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Secretary of Labor Thomas E. Perez
Grant of Individual Exemptions; The Retirement Plan for Salaried and Certain Hourly Employees of Keebler Company (the Plan), et al. [Notices] [05/20/1997]

EBSA (Formerly PWBA) Federal Register Notice

Grant of Individual Exemptions; The Retirement Plan for Salaried and Certain Hourly Employees of Keebler Company (the Plan), et al. [05/20/1997]

[PDF Version]

Volume 62, Number 97, Page 27621-27625

[DOCID:fr20my97-98]

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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).<SUP>1</SUP>
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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.<SUP>2</SUP> 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