14192 Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 

1Because the Ford VEBA Plan will not be 

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. 

Register pursuant to section 6(b) of the 

Act on December 21, 2009 (74 FR 

67903). 

Patricia A. Brink, 

Deputy Director of Operations, Antitrust 

Division. 

[FR Doc. 2010–6268 Filed 3–23–10; 8:45 am] 

BILLING CODE 4410–11–M 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Notice Pursuant to the National 

Cooperative Research and Production 

Act of 1993—Joint Venture Under Tip 

Award No. 70NANB10H014 To Perform 

Project Entitled: Automated 

Nondestructive Evaluation and 

Rehabilitation System (ANDERS) for 

Bridge Decks 

Notice is hereby given that, on 

January 28, 2010, pursuant to Section 

6(a) of the National Cooperative 

Research and Production Act of 1993, 

15 U.S.C. 4301 et seq. (the Act’’), the 

Joint Venture under TIP Award No. 

70NANB10H014 to Perform Project 

Entitled: Automated Nondestructive 

Evaluation and Rehabilitation System 

(‘‘ANDERS’’) for Bridge Decks has filed 

written notifications simultaneously 

with the Attorney General and the 

Federal Trade Commission disclosing 

(1) the identities of the parties to the 

venture and (2) the nature and 

objectives of the venture. The 

notifications were filed for the purpose 

of invoking the Act’s provisions limiting 

the recovery of antitrust plaintiffs to 

actual damages under specified 

circumstances. 

Pursuant to Section 6(b) of the Act, 

the identities of the parties to the 

venture are: Rutgers, the State 

University of New Jersey, New 

Brunswick, NJ; Drexel University, 

Philadelphia, PA; PD–LD, INC., 

Pennington, NJ; Mala GeoScience USA, 

Inc., Charleston, SC; and Pennoni 

Associates Inc., Philadelphia, PA. The 

general area of ANDERS’ planned 

activity is to provide a uniquely 

comprehensive tool that will transform 

the manner in which bridge decks are 

assessed and rehabilitated, and to 

provide a unique tool that enables the 

sustainable management of aging bridge 

stock through (1) a much higher 

evaluation detail and 

comprehensiveness of detection at an 

early stage 2 deterioration for far less 

cost and time than traditional 

approaches or fragmented NDE, (2) 

comprehensive condition and structural 

assessment (including the 

understanding of effects of local 

deterioration on global performance) at 

all stages of deterioration, and (3) 

integrated assessment and rehabilitation 

that will be nondestructive, rapid, cost 

effective and implementable at all stages 

of deterioration. 

Patricia A. Brink, 

Deputy Director of Operations, Antitrust 

Division. 

[FR Doc. 2010–6260 Filed 3–23–10; 8:45 am] 

BILLING CODE 4410–11–M 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Notice Pursuant to the National 

Cooperative Research and Production 

Act of 1993—Cooperative Research 

Group on High-Efficiency Dilute 

Gasoline Engine II 

Notice is hereby given that, on 

February 18, 2010, pursuant to section 

6(a) of the National Cooperative 

Research and Production Act of 1993, 

15 U.S.C. 4301 et seq. (‘‘the Act’’), 

Southwest Research Institute— 

Cooperative Research Group on HighEfficiency Dilute Gasoline Engine II 

(‘‘HEDGE II’’) has filed written 

notifications simultaneously with the 

Attorney General and the Federal Trade 

Commission disclosing changes in its 

membership. The notifications were 

filed for the purpose of extending the 

Act’s provisions limiting the recovery of 

antitrust plaintiffs to actual damages 

under specified circumstances. 

Specifically, Ford Motor Company, 

Dearborn, MI; Valeo Systemes de 

Controle Moteur, Cergy Pontoise, 

FRANCE; and Navistar, Melrose Park, IL 

have been added as parties to this 

venture. 

No other changes have been made in 

either the membership or planned 

activity of the group research project. 

Membership in this group research 

project remains open, and HEDGE II 

intends to file additional written 

notifications disclosing all changes in 

membership. 

On February 19, 2009, HEDGE II filed 

its original notification pursuant to 

section 6(a) of the Act. The Department 

of Justice published a notice in the 

Federal Register pursuant to section 

6(b) of the Act on April 2, 2009 (74 FR 

15003). 

The last notification was filed with 

the Department of Justice on December 

10, 2009. A notice was published in the 

Federal Register pursuant to section 

6(b) of the Act on January 27, 2010 (75 

FR 4423). 

Patricia A. Brink, 

Deputy Director of Operations, Antitrust 

Division. 

[FR Doc. 2010–6257 Filed 3–23–10; 8:45 am] 

BILLING CODE 4410–11–M 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Prohibited Transaction Exemption 2010– 

08; Exemption Application No. L–11575] 

Grant of Individual Exemption 

Involving Ford Motor Company, 

Located in Detroit, MI 

AGENCY: Employee Benefits Security 

Administration, U.S. Department of 

Labor. 

ACTION: Grant of individual exemption. 

This document contains a final 

exemption issued by the Department of 

Labor (the Department) from certain 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (the Act or ERISA). The 

transactions involve the UAW Ford 

Retirees Medical Benefits Plan (the Ford 

VEBA Plan) and its funding vehicle, the 

UAW Retiree Medical Benefits Trust 

(the VEBA Trust), (collectively the 

VEBA).1

DATES: Effective Date: This exemption is 

effective as of December 31, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Warren Blinder, Office of Exemption 

Determinations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, telephone (202) 

693–8553. (This is not a toll-free 

number.) 

SUPPLEMENTARY INFORMATION: On 

December 8, 2009, the Department 

published a notice of proposed 

individual exemption in the Federal 

Register at 74 FR 64716 from the 

restrictions of sections 406(a)(1)(A), 

406(a)(1)(B), 406(a)(1)(D), 406(a)(1)(E), 

406(a)(2), 406(b)(1), 406(b)(2), and 

407(a) of ERISA. The proposed 

exemption was requested in an 

application filed by the Ford Motor 

Company (Ford or the Applicant) 

pursuant to section 408(a) of ERISA and 

in accordance with the procedures set 

forth in 29 CFR 2570, Subpart B (55 FR 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 14193 

2See Ford Motor Co., 2008 WL 4104329. 

3See Int’l Union, UAW, et al. v. Ford Motor 

Company, Civil Action No. 07–14845, (E.D. Mich. 

Nov. 9, 2009) (Doc. # 71, Order and Final J.). 

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 final exemption is 

being issued solely by the Department. 

Background 

On February 13, 2006, Ford and the 

International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America (the 

UAW) and a class of Ford retirees 

entered into a settlement agreement (the 

Hardwick I Settlement Agreement) in 

the case of Int’l Union, UAW, et al. v. 

Ford Motor Company, Civil Action No. 

05–74730, 2006 WL 1984363 (E.D. 

Mich. July 13, 2006). The case was 

brought to contest whether Ford had the 

right to unilaterally modify hourly 

retiree welfare benefits for hourly 

retirees who had been represented by 

the UAW. Under the terms of the 

Hardwick I Settlement Agreement, 

benefits provided under a new plan 

were to be paid from a voluntary 

employees’ beneficiary association (the 

Mitigation VEBA) controlled by a 

committee independent of Ford. The 

Mitigation VEBA was to be funded by 

Ford through cash and other payments, 

and by contributions from active Ford 

employees through wage deferrals and 

the diversion of cost-of-living 

adjustments. 

In light of deteriorating global 

economic conditions and the significant 

impact on Ford’s financial health by 

retiree health care funding obligations, 

in 2007 Ford announced its intention to 

terminate retiree health care coverage 

for UAW represented employees and 

retirees and its plan to terminate the 

Hardwick I Settlement Agreement, 

effective in 2011. As a result, on 

November 9, 2007, the UAW and a class 

of retirees (the 2007 Class) filed suit 

against Ford in the United States 

District Court for the Eastern District of 

Michigan (the District Court), 

challenging Ford’s unilateral right to 

alter retiree health benefits and asserting 

that such benefits were vested. See Int’l 

Union, UAW, et al. v. Ford Motor 

Company, Civil Action No. 07–14845, 

2008 WL 4104329 (E.D. Mich. Aug. 29, 

2008). 

Following a series of negotiations, 

Ford and the UAW agreed to a proposed 

settlement (the Hardwick II 2008 

Settlement Agreement, otherwise 

referred to as the 2008 Settlement 

Agreement), under which Ford’s 

obligations for providing postretirement medical benefits to the 2007 

Class and a group of Ford active 

employees eligible for retiree benefits 

(the 2007 Covered Group) would be 

terminated and the Ford VEBA Plan 

would be established and maintained by 

an independent committee (the 

Committee).2 Pursuant to the 2008 

Settlement Agreement, the Ford VEBA 

Plan would be funded by the VEBA 

Trust, which would be responsible for 

the payment of post-retirement medical 

benefits to members of the 2007 Class 

and the 2007 Covered Group. 

Furthermore, under the terms of the 

2008 Settlement Agreement, coverage 

and operations for the Ford VEBA Plan 

would commence on the day following 

the ‘‘Implementation Date,’’ or January 1, 

2010. Ford also agreed to transfer assets 

to the VEBA Trust on behalf of the Ford 

VEBA Plan with an estimated worth of 

$13.2 billion, based on a present value 

as of December 31, 2007. 

On July 23, 2009, Ford, the UAW, and 

Class Counsel entered into an agreement 

to amend the 2008 Settlement 

Agreement (the Amendment Agreement) 

by providing, inter alia, that Ford could 

use Ford common stock (Ford Common 

Stock) to pay up to approximately 50% 

of certain future obligations to the VEBA 

Trust on behalf of the Ford VEBA Plan. 

The revised settlement agreement (the 

2009 Settlement Agreement) took effect 

on November 9, 2009, upon the District 

Court’s issuance of an ‘‘Order and Final 

Judgment’’ granting approval to the 

Amendment Agreement, including 

approval of the amendment to the trust 

agreement for the VEBA Trust and 

certification of the class under the 

modified class definition.3

The 2009 Settlement Agreement 

obligates Ford to contribute to the VEBA 

Trust, on behalf of the Ford VEBA Plan, 

the following deposits or remittances: 

(a) The balance in a temporary asset 

account created under the 2008 

Settlement Agreement (the TAA) as of 

the date of transfer or, at Ford’s 

discretion, cash in lieu of some or all of 

the investments in the TAA, (b) two 

promissory notes issued by Ford in an 

aggregate principal amount of $13.2 

billion (New Note A and New Note B, 

and collectively, the New Notes), (c) 

warrants to acquire 362,391,305 shares 

of Ford Common Stock, at a par value 

of $.01 and at a strike price of $9.20 per 

share (the Warrants), and (d) any shares 

of Ford Common Stock transferred by 

Ford in settlement of its payment 

obligation under New Note B (Payment 

Shares). In addition, Ford is obligated to 

direct the trustee of the Existing Internal 

VEBA (as defined below) to transfer to 

the VEBA Trust all assets in the Existing 

Internal VEBA or cash in an amount 

equal to the Existing Internal VEBA 

balance on the date of transfer. 

Furthermore, the District Court’s Order 

and Final Judgment directed the 

committee of the Mitigation VEBA, or 

the trustee of the Mitigation VEBA, to 

transfer the assets of such plan to the 

VEBA Trust. 

Written Comments 

The Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the notice of proposed 

exemption on or before January 21, 

2010. During the comment period, the 

Department received three (3) telephone 

inquiries and thirteen (13) written 

comments from interested persons on 

the proposed exemption. Of the written 

comments received, ten (10) were 

submitted by participants in the Ford 

VEBA Plan. Ford, counsel for the 

Committee, and Independent Fiduciary 

Services (IFS), the independent 

fiduciary for the Ford VEBA Plan (the 

Independent Fiduciary), submitted the 

remaining comments. The Department 

received no hearing requests during the 

comment period. 

Several of the written comments and 

callers supported the adoption of the 

exemption. In this regard, the UAW, 

along with Class Counsel, reviewed 

Ford’s application for exemption and 

expressed support for the application 

and stated their belief that the 

transactions which are the subject of the 

exemption are in the best interest of the 

Ford VEBA Plan’s participants and 

beneficiaries. Furthermore, the 

Department received written comments 

from Ford, the Committee, and IFS, 

which supported the exemption and 

requested certain modifications and/or 

clarifications regarding the exemption. 

Following is a discussion of the 

aforementioned comments, including 

the responses made by Ford or the 

Department to address the issues raised 

therein. 

Participant Comments 

The telephone inquiries received by 

the Department from participants in the 

Ford VEBA Plan related primarily to the 

commenters’ difficulty in understanding 

the notice of proposed exemption or the 

effect of the exemption on the 

commenters’ benefits, including a 

concern that the 2009 Settlement 

Agreement was too advantageous to 

Ford and would not ensure that benefit 

levels would remain affordable for all 

retirees. 


srobinson on DSKHWCL6B1PROD with NOTICES
14194 Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 

With respect to the written comments 

received by the Department from Ford 

VEBA Plan participants, the majority of 

commenters neither supported nor 

opposed the exemption but instead 

raised other concerns which were 

beyond the scope of the exemption. 

Such comments related to the perceived 

unfair treatment of retirees within the 

UAW; lack of bargaining power of 

retirees in the settlement negotiation 

process between Ford, the UAW, and 

Class Counsel; and concerns about the 

rising costs of maintaining healthcare 

coverage under the Ford VEBA Plan. 

However, several commenters did raise 

concerns that were relevant to the 

Department’s consideration of the final 

exemption. 

One commenter questioned whether, 

when Ford returns to profitability, 

participants in the Ford VEBA Plan 

would benefit from any increase in the 

health benefits of active UAW members 

that may be earned as a result of 

negotiations between the UAW and 

Ford with respect to future labor 

contracts. A second commenter was 

concerned that the amount of employer 

securities contributed by Ford to the 

VEBA Trust was ‘‘inherently insecure 

and unstable,’’ in light of the volatility 

in the stock markets. The commenter 

also asked whether Ford would provide 

additional funding to the Ford VEBA 

Plan if the fair market value of Ford 

Common Stock declines, and what else 

Ford had done to ensure that the 

securities will maintain their value. 

Ford’s Response to Participant 

Comments 

In responding to both of the 

commenters’ concerns, Ford initially 

observes that the funding of the VEBA 

Trust was not unilaterally determined 

by Ford, but rather was the product of 

a prolonged and intense negotiation 

among Ford, the UAW (representing 

active employees), and Class Counsel 

(representing retirees). Ford contends 

that, although no party got everything it 

wanted, all three parties were ultimately 

satisfied that the 2009 Settlement 

Agreement was the best one that they 

could achieve under the circumstances. 

Otherwise, Ford points out that no 

agreement would have been reached. As 

Ford notes, the 2009 Settlement 

Agreement was also approved by a 

Federal court, which had to satisfy itself 

that the 2009 Settlement Agreement was 

fair, reasonable, and adequate, and was 

in the best interests of the retiree Class. 

In responding to the first commenter’s 

concerns, Ford contends that the 

fundamental deal reached by the parties 

is that Ford will make the payments 

specified by the 2009 Settlement 

Agreement at the times specified by the 

agreement, to an independent VEBA 

(i.e., the VEBA Trust) over which it has 

no authority. Ford notes that, in 

exchange, its obligation to pay for 

retiree health care is extinguished, and 

instead, the VEBA Trust will establish 

and administer a welfare plan that will 

provide Ford retirees with health care 

benefits. 

Ford explains that under this 

structure, the health care benefits to be 

provided to retirees by the VEBA Trust 

are completely separate from the health 

care benefits to be provided to active 

employees by Ford. Neither Ford nor 

the UAW has the ability to adjust retiree 

health benefits. Rather, notes Ford, 

retiree health benefits are set by the 

Committee of the VEBA Trust in the 

interest of present and future retirees 

within the Covered Group whose health 

care will be funded by the VEBA Trust. 

Ford explains that, if Ford and the UAW 

were to agree on improved benefits for 

active employees, the Committee could 

consider increasing benefit levels, but 

would not have to do so. 

In sum, Ford represents that its 

responsibility is to provide no more or 

no less than the agreed-upon funding for 

the VEBA Trust. Ford remarks that, 

what the Committee of the Ford VEBA 

Plan does with those funds, including 

how much health care coverage to 

provide for retirees, is a matter for the 

Committee to decide, and not Ford. 

In responding to the second 

commenter, Ford explains that, as a 

condition of agreeing to accept 

employer securities in lieu of cash, the 

UAW and Class Counsel negotiated a 

number of provisions designed to 

protect the VEBA Trust. Ford notes that, 

for example, the VEBA Trust is 

provided with ‘‘registration rights,’’ to 

aid the Independent Fiduciary in 

divesting the Ford securities that are 

paid into the VEBA Trust. In addition, 

Ford makes it clear that the 2009 

Settlement Agreement sets forth several 

specific conditions under which Ford is 

prevented from exercising its option to 

make contributions in Ford Common 

Stock. 

Moreover, Ford explains that its 

option to contribute securities instead of 

cash is itself a form of protection for the 

VEBA Trust. As Ford notes, its 

continued commercial viability is 

necessary to ensure that the VEBA Trust 

is fully funded. Ford asserts that 

permitting it to make contributions in 

Ford Common Stock rather than cash 

gives Ford the flexibility to avoid cash 

payments in low liquidity 

environments. Moreover, Ford 

maintains that it is not in anyone’s 

interest to compel a payment that 

pushes Ford into insolvency, thereby 

jeopardizing the New VEBA’s funding 

going forward. 

With respect to the second 

commenter’s concern regarding market 

volatility, Ford notes that its option to 

contribute shares of Ford Common 

Stock does not have a fixed share price, 

but rather fluctuates with the market. 

Ford explains that, specifically, it must 

pay the number of shares equal in value 

to the amount of the cash payment it 

was obligated to make, calculated using 

a share price derived from an average of 

recent market prices. If Ford’s share 

price is down, observes Ford, it must 

pay proportionally more shares of Ford 

Common Stock to the VEBA Trust to 

satisfy its payment obligation. 

According to Ford, the Independent 

Fiduciary can then assess the market— 

acting solely in the interest of the VEBA 

Trust (and thus, of retirees)—to 

determine whether to continue to hold 

Ford Common Stock, thereby giving the 

VEBA Trust the advantage of any 

appreciation, or whether to sell it, using 

the registration rights noted above. 

Ford reiterates that it will pay what it 

is obligated to do so under the 2009 

Settlement Agreement, and whether that 

obligation is settled in more or fewer 

securities is a function of Ford’s market 

price. Ford notes that it does not have 

an obligation to ‘‘true-up’’ the Ford 

VEBA Plan. If, for example, the price of 

Ford Common Stock falls before the 

VEBA Trust disposes of the securities, 

Ford explains that the parties have 

agreed that the other rights possessed by 

the VEBA Trust and the Independent 

Fiduciary are sufficient to protect the 

VEBA Trust. In addition, Ford notes that 

it is paying $25 million extra under New 

Note A in each year where there is a 

payment date under New Note B. Ford 

maintains that this additional amount 

was designed to compensate the VEBA 

Trust for any costs in selling shares of 

Ford Common Stock and for any short 

term risk of stock price volatility. 

In sum, Ford represents that it, the 

UAW, and the Class Counsel, on behalf 

of retirees, agreed that giving Ford the 

option to pay part of its payment 

obligation to the VEBA Trust with 

employer securities was in the long term 

interest of the VEBA Trust, Ford 

retirees, and Ford, given the protections 

that were put in place to protect the 

VEBA Trust from downside risk. 

Ford’s Comment 

The Department also received a 

written comment from Ford, which 

provides factual corrections and 

supplemental information regarding the 

2009 Settlement Agreement and events 

occurring after the date on which the 


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Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 14195 

4The Term Note, issued by Ford in April 2008 

and due January 1, 2018, was issued in the original 

principal amount of $3.0 billion and bears 9.50% 

interest per annum, which is payable semiannually. 5The Convertible Note, issued by Ford in April 

2008 and due January 1, 2013, was issued with an 

aggregate principal amount of $3.3 billion and bears 

5.75% interest per annum, which is payable semiannually. 

6The TAA Note was issued by Ford to the LLC 

in late 2008 under the 2008 Settlement Agreement 

in exchange for a payment of $2.282 billion, the 

value of the assets in the TAA as of December 31, 

2008. The TAA Note had an interest rate of 9% per 

annum and a maturity date of December 31, 2009. 7The Base Amount Payments are annual 

payments of $52.3 million that Ford is obligated to 

make for 15 years to the VEBA Trust under the 2008 

Settlement Agreement. 8Upon the exchange, the aggregate principal 

amount of the New Notes and the amortization 

thereof represent the equivalent value of (a) the 

principal amounts of and interest payments on the 

Term Note, the Convertible Note and the TAA Note; 

(b) any unpaid Base Amount Payments; and (c) an 

additional $25 million per year during the period 

2009 through 2018, which is intended to cover 

transaction costs the Ford VEBA Plan incurs in 

selling any shares of Ford Common Stock delivered 

pursuant to Ford’s exercise of the stock settlement 

option under New Note B. 

9Under the terms of New Note A, Ford is 

obligated to pay to the LLC a ‘‘True-up Amount,’’ 

calculated according to a formula provided in the 

TAA Note, to reflect a hypothetical investment 

return on the TAA assets paid to Ford in exchange 

for the TAA Note. Based on year-end returns 

available after December 31, 2009, Ford determined 

that the final True-Up Amount due under New Note 

A is $150,000,000. 

proposed exemption was published in 

the Federal Register. The comment also 

requests the modification of certain 

operative language of the proposed 

exemption. Furthermore, Ford’s 

comment requests the Department’s 

confirmation relating to the party in 

interest status of the Existing Internal 

VEBA and modifications regarding the 

duties and responsibilities of the 

Committee and the Independent 

Fiduciary. 

A. Supplemental Information Regarding 

Implementation of the 2009 Settlement 

Agreement 

1. Name Change of the LLC. Ford 

represents that, on December 1, 2009, 

the name of its wholly-owned limited 

liability company, ‘‘Ford-UAW Holdings 

LLC’’ (the LLC), was changed to ‘‘VEBA– 

F Holdings LLC.’’ As is described in 

Representation 8, on pages 64720— 

64721 of the Summary of Facts and 

Representations of the proposed 

exemption (the Representations, and 

each individually, a Representation), 

Ford established the LLC to hold the 

assets in the TAA, the New Notes, the 

Warrants, and any Payment Shares 

transferred by Ford in settlement of its 

first payment obligation under New 

Note B. Under the 2009 Settlement 

Agreement, Ford had the option to 

transfer its wholly owned interest in the 

LLC (the LLC Interest) to the VEBA 

Trust in lieu of transferring the assets 

inside the LLC. According to Ford, the 

name was changed in advance of Ford’s 

transfer of the LLC Interest to the VEBA 

Trust on behalf of the Ford VEBA Plan 

because Ford’s trademark policy 

prohibits Ford from transferring an 

entity with ‘‘Ford’’ in its name to an 

unaffiliated party. 

2. Execution of Agreements and 

Exchange of Notes. As described in 

Representation 9, on page 64721 of the 

proposed exemption, the 2009 

Settlement Agreement provides that the 

‘‘Term Note,’’ 4 ‘‘Convertible Note,’’ 5

‘‘TAA Note’’ 6 and the right to future 

‘‘Base Amount Payments,’’ 7 will be 

exchanged for the New Notes and 

Warrants, in accordance with the terms 

of the Security Exchange Agreement 

(the Exchange Agreement) among Ford, 

certain subsidiary guarantors, and the 

LLC.8

Ford represents that, on December 11, 

2009, Ford, the LLC, and certain 

subsidiary guarantors entered into the 

Exchange Agreement. On the same date, 

Ford and the LLC also entered into the 

Securityholder and Registration Rights 

Agreement, and Ford and 

ComputerShare Trust Company N.A. 

(Ford’s transfer agent) entered into an 

agreement (the Warrant Agreement) to 

effect the transfer of the Warrants to the 

VEBA Trust. In accordance with the 

2009 Settlement Agreement and the 

Exchange Agreement, Ford issued New 

Note A, New Note B, certain guaranties, 

and the Warrants to the LLC on 

December 31, 2009 in exchange for the 

Convertible Note, the Term Note, and 

the TAA Note. Upon the exchange, the 

Convertible Note, the Term Note, and 

the TAA Note were cancelled. The 

Department notes the foregoing updates 

and additional representations. 

3. Payments Under New Note A and 

New Note B. On page 64721 of the 

proposed exemption, Representation 9 

describes the payment schedule under 

the New Notes which Ford is obligated 

to follow unless Ford elects to prepay 

the amounts due thereunder. Ford 

represents that, on December 31, 2009, 

with respect to New Note A, it paid to 

the LLC the payment due on that date 

of $1,268,470,000, the payment of an 

estimated ‘‘True-Up Amount’’ of 

$150,000,000,9 and a partial prepayment 

of New Note A in the amount of 

$500,000,000. Furthermore, Ford 

represents that it also paid $609,950,000 

in cash to the LLC on December 31, 

2009 in accordance with the terms of 

New Note B. 

According to Ford, it determined to 

make the $500,000,000 prepayment on 

New Note A in order to retire some of 

its most expensive debt, and, as a result, 

improve its balance sheet. Ford 

maintains that this prepayment was 

beneficial to the Ford VEBA Plan, both 

as a creditor and as a shareholder of 

Ford. 

Consequently, Ford notes that in 

accordance with the terms of New Note 

A, described in Representation 10 of the 

proposed exemption, on page 64722, 

each future principal payment on New 

Note A, beginning with the June 30, 

2010 payment, will be reduced 

proportionately to reflect the 

prepayment made on December 31, 

2009. As a result, the payment schedule 

under the New Notes has been modified 

as follows to reflect the foregoing 

payments: 

Payment date Payment of note A Payment of note 

B 

June 30, 2010 ........................................................................... $249.45 million ......................................................................... $609.95 million 

June 30, 2011 ........................................................................... 249.45 million ............................................................................ 609.95 million 

June 30, 2012 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2013 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2014 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2015 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2016 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2017 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2018 ........................................................................... 584.06 million ............................................................................ 654 million 

June 30, 2019 ........................................................................... 22.36 million ............................................................................. 26 million 

June 30, 2020 ........................................................................... 22.36 million ............................................................................. 26 million 

June 30, 2021 ........................................................................... 22.36 million ............................................................................. 26 million 


srobinson on DSKHWCL6B1PROD with NOTICES
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Payment date Payment of note A Payment of note 

B 

June 30, 2022 ........................................................................... 22.36 million ............................................................................. 26 million 

4. Transfer of Certain Assets to the 

VEBA Trust. Ford represents that, at the 

close of business on December 31, 2009, 

it exercised its right under the 2009 

Settlement Agreement, as described in 

Representation 15.a.(1), on pages 

64724–64725 of the proposed 

exemption, to transfer the LLC Interest 

to the VEBA Trust in order to satisfy its 

contractual obligations thereunder. Ford 

notes that the unaudited fair market 

value of assets in the TAA Account as 

of December 31, 2009, excluding New 

Notes A and B and the Warrants, was 

$768,716,494.20. 

Ford also represents that it caused 

certain assets of the Existing Internal 

VEBA to be transferred to the VEBA 

Trust upon the close of business on 

December 31, 2009 in satisfaction of its 

obligations under the 2009 Settlement 

Agreement, described in Representation 

13, on page 64724 of the proposed 

exemption. Ford notes that the 

unaudited fair market value of the assets 

in the Existing Internal VEBA as of 

December 31, 2009 was 

$3,517,847,429.91. 

Furthermore, Ford represents that, in 

accordance with the 2009 Settlement 

Agreement, as described in 

Representation 15.c.(2) on pages 64726– 

64727 of the proposed exemption, the 

Existing Internal VEBA retained 

$850,000, which may be used for 

outstanding fees owed by the Existing 

External VEBA to its investment 

managers. Ford notes further that after 

these outstanding expenses are satisfied, 

any remaining funds will be transferred 

to the VEBA Trust. 

In response to the above referenced 

comments, the Department has revised 

the name of the LLC in Section VII(l) of 

the final exemption. In addition, the 

Department takes note of the foregoing 

clarifications and updates to the 

Representations. 

B. Comments on the Summary of Facts 

and Representations 

1. Factual Corrections. Ford maintains 

that certain statements in the 

Representations attributed to the 

Applicant are not accurate. Specifically, 

Ford notes that in Representation 3, the 

definition of the term ‘‘Covered Group’’ 

appearing on page 64718 of the 

proposed exemption in the last sentence 

of the first full paragraph in the second 

column, inaccurately states that the 

2009 Settlement Agreement expanded 

the members included in the definition 

of the 2007 Covered Group. Instead, 

according to Ford, the definition of the 

‘‘Covered Group’’ reduced the number of 

members in the 2007 Covered Group as 

certain of these members retired since 

the 2008 Settlement Agreement and 

became members of the expanded Class. 

In addition, Ford suggests that, on 

page 64721 of the proposed exemption, 

in Representation 9, the amortization 

schedule for New Note A should have 

included the ‘‘True-Up Amount’’ that 

was due on December 31, 2009. As 

noted above, the final True-Up Amount 

was calculated to be $150,000,000 and 

paid by Ford to the LLC on December 

31, 2009. 

In response to these comments, the 

Department takes note of the foregoing 

clarifications and updates to the 

Representations. 

2. Status of Existing Internal VEBA as 

a ‘‘Party in Interest’’. As described on 

page 64724 of the proposed exemption, 

in Representation 13, the Existing 

Internal VEBA was the subaccount of 

the Ford-UAW Benefits Trust previously 

maintained by Ford as a source of 

funding for retiree health care expenses. 

As of December 31, 2008, the Existing 

Internal VEBA had an estimated asset 

value of approximately $2.7 billion. 

Until the Existing Internal VEBA’s 

assets were transferred to the VEBA 

Trust, the assets were invested in a 

manner consistent with its investment 

policy. 

As described above, on December 31, 

2009, Ford directed the trustee of the 

Existing Internal VEBA to transfer to the 

VEBA Trust all assets in the Existing 

Internal VEBA or cash in an amount 

equal to the Existing Internal VEBA 

balance on the date of the transfer. The 

Existing Internal VEBA retained an 

amount equal to the Existing Internal 

VEBA’s share of expenses (to the extent 

permitted by ERISA) subject to 

reconciliation with actual expenses 

incurred. 

In its exemption application, Ford 

stated that it believed that any deposits, 

remittances or asset transfers between 

the VEBA Trust and the Existing 

Internal VEBA do not implicate any 

prohibited transactions under section 

406(a) of ERISA because the Existing 

Internal VEBA is not a ‘‘party in interest’’ 

as defined under section 3(14) of ERISA, 

with respect to the Ford VEBA Plan. 

The VEBA Trust and the Ford VEBA 

Plan were established by the UAW Ford 

Retirees Employees’ Beneficiary 

Association (the Ford EBA), an 

employees’ beneficiary organization 

within the meaning of section 3(4) of 

ERISA, acting through the Committee. 

Ford requests that the Department 

confirm that the Existing Internal VEBA 

was not a ‘‘party in interest’’ with respect 

to the Ford VEBA Plan at the time the 

trustee of the Existing Internal VEBA 

transferred assets to the VEBA Trust in 

accordance with the terms of the 2009 

Settlement Agreement based on its 

analysis of section 3(14) of ERISA. In 

this regard, Ford explains that the 

Existing Internal VEBA was a ‘‘voluntary 

employees’ beneficiary association’’ and 

a tax-exempt trust authorized by section 

501(c)(9) of the Code. Ford also explains 

that the Existing Internal VEBA was 

governed by the Ford-UAW Benefits 

Trust Master Trust Agreement between 

Ford Motor Company and The Northern 

Trust Company and that the Existing 

Internal VEBA is managed by the Asset 

Management department of Ford Motor 

Company through various third party 

managers. In addition, Ford examined 

the party in interest provisions under 

section 3(14) of ERISA and concludes 

that the Existing Internal VEBA and the 

Ford VEBA Plan would not fit any of the 

party in interest relationships that are 

described therein with respect to each 

other. 

Based upon Ford’s representations 

that neither VEBA was a fiduciary or 

service provider to the other or is 

otherwise described in any of the other 

categories of party in interest under 

section 3(14) of ERISA, the Department 

is of the view that neither the Existing 

Internal VEBA nor the Ford VEBA Plan 

is a party in interest with respect to each 

other. Based upon Ford’s 

representations, the transfer of assets 

from the Existing Internal VEBA to the 

Ford VEBA Plan was not a prohibited 

sale, exchange or transfer of assets 

between a plan and a party in interest 

under section 406(a) of ERISA. 

C. Comments on the Operative Language 

1. Covered Transactions. On page 

64730 of the proposed exemption, 

Section I(b) provides exemptive relief 

for the sale of Ford Common Stock held 

by the Ford VEBA Plan to Ford in 

accordance with the Right of First Offer 

or a Ford self-tender under the 

Securityholder and Registration Rights 

Agreement. However, Ford notes that 

the Securityholder and Registration 

Rights Agreement provides that Ford 


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10See Section II–Conditions Applicable to 

Section I(a), Notice of Proposed Individual 

Exemption Involving General Motors Corporation, 

Located in Detroit, MI, 74 FR 47963, September 18, 

2009; Section II–Conditions Applicable to Section 

I(a), Notice of Proposed Individual Exemption 

Involving Chrysler LLC, Located in Auburn Hills, 

MI, 74 FR 51182, October 5, 2009. 

11The Committee suggests that an investment 

bank performing valuation or investment consulting 

and advisory services will often be paid a flat or 

asset-based fee, while an investment bank 

performing underwriting and brokerage services 

will be paid a transaction-based fee as a percentage 

of the overall sale. Additionally, the Committee 

notes that it is not anticipated that the Independent 

Fiduciary likely would retain a separate consulting 

and advisory firm for day-to-day advice (unless 

appropriate). 

may purchase Payment Shares or 

Warrants, that the VEBA Trust intends 

to transfer to third parties in accordance 

with the Right of First Offer or a Ford 

self-tender. Moreover, Representation 

12.c of the proposed exemption, on page 

64724, also states that the Right of First 

Offer applies to ‘‘Warrants, Payment 

Shares or shares of Ford Common Stock 

received upon the exercise of all or a 

portion of the Warrants.’’ 

To ensure that the final exemption 

aligns with the description in the 

Representations, as well as with the 

substantive underlying documents 

themselves, Ford requests that Section 

I(b) of the proposed exemption be 

revised as follows: 

If the exemption is granted, the restrictions 

of sections 406(a)(1)(A), 406(b)(1), and 

406(b)(2) of ERISA shall not apply, effective 

December 31, 2009, to the sale of Ford 

Common Stock or Warrants held by the Ford 

VEBA Plan to Ford in accordance with the 

Right of First Offer or a Ford self-tender 

under the Securityholder and Registration 

Rights Agreement. 

The Department acknowledges the 

fact that Warrants were inadvertently 

excluded from Section I(b) of the 

proposed exemption. As such, the 

Department concurs with Ford’s 

requests to modify Section I(b), and 

conforming changes have been made to 

the final exemption. 

2. Definitions. Ford suggests that 

certain definitions should be added to 

Section VII of the final exemption or 

modified for clarity and to reflect the 

occurrence of certain events prescribed 

by the 2009 Settlement Agreement. 

Specifically, Ford suggests that the 

following definition for ‘‘Payment 

Shares’’ be added in the final exemption 

to the Definitions in Section VII, 

because the term is not defined and it 

is an element of the previously defined 

term ‘‘Securities’’: 

The term ‘‘Payment Shares’’ means any 

shares of Ford Common Stock issued by Ford 

to satisfy all or a portion of its payment 

obligation under New Note B, subject to the 

terms and conditions specified in New Note 

B. 

Ford also requests that the following 

definitions in Section VII be modified in 

the final exemption to correct the 

effective dates, and updated to reflect 

recent events described in Section A 

above: 

The term ‘‘Exchange Agreement’’ means the 

Security Exchange Agreement among Ford, 

the subsidiary guarantors listed in Schedule 

I thereto, and the LLC, dated as of December 

11, 2009. 

The term ‘‘LLC’’ means the Ford-UAW 

Holdings LLC, established by Ford as a 

wholly-owned LLC, and subsequently 

renamed VEBA–F Holdings LLC, established 

to hold the assets in the TAA and certain 

other assets required to be contributed to the 

VEBA under the 2008 Settlement Agreement, 

as amended by the 2009 Settlement 

Agreement. 

The term ‘‘Securityholder and Registration 

Rights Agreement’’ means the Securityholder 

and Registration Rights Agreement by and 

among Ford and the LLC, dated as of 

December 11, 2009. 

The Department concurs with the 

above referenced additions and 

modifications to Section VII of the 

proposed exemption, and it has made 

conforming changes to the final 

exemption. 

3. Conditions. Ford notes that on 

pages 64730—64731 of the proposed 

exemption, Section II provides 

‘‘Conditions Applicable to Section I(a) 

and I(b)’’ that relate to the duties and 

responsibilities of the Committee and 

the Independent Fiduciary. Ford 

requests that, to the extent the parallel 

conditions proposed in both General 

Motor Corporation’s and Chrysler LLC’s 

proposed individual exemptions 10 are 

substantively modified in a manner 

affecting Ford’s proposed exemption, 

conforming modifications will be made 

to the conditions proposed for Ford. 

The Department concurs with Ford’s 

request to conform modifications of the 

operative language in Section II of the 

proposed exemption relating to the 

functions of the Committee and the 

Independent Fiduciary. 

The Committee’s Comment 

The Committee submitted a written 

comment that was supportive of the 

proposed exemption, and suggests 

certain modifications to the operative 

language of the proposed exemption and 

the Representations. The Committee’s 

comment letter also relates to the 

respective roles of the Independent 

Fiduciary and any investment banks 

retained by the Independent Fiduciary 

with respect to the Securities held by 

the VEBA Trust. 

A. Modifications to Summary of Facts 

and Representations 

1. Number of Investment Banks. As 

illustrated on page 64718 of the 

proposed exemption, Representation 4 

states that the trust agreement for the 

VEBA Trust provides for separate retiree 

accounts designed to segregate 

payments attributable to GM, Chrysler, 

and Ford, pursuant to the terms of each 

company’s settlement agreement with 

the UAW and each respective class (the 

Separate Retiree Accounts). As 

described on page 64728 of the 

proposed exemption, in Representation 

16, the Committee represented that, in 

the event that a single Independent 

Fiduciary represents two or more 

Separate Retiree Accounts: 

A separate investment bank will be 

retained with respect to each of the three 

plans comprising the VEBA Trust. The 

investment bank’s initial recommendations 

will be made solely with the goal of 

maximizing the returns for the single plan 

that owns the securities for which the 

investment bank is responsible. 

In its initial discussions with the 

Department, the Committee made the 

argument that the arrangement for 

retention of separate investment banks 

would minimize the likelihood of an 

immediate transactional conflict 

inherent wherein one Independent 

Fiduciary managing more than one 

Separate Retiree Account would be 

immediately confronted by the need to 

dispose of the securities of each 

company. 

The Committee has retained IFS as 

the Independent Fiduciary with respect 

to the Securities, and has currently 

retained separate independent 

fiduciaries with respect to the GM and 

Chrysler Separate Retiree Accounts. As 

noted, however, it is conceivable that at 

some future date any or all three 

Independent Fiduciary engagements 

may be consolidated and the foregoing 

conditions would then come into play. 

In such event, the Committee argues 

that the requirement for different 

investment banks for each Separate 

Retiree Account would not be in the 

interest of the Ford VEBA Plan and 

would not advance the goal of reducing 

potential fiduciary conflicts. The 

Committee contends that the need to 

retain multiple investment banks should 

be at the discretion of the Independent 

Fiduciary and the investment banks 

themselves, or that such requirement 

should be limited to investment banks 

performing a traditional underwriting 

role and being paid on a transactional 

basis, not those retained for ongoing 

valuation or investment consulting 

services.11


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12According to the Committee, the most likely 

reason that an investment bank would propose 

going to market under this scenario is if the overall 

market itself is booming, such that there is ample 

appetite for the securities. In the event that a plan 

needs liquidity in a falling market, the Committee 

is more likely to explore other options, including 

reducing benefits or seeking alternative sources of 

capital such as through borrowing. 

13 In reaching the Department’s conclusion, it is 

our understanding, based on the Committee’s 

representations, that the fees paid to a single 

investment bank to provide valuation services or 

long-term investment consulting on behalf of two or 

more Separate Retiree Accounts will not be 

contingent upon the success or size of an offering 

or sale, and for each Separate Retiree Account, the 

investment bank’s recommendations are made 

solely with the goal of maximizing the returns for 

such Account. 

The Committee points out that, as a 

threshold matter, the term ‘‘investment 

bank’’ or ‘‘investment banker’’ is not a 

precise term, but refers to a range of 

services including investment valuation, 

investment consulting and advice, and 

brokerage or underwriting performed 

under the authority and supervision of 

one or more regulators (including, but 

not limited to the Federal Reserve and/ 

or the SEC). The Committee maintains 

that typically, though not necessarily, 

an investment bank engaged to provide 

a regular valuation will not be the same 

as an investment bank engaged to assist 

the Independent Fiduciary in 

connection with a large private sale or 

an initial public offering, and even in 

the latter event, different investment 

banks may be employed for different 

markets (public versus private, 

international versus domestic, 

institutional versus retail). 

The Committee suggests that, 

particularly in the case of an investment 

bank engaged only to provide valuation 

or investment advice, the Independent 

Fiduciary may conclude that there is no 

potential conflict in retaining a single 

investment bank with respect to two or 

more Separate Retiree Accounts. 

Furthermore, the Committee believes 

that retaining a single investment bank 

may in fact provide potential benefits in 

the form of experience, cost savings, and 

communication. 

The Committee proffers that Ford, 

Chrysler, and GM are at vastly different 

stages of marketability, are competing 

for capital in different markets 

(including public versus private), and 

are not competing against each other so 

much as they are part of a huge global 

automobile market with many other 

competitors.12 The Committee notes 

that a conflict could arise in the 

unlikely event that the Independent 

Fiduciary proposes to sell large blocks 

of stock of two or more car companies 

in the same market at the exact same 

time. In that case, the Committee 

suggests that the Independent Fiduciary 

would probably (though not necessarily) 

engage separate investment bankers at 

that time to underwrite the sales. 

Furthermore, the Committee contends 

that it would maintain safeguards to 

mitigate the risk of conflicts. For 

example, the Committee notes that it 

would still appoint a conflicts monitor 

and perform its own monitoring of the 

Independent Fiduciary, and it would 

continue to raise any questions about 

potential conflicts. 

Accordingly, the Committee proposes 

that, on page 64728 of the proposed 

exemption, Representation 16 should be 

revised, to replace the text referenced 

above, as follows: 

In the event that a single Independent 

Fiduciary is retained to represent two or 

more plan Accounts, and it proposes to sell 

Securities from two or more such Accounts 

at the same time, a separate investment bank 

(if any) will be retained for each Account 

with respect to the marketing or underwriting 

of the Securities. For this purpose, an 

investment bank will be considered as having 

been retained to market or underwrite 

securities if it is compensated on the success 

of the offering and/or as a percentage of the 

offering or sales proceeds. The foregoing does 

not preclude the engagement of a single 

investment bank to provide valuation 

services or long-term investment consulting 

on behalf of two or more plan Accounts, 

provided that (1) the fees of the investment 

bank are not contingent upon the success or 

size of an offering or sale, and (2) for each 

plan Account, the investment bank’s 

recommendations are made solely with the 

goal of maximizing the returns for such 

Account. 

In addition, the Committee explains 

that there may be some confusion as to 

whether two different Independent 

Fiduciaries may retain the same 

investment bank. The Committee states 

that there should be no limitations on 

the number of investment banks that the 

Independent Fiduciary must retain 

other than general fiduciary principles. 

According to the Committee, although it 

is unlikely that an Independent 

Fiduciary would consider, or that an 

investment bank would accept, an 

engagement that might involve 

marketing securities of two different 

companies in the same market at the 

same time, it would not be unusual, for 

instance, to retain the same investment 

bank to make a private offering of 

securities in the domestic market and a 

public offering of different securities in 

a foreign market, where such investment 

bank is best qualified to do so. 

Accordingly, the Committee suggests 

that Representation 16 of the proposed 

exemption be modified to include the 

following: 

To the extent that two Accounts are 

represented by different Independent 

Fiduciaries, nothing herein shall prohibit the 

Independent Fiduciaries from retaining the 

same investment bank with respect to the 

Accounts which they manage if they 

determine that it is in the interest of their 

respective Accounts to do so. 

The Department concurs with the 

Committee that, in the event that one 

Independent Fiduciary represents two 

or more (Separate Retiree) Accounts, 

and it proposes to sell Securities from 

two or more such Separate Retiree 

Accounts at the same time, then a 

separate investment bank (if any) will be 

retained for each Separate Retiree 

Account with respect to the marketing 

or underwriting of the Securities. 

Notwithstanding the above, nothing in 

the final exemption would preclude the 

Independent Fiduciary of two or more 

Separate Retiree Accounts from 

retaining the same investment banker to 

provide valuation services or long-term 

investment consulting on behalf of two 

or more of such Separate Retiree 

Accounts.13 Lastly, with respect to the 

Committee’s suggestion that, to the 

extent that two Separate Retiree 

Accounts are represented by different 

Independent Fiduciaries, nothing herein 

shall prohibit the Independent 

Fiduciaries from retaining the same 

investment bank with respect to the 

Separate Retiree Accounts which they 

manage if they determine that it is in the 

interest of their respective Separate 

Retiree Accounts to do so, the 

Department is of the view that a 

separate investment bank (if any) must 

be retained to represent each such 

Separate Retiree Account with respect 

to the marketing or underwriting of the 

Securities. Therefore, subject to these 

limitations, the Department concurs 

with the Committee’s requested 

clarifications. 

2. Reporting Deviations From an 

Investment Bank’s Recommendations. If 

a single Independent Fiduciary is 

retained with respect to more than one 

Separate Retiree Account, on page 

64728 of the proposed exemption, 

Representation 16 provides that the 

Independent Fiduciary shall report each 

instance in which it proposes to 

‘‘deviate’’ from a ‘‘recommendation’’ of 

the investment bank. The Committee 

initially represented to the Department 

that such arrangement would help to 

minimize the likelihood of a conflict 

inherent in retaining one Independent 

Fiduciary to manage the securities of 

more than one Separate Retiree 

Account. 

However, the Committee now proffers 

that this requirement may not be 

practical, in light of information gained 


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during the process of interviewing and 

selecting the Independent Fiduciaries in 

connection with the Ford, GM, and 

Chrysler exemption applications. The 

Committee notes that, typically, an 

investment bank will not ‘‘recommend’’ 

a single, specific course of action, but 

through a dialogue with the 

Independent Fiduciary will present, 

discuss, modify and refine various 

options and scenarios that the 

Independent Fiduciary ultimately will 

use in making its decisions as a 

fiduciary. Thus, the Committee argues 

that it would not be feasible for the 

Independent Fiduciary to report back to 

the Committee when it proposes to 

deviate from a specific 

recommendation, given that interactions 

between the Independent Fiduciary and 

an investment bank generally lack a 

single, identifiable ‘‘recommendation’’ 

(either orally or in writing) that the 

Independent Fiduciary does or does not 

intend to follow. 

Moreover, the Committee contends 

that some investment banker 

recommendations are unlikely ever to 

raise conflict issues. For instance, the 

Committee notes that an investment 

bank may develop a preliminary 

valuation of certain Ford Securities of 

$xx, and after thorough consideration, 

the Independent Fiduciary may 

determine that such securities are 

actually worth $yy. In such event, the 

Committee asserts that the Independent 

Fiduciary’s valuation might be viewed 

as a ‘‘deviation’’ from the initial 

recommendation but is unlikely to raise 

any conflict vis-a`-vis any Securities held 

by the VEBA Trust. 

The Committee is also concerned that 

the requirement for the Committee to 

review the reported deviations will 

cause the Committee to interpose itself 

between the two parties before such 

parties have reached a consensus. In 

this event, the Committee is concerned 

that it may have an implied obligation 

to substitute its judgment for that of the 

Independent Fiduciary. 

The Department concurs with the 

Committee’s comment that their initial 

representation that the Independent 

Fiduciary would report any deviations 

from the recommendation of the 

investment bank raises operational 

issues. Nevertheless, the Department 

notes that the Independent Fiduciary 

and the Committee are not relieved from 

their fiduciary duties under ERISA in 

carrying out their respective 

responsibilities. There may be 

circumstances where the Independent 

Fiduciary has a responsibility under 

ERISA to inform the conflicts monitor or 

the Committee of a deviation from the 

investment bank’s recommendations, 

and the Committee, as part of its 

oversight responsibility, may need to 

take appropriate action based on such 

disclosure. Subject to the caveat above, 

the Department takes note of these 

clarifications and updates to the 

Summary of Facts and Representations 

of the proposed exemption. 

3. Ford’s right to defer payments 

under New Note B. The Committee 

suggests that the description of Ford’s 

ability to defer payments in respect of 

New Note B, set out in Representation 

9.b. in the middle column of page 64722 

(beginning with ‘‘Furthermore * * *’’) 

may be inaccurate. The proposed 

exemption provides that, on each New 

Note B payment date, subject to 

satisfaction of all of the ‘‘Stock 

Settlement Conditions’’ (as described in 

the proposed exemption), Ford has the 

option to settle any or all of the amount 

due with respect to New Note B with 

Ford Common Stock designated as 

‘‘Payment Shares.’’ The proposed 

exemption further provides that: 

* * * if on any payment date under New 

Note B, conditions 1., 2., 3., 5., and 6. are 

met, then, subject to certain limitations, Ford 

would generally have the right to defer such 

payment by paying it in up to five equal 

annual installments beginning with the next 

scheduled payment date, with interest 

accruing at 9% beginning on the date such 

payment was originally due and continuing 

through the date such payment is made. 

Thus, Ford may make such payment (or 

installment thereof) in common stock on any 

deferred installment date if all the conditions 

for payment in common stock have been met 

on such date. 

The Committee suggests that the 

above paragraph describing Ford’s 

ability to defer payments in respect of 

New Note B, set out on page 67422 of 

the proposed exemption, should be 

revised to provide the following: 

Furthermore, if on any payment date under 

New Note B, all of the foregoing Stock 

Settlement Conditions other than conditions 

4., 7. and/or 8. are met, then, subject to 

certain conditions, Ford would generally 

have the option to defer such payment and 

to pay it in up to five equal annual 

installments on the first through fifth 

anniversaries of such payment date together 

with interest at the rate of 9% from the date 

such payment was originally due through the 

applicable installment payment date. On 

each such installment payment date, if all of 

the Stock Settlement Conditions are then 

satisfied, Ford will have the option to pay the 

installment by delivering Payment Shares 

with the number of Payment Shares to be so 

delivered determined based on the volumeweighted average selling price per shares of 

Ford Common Stock for the 30 trading day 

period ending on the second business day 

prior to such installment payment date. 

The Department concurs with the 

Committee’s suggested revision to the 

proposed exemption, and takes note of 

the foregoing clarifications and updates 

to the Representations. 

B. Requests for Confirmation 

1. Conditions Applicable in the Event 

That the Committee Appoints a Single 

Independent Fiduciary. The 

Committee’s comment requested 

confirmation that certain terms and 

conditions described in the 

Representations on page 64728, and 

incorporated into Sections II(b)(1) 

through (3) on page 64731, of the 

proposed exemption would apply only 

if and to the extent that the same 

Independent Fiduciary is appointed to 

represent two or more Separate Retiree 

Accounts. 

Sections II(b)(1) through (3) of the 

proposed exemption provide that the 

Committee will take certain steps to 

mitigate potential conflicts of interest, 

including the appointment of a conflicts 

monitor, the adoption of procedures to 

facilitate prompt replacement of the 

Independent Fiduciary due to a conflict 

of interest, the adoption of a written 

policy by the Independent Fiduciary 

regarding conflicts, and the periodic 

reporting of actual or potential conflicts. 

Additionally, on page 64728 of the 

proposed exemption, Representation 16 

provides that a separate investment 

bank will be retained with respect to 

each Separate Retiree Account, and in 

the event that the Independent 

Fiduciary deviates from the ‘‘initial 

recommendations’’ of an investment 

bank, ‘‘it would find it necessary to 

explain why it deviated from a 

recommendation.’’ 

The Department concurs with the 

Committee, that the terms and 

conditions described above will apply 

only if and to the extent that the same 

Independent Fiduciary is appointed to 

represent two or more Separate Retiree 

Accounts. Notwithstanding the above, 

nothing in the final exemption would 

preclude the Committee from adopting 

procedures similar to those described in 

Sections II(b)(1) through (3) of the 

proposed exemption in furtherance of 

its oversight responsibilities. However, 

the Department believes that the 

requirement that the Independent 

Fiduciary retain separate investment 

banks with respect to each Separate 

Retiree Account, subject to the 

limitations described above, applies 

regardless of how many Separate Retiree 

Accounts are represented by the same 

Independent Fiduciary. 

2. Investment Bank’s 

Acknowledgement that the VEBA Trust 

is its Ultimate Client. On page 64731 of 

the proposed exemption, Section II(e) 

provides that ‘‘any contract between the 


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14 IFS states that any such transaction would be 

entered into only after IFS has met all the 

conditions precedent to entering into such a 

transaction as set forth in Section II of the proposed 

exemption, including, but not limited to, 

determining that the transaction is feasible, in the 

best interests of the Ford VEBA Plan, and protective 

of the participants and beneficiaries of the Ford 

VEBA Plan. 

15 IFS notes that for this purpose, it would seek 

the advice of an investment advisor to determine 

value. 

Independent Fiduciary and an 

investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA Plan.’’ In 

assisting the Department in formulating 

the conditions of the proposed 

exemption, the Committee represented 

to the Department that such 

acknowledgement would be helpful in 

the event that the Committee is forced 

to replace the Independent Fiduciary 

(such as in the event of an irreconcilable 

conflict). The Committee reasoned that 

this requirement would ensure that, in 

the event the Independent Fiduciary 

was replaced, the investment banker 

would continue to represent the plan 

and work with the replacement 

Independent Fiduciary. 

After conducting interviews and 

consulting with numerous parties in its 

search for an independent fiduciary to 

manage the Securities received by the 

Ford VEBA Plan, the Committee has 

raised concerns regarding such 

condition. The Committee has requested 

that the Department confirm that this 

condition will not cause the investment 

bank to become a fiduciary or otherwise 

obligate the investment bank or the 

Independent Fiduciary to provide to the 

Committee any of the investment bank’s 

work-product except upon request, nor 

will it obligate the Committee to request 

or review any such work product. The 

Committee contends that the 

Independent Fiduciary is both a named 

fiduciary and an investment manager, 

thus it should be free within the 

parameters of its contract to determine 

what information it shares with the 

Committee. 

The Department confirms that the 

requirement that the investment banker 

acknowledge that its ultimate client is 

the Ford VEBA Plan will not, by itself, 

make the investment banker a fiduciary 

of the Ford VEBA Plan. Rather, whether 

an investment banker referred to in 

Section II of the proposed exemption 

becomes a fiduciary as a result of its 

provision of services depends on 

whether it meets the definition of a 

‘‘fiduciary’’ as set forth in section 3(21) 

of ERISA and the regulations 

promulgated thereunder. 

3. Obligation of the Committee to 

Review the Investment Banker Reports. 

As described in Representation 16, on 

page 64728 of the proposed exemption, 

several safeguards are provided to 

reduce the risk of conflict in the event 

that a single independent fiduciary is 

retained with respect to more than one 

Retiree Separate Account. Specifically, 

in assisting the Department to formulate 

these procedures, the Committee had 

suggested that a ‘‘conflicts monitor’’ 

would develop a process for identifying 

potential conflicts. As a result, the 

Department added Section II(b)(1)(ii) of 

the proposed exemption, which 

provides that a conflicts monitor 

appointed by the Committee ‘‘regularly 

review the... investment banker 

reports... to identify the presence of 

factors that could lead to a conflict.’’ 

After conducting interviews with 

candidates for the Independent 

Fiduciary position, the Committee has 

raised a concern regarding the conflicts 

monitor’s duties. The Committee has 

requested confirmation that Section 

II(b)(1)(i) does not independently 

impose any obligation on the Committee 

to provide (or request) ‘‘investment 

banker reports’’ as a matter of course 

(i.e., beyond ERISA’s general fiduciary 

requirements). In its comment letter, the 

Committee notes that it may be 

appropriate for the conflicts monitor or 

the Committee (or any subcommittee 

with delegated authority) to review 

investment banker reports when 

provided to them by the Independent 

Fiduciary, or to request such reports 

under certain circumstances. However, 

the Committee maintains that such 

reports may contain information that is 

confidential or proprietary, or 

preliminary, or simply irrelevant to its 

responsibilities. Furthermore, according 

to the Committee, it is not clear what 

constitutes a ‘‘report,’’ with the result 

that informal notes and/or emails may 

fall under the definition. 

The Department concurs with the 

Committee that Section II(b)(1)(ii) of the 

proposed exemption does not 

independently impose an affirmative 

obligation on the Committee to provide 

(or request) ‘‘investment banker reports’’ 

as a matter of course beyond ERISA’s 

general fiduciary requirements. 

IFS’ Comment 

IFS submitted a written comment that 

is supportive of the proposed 

exemption, and seeks written 

clarification and confirmation from the 

Department as to the scope of the 

exemptive relief provided under the 

proposed exemption with respect to 

certain transactions involving Securities 

held by the Ford VEBA Plan. 

A. Exchange of Warrants for Warrants 

Section I(a)(1)-(5), on page 64730 of 

the proposed exemption, provides relief 

for the acquisition and holding of 

Securities by the Ford VEBA Plan and 

its funding vehicle, the VEBA Trust, 

from the restrictions of sections 

406(a)(1)(A), 406(a)(1)(B), 406(a)(1)(E), 

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

of ERISA if the proposed exemption is 

granted by the Department. 

Additionally, on page 64730 of the 

proposed exemption, Section I(a)(6) 

provides relief for the disposition of 

Securities by the Independent 

Fiduciary, if the exemption is granted. 

For these purposes, Section VII(q) and 

Section VII(z), on page 64733 of the 

proposed exemption, define ‘‘Securities’’ 

and ‘‘Warrants,’’ respectively, as ‘‘the 

New Note A, the New Note B, the 

Warrants, the LLC Interest, any Payment 

Shares, and additional shares of Ford 

Common Stock acquired pursuant to the 

Independent Fiduciary’s exercise of the 

Warrants,’’ and as ‘‘warrants to acquire 

shares of Ford Common Stock, par value 

$0.01 per share, issued by Ford.’’ 

IFS requests clarification as to 

whether the aforementioned relief 

extends to warrants issued by Ford or 

Ford Common Stock acquired and held 

by the Ford VEBA Plan as a result of the 

disposition of all or some of the 

Securities of a like type (e.g., warrant for 

warrant or stock for stock) (In-Kind Ford 

Securities) by the Independent 

Fiduciary in exchange for some or all of 

the Securities. IFS posits that the same 

question arises in the context of a 

disposition of Warrants by the 

Independent Fiduciary in a transaction 

in which the consideration the Ford 

VEBA Plan receives consists in whole or 

in part of In-Kind Ford Securities that 

constitute Ford issued warrants. 

IFS notes that it may determine that 

it is in the interest of the Ford VEBA 

Plan’s participants and beneficiaries to 

sell certain Warrants in exchange for a 

combination of cash and other Ford 

issued warrants.14 IFS explains that the 

warrants [given by Ford] would have a 

fair market value no less than the fair 

market value of the Warrants the Ford 

VEBA Plan is selling.15 For example, 

IFS suggests that it may find it in the 

interest of the Ford VEBA Plan and its 

participants and beneficiaries to sell a 

Warrant to Ford in exchange for cash 

and a replacement warrant of shorter/ 

longer duration or with a different strike 

price. In this example, IFS highlights 

three transactions; namely, (1) the 

disposition of Warrants by IFS in its role 

as the Independent Fiduciary in favor of 

other Ford issued warrants, (2) the 

acquisition of the new warrants by the 

Ford VEBA Plan, and (3) the holding of 


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16 IFS notes that it is not suggesting that 

transactions which would fundamentally alter the 

terms of the Settlement Agreement are being 

contemplated, nor is IFS seeking to bring any such 

transactions within the scope of the Proposed PTE. 

17 IFS notes that certain corporate transactions are 

contemplated under the Warrants such that on the 

occurrence of the transaction the exercise price 

available to the Ford VEBA Plan would be adjusted. 

See, e.g., Section 5.01(e) of the Warrant Agreement 

dated as of December 11, 2009 between Ford Motor 

Company and Computershare Trust Company, N.A. 

as Warrant Agent; See, also, Section 7.02 of the 

Securityholder and Registration Rights Agreement. 

18Calpine Corporation, PTE 2009–01, 74 FR 3644 

(January 21, 2009). See also The Golden 

Comprehensive Security Program, et al., PTE 2002– 

02, 67 FR 1243 (January 9, 2002). 

these warrants by the Ford VEBA Plan. 

IFS is seeking confirmation from the 

Department that each of these In-Kind 

Ford Securities and like transactions, 

assuming the transactions otherwise 

meet the conditions set forth in Section 

II of the proposed exemption, would fall 

within the exemptive relief 

contemplated under the proposed 

exemption.16

More specifically, IFS is seeking 

confirmation that what it has defined as 

‘‘other Ford issued warrants’’ would fall 

within the definitions of Securities and 

warrants, as applicable, for purposes of 

the proposed exemption. IFS states that 

inclusion of such warrants in the 

definitions of Securities and Warrants is 

critical inasmuch as the warrants will 

themselves be subject to future 

transactions as IFS seeks to dispose of 

these securities in a manner that is 

consistent with its duties to the Ford 

VEBA Plan and its participants and 

beneficiaries. 

B. Securities Acquired in Connection 

With a Corporate Transaction 

In addition to the transactions 

discussed above, IFS requests 

clarification whether the proposed 

exemption would cover Ford Common 

Stock or Warrants acquired in 

connection with a corporate transaction, 

restructuring or other change in capital 

structure of Ford (such Securities 

hereinafter referred to as after-acquired 

securities). IFS notes that, under this 

scenario, the Ford VEBA Plan would 

receive after-acquired securities in 

exchange for, or with respect to, all or 

some of the Securities of like kind then 

held by the Ford VEBA Plan due to a 

corporate transaction, restructuring, or 

other change in Ford’s capital 

structure.17

As noted in Representation 16 of the 

proposed exemption, on page 64727, the 

Independent Fiduciary does not have 

authority to vote Ford Common Stock. 

Thus, IFS notes that it would have little, 

if any, ability to affect the negotiation 

and ultimate approval of any such 

corporate transaction. Moreover, IFS 

suggests that the Department has 

previously issued relief from sections 

406(a)(1)(A), 406(a)(1)(B), 406(a)(1)(E), 

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

of ERISA for the disposition of 

securities by an independent fiduciary 

as well as the acquisition and holding 

of any after-acquired securities in this 

type of scenario in a previous individual 

exemption.18

In response to the above referenced 

comments, the Department confirms 

that the proposed exemption provides 

exemptive relief for other Ford issued 

warrants acquired in exchange for 

Warrants held by the Ford VEBA Plan 

at the direction of the Independent 

Fiduciary, and such relief also extends 

to additional shares of Ford Common 

Stock or other Ford issued warrants 

acquired in exchange for Ford Common 

Stock or Warrants held by the Ford 

VEBA Plan in connection with a 

restructuring, recapitalization, merger or 

other corporate transaction involving 

Ford. Accordingly, the Department has 

made revisions to the definitions of 

‘‘Securities’’ and ‘‘Warrants’’ in Section 

VII(r) and Section VII(aa), respectively, 

of the final exemption. In addition, the 

Department takes note of the foregoing 

clarifications and updates to the 

Representations. 

The Department has carefully 

considered the issues expressed by the 

commenters in their written comments, 

including the issues raised by the 

individuals who had telephoned the 

Department. After consideration of the 

commenters’ concerns and 

documentation provided, the 

Department does not believe that any 

material factual issues have been raised 

which would require the convening of 

a public hearing. Further, after giving 

full consideration to the entire record, 

including the comments, the 

Department has determined to grant the 

exemption, subject to the modifications 

and clarifications described herein. 

For a complete statement of the facts 

and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption that was published 

in the Federal Register on December 8, 

2009 at 74 FR 64716. For further 

information regarding the comments 

and other matters discussed herein, 

interested persons are encouraged to 

obtain copies of the exemption 

application file (Exemption Application 

No. L–11575) 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, US Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210. The written comments may 

also be viewed online at http:// 

www.regulations.gov, at Docket ID 

Number: EBSA–2009–0026. 

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 ERISA does not relieve a 

fiduciary or other party in interest from 

certain other provisions of ERISA, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of ERISA, 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 ERISA; 

(2) In accordance with section 408(a) 

of ERISA, the Department makes the 

following determinations: 

(a) The exemption is administratively 

feasible; 

(b) The exemption is in the interests 

of the Ford VEBA Plan and of its 

participants and beneficiaries; and 

(c) The exemption is protective of the 

rights of participants and beneficiaries 

participating in the Ford VEBA Plan; 

and 

(3) The exemption is supplemental to, 

and not in derogation of, any other 

provisions of ERISA, including statutory 

or administrative exemptions and 

transitional 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. 

Accordingly, the following exemption 

is granted under the authority of section 

408(a) of ERISA and in accordance with 

the procedures set forth in 29 CFR Part 

2570, Subpart B (55 FR 32836, 32847, 

August 10, 1990). 

Exemption 

Section I. Covered Transactions 

(a) The restrictions of sections 

406(a)(1)(A), 406(a)(1)(B), 406(a)(1)(E), 

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

of ERISA shall not apply, effective 

December 31, 2009, to: 

(1) The acquisition by the UAW Ford 

Retirees Medical Benefits Plan (the Ford 


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VEBA Plan) and its funding vehicle, the 

UAW Retiree Medical Benefits Trust 

(the VEBA Trust) of: (i) The LLC 

Interests; (ii) New Note A; (iii) New 

Note B (together with New Note A, the 

New Notes); and (iv) Warrants, 

transferred by Ford and deposited in the 

Ford Employer Security Sub-Account of 

the Ford Separate Retiree Account of the 

VEBA Trust. 

(2) The acquisition by the Ford VEBA 

Plan of shares of Ford Common Stock 

pursuant to Ford’s right to settle its 

payment obligations under New Note B 

in shares of Ford Common Stock (i.e., 

Payment Shares), consistent with the 

2009 Settlement Agreement; 

(3) The acquisition by the Ford VEBA 

Plan of shares of Ford Common Stock 

pursuant to (i) the Independent 

Fiduciary’s exercise of all or a pro rata 

portion of the Warrants, consistent with 

the 2009 Settlement Agreement and (ii) 

an adjustment, substitution, conversion, 

or other modification of Ford Common 

Stock in connection with a 

reorganization, restructuring, 

recapitalization, merger, or similar 

corporate transaction, provided that 

each holder of Ford Common Stock is 

treated in an identical manner; 

(4) The holding by the Ford VEBA 

Plan of the aforementioned Securities in 

the Ford Employer Security SubAccount of the Ford Separate Retiree 

Account of the VEBA Trust, consistent 

with the 2009 Settlement Agreement; 

(5) The deferred payment of any 

amounts due under New Note B by Ford 

pursuant to the terms thereunder; and 

(6) The disposition of the Securities 

by the Independent Fiduciary. 

(b) The restrictions of sections 

406(a)(1)(A), 406(b)(1), and 406(b)(2) of 

ERISA shall not apply, effective 

December 31, 2009, to the sale of Ford 

Common Stock or Warrants held by the 

Ford VEBA Plan to Ford in accordance 

with the Right of First Offer or a Ford 

self-tender under the Securityholder 

and Registration Rights Agreement. 

(c) The restrictions of sections 

406(a)(1)(B), 406(a)(1)(D), 406(b)(1), and 

406(b)(2) of ERISA shall not apply, 

effective December 31, 2009, to: 

(1) The extension of credit or transfer 

of assets by Ford, the Ford Retiree 

Health Plan, or the Ford VEBA Plan in 

payment of a benefit claim that was the 

responsibility and legal obligation, 

under the terms of the applicable plan 

documents, of one of the other parties 

listed in this paragraph; 

(2) The reimbursement by Ford, the 

Ford Retiree Health Plan, or the Ford 

VEBA Plan, of a benefit claim that was 

paid by another party listed in this 

paragraph, which was not legally 

responsible for the payment of such 

claim, plus interest; 

(3) The retention of an amount by 

Ford until payment to the Ford VEBA 

Plan resulting from an overaccrual of 

pre-transfer expenses attributable to the 

TAA or the retention of an amount by 

the Ford VEBA Plan until payment to 

Ford resulting from an underaccrual of 

pre-transfer expense attributable to the 

TAA; and 

(4) The Ford VEBA Plan’s payment to 

Ford of an amount equal to any 

underaccrual by Ford of pre-transfer 

expenses attributable to the TAA or the 

payment by Ford to the Ford VEBA Plan 

of an amount equal to any overaccrual 

by Ford of pre-transfer expenses 

attributable to the TAA. 

(d) The restrictions of sections 

406(a)(1)(B), 406(a)(1)(D), 406(b)(1), and 

406(b)(2) of ERISA shall not apply, 

effective December 31, 2009, to the 

return to Ford of assets deposited or 

transferred to the Ford VEBA Plan by 

mistake, plus interest. 

Section II. Conditions Applicable to 

Section I(a) and I(b) 

(a) The Committee appoints a 

qualified Independent Fiduciary to act 

on behalf of the Ford VEBA Plan for all 

purposes related to the transfer of the 

Securities to the Ford VEBA Plan for the 

duration of the Ford VEBA Plan’s 

holding of the Securities. Such 

Independent Fiduciary will have sole 

discretionary responsibility relating to 

the holding, ongoing management and 

disposition of the Securities, except for 

the voting of the Ford Common Stock. 

The Independent Fiduciary has 

determined or will determine, before 

taking any actions regarding the 

Securities, that each such action or 

transaction is in the interest of the Ford 

VEBA Plan. 

(b) In the event that the same 

Independent Fiduciary is appointed to 

represent the interests of one or more of 

the other plans comprising the VEBA 

Trust (i.e., the UAW Chrysler Retiree 

Medical Benefits Plan and/or the UAW 

General Motors Company Retiree 

Medical Benefits Plan) with respect to 

employer securities deposited into the 

VEBA Trust, the Committee takes the 

following steps to identify, monitor and 

address any conflict of interest that may 

arise with respect to the Independent 

Fiduciary’s performance of its 

responsibilities: 

(1) The Committee appoints a 

‘‘conflicts monitor’’ to: (i) develop a 

process for identifying potential 

conflicts; (ii) regularly review the 

Independent Fiduciary reports, 

investment banker reports, and public 

information regarding the companies, to 

identify the presence of factors that 

could lead to a conflict; and (iii) further 

question the Independent Fiduciary 

when appropriate. 

(2) The Committee adopts procedures 

to facilitate prompt replacement of the 

Independent Fiduciary if the Committee 

in its sole discretion determines such 

replacement is necessary due to a 

conflict of interest. 

(3) The Committee requires the 

Independent Fiduciary to adopt a 

written policy regarding conflicts of 

interest. Such policy shall require that, 

as part of the Independent Fiduciary’s 

periodic reporting to the Committee, the 

Independent Fiduciary includes a 

discussion of actual or potential 

conflicts identified by the Independent 

Fiduciary and options for avoiding or 

resolving the conflicts. 

(c) The Independent Fiduciary 

authorizes the trustee of the Ford VEBA 

Plan to dispose of the Ford Common 

Stock (including any Payment Shares or 

any shares of Ford Common Stock 

acquired pursuant to exercise of the 

Warrants), the LLC Interests, the New 

Notes, or exercise the Warrants, only 

after the Independent Fiduciary 

determines, at the time of the 

transaction, that the transaction is 

feasible, in the interest of the Ford 

VEBA Plan, and protective of the 

participants and beneficiaries of the 

Ford VEBA Plan. 

(d) The Independent Fiduciary 

negotiates and approves on behalf of the 

Ford VEBA Plan any transactions 

between the Ford VEBA Plan and any 

party in interest involving the Securities 

that may be necessary in connection 

with the subject transactions (including 

but not limited to the registration of the 

Securities contributed to the Ford VEBA 

Plan). 

(e) Any contract between the 

Independent Fiduciary and an 

investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA plan. 

(f) The Independent Fiduciary 

discharges its duties consistent with the 

terms of the Ford VEBA Plan, the Trust 

Agreement, the Independent Fiduciary 

Agreement, and any other documents 

governing the Securities, such as the 

Registration Rights Agreement. 

(g) The Ford VEBA Plan incurs no 

fees, costs or other charges (other than 

described in the Trust Agreement, the 

2009 Settlement Agreement, and the 

Securityholder and Registration Rights 

Agreement) as a result of the 

transactions exempted herein. 

(h) The terms of any transaction 

exempted herein are no less favorable to 

the Ford VEBA Plan than the terms 


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negotiated at arms’ length under similar 

circumstances between unrelated 

parties. 

Section III. Conditions Applicable to 

Section I(c)(1) and I(c)(2) 

(a) The Committee and the Ford 

VEBA Plan’s third party administrator 

will review the benefits paid during the 

transition period and determine the 

dollar amount of mispayments made, 

subject to the review of the Ford VEBA 

Plan’s independent auditor. The results 

of this review will be made available to 

Ford. 

(b) Ford and the applicable third party 

administrator of the Ford Active Health 

Plan will review the benefits paid 

during the transition period and 

determine the dollar amount of 

mispayments made, subject to the 

review of the plan’s independent 

auditor. The results of this review will 

be made available to the Committee. 

(c) Interest on any reimbursed 

mispayment will accrue from the date of 

the mispayment to the date of the 

reimbursement. 

(d) Interest will be determined using 

the applicable 6 month published 

LIBOR rate. 

(e) If there is a dispute as to the 

amount, timing or other feature of a 

reimbursement payment, the parties 

will enter into the Dispute Resolution 

Procedure found in Section 26B of the 

2009 Settlement Agreement and 

described further in Section VII(c) 

herein. 

Section IV. Conditions Applicable to 

Section I(c)(3) and I(c)(4) 

(a) Ford and the Committee will 

cooperate in the calculation and review 

of the amounts of expense accruals 

related to the TAA, and the amount of 

any overaccrual shall be made subject to 

the review of an independent auditor 

selected by Ford and the amount of any 

underaccrual shall be made subject to 

the review of the Ford VEBA Plan’s 

independent auditor. 

(b) Ford must make a claim for any 

underaccrual to the Committee, and the 

Committee must make a claim for any 

overaccrual to Ford, as applicable, 

within the Verification Time Period, as 

defined in Section VII(z). 

(c) Interest on any true-up payment 

will accrue from the date of transfer of 

the assets in the TAA (or the LLC 

containing the TAA) for the amount in 

respect of the overaccrual or 

underaccrual, as applicable, until the 

date of payment of such true-up 

amount. 

(d) Interest will be determined using 

the published six month LIBOR rate. 

(e) If there is a dispute as to the 

amount, timing or other feature of a 

true-up payment in respect of TAA 

expenses, the parties will enter into the 

Dispute Resolution Procedure found in 

Section 26B of the 2009 Settlement 

Agreement and described further in 

Section VII(c) herein. 

Section V. Conditions Applicable to 

Section I(d) 

(a) Ford must make a claim to the 

Committee regarding the specific 

deposit or transfer made in error or 

made in an amount greater than that to 

which the Ford VEBA Plan was entitled. 

(b) The claim is made within the 

Verification Time Period, as defined in 

Section VII(z). 

(c) Interest on any mistaken deposit or 

transfer will accrue from the date of the 

mistaken deposit or transfer to the date 

of the repayment. 

(d) Interest will be determined using 

the published six-month LIBOR rate. 

(e) If there is a dispute as to the 

amount, timing or other feature of a 

mistaken payment, the parties will enter 

into the Dispute Resolution Procedure 

found in Section 26B of the 2009 

Settlement Agreement and described 

further in Section VII(c) herein. 

Section VI. Conditions Applicable to 

Section I 

(a) The Committee and the 

Independent Fiduciary maintain for a 

period of six years from the date (i) the 

Securities are transferred to the Ford 

VEBA Plan, and (ii) the shares of Ford 

Common Stock are acquired by the Ford 

VEBA Plan through the exercise of the 

Warrants or Ford’s delivery of Payment 

Shares in settlement of its payment 

obligations under New Note B, the 

records necessary to enable the persons 

described in paragraph (b) below to 

determine whether the conditions of 

this exemption have been met, provided 

that (i) a separate prohibited transaction 

will not be considered to have occurred 

if, due to circumstances beyond the 

control of the Committee and/or the 

Independent Fiduciary, the records are 

lost or destroyed prior to the end of the 

six-year period, and (ii) no party in 

interest other than the Committee or the 

Independent Fiduciary shall be subject 

to the civil penalty that may be assessed 

under ERISA section 502(i) if the 

records are not maintained, or are not 

available for examination as required by 

paragraph (b) below; and 

(b) Notwithstanding any provisions of 

subsections (a)(2) and (b) of section 504 

of ERISA, the records referred to in 

paragraph (a) above shall be 

unconditionally available at their 

customary location during normal 

business hours to: 

(1) Any duly authorized employee or 

representative of the Department or the 

Internal Revenue Service; 

(2) The UAW or any duly authorized 

representative of the UAW; 

(3) Ford or any duly authorized 

representative of Ford; 

(4) The Independent Fiduciary or any 

duly authorized representative of the 

Independent Fiduciary; 

(5) The Committee or any duly 

authorized representative of the 

Committee; and 

(6) Any participant or beneficiary of 

the Ford VEBA Plan or any duly 

authorized representative of such 

participant or beneficiary. 

(c) None of the persons described 

above in paragraphs (b)(2), (4)–(6) shall 

be authorized to examine trade secrets 

of Ford, or commercial or financial 

information which is privileged or 

confidential, and should Ford refuse to 

disclose information on the basis that 

such information is exempt from 

disclosure, Ford shall, by the close of 

the thirtieth (30th) day following the 

request, provide a written notice 

advising that person of the reasons for 

the refusal and that the Department may 

request such information. 

Section VII. Definitions 

(a) The term ‘‘affiliate’’ means: (1) Any 

person directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; (2) any officer, 

director, partner, or employee in any 

such person, or relative (as defined in 

section 3(15) of ERISA) of any such 

person; or (3) any corporation, 

partnership or other entity of which 

such person is an officer, director or 

partner. (For purposes of this definition, 

the term ‘‘control’’ means the power to 

exercise a controlling influence over the 

management or policies of a person 

other than an individual). 

(b) The ‘‘Committee’’ means the eleven 

individuals consisting of six 

independent members and five UAW 

appointed members who will serve as 

the plan administrator and named 

fiduciary of the Ford VEBA Plan. 

(c) The term ‘‘Dispute Resolution 

Procedure’’ means the process found in 

Section 26B of the 2009 Settlement 

Agreement to effectuate the resolution 

of any dispute respecting the 

transactions described in Sections 

I(c)(1), (c)(2), (c)(3), (c)(4), and (d) 

herein, and which reads in pertinent 

part: (1) The aggrieved party shall 

provide the party alleged to have 

violated the 2009 Settlement Agreement 

(Dispute Party) with written notice of 


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19The Department notes that the preceding 

conditions are not exclusive, and that other 

circumstances may develop which cause the 

Independent Fiduciary to be deemed not to be 

independent of and unrelated to Ford, the UAW, 

the Committee, and their affiliates. 

20LIBOR is calculated by Thomson Reuters and 

published by the British Bankers’ Association after 

11 a.m. (and generally around 11:45 a.m.) each day 

(London time). It is a trimmed average of inter-bank 

deposit rates offered by designated contributor 

banks, for maturities ranging from overnight to one 

year. The rates are a benchmark rather than a 

tradable rate, the actual rate at which banks will 

lend to one another continues to vary throughout 

the day. 

such dispute, which shall include a 

description of the alleged violation and 

identification of the Section(s) of the 

2009 Settlement Agreement allegedly 

violated. Such notice shall be provided 

so that it is received by the Dispute 

Party no later than 180 calendar days 

from the date of the alleged violation or 

the date on which the aggrieved party 

knew or should have known of the facts 

that give rise to the alleged violation, 

whichever is later, but in no event 

longer than 3 years from the date of the 

alleged violation; and (2) If the Dispute 

Party fails to respond within 21 

calendar days from its receipt of the 

notice, the aggrieved party may seek 

recourse to the District Court; provided 

however, that the aggrieved party 

waives all claims related to a particular 

dispute against the Dispute Party if the 

aggrieved party fails to bring the dispute 

before the District Court within 180 

calendar days from the date of sending 

the notice. All the time periods in 

Section 26 of the 2009 Settlement 

Agreement may be extended by 

agreement of the parties to the particular 

dispute. 

(d) The term ‘‘Exchange Agreement’’ 

means the Security Exchange 

Agreement among Ford, the subsidiary 

guarantors listed in Schedule I thereto 

and the LLC, dated as of December 11, 

2009. 

(e) The term ‘‘Ford’’ or the ‘‘Applicant’’ 

means Ford Motor Company, located in 

Detroit MI, and its affiliates. 

(f) The term ‘‘Ford Active Health Plan’’ 

means the medical benefits plan 

maintained by Ford to provide benefits 

to eligible active hourly employees of 

Ford and its participating subsidiaries. 

(g) The term ‘‘Ford Common Stock’’ 

means the shares of common stock, par 

value $0.01 per share, issued by Ford. 

(h) The term ‘‘Ford Employer Security 

Sub-Account of the Ford Separate 

Retiree Account of the VEBA Trust’’ 

means the sub-account established in 

the Ford Separate Retiree Account of the 

VEBA Trust to hold Securities on behalf 

of the Ford VEBA Plan. 

(i) The term ‘‘Ford Retiree Health 

Plan’’ means the retiree medical benefits 

plan maintained by Ford that provided 

benefits to, among others, those who 

will be covered by the Ford VEBA Plan. 

(j) The term ‘‘Implementation Date’’ 

means December 31, 2009. 

(k) The term ‘‘Independent Fiduciary’’ 

means a fiduciary that is (1) 

independent of and unrelated to Ford, 

the UAW, the Committee, and their 

affiliates, and (2) appointed to act on 

behalf of the Ford VEBA Plan with 

respect to the holding, management and 

disposition of the Securities. In this 

regard, the fiduciary will be deemed not 

to be independent of and unrelated to 

Ford, the UAW, the Committee, and 

their affiliates if (1) such fiduciary 

directly or indirectly controls, is 

controlled by, or is under common 

control with Ford, the UAW, the 

Committee or their affiliates, (2) such 

fiduciary directly or indirectly receives 

any compensation or other 

consideration from Ford, the UAW or 

any Committee member in his or her 

individual capacity in connection with 

any transaction contemplated in this 

exemption (except that an Independent 

Fiduciary may receive compensation 

from the Committee or the Ford VEBA 

Plan for services provided to the Ford 

VEBA Plan in connection with the 

transactions discussed herein if 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 fiduciary, in any fiscal year, from 

Ford, the UAW or a member of the 

Committee in his or her individual 

capacity, exceeds 3% of the fiduciary’s 

annual gross revenue from all sources 

(for federal income tax purposes) for its 

prior tax year.19

(l) The term ‘‘LLC’’ means the FordUAW Holdings LLC, established by 

Ford as a wholly-owned LLC, and 

subsequently renamed VEBA–F 

Holdings LLC, established to hold the 

assets in the TAA and certain other 

assets required to be contributed to the 

VEBA under the 2008 Settlement 

Agreement, as amended by the 2009 

Settlement Agreement. 

(m) The term ‘‘LLC Interests’’ means 

Ford’s wholly-owned interest in the 

LLC. 

(n) The term ‘‘New Note A’’ means the 

amortizing guaranteed secured note 

maturing on June 30, 2022, in the 

principal amount of $6,705,470,000, 

with payments to be made in cash, in 

annual installments from 2009 through 

2022, issued by Ford and referred to in 

the Exchange Agreement. 

(o) The term ‘‘New Note B’’ means the 

amortizing guaranteed secured note 

maturing June 30, 2022, in the principal 

amount of $6,511,850,000, with 

payments to be made in cash, Ford 

Common Stock, or a combination 

thereof, in annual installments from 

2009 through 2022, issued by Ford and 

referred to in the Exchange Agreement. 

(p) The term ‘‘Payment Shares’’ means 

any shares of Ford Common Stock 

issued by Ford to satisfy all or a portion 

of its payment obligation under New 

Note B, subject to the terms and 

conditions specified in New Note B. 

(q) The term ‘‘published six month 

LIBOR rate’’ means the Official British 

Banker’s Association Six Month London 

Interbank Offered Rate (LIBOR) 11:00am 

GMT ‘‘fixing’’ as reported on Bloomberg 

page ‘‘BBAM’’.20

(r) The term ‘‘Securities’’ means (1) 

New Note A; (2) New Note B; (3) the 

Warrants; (4) the LLC Interests, (5) any 

Payment Shares, and (6) additional 

shares of Ford Common Stock acquired 

in accordance with the transactions 

described in Sections I(a)(2) and (3) of 

this exemption. 

(s) The term ‘‘Securityholder and 

Registration Rights Agreement’’ means 

the Securityholder and Registration 

Rights Agreement by and among Ford 

and the LLC, dated as of December 11, 

2009. 

(t) The term ‘‘2008 Settlement 

Agreement’’ means the settlement 

agreement, effective as of August 29, 

2008, entered into by Ford, the UAW, 

and a class of retirees in the case of Int’l 

Union, UAW, et al. v. Ford Motor 

Company, Civil Action No. 07–14845, 

2008 WL 4104329 (E.D. Mich. Aug. 29, 

2008). 

(u) The term ‘‘2009 Settlement 

Agreement’’ means the 2008 Settlement 

Agreement, as amended by an 

Amendment to such Settlement 

Agreement dated July 23, 2009, effective 

as of November 9, 2009, entered into by 

Ford, the UAW, and a class of retirees 

in the case of Int’l Union, UAW, et al. 

v. Ford Motor Company, Civil Action 

No. 07–14845, 2008 WL 4104329 (E.D. 

Mich. Aug. 29, 2008), Order and Final 

Judgment Granted, Civil Action No. 07– 

14845, Doc. #71, (E.D. Mich. Nov. 9, 

2009). 

(v) The term ‘‘TAA’’ means the 

temporary asset account established by 

Ford under the 2008 Settlement 

Agreement to serve as tangible evidence 

of the availability of Ford assets equal 

to Ford’s obligation to the Ford VEBA 

Plan. 

(w) The term ‘‘Trust Agreement’’ 

means the trust agreement for the VEBA 

Trust. 

(x) The term ‘‘UAW’’ means the 

International Union, United 


srobinson on DSKHWCL6B1PROD with NOTICES
Federal Register / Vol. 75, No. 56 / Wednesday, March 24, 2010 / Notices 14205 

Automobile, Aerospace and Agricultural 

Implement Workers of America. 

(y) The term ‘‘VEBA’’ means the Ford 

UAW Retirees Medical Benefits Plan 

(the Ford VEBA Plan) and its associated 

UAW Retiree Medical Benefits Trust 

(the VEBA Trust). 

(z) The term ‘‘Verification Time 

Period’’ means: (1) With respect to each 

of the Securities other than the 

payments in respect of the New Notes, 

the period beginning on the date of 

publication of the final exemption in the 

Federal Register (or, if later, the date of 

the transfer of any such Security to the 

Ford VEBA Plan) and ending 90 

calendar days thereafter; (2) with 

respect to each payment pursuant to the 

New Notes, the period beginning on the 

date of the payment and ending 90 

calendar days thereafter; and (3) with 

respect to the TAA, the period 

beginning on the date of publication of 

the final exemption in the Federal 

Register (or, if later, the date of the 

transfer of the assets in the TAA to the 

Ford VEBA Plan) and ending 180 

calendar days thereafter. 

(aa) The term ‘‘Warrants’’ means 

warrants issued by Ford to acquire 

362,391,305 shares of Ford Common 

Stock at a strike price of $9.20 per share, 

expiring on January 1, 2013. For 

purposes of this definition, the term 

‘‘Warrants’’ includes additional warrants 

to acquire Ford Common Stock acquired 

in partial or complete exchange for, or 

adjustment to, the warrants described in 

the preceding sentence, at the direction 

of the Independent Fiduciary or 

pursuant to a reorganization, 

restructuring or recapitalization of Ford 

as well as a merger or similar corporate 

transaction involving Ford (each, a 

corporate transaction), provided that, in 

such corporate transaction, similarly 

situated warrantholders, if any, will be 

treated the same to the extent that the 

terms of such warrants and/or rights of 

such warrantholders are the same. 

Signed at Washington, DC, this 19th day of 

March, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–6458 Filed 3–23–10; 8:45 am] 

BILLING CODE 4510–29–P 

NATIONAL SCIENCE FOUNDATION 

Engineering Advisory Committee; 

Notice of Meeting 

In accordance with Federal Advisory 

Committee Act (Pub. L. 92–463, as 

amended), the National Science 

Foundation announces the following 

meeting: 

Name: Advisory Committee for 

Engineering, #1170. 

Date/Time: April 14, 2010: 12 p.m. to 6 

p.m. April 15, 2010: 8:15 a.m. to 12 p.m. 

Place: National Science Foundation, 4201 

Wilson Boulevard, Suite 1235, Arlington, 

Virginia 22230. 

Type of Meeting: Open. 

Contact Person: Deborah Young, National 

Science Foundation, 4201 Wilson Boulevard, 

Suite 505, Arlington, Virginia 22230 703/ 

292–8300. 

Purpose of Meeting: To provide advice, 

recommendations and counsel on major goals 

and policies pertaining to engineering 

programs and activities. 

Agenda: The principal focus of the meeting 

on both days will be to discuss emerging 

issues and opportunities for the Directorate 

for Engineering and its divisions and review 

Committee of Visitors Reports. 

Dated: March 19, 2010. 

Susanne Bolton, 

Committee Management Officer. 

[FR Doc. 2010–6448 Filed 3–23–10; 8:45 am] 

BILLING CODE 7555–01–P 

NUCLEAR REGULATORY 

COMMISSION 

[Docket No. NRC–2010–0104] 

Agency Information Collection 

Activities: Proposed Collection; 

Comment Request 

AGENCY: U.S. Nuclear Regulatory 

Commission (NRC). 

ACTION: Notice of pending NRC action to 

submit an information collection 

request to the Office of Management and 

Budget (OMB) and solicitation of public 

comment. 

SUMMARY: The NRC invites public 

comment about our intention to request 

the OMB’s approval for renewal of an 

existing information collection that is 

summarized below. We are required to 

publish this notice in the Federal 

Register under the provisions of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. Chapter 35). 

Information pertaining to the 

requirement to be submitted: 

1. The title of the information 

collection: 10 CFR Part 95—Facility 

Security Clearance and Safeguarding of 

National Security Information and 

Restricted Data. 

2. Current OMB approval number: 

3150–0047. 

3. How often the collection is 

required: On occasion. 

4. Who is required or asked to report: 

NRC-regulated facilities and other 

organizations requiring access to NRCclassified information. 

5. The number of annual respondents: 

16. 

6. The number of hours needed 

annually to complete the requirement or 

request: 1,087 hours (938 hours 

reporting plus 149 hours 

recordkeeping). 

7. Abstract: NRC-regulated facilities 

and other organizations are required to 

provide information and maintain 

records to ensure that an adequate level 

of protection is provided to NRCclassified information and material. 

Submit, by May 24, 2010, comments 

that address the following questions: 

1. Is the proposed collection of 

information necessary for the NRC to 

properly perform its functions? Does the 

information have practical utility? 

2. Is the burden estimate accurate? 

3. Is there a way to enhance the 

quality, utility, and clarity of the 

information to be collected? 

4. How can the burden of the 

information collection be minimized, 

including the use of automated 

collection techniques or other forms of 

information technology? 

A copy of the draft supporting 

statement may be viewed free of charge 

at the NRC Public Document Room, One 

White Flint North, 11555 Rockville 

Pike, Room O–1 F21, Rockville, MD 

20852. OMB clearance requests are 

available at the NRC worldwide Web 

site: http://www.nrc.gov/public-involve/ 

doc-comment/omb/index.html. The 

document will be available on the NRC 

home page site for 60 days after the 

signature date of this notice. Comments 

submitted in writing or in electronic 

form will be made available for public 

inspection. Because your comments will 

not be edited to remove any identifying 

or contact information, the NRC 

cautions you against including any 

information in your submission that you 

do not want to be publicly disclosed. 

Comments submitted should reference 

Docket No. NRC–2010–0104. You may 

submit your comments by any of the 

following methods. Electronic 

comments: Go to http:// 

www.regulations.gov and search for 

Docket No. NRC–2010–0104. Mail 

comments to NRC Clearance Officer, 

Tremaine Donnell (T–5 F53), U.S. 

Nuclear Regulatory Commission, 

Washington, DC 20555–0001. Questions 

about the information collection 

requirements may be directed to the 

NRC Clearance Officer, Tremaine 

Donnell (T–5 F53), U.S. Nuclear 

Regulatory Commission, Washington, 

DC 20555–0001, by telephone at 301– 

415–6258, or by e-mail to 

INFOCOLLECTS.Resource@NRC.GOV. 

Dated at Rockville, Maryland, this 17th day 

of March, 2010. 


srobinson on DSKHWCL6B1PROD with NOTICES