Grant of Individual Exemptions; Wells Fargo Bank, N.A. (the Bank), et al.

DEPARTMENT OF LABOR

[Prohibited Transaction Exemption 96-54; Exemption Application No. D-

09334, et al.]

Grant of Individual Exemptions; Wells Fargo Bank, N.A. (the

Bank), et al.

AGENCY: Pension and Welfare Benefits Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of

Labor (the Department) from certain of the prohibited transaction

restrictions of the Employee Retirement Income Security Act of 1974

(the Act) and/or the Internal Revenue Code of 1986 (the Code).

Notices were published in the Federal Register of the pendency

before the Department of proposals to grant such exemptions. The

notices set forth a summary of facts and representations contained in

each application for exemption and referred interested persons to the

respective applications for a complete statement of the facts and

representations. The applications have been available for public

inspection at the Department in Washington, DC. The notices also

invited interested persons to submit comments on the requested

exemptions to the Department. In addition the notices stated that any

interested person might submit a written request that a public hearing

be held (where appropriate). The applicants have represented that they

have complied with the requirements of the notification to interested

persons. No public comments and no requests for a hearing, unless

otherwise stated, were received by the Department.

The notices of proposed exemption were issued and the exemptions

are being granted solely by the Department because, effective December

31, 1978, section 102 of Reorganization Plan No. 4 of 1978 (43 FR

47713, October 17, 1978) transferred the authority of the Secretary of

the Treasury to issue exemptions of the type proposed to the Secretary

of Labor.

Statutory Findings

In accordance with section 408(a) of the Act and/or section

4975(c)(2) of the Code and the procedures set forth in 29 CFR Part

2570, Subpart B (55 FR 32836, 32847, August 10, 1990) and based upon

the entire record, the Department makes the following findings:

(a) The exemptions are administratively feasible;

(b) They are in the interests of the plans and their

participants and beneficiaries; and

(c) They are protective of the rights of the participants and

beneficiaries of the plans.

Wells Fargo Bank, N.A. (the Bank) Located in San Francisco, CA

[Prohibited Transaction Exemption 96-54; Exemption Application No. D-

09334]

Exemption

Section I. Exemption for the In-Kind Transfer of Assets

The restrictions of sections 406(a) and 406(b) of the Act and the

sanctions resulting from the application of section 4975 of the Code,

by reason of section 4975(c) of the Code, shall not apply, effective

July 2, 1993 until October 1, 1993, to the in-kind transfer of all or a

pro rata portion of the assets of employee benefit plans (the Plans)

that are held in certain collective investment funds (the CIF or CIFs),

for which the Bank or any of its affiliates (collectively, Wells Fargo)

serves as fiduciary, to the Stagecoach Funds, Inc. (the Fund or Funds),

an open-end investment company registered under the Investment Company

Act of 1940 (the '40 Act), as amended, for which Wells Fargo acts as

investment adviser and may provide other services, in exchange for

shares of the Funds (the CIF Exchanges), in connection with the partial

termination of the CIFs.

This exemption is subject to the following conditions and the

general conditions of Section II:

(a) The CIF Exchange is a one-time transaction between the Plan and

the respective Fund.

(b) No sales commissions or other fees are paid by the Plans in

connection with the CIF Exchanges and no redemption fees are paid by

the Plan in connection with the sale by the Plan of shares acquired in

a CIF Exchange.

(c) A fiduciary of each Plan who is independent of and unrelated to

Wells Fargo (the Second Fiduciary) receives advance written notice of

the CIF Exchange and full written disclosure of information concerning

the Funds which includes, but is not limited to the following:

(1) A current prospectus for each Fund in which the Plan is

considering investing;

(2) A statement describing the fees for investment advisory or

similar services, any secondary services (the Secondary Services) as

referred to in paragraph (h) of Section III, and all other fees to be

charged to, or paid by, the Plan (and by such Fund) to Wells Fargo,

including the nature and extent of any differential between the rates

of the fees;

(3) The reasons why Wells Fargo considers an investment in the Fund

to be appropriate for the Plan; and

(4) A statement describing whether there are any limitations

applicable to Wells Fargo with respect to which assets of a Plan may be

invested in a Fund, and, if so, the nature of such limitations.

(d) On the basis of the foregoing information, the Second Fiduciary

approves, in writing, the CIF Exchange.

(e) Each Plan receives shares of the Funds which have a total net

asset value equal to the value of all or the Plan's pro rata share of

the Plan's assets invested in the CIF on the date of the transfer,

based on the current market value of the CIF's assets, as objectively

determined in a single valuation, performed in the same manner at the

close of the same business day by a principal pricing service (the

Principal Pricing Service), disclosed previously by Wells Fargo to the

Second Fiduciary, and/or as applicable, by the amortized cost method.

(f) The terms of the transaction are no less favorable to each Plan

than those obtainable in an arm's length transaction with an unrelated

party.

(g) Wells Fargo sends by regular mail to each affected Plan a

written confirmation, not more than 7 days after the completion of the

transaction, containing the date of the transaction, the number of

shares acquired by the Plan in each of the Funds, the price paid per

share for the shares in each of the Funds and the total dollar amount

involved in the transaction with each Fund.

(h) As to each Plan, the combined total of all fees received by

Wells Fargo for the provision of services to such Plan, and in

connection with the provision of services to any of the Funds in which

the Plan may invest, is not in excess of ``reasonable compensation''

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

(i) Wells Fargo does not receive any fees payable pursuant to Rule

12b-1 of

[[Page 37934]]

the `40 Act in connection with the transactions involving the Funds.

(j) The Plans are not sponsored or maintained by Wells Fargo.

(k) Wells Fargo provides the Second Fiduciary of such Plan with--

(l) A copy of the proposed exemption and/or the final exemption, if

granted;

(2) A copy of an updated prospectus of such Fund, at least

annually;

(3) A report or statement (which may take the form of the most

recent financial report, the current statement of additional

Information, or some other written statement) which contains a

description of all fees paid by the Fund to Wells Fargo, upon the

request of the Second Fiduciary; and

(4) A statement specifying--

(A) The total, expressed in dollars, of brokerage commissions that

are paid to Wells Fargo by such Fund;

(B) The total, expressed in dollars, of brokerage commissions that

are paid by such Fund to brokerage firms unrelated to Wells Fargo;

(C) The average brokerage commissions per share, expressed as cents

per share, paid to Wells Fargo by such Fund; and

(D) The average brokerage commissions per share, expressed as cents

per share, paid by such Fund to brokerage firms unrelated to Wells

Fargo. (Such statement will be provided at least annually with respect

to each of the Funds in which a Plan invests in the event a Fund places

brokerage transactions with Wells Fargo.)

(l) All dealings between the Plans and the Funds are on a basis no

less favorable to the Plans than dealings with other shareholders of

the Funds.

Section II. General Conditions

(a) Wells Fargo maintains for a period of six years the records

necessary to enable the persons described below in paragraph (b) of

Section II to determine whether the conditions of this exemption have

been met, except that (1) a prohibited transaction will not be

considered to have occurred if, due to circumstances beyond the control

of Wells Fargo, the records are lost or destroyed prior to the end of

the six-year period, and (2) no party in interest, other than Wells

Fargo shall be subject to the civil penalty that may be assessed under

section 502(i) of the Act or the taxes imposed by section 4975 (a) and

(b) of the Code if the records are not maintained or are not available

for examination as required by paragraph (b) below; and

(b)(1) Except as provided in paragraph (b)(2) and notwithstanding

any provisions of section 504 (a)(2) and (b) of the Act, the records

referred to in paragraph (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 or the Internal Revenue Service,

(B) Any fiduciary of the Plans who has authority to acquire or

dispose of shares of the Funds owned by the Plans, or any duly

authorized employee or representative of such fiduciary, and

(C) Any participant or beneficiary of the Plans or duly authorized

employee or representative of such participant or beneficiary;

(2) None of the persons described in paragraph (b)(1)(B) and (C)

shall be authorized to examine trade secrets of Wells Fargo, or

commercial or financial information which is privileged or

confidential.

Section III. Definitions

For purposes of this exemption,

(a) The term ``Wells Fargo'' means Wells Fargo Bank, N.A. and any

affiliate of Wells Fargo Bank, N.A., as defined in paragraph (b) of

this Section VI.

(b) An ``affiliate'' of Wells Fargo includes--

(1) Any person directly or indirectly through one or more

intermediaries, controlling, controlled by, or under common control

with Wells Fargo;

(2) Any officer, director, employee, relative, or partner in any

such person; and

(3) Any corporation or partnership of which such person is an

officer, director, partner, or employee;

(c) The term ``control'' means the power to exercise a controlling

influence over the management or policies of a person other than an

individual.

(d) The term ``relative'' means a ``relative'' as that term is

defined in section 3(15) of the Act (or a ``member of the family'' as

that term is defined in section 4975(e)(6) of the Code), or a brother,

a sister, or a spouse of a brother or a sister.

(e) The term ``Second Fiduciary'' means a fiduciary of a Plan who

is independent of and unrelated to Wells Fargo. For purposes of this

exemption, the Second Fiduciary will not be deemed to be independent of

and unrelated to Wells Fargo if--

(1) Such Second Fiduciary directly or indirectly controls, is

controlled by, or is under common control with Wells Fargo;

(2) Such Second Fiduciary, or any officer, director, partner,

employee, or relative of such Second Fiduciary is an officer, director,

partner, or employee of Wells Fargo (or is a relative of such persons);

(3) Such Second Fiduciary directly or indirectly receives any

compensation or other consideration for his or her own personal account

in connection with any transaction described in this proposed

exemption.

If an officer, director, partner, or employee of Wells Fargo (or a

relative of such persons), is a director of such Second Fiduciary, and

if he or she abstains from participation in the choice of the Plan's

investment manager/adviser, the approval of any purchase or sale by the

Plan of shares of the Funds, and the approval of any change of fees

charged to or paid by the Plan, in connection with any of the

transactions described in Section I above, then paragraph (e)(2) of

this Section III, shall not apply.

(f) The term ``Fund or Funds'' means a diversified open-end

investment company or companies registered under the `40 Act for which

Wells Fargo serves as investment adviser and may also provide Secondary

Services as approved by such Fund. The Funds are limited to six

investment Fund portfolios of the Stagecoach Funds, Inc. These Fund

portfolios include include the Asset Allocation Fund, the Bond Index

Fund, the Growth Stock Fund, the Short-Intermediate Term Fund, the S&P

500 Stock Fund and the U.S. Treasury Allocation Fund.

(g) The term ``net asset value'' means the amount for purposes of

pricing all purchases and sales of shares in a Fund calculated by

dividing the value of all securities, determined by a method as set

forth in a Fund's prospectus and statement of additional information,

and other assets belonging to such Fund, less the liabilities charged

to the Fund, by the number of outstanding shares in such Fund.

(h) The term ``Secondary Service'' means a service other than an

investment management, investment advisory or similar service which is

provided by Wells Fargo to the Funds. However, for purposes of this

exemption, Secondary Services will include only brokerage services

provided to the Funds by Wells Fargo for the execution of securities

transactions engaged in by the Funds.

(i) The term ``Principal Pricing Service'' means an independent,

recognized pricing service that has determined the aggregate dollar

value of marketable securities involved in a CIF Exchange. Prior to the

CIF Exchange, the Principal Pricing Service was disclosed in writing by

Wells Fargo to the Second Fiduciary.

EFFECTIVE DATE: This exemption is effective from July 2, 1993 until

October

[[Page 37935]]

1, 1993 with respect to CIF Exchanges that occurred on July 2, August

19, and October 1, 1993.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption published on April 4, 1996 at 61 FR

15123.

Written Comments

The Department received one written comment with respect to the

notice of proposed exemption and no requests for a public hearing. The

comment, which was submitted by Wells Fargo, concerned notification of

interested persons. In this regard, Wells Fargo represented that notice

of the proposed exemption was originally sent to its client Plans on

April 24, 1996. However, because the notice was incomplete, Wells Fargo

explained that it renotified these Plans of the proposed exemption on

May 24, 1996 and extended the comment period until June 24, 1996.

In addition, Wells Fargo stated that client Plans of BZW Barclays

Global Investors, N.A. were properly notified of the proposed

exemption. Therefore, there were no further extensions of the comment

period with respect to such Plans.

Thus, after giving full consideration to the entire record, the

Department has decided to grant the subject exemption. Wells Fargo's

comment letter has been included as part of the public record of the

exemption application. The complete application file, including all

supplemental submissions received by the Department, is made available

for public inspection in the Public Documents Room of the Pension and

Welfare Benefits Administration, Room N-5638, U.S. Department of Labor,

200 Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

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

Sacramento, California

[Prohibited Transaction Exemption 96-55; Exemption Application No. D-

10073]

Exemption

The restrictions of sections 406(a), 406(b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

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

shall not apply to the sale by the Plan of certain office equipment

(the Workstations) to Aircon Energy, Inc. (Aircon), a party in interest

with respect to the Plan, provided that the following conditions are

satisfied: (1) the sale is a one-time transaction for cash; (2) the

Plan pays no commissions nor any other expenses relating to the sale;

(3) the purchase price is the greater of: (a) the fair market value of

the Workstations as determined by a qualified, independent appraiser,

or (b) the Plan's initial acquisition cost plus opportunity costs

attributable to the Workstations while in storage; (4)

contemporaneously with the sale, Aircon reimburses the Plan for the

fair market rental value with respect to the prohibited use of certain

of the Workstations; (5) contemporaneously with the sale, Aircon

reimburses the Plan for losses and opportunity costs associated with

the prior sale of certain of the Workstations to an unrelated third

party; and (6) within 90 days of the publication in the Federal

Register of the grant of this exemption, Aircon files Form 5330 with

the Internal Revenue Service (the Service) and pays all applicable

additional excise taxes that are due by reason of the prohibited use

transactions.

The Department has determined to clarify Conditions 4 and 5 and has

modified the language in this exemption accordingly.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption published on January 31, 1996 at 61 FR

3476.

FOR FURTHER INFORMATION CONTACT: Karin Weng of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

Smith Barney, Located in New York, New York

[Prohibited Transaction Exemption 96-56; Exemption Application No. D-

10126]

Exemption

The restrictions of section 406(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) through (D) of the Code, shall not apply to

the lending of securities, under certain ``exclusive borrowing''

arrangements, to Smith Barney, and to any affiliate of Smith Barney who

is a U.S. registered broker-dealer or a government securities broker or

dealer (Affiliates; collectively Smith Barney), by employee benefit

plans (Plans) with respect to which Smith Barney is a party in

interest, provided that the following conditions are satisfied:

(a) For each Plan, neither Smith Barney nor its Affiliates has

discretionary authority or control over the Plan's investment in the

securities available for loan, nor do they render investment advice

(within the meaning of 29 CFR 2510.3-21(c)) with respect to those

assets;

(b) Smith Barney directly negotiates an exclusive borrowing

agreement (Borrowing Agreement) with a Plan fiduciary which is

independent of Smith Barney;

(c) In exchange for granting Smith Barney the exclusive right to

borrow certain securities, the Plan either (i) receives a reasonable

fee, which is specified in the Borrowing Agreement for each category of

securities available for loan and is a flat fee, a set percentage rate,

or a percentage rate established by reference to an objective formula,

or (ii) has the opportunity to derive compensation through the

investment of cash collateral posted by Smith Barney;

(d) Any change in the rate that Smith Barney pays to the Plan with

respect to any securities loan requires the prior written consent of

the independent fiduciary, except that consent is presumed where the

rate changes pursuant to an objective formula specified in the

Borrowing Agreement and the independent fiduciary is notified at least

24 hours in advance of such change and does not object in writing

thereto, prior to the effective time of such change;

(e) On or before the day the loaned securities are delivered, the

Plan receives from Smith Barney (by physical delivery, book entry in a

securities depository, wire transfer, or similar means) collateral

consisting of cash, securities issued or guaranteed by the U.S.

Government or its agencies, irrevocable bank letters of credit issued

by persons other than Smith Barney or its Affiliates, or other

collateral permitted under PTCE 81-6, as it may be amended or

superseded; 1

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1 PTCE 81-6 (46 FR 7527, January 23, 1981, as amended at 52 FR

18754, May 19, 1987) provides an exemption under certain conditions

from section 406(a)(1) (A) through (D) of the Act and the

corresponding provisions of section 4975(c) of the Code for the

lending of securities that are assets of an employee benefit plan to

certain broker-dealers or banks which are parties in interest.

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(f) The market value of the collateral initially equals at least

102 percent of the market value of the loaned securities and, if the

market value of the collateral at any time falls below 100 percent,

Smith Barney delivers additional collateral on the following day to

bring the level of the collateral back to 102 percent;

(g) Before entering into a Borrowing Agreement, Smith Barney

furnishes to the Plan the most recent publicly available audited and

unaudited statements of its financial condition, as

[[Page 37936]]

well as any publicly available information which it believes is

necessary for the independent fiduciary to determine whether the Plan

should enter into or renew the Borrowing Agreement;

(h) The Borrowing Agreement contains a representation by Smith

Barney that as of each time it borrows securities, there has been no

material adverse change in its financial condition since the date of

the most recently furnished financial statements;

(i) The Plan receives the equivalent of all distributions made

during the loan period, including, but not limited to, cash dividends,

interest payments, shares of stock as a result of stock splits, and

rights to purchase additional securities, that the Plan would have

received (net of tax withholdings) 2 had it remained the record

owner of the securities;

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2 The Department notes the applicant's representation

that dividends and other distributions on foreign securities payable

to a lending Plan are subject to foreign tax withholdings and that

Smith Barney will always put the Plan back in at least as good a

position as it would have been in had it not loaned the securities.

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(j) The Borrowing Agreement and/or any securities loan outstanding

may be terminated by either party at any time without penalty,

whereupon Smith Barney returns any borrowed securities (or the

equivalent thereof in the event of reorganization, recapitalization, or

merger of the issuer of the borrowed securities) to the Plan within

five business days of written notice of termination;

(k) In the event that Smith Barney fails to return the borrowed

securities, Smith Barney indemnifies the Plan with respect to the

difference, if any, between the replacement cost of the borrowed

securities and the market value of the collateral on the date the loan

is declared in default, together with expenses not covered by the

collateral plus applicable interest at a reasonable rate;

(l) All procedures regarding the securities lending activities, at

a minimum, conform to the applicable provisions of PTCE 81-6, as it may

be amended or superseded;

(m) Only Plans, which together with related Plans,3 having

assets with an aggregate market value in excess of $50 million may lend

securities to Smith Barney under an exclusive borrowing arrangement;

and

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3 The Department notes the applicant's representation

that the term ``related Plans'' refers to plans within the

jurisdiction of Title I of the Act that are maintained by an entity

or its affiliates, as ``affiliate'' is defined in section 407(d)(7)

of the Act.

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(n) Prior to any Plan's approval of the lending of its securities

to Smith Barney, a copy of this exemption, if granted (and the notice

of pendency) are provided to the Plan, and Smith Barney informs the

independent fiduciary that Smith Barney is not acting as a fiduciary of

the Plan in connection with its borrowing securities from the

Plan.4

4 The Department notes the applicant's representation that,

under the proposed exclusive borrowing arrangements, Smith Barney

will not perform the functions of a securities lending agent, nor

will Smith Barney perform any services ancillary to securities

lending, such as monitoring the level of collateral and the value of

the loaned securities.

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EFFECTIVE DATE: The exemption is effective as of September 25, 1995.

For a more complete statement of the facts and representations

supporting the Department's decision to grant this exemption, refer to

the notice of proposed exemption published on May 23, 1996 at 61 FR

25905.

FOR FURTHER INFORMATION CONTACT: Ms. Karin Weng of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

VVP America, Inc. Incentive Savings Plan (the Plan) Located in Memphis,

Tennessee

[Prohibited Transaction Exemption 96-57; Exemption Application No. D-

10141]

Exemption

The restrictions of sections 406(a), 406 (b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

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

shall not apply to the sales by the Plan to VVP America, Inc., the

sponsor of the Plan, of universal life insurance policies (the

Policies) issued by the Confederation Life Insurance Company; provided

that the following conditions are satisfied:

(A) All terms and conditions of the transactions are at least as

favorable to the Plan as those which the Plan could obtain in arm's-

length transactions with unrelated parties;

(B) The Plan receives cash purchase prices for the Policies of no

less than the greater of (1) the fair market value of each Policy as of

the sale date, or

(2) each Policy's cash surrender value (as described in the Notice

of Proposed Exemption) as of the sale date; and

(C) The Plan does not incur any expenses or suffer any loss with

respect to the transactions.

For a more complete statement of the facts and representations

supporting this exemption, refer to the notice of proposed exemption

published on May 23, 1996 at 61 FR 25907.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

Fieldcrest Cannon, Inc. Retirement Savings Plan for Salaried Employees,

and Fieldcrest Cannon, Inc. Retirement Savings Plan for Hourly

Employees (the Plans) Located in Eden, North Carolina

[Prohibited Transaction Exemption 96-58; Exemption Application Nos. D-

10180 & D-10181]

Exemption

The restrictions of sections 406(a), 406 (b)(1) and (b)(2) of the

Act and the sanctions resulting from the application of section 4975 of

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

shall not apply to (1) the guaranty (the Guaranty) by Fieldcrest

Cannon, Inc. (the Employer), the sponsor of the Plans, of amounts due

the Plans with respect to three guaranteed investment contracts (the

GICs) issued by Confederation Life Insurance Company (Confederation);

(2) the potential extensions of credit (the Advances) to the Plans by

the Employer pursuant to the Guaranty; (3) the Plans' potential

repayment of the Advances; and (4) the potential purchase of the GICs

from the Plans by the Employer for cash; provided the following

conditions are satisfied:

(A) All terms and conditions of such transactions are no less

favorable to the Plans than those which the Plans could obtain in

arm's-length transactions with unrelated parties;

(B) No interest and/or expenses are paid by the Plans in connection

with the transactions;

(C) The proceeds of the Advances are used solely in lieu of

payments due from Confederation with respect to the GICs;

(D) Repayment of the Advances will be restricted to the GIC

Proceeds, defined as the cash proceeds obtained by the Plans from or on

behalf of Confederation with respect to the GICs;

(E) Repayment of the Advances will be waived to the extent that the

Advances exceed the GIC Proceeds; and

(F) In any sale of a GIC to the Employer, the Plans will receive a

purchase price which is no less than the fair market value of the GIC

as of the sale date, and no less than the GIC's ``Book Value'' as

defined in the Notice of Proposed Exemption, plus post-maturity

interest, if applicable, at the FIF Rate as defined in the Notice of

Proposed Exemption, less any Advances made pursuant to this exemption

and any GIC Proceeds received with respect to the GIC, as of the sale

date.

For a more complete statement of the facts and representations

supporting

[[Page 37937]]

this exemption, refer to the notice of proposed exemption published on

May 6, 1996 at 61 FR 20281.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

telephone (202) 219-8881. (This is not a toll-free number.)

General Information

The attention of interested persons is directed to the following:

(1) The fact that a transaction is the subject of an exemption

under section 408(a) of the Act and/or section 4975(c)(2) of the Code

does not relieve a fiduciary or other party in interest or disqualified

person from certain other provisions to which the exemption does not

apply and the general fiduciary responsibility provisions of section

404 of the Act, which among other things require a fiduciary to

discharge his duties respecting the plan solely in the interest of the

participants and beneficiaries of the plan and in a prudent fashion in

accordance with section 404(a)(1)(B) of the Act; nor does it affect the

requirement of section 401(a) of the Code that the plan must operate

for the exclusive benefit of the employees of the employer maintaining

the plan and their beneficiaries;

(2) These exemptions are supplemental to and not in derogation of,

any other provisions of the Act and/or the Code, including statutory or

administrative exemptions and transactional rules. Furthermore, the

fact that a transaction is subject to an administrative or statutory

exemption is not dispositive of whether the transaction is in fact a

prohibited transaction; and

(3) The availability of these exemptions is subject to the express

condition that the material facts and representations contained in each

application are true and complete and accurately describe all material

terms of the transaction which is the subject of the exemption. In the

case of continuing exemption transactions, if any of the material facts

or representations described in the application change after the

exemption is granted, the exemption will cease to apply as of the date

of such change. In the event of any such change, application for a new

exemption may be made to the Department.

Signed at Washington, D.C., this 17th day of July, 1996.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 96-18539 Filed 7-19-96; 8:45 am]

BILLING CODE 4510-29-P