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Prohibited Transaction Exemption 2002-01; Grant of Individual Exemptions; Key Trust Company of Ohio, et al. [01/09/2002]
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Volume 67, Number 6, Page 1242-1247
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DEPARTMENT OF LABOR
Pension and Welfare Benefits Administration
[Exemption Application No. D-10762, et al.]
Prohibited Transaction Exemption 2002-01; Grant of Individual
Exemptions; Key Trust Company of Ohio, 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, 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 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, 5 U.S.C.
App. 1 (1996), 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.
Key Trust Company of Ohio (Key Trust), Located in Cleveland, OH
[Prohibited Transaction Exemption 2002-01; Exemption Application No. D-
10762]
Exemption
I. Covered Transactions
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,\1\ shall not apply to the making of interest-free loans to a
defined contribution plan (the Plan) by its respective sponsor (the
Plan Sponsor) pursuant to the terms of a credit facility arrangement
(the Credit Facility Arrangement), established by Key Trust and its
affiliates (collectively, KeyBank), which enables daily transactions,
such as participant investment transfers, distributions or participant
loans, in connection with the Plan's unitized employer stock fund (the
Unitized Employer Stock Fund or Fund) within KeyBank; and (2) the
repayment, by the Plan to the Plan Sponsor, of any interest-free loan
within 90 days with cash proceeds received from the sale of employer
stock (Employer Stock) held in the Unitized Employer Stock Fund.
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\1\ Unless otherwise noted, references to specific sections of
the act refer also to the corresponding provisions of the Code.
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II. General Conditions
(a) Each loan made under the Credit Facility Arrangement provides
short-term funds to the Plan for a period of no longer than 90 days for
the purpose of facilitating Plan participant transfers, distributions,
loans and other participant transactions involving the Plan's Unitized
Employer Stock Fund.
(b) The maximum amount of short-term funds available to a Plan
under the Credit Facility Arrangement, in the aggregate, does not
exceed 25 percent of the fair market value of the Plan's Unitized
Employer Stock Fund.
(c) Each loan made under the Credit Facility Arrangement is repaid
with proceeds from the sale of Employer Stock held in the Unitized
Employer Stock Fund.
(d) For purposes of repaying a loan under the Credit Facility
Arrangement, the sales price for the Employer Stock is based upon its
fair market value as determined on the New York Stock Exchange (the
NYSE) or other applicable securities exchange where such Employer Stock
is primarily traded on the date of the transaction, as calculated by an
independent pricing service.
(e) Each loan made under the Credit Facility Arrangement is
unsecured and no commitment fees, interest or commissions are paid by
the Plan.
(f) In the event of a loan default or delinquency, the Plan Sponsor
has no recourse against the Plan.
(g) Each loan is initiated, accounted for and administered by
KeyBank, the independent fiduciary, which will monitor the terms and
conditions of the exemption on behalf of the Plan, at all times.
(h) KeyBank maintains for a period of six years, in a manner that
is accessible for audit and examination, the records necessary to
enable the persons described in paragraph (i) 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 KeyBank, such
records are lost or destroyed prior to the end of such six year period;
and
(2) No party in interest, other than KeyBank, shall be subject to
the civil penalty that may be assessed under section 502(i), or 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 (h).
(i)(1) Except as provided in paragraph (h)(2) and notwithstanding
anything to the contrary in sections 504(a)(2) and (b) of the Act, the
records referred to in paragraph (h) are unconditionally available for
examination during normal business hours by--
(A) Any duly authorized employees or representatives of the
Department or the Internal Revenue Service;
(B) Any fiduciary of a Plan or any duly authorized employee or
representative of such fiduciary; and
(C) Any participant or beneficiary of a Plan or any duly authorized
employee or representative of such participant or beneficiary.
(2) None of the persons described above in paragraph (i)(1)(B) or
(C) shall be authorized to examine the trade secrets of KeyBank or
commercial or financial information which is privileged or
confidential.
[[Page 1243]]
III. Definitions
For purposes of this exemption,
(a) The term ``KeyBank'' refers to Key Trust Company of Ohio and
its affiliates.
(b) An ``affiliate'' of KeyBank includes--
(1) Any person, directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control
with KeyBank;
(2) Any officer, director, employee, relative or partner in
KeyBank; and
(3) Any corporation or partnership of which KeyBank 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 ``closing price'' means the final price at which
Employer Stock has traded on the NYSE (or such other exchange on which
Employer Stock is primarily traded) on the date of the transaction as
may be reported to KeyBank using an independent pricing service for the
reporting of final prices.
(e) The term ``Employer Stock'' refers to common stock issued by a
Plan Sponsor, an affiliate of the Plan Sponsor, a former Plan Sponsor,
or an affiliate of the former Plan Sponsor.\2\
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\2\ The Department notes that the term ``Employer Stock,'' as
defined in this final exemption, may not satisfy the definition of
``employer security'' contained in section 407(d)(1) of the Act.
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(f) The term ``Plan Sponsor'' refers to an employer (or an
affiliate of the employer) sponsoring a defined contribution plan which
has entered into a Unitized Employer Stock Fund Investment Policy
Agreement with KeyBank in order to structure the investment by the
Plan's Unitized Employer Stock Fund in Employer Stock.
(g) The term ``Unitized Employer Stock Fund'' refers to an
investment fund established by KeyBank whose assets will consist
primarily of shares of Employer Stock.
(h) The ``trading day'' refers to any day on which KeyBank and the
NYSE are open for business and are able to transact trades involving
Employer Stock as a Plan investment. The close of trading day will be
the time of the close on the NYSE. In the event that either KeyBank or
the NYSE (or any other exchange on which the Employer Stock is
primarily traded) is incapable of processing trades involving Employer
Stock, or in the event trading in Employer Stock is suspended, the
close of the trading day will be the last time by which transactions
involving Employer Stock are processed on any such day.
(i) The term ``drift allowance'' refers to the range of
percentages, comprised of a maximum and minimum percentage, which is
determined and established by the Plan Sponsor as being the proper
percentages within which the liquidity component of the Unitized
Employer Stock Fund should represent of the entire market value of such
Fund on any given day.
(j) The term ``liquidity component'' means the short-term
investment vehicle which is selected by the Plan Sponsor and used to
invest any uninvested cash in the Plan's Unitized Employer Stock Fund.
(k) The term ``target percentage'' means the number, expressed as a
percentage, which is determined and established by the Plan Sponsor, as
being the proper percentage that the liquidity component of the
Unitized Employer Stock Fund will represent of the entire market value
of such Fund (including the liquidity component and the Employer
Stock). The target percentage will take into consideration factors such
as the daily market volume for trading in the Employer Stock and the
average daily trading activity of such stock in the Unitized Employer
Stock Fund.
(l) The term ``transaction valuation date'' refers to any day on
which KeyBank and the NYSE (or any other national securities exchange
on which Employer Stock is primarily traded) are open for business and
are able to transact trades.
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 September 7, 2001 at 66
FR 46830.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 693-8556. (This is not a toll-free number.)
The Golden Retirement Savings Program (the Savings Program); and
The Golden Comprehensive Security Program (the Security Program),
(collectively, the Plans) Located in New York, New York
[Prohibited Transaction Exemption No. 2002-02; Exemption Application
Nos. D-10913; D-10914]
Exemption
The restrictions of sections 406(a) and 406(b)(1) and (b)(2) and
section 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, shall not apply, effective
January 27, 2000, to the past acquisition and holding by the Savings
Program of 1,896.294 publicly traded warrants and by the Security
Program of 2,073.554 publicly traded warrants (the Warrants) of Golden
Books Family Entertainment, Inc. (the Employer), a party in interest
with respect to the Plans, provided that the following conditions were
or will be met:
(a) The acquisition and holding of the Warrants by the Plans
occurred in connection with the Employer's bankruptcy proceeding
pursuant to which all holders of the old common stock of the Employer
were treated in the same manner;
(b) The Plans had little, if any, ability to affect the negotiation
of the Employer's plan of reorganization with respect to the bankruptcy
proceeding;
(c) The Warrants were acquired automatically and without any action
on the part of the Plans; and
(d) The Plans did not pay any fees or commissions in connection
with the receipt of the Warrants, nor did the Plans pay any fees or
commissions in connection with the holding of the Warrants.
EFFECTIVE DATE: This exemption is effective as of January 27, 2000.
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 (the Notice) published on September 7,
2001 at 66 FR 46839.
FOR FURTHER INFORMATION CONTACT: Khalif Ford of the Department,
telephone (202) 693-8540 (this is not a toll-free number).
Metropolitan Life Insurance Company (MetLife Insurance Company) and
Its Affiliates (collectively, MetLife) Located in New York, NY
[Prohibited Transaction Exemption 2002-03; Exemption Application No. D-
10954]
Exemption
Section I. Retroactive Exemption for the Acquisition, Holding and
Disposition of Metlife, Inc. Common Stock
The restrictions of sections 406(a)(1)(D), 406(b)(1) and section
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)(D) and (E)
of the Code,\3\ shall not apply, as of December 7, 2000 until (insert
the date the final exemption is published in the Federal Register), to
[[Page 1244]]
the acquisition, holding and disposition of the common stock of
MetLife, Inc. (the MetLife, Inc. Stock), by Index and Model-Driven
Funds (collectively, the Funds) that are managed by MetLife, in which
client plans of MetLife invest, provided that the following conditions
and the General Conditions of Section III are met:
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\3\ For purposes of this exemption, references to provisions of
the Act refer also to corresponding provisions of the Code.
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(a) The acquisition or disposition of MetLife, Inc. Stock is for
the sole purpose of maintaining strict quantitative conformity with the
relevant index upon which the Index or Model-Driven Fund is based, and
does not involve any agreement, arrangement or understanding regarding
the design or operation of the Fund acquiring MetLife, Inc. Stock which
is intended to benefit MetLife or any party in which MetLife may have
an interest.
(b) All aggregate daily purchases of MetLife, Inc. Stock by the
Funds do not exceed on any particular day the greater of--
(1) 15 percent of the average daily trading volume for the MetLife,
Inc. Stock, occurring on the applicable exchange and automated trading
system (as described in Section I(c) below) for the previous 5 business
days, or
(2) 15 percent of the trading volume for MetLife, Inc. Stock
occurring on the applicable exchange and automated trading system on
the date of the transaction, as determined by the best available
information for the trades occurring on that date.
(c) All purchases and sales of MetLife, Inc. Stock occur (i) either
on a recognized U.S. securities exchange (as defined in Section IV(j)
below), so long as the broker is acting on an agency basis; (ii)
through an automated trading system (as defined in Section IV(i) below)
operated by a broker-dealer independent of MetLife that is registered
under the Securities Exchange Act of 1934 (the 1934 Act) and thereby
subject to regulation by the Securities and Exchange Commission (SEC),
or an automated trading system operated by a recognized U.S. securities
exchange, which, in either case, provides a mechanism for customer
orders to be matched on an anonymous basis without the participation of
a broker-dealer, or (iii) in a direct, arm's length transaction entered
into on a principal basis with a broker-dealer, in the ordinary course
of its business, where such broker-dealer is independent of MetLife and
is registered under the 1934 Act, and thereby subject to regulation by
the SEC.
(d) No transactions by a Fund involve purchases from, or sales to,
MetLife (including officers, directors, or employees thereof), or any
party in interest that is a fiduciary with discretion to invest plan
assets into the Fund (unless the transaction by the Fund with such
party in interest would otherwise be subject to an exemption).
(e) No more than 5 percent of the total amount of MetLife, Inc.
Stock, that is issued and outstanding at any time, is held in the
aggregate by Index and Model-Driven Funds managed by MetLife.
(f) MetLife, Inc. Stock constitutes no more than 5 percent of any
independent third party index on which the investments of an Index or
Model-Driven Fund are based.
(g) A fiduciary of a plan, which is independent of MetLife,
authorizes the investment of such plan's assets in an Index or Model-
Driven Fund which purchases and/or holds MetLife, Inc. Stock, pursuant
to the procedures described herein.
(h) A fiduciary independent of the MetLife directs the voting of
MetLife, Inc. Stock held by an Index or Model-Driven Fund on any matter
in which shareholders of MetLife, Inc. Stock are required or permitted
to vote.
Section II. Prospective Exemption for the Acquisition, Holding and
Disposition of Metlife, Inc. Stock and/or the Common Stock of a Metlife
Affiliate
The restrictions of sections 406(a)(1)(D), 406(b)(1) and section
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)(D) and (E)
of the Code, shall not apply to the acquisition, holding and
disposition of MetLife, Inc. Stock and/or common stock issued by a
MetLife affiliate (together, the MetLife Stock), by Index and Model-
Driven Funds that are managed by MetLife, in which client plans of
MetLife invest, provided that the following conditions and the General
Conditions of Section III are met:
(a) The acquisition or disposition of MetLife Stock is for the sole
purpose of maintaining strict quantitative conformity with the relevant
index upon which the Index or Model-Driven Fund is based, and does not
involve any agreement, arrangement or understanding regarding the
design or operation of the Fund acquiring MetLife Stock which is
intended to benefit MetLife or any party in which MetLife may have an
interest.
(b) Whenever MetLife Stock is initially added to an index on which
an Index or Model-Driven Fund is based, or initially added to the
portfolio of an Index or Model-Driven Fund, all acquisitions of MetLife
Stock necessary to bring the Fund's holdings of such stock either to
its capitalization-weighted or other specified composition in the
relevant index, as determined by the independent organization
maintaining such index, or to its correct weighting as determined by
the model which has been used to transform the index, occur in the
following manner:
(1) Purchases are from, or through, only one broker or dealer on a
single trading day;
(2) Based on the best available information, purchases are not the
opening transaction for the trading day;
(3) Purchases are not effected in the last half hour before the
scheduled close of the trading day;
(4) Purchases are at a price that is not higher than the lowest
current independent offer quotation, determined on the basis of
reasonable inquiry from non-affiliated brokers;
(5) Aggregate daily purchases do not exceed 15 percent of the
average daily trading volume for the security, as determined by the
greater of either (i) the trading volume for the security occurring on
the applicable exchange and automated trading system on the date of the
transaction, or (ii) an aggregate average daily trading volume for the
security occurring on the applicable exchange and automated trading
system for the previous 5 business days, both based on the best
information reasonably available at the time of the transaction;
(6) All purchases and sales of MetLife Stock occur either (i) on a
recognized U.S. securities exchange (as defined in Section IV(j)
below), (ii) through an automated trading system (as defined in Section
IV(i) below) operated by a broker-dealer independent of MetLife that is
registered under the 1934 Act, and thereby subject to regulation by the
SEC, which provides a mechanism for customer orders to be matched on an
anonymous basis without the participation of a broker-dealer, or (iii)
through an automated trading system (as defined in Section IV(i) below)
that is operated by a recognized U.S. securities exchange (as defined
in Section IV(j) below), pursuant to the applicable securities laws,
and provides a mechanism for customer orders to be matched on an
anonymous basis without the participation of a broker-dealer; and
(7) If the necessary number of shares of MetLife Stock cannot be
acquired within 10 business days from the date of the event which
causes the particular Fund to require MetLife Stock, MetLife appoints a
fiduciary which is independent of MetLife to design acquisition
procedures and monitor compliance with such procedures.
[[Page 1245]]
(c) Subsequent to acquisitions necessary to bring a Fund's holdings
of MetLife Stock to its specified weighting in the index or model
pursuant to the restrictions described in Section II(b) above, all
aggregate daily purchases of MetLife Stock by the Funds do not exceed
on any particular day the greater of:
(1) 15 percent of the average daily trading volume for MetLife
Stock occurring on the applicable exchange and automated trading system
(as defined below) for the previous 5 business days, or
(2) 15 percent of the trading volume for MetLife Stock occurring on
the applicable exchange and automated trading system (as defined below)
on the date of the transaction, as determined by the best available
information for the trades that occurred on such date.
(d) All transactions in MetLife Stock not otherwise described above
in Section II(b) are either--(i) entered into on a principal basis in a
direct, arm's length transaction with a broker-dealer, in the ordinary
course of its business, where such broker-dealer is independent of
MetLife and is registered under the 1934 Act, and thereby subject to
regulation by the SEC, (ii) effected on an automated trading system (as
defined in Section IV(i) below) operated by a broker-dealer independent
of MetLife that is subject to regulation by either the SEC or another
applicable regulatory authority, or an automated trading system
operated by a recognized U.S. securities exchange (as defined in
Section IV(j) below) which, in either case, provides a mechanism for
customer orders to be matched on an anonymous basis without the
participation of a broker-dealer, or (iii) effected through a
recognized U.S. securities exchange (as defined in Section IV(j)
below), so long as the broker is acting on an agency basis.
(e) No transactions by a Fund involve purchases from, or sales to,
MetLife (including officers, directors, or employees thereof), or any
party in interest that is a fiduciary with discretion to invest plan
assets into the Fund (unless the transaction by the Fund with such
party in interest would otherwise be subject to an exemption).
(f) No more than 5 percent of the total amount of MetLife Stock,
that is issued and outstanding at any time, is held in the aggregate by
Index and Model-Driven Funds managed by MetLife.
(g) MetLife Stock constitutes no more than 5 percent of any
independent third party index on which the investments of an Index or
Model-Driven Fund are based.
(h) A fiduciary of a plan which is independent of MetLife
authorizes the investment of such plan's assets in an Index or Model-
Driven Fund which purchases and/or holds MetLife Stock, pursuant to the
procedures described herein.
(i) A fiduciary independent of the MetLife directs the voting of
MetLife Stock held by an Index or Model-Driven Fund on any matter in
which shareholders of MetLife Stock are required or permitted to vote.
Section III. General Conditions
(a) MetLife maintains or causes to be maintained for a period of
six years from the date of the transaction the records necessary to
enable the persons described in paragraph (b) of this Section III 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 MetLife, the
records are lost or destroyed prior to the end of the six year period,
and (2) no party in interest other than MetLife shall be subject to the
civil penalty that may be assessed under section 502(i) of the Act or
to the taxes imposed by section 4975(a) and (b) of the Code if the
records are not maintained or are not available for examination as
required by paragraph (b) below.
(b)(1) Except as provided in paragraph (b)(2) of this Section III
and notwithstanding any provisions of section 504(a)(2) and (b) of the
Act, the records referred to in paragraph (a) of this Section III are
unconditionally available at their customary location for examination
during normal business hours by--
(A) Any duly authorized employee or representative of the
Department, the Internal Revenue Service or the SEC,
(B) Any fiduciary of a plan participating in an Index or Model-
Driven Fund who has authority to acquire or dispose of the interests of
the plan, or any duly authorized employee or representative of such
fiduciary,
(C) Any contributing employer to any plan participating in an Index
or Model-Driven Fund or any duly authorized employee or representative
of such employer, and
(D) Any participant or beneficiary of any plan participating in an
Index or Model-Driven Fund, or a representative of such participant or
beneficiary.
(2) None of the persons described in subparagraphs (B) through (D)
of this Section III(b)(1) shall be authorized to examine trade secrets
of MetLife or commercial or financial information which is considered
confidential.
Section IV. Definitions
(a) The term ``Index Fund'' means any investment fund, account or
portfolio sponsored, maintained, trusteed, or managed by MetLife, in
which one or more investors invest, and--
(1) Which is designed to track the rate of return, risk profile and
other characteristics of an independently maintained securities Index,
as described in Section IV(c) below, by either (i) replicating the same
combination of securities which compose such Index or (ii) sampling the
securities which compose such Index based on objective criteria and
data;
(2) For which MetLife does not use its discretion, or data within
its control, to affect the identity or amount of securities to be
purchased or sold;
(3) That contains ``plan assets'' subject to the Act, pursuant to
the Department's regulations (see 29 CFR 2510.3-101, Definition of
``plan assets''--plan investments); and,
(4) That involves no agreement, arrangement, or understanding
regarding the design or operation of the Fund which is intended to
benefit MetLife or any party in which MetLife may have an interest.
(b) The term ``Model-Driven Fund'' means any investment fund,
account or portfolio sponsored, maintained, trusteed, or managed by
MetLife, in which one or more investors invest, and--
(1) Which is composed of securities the identity of which and the
amount of which are selected by a computer model that is based on
prescribed objective criteria using independent third party data, not
within the control of MetLife, to transform an independently maintained
Index, as described in Section IV(c) below;
(2) Which contains ``plan assets'' subject to the Act, pursuant to
the Department's regulations (see 29 CFR 2510.3-101, Definition of
``plan assets''--plan investments); and
(3) That involves no agreement, arrangement, or understanding
regarding the design or operation of the Fund or the utilization of any
specific objective criteria which is intended to benefit MetLife or any
party in which MetLife may have an interest.
(c) The term ``Index'' means a securities index that represents the
investment performance of a specific segment of the public market for
equity or debt securities in the United States, but only if--
(1) The organization creating and maintaining the index is--
(A) Engaged in the business of providing financial information,
[[Page 1246]]
evaluation, advice or securities brokerage services to institutional
clients,
(B) A publisher of financial news or information, or
(C) A public stock exchange or association of securities dealers;
and,
(2) The index is created and maintained by an organization
independent of MetLife; and,
(3) The index is a generally-accepted standardized index of
securities which is not specifically tailored for the use of MetLife.
(d) The term ``opening date'' means the date on which investments
in or withdrawals from an Index or Model-Driven Fund may be made.
(e) The term ``Buy-up'' means an acquisition of MetLife Stock by an
Index or Model-Driven Fund in connection with the initial addition of
such stock to an independently maintained index upon which the Fund is
based or the initial investment of a Fund in such stock.
(f) The term ``MetLife'' refers to Metropolitan Life Insurance
Company, its parent, MetLife, Inc. and their current or future
affiliates, as defined below in paragraph (g).
(g) An ``affiliate'' of MetLife 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 or relative of such person, or
partner of any such person; and
(3) Any corporation or partnership of which such person is an
officer, director, partner or employee.
(h) The term ``control'' means the power to exercise a controlling
influence over the management or policies of a person other than an
individual.
(i) The term ``automated trading system'' means an electronic
trading system that functions in a manner intended to simulate a
securities exchange by electronically matching orders on an agency
basis from multiple buyers and sellers, such as an ``alternative
trading system'' within the meaning of the SEC's Reg. ATS [17 CFR Part
242.300], as such definition may be amended from time to time, or an
``automated quotation system'' as described in Section 3(a)(51)(A)(ii)
of the 1934 Act [15 U.S.C. 8c(a)(51)(A) (ii)].
(j) The term ``recognized U.S. securities exchange'' means a U.S.
securities exchange that is registered as a ``national securities
exchange'' under Section 6 of the 1934 Act (15 U.S.C. 78f), as such
definition may be amended from time to time, which performs with
respect to securities the functions commonly performed by a stock
exchange within the meaning of definitions under the applicable
securities laws (e.g., 17 CFR part 240.3b-16).
EFFECTIVE DATE: This exemption is effective from December 7, 2000 until
(insert the date the final exemption is published in the Federal
Register) with respect to the transactions described in Section I
above, and is effective as of (insert the date the final exemption is
published in the Federal Register) for the transactions described in
Section II above.
For a more complete statement of the facts and representations
supporting the Department's decision to grant this exemption, refer to
the notice of proposed exemption published on September 27, 2001 at 66
FR 49400.
FOR FURTHER INFORMATION CONTACT: Ms. Jan D. Broady of the Department,
telephone (202) 219-8881. (This is not a toll-free number.)
Kimball International, Inc. Retirement Plan (the Plan), Located in
Jasper, Indiana
[Prohibited Transaction Exemption No. 2002-04; Exemption Application
No. D-10949]
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 sale (the Sale) by the Plan of stock
(the Shares) of SVB&T Corporation (Springs Valley) to Springs Valley,
the Trustee of the Plan and a party in interest with respect to the
Plan, provided that the following conditions are met:
(a) All terms and conditions of the Sale are at least as favorable
to the Plan as those obtainable in an arm's-length transaction with an
unrelated party;
(b) The Sale is a one-time transaction for cash;
(c) The fair market value of the Shares is determined by a
qualified, independent appraiser;
(d) The Plan does not pay any commissions, costs or other expenses
in connection with the Sale; and
(e) The Plan receives as consideration an amount that is no less
than the greater of: (1) the fair market value of the Shares as of the
date of the Sale or (2) $40 per Share.
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 October 23, 2001 at 66 FR
53635.
Written Comments
One written comment was received by the Department, which was
submitted by the applicant, Kimball. The comment requested a change to
the Notice as described below.
On page 53635 of the Notice, with respect to the operative language
describing the transaction, the reference to Springs Valley Bank &
Trust should be deleted and, in lieu thereof, SVB&T Corporation
(Springs Valley) should be inserted.
The Department concurs in this change submitted by the applicant.
Accordingly, after giving full consideration to the entire record,
including the comments by the applicant, the Department has determined
to grant the exemption as modified. In this regard, the comment
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 Disclosure Room of
the Pension and Welfare Benefits Administration, Room N-1513, U.S.
Department of Labor, 200 Constitution Avenue. NW, Washington, D.C.
20210.
FOR FURTHER INFORMATION CONTACT: Khalif Ford of the Department,
telephone (202) 693-8540 (this is not a toll-free number).
Alaska United Food and Commercial Workers Health and Security Trust
Fund (the Plan) Located in Anchorage, Alaska
[Prohibited Transaction Exemption 2002-05; Exemption Application No. L-
10896]
Exemption
The restrictions of section 406(a) of the Act shall not apply to
the purchase by Plan participants and beneficiaries of prescription
drugs from Safeway, Inc. (Safeway), a party in interest with respect to
the Plan, provided the following conditions are satisfied: (a) the
terms of the transaction are at least as favorable to the Plan as those
the Plan could obtain in a similar transaction with an unrelated party;
(b) any decision by the Plan to enter into agreements governing the
subject purchases will be made by Plan fiduciaries independent of
Safeway and its wholly owned subsidiary, SMCrx; (c) at least 50% of the
preferred providers participating in the Preferred Provider Network
(PPN) involving Safeway are unrelated to Safeway or any other party
[[Page 1247]]
in interest with respect to the Plan; (d) Safeway will be treated no
differently than any other pharmacy participating in the PPN; and (e)
the transaction is not part of an agreement, arrangement or
understanding designed to benefit Safeway or any other party in
interest with respect to the 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 October 23, 2001 at 66 FR
53637.
EFFECTIVE DATE: This exemption is effective as of August 1, 2000.
FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz of the Department,
telephone (202) 693-8540. (This is not a toll-free number.)
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under section 408(a) of the Act and/or section 4975(c)(2) of the Code
does not relieve a fiduciary or other party in interest or disqualified
person from certain other provisions to which the exemptions does not
apply and the general fiduciary responsibility provisions of section
404 of the Act, which among other things require a fiduciary to
discharge his duties respecting the plan solely in the interest of the
participants and beneficiaries of the plan and in a prudent fashion in
accordance with section 404(a)(1)(B) of the Act; nor does it affect the
requirement of section 401(a) of the Code that the plan must operate
for the exclusive benefit of the employees of the employer maintaining
the plan and their beneficiaries;
(2) These exemptions are supplemental to and not in derogation of,
any other provisions of the Act and/or the Code, including statutory or
administrative exemptions and transactional rules. Furthermore, the
fact that a transaction is subject to an administrative or statutory
exemption is not dispositive of whether the transaction is in fact a
prohibited transaction; and
(3) The availability of these exemptions is subject to the express
condition that the material facts and representations contained in each
application accurately describes all material terms of the transaction
which is the subject of the exemption.
Signed at Washington, D.C., this 3rd day of January, 2002.
Ivan Strasfeld,
Director of Exemption Determinations, Pension and Welfare Benefits
Administration, U.S. Department of Labor.
[FR Doc. 02-549 Filed 1-8-02; 8:45 am]
BILLING CODE 4510-29-P
