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Secretary of Labor Thomas E. Perez
Prohibited Transaction Exemption 2002-01; Grant of Individual Exemptions; Key Trust Company of Ohio, et al. [Notices] [01/09/2002]

EBSA (Formerly PWBA) Federal Register Notice

Prohibited Transaction Exemption 2002-01; Grant of Individual Exemptions; Key Trust Company of Ohio, et al. [01/09/2002]

[PDF Version]

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