Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 47963 

1Because the New GM VEBA Plan will not be 

qualified under section 401 of the Internal Revenue 

Code of 1986, 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. 

2The Summary of Facts and Representations is 

based on the Applicant’s representations and does 

not reflect the views of the Department. 3No. 09–50026 (Bankr. S.D.N.Y.). 

4Following the asset sale, Old GM was renamed 

Motors Liquidation Company. For the operations, 

assets and liabilities that were not transferred to 

New GM, the chapter 11 bankruptcy proceeding 

will continue in order to resolve creditors’ claims 

and wind down those operations in an orderly way. 

factors in 21 U.S.C. 823(a) and 

determined that the registration of 

Norac Inc. to manufacture the listed 

basic class of controlled substance is 

consistent with the public interest at 

this time. DEA has investigated Norac 

Inc. to ensure that the company’s 

registration is consistent with the public 

interest. The investigation has included 

inspection and testing of the company’s 

physical security systems, verification 

of the company’s compliance with state 

and local laws, and a review of the 

company’s background and history. 

Therefore, pursuant to 21 U.S.C. 823, 

and in accordance with 21 CFR 1301.33, 

the above named company is granted 

registration as a bulk manufacturer of 

the basic class of controlled substance 

listed. 

Dated: September 11, 2009. 

Joseph T. Rannazzisi, 

Deputy Assistant Administrator, Office of 

Diversion Control, Drug Enforcement 

Administration. 

[FR Doc. E9–22453 Filed 9–17–09; 8:45 am] 

BILLING CODE 4410–09–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Application No. L–11568] 

Notice of Proposed Individual 

Exemption Involving General Motors 

Corporation, Located in Detroit, MI 

AGENCY: Employee Benefits Security 

Administration, U.S. Department of 

Labor. 

ACTION: Notice of proposed individual 

exemption. 

This document contains a notice of 

pendency before the Department of 

Labor (the Department) of a proposed 

individual exemption from certain 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (the Act or ERISA). The 

transactions involve the UAW General 

Motors Company Retiree Medical 

Benefits Plan (the New GM VEBA Plan) 

and its associated UAW Retiree Medical 

Benefits Trust (the VEBA Trust) 

(collectively the VEBA).1 The proposed 

exemption, if granted, would affect the 

VEBA, its participants and beneficiaries. 

DATES: Effective Date: If granted, this 

proposed exemption will be effective as 

of July 10, 2009. 

Written comments and requests for a 

public hearing on the proposed 

exemption should be submitted to the 

Department within 45 days from the 

date of publication of this Federal 

Register Notice. 

ADDRESSES: All written comments and 

requests for a public hearing concerning 

the proposed exemption should be sent 

to the Office of Exemption 

Determinations, Employee Benefits 

Security Administration, Room N–5700, 

U.S. Department of Labor, 200 

Constitution Avenue, NW., Washington 

DC 20210, Attention: Application No. 

L–11568. Interested persons are also 

invited to submit comments and/or 

hearing requests to EBSA via e-mail or 

FAX. Any such comments or requests 

should be sent either by e-mail to: 

gm@dol.gov, or by FAX to (202) 219– 

0204 by the end of the scheduled 

comment period. The application 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. 

FOR FURTHER INFORMATION CONTACT: 

Karen E. Lloyd, Office of Exemption 

Determinations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, telephone (202) 

693–8547. (This is not a toll-free 

number.) 

SUPPLEMENTARY INFORMATION: This 

document contains 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 ERISA. The proposed 

exemption has been requested in an 

application filed by General Motors 

Corporation pursuant to section 408(a) 

of ERISA 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 to issue 

exemptions of the type requested to the 

Secretary of Labor. Accordingly, this 

proposed exemption is being issued 

solely by the Department. 

Summary of Facts and 

Representations 2

The Applicant 

Prior to its bankruptcy filing on June 

1, 2009, General Motors Corporation 

(Old GM) and its subsidiaries were 

engaged primarily in the worldwide 

development, production, and 

marketing of cars, trucks, and related 

parts. Old GM had its largest operating 

presence in North America. As of March 

31, 2009, Old GM had total assets on its 

consolidated balance sheet of 

$82,290,000,000 and liabilities of 

$172,810,000,000. 

By motion filed June 1, 2009, in In re 

General Motors Corporation, 3 Old GM 

sought approval for the sale of 

substantially all of its assets to a 

purchaser sponsored by the United 

States Department of the Treasury (U.S. 

Treasury). On July 10, 2009, following 

approval of the U.S. Bankruptcy Court 

for the Southern District of New York, 

certain assets and liabilities of Old GM 

were sold to General Motors Company 

(New GM).4 New GM maintains its 

headquarters in Detroit, MI, and 

employs 235,000 people throughout the 

world. 

Background 

Throughout much of 2005, Old GM 

and the International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America (UAW) 

engaged in extended discussions 

concerning the impact of rising health 

care costs on Old GM’s financial 

condition. During these discussions, 

Old GM asserted that it had the right to 

unilaterally modify the retiree health 

benefits under the General Motors 

Health Care Program for Hourly 

Employees (‘‘Old GM Plan’’) and that, if 

no agreement was reached to address 

the economic burden of its retiree health 

obligation, Old GM would do so 

unilaterally. The UAW disagreed with 

Old GM’s position and asserted that 

retiree benefits were vested and that Old 

GM did not have the right to modify 

them unilaterally. The UAW and a class 

of retirees (‘‘Class’’) sued Old GM over 

this issue, and after an extensive review 

by the UAW and class counsel (Class 

Counsel) of Old GM’s ability to continue 

providing retiree health care benefits, 

the parties entered into a settlement 


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47964 Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 

5The Applicant’s position is that the U.S. 

Treasury’s ownership of more than 50% of New GM 

should not result in the U.S. Treasury being 

considered a party in interest to the New GM VEBA 

Plan under section 3(14)(E) of ERISA. Section 

3(14)(E) states that a party in interest means, as to 

an employee benefit plan, ‘‘an owner, direct or 

indirect, of 50 percent or more of * * * the 

combined voting power of all classes of stock 

entitled to vote or the total value of shares of all 

classes of stock of a corporation * * * which is an 

employer,’’ any of whose employees are covered by 

agreement, providing for, among other 

things, the institution of co-pays and 

deductibles under the Old GM Plan. 

UAW et al. v. General Motors Corp., No. 

05–CV–73991, 2006 WL 891151 (E.D. 

Mich. Mar. 31, 2006), aff’d Int’l Union, 

UAW v. General Motors Corp., 497 F.3d 

615 (6th Cir. 2006) (‘‘Henry I’’). 

By its terms, however, the Henry I 

settlement agreement provided only a 

temporary and limited solution. The 

settlement agreement imposed new, 

cost-sharing requirements on UAWhourly retirees, and required Old GM to 

make certain payments to a voluntary 

employees’ beneficiary association trust 

(‘‘Mitigation VEBA’’) controlled by a 

committee independent of Old GM, 

which would act as a funding source to 

mitigate the impact of these cost-sharing 

provisions on retirees. The settlement 

agreement was to remain in effect until 

at least September 14, 2011, after which 

either Old GM or the UAW could 

terminate the agreement and reassert its 

original position regarding Old GM’s 

ability to unilaterally modify and/or 

terminate retiree health care benefits. If 

not terminated, the settlement 

agreement would remain in effect 

indefinitely. 

In 2007, during labor negotiations 

concerning a new national collective 

bargaining agreement for UAWrepresented employees, Old GM advised 

the UAW that it planned to terminate 

the Henry I settlement agreement in 

accordance with its terms in 2011, and 

exercise its right to unilaterally 

terminate and/or modify the Old GM 

Plan’s retiree coverage for UAW retirees 

and their dependents, if Old GM’s 

preference for a mutual agreement could 

not be attained. In response, the UAW 

reasserted its legal position that postretirement medical coverage for current 

UAW retirees under the Old GM Plan is 

vested and unalterable, but agreed to 

enter into discussions to see if a 

solution acceptable to all parties could 

be negotiated. 

On September 26, 2007, the UAW and 

the Class sued Old GM in the United 

States District Court for the Eastern 

District of Michigan, again challenging 

Old GM’s right to unilaterally modify 

and/or terminate retiree health benefits. 

Int’l Union, UAW, et al. v. General 

Motors Corp., No. 07–cv–14074 (E.D. 

Mich. Sept. 26, 2007) (‘‘Henry II’’). Also, 

on that day, Old GM and the UAW 

agreed to a memorandum of 

understanding regarding post-retirement 

medical benefits. 

On February 21, 2008, the Henry II 

parties agreed on a detailed settlement 

to effectuate the September 2007 

memorandum of understanding (‘‘Henry 

II Settlement Agreement’’). The Henry II 

Settlement Agreement provided that on 

the later of January 1, 2010, or final 

court approval of the Settlement 

Agreement, Old GM would terminate 

retiree coverage under the Old GM Plan 

for the Class and an additional group of 

employees and retirees known as the 

‘‘Covered Group,’’ and would transfer 

certain assets to the New GM VEBA 

Plan to provide the Class and Covered 

Group with post-retirement medical 

benefits. The VEBA Trust was to receive 

assets from a number of sources 

including: funds that were then in the 

Mitigation VEBA and in the VEBA that 

supports the Old GM Plan (‘‘the Internal 

VEBA’’), cash from Old GM and Old GM 

issued notes. 

After a fairness hearing, the Henry II 

Settlement Agreement was approved by 

the District Court on July 31, 2008, as 

fair, reasonable, and adequate. See Int’l 

Union, UAW, et al. v. General Motors 

Corp., No. 07–cv–14074, 2008 WL 

2968408 (E.D. Mich. July 31, 2008). No 

appeal of the court’s order approving 

the settlement was taken. 

The Henry II Settlement Agreement 

fully resolved the parties’ dispute 

regarding post-retirement health 

benefits and replaced the Henry I 

settlement agreement. Under the new 

agreement, Old GM’s obligation to 

provide post-retirement medical 

benefits to the Class and Covered Group 

would be terminated. The New GM 

VEBA Plan would be established and 

maintained not by Old GM, but by an 

employees’ beneficiary association 

consisting of the population covered by 

the New GM VEBA Plan and 

administered by an independent 

committee (‘‘Committee’’). The New GM 

VEBA Plan, to be funded exclusively 

through 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. 

Since final approval of the Henry II 

Settlement Agreement by the court on 

July 31, 2008, Old GM’s financial 

position deteriorated significantly due 

to a steep and unanticipated decline in 

revenue caused by a dramatic drop in 

the market for new motor vehicles. As 

a consequence, Old GM petitioned the 

Federal government for emergency 

financial assistance, which resulted in a 

Loan and Security Agreement dated 

December 31, 2008, between Old GM 

and the U.S. Treasury (‘‘2008 Loan 

Agreement’’). The 2008 Loan Agreement 

required Old GM to present, by March 

31, 2009, a certification and report 

detailing, among other things, the 

progress made by Old GM and its 

subsidiaries in implementing a 

restructuring plan that included (a) 

modification of labor contracts, (b) 

modification of Old GM’s obligations to 

the New GM VEBA Plan, and (c) a bond 

exchange offer with its creditors. Failure 

to reach the preceding agreements, to 

the satisfaction of the President’s 

designee, would cause the 2008 Loan to 

become due and payable within 30 

days. 

On March 31, 2009, Old GM entered 

into amendments to the 2008 Loan 

Agreement that extended the deadline 

to June 1, 2009. Between March 31, 

2009, and June 1, 2009, Old GM drew 

additional government aid. On June 1, 

2009, Old GM filed for bankruptcy 

protection. 

Bankruptcy 

Given Old GM’s financial situation, 

the bankruptcy, and the need to meet 

the requirements of the 2008 Loan 

Agreement, Old GM, the UAW, Class 

Counsel, and the U.S. Treasury agreed 

that Old GM and the UAW would enter 

into another agreement, known as the 

Modified Settlement Agreement, and 

seek approval of the Modified 

Settlement Agreement from the 

bankruptcy court. The Modified 

Settlement Agreement governed the 

provision of post-retirement medical 

benefits to the Class and the Covered 

Group by the new company (i.e., New 

GM) that was anticipated to purchase 

certain assets of Old GM as part of the 

bankruptcy action. 

On July 5, 2009, the bankruptcy court 

approved a sale under Section 363 of 

Title 11 of the U.S. Code by which New 

GM succeeded to certain assets and 

liabilities of Old GM (‘‘Section 363 

Sale’’). The bankruptcy court also 

approved the Modified Settlement 

Agreement. The Section 363 Sale 

closed, and the Modified Settlement 

Agreement was executed, on July 10, 

2009. 

Effective as of the Section 363 Sale, 

New GM has the following 

capitalization: 

Common Equity: The outstanding 

common stock of New GM (New GM 

Common Stock) (without giving effect to 

the warrants described below) is 

allocated as follows: 

• 60.8% (304,131,356 shares) to the 

U.S. Treasury 5


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Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 47965 

such plan. In the Applicant’s view, Congress did 

not intend the party in interest definition to include 

the government of the United States or a Cabinet 

Department of its Executive Branch. In the 

Department’s view, section 3(14) does not apply to 

the U.S. Treasury in connection with its ownership 

interest in New GM because a contrary 

interpretation would conflict with section 514(d) of 

ERISA. That section provides, in part, that 

‘‘[n]othing in [title I] shall be construed to alter, 

amend, modify, invalidate, impair, or supersede 

any law of the United States * * *’’ If the U.S. 

Treasury were to be a party in interest with respect 

to a plan subject to ERISA, then ERISA would 

prohibit almost any transaction between that plan 

and the Federal government arising under a federal 

statutory framework other than ERISA. 

Accordingly, the Department concurs with the 

Applicant’s conclusion that the U.S. Treasury is not 

a party in interest under ERISA. 

6As of the date of the bankruptcy filing, 

approximately 751,700 hourly retirees and 

dependents in the U.S. received retiree health 

benefits from Old GM. Of this total, approximately 

699,000 are hourly retirees and spouses, surviving 

spouses and eligible dependents represented by the 

UAW. Additionally, approximately 78,000 UAWrepresented active employees had attained seniority 

as of September 14, 2007, and will, upon 

retirement, be covered by the New GM VEBA Plan. 

• 11.7% (58,368,644 shares) to the 

Canadian and Ontario governments 

(collectively) 

• 17.5% (87,500,000 shares) to the 

New GM VEBA Plan 

• 10% (50,000,000 shares) to Old GM 

Perpetual Preferred Stock: Single 

issue of $9.0 billion cumulative 

perpetual preferred stock with a 9% 

dividend per annum (‘‘Series A’’), 

consisting of: 

• $2.1 billion issued to the U.S. 

Treasury 

• $0.4 billion issued to the Canadian 

and Ontario governments (collectively) 

• $6.5 billion issued to the New GM 

VEBA Plan 

Debt: Approximately $17.3 billion 

estimated total consolidated debt 

(excluding debt related to Old GM’s 

automotive supplier financing program 

and warranty program), each in a 

separate issue, including approximately: 

• $6.7 billion owed to the U.S. 

Treasury 

• $1.3 billion owed to the Canadian 

and Ontario governments (collectively) 

• $2.5 billion owed to the New GM 

VEBA Plan 

• $6.8 billion of other, primarily 

international debt, but excluding Europe 

Warrants: Separate issues of warrants 

will be allocated as follows: 

• To Old GM: Warrants to acquire 

45,454,545 newly issued shares of New 

GM Common Stock, exercisable at any 

time prior to the seventh anniversary of 

issuance, with an exercise price set at 

$30.00 per share. 

• To Old GM: Warrants to acquire 

45,454,545 newly issued shares of New 

GM Common Stock, exercisable at any 

time prior to the tenth anniversary of 

issuance, with an exercise price set at 

$55.00 per share. 

• To the New GM VEBA Plan: 

Warrants to acquire 15,151,515 newly 

issued shares of New GM Common 

Stock, exercisable at any time prior to 

December 31, 2015, with an exercise 

price set at $126.92 per share. 

New GM VEBA Plan and VEBA Trust 

The UAW General Motors Company 

Retirees Employees’ Beneficiary 

Association (‘‘General Motors Company 

Retirees EBA’’), acting through the 

Committee, will establish and maintain 

the New GM VEBA Plan, subject to 

ERISA, to provide retiree health benefits 

to the Class and Covered Group after the 

Implementation Date, which will be 

December 31, 2009. Prior to the Section 

363 Sale, the Old GM Plan provided 

retiree health benefits to the Class and 

the Covered Group; following the 

closing of the Section 363 Sale, the 

General Motors Company Plan (‘‘New 

GM Plan’’) assumed provision of the 

benefits with respect to claims incurred 

on or before the Implementation Date. 

The New GM VEBA Plan will be 

responsible for benefit claims incurred 

after the Implementation Date.6

Beginning with claims incurred on 

and after the later of (i) July 1, 2009, or 

(ii) receipt of necessary bankruptcy 

court approval, the Old GM Plan will be 

amended and/or implemented to reflect 

certain benefit changes set forth in 

Exhibit F of the Modified Settlement 

Agreement. After the Implementation 

Date, the Committee will have sole 

responsibility to determine the scope 

and level of retiree health benefits 

available to the Class and Covered 

Group under the New GM VEBA Plan. 

The Committee may raise or lower the 

level of retiree health care benefits 

available to the Class and Covered 

Group. In exercising its authority over 

benefit design, the Committee shall be 

guided by the principle that the New 

GM VEBA Plan should provide 

substantial health benefits for the 

duration of the lives of all participants 

and beneficiaries in the New GM VEBA 

Plan. 

The General Motors Company 

Retirees EBA, along with the UAW 

Chrysler Retirees Employees’ 

Beneficiary Association and the UAW 

Ford Retirees Employees’ Beneficiary 

Association, each acting through the 

Committee, established the VEBA Trust 

on October 16, 2008. The VEBA Trust 

will be the funding source for the New 

GM VEBA Plan. The VEBA Trust is the 

subject of a trust agreement between the 

trustee and the Committee, acting on 

behalf of the respective EBAs. The 

VEBA Trust is intended to be taxexempt under section 501(c)(9) of the 

Internal Revenue Code, as amended, 

and, as a trust holding assets of plans 

subject to ERISA, will itself be subject 

to ERISA’s fiduciary responsibility 

standards. 

The VEBA Trust will have three 

separate retiree accounts, designed to 

segregate payments attributable to GM, 

Ford, and Chrysler, pursuant to the 

terms of each company’s settlement 

agreement with the UAW and each 

respective class. Each retiree account 

will be a separate, dedicated account, to 

be used for the sole purpose of funding 

benefits provided under the separate 

plans providing health benefits to the 

retirees of GM, Ford and Chrysler, and 

defraying the reasonable expenses of 

each plan. Each retiree account will 

contain a separate sub-account 

maintained to hold any employer 

security. Assets from one retiree account 

may not offset the liabilities or defray 

the expenses attributable to another 

retiree account. The VEBA Trust was 

structured in this way to allow for the 

pooled investment of assets and to 

provide economies of scale to the 

respective plans’ investments, while 

maintaining a separate plan for each of 

the three retiree classes. Unless the 

Committee decides to establish 

segregated investment vehicles for 

specific separate retiree accounts, the 

assets of the separate retiree accounts, 

other than any employer security subaccount, will be invested on a pooled 

basis within the VEBA Trust. 

Under the terms of the Modified 

Settlement Agreement, the assets New 

GM transfers or causes to be transferred 

to the New GM VEBA Plan will be 

credited to the GM retiree account in the 

VEBA Trust (the ‘‘General Motors 

Company Separate Retiree Account’’). 

The transferred assets and remittances 

of, or attributable to, the GM UAW 

retirees will be professionally managed 

and reinvested and will pay benefits 

and New GM VEBA Plan expenses 

under the New GM VEBA Plan. The 

transferred securities issued by New GM 

will be held in a separate sub-account 

(the ‘‘General Motors Company 

Employer Security Sub-Account’’) of the 

General Motors Company Separate 

Retiree Account and will be managed by 

an independent fiduciary. 

The Committee 

The Committee acts as the plan 

administrator and named fiduciary with 

respect to the New GM VEBA Plan, and 

appoints the trustee, the independent 

fiduciary and all investment managers 

of the VEBA Trust’s assets. The 

Committee is comprised of eleven 


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47966 Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 

individuals, consisting of two groups: 

Six Independent Members and five 

UAW Members. The initial Independent 

Members were approved by the district 

court in Henry II and the UAW 

Members were appointed by the UAW. 

The Modified Settlement Agreement 

maintains these appointments. Neither 

Old GM nor New GM has any 

appointment power, and the Committee 

will function completely independently 

of both. No member of the Committee 

may be a current or former officer, 

director or employee of Old GM, New 

GM, Ford, Chrysler, or Chrysler Group, 

with the following exceptions: (i) A 

retiree who was represented by the 

UAW in his or her employment with 

either Old GM, New GM, Ford, Chrysler, 

or Chrysler Group, may be a UAW 

Member of the Committee, and (ii) an 

employee of Old GM, New GM, Ford, 

Chrysler, or Chrysler Group who is on 

leave from the company and is 

represented by the UAW, may be a 

UAW Member of the Committee. None 

of the Independent Members nor any of 

their family members, employers or 

partners may have any financial or 

institutional relationship with either 

Old GM, New GM, Ford, Chrysler, or 

Chrysler Group if such relationship 

could reasonably be expected to impair 

such Independent Member’s exercise of 

independent judgment. 

The UAW Members serve at the 

discretion of the UAW International 

President and may be removed or 

replaced, and a successor designated, at 

any time by written notice by the UAW 

International President to the 

Committee. Independent Members serve 

for a term of three years, except two of 

the initial Independent Members will 

have an initial term of two years, and 

another two will have an initial term of 

one year. Independent Members may 

serve more than one term. An 

Independent Member will serve on the 

Committee until expiration of his or her 

term, or his or her death, incapacity to 

serve, resignation or removal. An 

Independent Member may be removed 

or replaced, and a successor designated, 

at any time by an affirmative vote of 

nine of the other members of the 

Committee. In the event of a vacancy in 

the group of Independent Members, 

whether by expiration of a term, 

resignation, removal, incapacity, or 

death, a successor Independent Member 

will be elected by the affirmative vote of 

nine members. If a successor 

Independent Member is not appointed 

within a reasonable time after a 

vacancy, an arbitrator may be 

appointed, upon application of any 

member, to appoint a successor 

Independent Member to the Committee. 

A majority of the members of the 

Committee then in office shall 

constitute a quorum for the purpose of 

transacting any business; provided that 

at least one Independent Member and 

one UAW Member are present. Each 

Member of the Committee present at the 

meeting shall have one vote. Generally, 

actions of the Committee shall be by 

majority vote of the entire Committee, 

provided that at least one Independent 

Member and one Union Member must 

be a Member in the majority for any 

Committee action to take effect. 

The Committee will select a chair 

from among its members. The term of 

the chair will continue until he or she 

ceases to be a member, resigns as chair 

or is replaced as chair with another 

member by majority vote among the 

remaining members. 

Old GM and New GM Role 

Neither Old GM nor New GM will 

have any role in the governance, 

management and operations of the New 

GM VEBA Plan. Old GM and New GM 

will not be fiduciaries or have any 

ability to appoint any member of the 

Committee, and the Committee is not 

authorized to act for Old GM or New 

GM and is not an agent or representative 

of Old GM or New GM for any purpose. 

Pursuant to the Modified Settlement 

Agreement, New GM will cooperate 

with the UAW and the Committee and 

at the Committee’s request will 

undertake reasonable actions to assist 

the Committee in the orderly transition 

of responsibility for administration of 

retiree medical benefits from the Old 

GM Plan, or New GM Plan, as 

applicable, to the New GM VEBA Plan. 

Such cooperation may include assisting 

the Committee in educational efforts 

and other communications to the Class 

and Covered Group so that they 

understand the terms of the New GM 

VEBA Plan and the shift of coverage for 

the Class and Covered Group from the 

Old GM Plan, or New GM Plan, as 

applicable, to the New GM VEBA Plan, 

and understand the claims submission 

process and any other initial 

administrative changes undertaken by 

the Committee. At the Committee’s 

request and as permitted by law, New 

GM will furnish to the Committee such 

information and will provide such 

cooperation as may be reasonably 

necessary to permit the Committee to 

effectively administer the New GM 

VEBA Plan. At the request of the 

Committee, and subject to 

reimbursement for reasonable costs, 

New GM will continue to perform the 

necessary eligibility work for a 

reasonable period of time, not to exceed 

90 days after the Implementation Date, 

in order to allow the Committee to 

establish and test the eligibility 

database. New GM will also assist the 

Committee in transitioning benefit 

provider contracts to the New GM VEBA 

Plan. 

To the extent permitted by law, New 

GM will allow pension plan participants 

to voluntarily authorize the withholding 

of required contributions under the New 

GM VEBA Plan from pension benefits, 

and, to the extent reasonably practical, 

crediting such amounts to the General 

Motors Company Separate Retiree 

Account of the VEBA Trust on a 

monthly basis (the Contribution 

Withholding). A pension plan 

participant may elect or withdraw 

consent for the Contribution 

Withholding at any time by providing 

45 days written notice to the plan 

administrator of the General Motors 

Hourly-Rate Employees Pension Plan or 

such shorter period as may be required 

by law. New GM also will cooperate 

with the Committee to make provision 

for the VEBA Trust payments of the 

covered benefit related to Medicare Part 

B premiums to be incorporated into the 

monthly New GM pension checks for 

eligible retirees and surviving spouses 

participating in the New GM VEBA Plan 

(the Part B Payment). 

The New GM VEBA Plan will be 

responsible for the payment of 

reasonable costs associated with New 

GM’s administration of payment of the 

Contribution Withholdings and the Part 

B Payment. The Applicant asserts that, 

to the extent these payments are 

prohibited transactions, the statutory 

exemption for the provision of services 

provided by section 408(b)(2) of ERISA 

provides relief from the prohibited 

transaction restrictions of section 406(a) 

of ERISA. 

ERISA section 408(b)(2) provides 

relief for the ‘‘[c]ontracting or making 

reasonable arrangements with a party in 

interest for office space, or legal, 

accounting or other services necessary 

for the establishment or operation of the 

plan, if no more than reasonable 

compensation is paid therefor.’’ Under 

the Department’s regulations, a service 

is necessary for the establishment or 

operation of a plan if the service is 

‘‘appropriate and helpful to the plan 

obtaining the service in carrying out the 

purposes for which the plan is 

established or maintained.’’ 29 CFR 

section 2550.408(b)(2). 

According to the Applicant, the 

Contribution Withholding is helpful to 

the New GM VEBA Plan as it reduces 

expenses associated with processing of 

participant contributions and 


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Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 47967 

7Pursuant to the Henry II Settlement Agreement, 

the Internal VEBA was divided into two 

bookkeeping accounts effective January 1, 2008; one 

with assets equal to the value of the Internal VEBA 

as of December 31, 2007, multiplied by the 

percentage of Old GM’s hourly OPEB liability as of 

December 31, 2007, attributable to UAW 

represented employees, retirees, their eligible 

spouses, surviving spouses and dependents (the 

‘‘UAW–Related Account’’), and the other account of 

the remaining assets, attributable to non-UAW 

represented individuals. 

investigating delinquent contributions. 

This service is also helpful to 

participants as it assures that 

contributions are received on time, and 

without the need to mail a check 

monthly to the New GM VEBA Plan. 

Accordingly, the Contribution 

Withholding is appropriate and helpful 

to the New GM VEBA Plan in carrying 

out its purpose because it reduces 

expenses and aids in making sure 

participants receive benefits without 

interruption. 

With respect to the Part B Payment, 

the Applicant states that it is 

appropriate and helpful to the New GM 

VEBA Plan as it allows the New GM 

VEBA Plan to take advantage of an 

existing system in order to incorporate 

a defined, monthly payment to 

participants into pension checks that 

participants are already receiving. This 

obviates the need for the New GM VEBA 

Plan to develop its own distribution 

system and undertake the expense of 

mailing monthly checks to all 

participants. Accordingly, the Part B 

Payment also reduces expenses of the 

New GM VEBA Plan, which helps 

conserve the amount of resources 

available to provide benefits. 

The Applicant further represents that 

the costs of the Contribution 

Withholding and the Part B Payment 

have not yet been determined. However, 

the Committee will be subject to 

ERISA’s fiduciary responsibility rules 

when determining the cost structure, 

and the Modified Settlement Agreement 

states that both services will only be 

provided to the extent permitted by law, 

and a cost that is not reasonable would 

not permitted by law. 

In the Department’s view, relief under 

section 408(b)(2) would be available for 

these services provided the conditions 

of that exemption are satisfied. 

Ultimately it is the responsibility of the 

Committee to determine whether the 

services provided by New GM satisfy all 

of the conditions set forth in the 

statutory exemption and pertinent 

regulations. 

Payments to the New GM VEBA Plan 

As described more fully below, under 

the Modified Settlement Agreement, 

New GM transferred to the New GM 

VEBA Plan (i) New GM Common Stock 

representing 17.5% of New GM’s 

common equity, (ii) New GM preferred 

stock with a value of $6.5 billion, (iii) 

a note for $2.5 billion, (iv) warrants 

entitling the New GM VEBA Plan to 

acquire an additional 2.5% of New GM 

Common Stock, and (v) all of the assets 

in the ‘‘UAW–Related Account’’ of the 

Internal VEBA.7 Additionally, as 

contemplated by section 12.C. of the 

Modified Settlement Agreement, the 

approval order in the bankruptcy case 

directed that the assets in the Mitigation 

VEBA be transferred to the New GM 

VEBA Plan. 

Common Stock 

As of the closing of the Section 363 

Sale, New GM issued 87,500,000 shares 

of New GM Common Stock, 

representing 17.5% of its common 

stock, to the New GM VEBA Plan. The 

New GM Common Stock will be held in 

the General Motors Company Employer 

Security Sub-Account in the General 

Motors Company Separate Retiree 

Account of the VEBA Trust. Any 

exercise of warrants after the Section 

363 Sale will dilute all stock holders 

ratably. The New GM Common Stock 

will be transferable, in whole or in part, 

at any time subject to certain conditions 

that are contained in the Stockholders 

Agreement by and among New GM, the 

U.S. Treasury, the New GM VEBA Plan, 

and the governments of Canada and 

Ontario (‘‘Canada’’) (‘‘Stockholders 

Agreement’’). Pursuant to the 

Stockholders Agreement and the Equity 

Registration Rights Agreement by and 

among New GM, the U.S. Treasury, 

Canada, the New GM VEBA Plan and 

Old GM (the Registration Rights 

Agreement), the New GM VEBA Plan 

will have demand, shelf, and piggyback 

registration rights with respect to the 

New GM Common Stock that are 

substantially consistent with the 

registration rights that are held by the 

U.S. Treasury, Canada and the Old GM 

unsecured creditors. 

Preferred Stock 

As of the closing of the Section 363 

Sale, New GM transferred to the New 

GM VEBA Plan $6.5 billion of Series A 

cumulative perpetual preferred stock 

(‘‘Preferred Stock’’). The Preferred Stock 

is from the same series of preferred 

stock that was issued to the U.S. 

Treasury and Canada. The Preferred 

Stock will be held in the General Motors 

Company Employer Security SubAccount in the General Motors 

Company Separate Retiree Account of 

the VEBA Trust. The Preferred Stock 

will be transferable, in whole or in part, 

at any time subject to certain conditions 

that are contained in the Stockholders 

Agreement. The Preferred Stock carries 

a 9% dividend rate per annum, and is 

payable quarterly in cash if, as, and 

when declared by New GM’s Board. 

Each share of Preferred Stock will have 

a liquidation preference of $25. The 

Preferred Stock is not callable prior to 

December 31, 2014. The redemption 

price must be paid in cash. 

The Preferred Stock will be senior to 

the New GM Common Stock and future 

preferred equity but junior to all 

existing and future debt. The New GM 

VEBA Plan will have demand, shelf, 

and piggyback registration rights with 

respect to the Preferred Stock that are 

substantially consistent with its 

registration rights with respect to the 

New GM Common Stock. The Preferred 

Stock has no voting rights, except under 

the following circumstances, in which 

case the independent fiduciary will vote 

the shares. If dividends payable on the 

Series A preferred stock have not been 

paid for an aggregate of six quarters, the 

holders of the Series A preferred stock 

have the right, as a class, to elect two 

newly created directorships of New GM. 

In addition, a two-thirds majority vote 

of the Series A preferred stock is 

necessary to authorize the issuance of 

shares senior or pari passu to Series A 

preferred stock, amend the terms of 

Series A preferred stock, or approve a 

share exchange or reclassification of the 

Series A preferred stock or merger or 

consolidation involving New GM. 

The Note 

As of the closing of the Section 363 

Sale, New GM issued to the New GM 

VEBA Plan a note (‘‘Note’’) with a 

principal amount of $2.5 billion. The 

Note will be payable in cash in three 

equal installments. Each payment will 

be in the amount of $1.384 billion and 

will be made on July 15 of the years 

2013, 2015, and 2017. The Note is 

transferable at any time in whole or in 

part, subject to certain limited 

exceptions. 

The Note ranks pari passu with notes 

that were issued to the U.S. Treasury 

and Canada in the aggregate principal 

amount of $8.0 billion. The New GM 

VEBA Plan will not have registration 

rights regarding the Note; however, if 

the notes issued to the U.S. Treasury 

and Canada are registered or registration 

rights are extended with respect to such 

notes, then the New GM VEBA Plan will 

have demand, shelf, and piggyback 

registration rights pertaining to the Note 

that are no less favorable than those 

pertaining to the U.S. Treasury or 

Canada notes. Other terms of the Note 


erowe on DSK5CLS3C1PROD with NOTICES
47968 Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 

8The Mitigation VEBA is the subject of 

Prohibited Transaction Exemption 2009–03, 74 FR 

3645 (Jan. 21, 2009), which provided relief for 

certain cash advances and ‘‘true ups’’ between GM 

and the Mitigation VEBA related to administration 

of the Mitigation VEBA. 

are no less favorable than the terms of 

the U.S. Treasury or Canada notes. The 

Note will be subordinate to any exit 

financing, including the U.S. Treasury 

delayed draw term loan, revolver or any 

other third party exit financing entered 

into with the consent of the U.S. 

Treasury. 

Warrants 

As of the closing of the Section 363 

Sale, New GM transferred to the New 

GM VEBA Plan warrants to acquire 

15,151,515 shares of New GM Common 

Stock representing 2.5% of its common 

equity on a fully diluted basis 

(‘‘Warrants’’). The Warrants will be held 

by the General Motors Company 

Employer Security Sub-Account in the 

General Motors Company Separate 

Retiree Account of the VEBA Trust, as 

will any New GM Common Stock 

acquired by exercise of the Warrants. 

The Warrants will be transferable, in 

whole or in part, at any time subject to 

certain conditions that are contained in 

the Stockholders Agreement. The strike 

price will be set at $126.92 per share 

representing a $75 billion equity value 

of New GM. The expiration date for the 

Warrants will be December 31, 2015. 

The Warrants will contain other terms 

which the Applicant represents are 

typical for securities of this type, 

including anti-dilution, and partial and 

cashless exercise provisions. The New 

GM VEBA Plan has registration rights 

with respect to the Warrants (and the 

New GM Common Stock underlying the 

Warrants) that are consistent with its 

registration rights with respect to the 

New GM Common Stock and the 

Preferred Stock. 

Transfer of Assets From UAW-Related 

Account of the Internal VEBA 

The Internal VEBA is the General 

Motors Welfare Benefit Trust that is 

maintained by Old GM as a source of 

funding for various retiree welfare 

benefit plans, including the Old GM 

Plan. Pursuant to the Henry II 

Settlement Agreement, the Internal 

VEBA was divided into two 

bookkeeping accounts effective January 

1, 2008: the UAW-Related Account, as 

described above in footnote 7, and the 

other account of the remaining assets, 

attributable to non-UAW represented 

individuals. As of March 31, 2009, the 

UAW-Related Account had an estimated 

asset value of approximately $9.4 

billion. 

Until the UAW-Related Account is 

transferred to the VEBA Trust, the assets 

of the Internal VEBA will continue to be 

invested under the existing investment 

policy, with investment returns, net of 

expenses, applied proportionally to the 

value of the UAW-Related Account. The 

appropriate New GM Plan fiduciary will 

direct the trustee of the Internal VEBA 

to transfer the UAW-Related Account to 

the VEBA Trust within 10 days after the 

Implementation Date. At the time of 

transfer, pursuant to the Modified 

Settlement Agreement, an amount equal 

to the UAW-Related Account’s share of 

expenses (to the extent permitted by 

ERISA) will be retained within the 

Internal VEBA to pay such expenses. 

After payment of these expenses is 

completed, a reconciliation of the 

amount retained and the actual 

expenses will be performed. The 

Internal VEBA will then pay the VEBA 

Trust for any amount over withheld, or 

the VEBA Trust will pay the Internal 

VEBA for any amount under withheld (a 

‘‘true-up’’). 

Transfer of Assets, Via the Bankruptcy 

Approval Order, From the Mitigation 

VEBA 

The Mitigation VEBA was created in 

connection with the settlement in Henry 

I, and was established through a trust 

agreement between State Street Bank 

and Trust Company and Old GM. The 

Mitigation VEBA was intended to be a 

source of ‘‘mitigation’’ payments to Old 

GM Plan participants to lessen the 

impact of the new cost-sharing 

provisions implemented under the 

Henry I settlement agreement.8 As of 

April 30, 2009, the Mitigation VEBA 

had an estimated asset value of $1.025 

billion. Until the assets and liabilities of 

the Mitigation VEBA are transferred to 

the VEBA Trust, its value will be 

affected by certain additional 

contributions and by income (including 

investment returns) offset by mitigation 

payments and expenses. Pursuant to the 

Modified Settlement Agreement, the 

Mitigation VEBA assets will be 

transferred to the New GM VEBA Plan 

within 15 days after the Implementation 

Date, and the Mitigation VEBA will be 

terminated. 

Covered Transactions 

The Applicant seeks exemptive relief 

for two sets of transactions. The first set 

of transactions involves the transfer by 

New GM to the New GM VEBA Plan of 

the securities described above, and the 

second set of transactions involves asset 

transfers to and from the New GM VEBA 

Plan necessitated by the transition of 

benefit payment responsibility from one 

plan to another, or due to mistaken 

deposits into the New GM VEBA Plan. 

With respect to the transfer of New 

GM securities to the New GM VEBA 

Plan, the Applicant states that, 

following months of negotiations 

involving the UAW, Class Counsel, Old 

GM, the U.S. Treasury, and other Old 

GM debt holders, the transaction 

embodies the only feasible mechanism 

to ensure that assets are dedicated to, 

and held in the New GM VEBA Plan 

solely for use as retiree health care 

benefits (and related reasonable 

expenses). Class Counsel supported the 

Applicant’s request for exemptive relief 

described herein. 

1. Transfer of New GM Securities 

The Applicant requests relief from 

sections 406(a)(1)(E), 406(a)(2), and 

407(a) of ERISA for the acquisition and 

holding by the New GM VEBA Plan of 

the New GM Common Stock, the 

Preferred Stock, the Note and the 

Warrants (the Securities). Additionally, 

the Department has proposed relief from 

section 406(a)(1)(A) for the disposition 

of the Securities, in the event that the 

Securities are sold in a transaction 

involving a party in interest. 

Section 406(a)(1)(E) prohibits a 

fiduciary from causing a plan to engage 

in a transaction, if he knows or should 

know that such transaction constitutes 

the direct or indirect acquisition, on 

behalf of a plan, of any employer 

security in violation of section 407(a). 

Section 406(a)(2) prohibits a fiduciary 

who has authority or discretion to 

control or manage the assets of a plan 

from permitting the plan to hold any 

employer security if he knows or should 

know that holding such security violates 

section 407(a). 

Section 407(a)(1) states that a plan 

may not acquire or hold any ‘‘employer 

security’’ that is not a ‘‘qualifying 

employer security.’’ Section 407(a)(2) 

states that a plan may not acquire any 

qualifying employer security (or 

qualifying employer real property) if 

immediately after such acquisition the 

aggregate fair market value of employer 

securities (and employer real property) 

held by the plan exceeds 10 percent of 

the fair market value of the assets of the 

plan. 

According to the Applicants, when 

the New GM VEBA Plan acquired the 

New GM Common Stock, the Preferred 

Stock, the Note and the Warrants, each 

asset might not have been a ‘‘qualifying 

employer security’’ within the meaning 

of section 407(d)(5) and therefore the 

acquisition of each would not be 

permitted under section 406(a). 

Additionally, the Applicants note that 

even if the New GM Common Stock, the 


erowe on DSK5CLS3C1PROD with NOTICES
Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 47969 

9Under section 5A of the Modified Settlement 

Agreement, claims incurred on or before the 

Implementation Date will be paid by Old GM or 

New GM, as applicable, in accordance with the 

New GM Plan. 

Preferred Stock, the Note and the 

Warrants were considered qualifying 

employer securities, the aggregate fair 

market value of employer securities 

held by the New GM VEBA Plan would 

exceed the 10 percent limitation in 

section 407(a)(2). Finally, Applicants 

request relief from the provisions of 

sections 406(a)(1)(E), 406(a)(2) and 

407(a) for the future exercise of the 

Warrants by the New GM VEBA Plan. 

When, and if, the New GM VEBA Plan’s 

Warrants are exercised, New GM 

Common Stock will be acquired and 

may not constitute a qualifying 

employer security within the meaning 

of section 407(d)(5), and, immediately 

after the acquisition of the New GM 

Common Stock due to the exercise of 

the Warrants, the aggregate fair market 

value of employer securities held by the 

New GM VEBA Plan may exceed 10 

percent of the fair market value of its 

assets. 

Section 406(a)(1)(A) prohibits the 

sale, exchange or leasing of any property 

between a plan and a party in interest. 

The Department is proposing relief from 

that provision in the event the 

Securities are disposed of in a 

transaction with a party in interest. 

2. Transition Payments 

Benefit Payments and Reimbursements 

The Applicant requests exemptive 

relief from the prohibitions of sections 

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

for certain payments and 

reimbursements between Old GM, New 

GM, the Old GM Plan, the New GM Plan 

and the New GM VEBA Plan. 

ERISA section 406(a)(1)(B) prohibits a 

fiduciary from causing a plan to engage 

in a transaction if he knows or should 

know that such transaction constitutes a 

direct or indirect lending of money or 

other extension of credit between a plan 

and a party in interest. ERISA section 

406(a)(1)(D) prohibits a fiduciary from 

causing a plan to engage in a transaction 

if he knows or should know that such 

transaction constitutes a direct or 

indirect transfer to, or use by or for the 

benefit of, a party in interest, of any 

assets of the plan. 

Prior to the Section 363 Sale, the Old 

GM Plan provided benefits to, among 

others, individuals who ultimately will 

be covered by the New GM VEBA Plan. 

The New GM Plan currently provides 

benefits to most of these same 

individuals from the date of the Section 

363 Sale until the Implementation Date 

of the New GM VEBA Plan. The New 

GM VEBA Plan will have sole 

responsibility and be the exclusive 

source of funds for the payment of 

retiree medical benefits to the Class and 

Covered Group, with respect to benefit 

claims incurred after the 

Implementation Date. 

Under certain circumstances 

connected to the transition, Old GM, 

New GM, the Old GM Plan, the New GM 

Plan, and the New GM VEBA Plan may 

arguably extend credit or transfer plan 

assets to one another in order to pay 

benefit claims that are the legal 

responsibility of another one of those 

five parties (the ‘‘Responsible Party’’).9

The Applicant asserts that mispayments 

and reimbursements are likely to occur 

in the normal course due to the 

administrative realities of health care 

payments and the shifting of plan 

responsibilities between multiple plans 

in a short period of time. 

The Applicant provides the following 

examples of transactions that would 

require relief under the requested 

exemption. A UAW retiree is incorrectly 

classified as an IUE–CWA retiree and is 

receiving retiree medical benefits in 

accordance with the New GM Plan, paid 

directly by New GM. The 

misclassification is discovered on 

September 1, 2010, and the New GM 

VEBA Plan reimburses New GM for the 

payments relating to claims incurred on 

or after January 1, 2010. Or, a member 

of the Covered Group receives medical 

care on December 28, 2009, thereby 

incurring a claim under the New GM 

Plan. However, in April of 2010, the 

claim is presented to and paid by the 

New GM VEBA Plan. The New GM 

VEBA Plan would be reimbursed by the 

New GM Plan. 

In such event, the Responsible Party 

will reimburse the payor for such 

benefits, plus interest. According to the 

Applicant, payment by a payor of 

benefits for claims incurred after benefit 

responsibility has been transferred 

arguably is an extension of credit 

between the payor and the Responsible 

Party that is prohibited under section 

406(a)(1)(B). Payment by the 

Responsible Party to the payor as 

reimbursement for these paid claims 

arguably is a transfer of plan assets to 

a party in interest that is prohibited 

under 406(a)(1)(D). 

Deposits by Mistake 

The Applicant likewise seeks relief 

from section 406(a)(1)(D) of ERISA for 

return of mistaken payments to the New 

GM VEBA Plan, with interest. 

Under the last paragraph of section 12 

of the Modified Settlement Agreement, 

any deposit made to the New GM VEBA 

Plan by mistake will be returned (with 

earnings) within 30 days of notice to the 

Committee of the mistake, to the extent 

permitted by law. The Applicant is 

concerned that this could be viewed as 

involving a prohibited transfer of plan 

assets to a party in interest. Accordingly 

the Applicant requests exemptive relief 

for this transaction. 

Conditions Related to the Transfer of 

New GM Securities to the New GM 

VEBA Plan: The Independent Fiduciary 

Pursuant to the trust agreement of the 

VEBA Trust, the Committee will 

appoint an independent fiduciary to 

manage the General Motors Company 

Employer Security Sub-Account 

(‘‘Independent Fiduciary’’). The 

Independent Fiduciary will be a 

‘‘named fiduciary’’ and ‘‘investment 

manager’’ as both terms are defined in 

ERISA, with complete discretion 

regarding the holding, ongoing 

management, and disposition of any 

New GM security (i.e., the New GM 

Common Stock, Preferred Stock, Note 

and Warrants) acquired and held by the 

New GM VEBA Plan. 

The Independent Fiduciary does not 

have discretion with respect to certain 

other aspects of the Securities. First, 

because the New GM VEBA Plan 

acquired the Securities by virtue of the 

Section 363 Sale, the Independent 

Fiduciary had no discretion regarding 

the acquisition of the Securities. 

Additionally, under the Stockholders 

Agreement, the New GM Common Stock 

held by the New GM VEBA Plan must 

be voted in the same proportion as votes 

cast by other stockholders. Therefore, 

the Independent Fiduciary will have no 

responsibility for the voting of the New 

GM Common Stock. 

The Independent Fiduciary must be 

independent of and unrelated to Old 

GM, New GM, the UAW and the 

Committee. This will not be the case if 

(1) such fiduciary directly or indirectly 

controls, is controlled by, or is under 

common control with Old GM, New 

GM, the UAW, the Committee or their 

affiliates, (2) such fiduciary directly or 

indirectly receives any compensation or 

other consideration from Old GM, New 

GM, the UAW or any Committee 

member in his or her individual 

capacity in connection with any 

transaction described in this exemption 

(except that an independent fiduciary 

may receive compensation from the 

Committee or the New GM VEBA Plan 

for services provided to the New GM 

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) 


erowe on DSK5CLS3C1PROD with NOTICES
47970 Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 

10The Department notes that candidates for the 

position of Independent Fiduciary to the New GM 

VEBA Plan may be affiliated with entities that 

provide services to Old GM, New GM, Ford, 

Chrysler or Chrysler Group or their affiliates. It is 

the responsibility of the Committee to determine 

whether such affiliations are likely to affect the 

judgment of the candidate in performing its services 

as Independent Fiduciary. 

11Cause is defined in the Independent Fiduciary 

Agreement as: (i) Any disqualifying event described 

in ERISA section 411; (ii) Determination by any 

court, arbitrator or government regulatory body that 

the Independent Fiduciary has violated any civil or 

criminal law (including, but not limited to, 

securities, antitrust or ERISA) in connection with 

the performance of its responsibilities to the VEBA 

Trust. For purposes of avoidance of doubt in 

connection with this and the subsequent 

subparagraph, a ‘‘determination’’ shall mean any 

written judgment, order or decree; court-approved 

settlement; arbitration award; or enforcement action 

of a government regulatory body or SRO, in the 

form of a written sanction, claim, demand or 

opinion, whether or not appealable; (iii) 

Determination by any court, arbitrator or 

government regulatory body that the Independent 

Fiduciary has materially breached the terms of its 

engagement, whether or not appealable; (iv) Any 

action by the Independent Fiduciary that results in 

imposition of a civil or criminal sanction, any 

prohibited transaction excise tax, or any civil 

judgment or award of damages, on the VEBA Trust, 

the Committee, the trustee, or their respective 

employees, officers directors or owners (whether or 

not subject to indemnity by the Independent 

Fiduciary, an insurer, or any other person); (v) 

Termination, resignation, or death of the 

Independent Fiduciary principal or officer assigned 

to serve as the relationship principal with respect 

to the VEBA Trust, or the inability of such person 

to perform his or her duties for a continuous period 

of more than 30 days; (vi) Any change of ownership 

of the Independent Fiduciary that constitutes an 

‘‘assignment’’ of the Independent Fiduciary’s 

contract with the VEBA Trust, within the meaning 

of the Investment Advisers Act; (vii) Failure of the 

Independent Fiduciary to qualify as an ‘‘investment 

manager’’ within the meaning of ERISA section 

3(38); (viii) Any change in the clientele, business 

or ownership of the Independent Fiduciary that 

results in an actual conflict of interest; (ix) Failure 

of the Independent Fiduciary to take into account 

the legitimate needs of the VEBA Trust for liquidity 

to pay benefits; (x) Violation of any conditions 

imposed on the Independent Fiduciary under the 

terms of the prohibited transaction exemption 

issued by the Department; (xi) Any other action or 

inaction of the Independent Fiduciary that the 

Committee determines to be a material breach of the 

Independent Fiduciary’s agreement or any law, or 

is likely to result in an irreconcilable conflict; (xii) 

Any circumstance that leads the Committee to 

reasonably conclude that the termination of the 

Independent Fiduciary and replacement by a 

successor Independent Fiduciary is in the financial 

interest of the VEBA Trust, provided that the 

Committee documents the reasons for the 

termination. 

the annual gross revenue received by 

the fiduciary, in any fiscal year, from 

Old GM, New GM, 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.10

The Independent Fiduciary may be 

removed by the Committee on 30 days 

written notice only for cause.11 The 

removal will be effective as specified in 

the written notice, provided that the 

Independent Fiduciary has been given 

notice of the appointment of a successor 

independent fiduciary. No successor 

will be appointed in the event the New 

GM VEBA Plan ceases to hold any 

employer security. In the event that the 

New GM VEBA Plan subsequently 

acquires or holds an employer security 

and no appointment of a successor 

independent fiduciary has been made, 

any court of competent jurisdiction 

may, upon application by the retiring 

independent fiduciary, appoint a 

successor after such notice to the 

Committee and the retiring independent 

fiduciary. 

The Committee delegated to a 

subcommittee (i.e., three Committee 

members) the responsibility to retain an 

Independent Fiduciary on behalf of the 

New GM VEBA Plan. The subcommittee 

initially determined to proceed with the 

assumption that the interests of each 

plan whose assets are held by the VEBA 

Trust would be best served by seeking 

to retain a single qualified Independent 

Fiduciary to represent all three plans 

(providing health benefits, respectively, 

to retirees of Chrysler, GM and Ford). 

However, the subcommittee recognizes 

the possibility that engaging multiple 

Independent Fiduciaries may turn out to 

be the better option. 

The subcommittee intends, as part of 

the interview process for potential 

candidates for the Independent 

Fiduciary appointment, to question the 

candidates on the nature and likelihood 

of potential conflicts of interest, the 

appropriate means of monitoring and 

communicating actual or potential 

conflicts, including whether the 

candidates currently have formal 

conflict monitoring procedures, and 

mechanisms for dealing with actual or 

potential conflicts as they are identified. 

After reviewing the candidates’ 

qualifications, capacity to represent all 

three plans, willingness to do so, and 

other relevant factors, in consultation 

with counsel, the subcommittee 

anticipates making a final determination 

as to whether to hire one Independent 

Fiduciary or multiple Independent 

Fiduciaries. 

The subcommittee will work with the 

Independent Fiduciary candidate(s) to 

develop procedures to identify, 

minimize and address conflicts of 

interest as they arise. Specifically, in the 

event that a single Independent 

Fiduciary is appointed, the 

subcommittee will engage a ‘‘conflicts 

monitor’’ to (i) develop a process for 

identifying potential conflicts, (ii) to 

regularly review the Independent 

Fiduciary reports, investment banker 

reports, and public information 

regarding the companies, to identify the 

presence of factors that could lead to a 

conflict, and (iii) further question the 

Independent Fiduciary when 

appropriate. 

Additionally, the subcommittee will 

be prepared to replace the Independent 

Fiduciary in the event of an actual and 

irreconcilable conflict of interest. 

Finally, the subcommittee will require 

the Independent Fiduciary to adopt a 

written policy regarding conflicts of 

interest. Such policy will 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. 

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 would 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. If the Independent 

Fiduciary deviated from such initial 

recommendations, it would find it 

necessary to explain why it deviated 

from a recommendation; additionally, 

such a deviation would be a way for the 

Committee or its designee to flag 

possible conflicts of interest in advance. 

Any contract between the Independent 

Fiduciary and an investment banker 

will include an acknowledgement by 

the investment banker that the 

investment banker’s ultimate client is an 

ERISA plan. 

The Independent Fiduciary will 

comply with the following additional 

conditions. The Independent Fiduciary 

will authorize the trustee of the New 

GM VEBA Plan to dispose of the New 

GM Common Stock (including shares of 

New GM Common Stock acquired 

pursuant to exercise of the Warrants), 

the Preferred Stock, the Note, or 

exercise the Warrants, only after the 

Independent Fiduciary determines, at 

the time of the transaction, that the 

transaction is feasible, in the interest of 

the New GM VEBA Plan, and protective 

of the participants and beneficiaries of 

the New GM VEBA Plan. 

The Independent Fiduciary will 

negotiate and approve on behalf of the 

New GM VEBA Plan any transactions 

between the New GM VEBA Plan and 

any party in interest involving the 

Securities that may be necessary in 

connection with the subject transactions 

(including but not limited to the 

registration of the securities contributed 

to the New GM VEBA Plan). 


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12OPEB means Other Post-Employment Benefits, 

and typically includes retiree healthcare benefits, 

life insurance, tuition assistance, day care, legal 

services and the like. 

The Independent Fiduciary will 

discharge its duties consistent with the 

terms of the New GM VEBA Plan, the 

trust agreement, the Independent 

Fiduciary’s agreement, and any other 

documents governing the employer 

securities, such as the Registration 

Rights Agreement. 

The New GM VEBA Plan may not 

incur any fees, costs or other charges 

(other than described in the trust 

agreement and the Modified Settlement 

Agreement) as a result of the 

transactions exempted herein. 

The terms of any transaction 

exempted herein must be no less 

favorable to the New GM VEBA Plan 

than the terms negotiated at arms’ 

length under similar circumstances 

between unrelated parties. 

Conditions Related to Transition 

Payments 

The conditions for reimbursements of 

mispayments require the following 

procedure for audit and reconciling 

payments. The Applicants state that 

given the rapidity of the shifts in 

responsibility from the Old GM Plan to 

the New GM Plan, and from the New 

GM Plan to the New GM VEBA Plan, it 

is unlikely that any review will be 

undertaken until at least three months 

following the Implementation Date. 

The Committee and an independent 

third party administrator of the New GM 

VEBA Plan will review benefit 

payments paid during the transition 

period and determine the dollar amount 

of any mispayments made, subject to the 

review and approval of the New GM 

VEBA Plan’s independent auditor. The 

results of this review will be made 

available to Old GM and New GM. 

Old GM and New GM will perform 

similar reviews with respect to the Old 

GM Plan and the New GM Plan. Old GM 

and New GM will provide the results of 

their reviews to the Committee. 

Interest on any reimbursed 

mispayment will accrue from the date of 

the mispayment to the date of the 

reimbursement. Interest will be 

determined using the applicable OPEB 

discount rate. 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.12 The rate is developed by 

New GM’s Treasurer’s office, working in 

conjunction with New GM’s 

independent auditor, Deloitte & Touche. 

The discount rate’s validity is attested to 

by Deloitte & Touche, and is disclosed 

in New GM’s annual 10K filing with the 

Securities and Exchange Commission. 

If there is a dispute as to the amount 

of the mispayment and/or 

reimbursement, undisputed amounts 

will be paid and the parties will enter 

into a dispute procedure set forth in 

section 26D of the Modified Settlement 

Agreement. Specifically, the parties 

exchange written notices concerning the 

dispute and, within 21 days, meet and 

attempt to resolve the dispute. If the 

parties are unable to resolve the dispute 

within 30 days of the meeting, either 

party can demand arbitration. 

In the case of a mistaken deposit to 

the New GM VEBA Plan, New GM 

would 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 GM 

VEBA Plan was entitled. The claim 

must be made within the Verification 

Time Period, which is defined as 

follows in Section VI(r) of the proposed 

exemption. 

The term ‘‘Verification Time Period’’ 

means: (i) with respect to all Securities other 

than the Note, 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; (iii) with 

respect to the UAW-Related Account of the 

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 GM VEBA Plan) and ending 180 

calendar days thereafter; and (iv) with 

respect to the Mitigation VEBA, the period 

beginning on the date of publication of the 

final exemption in the Federal Register and 

ending 60 calendar days thereafter. 

Accordingly, any claim regarding a 

mistake with respect to the New GM 

Common Stock, the Preferred Stock, the 

Warrants or the transfer of the assets 

from the Mitigation VEBA must be made 

within 60 days of the date of publication 

of the final exemption in the Federal 

Register. A claim regarding a mistake 

with respect to a payment made 

pursuant to the Note must be made 

within 90 days of the date of the 

payment. A claim regarding a mistake 

with respect to the transfer of assets of 

the UAW-Related Account of the 

Internal VEBA must be made within 180 

days of the date of publication of the 

final exemption in the Federal Register 

(or, if later, from the date of the transfer 

of the UAW-Related Account to the New 

GM VEBA Plan). The Applicant requests 

a longer period for the assets of the 

UAW-Related Account of the Internal 

VEBA due to the difficulty in 

determining the value of some of the 

assets held by the Internal VEBA. 

Interest on any mistaken deposit will 

accrue from the date of the mistaken 

deposit to the date of the repayment. 

Interest will be determined using the 

applicable OPEB discount rate, 

described above. In the event of a 

dispute, the procedure set forth in 

section 26D of the Modified Settlement 

Agreement, described above, would 

apply. 

Statutory Findings 

The Applicant makes the following 

statements regarding the Department’s 

required findings under section 408(a) 

of ERISA that the exemption is 

administratively feasible, in the 

interests of the New GM VEBA Plan and 

of its participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the New GM VEBA 

Plan. 

The exemption transactions are 

administratively feasible because they 

are relatively simple and straightforward, easy to monitor, and involve 

the management of the Securities by the 

Independent Fiduciary. 

The exemption transactions are in the 

interest of the New GM VEBA Plan’s 

participants and beneficiaries and 

protective of their rights because they 

embody the only feasible mechanism to 

ensure that assets are dedicated to, and 

held in the New GM VEBA Plan solely 

for use as retiree health care benefits 

(and reasonable related expenses). The 

Independent Fiduciary will represent 

the interests of the participants and 

beneficiaries of the New GM VEBA Plan 

by exercising the sole discretion 

regarding the management and 

disposition of the New GM securities. 

Notification of 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). 

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 


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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 exemption, 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 exemption, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in the 

application are true and complete, and 

that the application accurately describes 

all material terms of the transaction 

which is the subject of the exemption. 

Proposed Exemption 

Based on the facts and representations 

set forth in the application, the 

Department is considering granting the 

following exemption 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), as follows: 

Section I—Covered Transactions 

(a) If the exemption is granted, the 

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

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

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

shall not apply, effective July 10, 2009, 

to: 

(1) The acquisition by the UAW 

General Motors Company Retiree 

Medical Benefits Plan (the New GM 

VEBA Plan) and its associated UAW 

Retiree Medical Benefits Trust (the 

VEBA Trust) of: (i) 87,500,000 shares of 

common stock of General Motors 

Company (New GM) (the New GM 

Common Stock) representing 17.5% of 

New GM equity; (ii) $6.5 billion of 

Series A Fixed Rate Cumulative 

Perpetual Preferred stock of New GM 

(the Preferred Stock); (iii) a note issued 

by New GM with a principal amount of 

$2.5 billion (the Note); and (iv) warrants 

to acquire New GM Common Stock 

representing 2.5% of New GM equity 

(the Warrants) (collectively, including 

any additional shares of New GM 

Common Stock acquired pursuant to the 

exercise of the Warrants, the Securities), 

transferred by New GM and deposited 

in the General Motors Company 

Employer Security Sub-Account of the 

General Motors Company Separate 

Retiree Account of the VEBA Trust. 

(2) The acquisition by the New GM 

VEBA Plan of shares of New GM 

Common Stock pursuant to the exercise 

of the Warrants; 

(3) The holding by the New GM VEBA 

Plan of the Securities in the General 

Motors Company Employer Security 

Sub-Account of the General Motors 

Company Separate Retiree Account of 

the VEBA Trust; and 

(4) The disposition of the Securities. 

(b) If the exemption is granted, the 

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

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

ERISA shall not apply, effective July 10, 

2009, to: 

(1) The payment by Old GM, New 

GM, the Old GM Plan, the New GM Plan 

or the New GM VEBA Plan 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 Old GM, 

New GM, the Old GM Plan, the New GM 

Plan, or the New GM VEBA Plan, of a 

benefit claim that was paid by another 

party listed in this paragraph, which 

was not legally responsible for the 

payment of such claim, plus interest. 

(c) If the exemption is granted, the 

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

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

ERISA shall not apply, effective July 10, 

2009, to the return to New GM of assets 

deposited or transferred to the New GM 

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 GM VEBA Plan for 

all purposes related to the transfer of the 

Securities to the New GM VEBA Plan 

for the duration of the New GM VEBA 

Plan’s holding of the Securities. Such 

Independent Fiduciary will have sole 

discretionary responsibility relating to 

the holding, ongoing management and 

disposition of the Securities, except for 

the voting of the New GM Common 

Stock. The Independent Fiduciary has 

determined or will determine, before 

taking any actions regarding the 

Securities, that each such action or 

transaction is in the interest of the New 

GM VEBA Plan. 

(b) In the event that the same 

Independent Fiduciary is appointed to 

represent the interests of one or more of 

the other plans comprising the VEBA 

Trust (i.e., the UAW Chrysler Retiree 

Medical Benefits Plan and/or the UAW 

Ford Retiree Medical Benefits Plan) 

with respect to employer securities 

deposited into the VEBA Trust, the 

Committee takes the following steps to 

identify, monitor and address any 

conflict of interest that may arise with 

respect to the Independent Fiduciary’s 

performance of its responsibilities: 

(1) The Committee appoints a 

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

process for identifying potential 

conflicts; (ii) regularly review the 

Independent Fiduciary reports, 

investment banker reports, and public 

information regarding the companies, to 

identify the presence of factors that 

could lead to a conflict; and (iii) further 

question the Independent Fiduciary 

when appropriate. 

(2) The Committee adopts procedures 

to facilitate prompt replacement of the 

Independent Fiduciary if the Committee 

in its sole discretion determines such 

replacement is necessary due to a 

conflict of interest. 

(3) The Committee requires the 

Independent Fiduciary to adopt a 

written policy regarding conflicts of 

interest. Such policy shall require that, 

as part of the Independent Fiduciary’s 

periodic reporting to the Committee, the 

Independent Fiduciary includes a 

discussion of actual or potential 

conflicts identified by the Independent 

Fiduciary and options for avoiding or 

resolving the conflict. 

(c) The Independent Fiduciary 

authorizes the trustee of the New GM 

VEBA Plan to dispose of the New GM 

Common Stock (including additional 

shares of New GM Common Stock 

acquired pursuant to exercise of the 

Warrants), the Preferred Stock, and/or 

the Note, or exercise the Warrants, only 

after the Independent Fiduciary 

determines, at the time of the 

transaction, that the transaction is 

feasible, in the interest of the New GM 

VEBA Plan, and protective of the 

participants and beneficiaries of the 

New GM VEBA Plan. 


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13OPEB 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. 

(d) The Independent Fiduciary 

negotiates and approves on behalf of the 

New GM VEBA Plan any transactions 

between the New GM VEBA Plan and 

any party in interest involving the 

Securities that may be necessary in 

connection with the subject transactions 

(including but not limited to the 

registration of the securities contributed 

to the New GM 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 GM VEBA Plan, the 

trust agreement, the Independent 

Fiduciary Agreement, and any other 

documents governing the employer 

securities, such as the Registration 

Rights Agreement. 

(g) The New GM VEBA Plan incurs no 

fees, costs or other charges (other than 

described in the 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 GM 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 GM 

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 

Old GM and New GM. 

(b) Old GM and New GM 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.13

(e) If there is a dispute as to the 

amount of a reimbursement requested, 

the parties will enter into a dispute 

procedure set forth in section 26D of the 

Modified Settlement Agreement. 

Section IV—Conditions Applicable to 

Section I(c) 

(a) New GM 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 GM VEBA Plan was 

entitled. 

(b) The claim is made within the 

Verification Time Period, as defined in 

Section VI(r). 

(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 a dispute 

procedure set forth in section 26D of the 

Modified Settlement Agreement. 

Section V—Conditions Applicable to 

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

(a) The Committee and the 

Independent Fiduciary maintain for a 

period of six years from the date the 

Securities are transferred to the New 

GM VEBA Plan, and the shares of New 

GM Common Stock are acquired by the 

New GM VEBA Plan through the 

exercise of the Warrants, the records 

necessary to enable the persons 

described in paragraph (b) below to 

determine whether the 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 ERISA section 502(i) if the 

records are not maintained, or are not 

available for examination as required by 

paragraph (b) below; and 

(b)(1) Except as provided in section 

(2) of this paragraph and 

notwithstanding any provisions of 

subsections (a)(2) and (b) of ERISA 

section 504, 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 GM or any duly authorized 

representative of New GM; 

(D) the Independent Fiduciary or any 

duly authorized representative of the 

Independent Fiduciary; 

(E) the Committee or any duly 

authorized representative of the 

Committee; and 

(F) any participant or beneficiary of 

the New GM VEBA Plan or any duly 

authorized representative of such 

participant or beneficiary. 

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, partner, 

or employee in any such person, or 

relative (as defined in section 3(15) of 

ERISA) of any such person; or (3) any 

corporation, partnership or other entity 

of which such person is an officer, 

director or partner. (For purposes of this 

definition, the term ‘‘control’’ means the 

power to exercise a controlling 

influence over the management or 

policies of a person other than an 

individual.) 

(b) The ‘‘Committee’’ means the 

eleven individuals consisting of six 

independent members and five UAW 

appointed members who will serve as 

the plan administrator and named 

fiduciary of the New GM VEBA Plan. 

(c) The term ‘‘New GM Common 

Stock’’ means the shares of common 

stock, par value $0.01 per share, issued 

by New GM. 

(d) The term ‘‘General Motors 

Company Employer Security SubAccount of the General Motors 

Company Separate Retiree Account of 

the VEBA Trust’’ means the sub-account 

established in the General Motors 

Separate Retiree Account of the VEBA 

Trust to hold New GM securities on 

behalf of the New GM VEBA Plan. 

(e) The term ‘‘Implementation Date’’ 

means December 31, 2009. 

(f) The term ‘‘Independent Fiduciary’’ 

means a fiduciary that is (i) independent 

of and unrelated to Old GM, New GM, 

the UAW, the Committee, and their 

affiliates, and (ii) appointed to act on 

behalf of the New GM VEBA Plan with 

respect to the holding, management and 

disposition of the Securities. In this 

regard, the fiduciary will not be deemed 

to be independent of and unrelated to 

Old GM, New GM, the UAW, the 

Committee, and their affiliates if (1) 


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47974 Federal Register / Vol. 74, No. 180 / Friday, September 18, 2009 / Notices 

such fiduciary directly or indirectly 

controls, is controlled by, or is under 

common control with Old GM, New 

GM, the UAW, the Committee or their 

affiliates, (2) such fiduciary directly or 

indirectly receives any compensation or 

other consideration from Old GM, New 

GM, 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 GM 

VEBA Plan for services provided to the 

New GM 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 

Old GM, New GM, 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. 

(g) The term ‘‘Modified Settlement 

Agreement’’ means The UAW Retiree 

Settlement Agreement between New GM 

and the UAW dated July 10, 2009. 

(h) The term ‘‘New GM’’ means the 

company that acquired certain assets 

and liabilities of Old GM pursuant to 

the Section 363 Sale. 

(i) The term ‘‘Note’’ means the note 

issued by New GM with a principal 

amount of $2.5 billion. 

(j) The term ‘‘New GM Plan’’ means 

the retiree medical benefits plan 

maintained by New GM that provides 

benefits to most of the same individuals 

as are covered by the Old GM Plan, from 

the date of the Section 363 Sale until the 

Implementation Date of the New GM 

VEBA Plan. 

(k) The term ‘‘Old GM’’ means the 

company that remains in bankruptcy 

protection after the Section 363 Sale. 

(l) The term ‘‘Old GM Plan’’ means 

the retiree medical benefits plan 

maintained by Old GM that provided 

benefits to, among others, those who 

will be covered by the New GM VEBA 

Plan. 

(m) The term ‘‘Preferred Stock’’ means 

shares of Series A Fixed Rate 

Cumulative Perpetual Preferred Stock, 

par value $0.01 per share, issued by 

New GM. 

(n) The term ‘‘Section 363 Sale’’ 

means a sale under section 363 of Title 

11 of the U.S. Code, by which on July 

10, 2009, New GM succeeded to certain 

assets and liabilities of Old GM. 

(o) The term ‘‘Securities’’ means (i) 

the New GM Common Stock; (ii) the 

Preferred Stock; (iii) the Note; (iv) the 

Warrants; and (v) additional shares of 

New GM Common Stock acquired 

pursuant to exercise of the Warrants. 

(p) The term ‘‘UAW’’ means the 

International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America. 

(q) The term ‘‘Warrants’’ means 

warrants to acquire shares of New GM 

Common Stock, par value $0.01 per 

share, issued by New GM. 

(r) The term ‘‘Verification Time 

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

Securities other than the Note, 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; (iii) with respect to the UAWRelated Account of the 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 GM VEBA Plan) 

and ending 180 calendar days thereafter; 

and (iv) with respect to the Mitigation 

VEBA, the period beginning on the date 

of publication of the final exemption in 

the Federal Register and ending 60 

calendar days thereafter. 

(s) The term ‘‘VEBA’’ means the UAW 

General Motors Company Retiree 

Medical Benefits Plan (the New GM 

VEBA Plan) and its associated UAW 

Retiree Medical Benefits Trust (the 

VEBA Trust). 

(t) The term ‘‘Registration Rights 

Agreement’’ means the Equity 

Registration Rights Agreement by and 

among New GM, the U.S. Treasury, 

Canada, the VEBA Trust and Old GM, 

entered into on July 10, 2009. 

Signed at Washington, DC, this 15th day of 

September 2009. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. E9–22485 Filed 9–17–09; 8:45 am] 

BILLING CODE 4510–29–P 

NATIONAL SCIENCE FOUNDATION 

National Science Board; Sunshine Act 

Meetings; Notice 

The National Science Board, pursuant 

to NSF regulations (45 CFR Part 614), 

the National Science Foundation Act, as 

amended (42 U.S.C. 1862n–5), and the 

Government in the Sunshine Act (5 

U.S.C. 552b), hereby gives notice in 

regard to the scheduling of meetings for 

the transaction of National Science 

Board business and other matters 

specified, as follows: 

AGENCY HOLDING MEETING: National 

Science Board. 

DATE AND TIME: Thursday, September 24, 

2009, at 8 a.m. 

PLACE: Columbus, Ohio, The Ohio State 

University, Nationwide and Ohio Farm 

Bureau 4H Center, Bob Evans 

Auditorium. 

STATUS: Some portions open, some 

portions closed. 

Open Sessions 

September 24, 2009 

8 a.m.–8:20 a.m. 

8:20 a.m.–8:35 a.m. 

8:35 a.m.–9:20 a.m. 

Closed Sessions 

September 24, 2009 

9:35 a.m.–10:50 a.m. 

10:50 a.m.–11:05 a.m. 

11:05 a.m.–11:15 a.m. 

11:15 a.m.–11:30 a.m. 

AGENCY CONTACT: Dr. Robert E. Webber, 

rwebber@nsf.gov, (703) 292–7000, 

http://www.nsf.gov/nsb/. 

Matters To Be Discussed 

Thursday, September 24, 2009 

Open Session: 8 a.m.–8:20 a.m., Bob 

Evans Auditorium 

• National Science Board Chairman’s 

Introduction 

• The Ohio State University 

President’s Welcome 

Executive Committee 

Open Session: 8:20 a.m.–8:35 a.m., Bob 

Evans Auditorium 

• Executive Committee Chairman’s 

Remarks 

• Approval of Minutes for the May 

2009 Meeting 

• Discussion of Board Priorities for 

FY 2010 

• Updates or New Business from 

Committee Members 

Plenary Open 

Open Session: 8:35 a.m.–9:20 a.m., Bob 

Evans Auditorium 

• Approval of Plenary Open Minutes, 

August 2009 

• Resolutions to Close Portions of 

December 2009 Meeting 

• Chairman’s Report 

• Director’s Report 

• Open Committee Reports 

• Board Member Proposal Review 

Process 

Committee on Programs and Plans (CPP) 

Closed Session: 9:35 a.m.–10:50 a.m., 

Bob Evans Auditorium 


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