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Employee Benefits Security Administration

EBSA Federal Register Notice

Prohibited Transaction Exemption 2006-19; Grant of Individual Exemption Involving Kaiser Aluminum Corporation and Its Subsidiaries (Together, Kaiser) Located in Foothill Ranch, CA [12/07/2006]

[PDF Version]

Volume 71, Number 235, Page 70992-70996

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Application No. L-11348]

 
Prohibited Transaction Exemption 2006-19; Grant of Individual 
Exemption Involving Kaiser Aluminum Corporation and Its Subsidiaries 
(Together, Kaiser) Located in Foothill Ranch, CA

AGENCY: Employee Benefits Security Administration, U.S. Department of 
Labor.

ACTION: Grant of individual exemption.

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    This document contains a final exemption before the Department of 
Labor (the Department) that provides relief from certain prohibited 
transaction restrictions of the Employee Retirement Income Security Act 
of 1974 (the Act).\1\ The exemption permits, effective July 6, 2006, 
(1) the acquisition by the VEBA for Retirees of Kaiser Aluminum (the 
Hourly VEBA) and by the Kaiser Aluminum Salaried Retirees VEBA (the 
Salaried VEBA; together, the VEBAs) of certain publicly traded common 
stock issued by Kaiser (the Stock or the Shares), through an in-kind 
contribution to the VEBAs by Kaiser of such Stock, for the purpose of 
prefunding VEBA welfare benefits; (2) the holding by the VEBAs of such 
Stock acquired pursuant to the contribution; and (3) the management of 
the Shares, including their voting and disposition, by an independent 
fiduciary (the Independent Fiduciary) designated to represent the 
interests of each VEBA with respect to the transactions. The exemption 
affects the VEBAs and their participants and beneficiaries.
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    \1\ Because the VEBAs are not qualified under section 401 of the 
Internal Revenue Code of 1986, as amended (the Code) there is no 
jurisdiction under Title II of the Act pursuant to section 4975 of 
the Code. However, there is jurisdiction under Title I of the Act.

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DATES: Effective Date: This exemption is effective as of July 6, 2006.

FOR FURTHER INFORMATION CONTACT: Ms. Blessed Chuksorji, Office of 
Exemption Determinations, Employee Benefits Security Administration, 
U.S. Department of Labor, telephone (202) 693-8567. (This is not a 
toll-free number.)

SUPPLEMENTARY INFORMATION: On October 26, 2006, the Department 
published a notice of proposed exemption in the Federal Register at 71 
FR 62615. The document contained a notice of proposed individual 
exemption from the restrictions of sections 406(a)(1)(E), 406(a)(2), 
406(b)(1), 406(b)(2) and 407(a) of the Act. The proposed exemption had 
been requested in an application filed by Kaiser pursuant to section 
408(a) of the Act, and in accordance with the procedures set forth in 
29 CFR Part 2570, Subpart B (55 FR 32836, August 10, 1990). 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 requested to the 
Secretary of Labor. Accordingly, this exemption is being issued solely 
by the Department.
    The proposed exemption gave interested persons an opportunity to 
comment and to request a hearing. In this regard, all interested 
persons were invited to submit written comments or requests for a 
hearing on the pending exemption on or before November 21, 2006. All 
comments were to be made part of the record.
    During the comment period, the Department received 18 comments by 
telephone from participants in the Hourly and Salaried VEBAs regarding 
benefits questions or requests for a simplified explanation of the 
transactions. For those inquiries pertaining to benefits, the 
Department referred the participants to sources recommended by either 
Independent Fiduciary Services, Inc. (IFS), the Independent Fiduciary 
for the Hourly VEBA or Fiduciary Counselors, Inc. (FCI), the 
Independent Fiduciary for the Salaried VEBA. Of the participant 
comments, one participant in the Hourly VEBA submitted a written 
comment to the Department regarding a substantive matter. For a 
response, the comment was forwarded to IFS. The Department did not 
receive any requests from any VEBA participants for a public hearing.
    In addition to the VEBA participant comments, the Department 
received written comments from IFS and FCI. Both comments are intended 
to clarify the Summary of Facts and Representations (the Summary) and 
the conditions and definitions of the proposal.
    The written comments and the responses are discussed below.

Hourly VEBA Participant's Comment

    A retired Kaiser employee and a participant in the Hourly VEBA 
questioned the decision to use the Kaiser Stock to fund the Hourly 
VEBA. The commenter suggested that each current retiree be given shares 
of Kaiser Stock to manage as such retiree wished.
    In response to the comment, IFS explains that Kaiser and various 
unions (the Unions) engaged in negotiations, and that the Unions, 
representing the interests of all Kaiser retirees (both current and 
future), agreed to use the Stock to fund the plans that would provide 
retiree health benefits for both current and future retirees of the 
VEBAs. IFS further explains that this decision was memorialized in the 
collective bargaining agreements that were ratified by Kaiser employees 
working under the agreements. In addition, IFS notes that the 
agreements were subsequently approved by the Bankruptcy Court.

Summary Clarifications

    In its comment letter, IFS has suggested the following 
clarifications to the Summary:
    1. Footnote 8. IFS explains that Footnote 8 of the Summary ends 
with the phrase ``* * * the pre-emergence sales are treated as if they 
occurred on or after the Effective Date.'' IFS states that Section 2.3 
of the Stock Transfer Restriction Agreement provides that these pre-
emergence sales are treated as if they occurred on the day immediately 
succeeding the Effective Date. Therefore, IFS recommends that Footnote 
8 of the Summary be revised to read ``* * * the pre-emergence sales are 
treated as if they occurred on the day immediately succeeding the 
Effective Date.''
    2. Representation 6(a)(1). IFS indicates that Representation 
6(a)(1) of the Summary states that ``On July 7, 2006, Kaiser issued 
8,809,000 shares of its common stock to the Hourly Trust.'' Similarly, 
in Representation 10(c), under the caption ``Pricing of the Hourly VEBA 
Shares,'' it states that ``The Hourly VEBA received its 8,809,000 
Shares as of July 7, 2006.'' IFS explains that Representation 10(c) 
further states that market-driven sales of pre-emergence Shares 
provided a benchmark value ``of the Shares to which the Hourly VEBA was 
eventually entitled on July 7, 2006.'' IFS wishes to clarify that the 
correct number of Shares issued to the Hourly VEBA was 8,809,900.
    In addition, IFS wishes to clarify that Kaiser issued the Shares--
and the Hourly VEBA became the legal owner of

[[Page 70993]]

the Shares--on July 6, 2006. However, IFS points out that the Hourly 
Trustee (National City Bank) did not obtain physical possession of the 
Share certificates on July 6, 2006 and that such physical possession 
did not affect legal ownership of the issued Shares. Therefore, IFS 
recommends that Representation 10(c) be changed to mirror 
Representation 6(a)(1). Thus, Representation 10(c) would read: ``Kaiser 
issued 8,809,900 Shares to the Hourly VEBA on July 6, 2006. Empire 
placed the fair market value of such Stock at $36.50 per Share as of 
that date.'' IFS also believes that Footnote 12 should immediately 
follow these sentences. Similarly, IFS states that the last sentence in 
the first paragraph of Representation 10(c) should reflect the July 6, 
2006 date and the fact that the Shares were issued on that date. 
Accordingly, that sentence should read ``In the interim, the market-
driven sales of pre-emergence Shares described above provided a 
benchmark for assessing the value of the Shares issued to the Hourly 
VEBA on July 6, 2006.''
    3. Representation 10(a). IFS indicates that the first paragraph of 
Representation 10(a) refers to IFS as a ``wholly owned Delaware 
corporation.'' To remove any ambiguity, IFS suggests referring to it as 
``Independent Fiduciary Services, Inc.'' In addition, IFS recommends 
that the first sentence of Representation 10(a) be revised to read, in 
part, as follows: ``* * * the Hourly Independent Fiduciary Agreement 
with Independent Fiduciary Services, Inc. (IFS) of Washington, D.C., to 
serve * * *.'' IFS also suggests that the second sentence of 
Representation 10(a) to read: ``IFS is a closely held Delaware 
corporation with no subsidiaries or affiliates.''
    Further, IFS explains that in the second paragraph of 
Representation 10(a), a new subparagraph should be added to its 
``Duties and Responsibilities'' which states: ``and (i), the authority 
to consider and engage in pre-emergence sales.'' IFS explains that this 
additional authority was given to it by the Board of Trustees of the 
Hourly VEBA in a letter dated April 5, 2006.
    4. Representation 10(c). IFS explains that the fourth paragraph of 
the second section mislabeled Representation 10(c) (with the caption 
``Views on the Stock Transfer Restriction Agreement and the 
Registration Rights Agreement'') states that ``all expenses associated 
with effecting a demand or shelf registration, including piggy-back 
rights, will be borne by Kaiser.'' The next paragraph describes the 
expenses related to a shelf registration and explains that ``the Hourly 
VEBA will be responsible for paying underwriting commissions and other 
selling fees.'' To remove any possible confusion, IFS notes that 
section 6.4(b) of the Registration Rights Agreement provides that, 
under any of the registration rights, any independent counsel or 
experts retained by the Hourly VEBA will be paid by the Hourly VEBA, 
and ``all underwriting fees, discounts, selling commissions and stock 
transfer taxes applicable to the sale of Registrable Securities will be 
borne by the applicable Holder.'' Thus, IFS believes that this sentence 
should read as follows: ``IFS further represents that all expenses 
associated with effecting a demand or shelf registration, including 
piggy-back rights, will be borne by Kaiser, except for underwriting 
commissions and other selling fees.''
    5. Representation 13(e). According to IFS, Representation 13(e) 
indicates that the VEBAs have not incurred, or will not incur, any 
fees, costs, or other charges, other than those described in certain 
agreements, ``as a result of any of the transactions described 
herein.'' Under the Registration Rights Agreement, IFS explains that a 
selling party will be responsible for ``all underwriting fees, 
discounts, selling commissions and stock transfer taxes applicable to 
the sale of Registrable Securities.'' Thus, IFS believes that the 
Registration Rights Agreement should be added to the agreements listed. 
Therefore, that portion of the sentence should read: ``* * * (other 
than those described in the Hourly and Salaried Trusts, the Independent 
Fiduciary Agreements, the Hourly Settlements, the Salaried Settlement 
Agreement, and the Registration Rights Agreement) * * *.''
    In response to these comments, the Department has noted the 
foregoing clarifications to the Summary.

Clarifications to the Conditions and Definitions of the Proposal

    In addition to the Summary clarifications, IFS and/or FCI have 
requested the following changes to the conditions and definitions of 
the proposed exemption:
    1. Section II(a). Section II(a) of the proposed exemption states 
that each independent fiduciary ``will have sole responsibility 
relating to the acquisition, holding, disposition, ongoing management, 
and voting of the Stock.'' IFS believes the following sentence more 
accurately reflects the fiduciary duties delegated to it under the 
Hourly Independent Fiduciary Agreement: ``* * * will have sole 
discretionary responsibility relating to the acquisition, holding, 
disposition, ongoing management, and voting of the Stock.''
    The Department acknowledges IFS's comment and has revised Section 
II(a) of the final exemption, accordingly.
    2. Section II(f). Section II(f) of the proposed exemption states 
that the VEBAs have not incurred, or will not incur, any fees, costs, 
or other charges ``as a result of any of the transactions described 
herein,'' except for those charges identified in certain agreements. 
IFS explains that the Registration Rights Agreement is not listed as 
one of the agreements. However, under the Registration Rights 
Agreement, IFS indicates that a selling party will be responsible for 
``all underwriting fees, discounts, selling commissions and stock 
transfer taxes applicable to the sale of Registrable Securities.'' 
Therefore, IFS suggests that Section II(f) be revised to read as 
follows:

    The VEBAs have incurred no fees, costs or other charges (other 
than those described in the Hourly and Salaried Trusts, the 
Independent Fiduciary Agreements, the Hourly Settlement Agreement, 
the Salaried Settlement Agreement, and the Registration Rights 
Agreement) as a result of any of the transactions described herein.

    In response to this comment, the Department has revised Section 
II(f) of the final exemption.
    3. Section III(h). In the Definitions, Section III(h) of the 
proposed exemption states that the Independent Fiduciary ``will not be 
deemed to be independent of and unrelated to Kaiser if: (1) such 
fiduciary directly or indirectly controls, is controlled by or is under 
common control with Kaiser; (2) such fiduciary directly or indirectly 
receives any compensation or other consideration in connection with any 
transaction described in this proposed exemption* * *'' Due to the 
ambiguity inherent in the word ``indirect'' in the context of the 
Hourly VEBA's ownership of 44 percent of Kaiser, IFS believes 
clarifying subparagraphs (1) and (2) with the qualifier ``other than 
described herein,'' is necessary to resolve any uncertainties. 
Therefore, IFS suggests that Section III(h) be revised to read as 
follows:

    ``Independent Fiduciary'' means the Independent Fiduciary for 
the Hourly VEBA (or the Hourly Independent Fiduciary) and the 
Independent Fiduciary for the Salaried VEBA (or the Salaried 
Independent Fiduciary). Such Independent Fiduciary is (1) 
independent of and unrelated to Kaiser or its affiliates; and (2) 
appointed to act on behalf of the VEBAs with respect to the 
acquisition, holding, management, and disposition of the Shares. In 
this regard, the fiduciary will not be deemed to be independent of 
and unrelated to Kaiser if: (1) Such fiduciary directly or 
indirectly controls, is controlled by or is under common control 
with Kaiser, other than described herein; (2)

[[Page 70994]]

such fiduciary directly or indirectly receives any compensation or 
other consideration in connection with any transaction described in 
this exemption, other than described herein; * * *

    In addition, IFS and FCI note that Section III(h) provides, in 
subparagraph (3) that ``the annual gross revenue received by an 
Independent Fiduciary during any year of its engagement with Kaiser, 
may not exceed 1% of the Independent Fiduciary's annual gross revenue 
from all sources in order for the fiduciary to be deemed 
``independent.'' As a matter of policy, IFS and FCI believe the 1% cap 
is a restriction that disadvantages relatively smaller independent 
fiduciaries, and which, in turn, deprives employee benefit plans of the 
opportunity to contract with otherwise qualified independent 
fiduciaries. Alternatively, both IFS and FCI recommend that the 
Department eliminate the 1% restriction and raise it to 5%, as has been 
done in past exemptions granted by the Department.
    In response to these comments, the Department has adopted the 
recommendation suggested by IFS and FCI. In this regard, the Department 
has modified subparagraph III(h)(3) by raising the gross revenue cap to 
5% in the final exemption.
    4. Sections III(k) and III(r). Section III(k) of the Definitions 
lists certain parties who were signatories to the Registration Rights 
Agreement. IFS points out that although the Pension Benefit Guaranty 
Corporation (the PBGC) was not a signatory to this agreement, buyers of 
200,000 or more pre-emergence Shares were signatories. Accordingly, IFS 
suggests that Section III(k) be revised to read as follows:

    The term ``Registration Rights Agreement'' refers to the 
Registration Rights Agreement between Kaiser and National City Bank, 
acknowledged by the Hourly Independent Fiduciary with respect to 
management of the Stock held by the Hourly Trust.

    Similarly, IFS explains that the PBGC was not a signatory to the 
Stock Transfer Restriction Agreement, and it requests that the 
Department revise Section III(r) to read as follows:

    The term ``Stock Transfer Restriction Agreement'' means the 
agreement between Kaiser and National City Bank, acknowledged by the 
Hourly Independent Fiduciary with respect to management of the 
Kaiser's Stock held by the Hourly Trust.

    In response to these comments, the Department concurs with IFS and 
has amended Sections III(k) and III(r) of the Definitions by deleting 
the reference to the PBGC. The Department, however, notes that the 
reference to the PBGC in these defined terms was included in the list 
of definitions that was provided by Kaiser in the documents supporting 
the exemption application.
    For further information regarding the comments or other matters 
discussed herein, interested persons are encouraged to obtain copies of 
the exemption application file (Exemption Application No. L-11348) the 
Department is maintaining in this case. The complete application file, 
as well as all supplemental submissions received by the Department, are 
made available for public inspection in the Public Disclosure Room of 
the Employee Benefits Security Administration, Room N-1513, U.S. 
Department of Labor, 200 Constitution Avenue, NW., Washington, DC 
20210.
    Accordingly, after giving full consideration to the entire record, 
including the written comments received, the Department has decided to 
grant the exemption.

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 does not relieve a fiduciary or other 
party in interest from certain other provisions of the Act, including 
any prohibited transaction provisions to which the exemption does not 
apply and the general fiduciary responsibility provisions of section 
404 of the Act, which require, among other things, a fiduciary to 
discharge his or her 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.
    (2) The exemption does not extend to transactions prohibited under 
section 406(b)(3) of the Act.
    (3) In accordance with section 408(a) of the Act, the Department 
makes the following determinations:
    (a) The exemption is administratively feasible;
    (b) The exemption is in the interest of the plans and of their 
participants and beneficiaries; and
    (c) The exemption set forth herein is protective of the rights of 
participants and beneficiaries of the plans.
    (4) The exemption is supplemental to, and not in derogation of, any 
other provisions of the Act, including statutory or administrative 
exemptions. 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.

Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(E), 406(a)(2), 406(b)(1), 
406(b)(2), and 407(a) of the Act shall not apply, effective July 6, 
2006, to: (1) The acquisition by the VEBA for Retirees of Kaiser 
Aluminum (the Hourly VEBA) and by the Kaiser Aluminum Salaried Retirees 
VEBA (the Salaried VEBA; together, the VEBAs) of certain publicly 
traded common stock issued by Kaiser (the Stock or the Shares), through 
an in-kind contribution to the VEBAs by Kaiser of such Stock, for the 
purpose of prefunding VEBA welfare benefits; (2) the holding by the 
VEBAs of such Stock acquired pursuant to the contributions; and (3) the 
management of the Shares, including their voting and disposition, by an 
independent fiduciary (the Independent Fiduciary) designated to 
represent the interests of each VEBA with respect to the transactions.

Section II. Conditions

    This exemption is conditioned upon adherence to the material facts 
and representations described herein and upon satisfaction of the 
following conditions:
    (a) An Independent Fiduciary has been appointed to separately 
represent each VEBA and its participants and beneficiaries for all 
purposes related to the contributions for the duration of each VEBA's 
holding of the Shares and will have sole discretionary responsibility 
relating to the acquisition, holding, disposition, ongoing management, 
and voting of the Stock. The Independent Fiduciary has determined or 
will determine, before taking any actions regarding the Shares, that 
each such action or transaction is in the interests of the VEBA it 
represents.
    (b) The Independent Fiduciary for the Hourly VEBA has discharged or 
will discharge its duties consistent with the terms of the Hourly Trust 
Agreement, the Stock Transfer Restriction Agreement, the Certificate of 
Incorporation, the Registration Rights Agreement, the Hourly 
Independent Fiduciary Agreement, and successors to these documents.
    (c) The Independent Fiduciary for the Salaried VEBA has discharged 
or will discharge its duties consistent with the terms of the Trust 
Agreement between the Salaried Board of Trustees (the Salaried Board) 
and the Salaried Trustee, the Certificate of Incorporation, the 
Salaried Independent Fiduciary Agreement, and successors to these 
documents.

[[Page 70995]]

    (d) The Independent Fiduciaries have negotiated and approved or 
will negotiate and approve on behalf of their respective VEBAs any 
transactions between the VEBA and Kaiser involving the Shares that may 
be necessary in connection with the subject transactions (including, 
but not limited to, registration of the Shares contributed to the 
Hourly Trust), as well as the ongoing management and voting of such 
Shares.
    (e) The Independent Fiduciary has authorized or will authorize the 
Trustee of the respective VEBA to accept or dispose of the Shares only 
after such Independent Fiduciary determines, at the time of each 
transaction, that such transaction is feasible, in the interest of the 
Hourly or Salaried VEBA, and protective of the participants and 
beneficiaries of such VEBAs.
    (f) The VEBAs have incurred or will incur no fees, costs or other 
charges (other than those described in the Hourly and Salaried Trusts, 
the Independent Fiduciary Agreements, the Hourly Settlements, the 
Salaried Settlement Agreement, and the Registration Rights Agreement) 
as a result of any of the transactions described herein.
    (g) The terms of any transactions between the VEBAs and Kaiser have 
been no less favorable or will be no less favorable to the VEBAs than 
terms negotiated at arm's length under similar circumstances between 
unrelated third parties.
    (h) The Board of Trustees of the Hourly VEBA (the Hourly Board) and 
the Board of Trustees of the Salaried Board have maintained or will 
maintain for a period for six years from the date any Shares are 
contributed to the VEBAs, any and all records necessary to enable the 
persons described in paragraph (i) below to determine whether 
conditions of this exemption have been met, except that (1) a 
prohibited transaction will not be considered to have occurred if, due 
to circumstances beyond the control of the Hourly Board and the 
Salaried Board, the records are lost or destroyed prior to the end of 
the six-year period, and (2) no party in interest other than the Hourly 
Board and the Salaried Board shall be subject to the civil penalty that 
may be assessed under section 502(i) of the Act if the records are not 
maintained, or are not available for examination as required by 
paragraph (i) below.
    (i)(1) Except as provided in section (2) of this paragraph and not 
withstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to in paragraph (h) above have 
been or shall be unconditionally available at their customary location 
during normal business hours by:
    (A) Any duly authorized employee or representative of the 
Department;
    (B) The United Steel, Paper and Forestry, Rubber, Manufacturing, 
Energy, Allied Industrial and Service Workers International Union (the 
USW) or any duly authorized representative of the USW, and other unions 
or their duly authorized representatives, as to the Hourly VEBA only;
    (C) The Salaried Board or any duly authorized representative of the 
Salaried Board, as to the Salaried VEBA only;
    (D) Kaiser or any duly authorized representative of Kaiser; and
    (E) Any participant or beneficiary of the VEBAs, or any duly 
authorized representative of such participant or beneficiary, as to the 
VEBA in which such participant or beneficiary participates.
    (2) None of the persons described above in subparagraph (1)(B), 
(C), or (E) of this paragraph (i) has been or shall be authorized to 
examine the trade secrets of Kaiser, or commercial or financial 
information that is privileged or confidential.

Section III. Definitions

    For purposes of this exemption, the term --
    (a) ``Certificate of Incorporation'' means the certificate of 
incorporation of Kaiser as amended and restated as of the Effective 
Date of Kaiser's Plan of Reorganization.
    (b) ``Effective Date'' means July 6, 2006, which is also the 
effective date of Kaiser's Plan of Reorganization.
    (c) ``Hourly Board'' means the Board of Trustees of the Hourly 
VEBA.
    (d) ``Hourly Independent Fiduciary Agreement'' means the agreement 
between the Hourly Independent Fiduciary and the Hourly Board.
    (e) ``Hourly Settlement Agreement'' means the modified collective 
bargaining agreements with various unions in the form of an agreement 
under Sections 1113 and 1114 of the United States Bankruptcy Code 
between the USW and Kaiser.
    (f) ``Hourly Trust'' means the trust established under the Trust 
Agreement between the Hourly Board and the Hourly Trustee, effective 
June 1, 2004.
    (g) ``Hourly VEBA'' means ``The VEBA For Retirees of Kaiser 
Aluminum'' and its associated voluntary employees' beneficiary 
association trust.
    (h) ``Independent Fiduciary'' means the Independent Fiduciary for 
the Hourly VEBA (or the Hourly Independent Fiduciary) and the 
Independent Fiduciary for the Salaried VEBA (or the Salaried 
Independent Fiduciary). Such Independent Fiduciary is (1) independent 
of and unrelated to Kaiser or its affiliates; and (2) appointed to act 
on behalf of the VEBAs with respect to the acquisition, holding, 
management, and disposition of the Shares. In this regard, the 
fiduciary will not be deemed to be independent of and unrelated to 
Kaiser if: (1) Such fiduciary directly or indirectly controls, is 
controlled by or is under common control with Kaiser, other than 
described herein; (2) such fiduciary directly or indirectly receives 
any compensation or other consideration in connection with any 
transaction described in this exemption, other than described herein, 
for acting as an Independent Fiduciary in connection with the 
transactions described herein, provided that the amount or payment of 
such compensation is not contingent upon, or in any way affected by, 
the Independent Fiduciary's ultimate decision, and (3) the annual gross 
revenue received by the Independent Fiduciary, during any year of its 
engagement, from Kaiser exceeds five percent (5%) of the Independent 
Fiduciary's annual gross revenue from all sources (for federal income 
tax purposes) for its prior tax year. Finally, the Hourly VEBA's 
Independent Fiduciary is Independent Fiduciary Services, Inc. (IFS), 
which has been appointed by the Hourly Board; and the Salaried VEBA's 
Independent Fiduciary is Fiduciary Counselors Inc. (FCI), which has 
been appointed by the Salaried Board.
    (i) ``Independent Fiduciary Agreements'' means the Hourly 
Independent Fiduciary Agreement and the Salaried Independent Fiduciary 
Agreement.
    (j) ``Kaiser'' means Kaiser Aluminum Corporation and its wholly 
owned subsidiaries.
    (k) ``Registration Rights Agreement'' refers to the Registration 
Rights Agreement between Kaiser and National City Bank, acknowledged by 
the Hourly Independent Fiduciary with respect to management of the 
Stock held by the Hourly Trust.
    (l) ``Salaried Board'' means the Board of Trustees of the Kaiser 
Aluminum Salaried Retirees VEBA.
    (m) ``Salaried Independent Fiduciary Agreement'' means the 
agreement between the Salaried Independent Fiduciary and the Salaried 
Board.
    (n) ``Salaried Settlement Agreement'' means the settlement, in the 
form of an agreement under Section 1114 of the Bankruptcy Code, between 
Kaiser and a committee of five former executives of Kaiser appointed 
pursuant to Section

[[Page 70996]]

1114 of the Bankruptcy Code as authorized representatives of current 
and future salaried retirees.
    (o) ``Salaried Trust'' means the trust established under the Trust 
Agreement between the Salaried Board and the Salaried Trustee, 
effective May 31, 2004.
    (p) ``Salaried VEBA'' means the Kaiser Aluminum Salaried Retirees 
VEBA and its associated voluntary employees' beneficiary association 
trust.
    (q) ``Shares'' or ``Stock'' refers to shares of common stock of 
reorganized Kaiser, par value $.01 per share.
    (r) ``Stock Transfer Restriction Agreement'' means the agreement 
between Kaiser and National City Bank, acknowledged by the Hourly 
Independent Fiduciary with respect to management of the Kaiser's Stock 
held by the Hourly Trust.
    (s) ``Trusts'' means the Salaried Trust and the Hourly Trust.
    (t) ``USW'' means the United Steel, Paper and Forestry, Rubber, 
Manufacturing, Energy, Allied Industrial and Service Workers 
International Union.
    (u) ``VEBA'' means a voluntary employees' beneficiary association.
    (v) ``VEBAs'' refers to the Hourly VEBA and Salaried VEBA.
    The availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
application for exemption are true and complete and accurately describe 
all material terms of the transactions. In the case of continuing 
transactions, if any of the material facts or representations described 
in the applications change, the exemption will cease to apply as of the 
date of such change.
    In the event of any such change, an application for a new exemption 
must be made to the Department.

    Signed at Washington, DC, this 4th day of January 2006.
Ivan L. Strasfeld,
Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
 [FR Doc. E6-20729 Filed 12-6-06; 8:45 am]

BILLING CODE 4510-29-P