by

each volume. Throughout the remainder

of the year, regular weekly updates are

distributed to subscribers.

Signed at Washington, D.C. this 29th day

of August 1997.

Margaret Washington,

Acting Chief, Branch of Construction Wage

Determinations.

[FR Doc. 97–23492 Filed 9–4–97; 8:45 am]

BILLING CODE 4510–27–M

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 97–44;

Exemption Application No. D–10346, et al.]

Grant of Individual Exemptions; 1st

Source Bank, et al.

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Grant of Individual Exemptions.

SUMMARY: This document contains

exemptions issued by the Department of

Labor (the Department) from certain of

the prohibited transaction restrictions of

the Employee Retirement Income

Security Act of 1974 (the Act) and/or

the Internal Revenue Code of 1986 (the

Code).

Notices were published in the Federal

Register of the pendency before the

Department of proposals to grant such

exemptions. The notices set forth a

summary of facts and representations

contained in each application for

exemption and referred interested

persons to the respective applications

for a complete statement of the facts and

representations. The applications have

been available for public inspection at

the Department in Washington, DC. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

being granted solely by the Department

because, effective December 31, 1978,

section 102 of Reorganization Plan No.
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47051

4 of 1978 (43 FR 47713, October 17,

1978) transferred the authority of the

Secretary of the Treasury to issue

exemptions of the type proposed to the

Secretary of Labor.

Statutory Findings

In accordance with section 408(a) of

the Act and/or section 4975(c)(2) of the

Code and the procedures set forth in 29

CFR part 2570, subpart B (55 FR 32836,

32847, August 10, 1990) and based upon

the entire record, the Department makes

the following findings:

(a) The exemptions are

administratively feasible

(b) They are in the interests of the

plans and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of the

plans.

1st Source Bank, Located in South

Bend, Indiana

[Prohibited Transaction Exemption 97–44;

Exemption Application No. D–10346]

Exemption

Section I—Exemption for In-Kind

Transfer of Assets

The restrictions of section 406(a) and

section 406(b) of the Act and the

sanctions resulting from the application

of section 4975 of the Code, by reason

of section 4975(c)(1) (A) through (F) of

the Code, shall not apply, effective

September 19, 1996, to the in-kind

transfer to separate series of an openend investment company registered

under the Investment Company Act of

1940 (the Funds) to which 1st Source

Bank or any of its affiliates (collectively,

the Bank) serves as investment advisor,

and may provide other services, of the

assets of various employee benefit plans

(the Plans) that are held in certain

collective investment funds (the CIFs)

maintained by the Bank or otherwise

held by the Bank as trustee, investment

manager, or in any other capacity as

fiduciary on behalf of the Plans, in

exchange for shares of such Funds;

provided that the following conditions

are met:

(A) A fiduciary (the Second

Fiduciary) who is acting on behalf of

each affected Plan and who is

independent of and unrelated to the

Bank, as defined in paragraph (G) of

Section III below, receives in advance of

the investment by the Plan in any of the

Funds a full and detailed written

disclosure of information concerning

such Fund, including, but not limited

to:

(1) A current prospectus for each

portfolio of each of the Funds in which

such Plan is considering investing,

(2) A statement describing the fees for

investment management, investment

advisory, or other similar services, any

fees for secondary services (Secondary

Services), as defined in paragraph (H) of

section III below, and all other fees to

be charged to or paid by the Plan and

by such Funds to the Bank, including

the nature and extent of any differential

between the rates of such fees,

(3) The reasons why the Bank may

consider such investment in the Funds

to be appropriate for the Plan,

(4) A statement describing whether

there are any limitations applicable to

the Bank with respect to which assets of

a Plan may be invested in the Funds,

and, if so, the nature of such limitations,

and

(5) Upon request of the Second

Fiduciary, a copy of this proposed

exemption and/or a copy of the final

exemption;

(B)(1) With respect to each of the

Funds in which a Plan invests, the Bank

will provide the Second Fiduciary of

such Plan:

(a) At least annually with a copy of an

updated prospectus of such Fund,

(b) Upon the request of such Second

Fiduciary, with a report or statement

(which may take the form of the most

recent financial report, the current

statement of additional information or

some other written statement) which

contains a description of all fees paid by

the Fund to the Bank;

(2) On the basis of the information

described above in paragraph (A) of this

section I, the Second Fiduciary

authorizes in writing the in-kind

transfer of assets of the Plans in

exchange for shares of the Funds, the

investment of such assets in

corresponding portfolios of the Funds,

and the fees received by the Bank in

connection with its services to the

Funds, such authorization by the

Second Fiduciary to be consistent with

the responsibilities, obligations, and

duties imposed on fiduciaries by Part 4

of Title I of the Act;

(C) No sales commissions or other fees

are paid by the Plans in connection with

the purchase of Fund shares through the

in-kind transfer of Plan assets in the

CIFs, and no redemption fees are paid

in connection with the sale of such

shares by the Plans to the Fund;

(D) All or a pro rata portion of the

assets of the Plans held in the CIFs or

all or a pro rata portion of the assets of

the Plans held by the Bank in any

capacities as fiduciary on behalf of such

Plans are transferred in-kind to the

Funds in exchange for shares of such

Funds;

(E) The Plans receive shares of the

Funds that have a total net asset value

that is equal to the value of the assets

of the Plans or the CIFs exchanged for

such shares on the date of transfer,

based on the current market value of the

assets of the Plans or the CIFs

(F) The current market value of the

assets of the Plans or the CIFs to be

transferred in-kind in exchange for

shares is determined in a single

valuation performed in the same

manner and at the close of business on

the same day, using independent

sources in accordance with the

procedures set forth in Rule 17a–7(b)

(Rule 17a–7), issued by the Securities

and Exchange Commission under the

Investment Company Act of 1940, and

the procedures established by the Funds

pursuant to Rule 17a–7 for the valuation

of such assets. Such procedures must

require that all securities for which a

current market price cannot be obtained

by reference to the last sale price for

transactions reported on a recognized

securities exchange or NASDAQ be

valued based on an average of the

highest current independent bid and

lowest current independent offer, as of

the close of business on the day

preceding the CIF or Plan transfers

determined on the basis of reasonable

inquiry from at least three sources that

are broker-dealers or pricing services

independent of the Bank;

(G) For all conversion transactions

that occur after the date of publication

in the Federal Register of a notice

proposing this exemption: Not later than

thirty (30) days after completion of each

in-kind transfer of assets of the Plans or

the CIFs in exchange for shares of the

Funds, the Bank sends by regular mail

to the Second Fiduciary, as defined in

paragraph (G) of Section III below, a

written confirmation which contains the

following information:

(1) The identity of each of the assets

that was valued for purposes of the

transaction in accordance with Rule

17a–7(b)(4) under the Investment

Company Act of 1940;

(2) The price of such asset involved in

the transaction; and

(3) The identity of each pricing

service or market maker consulted in

determining the value of such assets

(H) No later than ninety (90) days

after completion of each in-kind transfer

of assets of the Plans or the CIFs in

exchange for shares of the Funds, the

Bank sends by regular mail to the

Second Fiduciary, who is acting on

behalf of each affected Plan and who is

independent of and unrelated to the

Bank, as defined in paragraph (G) of

section III below, a written confirmation

that contains the following information:

(1) The number of CIF units held by

each affected Plan immediately before
47052 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

the transfer, the related per unit value,

and the aggregate dollar value of the

units transferred; and

(2) The number of shares in the Funds

that are held by each affected Plan

following the transfer, the related per

share net asset value, and the aggregate

dollar value of the shares received;

(I) The combined total of all fees

received by the Bank for the provision

of services to the Plans, and in

connection with the provision of

services to any of the Funds in which

the Plans may invest, are not in excess

of ‘‘reasonable compensation’’ within

the meaning of section 408(b)(2) of the

Act;

(J) The Bank does not receive any fees

payable pursuant to Rule 12b–1 under

the Investment Company Act of 1940 in

connection with the transactions

described herein;

(K) The Plans are not sponsored by

the Bank;

(L) All dealings between the Plans

and any of the Funds are on a basis no

less favorable to the Plans than dealings

between the Funds and other

shareholders holding the same class of

shares as the Plans; and

(M) The requirements of Prohibited

Transaction Class Exemption 77–4 (42

FR 18732, April 8, 1977) are met with

respect to all arrangements under which

investment advisory fees are paid to the

Bank directly or indirectly by Plans

with assets invested in the Funds.

Section II—General Conditions

(A) The Bank maintains for a period

of six years the records necessary to

enable the persons, as described in

paragraph (B) of this section II, to

determine whether the conditions of

this exemption have been met, except

that:

(1) A prohibited transaction will not

be considered to have occurred if, due

to circumstances beyond the control of

the Bank, the records are lost or

destroyed prior to the end of the six (6)

year period, and

(2) No party in interest, other than the

Bank, shall be subject to the civil

penalty that may be assessed under

section 503(i) of the Act, or to the taxes

imposed by section 4975(a) and (b) of

the Code, if the records are not

maintained, or are not available for

examination as required by paragraph

(B) of this section;

(B)(1) Except as provided in

paragraph (B)(2) of this section II and

notwithstanding any provisions of

subsection (a)(2) and (b) of section 504

of the Act, the records referred to in

paragraph (A) of section II above are

unconditionally available at their

customary location for examination

during normal business hours by—

(a) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service,

(b) Any fiduciary of each of the Plans

who has authority to acquire or dispose

of shares of any of the Funds owned by

such a Plan, or any duly authorized

employee or representative of such

fiduciary, and

(c) Any participant or beneficiary of

the Plans or duly authorized employee

or representative of such participant or

beneficiary;

(2) None of the persons described in

paragraphs (B)(1)(b) and (B)(1)(c) of this

section II shall be authorized to examine

trade secrets of the Bank or commercial

or financial information which is

privileged or confidential.

Section III—Definitions

For purposes of this exemption:

(A) The term Bank means 1st Source

Bank and any affiliate of the Bank, as

defined in paragraph (B) of this section

III.

(B) An affiliate of a person includes:

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with the person,

(2) Any officer, director, employee,

relative, or partner in any such person,

and

(3) Any corporation or partnership of

which such person is an officer,

director, partner or employee.

(C) The term control means the power

to exercise a controlling influence over

the management or policies of a person

other than an individual.

(D) The term Fund or Funds means

any diversified open-end investment

company or companies registered under

the Investment Company Act of 1940 for

which the Bank serves as investment

adviser, and may also provide custodial

or other services as approved by such

Funds.

(E) The term net asset value means

the amount for purposes of pricing all

purchases and sales calculated by

dividing the value of all securities,

determined by a method as set forth in

a Fund’s prospectus and statement of

additional information, and other assets

belonging to each of the portfolios in

such Fund, less the liabilities charged to

each portfolio, by the number of

outstanding shares.

(F) The term relative means a relative

as that term is defined in section 3(15)

of the Act (or a ‘‘member of the family’’

as that term is defined in section

4975(e)(6) of the Code), or a brother, a

sister, or a spouse of a brother or sister.

(G) The term Second Fiduciary means

a fiduciary of a plan who is independent

of and unrelated to the Bank. For

purposes of this exemption, the Second

Fiduciary will not be deemed to be

independent of and unrelated to the

Bank if:

(1) Such Second Fiduciary directly or

indirectly controls, is controlled by, or

is under common control with the Bank,

(2) Such Second Fiduciary, or any

officer, director, partner, employee, or

relative of such Second Fiduciary is an

officer, director, partner, or employee of

the Bank (or is a relative of such

person), or

(3) Such Second Fiduciary directly or

indirectly receives any compensation or

other consideration for his or her own

personal account in connection with

any transaction described in this

exemption.

If an officer, director, partner, or

employee of the Bank (or a relative of

such persons) is a director of such

Second Fiduciary, and if he or she

abstains from participation in (i) the

choice of the Plan’s investment

manager/advisor, (ii) the approval of

any purchase or sale by the Plan of

shares of the Funds, and (iii) the

approval of any change of fees charged

to or paid by the Plan, in connection

with any of the transactions described

in section I above, then paragraph (G)(2)

of section III above shall not apply.

(H) The term, Secondary Service

means a service, other than an

investment management, investment

advisory, or similar service, which is

provided by the Bank to the Funds,

including but not limited to custodial,

accounting, brokerage, administrative or

any other service.

EFFECTIVE DATE: This exemption is

effective as of September 19, 1996.

For a more complete statement of the

facts and representations supporting

this exemption, refer to the notice of

proposed exemption published on June

23, 1997 at 62 FR 33911.

FOR FURTHER INFORMATION CONTACT: Mr.

Ronald Willett of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

Ronald L. Chez (Mr. Chez) IRA and

Lawrence G. Kuntz (Mr. Kuntz) IRA

(Collectively; the IRAs) Located in

Chicago, Illinois and Wilmington,

Delaware, Respectively

[Prohibited Transaction Exemption 97–45;

Exemption Application Nos. D–10359 and D–

10360]

Exemption

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: (a) The sale by the IRAs of certain
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47053

closely held stock (the Stock) to Happy

Valley Corporation (the Corporation),

the issuer of the Stock and an unrelated

third party with respect to the IRAs; and

(b) the subsequent repurchase of the

Stock from the Corporation by Mr. Chez

and Mr. Kuntz, fiduciaries and

disqualified persons with respect to the

IRAs; provided that the following

conditions are met:

1. The sale and the repurchase of the

Stock will be one-time transactions for

cash;

2. The transactions described in (1)

above will take place on the same

business day;

3. Mr. Chez and Mr. Kuntz, in their

individual capacity, will purchase the

same shares of the Stock, as those that

were sold to the Corporation by the

IRAs. The stock transfer records of the

Corporation will evidence that this is

the case; and

4. The amount paid to the IRAs for the

Stock will be the fair market value of the

Stock determined at the time of the sale

by a qualified independent appraiser.

Mr. Chez and Mr. Kuntz will purchase

the Stock from the Corporation for the

same consideration as was received by

the IRAs for the sale of the Stock.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption refer to the notice of

proposed exemption published on July

11, 1997 at 62 FR 37309.

Written Comments

The Department received one written

comment on the proposed exemption

and no requests for a hearing. The

attorney for the applicant submitted the

written comment as follows:

1. Paragraph 1 at the top of the of the

third column on page 37309 and section

7 of the Summary of Facts and

Representations on page 37310 state that

‘‘the sale and repurchase of the Stock

will be one-time transactions for cash.’’

The applicant requests that the phrase

‘‘check or bank transfer’’ be added at the

end of that sentence to permit payment

by check or bank transfer.

The Department notes that the term

cash includes payment by ‘‘check or

bank transfer.’’ In this regard, the

Department wishes to assure that, as a

result of the transactions, the IRAs

receive payment by cash, as

distinguished from an in-kind transfer

of assets other than cash, and there will

be no extension of credit associated

with the transactions.

2. The second paragraph of section 3

of the Summary of Facts and

Representations states that ‘‘On August

1, 1995, Mr. Kuntz subscribed for Stock

shares in his own name. On December

20, 1995, at the request of Mr. Kuntz,

the Corporation issued a replacement

Stock certificate to Mr. Kuntz’s IRA.’’

The applicant clarified that although

the Stock was originally issued by the

Corporation to Mr. Kuntz, the intent of

Mr. Kuntz was always to make his

investment in the Corporation through

his IRA.

3. Section 5 of the Summary of the

Facts and Representations states that

‘‘By letter dated May 22, 1997, the

attorneys for the Corporation represent

that the transaction must be structured

through the Corporation’’ (emphasis

added).

In this regard, the applicant clarified

that it believed that the taint of having

a non-permitted shareholder of the

Corporation was most completely

removed where the parties were put

back in the position they would have

been in had the stock been issued to the

individuals concerned and not to the

IRAs.

After giving full consideration to the

record and the comment submitted to

the Department, the Department has

determined to grant the exemption.

FOR FURTHER INFORMATION CONTACT:

Ekaterina A. Uzlyan of the Department

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

number.)

John Hancock Mutual Life Insurance

Company (JH), Located in Boston,

Massachusetts,

[Prohibited Transaction Exemption 97–46;

Exemption Application Nos. D–10416–

10420]

Exemption

The restrictions of sections 406(a),

406 (b)(1) and (b)(2) of the Act and the

sanctions resulting from the application

of section 4975 of the Code, by reason

of section 4975(c)(1) (A) through (E) of

the Code, shall not apply to the: (1) The

acquisition by a separate account

maintained by JH (the FPGT Account)

from Willamette Industries, Inc. of

certain oil and gas rights (the Deer Creek

Oil and Gas Rights), subject to existing

leases (the Leases) of such rights to

Enerfin Resources Northwest Limited

Partnership (Enerfin), a party in interest

with respect to the plans invested in the

FPGT Account; and (2) the continuation

of the Leases following the acquisition

by the FPGT Account, provided the

following conditions are satisfied: (a) As

part of its decision to enter into the

separate account contract establishing

the FPGT Account, an independent

fiduciary determines that the

acquisition of the Deer Creek Oil and

Gas Rights is in the interest of the

participants of the plans investing in the

FPGT Account and that the price paid

for the rights is no more than the fair

market value of such rights; (b) an

independent fiduciary determines that

the continuation of the Leases is in the

best interests of the FPGT Account; and

(c) an independent fiduciary will

monitor the performance of Enerfin

under the Leases, as well as any

proposed modifications or renewals of

the Leases, and will take such steps as

are necessary to protect the interests of

the FPGT Account with respect to the

Leases.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption, refer to the notice of

proposed exemption published on June

23, 1997 at 62 FR 33915.

FOR FURTHER INFORMATION CONTACT: Gary

H. Lefkowitz of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

AmSouth Bank of Alabama (AmSouth),

Located in Birmingham, Alabama

[Prohibited Transaction Exemption 97–47;

Application No. D–10422]

Exemption

Section I—Transactions

The restrictions of section 406(a) and

406(b) of the Act and the sanctions

resulting from the application of section

4975 of the Code, by reason of section

4975(c)(1) (A) through (F) of the Code,

shall not apply to the receipt of fees by

AmSouth from the AmSouth Mutual

Funds, or any other diversified openend investment companies registered

under the Investment Company Act of

1940 (the Funds), for acting as an

investment adviser for the Funds as well

as for providing other services to the

Funds which are ‘‘Secondary Services’’

as defined in Section III(h), in

connection with the investment by the

Client Plans in shares of the Funds,

provided that the conditions set forth in

Section II below are met.

Section II—Conditions

(a) Each Client Plan satisfies either

(but not both) of the following:

(1) The Client Plan receives a cash

credit of such Plan’s proportionate share

of all fees charged to the Funds by

AmSouth for investment advisory

services, including any investment

advisory fees paid by AmSouth to third

party sub-advisers, no later than one

business day after the receipt of such

fees by AmSouth. The crediting of all

such fees to the Client Plans by

AmSouth is audited by an independent

accounting firm on at least an annual

basis to verify the proper crediting of

the fees to each Plan; or
47054 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

(2) The Client Plan does not pay any

Plan-level investment management fees,

investment advisory fees, or similar fees

to AmSouth with respect to any of the

assets of such Plan which are invested

in shares of any of the Funds. This

condition does not preclude the

payment of investment advisory or

similar fees by the Funds to AmSouth

under the terms of an investment

management agreement adopted in

accordance with section 15 of the

Investment Company Act of 1940 (the

1940 Act), nor does it preclude the

payment of fees for Secondary Services

to AmSouth pursuant to a duly adopted

agreement between AmSouth and the

Funds.

(b) The price paid or received by a

Client Plan for shares in a Fund is the

net asset value per share at the time of

the transaction, as defined in Section

III(e), and is the same price which

would have been paid or received for

the shares by any other investor at that

time.

(c) AmSouth, including any officer or

director of AmSouth, does not purchase

or sell shares of the Funds from or to

any Client Plan.

(d) No sales commissions are paid by

the Client Plans in connection with the

purchase or sale of shares of the Funds

and no redemption fees are paid in

connection with the sale of shares by

the Client Plans to the Funds.

(e) For each Client Plan, the combined

total of all fees received by AmSouth for

the provision of services to a Client

Plan, and in connection with the

provision of services to the Funds in

which the Client Plan may invest, are

not in excess of ‘‘reasonable

compensation’’ within the meaning of

section 408(b)(2) of the Act.

(f) AmSouth does not receive any fees

payable pursuant to Rule 12b–1 under

the 1940 Act in connection with the

transactions.

(g) The Client Plans are not employee

benefit plans sponsored or maintained

by AmSouth.

(h) The Second Fiduciary receives, in

advance of any initial investment by the

Client Plan in a Fund, full and detailed

written disclosure of information

concerning the Funds, including but not

limited to:

(1) A current prospectus for each

Fund in which a Client Plan is

considering investing;

(2) A statement describing the fees for

investment advisory or similar services,

any secondary services as defined in

Section III(h), and all other fees to be

charged to or paid by the Client Plan

and by the Funds, including the nature

and extent of any differential between

the rates of such fees;

(3) The reasons why AmSouth may

consider such investment to be

appropriate for the Client Plan

(4) A statement describing whether

there are any limitations applicable to

AmSouth with respect to which assets

of a Client Plan may be invested in the

Funds, and if so, the nature of such

limitations; and

(5) Upon request of the Second

Fiduciary, a copy of the proposed

exemption and/or a copy of the final

exemption as published in the Federal

Register.

(i) After consideration of the

information described above in

paragraph (h), the Second Fiduciary

authorizes in writing the investment of

assets of the Client Plan in each

particular Fund and the fees to be paid

by such Funds to AmSouth.

(j) All authorizations made by a

Second Fiduciary regarding investments

in a Fund and the fees paid to AmSouth

are subject to an annual reauthorization

wherein any such prior authorization

referred to in paragraph (i) shall be

terminable at will by the Client Plan,

without penalty to the Client Plan, upon

receipt by AmSouth of written notice of

termination. A form expressly providing

an election to terminate the

authorization described in paragraph (i)

above (the Termination Form) with

instructions on the use of the form must

be supplied to the Second Fiduciary no

less than annually; provided that the

Termination Form need not be supplied

to the Second Fiduciary pursuant to this

paragraph sooner than six months after

such Termination Form is supplied

pursuant to paragraph (l) below, except

to the extent required by such paragraph

in order to disclose an additional

service or fee increase. The instructions

for the Termination Form must include

the following information:

(1) The authorization is terminable at

will by the Client Plan, without penalty

to the Client Plan, upon receipt by

AmSouth of written notice from the

Second Fiduciary; and

(2) Failure to return the Termination

Form will result in continued

authorization of AmSouth to engage in

the transactions described in paragraph

(i) on behalf of the Client Plan.

(k) For each Client Plan using the fee

structure described in paragraph (a)(1)

above with respect to investments in a

particular Fund, the Second Fiduciary

of the Client Plan receives full written

disclosure in a Fund prospectus or

otherwise of any increases in the rates

of fees charged by AmSouth to the

Funds for investment advisory services,

prior to the effective date of such

increase.

(l)(1) For each Client Plan using the

fee structure described in paragraph

(a)(2) above with respect to investments

in a particular Fund, an increase in the

rate of fees paid by the Fund to

AmSouth regarding any investment

management services, investment

advisory services, or similar services

that AmSouth provides to the Fund over

an existing rate for such services that

had been authorized by a Second

Fiduciary in accordance with paragraph

(i) above; or

(2) For any Client Plan under this

exemption, an addition of a Secondary

Service (as defined in Section III(h)

below) provided by AmSouth to the

Fund for which a fee is charged, or an

increase in the rate of any fee paid by

the Funds to AmSouth for any

Secondary Service that results either

from an increase in the rate of such fee

or from the decrease in the number of

kind of services performed by AmSouth

for such fee over an existing rate for

such Secondary Service which had been

authorized by the Second Fiduciary of

a Client Plan in accordance with

paragraph (i) above.

AmSouth will, at least 30 days in

advance of the implementation of such

additional service for which a fee is

charged or fee increase, provide a

written notice (which may take the form

of a proxy statement, letter, or similar

communication that is separate from the

prospectus of the Fund and which

explains the nature and amount of the

additional service for which a fee is

charged or of the increase in fees) to the

Second Fiduciary of the Client Plan.

Such notice shall be accompanied by a

Termination Form with instructions as

described in paragraph (j) above.

(m) On an annual basis, AmSouth

provides the Second Fiduciary of a

Client Plan investing in the Funds with:

(1) A copy of the current prospectus

for the Funds in which the Client Plan

invests and, upon such fiduciary’s

request, a copy of the Statement of

Additional Information for such Funds

which contains a description of all fees

paid by the Funds to AmSouth;

(2) A copy of the annual financial

disclosure report prepared by AmSouth

which includes information about the

Fund portfolios as well as audit findings

of an independent auditor within 60

days of the preparation of the report;

and

(3) Oral or written responses to

inquiries of the Second Fiduciary as

they arise.

(n) With respect to each of the Funds

in which a Client Plan invests, in the

event such Fund places brokerage

transactions with AmSouth, AmSouth

will provide the Second Fiduciary of
Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices 47055

such Plan at least annually with a

statement specifying:

(1) The total, expressed in dollars, of

brokerage commissions of each Fund

that are paid to AmSouth by such Fund;

(2) The total, expressed in dollars, of

brokerage commissions of each Fund

that are paid by such Fund to brokerage

firms unrelated to AmSouth;

(3) The average brokerage

commissions per share, expressed as

cents per share, paid to AmSouth by

each Fund; and

(4) The average brokerage

commissions per share, expressed as

cents per share, paid by each Fund to

brokerage firms unrelated to AmSouth.

(o) All dealings between the Client

Plans and the Funds are on a basis no

less favorable to the Plans than dealings

with other shareholders of the Funds.

(p) AmSouth maintains for a period of

six years the records necessary to enable

the persons described below in

paragraph (q) to determine whether the

conditions of this exemption have been

met, except that (1) a prohibited

transaction will not be considered to

have occurred if, due to circumstances

beyond the control of AmSouth, the

records are lost or destroyed prior to the

end of the six-year period, and (2) no

party in interest other than AmSouth or

an affiliate shall be subject to the civil

penalty that may be assessed under

section 502(i) of the Act or to the taxes

imposed by section 4975 (a) and (b) of

the Code if the records are not

maintained or are not available for

examination as required by paragraph

(q) below.

(q)(1) Except as provided below in

paragraph (q)(2) and notwithstanding

any provisions of section 504(a)(2) of

the Act, the records referred to in

paragraph (p) are unconditionally

available at their customary location for

examination during normal business

hours by—

(i) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service,

(ii) Any fiduciary of the Client Plans

who has authority to acquire or dispose

of shares of the Funds owned by the

Client Plans, or any duly authorized

employee or representative of such

fiduciary, and

(iii) Any participant or beneficiary of

the Client Plans or duly authorized

employee or representative of such

participant or beneficiary;

(2) None of the persons described in

paragraph (q)(1) (ii) and (iii) shall be

authorized to examine trade secrets of

AmSouth, or commercial or financial

information which is privileged or

confidential.

Section III—Definitions

For purposes of this exemption:

(a) The term AmSouth means

AmSouth Bank of Alabama and any

affiliate thereof as defined below in

paragraph (b) of this section.

(b) An affiliate of a person includes:

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with the person;

(2) Any officer, director, employee,

relative, or partner in any such person;

and

(3) Any corporation or partnership of

which such person is an officer,

director, partner, or employee.

(c) The term control means the power

to exercise a controlling influence over

the management or policies of a person

other than an individual.

(d) The term Fund or Funds shall

include the AmSouth Mutual Funds or

any other diversified open-end

investment company or companies

registered under the 1940 Act for which

AmSouth serves as an investment

adviser and may also serve as a

custodian, dividend disbursing agent,

shareholder servicing agent, transfer

agent, Fund accountant, or provide

some other ‘‘Secondary Service’’ (as

defined below in paragraph (h) of this

Section) which has been approved by

such Funds.

(e) The term net asset value means the

amount for purposes of pricing all

purchases and sales calculated by

dividing the value of all securities,

determined by a method as set forth in

the Fund’s prospectus and statement of

additional information, and other assets

belonging to the Fund or portfolio of the

Fund, less the liabilities charged to each

such portfolio or Fund, by the number

of outstanding shares.

(f) The term relative means a relative

as that term is defined in section 3(15)

of the Act (or a ‘‘member of the family’’

as that term is defined in section

4975(e)(6) of the Code), or a brother, a

sister, or a spouse of a brother or a

sister.

(g) The term Second Fiduciary means

a fiduciary of a Client Plan who is

independent of and unrelated to

AmSouth. For purposes of this

exemption, the Second Fiduciary will

not be deemed to be independent of and

unrelated to AmSouth if:

(1) Such fiduciary directly or

indirectly controls, is controlled by, or

is under common control with

AmSouth;

(2) Such fiduciary, or any officer,

director, partner, employee, or relative

of the fiduciary is an officer, director,

partner or employee of AmSouth (or is

a relative of such persons); or

(3) Such fiduciary directly or

indirectly receives any compensation or

other consideration for his or her own

personal account in connection with

any transaction described in this

exemption.

If an officer, director, partner or

employee of AmSouth (or relative of

such persons), is a director of such

Second Fiduciary, and if he or she

abstains from participation in (i) the

choice of the Client Plan’s investment

adviser, (ii) the approval of any such

purchase or sale between the Client Plan

and the Funds, and (iii) the approval of

any change in fees charged to or paid by

the Client Plan in connection with any

of the transactions described in Sections

I and II above, then paragraph (g)(2) of

this section shall not apply.

(h) The term Secondary Service means

a service other than an investment

management, investment advisory, or

similar service, which is provided by

AmSouth to the Funds, including (but

not limited to) custodian services,

transfer and dividend disbursing agent

services, administrator or subadministrator services, accounting

services, shareholder servicing agent

services and brokerage services.

(i) The term Termination Form means

the form supplied to the Second

Fiduciary which expressly provides an

election to the Second Fiduciary to

terminate on behalf of a Client Plan the

authorization described in paragraph (i)

of Section II. Such Termination Form

may be used at will by the Second

Fiduciary to terminate an authorization

without penalty to the Client Plan and

to notify AmSouth in writing to effect a

termination by selling the shares of the

Funds held by the Client Plan

requesting such termination within one

business day following receipt by

AmSouth of the form; provided that if,

due to circumstances beyond the control

of AmSouth, the sale cannot be

executed within one business day,

AmSouth shall have one additional

business day to complete such sale.

EFFECTIVE DATE: This exemption is

effective as of April 16, 1997.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption refer to the notice of

proposed exemption published on June

23, 1997, at 62 FR 33917.

WRITTEN COMMENTS: The Department

received one written comment from an

officer of a Client Plan sponsor, which

supported the granting of an exemption

for the subject transactions. No other

written comments, and no requests for

a hearing, were received by the

Department. Accordingly, the
47056 Federal Register / Vol. 62, No. 172 / Friday, September 5, 1997 / Notices

1Pursuant to 29 CFR 2510.3–2(d), the IRA is not

within the jurisdiction of Title I of the Act.

However, there is jurisdiction under Title II of the

Act pursuant to section 4975 of the Code.

Department has determined to grant the

requested exemption as proposed.

FOR FURTHER INFORMATION CONTACT: Mr.

E.F. Williams of the Department,

telephone (202) 219–8194. (This is not

a toll-free number.)

Martin D. Ross Individual Retirement

Account (the IRA) Located in Boca

Raton, Florida

[Prohibited Transaction Exemption 97–48;

Exemption Application No. D–10451]

Exemption

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 March 4, 1996 sale by the IRA of

certain debentures (the Debentures) to

Mr. Martin D. Ross (Mr. Ross), a

disqualified person with respect to the

IRA, provided the following conditions

were satisfied: (1) The sale of the

Debentures by the IRA was a one-time

transaction for cash; (2) the IRA

received no less than the fair market

value of the Debentures as of the time

of the sale; and (3) as soon as Mr. Ross

became aware that the transaction was

prohibited, he reversed the transaction.1

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption, refer to the notice of

proposed exemption published on July

21, 1997 at 62 FR 39030.

EFFECTIVE DATE: This exemption is

effective March 4, 1996.

FOR FURTHER INFORMATION CONTACT: Gary

H. Lefkowitz of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

4975(c)(2) of the Code does not relieve

a fiduciary or other party in interest or

disqualified person from certain other

provisions to which the 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) These exemptions are

supplemental to and not in derogation

of, any other provisions of the Act and/

or the Code, including statutory or

administrative exemptions and

transactional rules. Furthermore, the

fact that a transaction is subject to an

administrative or statutory exemption is

not dispositive of whether the

transaction is in fact a prohibited

transaction; and

(3) The availability of these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application are true and complete and

accurately describe all material terms of

the transaction which is the subject of

the exemption. In the case of continuing

exemption transactions, if any of the

material facts or representations

described in the application change

after the exemption is granted, the

exemption will cease to apply as of the

date of such change. In the event of any

such change, application for a new

exemption may be made to the

Department.

Signed at Washington, DC, this 2nd day of

September, 1997.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 97–23641 Filed 9–4–97; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10393]

AEW Capital Management, L.P. (AEW);

Located in Boston, Massachusetts

AGENCY: Pension and Welfare Benefits

Administration.

ACTION: Notice of proposed exemption,

U.S. Department of Labor to replace

Prohibited Transaction Exemption (PTE)

93–40 Involving Aldrich, Eastman &

Waltch, L.P. and Aldrich, Eastman &

Waltch, Inc. (collectively, Old AEW).

SUMMARY: This document contains a

notice of pendency before the

Department of Labor (the Department) of

a proposed individual exemption

which, if granted, would replace PTE

93–40 (58 FR 34821, June 29, 1993). PTE

93–40 permitted the payment to Old

AEW of certain investment fees and

disposition fees relating to real estate

investments by employee benefit plans

for which Old AEW provided

investment management services, as

well as the investment by such plans in

a multiple client commingled account

managed by Old AEW, subject to certain

conditions. These transactions were

described in a notice of pendency that

was published in the Federal Register

on April 27, 1993 at 58 FR 25662. PTE

93–40, which was effective as of April

27, 1993, expired by operation of law,

as discussed below. The proposed

exemption would provide conditional

relief identical to that provided by PTE

93–40 for a newly-merged entity known

as ‘‘AEW Capital Management, L.P.’’

DATES: Written comments and/or

requests for a public hearing should be

received by the Department within 45

days of the date of publication of this

notice of proposed exemption in the

Federal Register. The proposed

exemption, if granted, will be effective

December 10, 1996.

ADDRESSES: All written comments and/

or requests for a public hearing

(preferably, three copies) should be sent

to the Office of Exemption

Determinations, Pension and Welfare

Benefits Administration, Room N–5649,

U.S. Department of Labor, 200

Constitution Avenue, NW, Washington,

DC 20210, Attention: Application No.

D–10393. The application pertaining to

the proposed exemption and the

comments received will be available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, U.S.

Department of Labor, Room N–5507,

200 Constitution Avenue, NW.,

Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Ms.

Karin Weng of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

SUPPLEMENTARY INFORMATION: Notice is

hereby given of the pendency before the

Department of a proposed exemption

that would replace PTE 93–40. PTE 93–

40 provided an exemption from certain

prohibited transaction restrictions of

section 406 of the Employee Retirement

Income Security Act of 1974 (the Act)

and from the sanctions resulting from

the application of section 4975 of the

Internal Revenue Code of 1986 (the

Code), as amended, by reason of section

4975(c)(1) of the Code. The proposed

exemption was requested in an

application filed by AEW pursuant to

section 408(a) of the Act and section

4975(c)(2) of the Code and in

accordance with the procedures (the

Procedures) set forth in 29 CFR part

2570, subpart B (55 FR 32836, August

10, 1990). Effective December 31, 1978,