(a) General. Section 408(e) of the Employee Retirement Income
Security Act of 1974 (the Act) exempts from the prohibitions of section
406(a) and 406(b)(1) and (2) of the Act any acquisition or sale by a
plan of qualifying employer securities (as defined in section 407(d)(5)
of the Act), or any acquisition, sale or lease by a plan of qualifying
employer real property (as defined in section 407(d)(4) of the Act) if
certain conditions are met. The conditions are that:
(1) The acquisition, sale or lease must be for adequate
consideration (which is defined in paragraph (d) of this section);
(2) No commission may be charged directly or indirectly to the plan
with respect to the transaction; and
(3) In the case of an acquisition or lease of qualifying employer
real property, or an acquisition of qualifying employer securities, by a
plan other than an eligible individual account plan (as defined in
section 407(d)(3) of the Act), the acquisition or lease must comply with
the requirements of section 407(a) of the Act.
(b) Acquisition. For purposes of section 408(e) and this section, an
acquisition by a plan of qualifying employer securities or qualifying
employer real property shall include, but not be limited to, an
acquisition by purchase, by the exchange of plan assets, by the exercise
of warrants or rights, by the conversion of a security, by default of a
loan where the qualifying employer security or qualifying employer real
property was security for the loan, or in connection with the
contribution of such securities or real property to the plan. However,
an acquisition of a security shall not be deemed to have occurred if a
plan acquires the security as a result of a stock dividend or stock
split.
(c) Sale. For purposes of section 408(e) and this section, a sale of
qualifying employer real property or qualifying employer securities
shall include any disposition for value.
(d) Adequate consideration. For purposes of section 408(e) and this
section, adequate consideration means:
(1) In the case of a marketable obligation, a price not less
favorable to the plan than the price determined under section 407(e)(1)
of the Act; and
(2) In all other cases, a price not less favorable to the plan than
the price determined under section 3(18) of the Act.
(e) Commission. For purposes of section 408(e) and this section, the
term ``commission'' includes any fee, commission or similar charge paid
in connection with a transaction, except that the term ``commission''
does not include a charge incurred for the purpose of enabling the
appropriate plan fiduciaries to evaluate the desirability of entering
into a transaction to which this section would apply, such as an
appraisal or investment advisory fee.
[45 FR 51197, Aug. 1, 1980]
