Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24899

Secretary of Labor or Executive Director

of the Secretariat for appointment.

ROUTINE USE OF RECORDS MAINTAINED IN THE

SYSTEM, INCLUDING CATEGORIES OF USERS AND

THE PURPOSES OF SUCH USES:

None, except for those uses listed in

the General Prefatory Statement to this

document.

DISCLOSURES TO CONSUMER REPORTING

AGENCIES:

None.

POLICIES AND PRACTICES FOR STORING,

RETRIEVING, ACCESSING, RETAINING AND

DISPOSING OF RECORDS OF THE SYSTEM:

STORAGE:

Manual files and computer disk.

RETRIEVABILITY:

By Nominee’s name and by selected

skills categories.

SAFEGUARDS:

Locked storage equipment and

personnel screening.

RETENTION AND DISPOSAL:

a. Advisory committee members,

arbitrators, contractors, consultants, and

experts: Permanent transfer to National

Archives three (3) years after expiration

of term of service.

b. Nominees not selected: destroy files

when five (5) years old.

SYSTEM MANAGER(S) AND ADDRESS:

Secretary, U.S. National

Administrative Office, U.S. Department

of Labor, Bureau of International Labor

Affairs, Room C–4327, Washington, D.C.

20210.

NOTIFICATION PROCEDURES:

Individuals wishing to gain access to

non-exempt records should contact the

system manager at the system location

above.

RECORD ACCESS PROCEDURES:

A request for access shall be

addressed to the system manager at the

address listed above. Individuals must

furnish the following information for

their records to be located and

identified:

a. Name;

b. Approximate date for investigation;

c. Individuals requesting access must

also comply with the Privacy Act

regulations regarding verification of the

identity to records at 29 CFR 70a.4.

CONTESTING RECORDS PROCEDURES:

A petition for amendments shall be

addressed to the System Manager and

must meet the requirements of 29 CFR

70a7.

RECORD SOURCE CATEGORIES:

Nominations submitted by

individuals within the system, other

individuals and organizations and by

government agencies.

SYSTEMS EXEMPTED FROM CERTAIN PROVISIONS

OF THE ACT:

Not applicable.

II. Publication of an Amendment

DOL/OASAM–31, DOL Flexible

Workplace (Flexiplace) Pilot Programs

Evaluation and Files, is amended by

revising three categories, System

Location, Purpose, and System Manager

and Address, to read as follows:

DOL/OASAM–31

SYSTEM NAME:

DOL Flexible Workplace (Flexiplace)

Pilot Programs Evaluation and Files.

* * * * *

SYSTEM LOCATION:

DOL/OASAM/Office of Human

Resources, Office of Human Resource

Systems.

* * * * *

PURPOSE(S):

These records are used for statistical

research and to evaluate the DOL

Flexiplace Pilot Programs.

* * * * *

SYSTEM MANAGER(S) AND ADDRESS:

U.S. Department of Labor, Office of

the Assistant Secretary for

Administration and Management, Office

of Human Resources, Office of Human

Resource Systems, Room N–5470,

Frances Perkins Building, 200

Constitution Avenue, N.W.,

Washington, DC 20210.

Signed at Washington, DC, this 5th day of

May 1995.

Robert B. Reich,

Secretary of Labor.

[FR Doc. 95–11462 Filed 5–9–95; 8:45 am]

BILLING CODE 4510–23–M

Pension and Welfare Benefits

Administration

[Application No. D–09872, et al.]

Proposed Exemptions; T.J. Lambrecht

Construction, Inc. et al.

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Notice of Proposed Exemptions.

SUMMARY: This document contains

notices of pendency before the

Department of Labor (the Department) of

proposed exemptions from certain of the

prohibited transaction restriction of the

Employee Retirement Income Security

Act of 1974 (the Act) and/or the Internal

Revenue Code of 1986 (the Code).

Written Comments and Hearing

Requests

All interested persons are invited to

submit written comments or request for

a hearing on the pending exemptions,

unless otherwise stated in the Notice of

Proposed Exemption, within 45 days

from the date of publication of this

Federal Register Notice. Comments and

request for a hearing should state: (1)

The name, address, and telephone

number of the person making the

comment or request, and (2) the nature

of the person’s interest in the exemption

and the manner in which the person

would be adversely affected by the

exemption. A request for a hearing must

also state the issues to be addressed and

include a general description of the

evidence to be presented at the hearing.

A request for a hearing must also state

the issues to be addressed and include

a general description of the evidence to

be presented at the hearing.

ADDRESSES: All written comments and

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, N.W.,

Washington, D.C. 20210. Attention:

Application No. stated in each Notice of

Proposed Exemption. The applications

for exemption and the comments

received will be available for public

inspection in the Public Documents

Room of Pension and Welfare Benefits

Administration, U.S. Department of

Labor, Room N–5507, 200 Constitution

Avenue, N.W., Washington, D.C. 20210.

Notice to Interested Persons

Notice of the proposed exemptions

will be provided to all interested

persons in the manner agreed upon by

the applicant and the Department

within 15 days of the date of publication

in the Federal Register. Such notice

shall include a copy of the notice of

proposed exemption as published in the

Federal Register and shall inform

interested persons of their right to

comment and to request a hearing

(where appropriate).

SUPPLEMENTARY INFORMATION: The

proposed exemptions were requested in

applications filed pursuant to section

408(a) of the Act and/or section

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

accordance with procedures set forth in

29 CFR Part 2570, Subpart B (55 FR

32836, 32847, August 10, 1990).

Effective December 31, 1978, section

102 of Reorganization Plan No. 4 of

1978 (43 FR 47713, October 17, 1978)

transferred the authority of the Secretary

of the Treasury to issue exemptions of
24900 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

1The Department notes that the decisions to

acquire and hold the Interests are governed by the

fiduciary responsibility requirements of Part 4,

Subtitle B, Title I of the Act. In this regard, the

Department herein is not proposing relief for any

violations of Part 4 which may have arisen as a

result of the acquisition and holding of the Interests

by the Plans.

2The applicant represents that the fair market

value of the Partnership Interests will not be

discounted for lack of marketability, or for any

other reason.

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.

T.J. Lambrecht Construction, Inc.,

Employees’ Profit Sharing Plan and

Trust (the TJLC Plan); Brown &

Lambrecht Earthmovers, Inc.

Employees’ Profit Sharing Plan and

Trust (the B&L Plan; collectively

referred to as the Plans)

Located in Joliet, Illinois

[Application Nos. D–09872 and D–09873]

Proposed Exemption

The Department is considering

granting an exemption under the

authority of section 408(a) of the Act

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

in accordance with the procedures set

forth in 29 CFR Part 2570, Subpart B (55

FR 32836, 32847, August 10, 1990). If

the exemption is granted, the

restrictions of sections 406(a), 406(b)(1)

and (b)(2) of the Act and the sanctions

resulting from the application of section

4975 of the Code, by reason of section

4975(c)(1)(A) through (E) of the Code

shall not apply to the proposed cash

sale (the Sale) by each of the Plans of

a 12.5% partnership interest in Prime

Industries (the Partnership Interest) to

Mr. Thomas J. Lambrecht (Mr.

Lambrecht), a party in interest with

respect to the Plans; provided the

following conditions are satisfied: (1)

The Sale is a one-time transaction for

cash; (2) the sale price for each

Partnership Interest will be the higher of

(a) the fair market value of the

Partnership Interest as determined by a

qualified independent appraiser at the

time of the Sale or, (b) each Plan’s total

investment in the Partnership Interest

($300,000); and (3) the Plans do not

suffer any loss nor incur any expenses

in connection with the transaction.

Summary of Facts and Representations

1. The Plans are defined contribution

profit sharing plans. As of December 31,

1994, the TJLC Plan had 48 participants

and $1,472,427.00 in assets. As of

September 30, 1994, the B&L Plan had

29 participants and $6,253,423.00 in

assets. T.J. Lambrecht Construction, Inc.

and Brown & Lambrecht Earthmovers,

Inc. (the Employers) are Illinois

subchapter S corporations in the

business of earthmoving and road

construction. Mr. Lambrecht is the sole

trustee of the TJLC Plan and co-trustee

(with Mr. Paul Lambrecht) of the B&L

Plan. Mr. Lambrecht is also the sole

shareholder and sole director of both

Employers.

2. The Plans purchased the

Partnership Interests in Prime Industries

from Lennon Wallpaper Company in

1991. The total purchase price of each

Partnership Interest was $258,750.00.

The applicant represents that both

Lennon Wallpaper Company and Prime

Industries are unrelated to the

Employers. Prime Industries’ only asset

is a 300,000 square foot steel building

on 15.6 acres located in Shorewood,

Illinois (the Partnership Property). From

1991 through September 30, 1994, each

Plan advanced additional funds in the

amount of $125,000.00 for

improvements to the Partnership

Property. The applicant represents that,

during this same time period, the

Partnership Property generated income

for each Plan in the amount of

$83,750.00. The applicant also

represents that the Partnership Property

continues to generate income for the

Plans in the form of rental payments

from tenants who are not related to the

Plans or the Employers. In addition, it

is represented that the Partnership

Interest currently represents 25.47% of

the TJLC Plan’s assets and 6% of the

B&L Plan’s assets.1

3. The applicant represents that,

because the Partnership Interests are

minority interests and because the

interests are not publicly traded, there is

not an established market for the

Partnership Interests. Furthermore, it is

represented that the Partnership

Property is the only asset owned by the

partnership. The applicant represents

that, for the foregoing reasons, the

interests are valued according to the

proportionate value of the underlying

property. In this regard, the applicant

submitted a letter prepared by Charles

Sharp, a general partner of the

partnership, in which Mr. Sharp

explained that the sole value of the

Partnership Interests is the value of the

Partnership Property itself and that the

Partnership Interests have no value in

and of themselves.

4. The applicant represents that

Brown & Lambrecht Earthmovers, Inc.

was merged into T.J. Lambrecht

Construction, Inc. on January 1, 1995.

As a result, the B&L Plan is in the

process of being terminated. In addition,

the TJLC Plan is being terminated and

T.J. Lambrecht Construction, Inc. is in

the process of establishing a new profit

sharing plan which will allow for

participant-directed investments. The

applicant requests an exemption to

permit the Sale by the Plans of the

Partnership Interests to Mr. Lambrecht.

Each Plan will receive the greater of (1)

the fair market value of the Partnership

Interest as determined by an

independent appraiser at the time of the

Sale, or (2) the Plan’s total investment

in the Partnership Interest. The

applicant represents that this Sale is in

the best interests of Plan participants

and beneficiaries because it will allow

the Plans to convert the Partnership

Interests into cash, creating the liquidity

needed for distributions to participants

who, at their election, have the right to

roll over their Plan benefits into the new

profit sharing plan. It is also represented

that the Sale will facilitate

implementation of participant-directed

investment of accounts in the new profit

sharing plan.

5. The Property was appraised by Mr.

Joseph Batis, MAI, a State of Illinois

Certified General Real Estate Appraiser

who is independent of the Plans, the

Employers, and Mr. Lambrecht. In

analyzing the value of the Partnership

Property, Mr. Batis stated that he relied

mainly on the direct sales comparison

approach but also considered the cost

approach and the income approach to

estimate the value of the property. The

appraised value of the Partnership

Property as of September 30, 1994 was

$4,000,000.00. The ratable value of each

Plan’s 12.5% interest in the Partnership

Property as of that date was

$500,000.00.2

6. The applicant represents that the

Plans would incur no expenses or

commissions with respect to the Sale.

The applicant also represents that the

proposed transaction is administratively

feasible and protective of the Plans’

participants and beneficiaries. Finally,

the applicant represents that the

proposed transaction will provide the

Plans with the liquidity needed to fund

participant-directed investments and

cash distributions to Plan participants.

7. In summary, the applicant

represents that the transaction satisfies

the statutory criteria of section 408(a) of

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

Code because: (1) The Sale will be a

one-time transaction for cash; (2) no
Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24901

3For 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.

4The Department notes that the decisions of the

fiduciary, acting on behalf of the Plan, in

connection with the acquisition and holding of the

Property are governed by the fiduciary

responsibility requirements of part 4, subpart B, of

Title I. The Department expresses no opinion

herein, as to whether any of the relevant provisions

of part 4, subpart B, of title I have been violated

regarding the Plan’s investment in and subsequent

holding of the Property, and no exemption from

such provisions is proposed herein.

commissions or fees will be paid by the

Plans as a result of the Sale; (3) the Sale

will enable the Plans to liquidate their

assets and will facilitate implementation

of participant-directed investments; and

(4) the Sale price will be the higher of:

(a) The fair market value of the

Partnership Interest on the date of the

Sale, or (b) the Plan’s total investment

in the Partnership Interest.

FOR FURTHER INFORMATION CONTACT:

Virginia J. Miller of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

Pediatric Dentistry Ltd. Profit Sharing

Trust (the Plan),

Located in Fargo, North Dakota

[Exemption Application No. D–09903]

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 3 shall not apply to the

proposed cash sale of a parcel of

improved real property (the Property) by

the Plan to William Hunter, M.D. (Dr.

Hunter), a party in interest with respect

to the Plan; provided that: (1) The sale

will be a one-time transaction for cash;

(2) as a result of the sale, the Plan will

receive in cash the greater of $79,000 or

the fair market value of the Property, as

determined by an independent,

qualified appraiser, as of the date of the

sale; (3) the Plan will pay no

commissions, fees, or other expenses as

a result of the transaction; and (4) the

terms of the sale will be no less

favorable to the Plan than those it would

have received in similar circumstances

when negotiated at arm’s length with

unrelated third parties.

Summary of Facts and Representations

1. The Plan is a defined contribution

profit sharing plan sponsored by

Pediatric Dentistry Ltd. (the Employer).

As of November 29, 1994, there were

seven (7) participants. As of November

17, 1994, the assets of the Plan totaled

approximately $1,295,866.

Approximately seven percent (7%) of

the Plan’s assets are invested in the

Property. Northern Capital Trust

Company is the trustee (the Trustee) of

the Plan. Dr. Hunter is the administrator

of the Plan.

2. The Employer which sponsors the

Plan is a professional service

corporation providing dental services.

The Employer’s business office is

located in a residential area

immediately adjacent to the Property.

Dr. Hunter is the sole shareholder of the

Employer.

3. In 1989, the Property was

purchased at a price of $67,500 from

third parties unrelated to Dr. Hunter or

to any other beneficiary of the Plan. It

is represented that one of the factors

contributing to the purchase was the

view that eventually the Property would

be needed for the Employer’s business

and would at that time satisfy the

definition of ‘‘qualifying employer real

property,’’ as set forth in section

407(d)(4) of the Act.4

However, it is represented that since

the acquisition by the Plan, the Property

has been rented to various parties

unrelated to Dr. Hunter or to any other

beneficiary of the Plan. It is represented

that the annual average return on the

investment to the Plan since the

Property was acquired in 1989, has been

4.31%.

4. The Property is described as a onestory detached single family residence

on a corner lot in a newer diversified

neighborhood in Fargo, North Dakota.

The Property consists of an 8,447 square

foot level site improved by a structure

that contains a 1,253 square foot

finished living area above grade and a

basement of the same size below grade.

The Property is located at 1206 15

Avenue South and is situated on the lot

adjacent to the Employer’s business

office.

5. This exemption is requested to

permit the Plan to sell the Property to

Dr. Hunter for the greater of $79,000 or

the appraised fair market value of the

Property on the date of sale. Dr. Hunter

represents that beginning in April, 1992,

the Property was listed with a local

realtor as part of the multiple listing

service. The Property was initially listed

at a price of $71,950 which it is

represented reflected the fair market

value of the Property at that time based

on an appraisal. Subsequently, the price

of the Property was reduced to $68,950.

Though the Property was shown to

prospective buyers by several realtors

who participate in the multiple listing

service, it is represented that the Plan

did not receive any offers from those

buyers to purchase the Property.

It is represented that the proposed

transaction is feasible in that it involves

a one-time sale of the Property for cash.

In addition, the proposed transaction is

in the interest of the Plan in that the

price offered by Dr. Hunter could not be

obtained otherwise. In addition, the

Plan will be able to sell the Property

without incurring any further expense

of searching for a buyer and without

paying brokerage commissions, fees, or

other expenses as a result of the transfer.

The Trustee is desirous of selling the

Property, which is illiquid, in order to

facilitate the establishment of

participant directed individual accounts

in the Plan. It is anticipated that once

the Property is sold the cash proceeds

would be invested in marketable

securities.

In the opinion of the Trustee, the

proposed transaction is protective of the

participants and beneficiaries of the

Plan in that the sales price would be

based on the fair market value of the

Property as determined by an

independent, qualified appraiser, as of

the date of the sale. Further, the Trustee

will review the transaction and make

the final determination regarding the

sale of the Property to Dr. Hunter. In

this regard, the Trustee represents that

in its fiduciary capacity with respect to

the Plan, it will review the

contemplated transaction so as to insure

that the interests of the participants of

the Plan are protected.

6. An appraisal of the Property was

prepared by Jerry Link (Mr. Link), of

Appraisal Services, Inc., in Fargo, North

Dakota. It is represented that Mr. Link

is qualified in that he is licensed by the

State of North Dakota as an appraiser. It

is further represented that he is

independent in that he has no present

or prospective interest in the Property

and has no personal interest or bias with

respect to the participants in the

proposed transaction. Mr. Link

represents that neither his employment

nor his compensation was conditioned

upon the appraised value of the

Property, nor was he required to report

a predetermined value or base the

appraisal on a requested minimum

value for the Property. After physically

inspecting the Property, and reconciling

values for the Property established by

the cost approach, income approach,

and sales comparison approach, Mr.

Link determined that the fair market
24902 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

5Since Robert J. Murphy, Jr. and his wife, Gail F.

Murphy, are the only participants in the Plan, there

is no jurisdiction under Title I of the Act pursuant

to 29 CFR 2510.3–3(b). However, there is

jurisdiction under Title II of the Act pursuant to

section 4975 of the Code.

value of the Property was $79,000, as of

January 13, 1994.

Because the Property is located on the

lot adjacent to the Employer’s business

office, Mr. Link was asked to determine

whether there would be any premium

value associated with the Property. In

this regard, Mr. Link indicated that the

Property is a single family dwelling

located in an R–l, One/Two Family

Dwelling District. It is represented that

this zoning category does not allow

commercial development without a

special use permit. According to Mr.

Link the highest and best use of the

Property is single family. Based on this

highest and best use, it is the opinion of

Mr. Link that the Property’s location

next to the Employer’s business office

does not result in a premium associated

with the value of the Property to Dr.

Hunter.

7. In summary, the applicant

represents that the proposed transaction

meets the statutory criteria for an

exemption under section 408(a) of the

Act because:

(a) the sale of the Property will be a

one-time transaction for cash; (b) as a

result of the sale, the Plan will receive

in cash the greater of $79,000 or the fair

market value of the Property, as

determined by an independent,

qualified appraiser, as of the date of the

sale; (c) the Plan will pay no

commissions, fees, or other expenses as

a result of the transaction; (d) the terms

of the sale will be no less favorable to

the Plan than those it would have

received in similar circumstances when

negotiated at arm’s length with

unrelated third parties; (e) the Plan will

be able to invest the proceeds from the

sale of the Property in marketable

securities; (f) the Plan will be able to

dispose of the Property which is

illiquid; and (g) the sale of the Property

will facilitate the establishment of

participant directed individual accounts

in the Plan.

FOR FURTHER INFORMATION CONTACT:

Angelena C. Le Blanc of the Department,

telephone (202) 219–8883 (This is not a

toll-free number.)

Bob Murphy, Inc. Profit Sharing Plan

(the Plan)

Located in Boynton Beach, Florida

[Exemption Application No. D–09949]

Proposed Exemption

The Department is considering

granting an exemption under the

authority of 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 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 (the Sale) of certain

works of art (the Art Work) by the Plan

to Robert J. Murphy, Jr., a disqualified

person with respect to the Plan.5

This proposed exemption is

conditioned upon the following

requirements: (1) all terms and

conditions of the Sale are at least as

favorable to the Plan as those obtainable

in an arm’s length transaction between

unrelated parties; (2) the Sale is a onetime cash transaction; (3) the Plan is not

required to pay any commissions, costs

or other expenses in connection with

the Sale; and (4) the Plan receives a

sales price equal to the fair market value

of the Art Work on the date of the Sale

as determined by an independent,

qualified appraiser.

Summary of Facts and Representations

1. The Plan is a profit sharing Plan

whose only participants are Mr. Murphy

and his wife, Gail F. Murphy. As of June

30, 1994, the Plan had total assets of

$572,050. Mr. and Mrs. Murphy serve as

the trustees of the Plan (the Trustees)

and have sole investment discretion

with respect to its assets.

2. The Plan has approximately 17

percent of its assets in the Art Work,

which consists of ten Leroy Nieman

serigraphs. The Plan received the Art

Work as a rollover from the Bob

Murphy, Inc. Defined Benefit Pension

Plan (the DB Plan), which the trustees

terminated on November 15, 1987. The

DB Plan purchased the Art Work

between 1980 and 1987 from two

dealers—Hammers Gallery in New York

and Hanson Gallery in New Orleans.

Mr. Murphy represents that he is

independent of, and unrelated to, both

Hammers Gallery and Hanson Gallery.

3. Following its acquisition, the Art

Work has been in the possession of Mr.

Murphy at his residence at Delray

Beach, Florida and his office at the

Delray Dunes Country Club in Boynton

Beach, Florida. In an examination report

dated January 6, 1993, the Internal

Revenue Service (the Service)

determined that Mr. and Mrs. Murphy

had engaged in prohibited transactions

by reason of their use of the Art Work

for the years 1989, 1990 and 1991. Mr.

Murphy represents that on August 22,

1994 he filed Forms 5330 with the

Service and paid the applicable excise

taxes associated with the past

prohibited transaction in the amount of

$9,195.

4. Because the Art Work is not an

income producing asset for the Plan and

certain pieces of the Art Work have

declined in value, Mr. Murphy proposes

to purchase the Art Work from the Plan

for a cash amount equal to its fair

market value on the date of the Sale.

Accordingly, Mr. Murphy requests an

administrative exemption from the

Department to permit his purchase of

the Art Work from the Plan under the

terms and conditions described herein.

5. Celeste B. Stover, the Assistant

Director for Hanson Gallery in New

Orleans, Louisiana, valued the Art Work

as of August 10, 1994. In her capacity

as Assistant Director, Ms. Stover has

actively represented the work of Leroy

Nieman since 1983. Ms. Stover

represents that while Mr. Murphy has

been a client of the Hanson Gallery

since 1984, both she and Hanson

Gallery are unrelated to, and

independent of, Mr. and Mrs. Murphy.

Ms. Stover states that she derives less

than 1 percent of her annual income

from Mr. Murphy.

In determining the fair market value

of the Art Work, Ms. Stover represents

that she looked to the recommended

retail values of Leroy Nieman serigraphs

provided yearly to Hanson Gallery by

Knoedler and Co., the publishers of

Leroy Nieman’s prints. The

recommended values are based upon

current demand for the specific image as

well as availability of the image and

previous bids within the last year. Ms.

Stover’s valuations of the Art Work are

as follows:

Work

Fair

Market

Value

Rush Street Bar ................................ $6,500

Elephant Nocturne ............................ 10,000

New York Stock Exchange ............... 15,000

P.J. Clarkes ...................................... 15,000

Buena Vista Bar ............................... 8,000

Harry’s Wall Street Bar ..................... 7,000

Bistro Gardens .................................. 6,800

Polo Lounge ..................................... 11,000

Bar at 21 ........................................... 7,000

Fix McRory’s Whiskey Bar ............... 12,000

6. In summary, it is represented that

the proposed transactions will satisfy

the statutory criteria for an exemption

under section 4975(c)(2) of the Code

because: (a) All terms and conditions of

the Sale will be at least as favorable to

the Plan as those obtainable in an arm’s

length transaction between unrelated

parties; (b) the Sale will be a one-time

cash transaction; (c) the Plan will not be

required to pay any commissions, costs
Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices 24903

6The Department notes that the decisions to

acquire and hold the GIC are governed by the

fiduciary responsibility requirements of Part 4,

Subtitle B, Title I of the Act. In this proposed

exemption, the Department is not proposing relief

for any violations of Part 4 which may have arisen

as a result of the acquisition and holding of the GIC.

or other expenses in connection with

the Sale; (d) the Plan will receive a sales

price equal to the fair market value of

the Art Work based on a determination

by an independent, qualified appraiser.

Notice to Interested Persons

Since Mr. and Mrs. Murphy are the

only participants in the Plan, it has been

determined that there is no need to

distribute the notice of proposed

exemption to interested persons.

Comments are due within thirty days

after publication of this notice in the

Federal Register.

FOR FURTHER INFORMATION CONTACT:

Kathryn Parr of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

The Brown Group, Inc., 401(k) Savings

Plan (the Plan),

Located in St. Louis, Missouri

[Application No. D–09951]

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 C.F.R. Part 2570, Subpart B

(55 FR 32836, August 10, 1990). If the

exemption is granted the restrictions of

sections 406(a), 406(b)(1) and (b)(2) of

the Act and the sanctions resulting from

the application of section 4975 of the

Code, by reason of section 4975(c)(1)(A)

through (E) of the Code, shall not apply

to the proposed guarantee (the

Guarantee) by The Brown Group, Inc.

(the Employer), the sponsor of the Plan,

of amounts due the Plan with respect to

a guaranteed investment contract issued

by Confederation Life (Confederation

Life), including the Employer’s potential

cash advances to the Plan (the

Advances) pursuant to the Guarantee

and the potential repayment of the

Advances (the Repayments); provided

that the following conditions are

satisfied:

(A) No interest and/or expenses are

paid by the Plan;

(B) The Advances are made in lieu of

amounts due the Plan under the terms

of the GIC;

(C) The Repayments are restricted to

cash proceeds actually received by the

Plan from Confederation Life or any

other entity making payment with

respect to Confederation Life’s

obligations under the terms of the GIC,

or from the sale or transfer of the GIC

to unrelated third parties (the GIC

Proceeds), and no other Plan assets are

used to make the Repayments; and

(D) The Repayments will be waived to

the extent the Advances exceed the GIC

Proceeds.

Summary of Facts and Representations

1. The Plan is a defined contribution

plan which includes a cash or deferred

arrangement under section 401(k) of the

Code, and which provides for employer

matching contributions and additional

employer discretionary contributions.

As of December 31, 1994 the Plan had

approximately 2,500 participants and

total assets of approximately

$44,937,281. The trustee of the Plan is

Boatmen’s Trust Company (the Trustee),

located in St. Louis, Missouri. The

Employer, a New York publicly-traded

corporation, is engaged in the

manufacture, import and retail sales of

shoes, with its corporate headquarters in

St. Louis, Missouri.

2. The Plan provides for individual

participant accounts (the Accounts) and

for participant-directed investment of

each Account. Plan participants direct

investment of their Accounts among

four investment options (the Funds),

and may reallocate their Account

balances among the Funds on a periodic

basis. The Funds include a guaranteed

interest fund (the G.I. Fund), which

invests in guaranteed investment

contracts issued by insurance

companies.

3. Among the assets of the G.I. Fund

is the GIC, a guaranteed investment

contracts issued to the Plan in 1992 by

Confederation Life Insurance Company

(Confederation Life), a Canadian

insurance company doing business in

the United States. The GIC is a singledeposit, benefit-responsive contract,

principal amount $1,000,000, earning

interest at a guaranteed annual rate of

7.15% (the Contract Rate). The GIC’s

terms enable the G.I. Fund to make

monthly withdrawals (the Withdrawals)

to effect, in accordance with the terms

of the Plan, benefit distributions, inservice withdrawals, participant

Advances, and participant-directed

transfers of Account balances to other

Funds offered by the Plan (the

Withdrawal Events). Interest at the

Contract Rate is credited daily,

calculated on the balance remaining

deposited under the GIC. If interest

earned under the GIC exceeds the

amount withdrawn, the difference is

paid annually (the Interest Payments) on

December 31. All Interest Payments

were made when due through December

31, 1993. The terms of the GIC also

require Confederation Life to make a

final payment to the Plan on December

12, 1996 (the Maturity Payment) in the

amount of the GIC’s total principal

deposits plus interest earnings at the

Contract Rate less previous withdrawals

(Accumulated Book Value) as of such

date. As of July 31, 1994, the GIC had

an Accumulated Book Value of

$1,034,447.59.

4. Commencing August 1, 1994 (the

Receivership Date), insurance regulatory

authorities in Canada and the state of

Michigan instituted proceedings to

place Confederation Life in receivership

(the Receivership).6 Consequently,

Confederation Life’s assets and

operations are frozen, and payments on

all its guaranteed investment contracts,

including the GIC held by the Plan,

were suspended effective as of the

Receivership Date. Since the

commencement of the Receivership, the

Plan has been unable to make

withdrawals from the GIC to fund

Withdrawal Events with respect to

Account balances invested in the GIC,

and the Employer represents that it is

uncertain whether, or to what extent,

the Plan will receive any GIC payments

or withdrawals to enable funding of

future Withdrawal Events. Additionally,

the Employer represents that it is

uncertain whether and to what extent

the Maturity Payment under the GIC

will be paid. The Employer desires to

alleviate the G.I. Fund of risks

associated with investments in the GIC,

and to enable the G.I. Fund to fully fund

the Withdrawal Events with respect to

Account balances invested in the G.I.

Fund. Accordingly, the Employer

proposes to guarantee (the Guarantee)

that the Plan will recover all amounts

due under the GIC, and in its discretion

to make advances to the Plan (the

Advances) pursuant to the Guarantee.

The Employer requests an exemption for

the Guarantee and the Advances, as well

as the potential repayment of the

Advances (the Repayments), under the

terms and conditions described herein.

5. The Employer and the Trustee will

execute a written agreement embodying

all the terms and conditions of the

Guarantee, the Advances and the

Repayments (the Agreement).

The Guarantee: The Guarantee is the

Employer’s undertaking to insure that in

the eventual resolution of the

Receivership, the Plan recovers a total

amount with respect to the GIC which

is no less than its investment in the GIC

as of the Receivership Date, plus interest

thereafter at the Contract Rate.

Accordingly, the amount which the

Employer guarantees under the
24904 Federal Register / Vol. 60, No. 90 / Wednesday, May 10, 1995 / Notices

Agreement (the Guaranteed Amount) is

the Receivership Date Accumulated

Book Value of the GIC, which is

$1,034,447.59, less the sum of GIC

Proceeds (cash proceeds actually

received by the Plan from Confederation

Life or any other entity making payment

with respect to Confederation Life’s

obligations under the terms of the GIC,

or from the sale or transfer of the GIC

to unrelated third parties) and Advances

under the Agreement as described

below, plus interest on the net of the

foregoing amount after the Receivership

date at the Contract Rate of 7.15 percent.

The Advances: On the monthly

occasions when the Employer, as Plan

administrator, would otherwise request

a withdrawal from the GIC to fund

Withdrawal Events with respect to

Account balances invested in the GIC,

the Employer will instead notify the

Trustee of the requested withdrawal

amount. The Trustee will then

determine whether it can satisfy the

withdrawal request by using the assets

in the G.I. Fund other than the GIC. If

the Trustee determines that the funds

available from the G.I. Fund are

insufficient to honor the withdrawal

request, the Trustee will determine the

amount of additional funds necessary to

honor the withdrawal request, and the

Employer will make an Advance in that

amount to the Plan. Valuation of the

Account balances invested in the GIC

for purposes of the Advances will be

based on the Guaranteed Amount as

described above.

Final Advance: The Agreement

provides for a final Advance after the

completion of the Receivership. After

the Trustee has determined that the Plan

will not receive any further proceeds

from Confederation Life or its

successors with respect to the GIC, the

Employer shall make a final Advance to

the Plan in the amount necessary to

enable the Plan’s recovery of the

Guaranteed Amount. In the event the

Receivership extends beyond the year

2000, the Employer will make the final

Advance on the first business day in the

year 2001 in the amount required on

such date to enable the Plan to recover

the Guaranteed Amount.

The Repayments: The Agreement

provides that the Repayments of the

Advances are restricted to the principal

amounts of the Advances, and the Plan

will pay no interest and will incur no

expenses with respect to the Advances.

The Repayments may be made only

from the GIC Proceeds received by the

Plan. No other Plan assets will be

available for the Repayments. If the GIC

Proceeds are not sufficient to repay fully

the Advances, the Agreement provides

that the Employer will have no recourse

against the Plan, or against any

participants or beneficiaries of the Plan,

for the unpaid amount. To the extent the

Plan receives GIC Proceeds in excess of

the total amount of the Advances, such

additional amounts will be retained by

the Plan and allocated among the

Accounts invested in the G.I. Fund.

6. In summary, the applicant

represents that the proposed transaction

satisfies the criteria of section 408(a) of

the Act for the following reasons: (1)

The Advances enable the Plan to resume

the full funding of the Withdrawal

Events; (2) The Advances will protect

the Plan’s investment in the GIC and

will ensure that the Plan will recover all

amounts due under the terms of the GIC;

(3) The Plan will pay no interest or

incur any expenses with respect to the

Advances; (4) Repayment of the

Advances will be made only from GIC

Proceeds and no other Plan assets will

be involved in the transactions; (5)

Repayment of the Advances will be

waived to the extent the Plan recoups

less from the GIC Payors than the total

amount of the Advances; and (6) In the

event the Plan receives GIC Proceeds in

excess of the Guaranteed Amount, such

amounts will be retained by the Plan

and allocated among the Accounts.

FOR FURTHER INFORMATION CONTACT:

Ronald Willett of the Department (202)

219–8881. (This is not a toll-free

number.)

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

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

a fiduciary or other party in interest of

disqualified person from certain other

provisions of the Act and/or the Code,

including any prohibited transaction

provisions to which the exemption does

not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which among other things

require a fiduciary to discharge his

duties respecting the plan solely in the

interest of the participants and

beneficiaries of the plan and in a

prudent fashion in accordance with

section 404(a)(1)(b) of the act; nor does

it affect the requirement of section

401(a) of the Code that the plan must

operate for the exclusive benefit of the

employees of the employer maintaining

the plan and their beneficiaries;

(2) Before an exemption may be

granted under section 408(a) of the Act

and/or section 4975(c)(2) of the Code,

the Department must find that the

exemption is administratively feasible,

in the interests of the plan and of its

participants and beneficiaries and

protective of the rights of participants

and beneficiaries of the plan;

(3) The proposed exemptions, if

granted, will be supplemental to, and

not in derogation of, any other

provisions of the Act and/or the Code,

including statutory or administrative

exemptions and transitional rules.

Furthermore, the fact that a transaction

is subject to an administrative or

statutory exemption is not dispositive of

whether the transaction is in fact a

prohibited transaction; and

(4) The proposed exemptions, if

granted, will be subject to the express

condition that the material facts and

representations contained in each

application are true and complete, and

that each application accurately

describes all material terms of the

transaction which is the subject of the

exemption.

Ivan Strasfel,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 95–11536 Filed 5–9–95; 8:45 am]

BILLING CODE 4510–29–P

UNITED STATES NUCLEAR

REGULATORY COMMISSION

Biweekly Notice

Applications and Amendments to

Facility Operating LicensesInvolving

No Significant Hazards Considerations

I. Background

Pursuant to Public Law 97-415, the

U.S. Nuclear Regulatory Commission

(the Commission or NRC staff) is

publishing this regular biweekly notice.

Public Law 97-415 revised section 189

of the Atomic Energy Act of 1954, as

amended (the Act), to require the

Commission to publish notice of any

amendments issued, or proposed to be

issued, under a new provision of section

189 of the Act. This provision grants the

Commission the authority to issue and

make immediately effective any

amendment to an operating license

upon a determination by the

Commission that such amendment

involves no significant hazards

consideration, notwithstanding the

pendency before the Commission of a

request for a hearing from any person.

This biweekly notice includes all

notices of amendments issued, or

proposed to be issued from April 17,

1995, through April 28, 1995. The last

biweekly notice was published on April

26, 1995.