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Daily Rules, Proposed Rules, and Notices of the Federal Government

DEPARTMENT OF LABOR

Employee Benefits Security Administration

Proposed Exemptions From Certain Prohibited Transaction Restrictions

AGENCY: Employee Benefits Security 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 restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). This notice includes the following proposed exemptions: D-11610, UBS Financial Services, Inc. D-11666, Central Pacific Bank 401(k) Retirement and Savings Plan (the Plan); D-11672, Studley, Inc. Section 401(k) Plan Profit Sharing Plan (the Plan); and D-11724, EquiLend Holdings LLC (EquiLend).
DATES: All interested persons are invited to submit written comments or requests 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 thisFederal RegisterNotice.
ADDRESSES: Comments and requests 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. All written comments and requests for a hearing (at least three copies) should be sent to the Employee Benefits Security Administration (EBSA), Office of Exemption Determinations, Room N-5700, U.S. Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210. Attention: Application No.___, stated in each Notice of Proposed Exemption. Interested persons are also invited to submit comments and/or hearing requests to EBSA via email or FAX. Any such comments or requests should be sent either by email to:moffitt.betty@dol.gov,or by FAX to (202) 219-0204 by the end of the scheduled comment period. The applications for exemption and the comments received will be available for public inspection in the Public Documents Room of the Employee Benefits Security Administration, U.S. Department of Labor, Room N-1513, 200 Constitution Avenue NW., Washington, DC 20210.

Warning:If you submit written comments or hearing requests, do not include any personally-identifiable or confidential business information that you do not want to be publicly-disclosed. All comments and hearing requests are posted on the Internet exactly as they are received, and they can be retrieved by most Internet search engines. The Department will make no deletions, modifications or redactions to the comments or hearing requests received, as they are public records.

SUPPLEMENTARY INFORMATION: 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 theFederal Register. Such notice shall include a copy of the notice of proposed exemption as published in theFederal Registerand shall informinterested persons of their right to comment and to request a hearing (where appropriate).

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 (76 FR 66637, 66644, October 27, 2011).1 Effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type requested to the Secretary of Labor. Therefore, these notices of proposed exemption are issued solely by the Department.

1The Department has considered exemption applications received prior to December 27, 2011 under the exemption procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 10, 1990).

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.

UBS Financial Services Inc., Located in Weehawken, New Jersey [Application No. D-11610] Proposed Exemption

Based on the facts and representations set forth in the application, the Department is considering granting the following exemption under the authority of Code section 4975(c)(2), and in accordance with the procedures set forth in 29 CFR Part 2570, subpart B (76 FR 66637, October 27, 2011), as follows:

Section I: Covered Transactions

If the proposed exemption is granted, the sanctions resulting from the application of Code section 4975, by reason of Code section 4975(c)(1)(A) and (D)-(E), shall not apply, effective January 4, 2002, until December 9, 2005, to (1) principal trades by UBS Financial Services Inc. (the Applicant) with certain plans, subject to Code section 4975, but not subject to Title I of ERISA (the IRAs), which resulted in the IRAs purchasing or selling securities from the Applicant (collectively, the Transactions); and (2) compensation paid by the IRAs to the Applicant in connection with the Transactions (the Transaction Compensation).

This proposed exemption is subject to the conditions set forth below in Sections II and III.

Section II: Specific Conditions

(a) The Transactions and the Transaction Compensation were corrected (1) pursuant to the requirements set forth in the Department's Voluntary Fiduciary Correction Program (the VFC Program)2 and (2) in a manner consistent with those transactions described in the Applicant's VFC Program application, dated March 5, 2010 (the VFC Program Application), that were substantially similar to the Transactions but that involved plans described in Code section 4975(e)(1) and subject to Title I of ERISA (the Qualified Plan Transactions).

271 FR 20262 (April 19, 2006).

(b) The Applicant received a “no-action letter” from the Department in connection with the Qualified Plan Transactions described in the VFC Program Application.

(c) An independent fiduciary confirmed that the methods utilized to correct the Transactions and Transaction Compensation were sufficient to return each affected IRA to at least the position that it would have been in had the Transactions and Transaction Compensation not occurred, and that the correction methods were properly applied to the Transactions and Transaction Compensation based on a review of a representative sample of the corrections, selected at random by the independent fiduciary.

For purposes of this exemption, a fiduciary is “independent” if it is independent of and unrelated to Applicant and its affiliates. In this regard, a fiduciary will not be deemed independent of Applicant and its affiliates if: (1) Such fiduciary directly or indirectly controls, is controlled by, or is under common control with Applicant or its affiliates, (2) such fiduciary directly or indirectly receives any compensation or other consideration in connection with any transaction described in this exemption, except that it may receive compensation for acting as an independent fiduciary from Applicant in connection with the transactions described herein, if the amount or payment of such compensation is not contingent upon, or in any way affected by such fiduciary's decision; or (3) the annual gross revenue received by the fiduciary, in any fiscal year, from Applicant or its affiliates exceeds one percent (1%) of the fiduciary's annual gross revenue from all sources (for federal income tax purposes) for its prior tax year.

(d) The terms of the Transactions and the Transaction Compensation were at least as favorable to the IRAs as the terms generally available in arm's-length transactions between unrelated parties.

(e) The Transactions and Transaction Compensation were not part of an agreement, arrangement or understanding designed to benefit a disqualified person, as defined in Code section 4975(e)(2).

(f) The Applicant did not take advantage of the relief provided by the VFC Program and Prohibited Transaction Exemption 2002-513 (PTE 2002-51) for three (3) years prior to the date of the Applicant's submission of the VFC Program Application.

367 FR 70623 (Nov. 25, 2002), as amended, 71 FR 20135 (April 19, 2006).

Section III: General Conditions

(a) The Applicant maintains, or causes to be maintained, for a period of six (6) years from the date of any Transaction such records as are necessary to enable the persons described in Section III(b)(1) to determine whether the conditions of this exemption have been met, except that:

(1) A separate prohibited transaction shall not be considered to have occurred if, due to circumstances beyond the control of Applicant, the records are lost or destroyed prior to the end of the six-year period; and

(2) No disqualified person with respect to an IRA, other than Applicant, shall be subject to excise taxes imposed by Code section 4975, if such records are not maintained, or are not available for examination, as required by Section III(b)(1).

(b)(1) Except as provided in Section III(b)(2), the records referred to in Section III(a) are unconditionally available at their customary location for examination during normal business hours by:

(A) Any duly authorized employee or representative of the Department, the Internal Revenue Service, or the Securities and Exchange Commission;

(B) Any fiduciary of any IRA that engaged in a Transaction, or any duly authorized employee or representative of such fiduciary; or

(C) Any owner or beneficiary of an IRA that engaged in a Transaction or a representative of such owner or beneficiary.

(2) None of the persons described in Sections III(b)(1)(B) and (C) shall be authorized to examine trade secrets of Applicant, or commercial or financial information which is privileged or confidential.

(3) Should Applicant refuse to disclose information on the basis that such information is exempt from disclosure, Applicant shall, by the close of the thirtieth (30th) day following the request, provide a written notice advising that person of the reasons for the refusal and that the Department may request such information.

Effective Date:If granted, this proposed exemption will be effective from January 4, 2002, until December 9, 2005.

Summary of Facts and Representations

1. The Applicant is UBS Financial Services Inc., a wholly owned subsidiary of UBS AG. The Applicant is a large financial institution headquartered in Basel and Zurich, Switzerland. As of December 31, 2011, UBS AG had invested assets of 2,167 billion CHF.

2. From January 4, 2002, to December 9, 2005, contrary to the Applicant's policies, certain of Applicant's financial advisors (the FAs) caused Applicant to engage in a number of principal transactions involving IRAs for which the Applicant or the FA acted as an ERISA fiduciary. These principal transactions included: (a) 711 principal purchases of bonds from the Applicant, with an aggregate purchase price of $18,359,746 in 88 IRAs (the Bond Purchase Transactions) (b) 110 principal sales of bonds to the Applicant, with an aggregate sales price of $4,257,643 in 45 IRAs (the Bond Sale Transactions); (c) 128 principal purchases of stock from the Applicant, for an aggregate purchase price of $1,882,230 in 37 IRAs (the Stock Purchase Transactions); and (d) 1 principal sale of stock to the Applicant, for a sales price of less than $1 (the Stock Sale Transaction) (collectively, the Bond Purchase Transactions, the Bond Sale Transactions, the Stock Purchase Transactions and Stock Sale Transaction are referred to as the Transactions). A total of 105 IRAs were involved in the Transactions. (Some of the IRAs were involved in more than one type of transaction.)

3. The Transactions caused the payment of compensation to the Applicant (Transaction Compensation). With respect to Bond Purchase Transactions and Bond Sale Transactions, the Applicant was compensated through a “mark-up” of the bond price; the aggregate amount of such mark-ups was $115,363. With respect to the Stock Purchase Transactions and the Stock Sale Transaction, the Applicant was compensated through commissions totaling $44,964.

4. Upon discovering that certain of the FAs caused the Applicant to engage in the Transactions, the Applicant implemented changes to its policies and procedures to prohibit the opening of any brokerage accounts that would permit FAs to exercise discretion. The Applicant represents that the FAs can now only open accounts that would permit the exercise of discretion under a discretionary advisory program where principal trades are blocked.

5. The Applicant seeks relief with respect to the Transactions and with respect to the payment of the Transaction Compensation. Specifically, the Applicant believes that: (a) The purchase and sale of securities, both bonds and stocks, between the IRAs and the Applicant was prohibited by Code section 4975(c)(1)(A); (b) both the Transactions and the payment of Transaction Compensation were prohibited by Code section 4975(c)(1)(D); and (c) the Transactions and the receipt of Transaction Compensation were prohibited by Code section 4975(c)(1)(E). The Applicant believes that, if the proposed exemption is not granted, the IRAs would be subject to hardship resulting from the uncertainty of not having the prohibited transactions outlined herein resolved. Further, if the proposed exemption is not granted, the IRAs would be subject to additional hardship as a result of the resultant uncertainty regarding the correction methodology applied by the Applicant.

6. The Applicant represents that as soon as the Transactions and the Qualified Plan Transactions were discovered it began an investigation that led to the correction process. The Applicant corrected the Qualified Plan Transactions pursuant to the requirements set forth in the VFC Program. The Applicant filed a VFC Program Application, dated March 5, 2010, with respect to the Qualified Plan Transactions, and it received a no-action letter from the Department, dated February 4, 2011, with respect to the Qualified Plan Transactions.

7. While the Qualified Plan Transactions were properly corrected under the VFC Program, the Applicant was not able to similarly correct the Transactions and the Transaction Compensation. Despite being substantially similar to the Qualified Plan Transactions, the Transactions and the Transaction Compensation are ineligible for relief under the VFC Program and PTE 2002-51 because they involved IRAs which are not covered under Title I of ERISA. The Applicant, however, believes that granting relief pursuant to the proposed exemption is consistent with the Department's statement that “[the VFC Program] does not foreclose its future consideration of individual exemption requests for transactions involving IRAs that are outside the scope of relief provided by both the VFC Program and the class exemption under circumstance when, for example, a financial institution received a no action letter applicable only to plans subject to [the VFC Program] for a transaction(s) that involved both plans and * * * IRAs.” 71 FR 20135, 20137 (April 19, 2006).

8. The Applicant represents that the Transactions were corrected pursuant to the requirements set forth in the VFC Program and in a manner consistent with the Applicant's VFC Program Application, with such representation made in the Applicant's exemption application, dated March 5, 2010, under penalty of perjury. In this regard, the Applicant corrected the Transactions in the manner described below:

(a) With respect to the Bond Purchase Transactions, since bonds are debt instruments, the Applicant corrected the Bond Purchase Transactions, based on economic similarity to a loan transaction correction, under the procedures for loans made at a fair market interest rate in Section 7.2(a) of the VFC Program. The correction method for a loan, which is set forth in Section 7.2(a)(2) of the VFC program, is for the party in interest to pay back the loan in full, including any prepayment penalties. The Applicant represents that the Bond Purchase Transactions were conducted at fair market values (FMVs) because, among other things, the transactions were conducted using trading systems and procedures designed to result in trades being conducted at prices that are as favorable as possible to the IRAs under prevailing market conditions and were in fact conducted at prices not less favorable to the IRAs than the prices the FAs could have obtained for the IRAs by conducting the trades in arm's-length transactions with third-party market participants.

(b) With respect to the Bond Sale Transactions and the Stock Sale Transaction, the Applicant corrected these Transactions under the procedures for sale of an asset by a plan to a party in interest under Section 7.4(b) of the VFC Program. Section 7.4(b)(2)(i) of the VFC Program generally requires that the asset be repurchased from the party in interest at the lower of the price for which it originally sold the property or the FMV of the property at the time of correction. As an alternative, Section 7.4(b)(2)(ii) of the VFC Program provides that a plan may receive a cashsettlement of the “Principal Amount,” defined as the amount by which the FMV of the asset at the time of original sale exceeds the original sales price, plus the greater of “Lost Earnings,” which is generally defined as the approximate amount that would have been earned by a plan on the Principal Amount but for the prohibited transaction, or the “Restoration of Profits,” as described in Section 5(b) of the VFC Program, provided, that, an independent fiduciary determines that the applicable Plan would receive a greater benefit with such correction than by repurchase. The Applicant represents that “Restoration of Profits,” as defined under the VFC Program, did not apply with respect to the Transactions because no amounts were used for a specific purpose such that a profit was determinable. The Principal Amount for each of the Bond Sale Transactions and the Stock Sale Transaction was zero because the bond or the stock was sold at FMV.

It was impractical or impossible for the IRAs to repurchase most of the bonds in the Bond Sale Transactions because most of the bonds had been called, matured, were thinly traded or not in the inventory of the Applicant or its affiliates. For the remaining bonds in the Bond Sale Transactions, none of the IRAs elected to repurchase the bond from the Applicant despite the Applicant's offer to sell the bond back to the IRA at the lower of the price for which the IRA originally sold the bond or the FMV of the bond at the time of correction. Therefore, the Applicant corrected all of the Bond Sale Transactions by paying the IRAs the Transaction Compensation, if any, plus Lost Earnings on the Transaction Compensation from the time of the Transaction.

For the Stock Sale Transaction, it was impossible to repurchase the stock because the company had dissolved. Further, because no commissions were charged by the Applicant for the Stock Sale Transaction, no payment to the IRA with respect to compensation was necessary to correct the Stock Sale Transaction. Finally, since the Principal Amount with respect to the Stock Sale Transaction was zero, there were no Lost Earnings on the Principal Amount to pay to the IRA.

(c) With respect to the Stock Purchase Transactions, the Applicant corrected the Stock Purchase Transactions under the procedures for the purchase by a plan of an asset from a party in interest pursuant to Section 7.4(a) of the VFC Program. Section 7.4(a) generally requires that the asset be sold back to the party in interest who originally sold the asset to the plan or to a person who is not a party in interest for a price equal to the greater of (1) the FMV of the asset at the time of resale, without reduction for the costs of sale, plus restoration to the plan of the party in interest's investment return from the proceeds of the sale, to the extent they exceed the plan's net profits from owning the property, or (2) the plan's original purchase price, plus the greater of Lost Earnings on the plan's original purchase price or the Restoration of Profits, if any. As an alternative, the plan may retain the asset and receive (1) the greater of the Lost Earnings or the Restoration of Profits, if any, on the original purchase price, but only to the extent that such Lost Earnings or Restoration of Profits exceeds the difference between the FMV of the asset as of correction and the original purchase price and (2) the amount by which the original purchase price exceeded the FMV of the asset (at the time of the original purchase), plus the greater of Lost Earnings or Restoration of Profits, if any, on such excess; provided, an independent fiduciary determined that the plan will realize a greater benefit from this correction than it would from the resale described in section 7.4(a)(2)(i) of the VFC Program. The Applicant corrected the Stock Purchase Transactions under the alternative correction methodology, taking into account any prior disposition of the stock by an IRA subsequent to the original purchase.

9. With respect to the Applicant's correction of the Transactions, (a) the Applicant took into account all transaction costs (e.g., Transaction Compensation), if any, paid by the IRAs in calculating the corrective payments; and (b) the Applicant engaged an independent fiduciary, Evercore Trust Company. Evercore Trust Company stated that (x) the methods utilized to correct the Transactions were sufficient to return each affected IRA to at least the position that it would have been in had the Transactions not occurred, (y) the alternative correction method utilized for the Stock Purchase Transactions did not result in the affected IRAs being returned to more unfavorable financial positions than if the general correction method described in 7.4(a) of the VFC Program been used instead, and (z) the correction methods were properly applied to the Transactions based on a review of a representative sample of the corrections.

10. Evercore Trust Company confirmed to the Applicant that (a) during the period beginning with the date on which the earliest Transaction occurred and ending with the date Evercore Trust Company completed its engagement as an independent fiduciary with respect to the Transactions and the Transaction Compensation, it was not an entity that was directly or indirectly controlling, controlled by, or under common control with, the Applicant or its affiliates, (b) the compensation received by Evercore Trust Company from the Applicant for its services as an independent fiduciary with respect to the Transactions and the Transaction Compensation was not contingent upon, or in any way affected by, Evercore Trust Company's determination, and Evercore Trust Company did not, and will not, directly or indirectly receive any other compensation or consideration from the Applicant in connection with the Transactions or Transaction Compensation, and (c) for any fiscal year of Evercore Trust Company, during which, or during part of which, it acted as an independent fiduciary with respect to the Transactions or Transaction Compensation, or received any compensation from the Applicant for its services as an independent fiduciary with respect to the Transactions or Transaction Compensation (Subject Fiscal Year), the annual gross revenue received by Evercore Trust Company and its affiliates from the Applicant or its affiliates for the Subject Fiscal Year did not exceed one percent (1%) of the annual gross revenue received by Evercore Trust Company and its affiliates from all sources (for federal income tax purposes) for their most recent fiscal years that ended prior to the Subject Fiscal Year.

11. The Applicant represents that it credited, or issued a check to, each IRA to which a corrective payment was due.

12. The Applicant believes that the Transactions were inadvertent and resulted in the IRAs paying no more than the market price with respect to the Bond Purchase Transactions and the Stock Purchase Transactions, and receiving at least the market price with respect to the Bond Sale Transactions and the Stock Sale Transaction, because the Transactions were conducted using trading systems and procedures designed to result in trades being conducted at prices that are as favorable as possible to the IRAs under prevailing market conditions and were in fact conducted at prices not less favorable to the IRAs than the prices the FAs could have obtained for the IRAs by conducting the trades in arm's-length transactions with third-party market participants.

13. The Applicant represents that it has not taken advantage of the relief provided by the VFC Program and PTE 2002-51 for the three (3) years prior tothe date of the Applicant's submission of the VFC Program Application, and that the Transactions were not part of an agreement, arrangement or understanding designed to benefit a disqualified person.

14. The Applicant represents that the proposed exemption is: (a) Administratively feasible because the Applicant has corrected the Transactions pursuant to the requirements set forth in the VFC Program; has obtained relief under the VFC Program for the Qualified Plan Transactions; has put procedures in place to ensure that no similar Transactions occur in the future; and has obtained an opinion from an independent fiduciary, Evercore Trust Company, confirming that the methods utilized to correct the Transactions and Transaction Compensation were sufficient to return each affected IRA to at least the position that it would have been in had the Transactions and Transaction Compensation not occurred, and that the correction methods were properly applied to the Transactions and Transaction Compensation based on a review of a representative sample of the corrections, selected at random by the independent fiduciary; (b) in the interests of the affected IRAs and their owners and beneficiaries because the Transactions have been corrected pursuant to the procedures set forth in the VFC Program, which are designed to ensure that the corrections are made in a manner that is in the interests of the IRAs and their owners and beneficiaries; and (c) protective of the rights of the owners and beneficiaries of the IRAs because the requested relief is only with respect to past transactions, which the Applicant believes were conducted at prices no less favorable to the IRAs than prices the IRAs could have paid or received in arm's-length transactions with third party market participants, that have already been effectively unwound pursuant to the requirements set forth in the VFC Program.

15. In summary, the Applicant represents that the Transactions and the Transaction Compensation satisfy the statutory criteria for an administrative exemption contained in Code section 4975(c)(2) because, among other things: (a) The Transactions and Transaction Compensation were substantially similar to the Qualified Plan Transactions; (b) the Transactions and Transaction Compensation were corrected pursuant to the requirements set forth in the VFC Program and in a manner similar to those described in the Applicant's VFC Program Application; (c) the Applicant received a “no-action letter” from the Department in connection with Applicant's VFC Program Application; (d) the Applicant obtained an opinion from an independent fiduciary, Evercore Trust Company, confirming that the methods utilized to correct the Transactions and Transaction Compensation were sufficient to return each affected IRA to at least the position that it would have been in had the Transactions and Transaction Compensation not occurred, and that the correction methods were properly applied to the Transactions and Transaction Compensation based on a review of a representative sample of the corrections, selected at random by the independent fiduciary; (e) the terms of the Transactions and the Transaction Compensation were at least as favorable to the IRAs as the terms generally available in arm's-length transactions between unrelated parties; (f) the Transactions and Transaction Compensation were not part of an agreement, arrangement or understanding designed to benefit a disqualified person; and (g) the Applicant did not take advantage of the relief provided by the VFC Program and PTE 2002-51 for three (3) years prior to the date of the Applicant's submission of the VFC Program Application.

FOR FURTHER INFORMATION CONTACT:

Mr. Brian Shiker of the Department, telephone (202) 693-8552. (This is not a toll-free number.)

Central Pacific Bank 401(k) Retirement and Savings Plan (the Plan), Located in Honolulu, HI [Application No. D-11666] 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).

Section I: Transactions

If the proposed exemption is granted, effective for the period beginning April 11, 2011 and ending May 6, 2011, the restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the sanctions resulting from the application of section 4975 of the Code, by reason of section 4975(c)(1)(A) and 4975(c)(1)(E) of the Code,4 shall not apply:

4For purposes of this proposed exemption, references to specific provisions of Title I of the Act, unless otherwise specified, refer also to the corresponding provisions of the Code.

(a) To the acquisition of certain subscription right(s) (the Right or Rights) by the individually-directed account(s) (the Account or Accounts) of certain participant(s) in the Plan in connection with an offering (the Offering) of shares of common stock (the Stock) of Central Pacific Financial Corporation (CPFC) by CPFC, a party in interest with respect to the Plan; and

(b) To the holding of the Rights received by the Accounts during the subscription period of the Offering; provided that the conditions, as set forth in Section II of this proposed exemption were satisfied for the duration of the acquisition and holding.

Section II: Conditions

The relief provided in this proposed exemption is conditioned upon adherence to the material facts and representations described, herein, and as set forth in the application file, and upon compliance with the conditions, as set forth in this proposed exemption.

(a) The receipt of the Rights by the Accounts occurred in connection with the Offering, and the Rights were made available by CPFC to all shareholders of the Stock of CPFC, including the Accounts;

(b) The acquisition of the Rights by the Accounts resulted from an independent corporate act of CPFC;

(c) Each shareholder of the Stock, including each of the Accounts, received the same proportionate number of Rights, and this proportionate number of Rights was based on the number of shares of Stock held by each such shareholder;

(d) The Rights were acquired pursuant to, and in accordance with, provisions under the Plan for individually-directed investment of the Accounts by the individual participants in the Plan, all or a portion of whose Accounts in the Plan held the Stock (the Invested Participant(s));

(e) The decision with regard to the holding and disposition of the Rights by an Account was made by the Invested Participant whose Account received the Rights;

(f) If any of the Invested Participants failed to give instructions as to the exercise of the Rights received in the Offering, such Rights were sold in blind transactions on the New York Stock Exchange (NYSE) and the proceeds from such sales were distributedpro-ratato the Accounts in the Plan of such Invested Participants;

(g) No brokerage fees, no commissions, and no fees or expenseswere paid by the Plan or by the Accounts to any related broker in connection with the sale of any of the Rights or in connection with the exercise of any of the Rights, and no brokerage fees, no commissions, no subscription fees, and no other charges were paid by the Plan or by the Accounts with respect to the acquisition and holding of the Stock; and

(h) Based on the difference ($1.13) between the average proceeds per Right ($6.05) received by other holders who sold Rights during the Offering and the average proceeds per Right ($4.92) received by Invested Participants whose Accounts sold Rights, between April 26, 2011 and May 3, 2011, CPFC will make a corrective payment to the Plan in the amount of $30,618.48 ($1.13 x 27,096 Rights sold), plus a lost earnings component on such amount, calculated at a 2.83% annual rate of interest for the period from May 6, 2011 to the date of the grant of this proposed exemption, and will distribute such corrective payment, and the lost earnings component,pro ratato the Accounts of each of the 186 Invested Participants whose Accounts in the Plan sold the 27,096 Rights.

Effective Date:This proposed exemption, if granted, will be effective for the period beginning on April 11, 2011, the commencement date of the Offering, and ending on May 6, 2011, the close of the Offering.

Summary of Facts and Representations

1. The Plan is a defined contribution 401(k) retirement saving plan which provides for a cash and deferred arrangement. The Plan was adopted, effective as of November 1, 1985.5 The Plan obtained its latest determination letter from the Internal Revenue Service (the IRS) in 2002. Although the Plan has been amended since receiving the determination letter from the IRS, the administrator of the Plan and the tax counsel for the Plan believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Code.

5Effective July 1, 2003, December 31, 2004, December 31, 2006, and July 26, 2007, respectively, the Central Pacific Bank Employee Stock Ownership Plan, the CB Bancshares, Inc. Profit Sharing Retirement Saving Plan, the CB Bancshares, Inc. ESOP, and the Hawaii HomeLoans, Inc. 401(k) Retirement Savings Plan were merged into the Plan.

As of April 11, 2011, there were 1,115 participants in the Plan. The Plan is a participant directed account plan designed and operated to comply with the requirements of section 404(c) of the Act.

The Plan is funded by elective employee contributions, as well as employer matching contributions, and discretionary employer profit sharing contributions in cash to the ESOP. It is represented that no discretionary contributions were made in 2008, 2009, and 2010. The fair market value of the total assets of the Plan, as of April 11, 2011, was $85,827,254. As of August 30, 2012, the fair market value of the Plan's assets was $90,594,733. 2. CPFC is the sponsor of the Plan. CPFC is a bank holding company, incorporated in the State of Hawaii on February 1, 1982, as “CPB Inc.” CPFC's principal place of business is Honolulu, Hawaii.

CPFC, a parent company, through its subsidiaries, offers full-service commercial banking throughout the State of Hawaii and offers limited commercial banking services in certain areas of California. CPFC does not employ any persons other than the officers of the Central Pacific Bank (the Bank) and from time to time the support staff of the Bank. It is represented that substantially all of the activities of CPFC are conducted through the Bank.

According to the Form 10-Q, as of March 3, 2012, on a consolidated basis, CPFC and its subsidiaries had total assets of $4,158,288,000, total liabilities of $3,680,848,000, and total stockholders' equity of $477,440,000.

3. The Bank is a wholly-owned subsidiary of CPFC. The Bank is a full-service commercial bank incorporated in the State of Hawaii on March 16, 1982, with 34 branches and 120 ATMs located throughout the State of Hawaii. The Bank also has an office in California. The Bank offers a broad range of products and services, including accepting time and demand deposits, and originating commercial, construction, and consumer loans, and commercial and residential mortgages. All employees of the Bank, its subsidiaries, and certain other affiliated companies are covered by the Plan.

4. Vanguard Fiduciary Trust Company (Vanguard) is the third party administrator, the trustee, and the custodian of the Plan. Vanguard, as trustee, has the responsibility of investing, holding, collecting, distributing, and accounting for the assets of the Plan in the trust.

5. The Plan is administered by a committee (the Committee), which is composed of certain appointed employees of the Bank. The Committee has the responsibility of selecting the investment options of the trust into which the participants of the Plan can direct their contributions.

6. Participants in the Plan are permitted to self-direct the investments in their Accounts based on certain options held under the Plan. Among the investment options offered to participants are various types of securities, including shares of the Stock held in the CPFC stock fund (the Stock Fund). Investment in the Stock Fund by the Accounts of participants in the Plan is entirely voluntary. It is represented that neither CPFC nor its subsidiaries contribute any capital Stock to the Plan. Instead all employer contributions are made in cash, and the Stock is acquired by the Accounts in the Plan only as a result of participant-directed investment decisions.

The Plan provides that participants are entitled to direct the voting of the Stock held in their Accounts in the Plan. Vanguard, as trustee, has the responsibility of carrying out such directions. As of December 31, 2009, and December 31, 2010, respectively, the Plan investments included 938,180 shares and 893,122 shares of the Stock held in the Stock Fund.

7. The Stock of CPFC is publicly-traded on the NYSE under the symbol “CPF.” The Stock has no par value. It is represented that the Stock is the same class of shares available to other investors. The Stock is a “qualifying employer security,” as defined under section 407(d)(5) of the Act and 4975(e) of the Code.

Background

8. On February 2, 2011, CPFC effected a one-for-twenty reverse stock split (the Reverse Stock Split) of the outstanding shares of Stock. As a result of the Reverse Stock Split, the outstanding shares of Stock decreased from 30,539,999 shares to 1,528,935 shares.

As part of its recapitalization plan to raise $325 million from accredited investors in a private placement (the Private Placement), CPFC, on February 18, 2011, entered into subscription agreements with affiliates of the Carlyle Group and the Anchorage Capital Group, LLC and with various other investors. In this regard, CPFC sold 32,500,000 shares of Stock at a price of $10 per share.

On the same day, February 18, 2011, CPFC entered into an exchange agreement (the Exchange Agreement) with the United States Department of the Treasury (Treasury), pursuant to which the Treasury agreed, subject to the terms and conditions in the Exchange Agreement, to exchange 135,000 shares of CPFC's preferred stock designated as Fixed Rate Cumulative Preferred Stock, having a liquidation amount of $1,000 per share, held by the Treasury and accrued and unpaid dividends thereon for 5,620,117 shares of CPFC's Stock, and amended a warrant held by the Treasury to reduce thenumber of shares of Stock issuable upon exercise of the warrant from 1,585,748 to 79,288 (the TARP Exchange).

Following the closing of the Private Placement and the TARP Exchange, CPFC had 39,649,052 shares of Stock outstanding, as of April 11, 2011. CPFC commenced the Offering whereby shareholders of record, as of 5 p.m. EST on the February 17, 2011 (the Record Date), would receive the Rights. CPFC represents that it conducted the Offering, because it wanted to provide existing shareholders and other investors, including the Accounts of Invested Participants in the Plan, who could not participate in the Private Placement, with the opportunity to purchase the Stock at the same price per share paid by the investors in the Private Placement.

9. The Offering commenced on April 11, 2011, and closed on May 6, 2011. It is represented that 2,000,000 shares of Stock were subscribed for by all shareholders. In this regard, the Offering was fully subscribed. There were valid exercises to purchase an aggregate of 1,325,230 shares, pursuant to directions from holders of the basic Rights. The remaining 674,770 shares available to be issued in the Offering were allocatedpro rataamong the holders entitled to exercise the over-subscription privilege. It is represented that the exercise of the Rights resulted in gross proceeds for CPFC of $20,000,000.

10. At the close of business on April 11, 2011, the date of the Offering, the Stock was trading on the NYSE at $19.43 per share. The closing price of the Stock on the ending date of the Offering on May 6, 2011, was $13.70.

11. Under the terms of the Offering, all shareholders of the Stock, including the Accounts of Invested Participants in the Plan, automatically received the Rights, at no charge. Each of the Rights entitled the shareholders of the Stock, including the Accounts of Invested Participants in the Plan, to purchase, through the exercise of such Rights, the Stock issued by CPFC in connection with the Offering. With respect to the Rights, under the terms of the Offering, one (1) Right was issued for each whole share of the Stock held by each shareholder, including the Accounts of Invested Participants in the Plan, on the Record Date.

12. The Rights entitled the holders thereof to a basic right to subscribe for theirpro ratashare of $20 million dollars' worth of Stock issued by CPFC, as well as an over-subscription privilege to subscribe for additional shares of Stock, subject to certain limitations and allocation procedures, up to the number of shares of Stock that were not subscribed for by the other holders of the Rights, pursuant to their basic Rights.

However, the over-subscription privilege was conditioned on each shareholder first exercising their basic Rights in full. Because the Accounts of Invested Participants in the Plan did not exercise all of their basic Rights in full and, because, as a practical matter it was unlikely that all of the Accounts of Invested Participants in the Plan would do so, given the number of Invested Participants in the Plan whose Accounts held the Stock, the over-subscription privilege was not available to Rights attributable to the Accounts of Invested Participants in the Plan.

13. All shareholders of the Stock, including the Accounts of Invested Participants in the Plan, held the Rights until such Rights were exercised, or such Rights were sold. With regard to the exercise of the Rights, it is represented that the Rights could only be exercised in whole numbers. Upon exercise, each of the Rights permitted a shareholder of the Stock, including each of the Accounts of Invested Participants in the Plan, to purchase 1.3081 shares of Stock at a subscription price of $10.00 per share (such amount is represented to take into account the Reverse Stock Split that occurred on February 2, 2011). Fractional shares of Stock resulting from the exercise of basic Rights on an aggregate basis as to any holder of such Rights, including the Accounts of Invested Participants in the Plan, were rounded down to the nearest whole number.

A shareholder, including each of the Accounts of Invested Participants in the Plan, had the right to choose to exercise some, all, or none of its Rights. The election to exercise, some, all or none of its Rights had to be received by 5 p.m. EST on April 29, 2011, by the tabulation agent, Wells Fargo Bank, NA Shareowner Services (WFSS), in order to allow sufficient processing time. The election to exercise any of the Rights was irrevocable.

14. With regard to the sale of the Rights, it is represented that the Rights were transferable. Further, it is represented that the Rights were traded on the NYSE. Any Rights that were not exercised either as a result of a partial exercise or as a result of insufficient assets in an Account to cover an exercise (excluding the assets in the Stock Fund), or as a result of a failure to timely return the election form were automatically sold on the NYSE to unrelated third parties by Vanguard, as trustee, acting on behalf of each such Account. The proceeds from such sale were creditedpro ratato the Plan Accounts of Invested Participants.

15. The Invested Participants were notified of the issuance of the Rights in a news release, in a posting on the CPFC's Web site, and in various letters and email communications from CPFC during the month of April 2011. In addition, each of the Invested Participants was also provided detailed information regarding the Rights Offering, including a copy of the prospectus which described the Offering, a document providing frequently asked questions and answers regarding the Offering, an election form, a return envelope addressed to WFSS, the tabulating agent, and a statement indicating the number of shares of Stock each such Invested Participant held in his/her Account in the Plan, as of the Record Date.

16. In order to exercise some or all of the Rights, an Invested Participant6 had to complete an election form and to submit such election form to WFSS by the close of business on the fifth (5th) business day (April 29, 2011, at 5 p.m. EST), prior to the expiration of the Offering on May 6, 2011.7

6It is represented that the Accounts of the Invested Participants in the Plan rely on the relief provide by the statutory exemption, pursuant to section 408(e) of the Act for the exercise of the Rights.

The Department is offering no view, as to whether the requirements of the statutory exemption provided in section 408(e) of the Act have been satisfied. Further, the Department, herein, is not providing any relief with respect to the exercise of the Rights.

7It is represented that the extra five (5) business days were required to provide sufficient time to process all such elections by the Accounts of Invested Participants in the Plan to exercise their Rights, tabulate and confirm the results, liquidate each such Invested Participant's funds, confirm the orders and the availability of such funds, and remit payment to purchase the shares. It is represented that non-Plan shareholders were also required to submit their election forms five (5) days prior to the expiration of the Offering.

Each Invested Participant who submitted an election form was required to indicate on such election form a sufficient amount of current investments in the Account of such Invested Participant in the Plan (other than the assets in the Stock Fund) to be liquidated on a pro-rated basis to cover the purchase of Stock in connection with the exercise of the Rights. The pro-rated funds were segregated from the other investments within the Invested Participant's Account into a separate holding fund (the Rights Fund) at Vanguard which was established in anticipation of the Offering. Vanguard placed the order to purchase the Stock with the subscription agent, Wells Fargo Bank, N.A. (Wells Fargo Bank), a registered broker-dealer that is unrelatedto CPFC and the Plan. It is represented that the Rights Fund was liquidated, and cash equal to the necessary subscription payment was transferred to the Wells Fargo Bank. Following the closing of the Offering, the purchased shares of Stock were then converted back to the equivalent number of units of the Plan's Stock Fund and credited to the Account of the Invested Participant.

17. As of the Record Date, February 17, 2011, 287 Accounts of Invested Participants in the Plan held the Stock. As of the Record Date, the approximate percentage of the fair market value of the total assets of the Plan invested in the Stock was two percent (2%). Also, as of the Record Date, the shares of Stock held in the Accounts of Invested Participants in the Plan constituted approximately three percent (3%) of the shares of Stock outstanding.

18. It is represented that based on the ratio of one (1) Right for each share of Stock held by the Accounts of Invested Participants, the Plan acquired 46,327 Rights as a result of the Offering. Of the Rights received by the Plan on behalf of Accounts of the Invested Participants, all such Rights were either exercised or sold. None of the Rights expired.

Of the 46,327 Rights received by the Accounts of Invested Participants as a result of the Offering, it is represented that 19,231 Rights held by 102 Accounts of Invested Participants in the Plan were exercised for Stock. It is represented that on May 19, 2011, the Accounts of the Invested Participants in the Plan received the Stock purchased as a result of the exercise of the Rights. It is further represented that the Stock purchased in connection with the Offering was eligible for trading on NYSE by the Accounts of the Invested Participants in the Plan on May 19, 2011.

Unlike the other holders of the Rights, the Invested Participants whose Accounts in the Plan received the Rights were not permitted to sell the Rights throughout the period April 11-25, 2012, due to Plan administrative constraints. However, of the 46,327 Rights received by the Accounts of Invested Participants as a result of the Offering, it is represented that over the period from April 26, 2011 to May 3, 2011, the Invested Participants of 186 Accounts sold 27,096 Rights on the NYSE. On May 9, 2011, the Accounts of those Invested Participants received the proceeds from the sales of such Rights totaling $133,339.44.

Based on the difference ($1.13) between the average proceeds per Right ($6.05) received by other holders who sold Rights during the Offering and the average proceeds per Right ($4.92) received by Invested Participants whose Accounts sold Rights, between April 26, 2011 and May 3, 2011, CPFC will make a corrective payment to the Plan in the amount of $30,618.48 ($1.13 × 27,096 Rights sold). Further, CPFC proposes to include a lost earnings component on the amount of the corrective payment calculated at a 2.83% annual rate of interest for the period from May 6, 2011, to the date of the grant of this proposed exemption. It is represented that the interest rate on the lost earnings component was calculated taking the greater of the weighted average return for all investment funds available under the Plan and the average return for the Retirement Savings Trust (the stable value fund under the Plan in which the proceeds from the sale of the Rights were distributed). CPFC will distribute such corrective contribution, plus the lost earnings component,pro ratato each of the 186 Invested Participants whose Accounts in the Plan sold Rights.

19. No brokerage fees, no commissions, no subscription fees, and no other charges were paid by the Plan or by any of the Accounts of Invested Participants in the Plan with respect to the acquisition and holding of the Stock and no brokerage fees, no commissions, and no fees or expenses were paid by the Plan or by any of the Accounts of Invested Participants in the Plan to any related broker in connection with the sale of the Rights or in connection with the exercise of the Rights.

Requested Relief

20. The application was filed on behalf of CPFC. In this regard, CPFC has requested an exemption: (a) For the acquisition of the Rights by the Accounts of the Invested Participants in the Plan in connection with the Offering of Rights by CPFC; and (b) for the holding of the Rights by the Accounts of the Invested Participants in the Plan during the subscription period of the Offering.

It is represented that the Rights acquired by the Accounts of Invested Participants in the Plan satisfy the definition of “employer securities,” pursuant to section 407(d)(1) of the Act. However, as the Rights were not stock or a marketable obligation, such Rights do not meet the definition of “qualifying employer securities,” as set forth in section 407(d)(5) of the Act. Accordingly, the subject transactions constitute an acquisition and holding on behalf of the Accounts of Invested Participants in the Plan, of employer securities which are not qualifying employer securities, in violation of section 407(a) of the Act, for which CPFC has requested relief from sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), and 407(a)(1)(A) of the Act. CPFC has also requested relief from the prohibitions of section 406(b)(1) and 406(b)(2) of the Act.

21. It is represented that the subject transactions have already been consummated. In this regard, the Accounts of Invested Participants in the Plan acquired the Rights pursuant to the Offering on April 11, 2011, and held such Rights pending the closing of the Offering on May 6, 2011, when such Rights either were exercised or sold. As there was insufficient time between the dates when the Accounts of Invested Participants in the Plan acquired the Rights and when such Rights were exercised or sold, to apply for and be granted an exemption, CPFC is seeking a retroactive exemption to be granted, effective from April 11, 2011, the date that the Accounts of Invested Participants in the Plan acquired the Rights, to May 6, 2011, the closing date of the Offering.

22. CPFC represents that the proposed exemption is administratively feasible. In this regard, the acquisition and holding of the Rights by the Accounts of Invested Participants in the Plan were one-time transactions that involved an automatic distribution of the Rights to all shareholders. It is represented that it is customary for corporations to make a rights offering available to all shareholders.

23. CPFC represents that the transactions which are the subject of this proposed exemption are in the interest of the Accounts of Invested Participants in the Plan, because the subject transactions represented a valuable opportunity to such Accounts to buy the Stock at a discount or to sell the Rights. It is represented that this discount could be realized by the Accounts of Invested Participants in the Plan by selling the Stock immediately after the exercise of the Rights and investing the proceeds from such sale of the Stock in other investment options under the Plan.

24. CPFC represents that the proposed exemption provides sufficient safeguards for the protection of the Accounts of Invested Participants in the Plan and the beneficiaries of such Accounts. In this regard, participation in the Offering protected the Accounts of the Invested Participants in the Plan from having their interests in CPFC diluted as a result of the Offering.

It is further represented that the interests of the Accounts of Invested Participants in the Plan were adequately protected in that such Accounts acquired and held the Rights automatically as a result of the Offering. In addition, CPFC made the Rightsavailable on the same terms to all shareholders of the Stock, including the Accounts. In this regard, each shareholder of the Stock, including each of the Accounts, received the same proportionate number of Rights, and this proportionate number of Rights was based on the number of shares of Stock held by such shareholder.

The Accounts of Invested Participants in the Plan were protected against economic loss by exercising the Rights or by selling the Rights. It is represented that the closing price of the Stock on May 6, 2011, was $13.70 per share which was in excess of the strike price of $10.00 per share.

25. In summary, CPFC represents that the subject transactions satisfy the statutory criteria of section 408(a) of the Act and section 4975(c)(2) of the Code because:

(a) The receipt of the Rights by the Accounts occurred in connection with the Offering, and the Rights were made available by CPFC to all shareholders of the Stock of CPFC, including the Accounts;

(b) The acquisition of the Rights by the Accounts resulted from an independent corporate act of CPFC;

(c) Each shareholder of the Stock, including each of the Accounts, received the same proportionate number of Rights, and this proportionate number of Rights was based on the number of shares of Stock held by such shareholder;

(d) The Rights were acquired pursuant to, and in accordance with, provisions under the Plan for individually-directed investment of the Accounts by the Invested Participants, all or a portion of whose Accounts in the Plan held the Stock;

(e) The decision with regard to the holding and disposition of the Rights by an Account was made by the Invested Participant whose Account received the Rights;

(f) If any of the Invested Participants failed to give instructions as to the exercise of the Rights received in the Offering, such Rights were sold in blind transactions on the NYSE and the proceeds from such sales were distributedpro-ratato the Accounts in the Plan of such Invested Participants;

(g) No brokerage fees, no commissions, and no fees or expenses were paid by the Plan or by the Accounts to any related broker in connection with the sale of any of the Rights or in connection with the exercise of any of the Rights, and no brokerage fees, no commissions, no subscription fees, and no other charges were paid by the Plan or by the Accounts with respect to the acquisition and holding of the Stock; and

(h) Based on the difference ($1.13) between the average proceeds per Right ($6.05) received by other holders who sold Rights during the Offering and the average proceeds per Right ($4.92) received by Invested Participants whose Accounts sold Rights, between April 26, 2011 and May 3, 2011, CPFC will make a corrective payment to the Plan in the amount of $30,618.48 ($1.13 × 27,096 Rights sold), plus a lost earnings component on such amount calculated at a 2.83% annual rate of interest for the period from May 6, 2011 to the date of the grant of this proposed exemption, and will distribute such corrective payment, and the lost earnings component,pro ratato the Accounts of each of the 186 Invested Participants whose Accounts in the Plan sold Rights.

Notice to Interested Persons

The persons who may be interested in the publication in theFederal Registerof the Notice of Proposed Exemption (the Notice) include all Invested Participants whose Accounts in the Plan were invested in the Stock at the time of the Offering.

It is represented that all such interested persons will be notified of the publication of the Notice by first class mail, to each such interested person's last known address within fifteen (15) days of publication of the Notice in theFederal Register. Such mailing will contain a copy of the Notice, as it appears in theFederal Registeron the date of publication, plus a copy of the Supplemental Statement, as required, pursuant to 29 CFR 2570.43(a)(2), which will advise all interested persons of their right to comment and to request a hearing. All written comments and/or requests for a hearing must be received by the Department from interested persons within 45 days of the publication of this proposed exemption in theFederal Register.

All comments will be made available to the public. Warning: Do not include any personally identifiable information (such as name, address, or other contact information) or confidential business information that you do not want publicly disclosed. All comments may be posted on the Internet and can be retrieved by most Internet search engines.

FOR FURTHER INFORMATION CONTACT:

Ms. Angelena C. Le Blanc of the Department, telephone (202) 693-8551. (This is not a toll-free number.)

Studley, Inc. Section 401(k) Profit Sharing Plan (the Plan), Located in New York, NY [Application No. D-11672] 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 proposed exemption is granted, the restrictions of section 406(a)(1)(A) and (D) 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), (D), (E) and (F) of the Code, shall not apply to the sale (the Sale) of an 8.828121% partnership interest (the Interest) in the Julien J. Studley N Street Partnership, a general partnership (the JJS Partnership), by the Plan to Studley, Inc. (the Employer), a party in interest with respect to the Plan, provided that the following conditions are satisfied:

(a) The Sale is a one-time transaction for cash;

(b) The terms and conditions of the Sale are at least as favorable to the Plan as those that the Plan could obtain in an arm's length transaction with an unrelated third party;

(c) The Interest is sold for $900,000;

(d) The Sale is consummated within two weeks after the date a final exemption regarding the Sale is published in theFederal Register;

(e) If, (1) within seven years of the date of the Sale of the Interest to the Employer, (i) the Employer sells the Interest, (ii) JJS Partnership sells its interest in N19 Associates LLC (N19 Associates), or (iii) N19 Associates sells its building on N Street, Washington, DC, and (2) the net amount realized by the Employer in respect of the Interest upon and by reason of such sale, exceeds the sum of (i) the $900,000 price paid for the Interest, and (ii) any capital contributed by the Employer to the JJS Partnership in respect of the Interest after the date of the Sale and any other funds paid or advanced by the Employer to, or on behalf of, the JJS Partnership in respect of the Interest after the date of the Sale, the Employer will contribute such excess amount to the Plan within two weeks of its receipt by the Employer;

(f) The Plan pays no commissions, fees, or other expenses in connection with the Sale; and

(g) The Plan has not waived or released and does not waive or release any claims, demands, and/or causes ofaction that the Plan may have against the Employer or the Plan fiduciaries in connection with the acquisition and holding of the Interest or Sale of the Interest to the Employer.

Summary of Facts and Representations

1. The Studley, Inc. Section 401(k) Profit Sharing Plan (the Plan) is sponsored by Studley, Inc. (the Employer or the Applicant), located in New York, New York. Julien Studley (Mr. Studley) was the founder of the Employer. Pursuant to a buyout, all of his shares in the Employer not held in an employee benefit plan were purchased on December 12, 2002, by the Employer, at which time Mr. Studley resigned as a voting member from the Employer's Board of Directors. He remained a non-voting member until June 2004. Since then, Mr. Studley has not held any position with, or interest in, the Employer (other than shares held in employee benefit plans). The Employer is in the business of providing commercial real estate advisory, brokerage and related services.

The Plan had 61 participants and beneficiaries, as of November 14, 2011. Based on the most recently available audited financial statements, the total value of the Plan's assets was $26,830,211, as of December 31, 2010. The Plan's trustee is T. Rowe Price Trust Company. The trust agreement indicates that the trustee takes direction from the named fiduciary (the Named Fiduciary), which is the Employer. The Plan has a non-participant directed profit sharing component in which it holds real estate investments, as well as a 401(k) component which is participant directed.

2. Among the assets of the Plan is an 8.828121% interest (the Interest) in the Julien J. Studley N Street Partnership (JJS Partnership), a general partnership in which the Employer and the Plan are both general partners. The Applicant represents that there are currently eight other members in the JJS Partnership in addition to the Employer and the Plan. No other employee benefit plans are members of the JJS Partnership.

The managing partners of the JJS Partnership are Mr. Studley and Mr. Peter Speier, and neit