Skip to page content
Secretary of Labor Thomas E. Perez
Pension and Welfare Benefits Administration[Prohibited Transaction Exemption 96-64; Exemption Application No. D- 10063, et al.] [Notices] [08/27/1996]

EBSA (Formerly PWBA) Federal Register Notice

Pension and Welfare Benefits Administration [Prohibited Transaction Exemption 96-64; Exemption Application No. D- 10063, et al.] [08/27/1996]

[PDF Version]

Volume 61, Number 167, Page 44081-44085

-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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.<SUP>*
---------------------------------------------------------------------------

    \*\ 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.
---------------------------------------------------------------------------

    (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