Grant of Individual Exemptions; Society National Bank; KeyTrust Company of Ohio; Society Asset Management, Inc; and KeyCorp, et al.

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 96-64; Exemption Application No. D-

10063, et al.]

Grant of Individual Exemptions; Society National Bank; KeyTrust

Company of Ohio; Society Asset Management, Inc; and KeyCorp, 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, D.C. 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.

Society National Bank; KeyTrust Company of Ohio; Society Asset

Management, Inc; and KeyCorp Located in Cleveland, Ohio

[Prohibited Transaction Exemption 96-64; Application No. D-10063]

SECTION I--Exemption for In-Kind Transfer of CIF Assets

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

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

by reason of section 4975(c)(1)(A) through (F) of the Code, shall not

apply as of December 1, 1993, to the in-kind transfer of assets of

plans for which Society National Bank, KeyTrust Company of Ohio, N.A.,

Society Asset Management, Inc., and KeyCorp or an affiliate

(collectively, the Bank) serves as a fiduciary (the Client Plans),

other than plans established and maintained by the Bank, that are held

in certain collective investment funds maintained by the Bank (the

CIFs), in exchange for shares of The Victory Portfolios (collectively,

the Funds), an open-end investment company registered under the

Investment Company Act of 1940 (the 1940 Act), for which the Bank acts

as an investment adviser as well as a custodian, sub-administrator,

and/or shareholder servicing agent, or provides some other ``secondary

service'' as defined in Section IV(h), in connection with the

termination of such CIFs, provided that the following conditions and

the general conditions of Section III below are met:

(a) No sales commissions or other fees are paid by the Client Plans

in connection with the purchase of Fund shares through the in-kind

transfer of CIF assets and no redemption fees are paid in connection

with the sale of such shares by the Client Plans to the Funds.

(b) All or a pro rata portion of the assets of a CIF are

transferred to a Fund in exchange for shares of such Fund.

(c) Each Client Plan receives shares of a Fund which have a total

net asset value that is equal to the value of the Client Plan's pro

rata share of the assets of the CIF on the date of the transfer, based

on the current market value of the CIF's assets, as determined in a

single valuation performed in the same manner at the close of the same

business day, using independent sources in accordance with Rule 17a-

7(b) of the Securities and Exchange Commission (SEC) under the 1940 Act

and the procedures established by the Funds pursuant to Rule 17a-7 for

the valuation of such assets. Such procedures must require that all

securities for which a current market price cannot be obtained by

reference to the last sale price for transactions reported on a

recognized securities exchange or NASDAQ be valued based on an average

of the highest current independent bid and lowest current independent

offer, as of the close of business on the Friday preceding the weekend

of the CIF transfers, determined on the basis of reasonable inquiry

from at least three sources that are broker-dealers or pricing services

independent of the Bank.

(d) A second fiduciary who is independent of and unrelated to the

Bank (the Second Fiduciary) receives advance written notice of the in-

kind transfer of assets of the CIFs and full written disclosure of

information concerning the Funds, including:

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

considering investing;

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

similar services, any secondary services as defined in Section IV(h),

and all other fees to be charged to or paid by the Client Plan and by

the Funds, including the nature and extent of any differential between

the rates of such fees;

(3) The reasons why the Bank considers investing in the Fund is an

appropriate investment decision for the Client Plan;

[[Page 44082]]

(4) A statement describing whether there are any limitations

applicable to the Bank with respect to which assets of a Client Plan

may be invested in a Fund, and, if so, the nature of such limitations;

and

(5) Upon request of the Second Fiduciary, a copy of the proposed

exemption and/or a copy of the final exemption, once such documents are

published in the Federal Register.

(e) After consideration of the foregoing information, the Second

Fiduciary authorizes in writing the in-kind transfer of the Client

Plan's CIF assets to a corresponding Fund in exchange for shares of the

Fund.

(f) For all in-kind transfers of CIF assets to a Fund following

March 5, 1996, the date of publication in the Federal Register for the

proposal of this exemption, the Bank sends by regular mail to each

affected Client Plan the following information:

(1) Within 30 days after completion of the transaction, a written

confirmation containing:

(i) The identity of each security that was valued for purposes of

the transaction in accordance with Rule 17a-7(b)(4);

(ii) The price of each such security involved in the transaction;

(iii) The identity of each pricing service or market-maker

consulted in determining the value of such securities; and

(2) Within 90 days after completion of each in-kind transfer, a

written confirmation containing:

(i) The number of CIF units held by the Client Plan immediately

before the transfer, the related per unit value, and the total dollar

amount of such CIF units; and

(ii) The number of shares in the Funds that are held by the Client

Plan following the transfer, the related per share net asset value, and

the total dollar amount of such shares.

(g) The conditions set forth in paragraphs (e), (f) and (n) of

Section II below are satisfied.

Section II--Exemption for Receipt of Fees

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)(1)(A) through (F) of the Code, shall not

apply as of October 1, 1995 to: (1) the receipt of fees by the Bank

from the Funds for acting as an investment adviser to the Funds in

connection with the investment by the Client Plans in shares of the

Funds; and (2) the receipt and retention of fees by the Bank from the

Funds for acting as custodian, sub-administrator and shareholder

servicing agent to the Funds, as well as for providing any other

services to the Funds which are not investment advisory services (i.e.

``secondary services''), in connection with the investment by the

Client Plans in shares of the Funds, provided that the following

conditions and the general conditions of Section III are met:

(a) No sales commissions are paid by the Client Plans in connection

with the purchase or sale of shares of the Funds and no redemption fees

are paid in connection with the sale of shares by the Client Plans to

the Funds.

(b) The price paid or received by a Client Plan for shares in a

Fund is the net asset value per share at the time of the transaction,

as defined in Section IV(e), and is the same price which would have

been paid or received for the shares by any other investor at that

time.

(c) The Bank, including any officer or director of the Bank, does

not purchase or sell shares of the Funds from or to any Client Plan.

(d) Each Client Plan receives a credit, either through cash or the

purchase of additional shares of the Funds pursuant to an annual

election made by the Client Plan, of such Plan's proportionate share of

all fees charged to the Funds by the Bank for investment advisory

services, including any investment advisory fees paid by the Bank to

third party sub-advisors, within no more than one business day of the

receipt of such fees by the Bank.

(e) For each Client Plan, the combined total of all fees received

by the Bank for the provision of services to the Client Plan, and in

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

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

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

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\*\ In addition, the Department notes that Section 404(a) of the

Act requires, among other things, that a fiduciary of a plan act

prudently, solely in the interest of the plan's participants and

beneficiaries, and for the exclusive purpose of providing benefits

to participants and beneficiaries when making investment decisions

on behalf of a plan. Thus, the Department believes that the Bank

should ensure, prior to any investments made by a Client Plan for

which it acts as a trustee or investment manager, that all fees paid

by the Funds, including fees paid to parties unrelated to the Bank

and its affiliates, are reasonable. In this regard, the Department

is providing no opinion as to whether the total fees to be paid by a

Client Plan to the Bank, its affiliates, and third parties under the

arrangements described herein would be either reasonable or in the

best interests of the participants and beneficiaries of the Client

Plans.

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(f) The Bank does not receive any fees payable pursuant to Rule

12b-1 under the 1940 Act in connection with the transactions.

(g) The Client Plans are not employee benefit plans sponsored or

maintained by the Bank.

(h) The Second Fiduciary receives, in advance of any initial

investment by the Client Plan in a Fund, full and detailed written

disclosure of information concerning the Funds, including but not

limited to:

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

considering investing;

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

similar services, any secondary services as defined in Section IV(h),

and all other fees to be charged to or paid by the Client Plan and by

the Funds, including the nature and extent of any differential between

the rates of such fees;

(3) The reasons why the Bank may consider such investment to be

appropriate for the Client Plan;

(4) A statement describing whether there are any limitations

applicable to the Bank with respect to which assets of a Client Plan

may be invested in the Funds, and if so, the nature of such

limitations; and

(5) Upon request of the Second Fiduciary, a copy of the proposed

exemption and/or a copy of the final exemption, once such documents are

published in the Federal Register.

(i) After consideration of the information described above in

paragraph (h), the Second Fiduciary authorizes in writing the

investment of assets of the Client Plan in each particular Fund, the

fees to be paid by such Funds to the Bank, and the purchase of

additional shares of a Fund by the Client Plan with the fees credited

to the Client Plan by the Bank.

(j) All authorizations made by a Second Fiduciary regarding

investments in a Fund and the fees paid to the Bank are subject to an

annual reauthorization wherein any such prior authorization referred to

in paragraph (i) shall be terminable at will by the Client Plan,

without penalty to the Client Plan, upon receipt by the Bank of written

notice of termination. A form expressly providing an election to

terminate the authorization described in paragraph (i) above (the

Termination Form) with instructions on the use of the form must be

supplied to the Second Fiduciary no less than annually; provided that

the Termination Form need not be supplied to the Second Fiduciary

pursuant to this paragraph sooner than six months after such

Termination Form is supplied pursuant to paragraph (l) below, except to

the extent required by such paragraph in order to disclose an

additional service or fee increase. The instructions

[[Page 44083]]

for the Termination Form must include the following information:

(1) The authorization is terminable at will by the Client Plan,

without penalty to the Client Plan, upon receipt by the Bank of written

notice from the Second Fiduciary; and

(2) Failure to return the Termination Form will result in continued

authorization of the Bank to engage in the transactions described in

paragraph (i) on behalf of the Client Plan.

(k) The Second Fiduciary of each Client Plan invested in a

particular Fund receives full written disclosure, in a statement

separate from the Fund prospectus, of any proposed increases in the

rates of fees charged by the Bank to the Funds for secondary services

(as defined in Section IV(h) below) at least 30 days prior to the

effective date of such increase, accompanied by a copy of the

Termination Form, and receives full written disclosure in a Fund

prospectus or otherwise of any increases in the rates of fees charged

by the Bank to the Funds for investment advisory services even though

such fees will be credited as required by paragraph (d) above.

(l) In the event that the Bank provides an additional secondary

service to a Fund for which a fee is charged or there is an increase in

the amount of fees paid by the Funds to the Bank for any secondary

services resulting from a decrease in the number or kind of services

performed by the Bank for such fees in connection with a previously

authorized secondary service, the Bank will, at least thirty days in

advance of the implementation of such additional service or fee

increase, provide written notice to the Second Fiduciary explaining the

nature and the amount of the additional service for which a fee will be

charged or the nature and amount of the increase in fees of the

affected Fund. Such notice shall be accompanied by the Termination

Form, as defined in Section IV(i) below.

(m) On an annual basis, the Bank provides the Second Fiduciary of a

Client Plan investing in the Funds with:

(1) A copy of the current prospectus for the Funds and, upon such

fiduciary's request, a copy of the Statement of Additional Information

for such Funds which contains a description of all fees paid by the

Funds to the Bank;

(2) A copy of the annual financial disclosure report of the Funds

in which such Client Plan is invested which includes information about

the Fund portfolios as well as audit findings of an independent auditor

within 60 days of the preparation of the report; and

(3) Oral or written responses to inquiries of the Second Fiduciary

as they arise.

(n) All dealings between the Client Plans and the Funds are on a

basis no less favorable to the Client Plans than dealings with other

shareholders of the Funds.

Section III--General Conditions

(a) The Bank maintains for a period of six years the records

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

determine whether the conditions of this exemption have been met,

except that (1) a prohibited transaction will not be considered to have

occurred if, due to circumstances beyond the control of the Bank, the

records are lost or destroyed prior to the end of the six-year period,

and (2) no party in interest other than the Bank shall be subject to

the civil penalty that may be assessed under section 502(i) of the Act

or to the taxes imposed by section 4975(a) and (b) of the Code if the

records are not maintained or are not available for examination as

required by paragraph (b) below.

(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--

(i) Any duly authorized employee or representative of the

Department or the Internal Revenue Service,

(ii) Any fiduciary of the Client Plans who has authority to acquire

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

duly authorized employee or representative of such fiduciary, and

(iii) Any participant or beneficiary of the Client Plans or duly

authorized employee or representative of such participant or

beneficiary;

(2) None of the persons described in paragraph (b)(1)(ii) and (iii)

shall be authorized to examine trade secrets of the Bank, or commercial

or financial information which is privileged or confidential.

Section IV--Definitions

For purposes of this exemption:

(a) The term ``Bank'' includes Society National Bank, KeyTrust

Company of Ohio, Society Asset Management, Inc., KeyCorp and any

affiliate thereof as defined below in paragraph (b)(1) of this section.

(b) An ``affiliate'' of a person includes:

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

intermediaries, controlling, controlled by, or under common control

with the person;

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

such person; and

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

officer, director, partner, or employee.

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

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

individual.

(d) The term ``Fund'' or ``Funds'' shall include the Victory

Portfolios, or any other diversified open-end investment company or

companies registered under the 1940 Act for which the Bank serves as an

investment adviser and may also serve as a custodian, shareholder

servicing agent, transfer agent or provide some other ``secondary

service'' (as defined below in paragraph (h) of this Section) which has

been approved by such Funds.

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

pricing all purchases and sales calculated by dividing the value of all

securities, determined by a method as set forth in the Fund's

prospectus and statement of additional information, and other assets

belonging to the Fund or portfolio of the Fund, less the liabilities

charged to each such portfolio or Fund, by the number of outstanding

shares.

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

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

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

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

(g) The term ``Second Fiduciary'' means a fiduciary of a Client

Plan who is independent of and unrelated to the Bank. For purposes of

this exemption, the Second Fiduciary will not be deemed to be

independent of and unrelated to the Bank if:

(1) Such fiduciary directly or indirectly controls, is controlled

by, or is under common control with the Bank;

(2) Such fiduciary, or any officer, director, partner, employee, or

relative of the fiduciary is an officer, director, partner or employee

of the Bank (or is a relative of such persons) or any affiliate

thereof;

(3) Such fiduciary directly or indirectly receives any compensation

or other consideration for his or her own personal account in

connection with any transaction described in this exemption.

If an officer, director, partner, employee of the Bank (or relative

of such persons), or affiliate thereof, is a director of such Second

Fiduciary, and

[[Page 44084]]

if he or she abstains from participation in (i) the choice of the

Client Plan's investment adviser, (ii) the approval of any such

purchase or sale between the Client Plan and the Funds, and (iii) the

approval of any change in fees charged to or paid by the Client Plan in

connection with any of the transactions described in Sections I and II

above, then paragraph (g)(2) of this section shall not apply.

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

investment management, investment advisory, or similar service, which

is provided by the Bank to the Funds. For purposes of this exemption,

the term ``secondary service'' will include securities lending services

provided by the Bank to the Funds, but will not include any brokerage

services provided to the Funds by the Bank for the execution of

securities transactions engaged in by the Funds.

(i) The term ``Termination Form'' means the form supplied to the

Second Fiduciary which expressly provides an election to the Second

Fiduciary to terminate on behalf of a Client Plan the authorization

described in paragraph (j) of Section II. Such Termination Form may be

used at will by the Second Fiduciary to terminate an authorization

without penalty to the Client Plan and to notify the Bank in writing to

effect a termination by selling the shares of the Funds held by the

Client Plan requesting such termination within one business day

following receipt by the Bank of the form; provided that if, due to

circumstances beyond the control of the Bank, the sale cannot be

executed within one business day, the Bank shall have one additional

business day to complete such sale.

EFFECTIVE DATE: This exemption is effective as of December 1, 1993, for

the transactions described in Section I above, and October 1, 1995, for

the transactions described in Section II above.

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 March 5, 1996, at 61 FR

8674.

NOTICE TO INTERESTED PERSONS: The applicant represents that it was

unable to notify interested persons within the time period specified in

the Federal Register notice published on March 5, 1996. The applicant

states that interested persons were notified, in the manner agreed upon

between the applicant and the Department, by June 30, 1996. Interested

persons were advised that they had until July 31, 1996 to comment or

request a hearing on the proposed exemption. No written comments or

requests for a hearing were received by the Department.

FOR FURTHER INFORMATION CONTACT: Mr. E. F. Williams of the Department,

telephone (202) 219-8194. (This is not a toll-free number.)

Bill Ussery Motors, Inc. Fourth Amended and Restated Profit Sharing

Plan and Trust (the Plan) Located in Coral Gables, Florida

[Prohibited Transaction Exemption 96-65; Exemption Application No. D-

10146]

Exemption

The restrictions of sections 406(a) and 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 cash sale (the Sale) of certain real property

(the Property) by the Plan to Mr. John C. Brockway, the sole

shareholder of the sponsoring employer and a party in interest with

respect to the Plan; provided that (1) the Sale is a one-time

transaction for cash; (2) the Plan does not experience any loss nor

incur any expenses from the transaction; and (3) the Plan receives as

consideration from the Sale the greater of either (a) the fair market

value of the property as determined by a qualified, independent

appraiser on the date of the Sale, or (b) an amount equal to the

appraised fair market value as determined on December 31, 1994.

For a more complete statement of the facts and representations

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

the notice of proposed exemption published on June 21, 1996, at 61 FR

31954.

COMMENTS: The Department received one written comment requesting that

the purchaser of the Property be changed from Bill Ussery Motors, Inc.

(the Employer), the sponsoring employer and a party in interest to Mr.

John C. Brockway, the sole shareholder of the Employer and its Chief

Executive Officer, and a party in interest. Accordingly, after giving

full consideration to the request and the entire record, the Department

has determined to change the designation of the purchaser of the

Property as requested and to grant the exemption.

FOR FURTHER INFORMATION CONTACT: Mr. C. E. Beaver of the Department,

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

Hach Company 401(k) Profit Sharing Plan (the Plan) Located in

Loveland, CO

[Prohibited Transaction Exemption 96-66; Exemption Application No. D-

10203]

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 proposed cash sale by the Plan of Group Annuity

Contract No. 5000008 (the GAC) issued by Anchor National Life Insurance

Company, located in Los Angeles, California, to Hach Company, a party

in interest with respect to the Plan.

This exemption is subject to the following conditions:

(a) The sale is a one-time transaction for cash.

(b) The Plan does not experience any losses or incur any expenses

in connection with the transaction.

(c) The Plan receives as consideration an amount that is equal to

the fair market value of the GAC as of the date of the sale.

(d) The trustees of the Plan have determined that the proposed

transaction is appropriate for the Plan and in the best interests of

the Plan's participants and beneficiaries.

For a more complete statement of the facts and representations

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

the notice of proposed exemption published on June 21, 1996 at 61 FR

31955.

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

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

Cablevision Industries Corporation Profit Sharing Plan (the Plan)

Located in New York, New York

[Prohibited Transaction Exemption 96-67; Exemption Application No. D-

10233]

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 purchase from the Plan by Cablevision Industries

Corporation (the Employer), the sponsor of the Plan, of the Plan's

entire remaining interest (the Surviving Claim) in guaranteed

investment contract number GCNG8690011A issued by the Executive Life

Insurance Company; provided that the following conditions are

satisfied:

[[Page 44085]]

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

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

length transaction with an unrelated party;

(B) The Plan receives a cash purchase price which is no less than

the greater of (1) the fair market value of the Surviving Claim as of

the sale date, or (2) the Plan's principal investment attributable to

the Surviving Claim plus interest through the purchase date at the

Contract Rate (as defined in the Notice of Proposed Exemption); and

(C) In the event the Employer subsequently receives payments with

respect to the Surviving Claim from any source in excess of the

purchase price paid to Plan, such excess will be paid to the Plan.

EFFECTIVE DATE: This exemption is effective as of June 17, 1996.

For a more complete statement of the facts and representations

supporting this exemption, refer to the notice of proposed exemption

published on June 4, 1996 at 61 FR 28242.

FOR FURTHER INFORMATION CONTACT: Ronald Willett of the Department,

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

Hoechst Marion Roussel, Inc. Matching Contribution Plan (the Plan)

Located in Kansas City, Missouri

[Prohibited Transaction Exemption 96-68; Exemption Application No. D-

10242]

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 continuing guarantee by Hoechst Marion Roussel,

Inc. (the Corporation) of a loan made to the Marion Merrell Dow Inc.

Associate Stock Ownership Plan (the Plan), provided the following

conditions are satisfied: a) the transaction is a continuation of a

guarantee that was statutorily exempt at the time it was entered into;

and b) the transaction requires an exemption because of an independent

transaction involving the Plan's sponsor as a corporate entity.

For a more complete statement of the facts and representations

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

the notice of proposed exemption published on June 21, 1996 at 61 FR

31956.

EFFECTIVE DATE: This exemption is effective from July 18, 1995 to

August 2, 2005.

WRITTEN COMMENTS AND HEARING REQUESTS: The only written comment

received by the Department was submitted by the applicant to correct an

erroneous representation in the notice of proposed exemption. The

applicant had represented that German companies do not maintain stock

plans since, under German law, companies are not legally permitted to

purchase their own stock. The applicant states in its comment letter

that it has recently come to the applicant's attention that in certain

cases some German corporations have introduced stock plans to

compensate their German employees. The applicant also represents that

this does not change the fact that Hoechst AG, the German corporation

of which the Corporation is an indirect wholly owned subsidiary, does

not wish to have any of its equity securities owned by an employee

stock ownership plan for the benefit of United States employees.

The Department received no hearing requests with respect to the

proposed exemption. The Department has considered the entire record,

including the applicant's comment, and has determined to grant the

exemption as proposed.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,

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

General Information

The attention of interested persons is directed to the following:

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

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

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

person from certain other provisions to which the exemptions 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 accurately describes all material terms of the transaction

which is the subject of the exemption.

Signed at Washington, D.C., this 22nd day of August, 1996.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 96-21840 Filed 8-26-96; 8:45 am]

BILLING CODE 4510-29-P