Grant of Individual Exemptions; The Retirement Plan for Salaried and Certain Hourly Employees of Keebler Company (the Plan), et al.

DEPARTMENT OF LABOR

Pension and Welfare Benefits Administration

[Prohibited Transaction Exemption 97-24; Exemption Application No. D-

10253, et al.]

Grant of Individual Exemptions; The Retirement Plan for Salaried

and Certain Hourly Employees of Keebler Company (the Plan), 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.

The Retirement Plan for Salaried and Certain Hourly Employees of

Keebler Company (the Plan) Located in Elmhurst, Illinois

[Prohibited Transaction Exemption 97-24; Exemption Application No. D-

10253]

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 leasing by the Plan of certain improved real

property (the Property) to Keebler Company (the Employer), a party in

interest with respect to the Plan, (2) the potential future purchase of

the Property by the Employer, either pursuant to the Employer's right

of first refusal, as stipulated in the lease, or pursuant to an offer

by the Employer to purchase the Property, and (3) the ``make whole

agreement,'' and any payments thereunder, whereby the Employer will

make the Plan whole, in the event that the Plan sells the Property to

an unrelated party at a net loss.

This exemption is subject to the following conditions:

(1) The Plan is represented for all purposes with respect to the

lease by a qualified, independent fiduciary;

[[Page 27622]]

(2) The terms and conditions of the lease are and continue to be at

least as favorable to the Plan as those the Plan could obtain in a

comparable arm's length transaction with an unrelated party;

(3) The rent paid to the Plan under the lease is and continues to

be no less than the fair market rental value of the Property, as

established by a qualified, independent appraiser;

(4) The rent is adjusted, at a minimum, every three years (upwards

only), based upon an updated independent appraisal;

(5) The lease is a net lease, under which the Employer as the

tenant is obligated for all operating expenses, including maintenance,

taxes, insurance, and utilities;

(6) The independent fiduciary for the Plan represents that it has

reviewed the terms and conditions of the lease on behalf of the Plan

and believes the lease is in the best interests of and appropriate for

the Plan;

(7) The independent fiduciary monitors and enforces compliance with

the terms and conditions of the lease and of the exemption for the

duration of the lease;

(8) The independent fiduciary expressly approves any improvements

by the Employer over $100,000 to the Property and any renewal of the

lease beyond the initial term;

(9) In the event that the Employer exercises its right of first

refusal under the lease, or makes an offer to purchase the Property

which is accepted by the Plan, the Employer purchases the Property from

the Plan for an amount which is the greater of: (a) The original

acquisition cost of the Property, plus the cost of any improvements,

paid by the Plan, or (b) the fair market value of the Property as of

the date of the sale, as established by a qualified, independent

appraiser selected by the independent fiduciary;

(10) In the event that the Plan sells the Property to an unrelated

party at a net loss (taking into account the cost of any improvements

and all selling expenses paid by the Plan), the Employer makes the Plan

whole, within 15 days after the date of such sale, by paying the Plan

cash in an amount equal to the difference between: (a) The original

acquisition cost of the Property, plus the cost of any improvements and

all selling expenses, paid by the Plan, and (b) the amount of the sale

proceeds received by the Plan; and

(11) At all times, the fair market value of the Property represents

no more than 25 percent of the total assets of the Plan.

EFFECTIVE DATE: This exemption is effective as of April 15, 1996.

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 30, 1996 at 61 FR

68791.

Written Comments

The Department received a number of telephone inquiries and written

comments from interested persons with respect to the proposed

exemption, as well as one request for a public hearing. All of the

comments, except for one comment from the applicant, were from

participants and beneficiaries of the Plan. The Department responded

directly to most of the commenters' concerns via a telephone hot line.

Three commenters raised substantive issues, which are addressed below.

The applicant wished the record to include the following updated

information regarding the Employer and the Plan. On June 4, 1996,

Keebler Corporation, the parent company of the Employer, acquired

Sunshine Biscuits, Inc. Effective as of December 31, 1996, the Sunshine

Biscuits, Inc. Pension Plan (the Sunshine Plan) was merged into, and

survived by, the Plan. Accordingly, in the first paragraph under the

Summary of Facts and Representations in the notice of proposed

exemption, the third and fourth sentences should be revised to read:

As of December 31, 1996, the Plan had approximately 14,300

participants and beneficiaries and total assets of $473,030,442.

Participants and beneficiaries of the former Sunshine Plan were

included by the Employer among the class of ``interested persons'' who

were provided with notice of the proposed exemption.

In addition, the applicant requested that the exemption as proposed

should be modified to permit the potential future purchase of the

Property by the Employer, either pursuant to the Employer's right of

first refusal, as stipulated in the lease, or pursuant to an offer by

the Employer to purchase the Property. The applicant argues, and the

Department concurs, that it would be in the best interests of the Plan

to be able to entertain an offer by the Employer to purchase the

Property, under the terms and conditions of the exemption, in

circumstances where the Plan did not have a ready offer to purchase the

Property from an unrelated party. The operative language, including

Condition 9, in this notice of exemption has been modified accordingly.

Another commenter raised a question concerning the procedures used

in the selection of the independent appraiser who valued the Property.

Chicago Trust, the Plan's independent fiduciary, which selected the

appraiser, states that it did so in a prudent manner consistent with

standard industry practices and that Messrs. Hall and Klein, M.A.I., of

Binswanger Real Estate Appraisal, were chosen on the basis of their

ability to render a fair and accurate valuation. The commenter also

inquired into the reason for a retroactive effective date for the

exemption. Chicago Trust states that the requested effective date of

April 15, 1996 coincides with the date of the sale of the California

Property, which is the date on which the Plan's leasing of the Property

to the Employer became a prohibited transaction under the Act.

A third commenter objected to the Department's condition that the

fair market value of the Property represent no more than 25% of the

total assets of the Plan, on the grounds that a permitted level of 25%

was excessive. Chicago Trust states that the 25% limitation is a

standard established by the Department and refers to a maximum

percentage that is in no way indicative of any requirement or intent on

the part of the Employer to increase the Plan's real estate investments

to 25% of Plan assets. As of December 31, 1996, the Property, which is

the Plan's sole real estate investment, represented 66% of the Plan's

assets.

Both the second and third commenters raised concerns regarding the

future financial integrity of the Employer. Chicago Trust states that,

as it has represented in the exemption application, it has examined the

financial viability of the Employer and determined that the Employer

has the ability to meet its contractual obligations under the lease.

Moreover, Chicago Trust, states that, as consistent with its duties as

a subtrustee of the Plan, it will continue to monitor these matters and

will take any action necessary to enforce the Plan's rights under the

lease and the exemption, including those provisions that pertain to the

potential sale of the Property to the Employer and to the ``make whole

agreement.''

After a careful consideration of the entire record, including the

written comments and the applicant's responses thereto, the Department

has determined that a public hearing in this instance is unwarranted

and that the exemption should be granted, as modified.

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

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

[[Page 27623]]

Hughes Non-Bargaining Retirement Plan, Hughes Bargaining Retirement

Plan, Hughes Subsidiary Retirement Plan (collectively, the Plans)

[Prohibited Transaction Exemption 97-25; Exemption Applications No. D-

10295, D-10296 and D-10297]

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 leasing by the Plans of 10,106 square feet of

office space (Suite 300) in a commercial office building which is owned

by the Plans (the Building) to Sarofim Realty Advisors (SRA), a party

in interest with respect to the Plans, for a period ending February 28,

2000 pursuant to the terms of a lease amendment (the Lease) provided

the following conditions are satisfied: (1) An independent third party

determined that the terms of the Lease represented not less than fair

rental value as of the date of the Lease; (2) the terms of the Lease

were reviewed and approved by a qualified independent fiduciary of the

Plans who determined that the terms of the transaction were at least as

favorable as the terms generally available to the Plans in arm's length

transactions between unrelated parties and that SRA's improvements to

Suite 300 were acceptable; (3) the qualified independent fiduciary

concluded that the transaction was in the best interests of the Plans

and the Plans' participants and beneficiaries; (4) on behalf of the

Plans, the qualified independent fiduciary continues to monitor SRA's

performance under the Lease; and (5) within sixty (60) days of [insert

the date of publication in the Federal Register of the notice granting

this exemption], SRA will file Form 5330 with the Internal Revenue

Service and pay the excise taxes applicable under section 4975(a) of

the Code that are due by reason of the prohibited Lease transaction

during the period beginning March 1, 1995 and ending on the effective

date of this exemption.

EFFECTIVE DATE: The effective date of this exemption is October 6,

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 January 14, 1997 at 62 FR

1921.

FOR FURTHER INFORMATION CONTACT: Wendy McColough of the Department,

telephone (202) 219-8971. (This is not a toll-free number.)

ADP Fluor Daniel, Incorporated Retirement Savings Plan (the Plan)

Located in Tucson, Arizona

[Prohibited Transaction Exemption 97-26; Exemption Application No. D-

10307]

Exemption

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

the Act and the sanctions resulting from the application of section

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

the Code, shall not apply to the sale by the Plan of two limited

partnership interests (the Units) to ADP Fluor Daniel, Incorporated, a

party in interest with respect to the Plan, providing the following

conditions are satisfied:

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

(2) The Plan pays no commissions or other expenses relating to the

sale; and

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

of the Units as determined by a qualified, independent appraiser, or

(b) the original acquisition and holding costs of the Units, plus

attributable opportunity costs.

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, 1997 at 62 FR

10074.

FOR FURTHER INFORMATION CONTACT: Janet L. Schmidt of the Department,

telephone (202) 219-8883. (This is not a toll-free number.)

Thompson, Siegel and Walmsley, Inc. (TS&W) Located in Richmond,

Virginia

[Prohibited Transaction Exemption 97-27; Application No. D-10369]

Exemption

Section I--Transactions

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 to the following transactions which occurred between April 16,

1996 and August 26, 1996, provided that the conditions set forth in

Section II below are met:

(a) The acquisition by the Lewis-Gale Clinic, Inc. Profit Sharing

Plan (the Plan) on April 16, 1996, of shares of the TS&W Equity

Portfolio and Fixed Income Portfolio (the TS&W Portfolios), each a

series of the UAM Funds, Inc. (the UAM Funds), an open-end investment

company registered under the Investment Company Act of 1940 (the '40

Act), with respect to which TS&W serves as the investment adviser,

through the in-kind transfer of assets of a separate account known as

``Fund E'' managed by TS&W as a fiduciary for the Plan;

(b) The subsequent sale of shares of the TS&W Portfolios by Fund E

of the Plan on a cash basis;

(c) The acquisition and sale of shares of the DSI Money Market

Portfolio (the DSI Portfolio), another series of the UAM Funds whose

investment adviser--Dewey Square Investors Corporation (DSI)--is an

affiliate of TS&W, by Fund E of the Plan on a cash basis;

(d) The receipt of fees from the TS&W Portfolios and the DSI

Portfolio (collectively, the Portfolios) by TS&W and DSI, respectively,

for acting as an investment adviser for the Portfolios; and

(e) The receipt of fees from the Portfolios by UAM Fund Services,

Inc. (UAM Fund Services), an affiliate of TS&W and DSI, for performing

secondary services for the Portfolios (e.g. administrative, fund

accounting, dividend disbursing and transfer agent services).

Section II--Conditions

(a) The Plan's in-kind acquisition of shares of the TS&W Portfolios

were one-time transactions; the initial cash acquisition of shares of

the DSI Portfolio was a one-time transaction; and all subsequent cash

acquisitions and sales of the Portfolios were the result of routine

contributions and withdrawals by Plan participants and beneficiaries

which were not subject to the control or influence of TS&W and the

routine reallocation of assets of Fund E by TS&W pursuant to its

responsibility to allocate assets of Fund E between the TS&W

Portfolios, the TS&W International Portfolio and the DSI Portfolio.

(b) No sales commissions or other fees were paid by the Plan in

connection with the acquisition of shares of the Portfolios and no

redemption fees were paid by the Plan in connection with the sale by

the Plan of such shares.

(c) A fiduciary of the Plan who was independent of and unrelated to

TS&W (the Second Fiduciary) received advance notice of the transactions

and full disclosure of information concerning the Portfolios which

included, but was not limited to, the following:

(1) A current prospectus for each Portfolio;

(2) The fees for investment advisory and other services charged to

and paid by the Plan (and by the Portfolios) to TS&W, DSI, UAM Fund

Services or an

[[Page 27624]]

affiliate, including the nature and extent of any differential between

the rates of the fees; and

(3) The reasons why TS&W considered investments in the Portfolios

to be appropriate for the Plan.

(d) On the basis of the information described in paragraph (c)

above, the Second Fiduciary approved the transactions, including the

initial in-kind transfer of Fund E's assets to the TS&W Portfolios in

exchange for shares of such Portfolios, prior to the transactions.

(e) The Second Fiduciary acknowledged in a writing dated August 26,

1996, that it received the information described in paragraph (c) above

prior to the transactions and that it approved all of the subject

transactions involving the Portfolios in advance. In addition, the

Second Fiduciary adopted resolutions approving, ratifying and affirming

the in-kind transfer of assets of Fund E to the TS&W Equity and Fixed

Income Portfolios (in exchange for shares of such Portfolios) and the

cash purchases of the shares of the DSI Portfolio as of April 15, 1996.

(f) With respect to the in-kind transfer of securities from Fund E

to the TS&W Portfolios, the Plan received shares of each of the

Portfolios which had a total net asset value equal to the value of all

of the Plan's assets transferred in-kind to such Portfolio on the date

of the transfer (i.e. April 16, 1996).

(g) The assets of the Plan transferred to the TS&W Portfolios were

publicly-traded securities that were valued at their closing prices on

the day they were accepted by the Portfolios (i.e. April 16, 1996), as

determined by independent market sources in accordance with Rule 17a-

7(b), issued by the Securities and Exchange Commission (SEC) under the

'40 Act, by a party unrelated to TS&W and its affiliates.

(h) The terms of the transactions were no less favorable to the

Plan than those which were obtainable in an arm's-length transaction

with an unrelated party at the time of such transactions.

(i) TS&W sent by regular mail to the Second Fiduciary, not more

than seven (7) days after the completion of the in-kind transfers to

the TS&W Portfolios, a written confirmation which contained the

following information: (1) Date of the transfers, (2) the number of

shares of each Portfolio acquired by the Plan, (3) the price paid per

share in each Portfolio, and (4) the total dollar amount involved in

each transfer.

(j) Cash acquisitions and sales of shares of the Portfolios were

reported to the Second Fiduciary in the normal course by means of

regular transaction statements issued by the UAM Funds.

(k) The combined total of all fees received by TS&W and its

affiliates for the provision of services to the Plan, and in connection

with the provision of services to the Portfolios in which the Plan

invested, was not in excess of ``reasonable compensation'' within the

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

(l) The Plan did not pay any plan-level investment management fees,

investment advisory fees, or similar fees to TS&W or an affiliate with

respect to any of the assets of such Plan which were invested in shares

of any of the Portfolios. This condition does not preclude the payment

of investment advisory fees or similar fees by the Portfolios to TS&W

or an affiliate under the terms of an investment advisory agreement

adopted in accordance with section 15 of the '40 Act.

(m) Within 10 days of the date that this exemption is granted, TS&W

pays the Plan an amount equal to the additional net fees attributable

to Fund E which TS&W and its affiliates received during the period

covered by this exemption (i.e., April 17, 1996 until August 26, 1996)

as a result of the investment of Fund E's assets in the Portfolios,

plus a reasonable rate of interest on such amount which is at least

equal to the rate of return such assets would have earned as assets

held in Fund E during this period.

(n) Neither TS&W, DSI nor any affiliate thereof received fees

payable pursuant to Rule 12b-1 under the '40 Act in connection with the

transactions involving the Portfolios.

(o) All dealings between the Plan and the Portfolios were on a

basis no less favorable to the Plan than dealings with other

shareholders of the Portfolios.

(p) TS&W provides the Second Fiduciary of the Plan with the

following:

(1) A copy of the proposed exemption and the final exemption when

such documents become available;

(2) A copy of an updated prospectus of each Portfolio at least

annually; and

(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 Portfolios to TS&W, DSI or any

affiliate thereof, upon the request of the Second Fiduciary.

(q) All acquisitions and sales of shares of the Portfolios on and

after August 26, 1996 are made in compliance with the terms and

conditions of Prohibited Transaction Exemption (PTE) 77-4 (42 FR 18732,

April 8, 1977).1

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\1\ PTE 77-4, in pertinent part, permits the purchase and sale

by an employee benefit plan of shares of a registered, open-end

investment company when a fiduciary with respect to the plan is also

the investment adviser for the investment company, provided that

certain conditions are met.

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(r) TS&W and its affiliates maintain for a period of six years the

records necessary to enable the persons described below in paragraph

(s) 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 TS&W or an

affiliate, the records are lost or destroyed prior to the end of the

six-year period, and (2) no party in interest other than TS&W or an

affiliate 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 (s) below.

(s)(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 (r) 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 Plan who has authority to acquire or

dispose of shares of the Portfolios owned by the Plan, or any duly

authorized employee or representative of such fiduciary, and

(iii) Any participant or beneficiary of the Plan or duly authorized

employee or representative of such participant or beneficiary.

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

(iii) shall be authorized to examine trade secrets of TS&W or its

affiliates, or commercial or financial information which is privileged

or confidential.

Section III--Definitions

For purposes of this exemption:

(a) The term ``TS&W'' means Thompson, Siegel and Walmsley, Inc. and

any affiliate thereof as defined below in paragraph (b) 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

[[Page 27625]]

(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 ``Portfolios'' means the TS&W Equity and Fixed Income

Portfolios and the DSI Money Market Portfolio, each a series of the UAM

Funds, Inc., an open-end series investment company registered under the

'40 Act, with respect to which TS&W and DSI, respectively serve as the

investment adviser and for which UAM Fund Services provides certain

``secondary services'' as defined below in paragraph (h).

(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 Portfolio's

prospectus and statement of additional information, and other assets

belonging to the Portfolio, less the liabilities charged to each such

Portfolio, 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 acting for the

Plan who is independent of and unrelated to TS&W and its

affiliates.2 For purposes of this exemption, the Second

Fiduciary will not be deemed to be independent of and unrelated to TS&W

if:

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\2\ The Second Fiduciary which acted for the Plan was the

Lewis-Gale Clinic, Inc. (the Plan Sponsor) and the individuals who

acted for the Plan Sponsor in carrying out its responsibilities as

the named fiduciary for the Plan.

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

by, or is under common control with TS&W or an affiliate;

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

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

of TS&W or an affiliate (or is a relative of such persons);

(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.

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

investment management, investment advisory, or similar service, which

was provided by TS&W's affiliate, UAM Fund Services, to the Portfolios.

EFFECTIVE DATE: This exemption is effective for the subject

transactions, which occurred during the period from April 16, 1996

until August 26, 1996.

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, 1997, at 62

FR 4803.

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

telephone (202) 219-8194. (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 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, DC, this 15th day of May, 1997.

Ivan Strasfeld,

Director of Exemption Determinations, Pension and Welfare Benefits

Administration, U.S. Department of Labor.

[FR Doc. 97-13180 Filed 5-19-97; 8:45 am]

BILLING CODE 4510-29-P