21668 Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Notices 

1Because the New Chrysler VEBA Plan will not 

be qualified under section 401 of the Internal 

Revenue Code of 1986, as amended, there is no 

jurisdiction under Title II of the Act pursuant to 

section 4975 of the Code. However, there is 

jurisdiction under Title I of the Act. 

2See Notice of Proposed Individual Exemption 

Involving Chrysler LLC, Located in Auburn Hills, 

MI, 74 FR 51182 (October 5, 2009). 

3See, International Union, United Automobile, 

Aerospace and Agricultural Implement Workers of 

America, et al. v. Chrysler, LLC, Civ. Act. No. 2:07– 

cv–14310 (E.D. Mich, complaint filed October 11, 

2007). 

4The New Chrysler VEBA Plan provides retiree 

medical benefits to members of the ‘‘Class’’ and the 

‘‘Covered Group’’ as defined in the Settlement 

Agreement and in Section VI. of this exemption. 

5 In light of the Bankruptcy Proceeding, the 

English Settlement Agreement is of no further force 

or effect. 

6 In re Chrysler LLC, et al., Case No. 09B 50002 

(Document 3073), slip op. (Bankr. S.D.N.Y. May 31, 

2009). 

grant CSA’s expansion request. The 

Assistant Secretary will make the final 

decision on granting the request, and, in 

making this decision, may undertake 

other proceedings that are prescribed in 

Appendix A to 29 CFR 1910.7. OSHA 

will publish a public notice of this final 

decision in the Federal Register. 

Authority and Signature 

David Michaels, PhD, MPH, Assistant 

Secretary of Labor for Occupational 

Safety and Health, 200 Constitution 

Avenue, NW., Washington, DC 20210, 

directed the preparation of this notice. 

Accordingly, the Agency is issuing this 

notice pursuant to Sections 6(b) and 8(g) 

of the Occupational Safety and Health 

Act of 1970 (29 U.S.C. 655 and 657), 

Secretary of Labor’s Order No. 5–2007 

(72 FR 31160), and 29 CFR part 1911. 

Signed at Washington, DC, on April 20, 

2010. 

David Michaels, 

Assistant Secretary for Occupational Safety 

and Health. 

[FR Doc. 2010–9546 Filed 4–23–10; 8:45 am] 

BILLING CODE 4510–26–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Prohibited Transaction Exemption 2010– 

12; Exemption Application No. L–11566] 

Grant of Individual Exemption 

Involving Chrysler LLC, Located in 

Auburn Hills, MI 

AGENCY: Employee Benefits Security 

Administration, U.S. Department of 

Labor. 

ACTION: Grant of individual exemption. 

This document contains an individual 

exemption issued by the Department of 

Labor (the Department) from certain 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (the Act or ERISA). The 

transactions involve the New Chrysler 

VEBA Plan and its associated UAW 

Retiree Medical Benefits Trust (the 

VEBA Trust) (collectively the VEBA).1

DATES: Effective Date: This exemption is 

effective as of June 10, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Warren Blinder, Office of Exemption 

Determinations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, telephone (202) 

693–8553. (This is not a toll-free 

number.) 

SUPPLEMENTARY INFORMATION: On 

October 5, 2009, the Department 

published a notice of proposed 

individual exemption from the 

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

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

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

407(a) of the Act (the Notice, or 

proposed exemption).2 The proposed 

exemption was requested in an 

application filed by New Chrysler, the 

successor to the assets of Chrysler LLC, 

pursuant to section 408(a) of the Act 

and in accordance with the procedures 

set forth in 29 CFR 2570, Subpart B (55 

FR 32836, August 10, 1990). Effective 

December 31, 1978, section 102 of 

Reorganization Plan No. 4 of 1978, (43 

FR 47713, October 17, 1978) transferred 

the authority of the Secretary of the 

Treasury Department to issue 

exemptions of the type requested to the 

Secretary of Labor. Accordingly, this 

final exemption is being issued solely 

by the Department. 

Background 

On March 30, 2008, Chrysler LLC and 

the International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America (the 

UAW), along with respective class 

representatives (Class Counsel) of 

plaintiff class members in UAW v. 

Chrysler LLC (the English Case) entered 

into a Settlement Agreement (the 

English Settlement Agreement) 

providing, among other things, that 

Chrysler LLC transfer responsibility and 

funding for retiree health care benefits 

to a voluntary employees’ beneficiary 

association (a VEBA).3 The English Case 

had been brought to contest Chrysler 

LLC’s asserted right to unilaterally 

modify the retiree health benefits under 

the Chrysler Health Care Program for 

Hourly Employees. Under the English 

Settlement Agreement, Chrysler LLC’s 

obligation to provide post-retirement 

medical benefits to the ‘‘Class’’ and 

‘‘Covered Group’’ would be terminated, 

and instead, Chrysler LLC would 

transfer certain assets to the VEBA Trust 

to provide the Class and Covered Group 

with post-retirement medical benefits 

under the New Chrysler VEBA Plan.4

As a result of deteriorating economic 

conditions and a growing liquidity 

crisis, on April 30, 2009, Chrysler LLC 

and 26 of its domestic direct and 

indirect subsidiaries filed a bankruptcy 

action under chapter 11 of Title 11 of 

the United States Code (the Bankruptcy 

Code) with the Bankruptcy Court and 

announced a plan for a partnership with 

Italian automaker Fiat S.p.A. (Fiat).5 On 

June 10, 2009, Chrysler LLC completed 

the sale under Section 363 of the 

Bankruptcy Code (a Section 363 Sale) of 

substantially all of its assets to an entity 

called New Carco Acquisition LLC (later 

renamed Chrysler Group LLC, and 

hereinafter referred to as ‘‘New 

Chrysler’’), a Delaware limited liability 

company formed by Fiat North America 

LLC, a subsidiary of Fiat.6 As discussed 

in greater detail in the proposed 

exemption, Fiat will initially own a 

minority 20% stake of New Chrysler 

with the option of acquiring additional 

equity if certain milestones are met. 

Through the Bankruptcy proceeding, 

New Chrysler acquired certain core 

assets from Chrysler LLC in exchange 

for the assumption of certain liabilities 

of Chrysler LLC and a cash payment to 

Chrysler LLC pursuant to the Master 

Transaction Agreement, dated as of 

April 30, 2009 as subsequently amended 

(collectively with other ancillary and 

supporting documents, the ‘‘MTA’’). 

Following the Bankruptcy proceeding 

and the sale of the assets from Chrysler 

LLC to New Chrysler, initial ownership 

of New Chrysler will be broken into two 

classes of membership interests, Class A 

(800,000 interests) and Class B (200,000 

interests). Fiat will initially own the 

200,000 Class B membership interests, 

representing 20% of the voting and 

economic interest of New Chrysler; the 

United States Treasury Department (the 

Treasury Department) will own 98,461 

Class A membership interests; the 

Canadian Government will together own 

24,615 Class A membership interests, 

and the VEBA Trust will own 676,924 

Class A membership interests (the Class 

A membership interests initially owned 

by the Trust are referred to herein as the 

‘‘Shares’’), in each case, subject to the 

applicable terms and conditions 

described below. In addition, after the 

Sale, New Chrysler became the new 

legal entity, Chrysler Group LLC. 

The assets in the Section 363 Sale 

were sold free and clear of liens, claims, 


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interests, and encumbrances. In 

addition, the claims of Chrysler LLC’s 

unsecured creditors were not assumed 

by New Chrysler through the 

Bankruptcy proceeding unless expressly 

provided for pursuant to the MTA. 

Among the claims that were not 

assumed by New Chrysler, was the 

obligation owed by Chrysler LLC to 

provide retiree medical benefits 

pursuant to the Memorandum of 

Understanding Post-Retirement Medical 

Care, dated October 12, 2007, between 

Chrysler LLC and the UAW and the 

Memorandum of Understanding of PostRetirement Medical Care, dated April 

29, 2009, between Chrysler LLC and the 

UAW (together, the ‘‘MOUs’’), as well as 

the English Settlement Agreement. 

The UAW asserted during the 

Bankruptcy proceeding, and New 

Chrysler denied, that New Chrysler was 

bound by the MOUs as a successor to 

Chrysler LLC and that it was, therefore, 

responsible for providing the retiree 

medical benefits contemplated. After 

engaging in a series of negotiations, New 

Chrysler and the UAW agreed to enter 

into an additional settlement agreement 

that was presented to the Bankruptcy 

Court for approval once notice was 

provided to affected parties. Pursuant to 

the UAW Retiree Settlement Agreement 

dated June 10, 2009, between Chrysler 

Group LLC and the UAW (the Modified 

Settlement Agreement), New Chrysler 

agreed to provide retiree medical 

benefits to a defined group of current 

UAW retirees who were formerly 

employed by Chrysler LLC as well as a 

defined group of current active 

employees (once retired) of New 

Chrysler who are covered under a 

collective bargaining agreement between 

New Chrysler and the UAW 

(collectively, the Covered Group). 

Ultimately, the Modified Settlement 

Agreement was approved by the 

Bankruptcy Court and the initial steps 

towards implementing the transactions 

that were at the heart of this exemption 

began to occur as contemplated. 

Specifically, upon the ‘‘Implementation 

Date,’’ the retiree medical benefit 

obligations to the Covered Group 

became fixed and such obligations were 

transferred to the New Chrysler VEBA 

Plan and the VEBA Trust. The VEBA 

Trust was established and maintained 

by an independent committee (the 

Committee). Moreover, the Modified 

Settlement Agreement provided that the 

New Chrysler VEBA Plan was to be 

funded exclusively through the VEBA 

Trust. Accordingly, the VEBA Trust 

would be solely responsible for the 

payment of post-retirement medical 

benefits to members of the Class and 

Covered Group on and after January 1, 

2010. 

Under the Modified Settlement 

Agreement, New Chrysler became 

obligated to contribute to the VEBA 

Trust, on behalf of the New Chrysler 

VEBA Plan, (1) the Shares, which 

represent sixty-seven and sixty-nine 

one-hundredths percent (67.69%) of the 

fully diluted ownership of New Chrysler 

as of the consummation of the Section 

363 Sale; and (2) a note issued by New 

Chrysler with a principal amount of 

$4,587,000,000 and an implicit interest 

rate of nine percent (9%) (the Note), 

payable in fixed annual installments 

pursuant to the following schedule: 

1 ..................................... Payment of $315 million ....................................................................................................................... July 15, 2010. 

2 ..................................... Payment of $300 million ....................................................................................................................... July 15, 2011. 

3 ..................................... Payment of $400 million ....................................................................................................................... July 15, 2012. 

4 ..................................... Payment of $600 million ....................................................................................................................... July 15, 2013. 

5 ..................................... Payment of $650 million ....................................................................................................................... July 15, 2014. 

6 ..................................... Payment of $650 million ....................................................................................................................... July 15, 2015. 

7 ..................................... Payment of $650 million ....................................................................................................................... July 15, 2016. 

8 ..................................... Payment of $650 million ....................................................................................................................... July 15, 2017. 

9 ..................................... Payment of $823.8 million .................................................................................................................... July 15, 2018. 

10 ................................... Payment of $823.8 million .................................................................................................................... July 15, 2019. 

11 ................................... Payment of $823.8 million .................................................................................................................... July 15, 2020. 

12 ................................... Payment of $823.8 million .................................................................................................................... July 15, 2021. 

13 ................................... Payment of $823.8 million .................................................................................................................... July 15, 2022. 

14 ................................... Final Payment of $827.1 million ........................................................................................................... July 15, 2023. 

The Shares and the Note (together, the 

‘‘New Chrysler Securities’’) were 

contributed to the VEBA Trust on June 

10, 2009, which was the closing date of 

the Section 363 Sale. In addition, New 

Chrysler was obligated, under the 

Modified Settlement Agreement, to 

cause the assets held under a preexisting internal Chrysler LLC VEBA 

(the Internal VEBA), attributable to the 

UAW retirees covered under the 

Modified Settlement Agreement and 

valued at $1,589,500,000 as of March 

31, 2009, to be transferred to the VEBA 

Trust within 10 days after January 1, 

2010. 

Written Comments 

The Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the Notice on or before 

November 19, 2009. Due to the failure 

by the Applicant to notify a small 

number of interested persons of the 

Notice, the Department extended the 

comment period until December 23, 

2009. 

During the comment period, the 

Department received ninety-two (92) 

telephone inquiries and forty (40) 

written comments from interested 

persons on the proposed exemption. Of 

the written comments received, the 

majority were submitted by participants 

in the New Chrysler VEBA Plan. In 

addition, counsel for the Committee and 

the Independent Fiduciary submitted 

comments. The Department received no 

hearing requests during the comment 

period. 

Several of the written comments and 

callers supported the adoption of the 

exemption. In this regard, the UAW, 

along with Class Counsel, reviewed 

New Chrysler’s application for 

exemption and expressed support for 

the application and stated their belief 

that the transactions which are the 

subject of the exemption are in the best 

interest of the New Chrysler Plan’s 

participants and beneficiaries. 

Furthermore, the Department received 

written comments from the Committee 

and the Independent Fiduciary which 

supported the exemption and requested 

certain modifications and/or 

clarifications regarding the exemption. 

Following is a discussion of the 

aforementioned comments, including 

the responses made by the Department 

to address the issues raised therein. 

Participant Comments 

The telephone inquiries received by 

the Department from participants in the 

New Chrysler VEBA Plan related to the 

commenters’ difficulty in understanding 

the Notice or the effect of the exemption 

on the commenters’ benefits, including 


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7Assets held under the Internal VEBA plus the 

earnings thereon. These assets are in addition to the 

Shares and Note issued by Chrysler, which were 

contributed on June 10, 2009. 

8The Committee suggests that an investment 

bank performing valuation or investment consulting 

and advisory services will often be paid a flat or 

asset-based fee, while an investment bank 

performing underwriting and brokerage services 

will be paid a transaction-based fee as a percentage 

of the overall sale. Additionally, the Committee 

notes that it is not anticipated that the Independent 

Fiduciary likely would retain a separate consulting 

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

appropriate). 

9According to the Committee, the most likely 

reason that an investment bank would propose 

going to market under this scenario is if the overall 

market itself is booming, such that there is ample 

appetite for the securities. In the event that a plan 

needs liquidity in a falling market, the Committee 

is more likely to explore other options, including 

reducing benefits or seeking alternative sources of 

capital such as through borrowing. 

the general concern that the Modified 

Settlement Agreement is too 

advantageous to New Chrysler and 

would not ensure that benefit levels for 

participants will remain affordable. 

With respect to the written comments 

submitted by interested persons, the 

majority of commenters neither 

supported nor opposed the exemption 

but instead raised other concerns that 

are beyond the scope of this exemption. 

Many such comments related to the 

perceived unfair treatment of retirees 

within the UAW and Chrysler LLC; a 

lack of participation afforded to retirees 

in the process of approving the 

settlements between Chrysler LLC and 

the UAW; concerns about the rising 

costs of healthcare; and the perceived 

government favoritism of the car 

companies at retirees’ expense. 

Several written comments and callers 

supported the adoption of the 

exemption. In addition, New Chrysler 

submitted a comment in support of the 

application and confirmed that New 

Chrysler effectuated the asset transfers 

to the VEBA Trust in accordance with 

the terms of the Modified Settlement 

Agreement. Specifically, New Chrysler 

represented that, pursuant to the 

Modified Settlement Agreement and 

under the terms of the Asset and 

Equivalent Transfer Agreement between 

New Chrysler and the UAW dated 

January 1, 2010, New Chrysler 

transferred $1.97 billion in cash and 

marketable securities to the VEBA Trust 

on January 1, 2010.7

The Committee’s Comment 

The Committee submitted a written 

comment that was supportive of the 

proposed exemption, and suggests 

certain modifications to the operative 

language of the proposed exemption and 

the Summary of Facts and 

Representations (the ‘‘Representations,’’ 

and individually, a ‘‘Representation’’). 

The Committee’s comment letter also 

relates to the respective roles of the 

Independent Fiduciary and any 

investment banks retained by the 

Independent Fiduciary with respect to 

the Securities held by the VEBA Trust. 

A. Modifications to Summary of Facts 

and Representations 

1. Number of Investment Banks. As 

illustrated in the right column on page 

51187 of the proposed exemption, the 

Representations state that the VEBA 

Trust will have three separate retiree 

accounts (the Separate Retiree 

Accounts) designed to segregate 

payments attributable to New Chrysler, 

General Motors (GM), and Ford Motor 

Company (Ford), pursuant to the terms 

of each company’s settlement agreement 

with the UAW and each respective 

class. As described in the middle 

column of page 51190 of the proposed 

exemption, the Committee represented 

that, in the event that a single 

Independent Fiduciary represents two 

or more Separate Retiree Accounts: 

A separate investment bank will be 

retained with respect to each of the three 

plans comprising the VEBA Trust. The 

investment bank’s initial recommendations 

will be made solely with the goal of 

maximizing the returns for the single plan 

that owns the securities for which the 

investment bank is responsible. 

In its initial discussions with the 

Department, the Committee made the 

argument that the arrangement for 

retention of separate investment banks 

would minimize the likelihood of an 

immediate transactional conflict 

inherent wherein one Independent 

Fiduciary managing more than one 

Separate Retiree Account would be 

immediately confronted by the need to 

dispose of the securities of each 

company. 

The Committee has retained Brock 

Securities LLC (Brock) as the 

Independent Fiduciary with respect to 

the Securities, and has currently 

retained separate independent 

fiduciaries with respect to the GM and 

Ford Separate Retiree Accounts. As 

noted, however, it is conceivable that at 

some future date any or all three 

Independent Fiduciary engagements 

may be consolidated and the foregoing 

conditions would then come into play. 

In such event, the Committee argues 

that the requirement for different 

investment banks for each Separate 

Retiree Account would not be in the 

interest of the New Chrysler VEBA Plan 

and would not advance the goal of 

reducing potential fiduciary conflicts. 

The Committee contends that the need 

to retain multiple investment banks 

should be at the discretion of the 

Independent Fiduciary and the 

investment banks themselves, or that 

such requirement should be limited to 

investment banks performing a 

traditional underwriting role and being 

paid on a transactional basis, not those 

retained for ongoing valuation or 

investment consulting services.8

The Committee points out that, as a 

threshold matter, the term ‘‘investment 

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

precise term, but refers to a range of 

services including investment valuation, 

investment consulting and advice, and 

brokerage or underwriting performed 

under the authority and supervision of 

one or more regulators (including, but 

not limited to the Federal Reserve and/ 

or the Securities and Exchange 

Commission). The Committee maintains 

that typically, though not necessarily, 

an investment bank engaged to provide 

a regular valuation will not be the same 

as an investment bank engaged to assist 

the Independent Fiduciary in 

connection with a large private sale or 

an initial public offering, and even in 

the latter event, different investment 

banks may be employed for different 

markets (public versus private, 

international versus domestic, 

institutional versus retail). 

The Committee suggests that, 

particularly in the case of an investment 

bank engaged only to provide valuation 

or investment advice, the Independent 

Fiduciary may conclude that there is no 

potential conflict in retaining a single 

investment bank with respect to two or 

more Separate Retiree Accounts. 

Furthermore, the Committee believes 

that retaining a single investment bank 

may in fact provide potential benefits in 

the form of experience, cost savings, and 

communication. 

According to the Committee, Chrysler, 

Ford, and GM are at vastly different 

stages of marketability, are competing 

for capital in different markets 

(including public versus private), and 

are not competing against each other so 

much as they are part of a huge global 

automobile market with many other 

competitors.9 The Committee notes that 

a conflict could arise in the unlikely 

event that the Independent Fiduciary 

proposes to sell large blocks of stock of 

two or more car companies in the same 

market at the exact same time. In that 

case, the Committee suggests that the 

Independent Fiduciary would probably 

(though not necessarily) engage separate 

investment bankers at that time to 

underwrite the sales. Furthermore, the 

Committee contends that it would 

maintain safeguards to mitigate the risk 


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10 In reaching the Department’s conclusion, it is 

our understanding, based on the Committee’s 

representations, that the fees paid to a single 

investment bank to provide valuation services or 

long-term investment consulting on behalf of two or 

more Separate Retiree Accounts will not be 

contingent upon the success or size of an offering 

or sale, and for each Separate Retiree Account, the 

investment bank’s recommendations are made 

solely with the goal of maximizing the returns for 

such Account. 

of conflicts. For example, the Committee 

notes that it would still appoint a 

conflicts monitor and perform its own 

monitoring of the Independent 

Fiduciary, and it would continue to 

raise any questions about potential 

conflicts. 

Accordingly, the Committee proposes 

that, in the middle column on page 

51190 of the proposed exemption, the 

aforementioned Representation should 

be revised, to replace the text, as 

follows: 

In the event that a single Independent 

Fiduciary is retained to represent two or 

more plan Accounts, and it proposes to sell 

Securities from two or more such Accounts 

at the same time, a separate investment bank 

(if any) will be retained for each Account 

with respect to the marketing or underwriting 

of the Securities. For this purpose, an 

investment bank will be considered as having 

been retained to market or underwrite 

securities if it is compensated on the success 

of the offering and/or as a percentage of the 

offering or sales proceeds. The foregoing does 

not preclude the engagement of a single 

investment bank to provide valuation 

services or long-term investment consulting 

on behalf of two or more plan Accounts, 

provided that (1) the fees of the investment 

bank are not contingent upon the success or 

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

plan Account, the investment bank’s 

recommendations are made solely with the 

goal of maximizing the returns for such 

Account. 

In addition, the Committee explains 

that there may be some confusion as to 

whether two different Independent 

Fiduciaries may retain the same 

investment bank. The Committee states 

that there should be no limitations on 

the number of investment banks that the 

Independent Fiduciary must retain 

other than general fiduciary principles. 

According to the Committee, although it 

is unlikely that an Independent 

Fiduciary would consider, or that an 

investment bank would accept, an 

engagement that might involve 

marketing securities of two different 

companies in the same market at the 

same time, it would not be unusual, for 

instance, to retain the same investment 

bank to make a private offering of 

securities in the domestic market and a 

public offering of different securities in 

a foreign market, where such investment 

bank is best qualified to do so. 

Accordingly, the Committee suggests 

that, on page 51190 of the proposed 

exemption, the representation be 

modified to contain the following: 

To the extent that two Accounts are 

represented by different Independent 

Fiduciaries, nothing herein shall prohibit the 

Independent Fiduciaries from retaining the 

same investment bank with respect to the 

Accounts which they manage if they 

determine that it is in the interest of their 

respective Accounts to do so. 

The Committee also requests that the 

Department clarify that, in all 

circumstances, the restrictions 

applicable to investment banks would 

not apply in the event that the 

Independent Fiduciary elects to 

participate in a broader offering of 

Securities by New Chrysler and such 

offering is underwritten by an 

investment bank selected by New 

Chrysler (see, e.g., Section 3.1(h) of the 

Registration Rights Agreement), rather 

than by the Independent Fiduciary. 

The Department concurs with the 

Committee that, in the event that one 

Independent Fiduciary represents two 

or more (Separate Retiree) Accounts, 

and it proposes to sell Securities from 

two or more such Separate Retiree 

Accounts at the same time, then a 

separate investment bank (if any) will be 

retained for each Separate Retiree 

Account with respect to the marketing 

or underwriting of the Securities. 

Notwithstanding the above, nothing in 

the final exemption would preclude the 

Independent Fiduciary of two or more 

Separate Retiree Accounts from 

retaining the same investment banker to 

provide valuation services or long-term 

investment consulting on behalf of two 

or more of such Separate Retiree 

Accounts.10 Furthermore, with respect 

to the Committee’s suggestion that, to 

the extent that two Separate Retiree 

Accounts are represented by different 

Independent Fiduciaries, nothing herein 

shall prohibit the Independent 

Fiduciaries from retaining the same 

investment bank with respect to the 

Separate Retiree Accounts which they 

manage if they determine that it is in the 

interest of their respective Separate 

Retiree Accounts to do so, the 

Department is of the view that a 

separate investment bank (if any) must 

be retained to represent each such 

Separate Retiree Account with respect 

to the marketing or underwriting of the 

Securities. 

Lastly, the Department concurs with 

the Committee that the restrictions 

applicable to investment banks would 

not apply in the event that the 

Independent Fiduciary elects to 

participate in a broader offering of 

Securities by New Chrysler and such 

offering is underwritten by an 

investment bank selected by New 

Chrysler (see, e.g., Section 3.1(h) of the 

Registration Rights Agreement), rather 

than by the Independent Fiduciary. In 

the Department’s view, the likelihood of 

conflicts is lower than in a situation 

where an offering of New Chrysler 

Securities is underwritten by an 

investment bank retained to sell the 

securities of one or more of the other 

Separate Retiree Accounts, because the 

interests of the New Chrysler VEBA 

Plan appear to align more closely with 

the interests of New Chrysler in the 

marketing and selling of the 

underwritten securities. Therefore, 

subject to the limitations above, the 

Department concurs with the 

Committee’s requested clarifications. 

2. Reporting Deviations From an 

Investment Bank’s Recommendations. If 

a single Independent Fiduciary is 

retained with respect to more than one 

Separate Retiree Account, in the middle 

column on page 51190 of the proposed 

exemption, the preamble provides that 

the Independent Fiduciary shall report 

each instance in which it proposes to 

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

the investment bank. The Committee 

initially represented to the Department 

that such arrangement would help to 

minimize the likelihood of a conflict 

inherent in retaining one Independent 

Fiduciary to manage the securities of 

more than one Separate Retiree 

Account. 

However, the Committee now proffers 

that this requirement may not be 

practical, in light of information gained 

during the process of interviewing and 

selecting the Independent Fiduciaries in 

connection with the Ford, GM, and 

Chrysler exemption applications. The 

Committee notes that, typically, an 

investment bank will not ‘‘recommend’’ 

a single, specific course of action, but 

through a dialogue with the 

Independent Fiduciary will present, 

discuss, modify and refine various 

options and scenarios that the 

Independent Fiduciary ultimately will 

use in making its decisions as a 

fiduciary. Thus, the Committee argues 

that it would not be feasible for the 

Independent Fiduciary to report back to 

the Committee when it proposes to 

deviate from a specific 

recommendation, given that interactions 

between the Independent Fiduciary and 

an investment bank generally lack a 

single, identifiable ‘‘recommendation’’ 

(either orally or in writing) that the 

Independent Fiduciary does or does not 

intend to follow. 

Moreover, the Committee contends 

that some investment banker 

recommendations are unlikely ever to 


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raise conflict issues. For instance, the 

Committee notes that an investment 

bank may recommend that the VEBA 

Trust sell stock of New Chrysler in the 

market on a particular day, but the 

Independent Fiduciary determines that 

it would be more convenient to wait 24 

hours. According to the Committee, it is 

questionable whether the Independent 

Fiduciary’s decision constitutes a 

deviation. Similarly, the Committee 

notes that an investment bank may 

develop a preliminary valuation of 

certain New Chrysler Securities of $xx, 

and after thorough consideration, the 

Independent Fiduciary may determine 

that such securities are actually worth 

$yy. In such event, the Committee 

suggests that the Independent 

Fiduciary’s valuation might be viewed 

as a ‘‘deviation’’ from the initial 

recommendation but is unlikely to raise 

any conflict vis-a`-vis any Securities held 

by the VEBA Trust. 

The Committee is also concerned that 

the requirement for the Committee to 

review the reported deviations will 

cause the Committee to interpose itself 

between the two parties before such 

parties have reached a consensus. In 

this event, the Committee explains that 

it may have an implied obligation to 

substitute its judgment for that of the 

Independent Fiduciary. 

The Department concurs with the 

Committee’s comment that their initial 

representation that the Independent 

Fiduciary would report any deviations 

from the recommendation of the 

investment bank raises operational 

issues. Nevertheless, the Department 

notes that the Independent Fiduciary 

and the Committee are not relieved from 

their fiduciary duties under the Act in 

carrying out their respective 

responsibilities. There may be 

circumstances where the Independent 

Fiduciary has a responsibility under the 

Act to inform the conflicts monitor or 

the Committee of a deviation from the 

investment bank’s recommendations, 

and the Committee, as part of its 

oversight responsibility, may need to 

take appropriate action based on such 

disclosure. Subject to the caveat above, 

the Department takes note of these 

clarifications and updates to the 

Summary of Facts and Representations 

of the proposed exemption. 

B. Requests for Confirmation 

1. Conditions Applicable in the Event 

That the Committee Appoints a Single 

Independent Fiduciary. The 

Committee’s comment requested 

confirmation that certain terms and 

conditions described in the 

Representations, in the middle column 

on page 51190, and incorporated into 

Sections II(b)(i) through (iii) on page 

51192 of the proposed exemption, 

would apply only if and to the extent 

that the same Independent Fiduciary is 

appointed to represent two or more 

Separate Retiree Accounts. 

Sections II(b)(i) through (iii) of the 

proposed exemption provide that the 

Committee will take certain steps to 

mitigate potential conflicts of interest, 

including the appointment of a conflicts 

monitor, the adoption of procedures to 

facilitate prompt replacement of the 

Independent Fiduciary due to a conflict 

of interest, the adoption of a written 

policy by the Independent Fiduciary 

regarding conflicts, and the periodic 

reporting of actual or potential conflicts. 

Additionally, in the middle column on 

page 51190 of the proposed exemption, 

the Representations provide that a 

separate investment bank will be 

retained with respect to each Separate 

Retiree Account, and in the event that 

the Independent Fiduciary deviates 

from the ‘‘initial recommendations’’ of 

an investment bank, ‘‘it would find it 

necessary to explain why it deviated 

from a recommendation.’’ 

The Department concurs with the 

Committee, that the terms and 

conditions described above will apply 

only if and to the extent that the same 

Independent Fiduciary is appointed to 

represent two or more Separate Retiree 

Accounts. Notwithstanding the above, 

nothing in the final exemption would 

preclude the Committee from adopting 

procedures similar to those described in 

Sections II(b)(i) through (iii) of the 

proposed exemption in furtherance of 

its oversight responsibilities. However, 

the Department believes that the 

requirement that the Independent 

Fiduciary retain separate investment 

banks with respect to each Separate 

Retiree Account, subject to the 

limitations described above, applies 

regardless of how many Separate Retiree 

Accounts are represented by the same 

Independent Fiduciary. 

2. Investment Bank’s 

Acknowledgement that the VEBA Trust 

is its Ultimate Client. On page 51193 of 

the proposed exemption, Section II(e) 

provides that ‘‘any contract between the 

Independent Fiduciary and an 

investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA Plan.’’ In 

assisting the Department in formulating 

the conditions of the proposed 

exemption, the Committee represented 

to the Department that such 

acknowledgement would be helpful in 

the event that the Committee is forced 

to replace the Independent Fiduciary 

(such as in the event of an irreconcilable 

conflict). The Committee reasoned that 

this requirement would ensure that, in 

the event the Independent Fiduciary 

was replaced, the investment banker 

would continue to represent the plan 

and work with the replacement 

Independent Fiduciary. 

After conducting interviews and 

consulting with numerous parties in its 

search for an independent fiduciary to 

manage the Securities received by the 

New Chrysler VEBA Plan, the 

Committee has raised concerns 

regarding such condition. The 

Committee has requested that the 

Department confirm that this condition 

will not cause the investment bank to 

become a fiduciary or otherwise obligate 

the investment bank or the Independent 

Fiduciary to provide to the Committee 

any of the investment bank’s work 

product except upon request, nor will it 

obligate the Committee to request or 

review any such work product. The 

Committee contends that the 

Independent Fiduciary is both a named 

fiduciary and an investment manager, 

thus it should be free within the 

parameters of its contract to determine 

what information it shares with the 

Committee. 

The Department confirms that the 

requirement that the investment banker 

acknowledge that its ultimate client is 

the New Chrysler VEBA Plan will not, 

by itself, make the investment banker a 

fiduciary of the New Chrysler VEBA 

Plan. Rather, whether an investment 

banker referred to in Section II of the 

proposed exemption becomes a 

fiduciary as a result of its provision of 

services depends on whether it meets 

the definition of a ‘‘fiduciary’’ as set 

forth in section 3(21) of the Act and the 

regulations promulgated thereunder. 

3. Obligation of the Committee to 

Review the Investment Banker Reports. 

As described in the middle column on 

page 51190 of the proposed exemption, 

the Representations describe several 

safeguards that are provided to reduce 

the risk of conflict in the event that a 

single independent fiduciary is retained 

with respect to more than one Separate 

Retiree Account. Specifically, in 

assisting the Department to formulate 

these procedures, the Committee had 

suggested that a ‘‘conflicts monitor’’ 

would develop a process for identifying 

potential conflicts. As a result, the 

Department added Section II(b)(i)(2) of 

the proposed exemption, which 

provides that a conflicts monitor 

appointed by the Committee ‘‘regularly 

review the * * * investment banker 

reports * * * to identify the presence of 

factors that could lead to a conflict.’’ 

After conducting interviews with 

candidates for the Independent 


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Fiduciary position, the Committee has 

raised a concern regarding the conflicts 

monitor’s duties. The Committee has 

requested confirmation that Section 

II(b)(i)(2) does not independently 

impose any obligation on the Committee 

to provide (or request) ‘‘investment 

banker reports’’ as a matter of course 

(i.e., beyond the Act’s general fiduciary 

requirements). In its comment letter, the 

Committee notes that it may be 

appropriate for the conflicts monitor or 

the Committee (or any subcommittee 

with delegated authority) to review 

investment banker reports when 

provided to them by the Independent 

Fiduciary, or to request such reports 

under certain circumstances. However, 

the Committee maintains that such 

reports may contain information that is 

confidential or proprietary, or 

preliminary, or simply irrelevant to its 

responsibilities. Furthermore, according 

to the Committee, it is not clear what 

constitutes a ‘‘report,’’ with the result 

that informal notes and/or emails may 

fall under the definition. 

The Department concurs with the 

Committee that Section II(b)(i)(2) of the 

proposed exemption does not 

independently impose an affirmative 

obligation on the Committee to provide 

(or request) ‘‘investment banker reports’’ 

as a matter of course beyond the Act’s 

general fiduciary requirements. 

The Independent Fiduciary’s Comment 

The Independent Fiduciary, Brock, 

submitted a written comment that was 

supportive of the proposed exemption, 

and suggests certain modifications to 

the operative language of the proposed 

exemption and the Representations. 

Brock’s comment relates to the effects of 

a potential corporate transaction 

involving New Chrysler, including a 

change in corporate structure of the 

company and the VEBA Trust’s 

potential acquisition of additional 

employer securities pursuant to future 

corporate reorganizations and other 

ministerial changes to certain 

definitions in Section VI of the 

proposed exemption. In addition, Brock 

suggests certain revisions to the 

Representations meant to correct or 

clarify information presented in the 

proposed exemption. 

A. Clarifications to the Operative 

Language 

1. Change in New Chrysler’s 

Corporate Structure. As described in the 

Representations, in the far right column 

on page 51184 of the proposed 

exemption, New Chrysler is a Delaware 

limited liability company that was 

formed by Fiat North America LLC, a 

subsidiary of Fiat, in order to receive the 

assets of Chrysler LLC, generally free 

and clear from all liens in connection 

with the Section 363 Sale. Brock notes 

that, in the event of consolidation, 

merger, sale, conveyance or public 

offering of New Chrysler, the company 

may no longer take the form of a 

Delaware limited liability company. 

Therefore, Brock suggests that Section 

VI(i), on page 51195 of the proposed 

exemption, should be amended to read 

in its entirety as follows: 

The term ‘‘New Chrysler’’ shall mean a 

Delaware Limited Liability Company formed 

by Fiat North America LLC, a subsidiary of 

Fiat S.p.A., a manufacturer of automobiles 

and automotive parts in Turin, Italy, and its 

successors and assigns. New Chrysler is the 

Company that acquired certain assets and 

liabilities from Chrysler LLC pursuant to the 

Section 363 Sale. 

The Department concurs with Brock 

that in the event of a consolidation, 

merger, sale, conveyance or public 

offering of New Chrysler, the company 

may no longer take the form of a 

Delaware limited liability company. 

Accordingly, the Department has made 

changes to the Definitions in Section 

VI(j) of the final exemption to clarify 

that the term ‘‘New Chrysler’’ includes 

such entity’s successors and assigns in 

the event of a reorganization, 

restructuring, recapitalization, merger, 

or similar corporate transaction. 

2. Effect of Corporate Transaction. 

Section I(a), on page 51192 of the 

proposed exemption, provides 

exemptive relief for the acquisition, 

holding, and disposition by the New 

Chrysler VEBA Plan and the VEBA 

Trust of the Shares and the Note 

transferred by New Chrysler and 

deposited in the Chrysler Employer 

Security Sub-Account of the Chrysler 

Separate Retiree Account of the VEBA 

Trust. 

Brock notes that, in the event of a 

consolidation, merger, sale or 

conveyance of New Chrysler, its 

corporate form may be reclassified and 

its equity interests may no longer fall 

under the current definition of ‘‘Shares’’ 

provided in Section VI(k) of the 

proposed exemption. In such event, the 

VEBA Trust may no longer hold 

‘‘Shares,’’ as defined by the proposed 

exemption. Furthermore, Brock notes 

that, pursuant to the Shareholders 

Agreement by and Among Fiat North 

America LLC, the U.S. Department of 

the Treasury, the VEBA Trust, 7169931 

Canada Inc. (Canada), and the VEBA 

Holdcos Signatory Thereto (the 

Shareholders Rights Agreement), Brock, 

as the Independent Fiduciary, will have 

limited input in the terms and execution 

of any corporate transaction. Therefore, 

in order to continue to provide 

exemptive relief, Brock suggests that the 

definition of Shares should be modified 

to take into account the effect of a future 

change in New Chrysler’s corporate 

form. Accordingly, Brock requests that 

Section VI(k) of the proposed exemption 

be amended in its entirety to read as 

follows: 

The term ‘‘Shares’’ means the membership 

interests issued by New Chrysler, including 

any membership interest, partnership 

interest, shares of stock or other equity 

resulting from an adjustment, substitution, 

conversion, or other modification of New 

Chrysler Shares in connection with a 

reorganization, restructuring, 

recapitalization, merger, or similar corporate 

transaction, provided that each holder of 

Shares is treated in an identical manner. 

In response to the above referenced 

comment, the Department confirms that 

the proposed exemption provides 

exemptive relief for other equity 

acquired as a result of an adjustment, 

substitution, conversion, or other 

modification of Shares in connection 

with a restructuring, recapitalization, 

merger or similar corporate transaction 

involving New Chrysler. Accordingly, 

the Department has revised the 

definition of ‘‘Shares’’ in Section VI(o) of 

the final exemption, and takes note of 

the foregoing clarifications and updates 

to the Representations. 

3. Conforming Relief Requested. Brock 

requests that, to the extent the final 

exemptive relief granted to the Ford or 

GM separate retiree accounts is equally 

applicable to the facts and 

circumstances covered by the proposed 

exemption for New Chrysler, any such 

relief be granted with respect to the 

exemption for New Chrysler as well. 

The Department concurs with Brock’s 

request to conform the exemptive relief 

granted to Ford or GM to the extent that 

such relief is equally applicable to the 

facts and circumstances covered by the 

proposed exemption for New Chrysler. 

B. Modifications to Summary of Facts 

and Representations 

1. Dates of Call Option Exercise 

Period. In the middle column on page 

51186 of the proposed exemption, the 

Representations describe certain 

mechanisms for the VEBA Trust to sell 

the Shares to other parties prior to New 

Chrysler becoming a publicly traded 

company. The Representations provide 

that, in accordance with the Call Option 

Agreement, dated as of June 10, 2009, by 

and among Fiat, the VEBA Trust, 

Canada, and the Treasury Department 

(the Call Option Agreement), Fiat has 

the option to purchase from the VEBA 

Trust up to 40% of the VEBA Trust’s 

equity interests in New Chrysler, 

between July 1, 2012 and June 1, 2016. 


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Brock suggests that, on page 51186 of 

the proposed exemption, ‘‘June 1, 2016’’ 

should be corrected to read ‘‘June 30, 

2016’’, which is the date set forth in the 

definition of ‘‘Call Option Exercise 

Period’’ in the Call Option Agreement. 

The Department acknowledges the fact 

that the ‘‘Call Option Exercise Period’’ 

means that period beginning on July 1, 

2012 and ending on June 30, 2016. As 

such, the Department takes note of the 

foregoing clarifications and updates to 

the Representations. 

2. Description of Equity Repurchase 

Rights. The Representations, in the left 

column on page 51187 of the proposed 

exemption, provide that, in reference to 

the Treasury Department’s repurchase 

right (a Repurchase Right) under the 

Equity Recapture Agreement, dated June 

10, 2009 between the VEBA Trust and 

the Treasury Department (the Equity 

Recapture Agreement), ‘‘This right 

expires upon the earlier of its exercise 

and the VEBA Trust’s surrender of all 

remaining New Chrysler interests held 

by the VEBA Trust to the Treasury 

Department.’’ 

However, Brock notes that, under 

Section III.B of the Equity Recapture 

Agreement, it is Fiat’s Call Option, not 

the Treasury Department’s, that expires 

‘‘upon the earlier of the exercise of the 

Repurchase Right and the surrender to 

the Holder of all remaining VEBA 

Interests held by VEBA Holdco or 

VEBA, as applicable.’’ To clarify the 

rights of the parties under the Equity 

Recapture Agreement, Brock proposes 

that the sentence from page 51187 of the 

proposed exemption quoted above, and 

the sentence preceding it, be amended 

to read as follows: 

In addition, the Treasury Department has 

the right, at any time, to purchase all 

outstanding Shares held by the VEBA Trust 

for an amount equal to the Threshold 

Amount less the amount of any proceeds 

already received by the VEBA Trust in 

respect of any of the Shares (the ‘‘Repurchase 

Right’’). The Repurchase Right terminates 

following any payment on the December 31, 

2018 interim settlement date, as described 

below, under the Equity Recapture 

Agreement, or upon the payment of the 

Threshold Amount Excess, if earlier. In 

addition, the Equity Recapture Agreement 

provides that the Fiat Call Option expires 

upon the earlier of the exercise of the 

Repurchase Right and the VEBA Trust’s 

surrender of all remaining New Chrysler 

interests held by the VEBA Trust to the 

Treasury Department. 

3. Voting of Shares by the 

Independent Fiduciary. On page 51189 

of the proposed exemption, in the 

middle column, the Representations 

provide the following: 

Additionally, under the Shareholder Rights 

Agreement, the New Chrysler VEBA Plan 

must vote its Membership Interest in New 

Chrysler in accordance with the 

recommendations of the independent 

directors of New Chrysler, in proportion to 

those recommendations. Therefore, the 

Independent Fiduciary will have no 

responsibility for the voting of the 

Membership Interests. 

Brock notes that Section 2.4 of the 

Shareholders Rights Agreement 

provides that the VEBA Trust will vote 

its interests in New Chrysler in 

accordance with the recommendations 

of the independent directors, but subject 

to certain exceptions with respect to 

major decisions set forth in the 

Amended and Restated Limited 

Liability Company Operating Agreement 

of Chrysler Group LLC, dated and 

effective as of June 10, 2009 (the New 

Chrysler Operating Agreement). Brock 

points out that Section 10.7 of the New 

Chrysler Operating Agreement provides 

that if Fiat owns more than 50% of the 

membership interests of New Chrysler, 

the Board of Directors shall not take 

certain major decisions without the 

prior written consent of each non-Fiat 

member affected thereby, if such nonFiat member would be adversely 

affected by such major decision 

disproportionately to Fiat. According to 

Brock, non-Fiat members would include 

the VEBA Trust. 

As such, Brock recommends that the 

language from page 51189 of the 

proposed exemption quoted above, 

beginning with ‘‘Therefore, the 

Independent Fiduciary* * *’’ be 

replaced with the following, to reflect 

the exception with respect to major 

decisions: 

Therefore, the Independent Fiduciary will 

have no responsibility for the voting of the 

membership interests; provided, however, 

that with respect to certain major decisions, 

as discussed in Section 10.7 of the Operating 

Agreement, under certain circumstances New 

Chrysler will not take such major decisions 

without the prior written consent of non-Fiat 

holders once Fiat owns more than 50% of the 

membership interests in New Chrysler. 

Brock also notes that in two instances 

in the proposed exemption, 

‘‘membership interests’’ is capitalized 

and should be made lower case. The 

Department takes note of the foregoing 

clarifications and updates to the 

Representations. 

4. Fiat’s Right of Appointment of 

Directors. The Representations on page 

51190 of the proposed exemption, in the 

right column, provide that ‘‘Fiat will 

have the right to appoint four (4) 

directors once it obtains an aggregate 

ownership interest of thirty-five percent 

(35%) or more in New Chrysler and the 

Final Director will resign once Fiat 

obtains the right to appoint a fourth 

director.’’ Brock notes that, according to 

Section 5.3 of the New Chrysler 

Operating Agreement, ‘‘[f]or so long as 

Fiat remains a Member and the Fiat 

Group has a Total Interest exceeding 

fifty percent (50%), Fiat shall have the 

right to designate up to five Directors to 

the Board of Directors to serve as 

Directors.’’ Accordingly, Brock 

recommends adding a more complete 

description of Fiat’s rights under 

Section 5.3 of the New Chrysler 

Operating Agreement by inserting, after 

the sentence from the proposed 

exemption reproduced above, the 

following: 

Furthermore, Fiat will have the right to 

appoint five (5) directors once it obtains an 

aggregate ownership interest of fifty percent 

(50%) or more in New Chrysler, and the 

remaining director appointed by the Treasury 

Department who is not an independent 

director will resign once Fiat obtains the 

right to appoint a fifth director. 

The Department takes note of the 

foregoing clarifications and updates to 

the Representations. 

The Department has carefully 

considered the issues expressed by the 

commenters in their written comments, 

including the issues raised by the 

individuals who had telephoned the 

Department. After consideration of the 

commenters’ concerns and 

documentation provided, the 

Department does not believe that any 

material factual issues have been raised 

which would require the convening of 

a public hearing. Further, after giving 

full consideration to the entire record, 

including the comments, the 

Department has determined to grant the 

exemption, subject to the modifications 

and clarifications described herein. 

For a complete statement of the facts 

and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption that was published 

in the Federal Register on October 5, 

2009 at 74 FR 51182. For further 

information regarding the comments 

and other matters discussed herein, 

interested persons are encouraged to 

obtain copies of the exemption 

application file (Exemption Application 

No. L–11566) the Department is 

maintaining in this case. The complete 

application file, as well as all 

supplemental submissions received by 

the Department, are made available for 

public inspection in the Public 

Disclosure Room of the Employee 

Benefits Security Administration, Room 

N–1513, US Department of Labor, 200 

Constitution Avenue, NW., Washington, 

DC 20210. The written comments may 

also be viewed online at http:// 


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www.regulations.gov, at Docket ID 

Number: EBSA–2009–0025. 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act does not relieve a 

fiduciary or other party in interest from 

certain other provisions of the Act, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which, 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; 

(2) In accordance with section 408(a) 

of the Act, the Department makes the 

following determinations: 

(a) The exemption is administratively 

feasible; 

(b) The exemption is in the interests 

of the New Chrysler VEBA Plan and of 

its participants and beneficiaries; and 

(c) The exemption is protective of the 

rights of participants and beneficiaries 

participating in the New Chrysler VEBA 

Plan; and 

(3) The exemption is supplemental to, 

and not in derogation of, any other 

provisions of the Act, including 

statutory or administrative exemptions 

and transitional rules. Furthermore, the 

fact that a transaction is subject to an 

administrative or statutory exemption is 

not dispositive of whether the 

transaction is in fact a prohibited 

transaction. 

Accordingly, the following exemption 

is granted under the authority of section 

408(a) of the Act and in accordance with 

the procedures set forth in 29 CFR Part 

2570, Subpart B (55 FR 32836, 32847, 

August 10, 1990). 

Section I. Covered Transactions 

(a) The restrictions of sections 

406(a)(1)(A), (B), and (E), 406(a)(2), 

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

shall not apply, effective June 10, 2009, 

to: 

(1) The acquisition by the UAW 

Chrysler Retiree Medical Benefits Plan 

(New Chrysler VEBA Plan) and its 

associated UAW Retiree Medical 

Benefits Trust (the VEBA Trust) of 

676,924 New Chrysler Shares (the 

Shares) and a note issued by New 

Chrysler with a principal amount of 

$4,587,000,000 and an implicit interest 

rate of nine percent (9%) (the Note) 

transferred by New Chrysler and 

deposited in the Chrysler Employer 

Security Sub-Account of the Chrysler 

Separate Retiree Account of the VEBA 

Trust; 

(2) The holding of the Shares and the 

Note by the New Chrysler VEBA Plan in 

the Chrysler Employer Security SubAccount of the Chrysler Separate Retiree 

Account of the VEBA Trust; 

(3) The disposition of the Shares and 

the Note; and 

(4) The sale by the New Chrysler 

VEBA Plan to Fiat S.p.A (Fiat) of Shares 

pursuant to the exercise by Fiat of the 

Call Option Agreement and/or the First 

Offer Right described in the New 

Chrysler Operating Agreement; 

(b) The restrictions of sections 

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

406(b)(2) of the Act shall not apply, 

effective June 10, 2009, to: 

(1) The payment by New Chrysler, the 

Existing Internal VEBA, the New 

Chrysler VEBA Plan, or any affiliate of 

New Chrysler, of a benefit claim that 

was the responsibility and legal 

obligation, under the terms of the 

applicable plan documents, of one of 

the other parties listed in this 

paragraph; and 

(2) The reimbursement by New 

Chrysler, the Existing Internal VEBA, 

the New Chrysler VEBA Plan, or any 

affiliate of New Chrysler, of a benefit 

claim that was paid by another party 

listed in this paragraph, which was not 

legally responsible for the payment of 

such claim, plus interest. 

(c) The restrictions of sections 

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

406(b)(2) of the Act shall not apply, 

effective June 10, 2009, to the return to 

New Chrysler of assets deposited or 

transferred to the New Chrysler VEBA 

Plan by mistake, plus interest. 

Section II. Conditions Applicable to 

Section I(a) 

(a) The Committee appoints a 

qualified Independent Fiduciary to act 

on behalf of the New Chrysler VEBA 

Plan for all purposes related to the 

transfer of the Shares and Note to the 

Plan for the duration of the Plan’s 

holding of the Shares and Note, except 

for the voting of the Shares. Such 

Independent Fiduciary will have sole 

discretionary responsibility relating to 

the holding, disposition and ongoing 

management of the Shares and the Note. 

The Independent Fiduciary will 

determine, before taking any of the 

actions regarding the Shares and the 

Note, that each such action or 

transaction is in the interest of the New 

Chrysler VEBA Plan. 

(b) In the event that the same 

Independent Fiduciary is appointed to 

represent the interests of one or more of 

the other plans comprising the VEBA 

Trust (i.e., the UAW General Motors 

Retiree Medical Benefits Plan and/or the 

UAW Ford Retiree Medical Benefits 

Plan) with respect to employer 

securities deposited into the Trust, the 

Committee takes the following steps to 

identify, monitor and address any 

conflict of interest that may arise with 

respect to the Independent Fiduciary’s 

performance of its responsibilities: 

(i) The Committee appoints a 

‘‘conflicts monitor’’ to: (1) Develop a 

process for identifying potential 

conflicts; (2) regularly review the 

Independent Fiduciary reports, 

investment banker reports, and public 

information regarding the companies, to 

identify the presence of factors that 

could lead to a conflict; and (3) further 

question the Independent Fiduciary 

when appropriate. 

(ii) The Committee adopts procedures 

to facilitate prompt replacement of the 

Independent Fiduciary if the Committee 

in its sole discretion determines such 

replacement is necessary due to a 

conflict of interest. 

(iii) The Committee requires the 

Independent Fiduciary to adopt a 

written policy regarding conflicts of 

interest. Such policy shall require that, 

as part of the Independent Fiduciary’s 

periodic reporting to the Committee, the 

Independent Fiduciary includes a 

discussion of actual or potential 

conflicts identified by the Independent 

Fiduciary and options for avoiding or 

resolving the conflict. 

(c) The Independent Fiduciary 

authorizes the Trustee of the New 

Chrysler VEBA Plan to dispose of the 

Shares and the Note only after the 

Independent Fiduciary determines, at 

the time of the transaction, that the 

transaction is feasible, in the interest of 

the New Chrysler VEBA Plan, and 

protective of the participants and 

beneficiaries of the Plan. 

(d) The Independent Fiduciary 

negotiates and approves on behalf of the 

New Chrysler VEBA Plan any 

transactions between the New Chrysler 

VEBA Plan and any party in interest 

involving the Shares or the Note that 

may be necessary in connection with 

the subject transactions (including but 

not limited to the registration of the 

securities contributed to the New 

Chrysler VEBA Plan). 

(e) Any contract between the 

Independent Fiduciary and an 

investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA plan. 

(f) The Independent Fiduciary 

discharges its duties consistent with the 

terms of the New Chrysler VEBA Plan, 

the Trust Agreement, the Independent 


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11OPEB means Other Post-Employment Benefits, 

and typically includes retiree healthcare benefits, 

life insurance, tuition assistance, day care, legal 

services and the like. The OPEB discount rate is a 

rate used to discount projected future OPEB 

benefits payment cash flows to determine the 

present value of the OPEB obligation. 

Fiduciary Agreement, and any other 

documents governing the employer 

securities, such as the registration rights 

agreement. 

(g) The New Chrysler VEBA Plan 

incurs no fees, costs or other charges 

(other than described in the VEBA Trust 

Agreement and the Modified Settlement 

Agreement) as a result of the 

transactions exempted herein. 

(h) The terms of any transaction 

exempted herein are no less favorable to 

the New Chrysler VEBA Plan than the 

terms negotiated at arms’ length under 

similar circumstances between 

unrelated parties. 

Section III. Conditions Applicable to 

Section I(b) 

(a) The Committee and the New 

Chrysler VEBA Plan’s third party 

administrator will review the benefits 

paid during the transition period and 

determine the dollar amount of 

mispayments made, subject to the 

review of the VEBA Trust’s independent 

auditor. The results of this review will 

be made available to New Chrysler. 

(b) New Chrysler and their respective 

plans’ third party administrator(s) will 

review the benefits paid during the 

transition period and determine the 

dollar amount of mispayments made, 

subject to the review of the respective 

plans’ independent auditor. The results 

of this review will be made available to 

the Committee. 

(c) Interest on any reimbursed 

mispayment will accrue from the date of 

the mispayment to the date of the 

reimbursement. 

(d) Interest will be determined using 

the applicable OPEB discount rate.11

(e) If there is a dispute as to the 

amount of a reimbursement requested, 

the parties will enter into an alternative 

dispute resolution procedure as defined 

in section VI.(b) of this exemption. 

Section IV. Conditions Applicable to 

Section I(c) 

(a) New Chrysler must make a claim 

to the Committee regarding the specific 

deposit or transfer made in error or 

made in an amount greater than that to 

which the New Chrysler VEBA Plan was 

entitled. 

(b) The claim is made within the 

Verification Time Period, as defined in 

Section VI(s) of this exemption. 

(c) Interest on any mistaken deposit or 

transfer will accrue from the date of the 

mistaken payment to the date of the 

repayment. 

(d) Interest will be determined using 

the applicable OPEB discount rate. 

(e) If there is a dispute as to the 

amount of a mistaken payment, the 

parties will enter into an alternative 

dispute resolution procedure as defined 

in Section VI(b) of this exemption. 

Section V. Conditions Applicable to 

Section I(a),(b),(c) 

(a) The Committee and the 

Independent Fiduciary maintain for a 

period of six (6) years from the date the 

Note or any Shares are transferred to the 

New Chrysler VEBA Plan the records 

necessary to enable the persons 

described in paragraph (b) below to 

determine whether conditions of this 

exemption have been met, except that (i) 

a separate prohibited transaction will 

not be considered to have occurred if, 

due to circumstances beyond the control 

of the Committee and/or the 

Independent Fiduciary, the records are 

lost or destroyed prior to the end of the 

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

interest other than the Committee or the 

Independent Fiduciary shall be subject 

to the civil penalty that may be assessed 

under section 502(i) if the records are 

not maintained, or are not available for 

examination as required by paragraph 

(b) below; and 

(b) Notwithstanding any provisions of 

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

of the Act, the records referred to in 

paragraph (a) above shall be 

unconditionally available at their 

customary location during normal 

business hours to: 

(A) any duly authorized employee or 

representative of the Department or the 

Internal Revenue Service; 

(B) the UAW or any duly authorized 

representative of the UAW; 

(C) New Chrysler or any duly 

authorized representative of New 

Chrysler; and 

(D) Fiat or any duly authorized 

representative of Fiat; and 

(E) the Independent Fiduciary or any 

duly authorized representative of the 

Independent Fiduciary; 

(F) the Committee or any duly 

authorized representative of the 

Committee; and 

(G) any participant or beneficiary of 

the New Chrysler VEBA Plan, or any 

duly authorized representative of such 

participant or beneficiary. 

(c) None of the persons described 

above in paragraphs (b)(B), (E)–(G) shall 

be authorized to examine trade secrets 

of New Chrysler, or commercial or 

financial information which is 

privileged or confidential, and should 

New Chrysler refuse to disclose 

information on the basis that such 

information is exempt from disclosure, 

New Chrysler shall, by the close of the 

thirtieth (30th) day following the 

request, provide a written notice 

advising that person of the reasons for 

the refusal and that the Department may 

request such information. 

Section VI. Definitions 

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

person directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; (2) Any officer, 

director, or partner, employee or relative 

(as defined in section 3(15) of the Act) 

of such other person; or (3) Any 

corporation, partnership or other entity 

of which such other person is an officer, 

director or partner. (For purposes of this 

definition, the term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual). 

(b) The term ‘‘Alternative Dispute 

Resolution Procedure’’ shall mean, 

notwithstanding anything in Section 23 

of the Modified Settlement Agreement 

to the contrary, the following process for 

the resolution of any dispute or 

controversy arising under Section 5 of 

the Modified Settlement Agreement for 

the reimbursement of benefit claims or 

in Section 9 of the Modified Settlement 

Agreement for the mistaken deposits. 

Such disputes shall be resolved in the 

following manner: 

(i) While the parties agree that each of 

the disputes with respect to mistaken 

deposits and reimbursement of benefit 

claims referred to in the Settlement 

Agreement may be submitted to 

arbitration, they first shall endeavor to 

resolve the dispute through the 

following procedures: 

(1) the aggrieved party shall provide 

the other party with written notice of 

such dispute; 

(2) the written notice shall include a 

description of the alleged violation and 

identify the Section(s) of the Settlement 

Agreement allegedly violated; 

(3) the party receiving the notice shall 

respond in writing within 21 calendar 

days of receipt of notice; and 

(4) within 21 calendar days of that 

response the parties shall meet in an 

effort to resolve the dispute. 

All the time periods in this definition 

may be extended by agreement of the 

parties to the particular dispute. 

(ii) Should the parties be unable to 

resolve the dispute within 30 calendar 

days from the date of the meeting set 

forth in this definition, either party may 

send written demand to the other party 

that the issue be resolved by arbitration. 


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Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Notices 21677 

The failure to demand arbitration within 

60 calendar days from the date of the 

meeting as set forth in this definition 

shall waive any right to such arbitration 

over the issue, absent mutual written 

agreement to the contrary by the parties. 

If a party fails to make a timely demand 

for arbitration pursuant to this 

definition, such party may not pursue 

the dispute in court, and the dispute 

will be resolved on the basis of the 

position taken by the opposing or 

answering party. 

(iii) In the event that New Chrysler, 

the UAW, or the Committee proceed to 

arbitration in accordance with this 

definition, that dispute shall be 

submitted to an arbitrator (the 

Arbitrator) who will not have the 

authority to modify or amend the 

Modified Settlement Agreement, but 

only to apply the Modified Settlement 

Agreement, as written, to particular 

factual situations based on a 

preponderance of the evidence. The 

Arbitrator shall not have the authority to 

award punitive or exemplary damages. 

Interest shall be paid on any delayed 

payments as a result of the arbitration 

process. The interest will be calculated 

daily at a rate equal to the OPEB 

Discount Rate for each day that amounts 

remain outstanding. Such arbitration 

shall take place in Auburn Hills, 

Michigan unless otherwise agreed upon 

in writing by the parties. Any award 

shall be in writing and issued within 30 

days from the close of the hearing, 

unless the parties otherwise agree. The 

award shall be final, conclusive and 

binding on New Chrysler, the UAW, and 

the Committee. The award may be 

reduced to judgment in any appropriate 

court having jurisdiction in accordance 

with the provisions of the applicable 

law. 

(iv) In the event that a dispute arising 

under this definition is taken to 

arbitration, the Arbitrator shall be the 

arbitrator/umpire used by New Chrysler 

and the UAW for disputes arising under 

the then-applicable New Chrysler-UAW 

National Agreement; provided that, if 

within 15 days of receipt of the written 

arbitration demand referred to in (ii) 

above, the parties agree in writing that 

the dispute requires an arbitrator with 

actuarial expertise, then the Arbitrator 

shall be a person with actuarial 

expertise upon whom the parties 

mutually agree in writing, but failing 

such mutual agreement with 30 days of 

receipt of the written arbitration 

demand referred to in (ii) above, the 

arbitrator/umpire used by New Chrysler 

and the UAW for disputes arising under 

then-applicable Chrysler-UAW National 

Agreement shall select a person with 

actuarial expertise to serve as the 

Arbitrator. 

(v) New Chrysler, the UAW, and the 

Committee shall cooperate in setting a 

hearing date for the arbitration as soon 

as possible following selection of the 

Arbitrator. 

(c) The term ’’Class’’ or ‘‘Class 

Members’’ shall mean all persons who 

are: (i) New Chrysler-UAW Represented 

Employees who, as of October 29, 2007, 

were retired from Chrysler LLC with 

eligibility for Retiree Medical Benefits 

under the Chrysler Plan, and their 

eligible spouses, surviving spouses and 

dependents; (ii) surviving spouses and 

dependents of any New Chrysler-UAW 

Represented Employees who attained 

seniority and died on or prior to October 

29, 2007 under circumstances where 

such employee’s surviving spouse and/ 

or dependents are eligible to receive 

Retiree Medical Benefits from New 

Chrysler and/or the Chrysler Plan; (iii) 

former New Chrysler-UAW Represented 

Employees or UAW-represented 

employees who, as of October 29, 2007, 

were retired from any previously sold, 

closed, divested or spun-off Chrysler 

LLC business unit with eligibility to 

receive Retiree Medical Benefits from 

Chrysler LLC and/or the Chrysler Plan 

by virtue of any agreement(s) between 

Chrysler LLC and the UAW, and their 

eligible spouses, surviving spouses, and 

dependents; and (iv) surviving spouses 

and dependents of any former New 

Chrysler LLC-UAW Represented 

Employee or UAW-represented 

employee of a previously sold, closed, 

divested or spun-off Chrysler LLC 

business unit, who attained seniority 

and died on or prior to October 29, 2007 

under circumstances where such 

employee’s surviving spouse and/or 

dependents are eligible to receive 

Retiree Medical Benefits from Chrysler 

LLC and/or the Chrysler Plan. 

(d) The term ‘‘Committee’’ shall mean 

the eleven individuals consisting of six 

independent members and five UAW 

appointed members who will serve as 

the plan administrator and named 

fiduciary of the New Chrysler VEBA 

Plan. 

(e) The term ‘‘Covered Group’’ shall 

mean: (i) All New Chrysler Active 

Employees who had attained seniority 

as of September 14, 2007, and who 

retire after October 29, 2007 under the 

Chrysler LLC-UAW National 

Agreements, or any other agreement(s) 

between Chrysler LLC and the UAW or 

New Chrysler and the UAW, and who 

upon retirement are eligible for Retiree 

Medical Benefits under the Chrysler 

Plan or the New Chrysler VEBA Plan, as 

applicable, and their eligible spouses, 

surviving spouses and dependents; (ii) 

all former New Chrysler-UAW 

Represented Employees and all UAWrepresented employees who, as of 

October 29, 2007, remained employed 

in a previously sold, closed, divested, or 

spun-off Chrysler LLC business unit, 

and upon retirement are eligible for 

Retiree Medical Benefits from Chrysler 

LLC and/or the Chrysler Plan or the 

New Chrysler VEBA Plan by virtue of 

any other agreement(s) between 

Chrysler LLC and the UAW or New 

Chrysler and the UAW, and their 

eligible spouses, surviving spouses and 

dependents; and (iii) all eligible 

surviving spouses and dependents of 

New Chrysler Active Employees, or of 

former New Chrysler-UAW Represented 

Employees or UAW-represented 

employees identified in (ii) above, who 

attained seniority on or prior to 

September 14, 2007 and die after 

October 29, 2007 but prior to retirement 

under circumstances where such 

employee’s surviving spouse and/or 

dependents are eligible for Retiree 

Medical Benefits from Chrysler LLC 

and/or the Chrysler Plan or the New 

Chrysler VEBA Plan, as applicable. 

(f) The term ‘‘Existing Internal VEBA’’ 

shall mean the Chrysler VEBA Trust 

between Chrysler and State Street Bank 

and Trust Company, which has been 

maintained by New Chrysler as of June 

10, 2009. 

(g) The term ‘‘Implementation Date’’ 

shall mean the later of January 1, 2010 

or (ii) the ‘‘Final Effective Date,’’ as 

defined in the Modified Settlement 

Agreement. 

(h) The term ‘‘Independent Fiduciary’’ 

means a fiduciary that is (i) independent 

of and unrelated to Chrysler LLC, New 

Chrysler, the UAW, the Committee, and 

their affiliates, and (ii) appointed to act 

on behalf of the New Chrysler VEBA 

Plan with respect to the holding, 

management and disposition of the 

Shares and the Note. In this regard, the 

fiduciary will not be deemed to be 

independent of and unrelated to 

Chrysler LLC, New Chrysler, the UAW, 

the Committee, and their affiliates if (1) 

such fiduciary directly or indirectly 

controls, is controlled by, or is under 

common control with Chrysler LLC, 

New Chrysler, the UAW, the Committee 

or their affiliates, (2) such fiduciary 

directly or indirectly receives any 

compensation or other consideration 

from Chrysler LLC, New Chrysler, the 

UAW or any Committee member in his 

or her individual capacity in connection 

with any transaction contemplated in 

this exemption (except that an 

independent fiduciary may receive 

compensation from the Committee or 

the New Chrysler VEBA Plan for 

services provided to the New Chrysler 


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21678 Federal Register / Vol. 75, No. 79 / Monday, April 26, 2010 / Notices 

VEBA Plan in connection with the 

transactions discussed herein if the 

amount or payment of such 

compensation is not contingent upon or 

in any way affected by the independent 

fiduciary’s ultimate decision), and (3) 

the annual gross revenue received by 

the fiduciary, in any fiscal year, from 

Chrysler LLC, New Chrysler, the UAW 

or a member of the Committee in his or 

her individual capacity, exceeds 3% of 

the fiduciary’s annual gross revenue 

from all sources (for federal income tax 

purposes) for its prior tax year. 

(i) The term ‘‘Modified Settlement 

Agreement’’ means the UAW Retiree 

Settlement Agreement between Chrysler 

LLC and the UAW dated June 10, 2009. 

(j) The term ‘‘New Chrysler’’ shall 

mean a Delaware Limited Liability 

Company formed by Fiat North America 

LLC, a subsidiary of Fiat S.p.A., a 

manufacturer of automobiles and 

automotive parts in Turin, Italy, and its 

successors and assigns in the event of a 

reorganization, restructuring, 

recapitalization, merger, or similar 

corporate transaction. New Chrysler is 

the Company that acquired certain 

assets and liabilities from Chrysler LLC 

pursuant to the Section 363 Sale. 

(k) The term ‘‘New Chrysler VEBA 

Plan’’ refers to the newly created retiree 

medical employee welfare benefit plan. 

The plan is an employee welfare benefit 

plan established and maintained by the 

Committee, and shall provide retiree 

medical benefits to the Class and the 

Covered Group established pursuant to 

the Modified Settlement Agreement. 

(l) The term ‘‘Note’’ shall mean a note 

issued by New Chrysler with a principal 

amount of $4,587 billion and an implicit 

interest rate of nine (9%) payable in 

fixed annual installments pursuant to 

the Indenture Agreement. Payments, 

consisting of accrued and unpaid 

interest and amortized principal shall be 

due on July 15 of each year, 

commencing July 15, 2010 and ending 

on July 15, 2023. 

(m) The term ‘‘Registration Rights 

Agreement’’ means the Equity 

Registration Rights Agreement by and 

among New Chrysler, the Treasury 

Department, Canada, the VEBA Trust 

and Chrysler LLC, entered into on June 

10, 2009. 

(n) The term ‘‘Section 363 Sale’’ means 

a sale under section 363 of Title 11 of 

the U.S. Code, by which on June 10, 

2009, New Chrysler succeeded to 

certain assets and liabilities of Chrysler 

LLC. 

(o) The term ‘‘Shares’’ means the 

membership interests issued by New 

Chrysler, including any membership 

interests, partnership interests, shares of 

stock, or other equity acquired pursuant 

to an adjustment, substitution, 

conversion, or other modification of 

Shares in connection with a 

reorganization, restructuring, 

recapitalization, merger or similar 

corporate transaction involving New 

Chrysler, provided that each holder of 

Shares is treated in an identical manner. 

(p) The term ‘‘Treasury Department’’ 

shall mean the United States 

Department of the Treasury. 

(q) The term ‘‘UAW’’ means the 

International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America. 

(r) The term ‘‘VEBA’’ means the New 

Chrysler VEBA Plan and its associated 

UAW Retiree Medical Benefits Trust 

(the VEBA Trust). 

(s) The term ‘‘Verification Time 

Period’’ means: (i) With respect to all 

Shares, the period beginning on the date 

of publication of the final exemption in 

the Federal Register and ending 60 

calendar days thereafter; (ii) with 

respect to each payment pursuant to the 

Note, the period beginning on the date 

of the payment and ending 90 calendar 

days thereafter; and (iii) with respect to 

the UAW-Related Account of the 

Existing Internal VEBA, the period 

beginning on the date of publication of 

the final exemption in the Federal 

Register (or, if later, the date of the 

transfer of the UAW-Related Account to 

the New Chrysler VEBA Plan) and 

ending 180 calendar days thereafter. 

Signed at Washington, DC, this 21st day of 

April, 2010. 

Ivan Strasfeld, 

Director of Exemption, Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–9607 Filed 4–23–10; 8:45 am] 

BILLING CODE 4510–29–P 

NATIONAL SCIENCE FOUNDATION 

Business and Operations Advisory 

Committee; Notice of Meeting 

In accordance with Federal Advisory 

Committee Act (Pub. L. 92–463, as 

amended), the National Science 

Foundation announces the following 

meeting: 

Name: Business and Operations Advisory 

Committee (9556). 

Date/Time: May 18, 2009; 1 p.m. to 5:45 

p.m. (EST). May 19, 2009; 8 a.m. to 12 p.m. 

(EST). 

Place: National Science Foundation, 4201 

Wilson Boulevard, Stafford I, Room 1235. 

Type of Meeting: Open. 

Contact Person: Joan Miller, National 

Science Foundation, 4201 Wilson Boulevard, 

Arlington, VA 22230; (703) 292–8200. 

Purpose of Meeting: To provide advice 

concerning issues related to the oversight, 

integrity, development and enhancement of 

NSF’s business operations. 

Agenda 

May 18, 2010 

Welcome/Introductions; OIRM/CIO/BFA 

Updates; Post Award/Policy Updates; 

Performance Evaluation Assessment; Open 

Government Initiative; NSF Workforce 

Management/Leadership Development. 

May 19, 2010 

NSF Strategic Plan Update—2010–2015; 

Future NSF–2013 Lease Expiration; 

Committee Discussion: Prepare for Meeting 

with NSF Deputy Director; Discussion with 

Deputy Director; Closing Committee 

Discussion/Wrap-Up. 

Dated: April 21, 2010. 

Susanne Bolton, 

Committee Management Officer. 

[FR Doc. 2010–9554 Filed 4–23–10; 8:45 am] 

BILLING CODE 7555–01–P 

NUCLEAR REGULATORY 

COMMISSION 

[Docket Nos. 50–498 and 50–499; NRC– 

2010–0162] 

STP Nuclear Operating Company 

South Texas Project, Units 1 and 2 

Environmental Assessment and 

Finding of No Significant Impact 

The U.S. Nuclear Regulatory 

Commission (NRC) is considering 

issuance of an exemption, pursuant to 

Title 10 of the Code of Federal 

Regulations (10 CFR), Section 26.9, for 

Facility Operating Licenses numbered 

NPF–76 and NPF–80, issued to STP 

Nuclear Operating Company (the 

licensee), for operation of the South 

Texas Project (STP), Units 1 and 2, 

respectively, located in Matagorda 

County, Texas. In accordance with 10 

CFR 51.21, the NRC prepared an 

environmental assessment documenting 

its finding. The NRC concluded that the 

proposed action will have no significant 

environmental impact. 

Environmental Assessment 

Identification of the Proposed Action: 

The proposed action would consider 

approval of an exemption for STP, Units 

1 and 2, from some of the requirements 

of 10 CFR Part 26, ‘‘Fitness for Duty 

Rule.’’ Specifically, the licensee requests 

approval of an exemption from the 

requirements of 10 CFR 26.205(c), 

‘‘Work hours scheduling,’’ and (d), 

‘‘Work hour controls.’’ 

The licensee states that during 

declaration of severe weather conditions 

such as tropical storm or hurricane force 

winds, adherence to all work hour 

controls requirements could impede the 


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