Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78481 

TA–908) in a prominent place on the 

cover page, the first page, or both. (See 

Handbook for Electronic Filing 

Procedures, http://www.usitc.gov/

secretary/fed_reg_notices/rules/

handbook_on_electronic_filing.pdf). 

Persons with questions regarding filing 

should contact the Secretary at (202) 

205–2000. 

Any person desiring to submit a 

document to the Commission in 

confidence must request confidential 

treatment. All such requests should be 

directed to the Secretary to the 

Commission and must include a full 

statement of the reasons why the 

Commission should grant such 

treatment. See 19 CFR 201.6. Documents 

for which confidential treatment by the 

Commission is properly sought will be 

treated accordingly. A redacted nonconfidential version of the document 

must also be filed simultaneously with 

any confidential filing. All nonconfidential written submissions will be 

available for public inspection at the 

Office of the Secretary and on EDIS. 

This action is taken under the 

authority of section 337 of the Tariff Act 

of 1930, as amended (19 U.S.C. 1337), 

and of sections 201.10 and 210.50 of the 

Commission’s Rules of Practice and 

Procedure (19 CFR 201.10, 210.50). 

By order of the Commission. 

Issued: December 19, 2014. 

Lisa R. Barton, 

Secretary to the Commission. 

[FR Doc. 2014–30248 Filed 12–29–14; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Community Oriented Policing 

Services; Public Meetings With 

Members of the Research Community, 

Subject-Matter Experts and the Public 

To Discuss Topics Relating to 

Policing; Executive Order— 

Establishment of the President’s Task 

Force on 21st Century Policing 

AGENCY: Community Oriented Policing 

Services, Justice. 

ACTION: Notice of meeting. 

SUMMARY: On December 18, 2014, 

President Barack Obama signed an 

Executive Order titled ‘‘Establishment of 

the President’s Task Force on 21st 

Century Policing’’ establishing the 

President’s Task Force on 21st Century 

Policing (‘‘Task Force’’). The Task Force 

seeks to identify best practices and 

make recommendations to the President 

on how policing practices can promote 

effective crime reduction while building 

public trust and examine, among other 

issues, how to foster strong, 

collaborative relationships between 

local law enforcement and the 

communities they protect. The Task 

Force will be holding its first public 

meeting. 

The meeting agenda is as follows: 

Call to Order 

Invited witness testimony 

Break 

Discussion 

DATES: The meeting date is: January 13, 

2015, 9:00 a.m. to 3:00 p.m., 

Washington, DC. 

ADDRESSES: The meeting location is 

Newseum, 555 Pennsylvania Avenue 

NW., Washington, DC 20001. The public 

is invited to submit written comments 

via U.S. Mail to: President’s Task Force 

on Policing in the 21st Century, Office 

of Community Oriented Policing 

Services, U.S. Department of Justice, 

145 N Street NE., 11th Floor, 

Washington, DC 20530. 

FOR FURTHER INFORMATION CONTACT: 

Director, Ronald L. Davis, 202–514– 

4229 or PolicingTaskForce@usdoj.gov. 

Address all comments concerning this 

notice to PolicingTaskForce@usdoj.gov. 

SUPPLEMENTARY INFORMATION: The 

meeting is open to the public with 

limited seating. Time will be allocated 

for hearing public comments. 

Depending on the number of persons 

wishing to comment and time available, 

the time for individual oral comments 

may be limited. 

Electronic Access and Filing Addresses 

The Task Force is interested in 

receiving written comments including 

proposed recommendations from 

individuals, groups, advocacy 

organizations, and professional 

communities. Additional information 

on how to provide your comments will 

be posted to www.cops.usdoj.gov. 

Additional information (viewing, 

access, materials, etc.) for the public 

meeting will be posted at 

www.cops.usdoj.gov. 

Melanca Clark, 

Chief of Staff. 

[FR Doc. 2014–30456 Filed 12–29–14; 8:45 a.m.] 

BILLING CODE P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Proposed Exemptions From Certain 

Prohibited Transaction Restrictions 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of proposed exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (ERISA or the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). This notice includes the 

following proposed exemptions: 

D–11770, Teamsters Union Local No. 

727 Pension Fund; L–11794, Local 268, 

Sheet Metal Workers International 

Association, AFL–CIO; and D–11821, 

EXCO Resources, Inc. 401(k) Plan. 

DATES: All interested persons are invited 

to submit written comments or requests 

for a hearing on the pending 

exemptions, unless otherwise stated in 

the Notice of Proposed Exemption, 

within 45 days from the date of 

publication of this Federal Register 

Notice. 

ADDRESSES: Comments and requests for 

a hearing should state: (1) The name, 

address, and telephone number of the 

person making the comment or request, 

and (2) the nature of the person’s 

interest in the exemption and the 

manner in which the person would be 

adversely affected by the exemption. A 

request for a hearing must also state the 

issues to be addressed and include a 

general description of the evidence to be 

presented at the hearing. 

All written comments and requests for 

a hearing (at least three copies) should 

be sent to the Employee Benefits 

Security Administration (EBSA), Office 

of Exemption Determinations, Room 

N–5700, U.S. Department of Labor, 200 

Constitution Avenue NW., Washington, 

DC 20210. Attention: Application No. 

___, stated in each Notice of Proposed 

Exemption. Interested persons are also 

invited to submit comments and/or 

hearing requests to EBSA via email or 

FAX. Any such comments or requests 

should be sent either by email to: 

moffitt.betty@dol.gov, or by FAX to 

(202) 219–0204 by the end of the 

scheduled comment period. The 

applications for exemption and the 

comments received will be available for 

public inspection in the Public 

Documents Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue NW., 

Washington, DC 20210. 

Warning: All comments will be made 

available to the public. Do not include 

any personally identifiable information 

(such as Social Security number, name, 

address, or other contact information) or 

confidential business information that 

mstockstill on DSK4VPTVN1PROD with NOTICES

78482 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

1The Department has considered exemption 

applications received prior to December 27, 2011 

under the exemption procedures set forth in 29 CFR 

part 2570, subpart B (55 FR 32836, 32847, August 

10, 1990). 2For purposes of this proposed exemption, 

references to section 406 of ERISA should be read 

to refer to the corresponding provisions of section 

4975 of the Code as well. 

you do not want publicly disclosed. All 

comments may be posted on the Internet 

and can be retrieved by most Internet 

search engines. 

SUPPLEMENTARY INFORMATION: 

Notice to Interested Persons 

Notice of the proposed exemptions 

will be provided to all interested 

persons in the manner agreed upon by 

the applicant and the Department 

within 15 days of the date of publication 

in the Federal Register. Such notice 

shall include a copy of the notice of 

proposed exemption as published in the 

Federal Register and shall inform 

interested persons of their right to 

comment and to request a hearing 

(where appropriate). 

The proposed exemptions were 

requested in applications filed pursuant 

to section 408(a) of the Act and/or 

section 4975(c)(2) of the Code, and in 

accordance with procedures set forth in 

29 CFR part 2570, subpart B (76 FR 

66637, 66644, October 27, 2011).1

Effective December 31, 1978, section 

102 of Reorganization Plan No. 4 of 

1978, 5 U.S.C. App. 1 (1996), transferred 

the authority of the Secretary of the 

Treasury to issue exemptions of the type 

requested to the Secretary of Labor. 

Therefore, these notices of proposed 

exemption are issued solely by the 

Department. 

The applications contain 

representations with regard to the 

proposed exemptions which are 

summarized below. Interested persons 

are referred to the applications on file 

with the Department for a complete 

statement of the facts and 

representations. 

Teamsters Union Local No. 727 Pension 

Fund (the Fund) Located in Chicago, 

Illinois 

[Application No. D–11770] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA) and 

section 4975(c)(2) of the Internal 

Revenue Code of 1986, as amended (the 

Code), and in accordance with the 

procedures set forth in 29 CFR part 

2570, subpart B (55 FR 32836, 32847, 

August 10, 1990).2

Section I. Covered Transactions 

If the proposed exemption is granted, 

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

and (D) of ERISA, and the sanctions 

resulting from the application of section 

4975 of the Code, by reason of section 

4975(c)(1)(A) and (D) of the Code, shall 

not apply to: (1) The sale (the Sale) by 

the Fund of three separate 25 percent 

interests in 1300 Higgins Road LLC (the 

LLC), a limited liability company of 

which the Fund is the sole member 

(each, an LLC Interest, and collectively, 

the LLC Interests), respectively, to each 

of Local 700, Teamsters Local Union No. 

727 (Local 727), and the Teamsters Joint 

Council No. 25 (the Joint Council, and 

together with Local 700 and Local 727, 

the Unions); and (2) the subsequent Sale 

of the Fund’s remaining 25 percent LLC 

interest (the Fund’s LLC Interest) to the 

Unions due to exercise by the Fund of 

a put right to sell the Fund’s LLC 

Interest to the Unions (the Put Right), 

provided that the conditions in Section 

II are satisfied. 

Section II. Conditions for Relief 

(a) The Fund receives from each of the 

Unions, as consideration for the Sale of 

the LLC Interests, a cash amount equal 

to 25 percent of the greater of: (1) The 

original purchase price paid by the 

Fund, or (2) the fair market value of the 

O’Hare Corporate Center in Park Ridge, 

Illinois (the Property), determined on 

the date of the Sale by an Independent 

Appraiser; 

(b) The Fund, upon exercise of the Put 

Right, receives from the Unions a onetime aggregate cash amount equal to 25 

percent of the greater of: (1) The original 

purchase price paid by the Fund, or (2) 

the fair market value of the Property on 

the date of exercise of the Put Right, as 

determined by an Independent 

Appraiser; 

(c) The Sale and the exercise of the 

Put Right are each one-time transactions 

for cash; 

(d) The Independent Fiduciary: (1) 

Analyzes and approves the terms of the 

Sale and Put Right; (2) ensures that the 

terms of the Sale and Put Right and the 

conditions of the exemption are met; (3) 

has sole responsibility for the exercise 

of the Put Right on behalf of the Fund; 

(4) has sole responsibility and authority 

for the management and operation of the 

LLC and the Property; and (5) selects the 

Independent Appraiser and verifies the 

methodology used by the Independent 

Appraiser in determining the fair market 

value of the Property for all purposes 

under this proposed exemption; 

(e) An Independent Appraiser, who is 

selected by the Independent Fiduciary, 

establishes the fair market value of the 

Property for purposes of the Sale and 

the Put Right, using a methodology 

approved by the Independent Fiduciary; 

(f) The Fund does not pay any 

commissions, costs or other expenses in 

connection with the Sale and Put Right, 

other than the legal fees of the Fund’s 

counsel, the services of the Independent 

Fiduciary and the services of the 

Independent Appraiser; 

(g) Since its acquisition of the 

Property, the Fund’s ownership interest 

in the Property has constituted five 

percent or less of the Fund’s assets, and 

immediately after the Sale the Fund’s 

ownership interest in the Property will 

be less than two percent of the Fund’s 

assets; 

(h) No member of the LLC shall, 

directly or indirectly, without the 

approval of the Independent Fiduciary: 

(1) Act for or on behalf of the LLC; (2) 

transact any business in the name of the 

LLC; or (3) sign documents for or 

otherwise bind the LLC; 

(i) No LLC Interests shall be 

transferable by the Unions prior to the 

exercise of the Put Right by the Fund, 

without the approval of the Independent 

Fiduciary; 

(j) Any trustee of the Fund must 

recuse himself or herself from any vote 

regarding the termination or removal of 

the Independent Fiduciary for the Fund 

if he or she is an officer (or a relative 

of an officer as defined in Section III) of 

any of the Unions; 

(k) The terms and conditions of the 

Sale and the Put Right are at least as 

favorable to the Fund as those 

obtainable in an arm’s-length 

transaction with an unrelated third 

party; and 

(l) The Sale or Put Right is not part 

of an arrangement, agreement, or 

understanding designed to benefit a 

party in interest with respect to the 

Fund. 

Section III. Definitions 

(a) The term ‘‘relative’’ is a relative as 

that term is defined in section 3(15) of 

ERISA, and also includes a brother, 

sister, and a spouse of a brother or 

sister; 

(b) The term ‘‘Independent Fiduciary’’ 

means Intercontinental Real Estate 

Corporation (Intercontinental) or 

another fiduciary of the Plan who (1) is 

independent or unrelated to the Unions 

and their affiliates and has the 

appropriate training, experience, and 

facilities to act on behalf of the Plan 

regarding the covered transactions in 

accordance with the fiduciary duties 

and responsibilities prescribed by 

ERISA (including, if necessary, the 

responsibility to seek the counsel of 

knowledgeable advisors to assist in its 

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Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78483 

3The Summary of Facts and Representations is 

based on the Applicant’s representations and does 

not reflect the views of the Department, unless 

otherwise indicated. 

4These amounts were reported on the Form 5500 

for the Fund’s plan year ending February 28, 2014. 

5The current value of the Property, as reported 

in an appraisal performed by US Realty 

Consultants, Inc. on behalf of the Fund for 

Intercontinental, is $9,100,000 as of May 30, 2013. 

6As of February 2, 2010, 76 percent of the net 

rentable area of the Property was leased. 

7The Applicant represents that it entered into the 

Leases with the belief that exemptive relief for such 

transactions is provided by PTE 76–1, 41 FR 12740, 

March 25, 1976, as corrected at 41 FR 16620, April 

20, 1976, and PTE 77–10, 42 FR 33918, July 1, 1977. 

The Department is not expressing a view herein 

whether the Applicant has complied with the 

conditions of such class exemptions. 

compliance with ERISA), and (2) if 

relevant, succeeds Intercontinental in its 

capacity as Fiduciary to the Plans in 

connection with the transactions 

described herein. The Independent 

Fiduciary will not be deemed to be 

independent of and unrelated to the 

Unions and their affiliates if: (i) Such 

Independent Fiduciary directly or 

indirectly controls, is controlled by or is 

under common control, with the Unions 

and their affiliates; (ii) such 

Independent Fiduciary directly or 

indirectly receives any compensation or 

other consideration in connection with 

any transaction described in this 

proposed exemption other than for 

acting as independent fiduciary in 

connection with the transactions 

described herein, provided that the 

amount or payment of such 

compensation is not contingent upon, or 

in any way affected by, the Independent 

Fiduciary’s ultimate decision; and (iii) 

the annual gross revenue received by 

the Independent Fiduciary, during any 

year of its engagement, from the Unions 

and their affiliates, exceeds two percent 

(2%) of the Independent Fiduciary’s 

annual gross revenue from all sources 

(for federal income tax purposes) for its 

prior tax year; 

(c) The term ‘‘Independent Appraiser’’ 

means an individual or entity meeting 

the definition of a ‘‘Qualified 

Independent Appraiser’’ under 29 CFR 

2570.31(i) retained to determine, on 

behalf of the Plans, the fair market value 

of the Property as of the date of the Sale, 

and may be the Independent Fiduciary, 

provided it satisfies the definition of 

Independent Appraiser herein; 

(d) The term ‘‘affiliate’’ of a person 

includes: 

(1) Any person directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with, the person; 

(2) Any officer, director, employee, 

relative, or partner of the person; or 

(3) Any corporation or partnership of 

which such person is an officer; and 

(e) The term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual. 

Effective Dates: The proposed 

exemption, if granted, will be effective 

as of the date that a final notice of 

granted exemption is published in the 

Federal Register. 

Summary of Facts and 

Representations 3

Background 

1. The Teamsters Union Local No. 727 

Pension Fund (the Fund) is a defined 

benefit pension plan established under 

a Declaration of Trust between the 

International Brotherhood of Teamsters 

Union Local No. 727 (Local 727) and 

several contributing employers. The 

Fund is established and administered 

pursuant to the provisions of section 

302(c)(5) of the Labor Management 

Relations Act of 1947. 

The Fund is managed and 

administered by a Board of Trustees (the 

Trustees or the Applicant) that is 

comprised of four Trustees who are 

selected by employers who are parties to 

collective bargaining agreements with 

Local 727 and four Trustees who are 

selected by Local 727. The Applicant 

states that the Fund covers eligible 

members of Local 727 and certain 

employees of Local 727, Teamsters 

Local Union No. 700 (Local 700) and 

Teamsters Joint Council No. 25 (Joint 

Council) (collectively, the Unions). As 

of February 28, 2014, the Applicant 

notes, the Fund had total assets of 

approximately $239,677,146 and net 

assets of $238,141,734.4

2. According to the Applicant, on 

February 26, 2010, the Fund completed 

its purchase of a building and a parcel 

of improved real estate located at 1300 

Higgins Road in Park Ridge, Illinois (the 

Property) from Duke Realty, an 

unaffiliated third party, for a purchase 

price of $7,405,000.5 The Applicant 

represents that the Property comprises 

approximately two acres and the 

building contains 95,600 square feet of 

net rentable area office space known as 

‘‘the O’Hare Corporate Center.’’ 

3. The Applicant represents that the 

purchase of the Property was based on 

a written recommendation from 

Intercontinental Real Estate Corporation 

(Intercontinental), a real estate 

consulting company based in Boston, 

Massachusetts. The Applicant states 

that Intercontinental is an SECregistered investment adviser with $2.5 

billion in assets under management, and 

that Intercontinental has developed, 

built, managed and owned $6 billion of 

commercial real estate. The 

recommendation was included in an 

investment management agreement 

prepared by Intercontinental for the 

Fund (the Management Agreement), 

dated February 2, 2010. The 

Management Agreement included a 

financial and strategic analysis of the 

Property and noted that the Property 

was well-maintained and could 

accommodate both small and mid-sized 

tenants, which make up the bulk of the 

demand in the O’Hare suburban 

submarket of Chicago where the 

Property is located. The Management 

Agreement also included a lease 

expiration schedule for the Property, a 

schedule of comparable sales and a 

schedule of comparable leases. 

4. The Applicant states that, in 

connection with the Fund’s purchase of 

the Property, Intercontinental formed 

the 1300 Higgins Road LLC (the LLC) to 

hold the Property after its purchase by 

the Fund. Accordingly, upon 

completing its purchase, the Fund 

transferred ownership of the Property to 

the LLC and the Fund became the LLC’s 

sole member (an LLC Member). 

5. The Applicant represents that 

Intercontinental has made leasing 

decisions on behalf of the LLC with 

respect to the Property since its 

acquisition. In its Management 

Agreement, Intercontinental concluded 

that leasing space to the Unions would, 

among other things, stabilize the 

building at the time of economic 

uncertainty.6 Accordingly, the 

Applicant represents that on July 1, 

2010, the Fund entered into a second 

investment management agreement with 

Intercontinental (the AMA), with 

respect to the leasing of the property. 

6. According to the Applicant, 

Intercontinental executed leases with 

respect to the Property (the Leases) 

with: Local 700, effective May 1, 2010; 

Joint Council, effective April 1, 2010; 

and Local 727, effective May 1, 2011.7

The Applicant represents that 

Intercontinental has had ongoing 

responsibilities with respect to the 

Property since February 2010 including 

executing the Leases and making 

subsequent decisions with respect to the 

Leases on behalf of the LLC. 

Request for Relief 

7. The Applicant represents that the 

Fund desires to sell a 25 percent interest 

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78484 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

8See 29 CFR 2570.31(j). 

in the LLC (an LLC Interest) to each of 

the Unions for an aggregate amount 

equal to 75 percent of the LLC in a onetime sale in exchange for cash (the Sale). 

The Applicant states that, in exchange 

for the LLC Interests, the Fund will 

receive an amount from each Union that 

is equal to 25 percent of the greater of: 

(1) The original purchase price paid by 

the Fund, or (2) the fair market value of 

the Property determined on the date of 

the Sale by an independent appraiser 

(Independent Appraiser). As discussed 

below, following any Sale, the 

Independent Fiduciary acting on behalf 

of the Fund will retain full and 

complete control over the management 

and operation of the LLC and the 

Property. 

8. The Applicant represents that the 

Fund wishes to engage in the Sale 

because the Fund desires to increase the 

diversity of its investments by reducing 

its investment in the O’Hare Corporate 

Center. Furthermore, the Fund believes 

that the Sale will be in the interest of 

its participants and beneficiaries 

because the Unions, as tenants, would 

be more likely to continue their 

occupancy if they also owned an 

interest in the Property (thus increasing 

the likelihood of the long-term success 

of the Fund’s investment in the 

Property), and will have a vested 

interest in preserving the value of the 

O’Hare Corporate Center. 

9. The Applicant represents that 

Intercontinental will act as the 

independent fiduciary (Independent 

Fiduciary) with respect to the Sale and 

will manage the operation of the LLC on 

behalf of the Fund, pursuant to the 

Amended and Restated Operating 

Agreement for the LLC (the Operating 

Agreement) following the Sale. The 

Applicant represents that no member of 

the LLC will, directly or indirectly, act 

for or on behalf of the LLC, transact any 

business in the name of the LLC or sign 

documents for or otherwise bind the 

LLC without the approval of the 

Independent Fiduciary. The Applicant 

represents that the Operating 

Agreementprovides that the 

Independent Fiduciary will have the 

sole authority to cause or permit the 

LLC to take certain actions that 

generally include (but are not limited to) 

borrowing money or amending the 

terms and conditions of any financing, 

granting any security interest affecting 

the Property, selling any portion of the 

Property (including any other sale of the 

Property in connection with the 

enforcement of the Fund’s rights under 

the Operating Agreement), entering into 

or amending any contract for the design, 

construction, management or leasing of 

the Property, making alterations to the 

Property, dissolving the LLC, and 

entering into any merger, consolidation 

or restructuring of the LLC. 

10. The Operating Agreement also 

provides the Fund with the right to 

require each of the Unions to purchase 

the Fund’s remaining LLC Interest (the 

Put Right) for an aggregate cash 

purchase price equal to 25 percent of 

the greater of: (a) The price the Fund 

originally paid for the Property; or (b) 

the current fair market value of the 

Property. The Put Right will be 

exercisable at the sole election of the 

Independent Fiduciary upon delivery of 

notice of such election to each of the 

Unions. For purposes of determining the 

price of the Put Right, the Applicant 

represents that the Independent 

Fiduciary will retain an Independent 

Appraiser to value the Property within 

10 days of delivering notice of election 

in order to prepare an appraisal report. 

In addition, the Applicant represents 

that the Independent Fiduciary will be 

responsible for ensuring that the 

methodology used by such independent 

appraiser is properly applied. The 

Applicant further represents that the 

exercise price of the Put Right will be 

determined without a minority 

ownership discount for any illiquidity 

of the Fund’s LLC Interest. Pursuant to 

the terms of the Operating Agreement, 

the purchase of the Fund’s LLC Interest 

by the Unions in connection with the 

exercise of the Put Right will close on 

the later of: (1) 30 business days after 

delivery of notice; or (2) five business 

days after the Independent Appraiser 

determines the fair market value of the 

Property. The Applicant represents that, 

prior to the exercise of the Put Right, the 

LLC Interests held by the Unions will 

not be transferable, without the 

approval of the Independent Fiduciary. 

11. The Applicant states that the 

initial Sale and subsequent Sale upon 

exercise of the Put Right would violate 

sections 406(a)(1)(A) and 406(a)(1)(D) of 

ERISA. Section 406(a)(1)(A) of ERISA 

prohibits a fiduciary of a plan from 

causing the plan to engage in a 

transaction, if he or she knows or 

should know that such transaction 

constitutes the sale or exchange or 

leasing of property between the plan 

and a party in interest with respect to 

the plan. Section 406(a)(1)(D) of ERISA 

prohibits a fiduciary of a plan from 

causing the plan to engage in a 

transaction, if he or she knows or 

should know that such transaction 

constitutes a transfer of assets of the 

plan to a party in interest. According to 

the Applicant, the Sale of the LLC 

Interests to the Unions and the exercise 

of the Put Right by the Independent 

Fiduciary on behalf of the Fund 

whereby the Unions would purchase the 

Fund’s LLC Interest, would constitute 

violations of section 406(a)(1)(A) and 

(D) of ERISA, because the Unions are 

parties in interest with respect to the 

Fund under section 3(14)(D) of ERISA. 

Accordingly, the Applicant requests 

exemptive relief from sections 

406(a)(1)(A) and 406(a)(1)(D) of ERISA 

for the initial Sale of the LLC Interests 

by the Fund to each of the Unions and 

for the subsequent Sale of the Fund’s 

LLC Interest to the Unions upon the 

exercise of the Put Right. 

The Independent Fiduciary 

12. The Applicant represents that 

Intercontinental has been continuously 

involved in representing the Fund as its 

Independent Fiduciary in connection 

with the Property. In this regard, 

Intercontinental represents that it meets 

the Department’s definition of a 

‘‘qualified independent fiduciary’’ for 

purposes of the covered transactions.8

Intercontinental explains that it has the 

training, experience, and facilities to act 

on behalf of the Fund regarding the 

Sale, the Put Right, and the management 

of the LLC and the Property. As 

described above, Intercontinental is a 

real estate consulting company and 

SEC-registered investment adviser with 

$2.5 billion in assets under 

management, that has developed, built, 

managed and owned approximately $6 

billion of commercial real estate. 

Intercontinental also represents that it is 

not an affiliate of, or related to, the 

entities involved in the covered 

transactions, and that it has received 

during each federal tax year of 

Intercontinental’s engagement with 

respect to the covered transactions less 

than 2 percent of Intercontinental’s 

annual revenue, based on the prior tax 

year, from the parties in interest and 

their affiliates. Intercontinental 

represents that, with respect to the 

covered transactions, it acts solely for 

the Fund and the Fund pays 

Intercontinental’s fees. 

13. Intercontinental also represents 

that it understands it is required, as the 

Independent Fiduciary, to conform its 

conduct to the duties and 

responsibilities of a fiduciary under 

ERISA, and understands the liabilities 

imposed under ERISA for its failure to 

do so. Intercontinental represents that it 

will engage the law firms of Mayer 

Brown LLP and Bradley & Associates to 

provide advice during the course of the 

covered transactions. 

14. The Applicant represents that 

Intercontinental will analyze and 

approve the terms of the Sale and Put 

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Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78485 

9See 29 CFR 2570.31(i). 

10The calculations are based on the information 

reported on the Form 5500 for the plan year ending 

February 28, 2014. 

Right; monitor and ensure that the terms 

of such covered transactions and the 

conditions of the exemption have been 

met; have the responsibility for the 

exercise of the Put Right on behalf of the 

Fund, in its sole discretion; and manage 

the operation of the LLC and the 

Property. Furthermore, the Applicant 

notes, Intercontinental will select the 

Independent Appraiser, and will verify 

the methodology used by the 

Independent Appraiser in establishing 

the fair market value of the Property. 

The Independent Appraiser 

15. Intercontinental represents that it 

retained US Realty Consultants, Inc. (US 

Realty) to serve as the Independent 

Appraiser and to prepare a qualified 

appraisal report for use in determining 

the fair market value of the Property for 

all purposes of the Sale and Put Right. 

The Applicant represents that 

Intercontinental will ensure that the 

methodology used by the Independent 

Appraiser is properly applied in 

determining the fair market value of the 

Property. 

16. The Applicant represents that US 

Realty satisfies the Department’s 

definition of a ‘‘qualified independent 

appraiser’’ for purposes of the covered 

transactions.9 US Realty represents that 

it had no prior relationship with the 

Unions or the Fund. Furthermore, US 

Realty states that its fee of $5,250, as 

paid by the LLC, represents 1.4% of the 

gross billings of the Chicago office, 

which is responsible for performing the 

appraisal of the Property. 

US Realty represents that Michael 

Maslanka and Noah McCloskey 

conducted the valuation of the Property. 

US Realty represents that Mr. Maslanka, 

Director for the Central Region, has 35 

years of experience in real estate 

analysis, and has valued billions of 

dollars of real property, including 

commercial, residential, and special 

purpose properties such as theaters and 

railroad property. US Realty represents 

that Mr. Maslanka is a General Real 

Estate Appraiser certified in Illinois, 

Michigan, and Indiana and holds a 

‘‘Member of Appraisal Institute’’ 

designation. US Realty represents that 

Mr. McCloskey has valued several 

billions of dollars of real property, 

including office, retail and industrial 

properties. US Realty represents that 

Mr. McCloskey is a General Real Estate 

Appraiser certified in Illinois, Indiana, 

Michigan, and Colorado. 

17. In its appraisal report (the 

Appraisal), US Realty concluded that 

the market value of the Property, as of 

May 30, 2013, is $9,100,000. US Realty 

employed an income capitalization 

approach and a sales comparison 

approach to derive this market value. 

Both income and expense estimates 

were based upon an analysis of historic 

data provided from the subject in 

addition to data from comparable office 

properties. As detailed in the Appraisal, 

the discount rate and capitalization rate 

for the Property were within the range 

of the investment criteria of investors as 

well as comparable sales. These rates 

best emulate investor decision-making 

in analyzing factors such as the present 

value of the anticipated lease-up of 

vacant space, the implicit present value 

of above-market contract rent, the 

Property’s tenant rollover profile, and 

other factors affecting the income stream 

over a period of time. The sales 

comparisons approach reflects the value 

of the Property based on an analysis of 

recent sales of similarly improved 

properties. Because the Property 

represents an investment capable of 

attracting investment capital, US Realty 

relied primarily on the value produced 

by the income capitalization approach, 

with the sales comparison approach 

providing additional support for the 

conclusion. 

18. According to the Applicant, as of 

February 28, 2014, the Fund’s interest in 

the LLC represented approximately 3.7 

percent of the total Fund assets. After 

the Sale, the Fund’s remaining interest 

in the LLC would represent 

approximately 0.9 percent of the Fund’s 

total assets.10

Statutory Findings 

19. The Applicant represents that the 

proposed exemption for the Sale would 

be administratively feasible because it is 

a one-time transaction for cash. 

Furthermore, the Applicant represents 

that an Independent Fiduciary will act 

on behalf of the Fund in connection 

with the approval of the Sale, the 

exercise of the Put Right, and the 

management of the LLC and the 

Property, thereby mitigating potential 

conflicts of interest and obviating the 

need for continued Departmental 

oversight. 

20. The Applicant represents that the 

proposed exemption for the Sale is in 

the interest of the Fund and its 

participants and beneficiaries because 

the Sale will allow the Fund to diversify 

its investments by reducing its 

ownership stake in the LLC. 

Furthermore, the Applicant represents 

that the Unions, as owners of an interest 

in the Property, would be more likely to 

maintain their Leases, thus increasing 

the likelihood of long-term success of 

the Fund’s investment in the Property. 

Also, due to the solvency of the Unions, 

the Applicant represents that the Fund 

has substantial assurance that the 

parties involved will be suitable 

company-owners with a vested interest 

in preserving the Property’s value. 

Finally, the Applicant states that the 

Fund will not be responsible for paying 

any commissions, costs or other 

expenses in connection with the Sale, or 

the exercise of the Put Right, other than 

the legal fees of the Fund’s counsel, the 

services of the Independent Fiduciary 

and the services of the Independent 

Appraiser. 

21. The Applicant represents that the 

proposed exemption for the Sale is 

protective of the rights of Fund 

participants and beneficiaries, because 

the conditions for the exemption require 

that Intercontinental, as the 

Independent Fiduciary for the Fund, 

will have the sole discretion to 

determine whether the Fund proceeds 

with the Sale and whether the Fund will 

exercise the Put Right. In such event, 

the Fund will receive the fair market 

value for its LLC Interest, determined by 

the Independent Appraiser in an 

appraisal and verified by the 

Independent Fiduciary. 

The Applicant states that the 

Independent Fiduciary will act as the 

manager of the LLC with the sole 

authority to manage its affairs, and will 

retain full and complete control over the 

management and operation of the 

Property. In this regard, the Applicant 

represents that no member of the LLC 

will, directly or indirectly, without the 

approval of the Independent Fiduciary: 

(1) Act for or on behalf of the LLC; (2) 

transact any business in the name of the 

LLC; or (3) sign documents for or 

otherwise bind the LLC. The Applicant 

represents that, prior to the exercise of 

the Put Right, the Unions must seek 

approval from the Independent 

Fiduciary prior to transferring the LLC 

Interests. The Applicant represents 

further that the Independent Fiduciary 

will enforce compliance with all 

conditions and obligations imposed on 

any party dealing with the Fund, ensure 

that the conditions of the proposed 

exemption, if granted, are met, and will 

ensure that the covered transactions 

remain in the interest of the Fund. 

Moreover, any Trustee of the Fund must 

recuse himself or herself from any vote 

regarding the termination or removal of 

the Independent Fiduciary for the Fund 

if he or she is an officer (or a relative 

of an officer) of any of the Unions. 

Finally, since its acquisition of the 

Property, the Applicant notes, the 

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78486 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

11The Department considers exemption 

applications filed prior to December 27, 2011 under 

the Prohibited Transaction Procedures regulation 

set forth in 29 CFR part 2570, subpart B (55 FR 

32836, 32847, August 10, 1990). 

Fund’s ownership interest in the 

Property has constituted five percent or 

less of the Fund’s assets, and 

immediately after the Sale the Fund’s 

ownership interest in the Property will 

be less than two percent of the Fund’s 

assets. 

Summary 

22. In summary, the Applicant 

represents that the proposed exemption, 

if granted, satisfies the statutory criteria 

of section 408(a) of ERISA, for the 

reasons described above, including the 

following: 

(a) The Fund will receive from each 

of the Unions as consideration for the 

Sale of the LLC Interests, a cash amount 

equal to 25 percent of the greater of: (1) 

The original purchase price paid by the 

Fund, or (2) the fair market value of the 

O’Hare Corporate Center in Park Ridge, 

Illinois (the Property), determined on 

the date of the Sale by an Independent 

Appraiser; 

(b) The Fund, upon exercise of the Put 

Right, will receive from the Unions a 

one-time aggregate cash amount equal to 

25 percent of the greater of: (1) The 

original purchase price paid by the 

Fund, or (2) the fair market value of the 

Property on the date of exercise of the 

Put Right, as determined by an 

Independent Appraiser; 

(c) The Sale and the exercise of the 

Put Right will each be one-time 

transactions for cash; 

(d) The Independent Fiduciary will: 

(1) Analyze and approve the terms of 

the Sale and Put Right; (2) ensure that 

the terms of the Sale and Put Right and 

the conditions of the exemption are met; 

(3) have sole responsibility for the 

exercise of the Put Right on behalf of the 

Fund; (4) have sole responsibility and 

authority for the management and the 

operation of the LLC and the Property; 

and (5) select the Independent 

Appraiser and verify the methodology 

used by the Independent Appraiser in 

determining the fair market value of the 

Property for all purposes under this 

proposed exemption; 

(e) An Independent Appraiser, who is 

selected by the Independent Fiduciary, 

will establish the fair market value of 

the Property for purposes of the Sale 

and the Put Right, using a methodology 

approved by the Independent Fiduciary; 

(f) The Fund will not pay any 

commissions, costs or other expenses in 

connection with the Sale and Put Right, 

other than the legal fees of the Fund’s 

counsel, the services of the Independent 

Fiduciary and the services of the 

Independent Appraiser; 

(g) Since its acquisition of the 

Property, the Fund’s ownership interest 

in the Property has constituted five 

percent or less of the Fund’s assets, and 

immediately after the Sale the Fund’s 

ownership interest in the Property will 

be less than two percent of the Fund’s 

assets; 

(h) No member of the LLC will, 

directly or indirectly, without the 

approval of the Independent Fiduciary: 

(1) Act for or on behalf of the LLC; (2) 

transact any business in the name of the 

LLC; or (3) sign documents for or 

otherwise bind the LLC; and 

(i) No LLC Interests will be 

transferable by the Unions prior to the 

exercise of the Put Right by the Fund, 

without the approval of the Independent 

Fiduciary. 

Notice to Interested Persons 

Notice of the proposed exemption 

will be provided to all interested 

persons within 15 days of the 

publication of the notice of proposed 

exemption in the Federal Register, by 

first class U.S. mail to the last known 

address of all such Participants. Such 

notice will contain a copy of the notice 

of proposed exemption, as published in 

the Federal Register, and a 

supplemental statement, as required 

pursuant to 29 CFR 2570.43(b)(2).11 The 

supplemental statement will inform 

interested persons of their right to 

comment on and to request a hearing 

with respect to the pending exemption. 

Written comments and hearing requests 

are due within 45 days of the 

publication of the notice of proposed 

exemption in the Federal Register. All 

comments will be made available to the 

public. 

Warning: Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the Internet and can be 

retrieved by most Internet search 

engines. 

FOR FURTHER INFORMATION CONTACT: 

Scott Ness of the Department, telephone 

(202) 693–8561. (This is not a toll-free 

number.) 

Local 268, Sheet Metal Workers 

International Association, AFL–CIO 

(the Union) Located in Caseyville, IL 

[Application No. L–11794] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the 

Employee Retirement Income Security 

Act of 1974, as amended (ERISA or the 

Act), and in accordance with the 

procedures set forth in 29 CFR part 

2570, subpart B (76 FR 66637, 66644, 

October 27, 2011). If the proposed 

exemption is granted, the restrictions of 

sections 406(a)(1)(A), 406(a)(1)(D), 

406(b)(1), and 406(b)(2) of the Act, shall 

not apply to the sale by the Fund of 

certain improved real property located 

at 2727 N. 89th Street, Caseyville, IL 

62232 (the Building), to the Union (the 

Sale), provided that the following 

conditions have been met: 

(a) The Sale is a one-time transaction 

for cash; 

(b) At the time of the Sale, the Fund 

receives the greater of either: (1) 

$110,226.48; or (2) the fair market value 

of the Building, as established by a 

qualified independent appraiser (the 

Appraiser), as described in condition 

(c), as of the date of Sale; 

(c) Before the date of Sale, an 

Appraiser who satisfies the 

Department’s definition of ‘‘qualified 

independent appraiser’’ will be retained 

by the Independent Fiduciary on behalf 

of the Fund without any involvement of 

the Union or any other party to the 

covered transactions or any planned 

future transactions, and will conduct a 

full, independent Appraisal (the 

Appraisal) of the Building for purposes 

of the Sale that complies in all respects 

with applicable appraisal standards; 

(d) A qualified independent fiduciary 

(the Independent Fiduciary), acting on 

behalf of the Fund, represents the 

Fund’s interests for all purposes with 

respect to the Sale, and: (1) Determines, 

among other things, that it is in the best 

interest of the Fund to proceed with the 

Sale; and (2) reviews and approves the 

purchase price and methodology used 

by the Appraiser in its Appraisal; 

(e) The Fund pays no fees, 

commissions or other expenses 

associated with the Sale; and 

(f) The terms and conditions of the 

Sale are at least as favorable to the Fund 

as those obtainable in an arm’s-length 

transaction with an unrelated third 

party. 

Summary of Facts and Representations 

Background 

1. Local 268, Sheet Metal Workers 

International Association, AFL–CIO (the 

Applicant or the Union) serves the 

Southern third of the State of Illinois. 

The Union was formed as an 

amalgamation of five smaller local 

unions on May 18, 1939. It is a local 

chapter of the Sheet Metal Workers 

International Association, an 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78487 

12The Applicant states that the Fund 

Coordinator’s duties include serving as an 

instructor for Fund participants and that he receives 

no additional compensation when he is instructing. 

Furthermore, the Applicant represents that the parttime instructors do not work for contributing 

employers at the same time that they are teaching 

classes for the Fund. The Applicant represents that 

it is relying on section 408(b)(2) of the Act in 

connection with the provision of services by 

employees of contributing employers to the Fund, 

and the payment by the Fund of compensation for 

such services. The Department is not expressing a 

view herein as to whether the Fund has satisfied the 

conditions of section 408(b)(2) of the Act with 

respect to the provision of services by such 

employees to the Fund and the payment of 

compensation by the Fund in connection with such 

services. 

organization representing workers in the 

United States, Canada, and Puerto Rico, 

who work in the construction, 

manufacturing, service, railroad and 

shipyard industries. 

2. The Local 268 Joint Apprenticeship 

and Training Fund (the Fund) is a 

jointly administered apprenticeship and 

training fund established under Section 

302(c)(5) of the Taft Hartley Act by the 

Union and the Southern Illinois 

Chapter, Sheet Metal Contractors 

National Association (Association). The 

Fund was established for the purpose of 

supporting a program for the training 

and education of sheet metal 

apprentices, journeymen and other 

individuals designated by the Fund 

trustees (the Trustees). The Fund is used 

to defray the reasonable expenses of the 

apprenticeship and training programs, 

including the costs of the establishment 

and maintenance of apprenticeship and 

training programs, employment of 

sufficient personnel, and administration 

of salaries, supplies, facilities (including 

the leasing or acquisition of real 

property and improvements thereon), 

tools, equipment, textbooks, and other 

instructional materials. 

3. The Applicant represents that the 

current Trustees include employerappointed Trustees, who are unaffiliated 

with the Union, and Union Trustees. 

The paid staff of the Fund includes the 

Fund coordinator (the Fund 

Coordinator), who is employed full time 

by the Fund, and two part-time 

instructors, who also work as hourly 

paid sheet metal workers and are 

employed by contributing employers. 

The Fund Coordinator and these 

instructors are not Trustees.12

4. The Applicant represents that the 

Fund’s offices are located in the current 

union hall (the Union Hall), located at 

2701 N. 89th Street, Caseyville, Illinois 

62232 (Building U). The Applicant 

represents that the Union purchased 

Building U in 1984. In addition to the 

office space, beginning in 1986, the 

Fund maintained classrooms and a shop 

that were also located in Building U. 

Under its current leasing arrangement 

with the Union (the Old Lease), the 

Fund uses 3,800 square feet of Building 

U and pays rent of $312 per month to 

the Union. 

5. The Applicant represents that the 

Trustees expect to expand the Fund’s 

training program to include service 

work, a computer lab for computer 

training, a larger welding lab, and 

additional equipment for training such 

as a press brake. In connection 

therewith, the training program staff has 

recently increased from two to three 

employees. The Applicant represents 

that the Trustees’ plan for the Fund to 

increase training programs requires 

greater space than the current space 

being leased by the Fund from the 

Union in Building U. 

The Sale 

6. The Applicant represents that in 

2010, the Fund purchased the building 

and real property located at 2727 N. 

89th Street (Building A), from an 

unrelated third party at a price of 

$65,000.00. The Applicant represents 

that Building A was purchased as a 

possible future site for the expansion of 

the Fund’s training program. The 

Applicant represents further that 

Building A was originally constructed 

as a three bedroom residential home, 

but it was converted to commercial and 

industrial use, and has 1,776 square 

feet. The Applicant states that Building 

A borders the property of Building U 

and shares a parking lot with Building 

U. The Applicant represents that, since 

purchasing Building A, the Fund has 

spent $16,776.79 to maintain and 

improve Building A, including 

replacing wiring that did not comply 

with the applicable electrical 

regulations and comprised of exposed 

wires, replacing the heating and air 

conditioning system, and installing new 

security doors to secure Building A. The 

Fund has also paid $13,938.76 in real 

estate taxes, $4,027.93 in utilities, and 

$10,483.00 in insurance costs with 

respect to Building A. The Applicant 

states that the total in holding costs and 

capital improvement costs (the Holding 

Costs) incurred by the Fund is 

$45,226.48. Thus, the cost of the Fund’s 

acquisition and holding of Building A 

has been $110,226.48. 

7. The Applicant represents that the 

Fund did not purchase Building A with 

the intent of eventually selling it to the 

Union. Nevertheless, the Applicant 

states that the sale of Building A to the 

Union (the Sale) will provide additional 

liquidity to the Fund and will dispose 

of real property which is no longer 

needed by the Fund. Moreover, the 

Applicant states that the Union would 

use Building A and the land that it sits 

on as a site for a new Union Hall. The 

Applicant represents that the proposed 

price for which the Union will purchase 

Building A from the Fund is equal to the 

greater of: (A) $110,226.48, representing 

the cost of acquisition and Holding 

Costs related to Building A that have 

been incurred by the Fund, or (B) the 

fair market value of Building A, as 

established by a qualified independent 

appraiser (the Appraiser), as of the date 

of Sale. As described in further detail 

below, an Appraiser selected by the 

qualified independent fiduciary (the 

Independent Fiduciary) without any 

assistance from a related party or a party 

to any current or planned future 

transactions with the Union, the Fund, 

or a related party will conduct the 

appraisal (the Appraisal) as of the date 

of Sale. 

8. The Applicant states that, because 

the Union is a party in interest to the 

Fund under section 3(14)(D) of the Act, 

the Sale would constitute a prohibited 

transaction under section 406(a)(1)(A) 

and (D) of the Act. Furthermore, because 

certain officers of the Union are also 

Trustees of the Fund and they may have 

an interest in causing the Fund to 

engage in the transaction with the 

Union, the Sale may also constitute a 

prohibited transaction under section 

406(b)(1) and (2) of the Act. Therefore, 

the Applicant requests an exemption 

from sections 406(a)(1)(A) and (D) and 

406(b)(1) and (2) of the Act for the Sale. 

The New Lease 

9. The Applicant represents that in 

2012, the Union offered a new lease to 

the Fund for all of Building U, which 

would include a total of 9,600 square 

feet (the New Lease). The Applicant 

represents that the Union offered a 

below market rental rate of $3 per 

square foot, or $2,400 per month. In 

2012, the Applicant engaged Tade 

Appraisal Company (Tade) to conduct 

an appraisal of Building U (the Tade 

Appraisal). Tade represents that it has 

not had any business engagements with 

the Union or any of its affiliates other 

than the Tade Appraisal. Furthermore, 

Tade represents that the fee paid in 

connection with the Tade Appraisal 

represented less than 1% of its annual 

income. Tade represents that its 

Appraiser, Scott Tade, is an Illinoiscertified General Real Estate Appraiser 

in Illinois with 30 years of experience 

in the real estate field. In his career, Mr. 

Tade has worked on valuations of 

residential, commercial and retail 

properties. The Tade Appraisal valued 

Building U at $425,000, and included an 

analysis of rental rates for comparable 

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78488 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

13 In this regard, the Applicant has submitted two 

recent appraisals to the Department that set the 

price of Building A at approximately $72,500. 

properties. In this regard, Tade 

represents that, for comparable 

properties, rental rates were $2.21 to 

$5.14 per square foot for a triple net 

lease. 

10. The Applicant represents that the 

New Lease is the best option for 

expanding the training program within 

the Fund’s projected budgets. The 

Applicant represents that Building U is 

already constructed with a shop and 

classroom space. Moreover, the Fund 

can expand the shop space and install 

a computer lab in Building U over time 

with equipment purchases. The 

Applicant represents that the leasing of 

Building U will thus permit the Fund to 

expand the training program 

incrementally, without expending large 

sums of money to purchase and 

renovate another building. 

11. Furthermore, the Applicant states 

that unless the Union can move its 

Union Hall to Building A, it will not be 

able to lease all of Building U to the 

Fund at the below market rent stated 

above. Therefore, according to the 

Applicant, the Fund would not be able 

to realize its best option to expand the 

training program. 

12. The Applicant represents that the 

New Lease would comply with PTE 78– 

6. In this regard, the Applicant 

represents that the New Lease between 

the Fund and the Union for use as 

classroom space would be based on 

terms at least as favorable to the Fund 

as an arm’s-length transaction with an 

unrelated party would be. Furthermore, 

the Applicant represents that the New 

Lease would be appropriate and helpful 

in carrying out the Fund’s purposes, and 

the Fund will maintain or cause to be 

maintained for a period of 6 years from 

the termination of any such transaction 

such records as are necessary to 

demonstrate continued compliance with 

the conditions of PTE 78–6. Finally, as 

described below, the Independent 

Fiduciary negotiated and approved the 

terms of the New Lease. 

The Appraisal 

13. The Applicant represents that 

prior to the date of Sale, the 

Independent Fiduciary will engage an 

Appraiser who satisfies the 

Department’s definition of ‘‘qualified 

independent appraiser’’ to perform an 

Appraisal of Building A on behalf of the 

Fund. The Applicant represents that the 

Appraiser will be selected by the 

Independent Fiduciary without any 

involvement of the Union or any other 

party to the covered transactions or any 

party to any planned future 

transactions. The Appraisal will 

establish the value of Building A as of 

the date of Sale and will be a full, 

independent appraisal that complies in 

all respects with applicable appraisal 

standards. 

The Independent Fiduciary’s Report 

14. The Applicant represents that the 

Trustees retained Rebecca Kling to serve 

both as the Independent Fiduciary and 

as legal counsel to the Fund. The 

Independent Fiduciary represents in her 

Statement of Independent Fiduciary that 

she was engaged by the Fund to 

represent its interests related to the Sale 

and the New Lease. The Independent 

Fiduciary represents that she is an 

experienced attorney with 28 years of 

experience specializing in commercial 

and residential real estate transactions, 

including acquisition, development and 

finance. The Independent Fiduciary 

represents that, prior to the Sale and the 

New Lease, she had no relationship 

with the Fund or the Union, and it is not 

anticipated that a relationship would 

continue following the consummation 

of the transactions. The Independent 

Fiduciary represents that she reviewed 

the terms of the Sale, and negotiated 

and approved the terms of the New 

Lease. 

15. The Independent Fiduciary 

represents that Building A is vacant and 

serves no purpose in the successful 

operation or financial well-being of the 

Fund, except as dormant investment 

property. The Independent Fiduciary 

represents that the Sale for a price of 

$110,226.48, which takes into account 

the Holding Costs incurred by the Fund 

since purchasing the Property is fair, 

reasonable and beneficial to the Fund, 

its participants and beneficiaries.13

Furthermore, the Independent Fiduciary 

believes that, because the proposed 

agreement of Sale between the Fund and 

the Union contains minimal, limited 

representations and warranties on the 

part of the Fund, as seller; with the Sale 

being conducted primarily on an ‘‘as-is, 

where-is’’ basis; the Fund and its 

participants and beneficiaries are 

adequately protected from potential 

liability. 

16. The Independent Fiduciary 

represents that the Sale furthers the 

interest of the Fund and its participants 

and beneficiaries because the Fund will 

have no use for Building A after 

entering into the New Lease and 

because the purchase price for Building 

A offered by the Union includes the 

Fund’s Holding Costs related to 

Building A. Furthermore, the 

Independent Fiduciary represents that 

Building U is the current site of the 

Fund’s training programs and provides 

more space for expansion than Building 

A, and the New Lease reflects the 

Union’s willingness to subsidize the 

Fund’s rent at market to below-market 

pricing as indicated in the Tade 

Appraisal. Moreover, the Independent 

Fiduciary represents that, based on 

information contained in the June 30, 

2012, audit report of the Fund, the Sale 

will not significantly change or 

adversely impact the Fund’s asset 

allocation. 

17. The Independent Fiduciary 

represents that she drafted the 

agreement for the New Lease to be 

entered into between the Fund as tenant 

and the Union as landlord. Based upon 

her review of the Tade Appraisal, she 

believes that the rent price of $3 per 

square foot, as reflected in the New 

Lease terms, is at least as favorable to 

the Fund as would be negotiated and 

agreed to in good faith by any 

disinterested third party tenant in an 

arms-length transaction. 

Statutory Findings 

18. The Applicant represents that the 

requested exemption with respect to the 

Sale is administratively feasible because 

the Sale is a one-time transaction of real 

property for cash between the Union 

and the Fund, which will be easy to 

implement if approved by the 

Department. The Applicant represents 

that the Sale is in the interest of the 

Fund and its participants and 

beneficiaries because it will permit the 

expansion of the training program at a 

below market rent. Furthermore, the 

Applicant represents that the Fund will 

receive greater than fair-market value in 

the Sale, accounting for Holding Costs. 

The Applicant states further that the 

Sale is protective of the Fund and its 

participants and beneficiaries because 

the Independent Fiduciary, an 

experienced real estate attorney, was 

engaged by the Fund to represent its 

interests related to the Sale. In this 

capacity, the Independent Fiduciary 

represents that she reviewed the terms 

of the Sale, including the purchase 

price, and negotiated and approved the 

terms of the New Lease. 

Summary 

19. In summary, the Applicant 

represents that the proposed exemption 

satisfies the statutory criteria for an 

exemption under section 408(a) of the 

Act for the reasons stated above and for 

the following reasons: 

a. The Sale is a one-time transaction 

for cash; 

b. At the time of the Sale, the Fund 

receives the greater of either: (1) 

$110,226.48; or (2) the fair market value 

mstockstill on DSK4VPTVN1PROD with NOTICES

Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 78489 

14For purposes of this proposed exemption, 

references to specific provisions of Title I of the 

Act, unless otherwise specified, refer also to the 

corresponding provisions of the Code. 

of Building A, as established by the 

Appraiser, as of the date of Sale; 

c. Before the date of Sale, the 

Appraiser will be retained by the 

Independent Fiduciary on behalf of the 

Fund without any involvement of the 

Union or any other party to the covered 

transactions or any planned future 

transactions; 

d. The Independent Fiduciary, acting 

on behalf of the Fund, represents the 

Fund’s interests for all purposes with 

respect to the Sale, and: (1) Determines, 

among other things, that it is in the best 

interest of the Fund to proceed with the 

Sale; and (2) reviews and approves the 

purchase price and methodology used 

by the Appraiser in its Appraisal; and 

e. The Fund pays no fees, 

commissions or other expenses 

associated with the Sale. 

Notice to Interested Persons 

Notice of the proposed exemption 

will be given to all Union members 

within 15 days of the publication of the 

notice of proposed exemption in the 

Federal Register, by first class U.S. mail 

to the last known address of all such 

individuals, and by posting in the 

Union hall in a prominent location. 

Such notice will contain a copy of the 

notice of proposed exemption, as 

published in the Federal Register, and 

a supplemental statement, as required 

pursuant to 29 CFR 2570.43(a)(2). The 

supplemental statement will inform 

interested persons of their right to 

comment on and to request a hearing 

with respect to the pending exemption. 

Written comments and hearing requests 

are due within 45 days of the 

publication of the notice of proposed 

exemption in the Federal Register. All 

comments will be made available to the 

public. 

Warning: Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. All comments may 

be posted on the Internet and can be 

retrieved by most Internet search 

engines. 

FOR FURTHER INFORMATION CONTACT: 

Scott Ness of the Department, telephone 

(202) 693–8561. (This is not a toll-free 

number.) 

EXCO Resources, Inc. 401(k) Plan (the 

Plan) Located in Dallas, TX 

[Application No. D–11821] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and section 4975(c)(2) of the Code and 

in accordance with the procedures set 

forth in 29 CFR part 2570, subpart B (76 

FR 66637, 66644, October 27, 2011). 

Section I: Transactions 

If the proposed exemption is granted, 

effective for the period beginning 

December 17, 2013, and ending January 

9, 2014, the restrictions of sections 

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

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

and the sanctions resulting from the 

application of section 4975 of the Code, 

by reason of section 4975(c)(1)(E) of the 

Code,14 shall not apply: 

(a) To the acquisition of certain 

transferable subscription right(s)(the 

Right or Rights) by the individuallydirected account(s) (the Account or 

Accounts) of certain participant(s) (the 

Invested Participant(s)) in the Plan, in 

connection with an offering (the 

Offering) of shares of the common stock 

(the Common Stock) of EXCO 

Resources, Inc. (EXCO) by EXCO, the 

plan sponsor (the Plan Sponsor) and a 

party in interest with respect to the 

Plan; and 

(b) To the holding of the Rights 

received by the Accounts during the 

subscription period of the Offering; 

provided that the conditions set forth in 

Section II of this proposed exemption 

were satisfied for the duration of the 

acquisition and holding of such Rights. 

Section II: Conditions 

(a) The acquisition of the Rights by 

the Accounts of Invested Participants 

occurred in connection with the 

Offering, and the Rights were made 

available by EXCO on the same material 

terms to all shareholders of the Common 

Stock of EXCO, including the Accounts 

of Invested Participants; 

(b) The acquisition of the Rights by 

the Accounts of Invested Participants 

resulted from an independent corporate 

act of EXCO; 

(c) Each shareholder of the Common 

Stock of EXCO, including each of the 

Accounts of Invested Participants, 

received the same proportionate number 

of Rights, and this proportionate 

number of Rights was based on the 

number of shares of Common Stock held 

by each such shareholder, as of 5:00 

p.m. New York City time, on December 

19, 2013 (the Record Date); 

(d) The Rights were acquired pursuant 

to, and in accordance with, provisions 

under the Plan for individually-directed 

investment of the Accounts by the 

Invested Participants, all of whose 

Accounts in the Plan held the Common 

Stock; 

(e) The decision with regard to the 

holding and disposition of the Rights by 

an Account was made by the Invested 

Participant whose Account received the 

Rights; 

(f) If any of the Invested Participants 

failed to give instructions as to the 

exercise of the Rights received in the 

Offering, or gave instructions to the Plan 

trustee (the Trustee) to sell such Rights, 

such Rights were automatically sold in 

blind transactions on the New York 

Stock Exchange (NYSE), and the 

proceeds from such sales were 

distributed pro-rata to the Accounts of 

such Invested Participants whose Rights 

were sold; 

(g) No brokerage fees, no 

commissions, no subscription fees, and 

no other charges were paid by the Plan 

or by the Accounts of Invested 

Participants with respect to the 

acquisition and holding of the Rights, 

and no commissions, no fees, and no 

expenses were paid by the Plan or by 

the Accounts of Invested Participants to 

any related broker in connection with 

the sale or exercise of any of the Rights, 

or with regard to the acquisition of the 

Common Stock through the exercise of 

such Rights; 

(h) EXCO did not influence any 

Invested Participant’s election with 

respect to the Rights; and 

(i) The terms of the Offering were 

described to the Invested Participants in 

clearly written communications, 

including, but not limited to, the 

prospectus for the Rights Offering. 

Effective Date: This proposed 

exemption, if granted, will be effective 

for the period beginning on December 

17, 2013, the commencement date of the 

Offering, and ending on January 9, 2014, 

the expiration date of the Offering. 

Summary of Facts and Representations 

Background 

1. The Plan, which was adopted, 

effective as of January 1, 1999, is a 

defined contribution, 401(k) retirement 

saving plan that provides for a cash and 

deferred arrangement. The Plan is a 

participant directed account plan 

designed to comply with the 

requirements of 404(c) of the Act. As of 

December 31, 2013, there were 863 

participants in the Plan. Also, as of 

December 31, 2013, the Plan had total 

net assets of $100,335,599. 

Prudential Retirement Insurance and 

Annuity Company is the third-party 

administrator and record-keeper for the 

Plan. Prudential Bank and Trust 

Company is the Trustee. The Plan is 

administered by a committee (the 

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15The Investors referred to above are WL Ross & 

Co. LLC and its affiliates and Hamblin Watsa 

Investment Counsel Ltd. and its affiliates. 

16The Applicant notes that the Record Date 

occurred on December 19, 2013. It is represented 

that there was no material impact to the Accounts 

of Invested Participants as a result of the Record 

Date being set two (2) days after the commencement 

of the Offering. In this regard, the number of Rights 

that each shareholder, including the Accounts, was 

entitled to receive was based on the number of 

shares each shareholder owned, as of the Record 

Date, and was not fully determined until the Record 

Date. 

Committee), composed of certain 

appointed employees of EXCO. The 

Committee has the responsibility of 

selecting the investment options into 

which Plan participants can direct their 

contributions. 

2. EXCO (the Applicant) is the Plan 

Sponsor. A Texas corporation 

incorporated in October 1955, EXCO is 

an independent oil and natural gas 

company engaged in the exploitation, 

exploration, acquisition, and 

development of onshore oil and natural 

gas properties, with a focus on shale 

resource plays. EXCO’s principal 

operations are conducted in certain key 

U.S. oil and natural gas areas, including 

Texas, Louisiana, and the Appalachia 

region. EXCO’s principal office is 

located in Dallas, Texas. According to 

EXCO’s Annual Report on Form 10–K 

for the year ended December 31, 2013, 

on a consolidated basis, EXCO and its 

consolidated subsidiaries had total 

assets of $2,408,628,000, total liabilities 

of $2,260,723,000, and total 

shareholders’ equity of $147,905,000. 

3. Among the investment options 

offered to Plan participants are various 

types of securities, including shares of 

EXCO Common Stock. Investment by 

Plan participants in the Common Stock 

is entirely voluntary. The Accounts in 

the Plan acquire the Common Stock 

only as a result of participant-directed 

investment decisions. The Invested 

Participants whose Accounts in the Plan 

are invested in the Common Stock are 

employees, former employees, or 

beneficiaries of employees of EXCO. As 

of the Record Date (December 19, 2013), 

the Accounts of Invested Participants 

held 704,396 shares of the Common 

Stock. 

4. The Common Stock is publiclytraded on the NYSE under the symbol 

‘‘XCO.’’ The Common Stock has a par 

value $0.001 per share. The Common 

Stock held by the Accounts of Invested 

Participants is the same type and class 

of shares as those held by other the 

Common Stock shareholders of EXCO. 

The Common Stock is a ‘‘qualifying 

employer security,’’ as defined under 

section 407(d)(5) of the Act. 

EXCO’s Considerations 

5. In connection with its regular 

review of EXCO’s liquidity and financial 

condition, the Board of Directors of 

EXCO (the Board) considered various 

alternatives in both debt and equity 

markets in order to strengthen EXCO’s 

liquidity and financial ability following 

several significant acquisitions and 

dispositions during 2013. The 

alternatives considered by the Board 

included a rights offering and an 

underwritten public offering of 

additional shares of Common Stock. 

After assessing these alternatives, a 

decision was made to conduct the 

Offering. 

In this regard, on November 22, 2013, 

the directors on the Board (the 

Disinterested Directors) who are not 

affiliated with certain investors (the 

Investors) 15 in the Common Stock by 

unanimous vote approved: (a) The basic 

terms of the Offering; and (b) the 

subscription price of $5.00 per share of 

the Common Stock. Furthermore, on the 

same date, the Investors agreed to the 

basic terms of their commitments under 

agreements (the Agreements) to 

purchase certain amount of shares of 

Common Stock in the Offering, and the 

Disinterested Directors approved these 

commitments with the Investors. 

The Offering 

6. The Offering commenced on 

December 17, 2013.16 The Offering 

permitted shareholders of record, as of 

the Record Date, who received the 

Rights, to purchase up to an aggregate of 

44,995,665 shares of Common Stock at 

a price of $5.00 per share, for an 

aggregate Offering price of 

$224,978,325. All shareholders also had 

the right to acquire additional Rights by 

purchasing additional shares of 

Common Stock on the open market (or 

through their Plan Accounts) prior to 

the Record Date. Further, all 

shareholders holding the Rights were 

entitled to an over-subscription 

privilege. However, the ability of any 

shareholder, including the Accounts, to 

exercise their over-subscription 

privilege was limited by the number of 

shares such shareholder owned as of the 

Record Date. Thus, all shareholders had 

the ability to increase or decrease their 

shares of Common Stock from the 

commencement of the Offering through 

the Record Date. The Offering expired 

on January 9, 2014. 

7. With respect to the trading prices 

of the Common Stock during the 

Offering period, it is represented that at 

the close of business on December 16, 

2013, the Common Stock was trading on 

the NYSE at $5.01 per share, and on 

December 17, 2013, the commencement 

date of the Offering, the Common Stock 

was trading on the NYSE at $4.83 per 

share. On the Record Date, the Common 

Stock was trading on the NYSE at $4.99 

per share. On December 24, 2013, the 

Common Stock traded at $5.41 per 

share. The closing price of the Common 

Stock on the expiration date of the 

Offering (January 9, 2014), was $4.99 

per share. Thus, during the subscription 

period of the Offering, the closing price 

of the Common Stock fluctuated 

between $4.83 and $5.41 per share. 

Accordingly, exemptive relief has 

been requested from December 17, 2013, 

the commencement date of the Offering, 

to January 9, 2014, the expiration date 

of the Offering. 

The Rights 

8. The Invested Participants were 

notified of the issuance of the Rights in 

a news release and in a posting on the 

EXCO’s Web site during the month of 

December 2013. In addition, each 

Invested Participant was provided 

detailed written information regarding 

the Rights Offering, which included: (a) 

A prospectus describing the Offering, (b) 

frequently asked questions and answers 

regarding the Offering, (c) an election 

form, (d) a return envelope addressed to 

Continental Stock Transfer & Trust 

Company (Continental), the 

subscription agent, and (e) a 

subscription form. 

The Rights entitled the holders 

thereof to basic subscription rights as 

well as to an over-subscription 

privilege. Under the basic subscription 

rights, each holder of a Right was 

entitled to purchase, through the 

exercise of such Right, 0.25 of one (1) 

share of Common Stock for each whole 

share of Common Stock held by the 

shareholder, at a subscription price of 

$5.00 per share of Common Stock. 

Under the over-subscription privilege, 

each holder was entitled to subscribe for 

additional shares of Common Stock, 

subject to certain limitations and 

allocation procedures, up to the number 

of shares of Common Stock that were 

not subscribed for by the other holders 

of the Rights, pursuant to their basic 

subscription rights. 

It is represented that there were valid 

exercises to purchase an aggregate of 

28,248,049 shares of Common Stock, 

pursuant to directions from holders of 

the Rights. The exercise of the Rights 

resulted in gross proceeds for EXCO of 

approximately $141.2 million. Together 

with the shares of Common Stock issued 

to the Investors pursuant to the 

Agreements, the Offering resulted in 

EXCO receiving gross proceeds of 

approximately $272.9 million. 

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17 It is represented that the Accounts relied on the 

relief provided by the statutory exemption, 

pursuant to section 408(e) of the Act for the exercise 

of the Rights. Accordingly, the Department is not 

providing any relief herein from such prohibited 

transaction provisions with respect to the exercise 

of the Rights. In addition, the Department is offering 

no view on whether the requirements of the 

statutory exemption provided in section 408(e) of 

the Act and the Department’s regulations, pursuant 

to 29 CFR 2550.408(e) were satisfied or whether the 

statutory exemption is applicable to the exercise of 

the Rights. 

Shareholder Elections 

9. The election form provided an 

Invested Participant with three (3) 

choices with respect to the Rights. In 

this regard, the Invested Participant 

could direct Continental: (a) To not 

exercise the Rights, with the express 

understanding that the Trustee would 

attempt to sell the Rights on the NYSE; 

(b) to neither exercise the Rights nor 

attempt to sell the Rights, with the 

understanding that the Rights would 

expire at the end of the Offering; or (c) 

to exercise the number of Rights elected 

by the Invested Participant, with the 

express understanding that if the 

Invested Participant did not elect to 

exercise all of the Rights, the Trustee 

would attempt to sell the remaining 

Rights on the NYSE. Each Right was 

transferable and was traded on the 

NYSE under the symbol ‘‘XCO–RT’’ 

from December 23, 2013 until 4:00 p.m. 

New York City time on January 8, 2014. 

As noted in the prospectus and on the 

election form, in order for the Invested 

Participant to exercise the Rights, there 

must have been sufficient funds in the 

Guaranteed Income Fund under the 

Invested Participant’s Account to cover 

the total subscription payment. If the 

value of the investments in the 

Guaranteed Income Fund did not equal 

or exceed the total subscription 

payment required, the Rights held by 

the Invested Participant’s Account were 

exercised for shares of Common Stock to 

the fullest extent possible based on the 

liquidated value of the Account 

invested in the Guaranteed Income 

Fund, to the nearest whole share. 

Following receipt of the election form 

by Continental, the Trustee and 

Continental confirmed and reconciled 

the identity of the Invested Participants 

who had made an election to sell their 

Rights, to exercise their Rights, or to 

allow all of their Rights to expire. The 

Trustee placed the order with 

Continental to purchase the Common 

Stock on behalf of the Accounts of the 

Invested Participants who elected to sell 

or to exercise the Rights, and liquidated 

the appropriate investments held in the 

Guaranteed Income Fund of such 

Accounts to purchase the Common 

Stock. Following the closing of the 

Offering, the shares of Common Stock 

purchased and the proceeds of the sale 

of the Rights were then credited to the 

Accounts of the Invested Participants. 

10. As of the Record Date, 307 

Accounts of Invested Participants held 

704,396 shares of Common Stock. As of 

the Record Date, the total fair market 

value of the Common Stock held by the 

Plan in all Accounts was $3,519,025, 

and the approximate percentage of the 

fair market value of the total assets of 

the Plan invested in the Common Stock 

was 3.49%. Also, as of the Record Date, 

the shares of Common Stock held in the 

Accounts of Invested Participants 

constituted approximately 0.3 percent 

(0.3%) of the shares of Common Stock 

outstanding. 

11. As a result of the Common Stock 

held by the Accounts of Invested 

Participants on the Record Date, the 

Plan acquired 704,396 Rights to acquire 

up to 176,099 shares of Common Stock 

during the Offering. Of the Rights 

acquired by the Plan on behalf of the 

Accounts, all such Rights were either 

exercised or sold, except for the Rights 

held by two (2) Accounts of Invested 

Participants who elected to allow a total 

of 25,961 combined Rights to expire. Of 

the 9,954 Rights acquired by the 

Accounts of three (3) Invested 

Participants as a result of the Offering, 

it is represented that 9,952 Rights held 

by these Accounts were exercised 17 for 

a total of 2,488 shares of Common Stock, 

which shares were eligible for trading 

on the NYSE by the Accounts. 

The exercise of the Rights held in the 

Accounts of the Invested Participants 

was subject to the requirement that on 

the date of the exercise of the Rights, the 

prevailing market price on the NYSE for 

a share of Common Stock (the Prevailing 

Price), was required to equal or exceed 

the per share subscription price of the 

Rights. Accordingly, the Invested 

Participants could instruct the Trustee 

to exercise the Rights and acquire shares 

only if the Prevailing Price of a share of 

Common Stock equaled or exceeded 

$5.00 per share. 

Notwithstanding the fact that the 

price per share of Common Stock on the 

expiration date of the Offering was 

$4.99 per share, it is represented that 

the Prevailing Price of a share of 

Common Stock exceeded the 

subscription price of $5.00 per share at 

the time the three (3) Invested 

Participants exercised the Rights on 

behalf of their Accounts. In this regard, 

the Rights held by these Accounts were 

all exercised on January 7, 2014, at an 

exercise price of $5.07 per share. The 

three (3) Invested Participants, 

respectively, exercised the following 

number of Rights, 7,944, 1,044, and 964. 

It is also represented that the three (3) 

Invested Participants had an oversubscription privilege. One of these 

Invested Participants exercised her oversubscription privilege and acquired an 

additional 482 shares of Common Stock. 

The Trustee was also able to sell the 

Rights on the NYSE. In this regard, the 

Trustee, on behalf of the Accounts of 

302 Invested Participants, sold 

approximately 668,481 Rights held in 

such Accounts for total sales proceeds 

of $8,235.25. The sale proceeds were 

allocated pro-rata to the Accounts of the 

Invested Participants whose Rights were 

sold. 

12. No brokerage fees, no 

commissions, no subscription fees, and 

no other charges were paid by the Plan 

or by any of the Accounts of Invested 

Participants with respect to the 

acquisition and holding of the Rights, 

and no commissions, no fees, and no 

expenses were paid by the Plan or by 

any of the Accounts of Invested 

Participants to any related broker in 

connection with the sale or the exercise 

of any of the Rights, or with regard to 

the acquisition of the Common Stock 

through the exercise of such Rights. 

Requested Relief 

13. EXCO has requested an exemption 

for: (a) The acquisition of the Rights by 

the Accounts of Invested Participants in 

connection with the Offering of the 

Common Stock by EXCO; and (b) the 

holding of the Rights by the Accounts of 

Invested Participants during the 

subscription period of the Offering. 

EXCO initially requested relief for the 

sale of the Rights by the Trustee, but 

subsequently withdrew its request for 

such relief, as the sale of the Rights 

occurred in blind transactions on the 

NYSE. 

Section 406(a)(1)(E) of the Act 

prohibits the acquisition on behalf of 

the plan of any ‘‘employer security’’ in 

violation of section 407(a). Section 

406(a)(2) of the Act prohibits a fiduciary 

who has authority or discretion to 

control or manage the assets of the plan 

to permit such plan to hold any 

‘‘employer security’’ if he knows or 

should know that the holding of such 

security violates section 407(a) of the 

Act. Section 407(a) of the Act prohibits 

a plan from acquiring or holding 

employer securities that are not 

‘‘qualifying employer securities.’’ 

It is represented that the Rights 

acquired by the Accounts of Invested 

Participants satisfy the definition of 

‘‘employer securities,’’ pursuant to 

section 407(d)(1) of the Act. However, as 

the Rights were not stock or marketable 

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78492 Federal Register / Vol. 79, No. 249 / Tuesday, December 30, 2014 / Notices 

obligations, such Rights do not meet the 

definition of ‘‘qualifying employer 

securities,’’ as set forth in section 

407(d)(5) of the Act. Accordingly, the 

subject transactions constitute an 

acquisition and holding on behalf of the 

Accounts of Invested Participants, of 

employer securities which are not 

qualifying employer securities, in 

violation of sections 406(a)(1)(E), 

406(a)(2), and 407(a)(1)(A) of the Act. 

EXCO has also requested relief from 

the prohibitions of section 406(b)(1) and 

406(b)(2) of the Act. Section 406(b)(1) of 

the Act prohibits a fiduciary from 

dealing with the assets of a plan in his 

own interest or for his own account. 

Section 406(b)(2) of the Act prohibits a 

fiduciary from engaging in his 

individual or any other capacity to act 

in any transaction involving the plan on 

behalf of a party (or represent a party) 

whose interest are adverse to the 

interest of the plan or the interests of its 

participants or beneficiaries. 

As the employer any of whose 

employees are covered by the Plan, 

EXCO is a party in interest with respect 

to the Plan, pursuant to section 3(14)(C) 

of the Act. Accordingly, the acquisition 

and holding by the Accounts of Invested 

Participants of the Rights issued by 

EXCO, a party in interest with respect 

to the Plan, would involve self-dealing 

and conflicts of interest for which relief 

is needed. 

14. It is represented that the subject 

transactions have already been 

consummated. In this regard, the 

Applicant represents that there was 

insufficient time between the dates 

when the Accounts of Invested 

Participants acquired the Rights and 

when such Rights were exercised, sold, 

or expired, to apply for and be granted 

an exemption. EXCO therefore is 

seeking a retroactive exemption to be 

granted, effective from December 17, 

2013, the commencement date of the 

Rights Offering, to January 9, 2014, the 

expiration date of the Offering. 

15. EXCO represents that the 

proposed exemption is administratively 

feasible. In this regard, the acquisition 

and holding of the Rights by the 

Accounts of Invested Participants was a 

one-time transaction that involved an 

automatic distribution of the Rights to 

all shareholders that resulted from an 

independent corporate act of EXCO. It is 

represented that corporations often 

make a rights offering available to all 

shareholders. 

16. EXCO represents that the 

transactions which are the subject of 

this proposed exemption are in the 

interest of the Accounts of Invested 

Participants, because the subject 

transactions represented a valuable 

opportunity to such Accounts to buy the 

Common Stock at a potential discount 

or to sell the Rights and receive the 

proceeds from such sale. The Rights 

Offering also provided all of EXCO’s 

shareholders, including the Accounts of 

Invested Participants, with the 

opportunity to participate in the subject 

transactions on a pro-rata basis. 

Safeguards of Exemption 

17. EXCO represents that the 

proposed exemption provides sufficient 

safeguards for the protection of the 

Accounts of Invested Participants and 

the beneficiaries of such Accounts. In 

this regard, the Applicant states that 

participation in the Offering protected 

the Accounts of the Invested 

Participants from having their interests 

in EXCO diluted as a result of the 

Offering. Further, under the terms of the 

Offering, all shareholders, including the 

Accounts of Invested Participants 

acquired and held the Rights 

automatically, at no charge. 

In addition, the Applicant explains 

that EXCO made the Rights available on 

the same terms to all shareholders of the 

Common Stock, including the Accounts. 

In this regard, each shareholder of 

EXCO, including each of the Accounts, 

received the same proportionate number 

of Rights, and this proportionate 

number of Rights was based on the 

number of shares of Common Stock held 

by such shareholder, as of the Record 

Date. Under the terms of the Offering, 

one (1) Right was issued for each whole 

share of the Common Stock held by 

each shareholder on the Record Date. 

Each of the Rights entitled the 

shareholders, including the Accounts, to 

purchase, through the exercise of such 

Rights, the Common Stock issued by 

EXCO in connection with the Offering. 

Further, the Applicant states that the 

Accounts of Invested Participants were 

protected against economic loss by 

exercising the Rights or by selling the 

Rights. If the Invested Participants 

affirmatively elected to sell the Rights or 

did not make an election with respect to 

the Rights, then the Trustee 

automatically sold the rights on the 

NYSE. If the Invested Participants 

elected to exercise their Rights, such 

Rights were exercised in accordance 

with their instructions, provided that 

the Prevailing Price on the date of the 

exercise equaled or exceeded the 

subscription price per share, thereby 

further protecting the Invested 

Participants. 

Summary 

18. In summary, EXCO represents that 

the subject transactions satisfy the 

statutory criteria of section 408(a) of the 

Act because: 

(a) The acquisition of the Rights by 

the Accounts of Invested Participants 

occurred in connection with the 

Offering, and the Rights were made 

available by EXCO to all shareholders of 

EXCO, including the Accounts of 

Invested Participants; 

(b) The acquisition of the Rights by 

the Accounts of Invested Participants 

resulted from an independent corporate 

act of EXCO; 

(c) Each shareholder of the Common 

Stock of EXCO, including each of the 

Accounts of Invested Participants, 

received the same proportionate number 

of Rights, and this proportionate 

number of Rights was based on the 

number of shares of EXCO Common 

Stock held by each such shareholder, as 

of the Record Date; 

(d) The Rights were acquired pursuant 

to, and in accordance with, provisions 

under the Plan for individually-directed 

investment of the Accounts by the 

Invested Participants all of whose 

Accounts in the Plan held the Common 

Stock; 

(e) The decision with regard to the 

holding and disposition of the Rights by 

an Account was made by the Invested 

Participant whose Account received the 

Rights; 

(f) If any of the Invested Participants 

failed to give instructions as to the 

exercise of the Rights received in the 

Offering, or gave instructions to the 

Trustee to sell such Rights, such Rights 

were automatically sold in blind 

transactions on the NYSE, and the 

proceeds from such sales were 

distributed pro-rata to the Accounts of 

such Invested Participants whose Rights 

were sold; 

(g) No brokerage fees, no 

commissions, no subscription fees, and 

no other charges were paid by the Plan 

or by the Accounts with respect to the 

acquisition and holding of the Rights, 

and no commissions, no fees, and no 

expenses were paid by the Plan or by 

the Accounts of Invested Participants to 

any related broker in connection with 

the sale or exercise of any of the Rights, 

or with regard to the acquisition of 

Common Stock through the exercise of 

such Rights; 

(h) EXCO did not influence any 

Invested Participant’s election with 

respect to the Rights; and 

(i) The terms of the Offering were 

described to the Invested Participants in 

clearly written communications, 

including, but not limited to, the 

prospectus for the Rights Offering. 

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Notice to Interested Persons 

The persons who may be interested in 

the publication in the Federal Register 

of the Notice of Proposed Exemption 

(the Notice) include all of the Invested 

Participants whose Accounts were 

invested in shares of Common Stock on 

the Record Date and received the Rights 

pursuant to the Offering. 

It is represented that all such 

interested persons will be notified of the 

publication of the Notice by first class 

mail, to each such interested person’s 

last known address within fifteen (15) 

days of publication of the Notice in the 

Federal Register. Such mailing will 

contain a copy of the Notice, as it 

appears in the Federal Register on the 

date of publication, plus a copy of the 

Supplemental Statement, as required, 

pursuant to 29 CFR 2570.43(a)(2), which 

will advise all interested persons of 

their right to comment and to request a 

hearing. All written comments and/or 

requests for a hearing must be received 

by the Department from interested 

persons within forty-five (45) days of 

the publication of this proposed 

exemption in the Federal Register. 

All comments will be made available 

to the public. Warning: Do not include 

any personally identifiable information 

(such as name, social security number, 

address, or other contact information) or 

confidential business information that 

you do not want publicly disclosed. All 

comments may be posted on the Internet 

and can be retrieved by most Internet 

search engines. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Angelena C. Le Blanc of the Department, 

telephone (202) 693–8540. (This is not 

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

4975(c)(2) of the Code does not relieve 

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act and/or the Code, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(b) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under section 408(a) of the Act 

and/or section 4975(c)(2) of the Code, 

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemptions, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or the Code, 

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; and 

(4) The proposed exemptions, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 23rd day of 

December 2014. 

Lyssa E. Hall, 

Director, Office of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2014–30526 Filed 12–29–14; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

Comment Request for Information 

Collection for Trade Adjustment 

Assistance Community College and 

Career Training (TAACCCT) Grant 

Program Reporting Requirements 

(Routine Extension With a Minor 

Revision to one Definition to Increase 

Clarity) 

AGENCY: Employment and Training 

Administration (ETA), Labor. 

ACTION: Notice. 

SUMMARY: The Department of Labor 

(Department), as part of its continuing 

effort to reduce paperwork and 

respondent burden, conducts a 

preclearance consultation program to 

provide the public and Federal agencies 

with an opportunity to comment on 

proposed and/or continuing collections 

of information in accordance with the 

Paperwork Reduction Act of 1995 [44 

U.S.C. 3506(c)(2)(A)] (PRA). The PRA 

helps ensure that respondents can 

provide requested data in the desired 

format with minimal reporting burden 

(time and financial resources), 

collection instruments are clearly 

understood and the impact of collection 

requirements on respondents can be 

properly assessed. 

Currently, ETA is soliciting comments 

concerning the information collection 

request (ICR) to collect data about the 

TAACCCT Grant Program Reporting 

Requirements (expires March 31, 2015). 

Interested parties are encouraged to 

provide comments to the contact shown 

in the ADDRESSES section. Comments 

must be written to receive 

consideration, and they will be 

summarized and included in the request 

for OMB approval of the final ICR. To 

help ensure appropriate consideration, 

comments should mention this grant 

program (OMB Control No. 1205–0489). 

DATES: Submit written comments to the 

office listed in the addresses section 

below on or before March 2, 2015. 

ADDRESSES: A copy of this ICR with 

applicable supporting documentation; 

including a description of the likely 

respondents, proposed frequency of 

response, and estimated total burden 

may be obtained free by contacting 

Kristen Milstead, Division of Strategic 

Investments, Room C4518, Employment 

and Training Administration, U.S. 

Department of Labor, 200 Constitution 

Avenue NW., Washington, DC 20210. 

Telephone number: 202–693–3949 (this 

is not a toll-free number). Individuals 

with hearing or speech impairments 

may access the telephone number above 

via TTY by calling the toll-free Federal 

Information Relay Service at 1–877– 

889–5627 (TTY/TDD). Fax: 202–693– 

3890. Email: taaccct@dol.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

ETA requires grantees to submit 

Quarterly Progress Reports with a 

narrative summary of at least two 

progress measures and at least two 

implementation measures identified by 

the grantee in their project work plan. 

Every fourth quarter, grantees submit an 

Annual Performance Report with 

standardized outcome measures that 

will include aggregate data for program 

participants for the following ten 

outcome measures: unique participants 

served/enrolled; total number of 

participants who have completed a 

grant-funded program of study; total 

number still retained in their programs 

of study; total number retained in other 

education programs; total number of 

credit hours completed; total number of 

mstockstill on DSK4VPTVN1PROD with NOTICES