Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14005

Medical Quality Assurance (BMQA)

filed an accusation against Respondent

seeking to suspend his medical license.

Following an administrative hearing, on

July 24, 1989, the state administrative

law judge recommended that

Respondent’s medical license be

revoked, but that the revocation be

stayed for five years, that Respondent be

placed on probation subject to certain

conditions, and that he be suspended

from the practice of medicine for 90

days. After the BMQA adopted the

decision of the state administrative law

judge, Respondent sued BMQA, but was

unsuccessful both in the lower court

and on appeal. The court subsequently

fined Respondent $10,000, and found

that his appeal was frivolous.

On June 21, 1989, DEA issued an

Order to Show Cause, seeking to revoke

Respondent’s prior DEA Certificate of

Registration, AL0033186. Respondent

requested a hearing, but later submitted

a written statement of his position in

lieu of participating in a hearing. Based

on Respondent’s statement and the

Government’s investigative file,

effective August 17, 1990, the thenActing Administrator revoked

Respondent’s DEA registration, based

upon the finding that his continued

registration would be inconsistent with

the public interest. See Robert A. Leslie,

M.D., 55 FR 29278 (1990). Respondent

subsequently filed a new application for

DEA registration on February 6, 1992,

which is the subject of this proceeding.

Respondent testified at the

administrative hearing to matters

surrounding his criminal conviction.

Respondent argued that his prescribing

to undercover operatives was justified

based upon their physical conditions

and complaints of pain, and that he was

entrapped; during the criminal trial, the

operatives perjured themselves

regarding events that took place during

their visits with Respondent; his direct

appeal of his criminal convictions was

denied, and his subsequent filing of ten

petitions for habeas corpus in state and

federal courts were unsuccessful; and,

he sued his attorney for malpractice

based upon the latter’s failure to provide

adequate legal representation.

Respondent also contended that the

1990 final order of the then-Acting

Administrator relied on false statements

supplied by BMQA that were not part of

the original court record. Respondent

testified that he filed a petition for

reconsideration of that final order,

however, since the Federal Register

notice of the final order was not timely

sent to him, the period for filing a

motion for reconsideration elapsed

before he became aware of the

revocation. The administrative law

judge found this argument without

merit based on the provisions of 21

U.S.C. 877, regarding judicial review,

and the fact that there is no provision

in the Code of Federal Regulations for

filing requests for reconsideration.

Pursuant to 21 U.S.C. 823(f), the

Deputy Administrator may deny any

application for registration, if he

determines that the continued

registration would be inconsistent with

the public interest. In determining the

public interest, the following factors are

considered:

(1) The recommendation of the

appropriate State licensing board or

professional disciplinary authority.

(2) The applicant’s experience in

dispensing controlled substances.

(3) The applicant’s conviction record

under Federal or State laws relating to

the distribution, or dispensing of

controlled substances.

(4) Compliance with applicable State,

Federal, or local laws relating to

controlled substances.

(5) Such other conduct which may

threaten the public health and safety.

It is well established that these factors

are to be considered in the disjunctive,

i.e., the Deputy Administrator may

properly rely on any one or a

combination of the factors and give each

factor the weight he deems appropriate.

See Henry J. Schwarz, Jr., M.D., Docket

No. 88–42, 54 FR 16422 (1989). In

considering whether grounds exist to

deny Respondent’s application for DEA

registration, the administrative law

judge found all of the above factors

relevant.

The administrative law judge found

that Respondent’s testimony,

documentary evidence and pleadings in

this proceeding contended that his

criminal conviction was invalid. The

administrative law judge concluded

however, that the conviction is res

judicata, and that Respondent should

not be allowed to relitigate the matter.

The administrative law judge found

that during the administrative hearing,

although Respondent was free to offer

new evidence that he would never again

engage in the type of conduct that

resulted in his conviction, he failed to

do so. The administrative law judge also

found that while Respondent offered

evidence and expended time arguing the

invalidity of his criminal convictions,

he offered no evidence of remorse for

his prior conduct, that he has taken

rehabilitative steps, or that he

recognizes the severity of his actions.

The administrative law judge concluded

that Respondent is either unwilling or

unable to discharge the responsibilities

inherent in a DEA registration, and

therefore, recommended that his

application for DEA registration be

denied.

The Deputy Administrator having

considered the entire record adopts the

administrative law judge’s findings of

fact, conclusions of law, and

recommended ruling in its entirety.

Accordingly, the Deputy Administrator

of the Drug Enforcement

Administration, pursuant to the

authority vested in him by 21 U.S.C. 823

and 824 and 28 CFR 0.100(b) and 0.104,

hereby orders that the application for

registration, executed by Robert A.

Leslie, M.D., be, and it hereby is,

denied. This order is effective March 15,

1995.

Dated: March 8, 1995.

Stephen H. Greene,

Deputy Administrator.

[FR Doc. 95–6297 Filed 3–14–95; 8:45 am]

BILLING CODE 4410–09–M

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 95–24;

Exemption Application No. D–09787, et al.]

Grant of Individual Exemptions;

Boston Cement Masons Union Local

No. 534 Deferred Income Plan, 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, DC. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of
14006 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

1For purposes of this exemption, references to

specific provisions of Title I of the Act, unless

otherwise specified, refer also to the corresponding

provisions of the Code.

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.

Boston Cement Masons Union Local No.

534 Deferred Income Plan (the Deferred

Income Plan), Boston Cement Masons

Union Local No. 534 Pension Plan (the

Pension Plan), Boston Cement Masons

Union Local No. 534 Health and

Welfare Plan (the Welfare Plan) and

Boston Cement Masons Union Local No.

534 Apprenticeship Plan (the

Apprenticeship Plan; Collectively, the

Plans) Located in Boston,

Massachusetts

[Prohibited Transaction Exemption 95–24;

Application Nos. D–9787, D–9788, L–9789

and L–9790, respectively]

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 leasing of office space in a

building (the Building) owned by the

Deferred Income Plan to the Boston

Cement Masons Union Local No. 534, a

party in interest with respect to the

Deferred Income Plan.

In addition, the restrictions of section

406(b)(2) of the Act shall not apply to

the proposed leasing of office space in

the Building by the Deferred Income

Plan to the Pension Plan, the Welfare

Plan and the Apprenticeship Plan.

This exemption is conditioned upon

the following requirements: (1) The

terms of all such leasing arrangements

are at least as favorable to the Plans as

those obtainable in an arm’s length

transaction with an unrelated party; (2)

an independent, qualified fiduciary,

who has approved of the leasing

arrangements, agrees to monitor all

leases on behalf of the Deferred Income

Plan as well as the terms and conditions

of the exemption at all times; (3) the

rental charged by the Deferred Income

Plan under each lease is based upon the

fair market rental value of the premises

as determined by an independent,

qualified appraiser; (4) the Building is

revalued annually by the independent,

qualified appraiser; (5) if appropriate,

the independent, qualified fiduciary

adjusts the rentals charged for the office

space based upon the annual appraisals

of the Building; and (6) the trustees

determine that the leasing arrangements

are in the best interests of the Pension

Plan, the Welfare Plan and the

Apprenticeship Plan.

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 18, 1995 at 60 FR 3659.

FOR FURTHER INFORMATION CONTACT:

Kathryn Parr of the Department,

telephone (202) 219–8971. (This is not

a toll-free number.)

General Motors Hourly-Rate Employes

Pension Plan (the Plan) Located in

Detroit, Michigan

[Prohibited Transaction Exemption No. 95–

25; Application No. D–9734]

Exemption

The restrictions of sections 406(a),

406(b)(1) and (b)(2), and 407(a) of the

Act and the sanctions resulting from the

application of section 4975 of the Code,

by reason of section 4975(c)(1)(A)

through (E) of the Code 1 shall not apply

to:

(1) The transfer of shares of Class E

common stock (the Class E stock) of

General Motors Corporation (GM) to the

Plan through the in-kind contribution of

such shares by GM, a party in interest

with respect to such Plan;

(2) The holding of the Class E stock

by the Plan;

(3) The sale for cash of shares of Class

E stock by the Plan to GM or its affiliates

or to certain defined contribution plans

sponsored by GM or its affiliates;

(4) The exchange of shares of Class E

stock for publicly-traded securities

between the Plan and GM or its affiliates

under the same terms and conditions as

are made available to all shareholders of

Class E stock; and

(5) The acquisition, holding, and

exercise by the Plan of a put option

granted by GM which permits the Plan

to sell the Class E stock or a successor

security for which the Class E stock has

been exchanged to GM.

This exemption is conditioned upon

the satisfaction of the following

requirements:

(a) GM contributes to the Plan at least

177 million shares of Class E stock but

no more than 186 million shares plus $4

billion in cash, with at least $2 billion

contributed in conjunction with or prior

to the contribution of the Class E stock,

and the remaining $2 billion

contributed no later than September 30,

1995;

(b) If less than 177 million shares of

Class E stock are contributed, GM will

contribute additional cash in an amount

equal to the difference between 177

million and the number of shares of

Class E stock contributed times the pershare value of such stock at the time of

contribution, or a weighted average

price if such stock is not contributed on

a single date;

(c) United States Trust (UST), an

independent qualified fiduciary, or a

successor independent fiduciary

acceptable to the Pension Benefit

Guaranty Corporation (PBGC) represents

the Plan’s interests with respect to the

acquisition of Class E stock and also

will serve as trustee of the Plan with

sole discretion respecting the

management and disposition of the

Class E stock after the acquisition. UST

must determine, prior to entering into

any of the transactions described herein,

that each such transaction, including

the contribution of the Class E stock, is

in the interest of the Plan;

(d) UST negotiates and approves the

terms of any of the transactions between

the Plan and GM or its affiliates or

certain defined contribution plans

sponsored by GM or its affiliates;

(e) UST manages the holding and

disposition of the Class E stock and

takes whatever action it deems

necessary to protect the rights of the

Plan;

(f) The terms of any of the

transactions between the Plan and

parties in interest are no less favorable

to such Plan than terms negotiated at

arm’s length under similar

circumstances with unrelated third

parties;

(g) A credit balance reserve is

maintained in the Plan consisting of the

cash credit balance or cash generated

from stock that has been sold in an

amount equal to at least 25 percent
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14007

2Contributed value means the value of the Class

E stock when contributed to the Plan, as determined

by Duff & Phelps Capital Markets Co. (formerly Duff

& Phelps Financial Consulting Co.).

(25%) of the contributed value 2 of the

Class E stock which remains unsold in

the Plan, for so long as such stock or any

securities received in exchange exceeds

the percentage limitations described in

sections 407(a) and 407(f) of the Act (the

ERISA Limits);

(h) An independent qualified

appraiser determines the fair market

value of the Class E stock contributed to

the Plan as of the date of such

contribution, and determines the fair

market value of the Class E stock at

various other times as required under

the agreement between GM and the

PBGC (the Agreement);

(i) With respect to any sale or

exchange of Class E stock by the Plan to

GM or its affiliates or to any defined

contribution plans sponsored by GM or

its affiliates, no commission will be

charged to or paid by the Plan;

(j) Any sale or exchange of Class E

stock between the Plan and GM or its

affiliates will be for no less than

‘‘adequate consideration’’ within the

meaning set forth in section 3(18) of the

Act, and any sale of Class E stock by the

Plan to a defined contribution plan

sponsored by GM or its affiliates will be

at the prevailing price for such stock on

the New York Stock Exchange (NYSE);

and

(k) The Plan incurs no fees, costs, or

other charges or expenses as a result of

its participation in transaction (1), above

and, with regard to other transactions

described herein, will not incur fees and

other costs payable by the issuer under

the Registration Rights Agreement

(RRA).

EFFECTIVE DATE: This exemption will be

effective on March 13, 1995.

Written Comments

In the Notice of Proposed Exemption

(the Notice), the Department invited all

interested persons to submit written

comments and requests for a hearing on

the exemption. All comments and

requests for hearing were due by

December 29, 1994.

The Department received 157 letters

from interested persons commenting on

the exemption. In addition, a number of

interested persons telephoned the

Department. These individuals were

assisted with their questions by

members of the staff of the Office of

Exemption Determinations of the

Department. With respect to all the

written comments submitted by

interested persons, the Department

forwarded copies to the applicant and

requested that the applicant address the

concerns raised by the commentators in

writing. A description of the comments

and the applicant’s responses are

summarized below.

Several of the written comments

received by the Department supported

adoption of the exemption. In this

regard, after review of GM’s application

for exemption and the terms of the

Agreement between GM and PBGC, the

International Union, United

Automobile, Aerospace and Agricultural

Implement Workers of America (the

UAW), the certified collective

bargaining representative for

approximately 215,000 employees of

GM who are participants in the Plan and

approximately 255,000 retired former

employees of GM who are participants

in the Plan, expressed support for the

application and stated its belief that the

transactions which are the subject of

this exemption are in the best interest of

the Plan’s participants and beneficiaries.

Some commentators neither

supported nor opposed the exemption

but either expressed a lack of

understanding of the exemption or

raised other concerns that are beyond

the scope of this exemption proceeding.

Other commentators opposed the

exemption and raised questions and

concerns regarding the transactions

described therein. The concerns

expressed by these commentators

generally related to: (a) The impact on

pension or health benefits; (b) the

holding by the Plan of more than 5% of

its assets in any company; (c) the

preference for a cash contribution over

that of stock; (d) the potential loss of

value of the Class E stock; (e) the

restrictions on the Plan’s ability to sell

the Class E stock under the terms of the

RRA; (f) the fact that the Class E stock

is not a qualifying employer security; (g)

the control by the Plan of more than

10% of the voting shares of a company;

(h) the presence of a financial flexibility

exception in the Agreement given GM’s

recent financial history; (i) the effect of

an EDS sale on GM’s future

contributions to the Plan; (j) the tax

advantages to GM of the contribution of

Class E stock; and (k) the lack of a

mandatory requirement in the

exemption to convert the Class E stock

into cash.

The following summarizes the

response to these concerns submitted to

the Department by GM. With respect to

(a) above, GM states that the exemption

does not change or affect in any way the

pension benefits payable under the Plan

or health benefits for active or retired

employees. As a result, the exemption

will not affect a participant’s eligibility

to receive a pension benefit, the amount

of a pension benefit check, or the terms

of any health care plan.

With respect to (b), GM states that

UST, the independent fiduciary, has

represented that the Plan’s receipt of the

Class E stock will not violate the general

diversification rule of the Act, which

requires that a plan’s assets be

sufficiently diversified in order to

minimize the risk of large losses.

With respect to (c), GM responded

that while in the abstract the

contribution of cash may be superior to

that of stock, the issue posed by the

exemption application was not whether

the Plan could choose to acquire Class

E Stock where an equivalent value of

cash is available. In this regard, as the

Plan is significantly underfunded, GM

believes it is offering a way to

substantially improve the Plan’s funding

with a combined contribution of Class E

stock and cash.

With respect to (d), GM maintains that

the Agreement, deferring credit for the

contribution of Class E stock and the $4

billion in cash, provides considerable

security because in all likelihood the

Plan will receive further cash

contributions from GM in excess of

minimum funding rules of the Act in

the years between 1995 and 2003. In

addition, GM states that the Agreement

contains other protective features that

adequately address the potential for

future losses in value, if any, in the

Class E stock. Finally, because the

dividends on Class E stock are based on

the earnings of Electronic Data Systems

Corporation (EDS), GM believes the

contribution provides more

diversification than a security whose

dividends are based on the performance

of GM.

With respect to (e), GM states that

UST, the independent fiduciary, is

required by law to act solely in the

interest of the Plan and its participants

and beneficiaries. In this regard, UST is

satisfied that, given the size of the block

and the likely means of disposition, that

the RRA affords ample opportunity for

UST to sell or otherwise dispose of the

Plan’s Class E stock while maximizing

the value of such stock to the Plan.

With respect to (f), GM states that

although the Class E stock is not a

qualifying employer security because

the Plan will acquire and hold in excess

of the limits imposed by the Act, there

are sufficient safeguards to protect the

interest of the Plan and the participants

and beneficiaries. In addition, GM

points out the Class E stock is widely

traded on the NYSE, and an

independent fiduciary, UST, has

negotiated a RRA that will allow it, as

trustee for the Class E stock, to dispose
14008 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

of the stock efficiently while

maximizing its value to the Plan.

With respect to (g), GM states that the

Class E stock is widely traded on the

NYSE and generates dividends based on

the earnings of EDS rather than on the

performance of GM. Further, an

independent fiduciary, UST, has

negotiated a RRA that will allow UST,

as trustee for the Class E stock, to

dispose of the stock efficiently while

maximizing its value to the Plan, and

UST is satisfied that it can do so given

the size of the block of Class E stock.

With respect to (h), GM states that the

commentator erroneously alleges that

GM’s North American Operations (the

NAO) has met the ‘‘bad year’’ definition

under the Agreement in each of the past

five (5) years and asserts that this

pattern will continue in the future,

allowing GM to access more of the

credit balance than ‘‘what would appear

to the common layperson.’’ In fact, the

NAO did not meet the ‘‘bad year’’

definition in 1994. Moreover, GM notes

that, although the proposed exemption

is complex, the Department’s notice and

comment process is fair and

comprehensive and the financial

flexibility provisions of the Agreement

in principle were disclosed in the

Notice on the same basis and in the

same fashion as all other parts of the

exemption transaction.

With respect to (i), GM states that the

commentator erroneously concludes

that if GM sells EDS, GM’s obligation to

contribute to the Plan will be nullified.

In this regard, GM represents that the

Agreement provides that the credit

balance rules generally apply to stock

for which the Plan’s Class E stock has

been exchanged. Further, GM asserts

that if the credit balance is unavailable,

GM will still make at least the minimum

contributions required by the Act.

With respect to (j), GM states that the

contribution of Class E stock to the Plan

does not defer or eliminate any income

taxes that otherwise would be payable

on GM’s disposition of Class E stock.

With respect to (k), GM states that the

commentator erroneously assumes that

GM will have control of the Plan’s

portfolio after the Class E stock is

contributed. In this regard, GM

represents that it will have no control

over the management of such stock.

UST, the independent trustee, will have

complete discretion over the

management and disposition of the

Class E stock, and, in its sole discretion,

will determine how and when the Class

E stock will be liquidated.

In addition to the comments

described above, the Department also

received comments from the applicant,

GM. The comments from GM requested

certain modifications and clarifications

to the exemption as proposed and to the

Summary of Facts and Representations

(SFR). GM’s comments fall into three

categories: (1) clarification regarding the

relationship of the exemption to the

Agreement between the PBGC and GM

regarding the contribution of cash and

Class E stock; (2) issues relating to the

conditions of the exemption; and (3)

certain technical corrections to the SFR.

With respect to the first category of

the comment, GM informed the

Department that, since May 1994, GM

and the PBGC have been negotiating the

terms of a definitive Agreement. In its

application for exemption, GM

described the tentative terms of this

Agreement, as reflected in an agreement

in principle (the AIP) executed on May

9, 1994, between the PBGC and GM. The

Department summarized certain terms

of the AIP in the SFR. The proposed

exemption provided that any final

exemption would be conditioned upon

adherence to the material facts and

representations described in the SFR.

GM notes that the terms of the AIP have

now been superseded by the executed

Agreement. Thus, GM believes that

there is a substantial risk that any

change in or non-adherence to a

material provision will vitiate the

exemption and, thereby, preclude the

Plan from continuing to hold

contributed Class E stock above the

limits set forth in sections 407(a) and

407(f)(1) of the Act. This situation in

turn would place the independent

fiduciary, UST, in the position of

potentially having to engage in a forced

liquidation of a sufficient quantity of

Class E stock to bring the Plan within

the limits of such sections of the Act. As

a result, GM requests clarification as to

whether any change in or nonadherence to either the terms of the AIP,

as described in the SFR, or the

Agreement would render the exemption

unavailable.

GM states that the Agreement is a

contract between GM and the PBGC. It

is lengthy and complicated, reflecting

the nature, size, and complexity of its

subject. Assets likely to be valued in

excess of $10 billion will be at issue,

and the terms of the Agreement will

require numerous complex calculations

to be performed. The Agreement will

continue in force until at least October

1, 2003, and, as with any such complex

document, it is possible that good faith

differences may arise between GM and

the PBGC over the meaning and

application of its terms.

GM notes in its comment that it

believes that the Plan is fully protected

by the reporting and enforcement

provisions set forth in the Agreement,

and the interests of the Plan and its

participants and beneficiaries are better

served by application of such

procedures than by enforcement

through the exemption. These reporting

and enforcement provisions are

carefully crafted to facilitate the timely

and effective resolution of disputes,

while permitting the Plan to continue

the orderly disposition of Class E stock.

The Agreement provides for annual

reporting by GM to the PBGC, and

contains a dispute resolution

mechanism through which the PBGC

can enforce the terms and conditions of

such Agreement. GM represents that it

will comply in all material respects with

the reporting provisions in the

Agreement (including as they may be

changed from time to time by mutual

agreement of GM and the PBGC). In

addition, the Agreement provides,

among other things, for access to the

courts, and under certain circumstances,

for the posting of collateral by GM if a

disputed amount exceeds a certain

threshold. Accordingly, GM suggests

that the exemption, if granted, contain

the following language, ‘‘Several aspects

of the Agreement are of special

importance to the Department and were

included as requirements (a), (b), and (g)

of the proposed exemption * * * .

Accordingly, if GM violates a term or

condition of the Agreement, other than

the specific requirements noted above

(emphasis added), the violation will be

addressed by PBGC under the

Agreement and not by withdrawal or

other invalidation of the exemption

itself.’’

In this regard, the Department

requested the views of the PBGC

concerning whether a breach of the

Agreement by GM in the future should

void the exemption. The PBGC

confirmed that the Agreement contains

adequate enforcement mechanisms in

the event of a breach. GM is required

under the Agreement to provide

information to the PBGC that will

enable the PBGC to monitor and confirm

that the restrictions have been properly

applied. Also, the PBGC will monitor

and enforce those terms of the

Agreement adopted by the Department

as conditions of the exemption, as

summarized in sections (a), (b), and (g)

therein. As a result, the PBGC stated

that it does not believe that voiding the

exemption is a necessary or appropriate

enforcement mechanism to ensure

compliance with the Agreement, and

that it would not recommend that the

exemption be voided for violation of a

term of the Agreement after GM has

contributed the stock and cash required

by the Agreement and by sections (a)
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14009

and (b) of the proposed exemption. In

addition, the PBGC is of the opinion

that voiding the exemption after the

stock is contributed could harm the Plan

if the independent fiduciary were forced

to sell stock held by the Plan to bring

the Plan’s employer securities within

the ERISA Limits.

UAW in its comment letter also

concurred with the views expressed by

GM on the question of whether the

exemption should be voided in the

event of an alleged breach of the

Agreement. UAW believes that the

enforcement mechanisms described in

the Agreement are adequate and

appropriate and that termination of the

exemption in the event of a breach of

that Agreement would only be harmful

to participants and beneficiaries, in that

termination of the exemption would by

necessity force a massive and

precipitous sale of the Class E stock. In

the opinion of the UAW, selling the

Class E stock under such conditions is

not likely to result in the realization of

optimum proceeds and would therefore

diminish the assets in the Plan.

However, the UAW noted that the

language suggested by GM to address

this issue, as quoted above, would

create the impression that these

requirements of the exemption are

precisely co-extensive with the

analogous sections of the Agreement.

The UAW further noted that the

language in (a), (b), and (g), as set forth

in the Notice, summarized but did not

recite word for word such sections from

the Agreement. Accordingly, the UAW

suggested that the word, ‘‘included’’ in

the first sentence of GM’s language

quoted above be replaced with the

word, ‘‘summarized,’’ and the

underlined portion of the second

sentence of GM’s language quoted above

be changed to read, ‘‘without violating

one of the express conditions of the

exemption.’’

The Department concurs with GM, the

PBGC, and the UAW that the rights

embodied in the reporting and dispute

resolution provisions of the Agreement

provide protection to the Plan, and that

enforcement by the PBGC through the

procedures negotiated in the Agreement

will serve the interest of the Plan and its

participants and beneficiaries. Further,

the Department believes that any ‘‘fire

sale’’ of Class E stock which may result

from the unavailability of the exemption

through a change in or non-adherence to

the terms of the AIP described in the

SFR or the Agreement would not be in

the interest of the Plan. However, the

Department has determined that

compliance with certain provisions of

the Agreement, as summarized in

paragraphs (a), (b), and (g) of the

proposed exemption, are important and

necessary to the continued availability

of the exemption. Accordingly, it is the

view of the Department that, if GM

violates a term or condition of the

Agreement, without violating one of the

express conditions of the exemption, the

violation will be addressed by the PBGC

in accordance with the enforcement

terms of such Agreement and will not

result in the unavailability of the

exemption. The Department is of the

further view that the exemption will be

available despite the fact that the terms

of the final Agreement differed in some

respects from the terms of the AIP

which was summarized in the SFR.

With respect to the second category of

the comment, GM requests

modifications to the language of certain

conditions of the exemption, as set forth

in the Notice. In this regard, condition

(c) on page 56541 and repeated in item

18(c) on page 56549 of the Notice as

published in the Federal Register,

states: ‘‘United States Trust (UST), an

independent qualified fiduciary, or a

successor independent fiduciary

acceptable to the Pension Benefit

Guaranty Corporation (PBGC) represents

the Plan’s interests for all purposes with

respect to the Class E stock and

determines (emphasis added), prior to

entering into any of the transactions

described herein, that each such

transaction, including the contribution

of the Class E stock, is in the interest of

the Plan.’’ GM believes this to be an

overly broad description of the

independent fiduciary’s responsibilities.

GM suggests striking the underlined

phrase above and substituting in lieu

thereof, ‘‘with respect to the acquisition

of Class E stock and also will serve as

trustee of the Plan with sole discretion

respecting the management and

disposition of the Class E stock after the

acquisition. UST must determine

* * *.’’ The Department concurs with

this comment and has modified the final

exemption accordingly.

Condition (k) on page 56541 and

repeated in item 18(k) on page 56549 of

the Notice, as published in the Federal

Register, states: ‘‘The Plan incurs no

fees, costs, or other charges or expenses

as a result of its participation in any of

the transactions (emphasis added).’’ GM

is concerned that this condition would

preclude the payment by the Plan to

UST or any other independent fiduciary

of fees for asset management services as

independent fiduciary. In this regard,

the applicant notes that the application

indicated that GM would bear the costs

of UST’s fees in connection with the

Plan’s acquisition of the Class E stock

but that fees for UST’s trustee services

will be payable by the Plan. It is

intended that all fees associated with

the management and disposition of

Class E stock, other than certain

underwriting and other fees and costs

described in section 9 of the RRA, will

be borne by the Plan. GM suggests

striking the underlined phrase above

and substituting the phrase,

‘‘transaction (1), above and, with regard

to other transactions addressed herein,

will not incur fees and other costs

payable by the issuer under the

Registration Rights Agreement.’’ The

Department concurs with this comment

and has revised the language of

condition (k).

With respect to the third category of

the comment, GM believes that certain

revisions to the SFR would more

accurately describe the transactions. As

mentioned above, the AIP was

summarized in the SFR. Subsequently,

the AIP was superseded by the terms of

the Agreement. Consequently, GM

wishes to point out the following four

(4) provisions of the AIP which were

summarized in the SFR but which have

now been modified by the Agreement.

The second sentence of item 6 of the

SFR on page 56543, states that GM’s

stock contribution will consist of,

‘‘* * * all of the remaining, 222 million

unissued shares of Class E stock less

approximately 45 million shares

reserved for conversion of GM’s Series

C Preference Stock, or approximately

177 million shares.’’ In accordance with

the terms of the Agreement, GM

suggests that the phrase, ‘‘and the

number of shares of GM Class E stock

that, as of the last contribution of such

stock, are reserved or committed (as

Treasury shares or otherwise) for

employee benefit plans, stock bonus

plans, or employee stock programs,’’

should have been inserted after the

words, ‘‘Preference Stock,’’ in the abovequoted language.

Item 12 of the SFR, on page 56545

(center column, third full paragraph),

refers to GM’s ‘‘* * * access annually to

an amount of up to $1.5 billion of the

stock credit balance generated by the

stock which has been sold.’’ GM

suggests that in accordance with the

Agreement the phrase, ‘‘an average of

approximately,’’ should have been

inserted in the above-quoted language

between the words, ‘‘to’’ and ‘‘$1.5,’’

because $1.5 assumes GM’s access to the

stock credit balance at approximately

the mid-point of a plan year and reflects

interest over the first portion of the plan

year at the Plan’s funding standard

account rate.

Item 12 of the SFR states on page

56545 (center column, sixth sentence of

the second full paragraph) that, the

restriction relating to the 25% credit
14010 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

balance reserve ‘‘* * * will expire on

October 1, 2003, if the Class E stock has

been exchanged for non-employer

securities.’’ GM notes that the

Agreement provides that, the restriction

will expire when the contributed Class

E stock or any shares received in

exchange therefor no longer exceed the

ERISA Limits. If the contributed Class E

shares are exchanged for non-employer

securities, the restriction will expire on

the later of October 1, 2003 or the date

on which the Class E stock has been

exchanged for non-employer securities.

Item 12 of the SFR states on page

56546 (center column, top carryover

paragraph, last sentence) that, ‘‘GM’s

independent auditor will provide a

statement to the PBGC once GM utilizes

the financial flexibility provisions

described above.’’ GM suggests that in

accordance with the Agreement, striking

the quoted sentence and substituting in

lieu thereof, ‘‘[f]or any plan year

through the 2002 plan year for which

GM utilizes the financial flexibility

provisions of the Agreement, GM will

include in its submission to the PBGC

a statement from its independent

auditor confirming the accuracy of the

schedule showing GM’s cash. In

addition, upon request by the PBGC,

GM also will furnish for such plan years

a report from its independent auditor

describing agreed upon procedures it

has performed in order to assist the

PBGC in evaluating the restructuring

charges included in GM’s financial

statements, if and to the extent those

charges were used to determine GM’s

adjusted net income.’’ The Department

concurs and notes that the above four

(4) clarifications to the SFR are

consistent with the terms of the

Agreement.

Also, as part of the third category of

the comments, GM has suggested the

following modifications to the language

of the SFR.

In item 5 of the SFR on page 56543

(center column), the first and second

sentences in the first full paragraph

stated: ‘‘[g]enerally, in order to correct

the unfunded liability of its main U.S.

plans, GM has revised the mortality

assumptions in such plans to more

closely reflect recent actual experience.

Further, effective for 1993, GM has

lowered the asset earnings rate

assumption for its main U.S. plans.’’ GM

points out that the mortality and asset

earnings rate assumptions were not

adopted in order to correct the

unfunded liability of GM’s main US

plans but rather to accurately reflect

recent experience. Accordingly, GM

believes that the two sentences quoted

above should have read, ‘‘[d]uring 1992,

GM revised the mortality assumptions

for its main U.S. plans to reflect recent

experience and, effective 1993, lowered

the asset earnings rate assumption for

those plans, to reflect GM’s reevaluation

of the expected long-term rate of return

on Plan assets.’’ The Department

concurs with this comment.

In item 5 of the SFR on page 56543

(center column) in the first full

paragraph, the fourth sentence stated

that GM ‘‘* * * will continue to

contribute additional amounts above

those required in 1994 and future

years.’’ Although GM anticipates

making such contributions, GM suggests

that substituting in the phrase quoted

above, the words, ‘‘intends to,’’ in lieu

of the word, ‘‘will,’’ and the words,

‘‘1994–1996,’’ in lieu of the phrase,

‘‘1994 and future years,’’ would have

been more accurate. The Department

concurs with this comment.

In the third sentence of item 8 of the

SFR on page 56543 (right column) GM

suggests the underlined word, ‘‘or,’’ in

the phrase, ‘‘assets remaining after

payments to creditors or (emphasis

added) to preferred or preference

stockholders,’’ should have been the

word, ‘‘and.’’ The Department concurs.

In the first sentence of the first

paragraph of item 10 of the SFR on page

56544 (left column), GM suggests that

the phrase, ‘‘based upon,’’ should have

been substituted for ‘‘linked to’’ in the

sentence, ‘‘[d]ividends on Class E stock

are linked to the earnings performance

of EDS.’’ The Department concurs.

In item 12 of the SFR on page 56545

(center column, first sentence, first full

paragraph), GM suggests that the phrase,

‘‘* * * GM has agreed to defer for two

(2) years the use of the credit balance

* * *,’’ should have read, ‘‘GM will

defer until 1997 use of the credit

balance arising from the contribution

(except for interest on the cash portion

thereof and as otherwise noted below).

* * *’’ GM states that because the cash

portion of the contribution need not be

completed until September 30, 1995, the

deferral period could be as short as one

(1) year. The Department concurs.

In item 12 of the SFR, in the last

clause of the first full sentence in the

center column of page 56545, GM

suggests that the underlined portion of

the phrase, ‘‘* * * to phase in full

access by GM to the credit balance in

the Plan’s funding standard account,’’

(emphasis added) should have read,

‘‘such credit balance.’’ The Department

concurs.

In item 16 of the SFR in the first

sentence of the first full paragraph in

the right column of page 56548, GM

suggests, and UST agrees, that in the

phrase, ‘‘[b]ecause the marketability and

dividends of Class E stock are based on

the earnings and financial performance

of EDS, UST has reviewed the business

of EDS, as well as that of GM,’’ the

words, ‘‘under the current policy of the

GM board,’’ should have been inserted

before the word, ‘‘dividends.’’ The

Department concurs.

In footnote 15 on page 56544 (left

column), the fourth sentence stated,

‘‘[a]t the discretion of the Board, as

appropriate, the number in the

denominator from time to time

decreases as shares of Class E stock are

purchased and increases as shares are

needed in order to meet certain

requirements of GM’s employee benefit

plans.’’ GM suggests that while the

above-quoted statement is correct, in the

interest of accuracy and completeness,

the following quoted sentence should

have been added to the footnote: ‘‘[t]he

denominator is subject to adjustment

from time to time (but never to a

number greater than one) by GM’s

Board, the discretion of which is limited

in accordance with criteria specified in

GM’s Certificate of Incorporation

intended to preserve fairness as between

the interests of both the holders of Class

E stock and the holders of $12⁄3 per

value common stock.’’ Accordingly, the

Department does not object to the

inclusion of GM’s additional clarifying

language.

The following GM comments relate to

the RRA and the Transfer Rights

Agreement (TRA), as described in the

SFR.

GM has commented upon the need of

UST to be able to amend the RRA due

to circumstances that may arise in the

future. In GM’s view, the exemption, if

granted, should permit UST to execute

amendments to the RRA that UST

believes are in the interest of the Plan

and its participants and beneficiaries,

without forcing GM or the Plan to

request another exemption. The

Department concurs.

Footnote 20 on page 56546, states that

the term, ‘‘transfer’’ includes an ‘‘offer.’’

GM suggests that, to more closely reflect

the RRA and TRA, the word, ‘‘offer,’’

should have been omitted from the

definition of the term, ‘‘transfer.’’ The

Department concurs.

In the second full paragraph in the

right column of page 56546, GM

suggests that, to more closely reflect the

RRA, it would have been more complete

to insert the words ‘‘in the aggregate,’’

in the first sentence of the paragraph

such that the first sentence would have

read as follows: ‘‘It is represented that

there will be no limit, except for market

considerations on the amount of Class E

stock that can be sold in the aggregate

(emphasis added) pursuant to a

‘demand’ transfer by the Plan.’’ Further,
Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices 14011

the word, ‘‘[s]imilarly,’’ should have

been substituted in lieu of the phrase,

‘‘[i]n addition,’’ at the beginning of the

third sentence of the paragraph, such

that the third sentence should have read

as follows, ‘‘[s]imilarly (emphasis

added), in a negotiated transaction, the

Plan may not transfer more than 2

percent (2%) of the outstanding Class E

stock to any person or related group.

* * *’’ The Department concurs.

In the carryover paragraph at the top

of the right column on page 56546, GM

suggests that, to more closely reflect the

RRA, the last sentence should have

read, ‘‘[u]nder the RRA, as long as the

Plan owns 2 percent (2%) or more of the

outstanding Class E stock, the Plan may

transfer such stock only under certain

terms and conditions summarized in the

paragraphs below.’’ The Department

concurs.

In the second full paragraph in the

right column on page 56546, GM

suggests that, to more closely reflect the

RRA, in the second sentence the

adjective, ‘‘reasonable,’’ should have

been inserted before the phrase, ‘‘best

efforts,’’ in the sentence, ‘‘However, in

any public offering the lead

underwriters must agree to use their

best efforts to assure that no more than

2 percent (2%) of the outstanding Class

E stock is transferred to any person or

related group.’’ The Department

concurs.

In the last paragraph in the right

column on page 56546, GM suggests

that, to more closely reflect the RRA, the

underlined phrases below should have

been inserted so that the third sentence

should have read as follows, ‘‘[i]f, at any

time that the Plan owns at least 25

million shares of Class E stock

(emphasis added), as a result of such

postponements or such market

holdbacks, the Plan is not able to effect

a ‘demand’ transfer for a period of

thirteen (13) months, and during such

period the Plan has not otherwise

transferred 25 million or more shares of

Class E stock or had the opportunity to

include at least 25 million shares of

Class E stock in a piggyback registration

(emphasis added), GM must terminate

the postponement within sixty (60) days

of the Plan’s notification to GM of such

fact and take all reasonable actions

necessary to effect such transfer.’’ The

Department concurs.

In the first full paragraph in the left

column on page 56547, in the definition

of Strategic Partner, GM suggests that to

more closely reflect the RRA, the second

sentence of the paragraph should have

read, ‘‘[a] Strategic Partner is an investor

or group of investors acting in concert

and designated as such by the Board of

GM (or any successor issuer) that

acquires 10 percent (10%) or more of

the outstanding Class E stock (or

securities convertible or exchangeable

therefor) in a transaction or series of

related transactions intended to achieve

a strategic objective.’’ The Department

concurs.

In the second full paragraph in the left

column on page 56547, GM suggests

that, to more closely reflect the RRA, the

second sentence should have read, ‘‘[i]n

a ’piggyback’ registration, if GM, in its

reasonable judgment, expects that at

least 25 percent (25%) of the total

number of shares of Class E stock to be

included in the offering are shares

owned by the Plan, the Plan may select

a co-manager reasonably acceptable to

GM.’’ The Department concurs.

In its comment, GM states that the

Plan and a Strategic Partner will

participate on an equal, not on a pro

rata basis in piggyback registrations.

Accordingly, GM suggests that, to more

closely reflect the RRA, the phrase, ‘‘an

equal basis,’’ should have been

substituted for the phrase, ‘‘a pro rata

basis,’’ in the last sentence of the

carryover paragraph in the center

column on the top of page 56547. The

Department concurs.

In the first full paragraph of the center

column on page 56547, GM suggests

that, to more closely reflect the RRA, in

the first sentence the phrase, ‘‘below 7.5

percent (7.5%) should have read ‘‘7.5

percent (7.5%) or less.’’ Further, the

fourth and fifth sentences in the same

paragraph should have read, ‘‘In

general, if a stockholders rights plan is

in effect when the third-party tender

offer commences but, in connection

with such offer, the stockholders rights

plan is revoked or invalidated (or the

rights issued thereunder are revoked or

redeemed) either by GM’s Board of

Directors or by a final and nonappealable court order, the Plan may

tender its shares of Class E stock into

such offer. If there is no stockholders

rights plan in effect (other than as

described above), generally the Plan

may tender its shares of Class E stock

into a tender offer so long as either the

GM Board or at least one-half of the

independent directors on the Board

have not recommended to stockholders

that such tender offer be rejected or

there are fewer than the two

independent directors on the Board.’’

The Department concurs.

In the second full paragraph in the

center column on page 56547, GM

suggests that, to more closely reflect the

RRA, the first sentence should have

read, ‘‘[i]n the event the Plan is

prohibited as described above from

tendering into a third-party offer and

GM does not otherwise consent to the

Plan tendering, in general, if the tender

results in a bidder in the tender offer

owning more than 50 percent (50%) of

the total combined voting power of all

outstanding securities of GM or other

issuer, the Plan will have the option to

put to GM or other issuer up to the same

number of shares that would have been

purchased if tendered in the tender offer

for a purchase price in cash equal to the

price per share offered in the tender.’’

The Department concurs.

In item 14 of the SFR, GM suggests

that, to more closely reflect the TRA, the

first sentence in the second full

paragraph in the right column of page

56547 should have read, ‘‘[t]he Transfer

Agreement is intended to preserve GM’s

ability to consummate at a later date a

tax-free reorganization, including a

split-off in which the Class E stock is

converted into or exchanged for shares

of capital stock of EDS in a transaction

that results in GM no longer controlling

EDS (’Split-Off’). In this regard, unless

and until a Split-Off is consummated,

the Plan will not be permitted to

transfer Class E stock if such transfer

will result in more than 5 percent (5%)

of the total value of Class E stock then

outstanding being owned by any foreign

person, as defined in the Code.’’ The

Department concurs.

In the second full paragraph in the

right column of page 56547, the third

sentence stated, ‘‘[u]nder certain

circumstances after the Split-Off, the

Plan may not transfer any Class E stock

if, as a result, the Plan would own less

than 50 percent (50%) of the Class E

stock that it owned immediately after it

received notice from GM of the SplitOff.’’ GM suggests that, to more closely

reflect the TRA, the words, ‘‘after the

Split-Off’’ should not have been

included in that sentence and the

words, ‘‘a proposed’’ should have been

inserted in lieu of the word, ‘‘the,’’

before the word, ‘‘Split-Off’’ the last

time it appears.

GM suggests that, to more closely

reflect the TRA, the following quoted

sentence should have been included as

the next to the last sentence in the

second full paragraph in the right

column of page 56547 of the Notice,

‘‘[f]rom the date of the initial

contribution until the first anniversary

of the Split-Off, if any, the Plan may not

transfer Class E stock to any person or

group, if, as a result, such person or

group would own 5 percent (5%) or

more of the Class E stock then

outstanding.’’ In addition, GM in its

comment provides further clarification

regarding the relationship of the abovequoted sentence to the last sentence of

the second full paragraph in the right

column of page 56547 of the Notice.
14012 Federal Register / Vol. 60, No. 50 / Wednesday, March 15, 1995 / Notices

That sentence reads, ‘‘[f]rom the date of

the initial contribution until the second

anniversary of the Split-Off, unless EDS

announces a merger with one or more

corporations, the Plan may not transfer

Class E stock to any person or related

group, if, as a result, such person or

group would own 5 percent (5%) or

more of the Class E stock then

outstanding.’’ GM states that the two

sentences quoted above, when read

together, mean that during the period

that begins on the initial contribution

date and ends on the first anniversary of

the Split-Off date, the Plan may not

transfer Class E stock to a person who

is (or, as a result of the transfer would

be) a ‘‘5 percent person.’’ However,

during the period that begins on the day

after the first anniversary of the SplitOff date and ends on the second

anniversary of the Split-Off date (or

later, in the case of a merger event

occurring before the second anniversary

of the Split-Off date), the Plan may

transfer Class E stock to a person who

would, as a result of the transfer,

constitute a ‘‘5 percent person,’’ if that

person agrees to be bound by the TRA.

The Department concurs.

In addition, to the comments from GM

described above, GM informed the

Department of an event which

transpired after the Notice was

published in the Federal Register. In

this regard, in item 12 on page 56545 of

the SFR, GM indicated that it

anticipated contributing $750 million to

the Plan before the end of 1994 which,

at its option, along with previous cash

contributions, could be considered part

of the $4 billion dollar contribution

which is the subject of this exemption.

In this regard, GM, in a letter dated

December 22, 1994, advised the

Department that this $750 million

contribution in cash was made on

December 12, 1994.

GM also clarified certain

representations regarding the

approximately 17 million shares of

Class E stock held by the Plan prior to

the contribution. On page 56546 of the

Notice, in the third full paragraph of the

center column, it is stated that the RRA

and the TRA ‘‘* * * will apply to all

Class E stock held by the Plan whether

acquired pursuant to the proposed

contribution in-kind or otherwise held

by the Plan at the time the exemption

is granted. In this regard, the 17 million

shares of Class E stock held by the Plan

prior to the contribution will be

surrendered to GM so that restrictions

may be placed on such shares.’’

Subsequent to the publication of the

Notice, it came to the attention of GM

that approximately 300,000 shares of the

17 million shares were acquired on the

open market by several independent

investment managers in the course of

implementing their respective portfolio

management strategies. These shares are

registered and tradable without

restriction. Because these shares are

registered, not subject to any trading

restrictions, and under management of

independent managers, GM believes

that it would be inappropriate to

transfer management of these shares to

UST pursuant to the exemption. Rather,

GM believes that these shares should

remain under the control of their

respective managers to be held and

disposed of in their discretion, as they

pursue their respective portfolio

management strategies. As a result,

these shares will not be subject to the

RRA and the TRA and will continue

under the control of their respective

managers, to be held or disposed of in

their discretion, rather than UST’s.

A number of individual commentators

requested a hearing with respect to the

exemption. Most of these commentators

appear to have requested a hearing

because of their belief that the

transaction would reduce their

retirement benefits. In addition, several

commentators requested a hearing but

did not state a reason for such request.

In response to these requests for

hearing, GM states that, given the

number of participants and beneficiaries

receiving the Notice of Proposed

Exemption, the number of requests for

a hearing is de minimis. Moreover, none

of the requests for a hearing presented

a compelling reason why such hearing

should be held.

The Department has considered the

concerns expressed by the individuals

who had requested a hearing and the

applicant’s written response addressing

such concerns. After consideration of

the materials provided, the Department

does not believe that any issues have

been raised which would require the

convening of a hearing. Further, after

giving full consideration to the record,

including the comments by

commentators and the responses of the

applicant, the Department has

determined to grant the exemption, as

described herein. In this regard, the

comments submitted to the Department

have been included as part of the public

record of the exemption application.

The complete application file, including

all supplemental submissions received

by the Department, is made available for

public inspection in the Public

Documents Room of the Pension

Welfare Benefits Administration, room

N–5507, U.S. Department of Labor, 200

Constitution Avenue NW., Washington,

DC 20210.

For a more complete statement of the

facts and representations supporting the

Department’s decision to grant this

exemption refer to the Notice published

on Monday, November 14, 1994, 59 FR

56541.

FOR FURTHER INFORMATION CONTACT:

Angelena C. Le Blanc of the Department,

telephone (202) 219–8883 (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, DC, this 10th day of

March, 1995.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 95–6345 Filed 3–14–95; 8:45 am]

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