Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 43069 

Trade Comm’n., 690 F.3d 1318 (Fed. 

Cir. 2012). 

On February 12, 2014, the 

Commission issued a Notice, Order, and 

Opinion deciding certain aspects of the 

investigation and remanding other 

aspects to the chief administrative law 

judge (‘‘ALJ’’). 79 FR 9277–79 (Feb. 18, 

2014); see also Comm’n Op. Remanding 

Investigation (Feb. 12, 2014); Comm’n 

Order Remanding Investigation (Feb. 12, 

2014). On February 24, 2014, Nokia 

petitioned for reconsideration of the 

Commission’s remand Order and 

Opinion. On March 24, 2014, the 

Commission granted in part the petition 

for reconsideration and issued a revised 

remand notice, order, and opinion. 79 

FR 17571–73 (Mar. 28, 2014). 

On May 21, 2014, respondents Nokia 

Corp. and Nokia Inc. and non-party 

MMO filed a motion to substitute MMO 

for Nokia Corp. as a result of MMO’s 

recent acquisition of Nokia’s Devices 

and Services business unit and to 

amend the Notice of Investigation 

(‘‘NOI’’). MMO also filed a motion to 

intervene for the limited purpose of 

filing the motion to substitute parties 

and amend the NOI. On May 30, 2014, 

the Commission investigative attorney 

(‘‘IA’’) filed a response, supporting the 

request to amend the NOI and to add 

MMO as a respondent but opposing the 

request to terminate Nokia Corp. from 

the investigation. On June 2, 2014, 

complainants InterDigital filed a 

response likewise agreeing that the NOI 

should be amended to add MMO as a 

respondent but that Nokia Corp. should 

not be terminated from the 

investigation. 

On June 18, 2014, the presiding ALJ 

issued the subject ID, granting MMO’s 

motion to intervene and granting in part 

Nokia’s and MMO’s motion to amend 

the NOI. Specifically, the ALJ granted 

the motion to add MMO as a respondent 

but denied the motion with respect to 

substituting MMO for Nokia Corp. and 

terminating Nokia Corp. from the 

investigation. 

On June 26, 2014, Nokia and MMO 

filed a petition for review of the subject 

ID, arguing that the ALJ erred by 

granting relief not requested by either 

moving party and by failing to substitute 

MMO for Nokia Corp. and terminate 

Nokia Corp. from the investigation. On 

July 1, 2014, the IA filed a response to 

Nokia’s petition. On July 3, 2014, 

InterDigital filed a response to Nokia’s 

petition. 

The Commission has determined not 

to review the subject ID. The 

Commission notes that pursuant to 

Commission Rule 210.21(c), 19 CFR 

210.21(c), Nokia Corp. may enter into a 

consent order to terminate its 

participation in this investigation. 

The authority for the Commission’s 

determination is contained in section 

337 of the Tariff Act of 1930, as 

amended (19 U.S.C. 1337), and in Part 

210 of the Commission’s Rules of 

Practice and Procedure (19 CFR part 

210). 

Issued: July 18, 2014. 

By order of the Commission. 

Lisa R. Barton, 

Secretary to the Commission. 

[FR Doc. 2014–17395 Filed 7–23–14; 8:45 am] 

BILLING CODE 7020–02–P 

DEPARTMENT OF JUSTICE 

Antitrust Division 

Notice Pursuant to the National 

Cooperative Research and Production 

Act of 1993; Global Climate and Energy 

Project 

Notice is hereby given that, on June 

10, 2014, pursuant to Section 6(a) of the 

National Cooperative Research and 

Production Act of 1993, 15 U.S.C. 4301 

et seq. (‘‘the Act’’), Global Climate and 

Energy Project (‘‘GCEP’’) has filed 

written notifications simultaneously 

with the Attorney General and the 

Federal Trade Commission disclosing 

changes in its membership, nature and 

objectives. The notifications were filed 

for the purpose of extending the Act’s 

provisions limiting the recovery of 

antitrust plaintiffs to actual damages 

under specified circumstances. 

Specifically, Bank of America, N.A., 

Charlotte, NC, has been added as a party 

to this venture. The change in its nature 

and objectives is that the members of 

GCEP have amended the agreement 

between them to update the list of 

project research that has been 

authorized by the members and to 

extend the termination of GCEP from 

August 31, 2015, to August 31, 2016. 

No other changes have been made in 

either the membership or planned 

activity of the group research project. 

Membership in this group research 

project remains open, and GCEP intends 

to file additional written notifications 

disclosing all changes in membership. 

On March 12, 2003, GCEP filed its 

original notification pursuant to Section 

6(a) of the Act. The Department of 

Justice published a notice in the Federal 

Register pursuant to Section 6(b) of the 

Act on April 4, 2003 (68 FR 16552). 

The last notification was filed with 

the Department on February 22, 2013. A 

notice was published in the Federal 

Register pursuant to Section 6(b) of the 

Act on March 21, 2013 (78 FR 17430). 

Patricia A. Brink, 

Director of Civil Enforcement, Antitrust 

Division. 

[FR Doc. 2014–17357 Filed 7–23–14; 8:45 am] 

BILLING CODE P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Exemptions From Certain Prohibited 

Transaction Restrictions 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Grant of Individual Exemptions. 

SUMMARY: This document contains 

exemptions issued by the Department of 

Labor (the Department) from certain of 

the prohibited transaction restrictions of 

the Employee Retirement Income 

Security Act of 1974 (ERISA or the Act) 

and/or the Internal Revenue Code of 

1986 (the Code). This notice includes 

the following: 2014–04, Northwestern 

Mutual Investment Services, Inc., D– 

11496; 2014–05, Liberty Media 401(k) 

Savings Plan, D–11756; 2014–06, AT&T 

Inc., D–11758; 2014–07, The Delaware 

County Bank and Trust Company 

Employee 401(k) Retirement Plan, D– 

11773; and 2014–08, The Home Savings 

and Loan Company 401(k) Savings Plan, 

D–11780. 

SUPPLEMENTARY INFORMATION: A notice 

was published in the Federal Register of 

the pendency before the Department of 

a proposal to grant such exemption. The 

notice set forth a summary of facts and 

representations contained in the 

application for exemption and referred 

interested persons to the application for 

a complete statement of the facts and 

representations. The application has 

been available for public inspection at 

the Department in Washington, DC. The 

notice also invited interested persons to 

submit comments on the requested 

exemption to the Department. In 

addition the notice stated that any 

interested person might submit a 

written request that a public hearing be 

held (where appropriate). The applicant 

has represented that it has complied 

with the requirements of the notification 

to interested persons. No requests for a 

hearing were received by the 

Department. Public comments were 

received by the Department as described 

in the granted exemption. 

The notice of proposed exemption 

was issued and the exemption is being 

granted solely by the Department 


emcdonald on DSK67QTVN1PROD with NOTICES
43070 Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 

1The Department has considered exemption 

applications received prior to December 27, 2011 

under the exemption procedures set forth in 29 CFR 

Part 2570, Subpart B (55 FR 32836, 32847, August 

10, 1990). 

2For purposes of this exemption, references to 

section 406 of ERISA should be read to refer as well 

to the corresponding provisions of section 4975 of 

the Code. 

3The Department notes that the Act’s general 

standards of fiduciary conduct also would apply to 

the transactions described herein. In this regard, 

section 404 requires, among other things, that a 

fiduciary discharge his duties respecting a plan 

solely in the interest of the plan’s participants and 

beneficiaries and in a prudent manner. 

Accordingly, a plan fiduciary must act prudently 

with respect to, among other things: (1) The 

decision to exchange an Auction Rate Security for 

a Delivery Security; and (2) the negotiation of the 

terms of such exchange (or a cash sale or loan 

described above), including the pricing of such 

securities. The Department further emphasizes that 

it expects plan fiduciaries, prior to entering into any 

of the transactions, to fully understand the risks 

associated with these types of transactions 

following disclosure by Northwestern Mutual of all 

relevant information. 

because, effective December 31, 1978, 

section 102 of Reorganization Plan No. 

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

transferred the authority of the Secretary 

of the Treasury to issue exemptions of 

the type proposed to the Secretary of 

Labor. 

Statutory Findings 

In accordance with section 408(a) of 

the Act and/or section 4975(c)(2) of the 

Code and the procedures set forth in 29 

CFR Part 2570, Subpart B (76 FR 66637, 

66644, October 27, 2011) 1 and based 

upon the entire record, the Department 

makes the following findings: 

(a) The exemption is administratively 

feasible; 

(b) The exemption is in the interests 

of the plan and its participants and 

beneficiaries; and 

(c) The exemption is protective of the 

rights of the participants and 

beneficiaries of the plan. 

Northwestern Mutual Investment 

Services, Inc. Located in Milwaukee, 

Wisconsin 

[Prohibited Transaction Exemption 2014–04; 

Application No. D–11496] 

Exemption 

Section I. Transactions Involving Plans 

Described in Both Title I and Title Ii of 

ERISA 

The restrictions of section 

406(a)(1)(A), (B), and (D) and section 

406(b)(1) and (2) of ERISA,2 and the 

taxes imposed by section 4975(a) and (b) 

of the Code, by reason of section 

4975(c)(1)(A), (B), (D), and (E) of the 

Code, shall not apply, effective February 

1, 2008, to the following transactions, if 

the conditions set forth in Section III 

have been met: 

(a) The sale or exchange of an Auction 

Rate Security (as defined in Section 

IV(b)) by a Plan (as defined in Section 

IV(h)) to the Sponsor (as defined in 

Section IV(g)) of such Plan; or 

(b) A lending of money or other 

extension of credit to a Plan in 

connection with the holding of an 

Auction Rate Security by the Plan, from: 

(1) Northwestern Mutual Investment 

Services, Inc. or an affiliate 

(Northwestern Mutual); (2) an 

Introducing Broker (as defined in 

Section IV(f)); or (3) a Clearing Broker 

(as defined in Section IV(d)); where the 

loan is: (i) Repaid in accordance with its 

terms; and (ii) guaranteed by the Plan 

Sponsor. 

Section II. Transactions Involving Plans 

Described in Title Ii of ERISA Only 

The sanctions resulting from the 

application of section 4975(a) and (b) of 

the Code, by reason of section 

4975(c)(1)(A), (B), (D), and (E) of the 

Code, shall not apply, effective February 

1, 2008, to the following transactions, if 

the conditions set forth in Section III 

have been met: 

(a) The sale or exchange of an Auction 

Rate Security by a Title II Only Plan (as 

defined in Section IV(i)) to the 

Beneficial Owner (as defined in Section 

IV(c)) of such Plan; or 

(b) A lending of money or other 

extension of credit to a Title II Only 

Plan in connection with the holding of 

an Auction Rate Security by the Title II 

Only Plan, from: (1) Northwestern 

Mutual; (2) an Introducing Broker; or (3) 

a Clearing Broker; where the loan is: (i) 

Repaid in accordance with its terms 

and; (ii) guaranteed by the Beneficial 

Owner. 

Section III. Conditions 

(a) Northwestern Mutual acted as a 

broker or dealer, non-bank custodian, or 

fiduciary in connection with the 

acquisition or holding of the Auction 

Rate Security that is the subject of the 

transaction described in Section I or II 

of this exemption; 

(b) For transactions involving a Plan 

(including a Title II Only Plan) not 

sponsored by Northwestern Mutual for 

its own employees, the decision to enter 

into the transaction is made by a Plan 

fiduciary who is Independent (as 

defined in Section IV(e)) of 

Northwestern Mutual. Notwithstanding 

the foregoing, an employee of 

Northwestern Mutual who is the 

Beneficial Owner of a Title II Only Plan 

may direct such Plan to engage in a 

transaction described in Section II, if all 

of the other conditions of this Section III 

have been met; 

(c) The last auction for the Auction 

Rate Security was unsuccessful; 

(d) The Plan does not waive any rights 

or claims in connection with the sale or 

loan as a condition of engaging in the 

above-described transaction; 

(e) The Plan does not pay any fees or 

commissions in connection with the 

transaction; 

(f) The transaction is not part of an 

arrangement, agreement or 

understanding designed to benefit a 

party in interest; 

(g) With respect to any sale described 

in Section I(a) or Section II(a): 

(1) The sale is for no consideration 

other than cash payment against prompt 

delivery of the Auction Rate Security; 

and 

(2) For purposes of the sale, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest; 

(h) With respect to an in-kind 

exchange described in Section (I)(a) or 

Section II(a), the exchange involves the 

transfer by a Plan of an Auction Rate 

Security in return for a Delivered 

Security, as such term is defined in 

Section IV(j), where: 

(1) The exchange is unconditional; 

(2) For purposes of the exchange, the 

Auction Rate Security is valued at par, 

plus any accrued but unpaid interest; 

(3) The Delivered Security is valued at 

fair market value, as determined at the 

time of the in-kind exchange by a third 

party pricing service or other objective 

source; 

(4) The Delivered Security is 

appropriate for the Plan and is a 

security that the Plan is otherwise 

permitted to hold under applicable 

law; 3 and 

(5) The total value of the Auction Rate 

Security (i.e., par plus any accrued but 

unpaid interest) is equal to the fair 

market value of the Delivered Security; 

(i) With respect to a loan described in 

Section I(b) or II(b): 

(1) The loan is documented in a 

written agreement containing all of the 

material terms of the loan, including the 

consequences of default; 

(2) The Plan does not pay an interest 

rate that exceeds one of the following 

three rates as of the commencement of 

the loan: 

(A) The coupon rate for the Auction 

Rate Security; 

(B) The Federal Funds Rate; or 

(C) The Prime Rate; 

(3) The loan is unsecured; and 

(4) The amount of the loan is not more 

than the total par value of the Auction 

Rate Securities held by the Plan. 

Section IV. Definitions 

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

person directly or indirectly, through 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 43071 

4For purposes of this exemption, references to 

specific provisions of Title I of the Act, unless 

otherwise specified, refer also to the corresponding 

provisions of the Code. 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; 

(b) The term ‘‘Auction Rate Security’’ 

or ‘‘ARS’’ means a security: 

(1) That is either a debt instrument 

(generally with a long-term nominal 

maturity) or preferred stock; and 

(2) With an interest rate or dividend 

that is reset at specific intervals through 

a Dutch auction process; 

(c) The term ’’Beneficial Owner’’ 

means: The individual for whose benefit 

the Title II Only Plan is established and 

includes a relative or family trust with 

respect to such individual; 

(d) The term ‘‘Clearing Broker’’ 

means: A member of a securities 

exchange that acts as a liaison between 

an investor and a clearing corporation 

and that helps to ensure that a trade is 

settled appropriately, that the 

transaction is successfully completed 

and that is responsible for maintaining 

the paper work associated with the 

clearing and executing of a transaction; 

(e) The term ‘‘Independent’’ means a 

person who is: (1) Not Northwestern 

Mutual or an affiliate; and (2) not a 

relative (as defined in ERISA section 

3(15)) of the party engaging in the 

transaction; 

(f) The term ‘‘Introducing Broker’’ 

means: A registered broker that is able 

to perform all the functions of a broker 

except for the ability to accept money, 

securities, or property from a customer; 

(g) The term ‘‘Sponsor’’ means: A plan 

sponsor as described in section 3(16)(B) 

of the Act and any Affiliates; 

(h) The term ‘‘Plan’’ means: Any plan 

described in section 3(3) of the Act and/ 

or section 4975(e)(1) of the Code; 

(i) The term ‘‘Title II Only Plan’’ 

means: Any plan described in section 

4975(e)(1) of the Code which is not an 

employee benefit plan covered by Title 

I of ERISA; 

(j) The term ‘‘Delivered Security’’ 

means a security that is: (1) Listed on a 

national securities exchange (excluding 

OTC Bulletin Board-eligible securities 

and Pink Sheets-quoted securities); or 

(2) a U.S. Treasury obligation; or (3) A 

fixed income security that has a rating 

at the time of the exchange that is in one 

of the two highest generic rating 

categories from an independent 

nationally recognized statistical rating 

organization (e.g., a highly rated 

municipal bond or a highly rated 

corporate bond); or (4) A certificate of 

deposit insured by the Federal Deposit 

Insurance Corporation. Notwithstanding 

the above, the term ‘‘Delivered 

Security’’ shall not include any Auction 

Rate Security, or any related Auction 

Rate Security, including derivatives or 

securities materially comprised of 

Auction Rate Securities or any illiquid 

securities. 

Written Comments 

The Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the notice of proposed 

exemption, published on April 9, 2014, 

at 79 FR 19642. All comments and 

requests for hearing were due by May 

24, 2014. During the comment period, 

the Department received no comments 

and no requests for a hearing from 

interested persons. Accordingly, after 

giving full consideration to the entire 

record, the Department has decided to 

grant the exemption. The complete 

application file (Application No. D– 

11496), including all supplemental 

submissions received by the 

Department, is available for public 

inspection in the Public Disclosure 

Room of the Employee Benefits Security 

Administration, Room N–1513, U.S. 

Department of Labor, 200 Constitution 

Avenue NW., Washington, DC 20210. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on April 

9, 2014, at 79 FR 19642. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Scott Ness of the Department, telephone 

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

number.) 

Liberty Media 401(k) Savings Plan (the 

Plan) Located in Englewood, Colorado 

[Prohibited Transaction Exemption 2014–05; 

Exemption Application No. D–11756] 

Exemption 

Section I. Transactions 

The restrictions of sections 

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

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

and the sanctions resulting from the 

application of section 4975 of the Code, 

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

Code,4 shall not apply, effective August 

9, 2012, until October 9, 2012, to: 

(a) The acquisition by the 

individually-directed accounts (the 

Accounts) in the Plan of certain 

participants (the Invested Participants) 

of stock subscription rights (the Rights) 

pursuant to a stock rights offering (the 

Rights Offering) by Liberty Interactive 

Corporation (LIC), a party in interest 

with respect to the Plan; and 

(b) The holding of the Rights by the 

Invested Participants’ Accounts during 

the subscription period. 

Section II. Conditions 

(a) The receipt of the Rights by the 

Invested Participants’ Accounts 

occurred in connection with the Rights 

Offering, and the Rights were made 

available by LIC to all shareholders of 

Series A Liberty Interactive common 

stock (the LIC Stock); 

(b) The acquisition of the Rights by 

the Invested Participants’ Accounts 

resulted from an independent corporate 

act of LIC; 

(c) Each shareholder of LIC Stock, 

including each Invested Participant’s 

Account, received the same 

proportionate number of Rights, and 

this proportionate number of Rights was 

based on the number of shares of the 

LIC Stock held by each such 

shareholder; 

(d) The Rights were acquired pursuant 

to, and in accordance with, provisions 

under the Plan for individually-directed 

investment of the Invested Participants’ 

Accounts, all or a portion of whose 

Accounts in the Plan held the LIC Stock; 

(e) The decision with regard to the 

disposition of the Rights by an Account 

was made by the Invested Participant 

whose Account received the Rights. 

Notwithstanding the above, if any of the 

Invested Participants failed to give 

instructions as to the disposition of the 

Rights received in the Rights Offering, 

such Rights were sold on the Nasdaq 

Global Market System and the proceeds 

from the sale were distributed to such 

Invested Participant’s Account; and 

(f) No brokerage fees, commissions, or 

other fees or expenses were paid by the 

Plan or by the Invested Participants’ 

Accounts to any broker related to 

Fidelity Management Trust Company 

(Fidelity), the Plan trustee, or to Liberty 

Media Corporation (LMC) or LIC in 

connection with the acquisition, 

holding or sale of the Rights. 

DATES: Effective Date: This exemption is 

effective for the period beginning 

August 9, 2012, through and including 

October 9, 2012. 

Written Comments 

In the Notice of Proposed Exemption 

(the Notice), the Department invited all 

interested persons to submit written 

comments and requests for a hearing 

within 45 days of the publication, on 

April 9, 2014, of the Notice in the 

Federal Register. In an email dated 

April 15, 2014, LMC’s representative 

confirmed that the required notification 

was sent to all interested persons via 

first class mail no later than April 14, 

2014. 


emcdonald on DSK67QTVN1PROD with NOTICES
43072 Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 

During the comment period, the 

Department received no requests for a 

hearing. In addition, the Department did 

not receive any written comments. 

After full consideration and review of 

the entire record, the Department has 

decided to grant the exemption. The 

complete application file (D–11756) is 

available for public inspection in the 

Public Disclosure Room of the 

Employee Benefits Security 

Administration, Room N–1515, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the proposed 

exemption published in the Federal 

Register on April 9, 2014 at 79 FR 

19653. 

FOR FURTHER INFORMATION CONTACT: Mrs. 

Blessed Chuksorji-Keefe of the 

Department at (202) 693–8567. (This is 

not a toll-free number.) 

AT&T Inc. (together with AT&T Inc.’s 

affiliates, AT&T) Located in Dallas, TX 

[Prohibited Transaction Exemption 2014–06; 

Exemption Application No. D–11758] 

Exemption 

Section I. Covered Transactions 

The restrictions of sections 

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

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

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

sanctions resulting from the application 

of section 4975 of the Code, by reason 

of section 4975(c)(1)(A), 4975(c)(1)(B), 

4975(c)(1)(D) and 4975(c)(1)(E) of the 

Code, shall not apply, effective 

September 9, 2013, to the following 

transactions, provided that the 

conditions described in Section II are 

satisfied: 

(a) The one-time, in-kind contribution 

(the Contribution) by AT&T of 320 

million series A Cumulative Perpetual 

Preferred Membership Interests (the 

Preferred Interests) of AT&T Mobility II 

LLC (the Issuer) to the SBC Master 

Pension Trust, which holds assets of the 

AT&T Pension Benefit Plan (the Plan) in 

accordance with the terms of the 

Contribution Agreement; 

(b) The holding of the Preferred 

Interests by the Trust on behalf of the 

Plan; 

(c) The disposition of the Preferred 

Interests by the Trust in connection 

with the exercise of the Put Option by 

the Independent Fiduciary, in 

accordance with the terms of the 

Contribution Agreement; 

(d) The disposition of the Preferred 

Interests by the Independent Fiduciary 

on behalf of the Trust in connection 

with the exercise of the Call Option, in 

accordance with the terms of the 

Contribution Agreement; 

(e) The disposition, restructuring, 

adjustment, or recapitalization of the 

Preferred Interests resulting from a 

Change of Control of the Issuer, in 

accordance with the terms of the 

Contribution Agreement; 

(f) The acquisition and holding by the 

Trust of shares in AT&T common stock 

(the AT&T Shares) received in 

connection with the exercise of the Put 

Option or the Call Option, in 

accordance with the terms of the 

Contribution Agreement, to the extent 

such acquisition and holding is not 

permitted by section 407(a) of ERISA; 

and 

(g) The deferred payment by AT&T to 

the Trust of any amounts due under the 

Call Option or the Put Option, in 

accordance with the terms of the 

Contribution Agreement. 

Section II. Conditions 

(a) The Preferred Interests have a 

liquidation value of $25 per Preferred 

Interest and carry distribution rights of 

$1.75 per Preferred Interest, or $560 

million per year in cash payable to the 

Trust (the Distributions) in accordance 

with the terms of the Contribution 

Agreement; 

(b) The Plan incurs no fees, costs or 

other charges in connection with the 

transactions described in paragraphs 

(a)–(g) of Section I, other than fees and 

expenses paid by the Plan to the 

Independent Fiduciary for duties 

required by this exemption; 

(c) AT&T makes $700 million in 

additional cash payments (the 

Additional Payments) to the Trust in the 

following manner: 

(1) $175 million paid at the time the 

Preferred Interests are contributed to the 

Trust; and 

(2) $175 million paid no later than the 

due date for AT&T’s tax return for each 

of the next three years (i.e., 2014, 2015 

and 2016); 

(d) AT&T makes an additional cash 

contribution to the Trust, equal to the 

‘‘Net Lookback Amount,’’ no later than 

September 15, 2019. The Net Lookback 

Amount will be calculated as follows: 

(1) Looking back from January 1, 

2018, AT&T will recalculate the 

minimum required contribution to the 

Plan after application of any carryover 

balances (the Mandatory Funding 

Obligation) for each of the 2013 through 

2017 Plan Years, subject to the 

following requirements: 

(i) The calculation of each Mandatory 

Funding Obligation will use actuarial 

assumptions in effect for funding 

purposes as of the first day of the Plan 

Year for which such contribution is 

calculated, and the calculation of plan 

assets will assume each Mandatory 

Funding Obligation is contributed when 

required for the 2013 through 2017 Plan 

Years and earn actual Trust returns for 

each such year; 

(ii) The value of the Preferred 

Interests will be disregarded; 

(iii) Actual cash contributions to the 

Trust, including the Additional 

Payments and Distributions, will be 

disregarded; and 

(iv) Earnings on all cash 

contributions, including any earnings 

on the Additional Payments and 

Distributions, will be included; 

(2) The amounts described in Section 

(II)(d)(1)(i)–(iv), in the aggregate (the 

Gross Lookback Amount), shall be 

reduced by the following items to arrive 

at the Net Lookback Amount: 

(i) Actual cash contributions to the 

Trust, including the Additional 

Payments and the Distributions paid to 

the Trust prior to the date the Net 

Lookback Amount is paid to the Trust; 

(ii) The value of the Preferred 

Interests as of January 1, 2018, that is 

not in excess of 10 percent of the total 

value of the Trust’s assets, and for the 

purpose of this clause (ii), the 

determination of the total value of the 

Trust’s assets includes the actual cash 

contributions to the Trust, such as cash 

contributions made in connection with 

the Additional Payments and 

Distributions (including contribution 

receivables); and 

(iii) Any consideration paid to the 

Trust pursuant to any exercise of the Put 

or Call Options at any time prior to the 

date the Net Lookback Amount is paid 

to the Trust; 

(e) An Independent Fiduciary, acting 

solely on behalf of the Plan and the 

Trust, represents the Plan’s interests for 

all purposes with respect to the 

Preferred Interests, and determines, 

prior to entering into any of the 

transactions described in Section I (a)– 

(g), that each such transaction is in the 

interest of the Plan. 

(f) The Independent Fiduciary will 

have complete discretion regarding the 

disposition of AT&T Shares in 

accordance with the IMA and the 

Registration Rights Agreement; 

(g) The Independent Fiduciary 

negotiated and approved, on behalf of 

the Plan and the Trust, the terms and 

conditions of the Contribution 

Agreement, including the terms of the 

Preferred Interests, the Call Option and 

the Put Option, as well as the terms of 

the IMA and Registration Rights 

Agreement; 

(h) The Independent Fiduciary 

manages the holding and disposition of 


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the Preferred Interests and takes 

whatever actions it deems necessary to 

protect the rights of the Plan with 

respect to the Preferred Interests or the 

AT&T Shares received in connection 

with the exercise of the Call Option or 

the Put Option; 

(i) The Independent Fiduciary 

monitors the credit rating of AT&T Inc. 

for purposes of determining whether the 

Put Option is triggered due to AT&T Inc. 

being rated below investment grade for 

two consecutive calendar quarters by at 

least two of the following rating 

agencies: Standard & Poor’s Ratings 

Services, Moody’s Investor Services, 

Inc. or FitchRatings, Inc.; 

(j) An Independent Appraiser, acting 

on behalf of the Plan, determines the 

fair market value of the Preferred 

Interests contributed to the Trust on 

behalf of the Plan as of the date of the 

Contribution and while the Preferred 

Interests are held on behalf of the Plan, 

and for all purposes under this 

exemption, consistent with sound 

principles of valuation; 

(k) The Preferred Interests rank senior 

to any other equity holders of the Issuer 

in respect of: The right to receive 

Distributions; and the right to receive 

Distributions or payments out of the 

assets of the Issuer upon liquidation of 

the Issuer, in accordance with the terms 

of the Contribution Agreement; 

(l) In the event that the Distributions 

are in arrears, AT&T is restricted from 

making certain transfers of cash out of 

the Issuer or declaring dividends on and 

repurchasing shares of AT&T stock, in 

accordance with the terms of the 

Contribution Agreement; 

(m) The Committee and the 

Independent Fiduciary maintain for a 

period of six (6) years from the date any 

Preferred Interests are contributed to the 

Trust, for a period of six (6) years from 

the date of any disposition of Preferred 

Interests by the Trust or the purchase of 

Preferred Interests by AT&T, and for a 

period of six (6) years from the last date 

that the Trust holds AT&T Shares 

received in connection with the exercise 

of the Put Option or the Call Option in 

violation of section 406(a)(2) of ERISA, 

in a manner that is convenient and 

accessible for audit and examination, 

the records necessary to enable the 

persons described in paragraph (n)(1) 

below to determine whether conditions 

of this exemption have been met, except 

that (i) a 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 sixyear 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 (n) below; and 

(n)(1) Except as provided in section 

(2) of this paragraph and not 

withstanding any provisions of 

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

of ERISA, the records referred to in 

paragraph (m) above shall be 

unconditionally available at their 

customary location during normal 

business hours to: 

(i) Any duly authorized employee or 

representative of the Department or the 

Internal Revenue Service; 

(ii) AT&T or any duly authorized 

representative of AT&T; 

(iii) the Independent Fiduciary or any 

duly authorized representative of the 

Independent Fiduciary; 

(iv) the Committee or any duly 

authorized representative of the 

Committee; and 

(v) any participant or beneficiary of 

the Plan, or any duly authorized 

representative of such participant or 

beneficiary; 

(2) None of the persons described 

above in paragraph (n)(1) (iii) or (v) 

shall be authorized to examine the trade 

secrets of AT&T or commercial or 

financial information that is privileged 

or confidential, and should AT&T refuse 

to disclose information on the basis that 

such information is exempt from 

disclosure; AT&T shall by the close of 

the thirtieth (30th) day following the 

request, provide a written notice 

advising that person of the reasons for 

the refusal and that the Department may 

request such information. 

III. Definitions 

For purposes of this exemption: 

(a) The term ‘‘Affiliate’’ means: 

(1) Any person directly or indirectly 

through one or more intermediaries, 

controlling, controlled by, or under 

common control with the person; 

(2) Any officer, director, employee, 

relative, or partner in any such person; 

(3) Any corporation or partnership of 

which such person is an officer, 

director, partner, or employee. For the 

purposes of clause (a)(1) above, the term 

‘‘control’’ means the power to exercise 

a controlling influence over the 

management or policies of a person 

other than an individual. 

(b) The term ‘‘Committee’’ means the 

AT&T Inc. Benefit Plan Investment 

Committee, which has been delegated 

the power and authority to appoint and 

remove trustees and investment 

managers, and to enter into and amend 

trust agreements and other agreements 

relating to the management of Plan 

assets and, in respect of such power and 

authority, has been designated by AT&T 

Services, Inc. as a ‘‘named fiduciary’’ of 

the Plan. 

(c) The term ‘‘Trust’’ means the SBC 

Master Pension Trust, established and 

maintained pursuant to an agreement 

between AT&T Inc. and JPMorgan Chase 

Bank, N.A., as amended and restated 

effective as of February 1, 2012. 

(d) The term ‘‘IMA’’ means the 

Investment Management Agreement by 

and between AT&T Services, Inc., the 

AT&T Benefit Plan Investment 

Committee, AT&T Inc. and Brock 

Fiduciary Services LLC, effective on 

September 9, 2013. 

(e) The term ‘‘Contribution 

Agreement’’ means the Contribution 

Agreement between Brock Fiduciary 

Services LLC, JPMorgan Chase Bank, 

N.A., as Directed Trustee of the Trust, 

AT&T Inc. and AT&T Mobility II LLC, 

dated August 30, 2013, which, among 

other things, sets forth the terms and 

conditions of the Contribution, the Put 

Option and the Call Option. 

(f) The term ‘‘Registration Rights 

Agreement’’ means the Registration 

Rights Agreement by and among AT&T 

Inc., the SBC Master Pension Trust and 

Brock Fiduciary Services LLC, as 

Independent Fiduciary and investment 

manager with respect to the AT&T 

Pension Benefit Plan, a participating 

plan in the SBC Master Pension Trust, 

dated August 30, 2013. 

(g) The term ‘‘Change of Control’’ 

means (i) the occurrence of any merger, 

reorganization or other transaction that 

results in AT&T, directly or indirectly, 

owning less than fifty percent of the 

capital or profits interests (where the 

Issuer remains taxable as a partnership), 

or equity (if the Issuer becomes taxable 

as a corporation), of the Issuer, 

exclusive of the Preferred Interests, or 

(ii) a transfer of fifty percent or more of 

the Plan liabilities and Trust assets to an 

entity not under common control with 

AT&T Inc. 

(h) The term ‘‘Independent Fiduciary’’ 

means Brock Fiduciary Services LLC 

and any other fiduciary who (1) is 

independent or unrelated to AT&T Inc. 

and its affiliates and has the appropriate 

training, experience, and facilities to act 

on behalf of the Plan regarding the 

covered transactions in accordance with 

the fiduciary duties and responsibilities 

prescribed by ERISA (including, if 

necessary, the responsibility to seek the 

counsel of knowledgeable advisors to 

assist in its compliance with ERISA), 

and (2) if relevant, succeeds Brock 

Fiduciary Services LLC pursuant to the 

terms of the Investment Management 

Agreement, Independent Fiduciary 


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5The Background information is based on 

AT&T’s representations and does not reflect the 

views of the Department, unless indicated 

otherwise. 

6Prior to the Contribution, as of December 31, 

2012, the Plan had 551,187 participants and assets 

with an approximate fair market value of $45.06 

billion. As of the same date the Plan was 

underfunded by $13.85 billion. 

7AT&T informed the Department that three 

Distributions have been made since the date of the 

Contribution. Specifically, AT&T represents that 

$34,222,222 was paid to the Trust on November 1, 

2013, for the 22 days the Trust held the Preferred 

Interests in the third quarter of 2013, $140 million 

was paid to the Trust on February 3, 2014, for the 

fourth quarter of 2013, and $140 million was paid 

to the Trust on May 1, 2014, for the first quarter 

of 2014. 

Agreement, or other relevant agreement. 

The Independent Fiduciary will not be 

deemed to be independent of and 

unrelated to AT&T Inc. and its affiliates 

if: (i) Such fiduciary directly or 

indirectly controls, is controlled by or is 

under common control, with AT&T and 

its affiliates; (ii) such fiduciary directly 

or indirectly receives any compensation 

or other consideration in connection 

with any transaction described in this 

exemption other than for acting as an 

Independent Fiduciary in connection 

with the transactions described herein, 

provided that the amount or payment of 

such compensation is not contingent 

upon, or in any way affected by, the 

Independent Fiduciary’s ultimate 

decision; and (iii) the annual gross 

revenue received by the Independent 

Fiduciary, during any year of its 

engagement, from AT&T Inc. and its 

affiliates, exceeds two percent of the 

Independent Fiduciary’s annual gross 

revenue from all sources (for federal 

income tax purposes) for its prior tax 

year. For the purpose of this Section 

III(h), the term ‘‘control’’ has the 

meaning set forth in Section III(a) above. 

(i) The term ‘‘Put Option’’ means the 

right of the Independent Fiduciary to 

require AT&T to purchase the Preferred 

Interests from the Trust, pursuant to the 

terms and conditions set forth in the 

Contribution Agreement, at the Option 

Price per Preferred Interest at any time 

and from time to time on or after the 

earliest of: (1) The first date that the 

Issuer’s debt-to-total-capitalization ratio 

(as defined in the Contribution 

Agreement) exceeds that of AT&T; (2) 

the date on which AT&T, Inc. is rated 

below investment grade for two 

consecutive calendar quarters by at least 

two of the following rating agencies: (x) 

Standard & Poor’s Ratings Services, (y) 

Moody’s Investor Services, Inc., or (z) 

FitchRatings, Inc.; (3) a Change of 

Control; or (4) the seventh anniversary 

of the date on which the Preferred 

Interests are contributed to the Trust. 

(j) The term ‘‘Call Option’’ means the 

right of AT&T to purchase all or any 

portion of the Preferred Interests from 

the Trust, pursuant to the terms and 

conditions set forth in the Contribution 

Agreement, at a price per Preferred 

Interest equal to the Option Price per 

Preferred Interest, at any time and from 

time to time: (1) During the twelve 

month period following the date AT&T 

issues an annual report reflecting that 

the Plan is fully funded as determined 

under U.S. GAAP and calculated by 

including the fair market value of the 

Preferred Interests; (2) on or after a 

Change of Control; or (3) on or after the 

fifth anniversary of the date on which 

the Preferred Interests are contributed to 

the Trust. 

(k) The term ‘‘Trustee’’ means 

JPMorgan Chase Bank, N.A. or any 

successor trustee retained by the Trust 

to hold the assets of the Trust, acting 

solely as a directed trustee with no 

discretionary authority over the 

investment of Trust assets. 

(l) The term ‘‘Option Price’’ means an 

amount equal to the greater of: (1) The 

fair market value of the Preferred 

Interest, determined by the Independent 

Fiduciary as of the last date of the 

calendar quarter preceding the date of 

notice of exercise of a Call Option or Put 

Option, as the case may be, without 

regard to the occurrence of any prior 

event described in clauses (1) or (2) of 

the definition of Call Option or in 

clauses (1) through (3) of the definition 

of Put Option, or, for the portion of 

Preferred Interests that are not 

immediately purchased by AT&T 

pursuant to the Put Option because of 

the limitation on AT&T’s obligation to 

purchase the Preferred Interests 

pursuant to the Put Option to no more 

than 106,666,667 Preferred Interests in 

any twelve month period, the fair 

market value of the Preferred Interest, 

determined by the Independent 

Fiduciary as of the last date of the 

calendar quarter immediately preceding 

the date such portion of the Preferred 

Interest is actually purchased by AT&T 

Inc., without regard to the occurrence of 

any prior event described in clauses (1) 

or (2) of the definition of Call Option or 

in clauses (1) through (3) of the 

definition of Put Option; and (2) the 

sum of $25.00 (i.e., $8 billion in the 

aggregate) plus any accrued and unpaid 

Distributions. 

(m) The term ‘‘Independent Fiduciary 

Agreement’’ means the Independent 

Fiduciary Agreement dated May 1, 

2012, as amended, by and among AT&T 

Services, AT&T Inc. and Brock. 

(n) The term ‘‘Independent 

Appraiser’’ means an individual or 

entity meeting the definition of a 

‘‘Qualified Independent Appraiser’’ 

under 25 CFR 2570.31(i) retained to 

determine, on behalf of the Plan, the fair 

market value of the Preferred Interests 

as of the date of the Contribution and 

while the Preferred Interests are held on 

behalf of the Plan. For avoidance of 

doubt, the Independent Appraiser may 

be the Independent Fiduciary, provided 

it qualifies as a Qualified Independent 

Appraiser. 

DATES: Effective Date: This exemption is 

effective as of September 9, 2013. 

Background 5

AT&T Inc. (together with its affiliates, 

AT&T) is a provider of 

telecommunications services, including 

wireless communications, with its 

principal executive offices in Dallas, 

Texas. AT&T sponsors the AT&T 

Pension Benefit Plan (the Plan), a 

noncontributory qualified defined 

benefit pension plan whose assets are 

held in trust by the SBC Master Pension 

Trust (the Trust). The Plan covers 

substantially all U.S. bargained and 

non-bargained employees of the 

participating subsidiaries of AT&T. As 

of December 31, 2013, the Plan had 

536,500 participants and assets with an 

approximate fair market value of $56.45 

billion, including the Preferred Interests 

with a value of $9.21 billion. As of the 

same date, the Plan was underfunded by 

$9.32 billion, excluding the Preferred 

Interests, and by $113 million, 

including the Preferred Interests.6

On September 9, 2013, AT&T made an 

in-kind contribution (the Contribution) 

to the Trust of 320 million Series A 

Cumulative Perpetual Preferred 

Membership Interests (i.e., the Preferred 

Interests) of AT&T Mobility II LLC (the 

Issuer), an indirect wholly-owned 

subsidiary of AT&T Inc. The Applicant 

stated that the Contribution would 

provide the Plan with a valuable asset 

in the fastest growing part of AT&T’s 

business and would be substantially in 

excess of the legally required Plan 

contributions and would allow AT&T to 

enhance the sound funding of the Plan. 

The Preferred Interests will pay 

annual distributions of $1.75 per 

Preferred Interest, or $560 million, to 

the Trust (the Distributions).7 The 

liquidation value of the Preferred 

Interests equals $25.00 per Preferred 

Interest (i.e., $8 billion in the aggregate) 

plus any accrued and unpaid 

Distributions. In addition, the Preferred 

Interests will rank senior to any other 

class or series of equity interests in the 

Issuer upon voluntary or involuntary 


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8On November 18, 2013, AT&T also forwarded to 

the Department a statement in support of the 

Contribution from the Communications Workers of 

America (the CWA) that the CWA had posted on its 

Web site. AT&T represents that the CWA is the 

union that covers the vast majority of AT&T’s 

collectively bargained employees. 

liquidation, dissolution or winding up 

of the Issuer. 

The Preferred Interests are 

transferable to AT&T upon exercise of a 

call option (the Call Option) and a put 

option (the Put Option). The Call Option 

and the Put Option are exercisable upon 

the occurrence of certain events, 

including as of the 5 year and 7 year 

anniversaries, respectively, of the date 

of the Contribution. At the sole election 

of AT&T, Inc., payment of the Option 

Price may be made in: (i) Shares of 

AT&T Inc. common stock (AT&T 

Shares); (ii) cash; or (iii) a combination 

of AT&T Shares and cash. 

In connection with the Contribution, 

the Applicant is committed to make 

additional cash contributions to the 

Trust, in order to approximate the 

minimum required contributions that 

would otherwise be payable to the Plan 

by AT&T in cash, computed as if the 

Contribution had never been made, for 

as long as relief under the proposed 

exemption is in effect, comprised of (i) 

lump sum cash payments totaling $700 

million (the Additional Payments); and 

(ii) a ‘‘lookback’’ payment (the Lookback 

Amount). 

The Independent Fiduciary, a whollyowned subsidiary of Brock Capital 

Group, was appointed by AT&T to serve 

as an independent fiduciary on behalf of 

the Plan and the Plan’s participants and 

beneficiaries with respect to the 

Contribution, and was appointed to 

serve as the investment manager with 

respect to the holding, management and 

disposition of the Preferred Interests 

held by the Trust. Furthermore, the fair 

market value of the Preferred Interests at 

any point in time will be determined by 

the Independent Fiduciary in its sole 

discretion. 

Written Comments 

In the Notice of Proposed Exemption 

(the Notice), published in the Federal 

Register at 78 FR 55103 (September 9, 

2013), the Department invited all 

interested persons to submit written 

comments and requests for a hearing on 

the proposed exemption. All comments 

and requests for hearing were due by 

November 3, 2013. During the comment 

period, the Department received a total 

of 44 comments from Plan participants 

(the Commenters). The Department also 

received a comment letter from AT&T 

(the AT&T Comment Letter) and a 

supplemental response (together with 

the AT&T Comment Letter, the AT&T 

Comment).8 Due to a misunderstanding 

by AT&T regarding the date of the last 

day in the comment period, the 

Department agreed to grant AT&T a 3- 

day extension of the comment period, 

and received the AT&T Comment Letter 

on November 6, 2013. In the AT&T 

Comment, AT&T sought: (1) minor 

changes to Section II(b), Section II(d) 

and Section III(d) of the Notice; (2) 

clarifications to the Notice; and (3) 

changes to the effective date of the 

Notice. 

Participant Comments 

Seventeen of the Commenters raised 

issues beyond the scope of the 

exemption request. Five Commenters 

expressed support for the adoption of 

the proposed exemption. Twenty-two 

Commenters expressed opposition to 

the exemption and expressed concerns 

regarding the transactions described in 

the Notice. These concerns generally 

related to: 

(a) The prudence of the Contribution 

and risk to the Plan; (b) Plan 

diversification; (c) fiduciary oversight; 

(d) the preference for a cash 

contribution; (e) the valuation of the 

Preferred Interests; (f) the benefits of the 

Contribution to AT&T; and (g) the 

accuracy of assumptions made in 

estimating AT&T’s minimum funding 

contributions. The following 

summarizes AT&T’s response to these 

concerns. 

(a) The Prudence of the Contribution 

and Risk to the Plan 

A number of the Commenters 

expressed concern regarding whether 

the Contribution was prudent, 

protective of the Plan, and in the Plan’s 

best interest. Several of these 

Commenters also expressed concern 

that AT&T needed an exemption from 

certain restrictions imposed by ERISA, 

including the 10 percent limitation on 

employer securities imposed by section 

407(a)(2) of ERISA. Other Commenters 

questioned whether the Contribution 

would be too risky, in particular 

because the Contribution would result 

in the Trust holding a greater percentage 

of its equity holdings in AT&T 

securities. In addition, one Commenter 

suggested that AT&T be compelled to 

fully fund the Plan with assets that have 

a value unrelated to AT&T’s earnings. 

Another Commenter questioned 

whether the Company’s decision to 

contribute the Preferred Interests to the 

Plan, as opposed to cash, was indicative 

of financial instability within the 

Company. 

(i) Prudence of the Contribution 

In response to Commenters’ prudence 

concerns, AT&T states that the Preferred 

Interests represent a better value and 

less risk than a cash contribution of an 

equal amount. In this regard, AT&T 

represents that the Preferred Interests 

will, pursuant to their terms, provide 

annual cash Distributions worth $560 

million to the Plan, so long as the 

Preferred Interests are held by the Trust. 

In connection with the Contribution, 

AT&T will additionally contribute the 

Additional Payments, worth $700 

million in cash, to the Plan ($175 

million was contributed on the date of 

the Contribution). AT&T states that over 

the course of the next five years, the 

Distributions and Additional Payments 

will total $3.5 billion, which is more 

than AT&T currently projects as its 

required contributions during this 

period if the Contribution had not been 

made. Further, AT&T represents that the 

Trust has approximately $33 billion in 

publicly traded, relatively liquid assets 

which are sufficient to pay benefit 

claims for eight years without taking 

into account investment growth on 

those assets. AT&T represents that the 

Trust’s annual rate of return over the 

past five years through 2013 has been 

approximately 12 percent, which is 

indicative of the continued growth 

potential of the Trust’s assets. 

AT&T states that in order to ensure 

that the Plan’s acceptance of the 

Contribution was prudent, it retained 

Brock Fiduciary Services, LLC, (the 

Independent Fiduciary), to represent the 

Plan’s interests as an independent 

fiduciary with regard to the acceptance, 

management and disposition of the 

Preferred Interests. AT&T represents 

that the Independent Fiduciary, after 

taking into account the features of the 

Preferred Interests as well as the 

percentage of Plan assets represented by 

such securities, concluded that it was 

prudent for the Plan to accept the 

Contribution and that the Contribution 

is in the best interests of the Plan and 

its participants and beneficiaries, and 

protective of the rights of the 

participants and beneficiaries. 

One Commenter indicated that the 

Contribution was not in the best 

interests of Plan participants because 

the Contribution would act as a poison 

pill preventing corporate transactions 

involving AT&T. In response, AT&T 

disagrees that the Contribution would 

have a deterrent effect on corporate 

transactions. AT&T states that even 

without the Contribution, the unfunded 

liability of the Plan could affect any 

potential corporate transaction. 

Moreover, AT&T represents that the 


emcdonald on DSK67QTVN1PROD with NOTICES
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9AT&T states that, pursuant to the Contribution 

Agreement, these types of transactions are 

comprised of (A) any merger, corporate 

reorganization or other transaction that results in 

AT&T, directly or indirectly, owning less than fifty 

percent of the capital or profits interests or equity 

of the Issuer, or (B) a transfer of fifty percent or 

more of the Plan liabilities and Trust assets to an 

entity that is not under common control with AT&T 

Inc. Thus, AT&T explains that the Independent 

Fiduciary has the authority to require AT&T Inc. to 

purchase the Preferred Interests if there is a 

significant (fifty percent or more) spin off of Plan 

assets/liabilities or if fifty percent or more of the 

Issuer is acquired or spun out of the AT&T Inc. 

family of companies. 

10AT&T notes that if it uses its common stock to 

purchase the Preferred Interests, the Trust, acting 

through the Independent Fiduciary, can sell such 

shares in the public market pursuant to a 

Registration Rights Agreement between AT&T and 

the Trust, acting through the Independent 

Fiduciary. 

Independent Fiduciary negotiated with 

AT&T for rights that protect the Plan’s 

interests in the event of a significant 

corporate transaction involving AT&T.9

A Commenter expressed concern that 

existing shareholders of AT&T common 

stock would be penalized by a dilution 

of their shares and that the Plan would 

receive diluted shares of AT&T common 

stock. In response, AT&T states that the 

Contribution did not, in fact, result in 

material dilution to its common stock. 

AT&T explains that there would, 

however, be dilution of AT&T common 

stock if the Preferred Interests were 

repurchased by AT&T using its common 

stock, and not cash. Nevertheless, AT&T 

suggests that any purchase of the 

Preferred Interests by AT&T would most 

likely be for cash, in order to avoid such 

dilution. 

(ii) Plan Safeguards 

In response to whether the 

Contribution is protective of the Plan, 

AT&T states that the Contribution 

Agreement between Brock Fiduciary 

Services LLC, JPMorgan Chase Bank, 

N.A., as Directed Trustee of the Trust, 

AT&T Inc. and the Issuer (the 

Contribution Agreement) will provide 

additional safeguards to the Trust. For 

example, AT&T represents that the 

Contribution Agreement provides the 

Trust with a Put Option that permits the 

Trust to cause AT&T to purchase the 

Preferred Interests with cash or 

unregistered, publicly-traded shares of 

AT&T common stock (such shares are 

referred to as the AT&T Shares), upon 

the occurrence of certain specified 

events, including a decline in AT&T 

Inc.’s credit rating by certain 

independent rating agencies.10 AT&T 

represents that the terms of the 

Contribution Agreement also provide 

that AT&T may not pay dividends and 

the Issuer may not transfer any cash to 

AT&T or any of its affiliated owners if 

any quarterly cash Distributions payable 

on the Preferred Interests are in arrears. 

Furthermore, AT&T represents that the 

Preferred Interests rank senior to any 

other class or series of equity interests 

in the Issuer. Therefore, according to 

AT&T, upon voluntary or involuntary 

liquidation or dissolution of the Issuer, 

the Plan would have the right to receive 

payments or distributions equal to not 

less than the Preferred Interests’ stated 

value, $8 billion, plus any unpaid 

Distributions, out of the assets of the 

Issuer before AT&T and AT&T’s 

creditors. Finally, in connection with 

the Contribution, the Preferred Interests 

will pay the Distributions pursuant to 

their terms at an ‘‘above-market’’ rate of 

return, and AT&T is obligated to make 

$700 million in Additional Payments 

described above. 

(iii) Preferred Interests Held by Plan in 

Excess of the 10 Percent Limit Imposed 

by ERISA 

AT&T explains that because the 

Preferred Interests represent more than 

10 percent of the Trust’s assets, AT&T 

agreed to make certain additional 

‘‘lookback’’ payments equal to the 

Lookback Amount that provide 

protection to the Plan in the event that 

AT&T’s projections regarding its 

required contributions turn out to be 

lower than the actual requirements. In 

this regard, AT&T explains that it agreed 

to make a cash contribution to the Trust 

equal to the Lookback Amount as of the 

end of 2017 in the event that the Plan’s 

legally required contributions from 2013 

through 2017, calculated as if the 

Preferred Interests had not been 

contributed, would have been larger 

than the cash actually received by the 

Trust through the Distributions and the 

Additional Payments. For purposes of 

calculating the Lookback Amount, 

AT&T may also offset a portion of the 

value of the Preferred Interests that is 

not in excess of the 10 percent limit 

contained in ERISA. Thus, AT&T 

contends that as of the end of 2017, in 

no event can the Trust be worse off than 

if the exemption had not been granted. 

(iv) Risks to the Plan Related to the 

Contribution 

With respect to the Commenters’ 

concern regarding the risk posed by the 

Contribution to the Plan, AT&T 

represents that the Contribution 

provides to the Plan an asset with a 

value, as of the date of the Contribution, 

of approximately $9.1 billion, that is 

well in excess of the amount AT&T was 

legally required to contribute to the Plan 

for 2013 through 2017. Furthermore, 

AT&T states that the Contribution 

provides a future stream of cash flow on 

which the Plan can rely for benefit 

payments and other purposes. AT&T 

states that the unique features of the 

Preferred Interests that it negotiated 

with the Independent Fiduciary are 

otherwise unavailable in the current 

market. 

In addition, AT&T represents that the 

Plan has always been in compliance 

with its legal funding requirements and 

AT&T cannot be compelled to 

immediately fund the Plan in full. 

AT&T observes that the Independent 

Fiduciary noted that the ‘‘voluntary 

contribution of valuable assets to the 

Plan . . . will far exceed what [AT&T] 

represents it would contribute if it were 

to make only a cash contribution.’’ 

AT&T asserts that the Contribution, 

together with the Additional Payments 

and the Lookback Amount discussed 

above provide the Plan and its 

participants with substantial assets in 

excess of its legal funding requirements 

that mitigate the risk to the Plan and 

protect their benefits now and in the 

future. 

(v) Proposed Exemption and Risk of 

Bankruptcy 

With respect to one Commenter’s 

concern that AT&T’s decision to 

contribute the Preferred Interests to the 

Plan, rather than cash, may be 

indicative of financial instability within 

the company, AT&T represents that its 

financial condition, including the 

Issuer, is robust, as demonstrated by its 

‘‘A’’ credit rating. 

(b) Plan Diversification 

Two Commenters conveyed a general 

concern that the Plan would lack 

adequate diversification due to the 

Contribution. In response, AT&T 

represents that the Committee is in the 

process of reassessing the allocation of 

the Plan’s other investments, thereby 

taking into account diversification 

requirements. As discussed above, 

AT&T believes the Contribution 

represents a better value and less risk 

than a cash contribution of an equal 

amount, even after taking into account 

the higher proportion of Plan assets that 

will be invested in AT&T securities, 

including, potentially, AT&T common 

stock. AT&T notes that this belief is 

shared by the Independent Fiduciary. 

Furthermore, as discussed above, AT&T 

states that it has agreed to provide 

significant protections to the Plan in 

connection with the Contribution, and 

that such protections are intended to 

mitigate risks to the Plan related to the 

Contribution, including those related to 

diversification. 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 43077 

11The Department is expressing no view herein 

as to whether the Contribution represents better 

value and less risk than a cash contribution of equal 

amount. 

(c) Fiduciary Oversight 

Five Commenters questioned whether 

the acceptance of the Contribution was 

in the interest of Plan participants and 

whether there was adequate fiduciary 

oversight. Three Commenters raised 

issues related to the qualification of the 

Independent Fiduciary and whether the 

Independent Fiduciary was sufficiently 

independent from AT&T. In a related 

comment, the Commenter expressed 

concern regarding the valuations 

because they were completed by the 

Independent Fiduciary, who was 

appointed by AT&T. A different 

Commenter stated that the Independent 

Fiduciary had a conflict of interest 

because it was coordinating the 

approval process of the Contribution. 

In response, AT&T states that the 

Independent Fiduciary represents 

exclusively the interests of the Plan and 

its participants and accordingly, its 

duties are to the Plan rather than to 

AT&T. AT&T states that the 

Independent Fiduciary’s responsibilities 

include, among other duties, 

determining whether the terms of the 

Contribution are prudent and in the 

interest of the Plan and the Trust. 

Furthermore, AT&T states that the 

Independent Fiduciary does not receive 

any compensation or other 

consideration from AT&T for its services 

to the Plan. AT&T states that the 

Independent Fiduciary was separately 

engaged and compensated for its 

respective roles as Independent 

Fiduciary and as investment manager. 

Moreover, AT&T stresses that the 

Independent Fiduciary is independent 

of AT&T and its subsidiaries and has 

never provided services to AT&T or any 

of its subsidiaries. In addition, AT&T 

states that the Independent Fiduciary 

made its own determination of the 

prudence of the Plan’s acceptance and 

holding of the Preferred Interests, and 

the Independent Fiduciary will have the 

exclusive authority to manage the 

Preferred Interests while held by the 

Plan. 

AT&T represents further that the 

Independent Fiduciary has 

demonstrated that it is qualified to act 

as independent fiduciary and 

investment manager. For example, 

AT&T states that the Independent 

Fiduciary serves as the independent 

fiduciary for the Chrysler Group LLC 

(Chrysler) United Auto Workers 

voluntary employee beneficiary 

association (UAW VEBA), where, as 

independent fiduciary for the Chrysler 

UAW VEBA, it successfully challenged 

Fiat SpA’s proposed purchase of the 

Chrysler interests held by the Chrysler 

UAW VEBA. AT&T has provided the 

following link for additional 

information regarding the qualifications 

of the Independent Fiduciary’s 

personnel working on this matter: 

http://www.brockcapital.com/our-team/

alphabetically. 

AT&T also represents that the 

Independent Fiduciary has extensive 

experience as an appraiser of nonpublicly traded securities, including 

securities like the Preferred Interests. 

Further, AT&T states that the 

Independent Fiduciary is a wholly 

owned subsidiary of Brock Capital 

Group and therefore has the capability 

to call upon the members of Brock 

Capital Group if required to provide 

expertise in the appraisal of employer 

securities to be contributed. 

One other Commenter requested that 

a rank and file employee be involved in 

the decision-making process with 

respect to the Contribution. In response, 

AT&T represents that the interests of 

Plan participants are in fact being 

represented by the Independent 

Fiduciary, which is qualified to 

represent their interests. In addition, 

AT&T states its belief that delegating 

investment authority to a rank and file 

employee would interfere with the 

ability of the Independent Fiduciary to 

carry out its duties. AT&T adds that the 

Communications Workers of America, a 

union that represents many Plan 

participants, has publicly expressed its 

support for the exemption. 

(d) The Preference for a Cash 

Contribution 

(i) Contribution of Cash Compared to 

Contribution of Preferred Interests 

Many Commenters expressed a 

preference for a cash contribution rather 

than the Contribution of Preferred 

Interests. In response, AT&T notes that, 

in fulfillment of the conditions of the 

exemption, AT&T contributed $175 

million of the $700 million in 

Additional Payments in cash in 2013 at 

the time of the Contribution, and it must 

provide $525 million more in 

Additional Payments prior to 2018. 

AT&T represents that the Plan also will 

receive the Distributions, equal to $560 

million in cash, each year in which it 

holds the Preferred Interests. Therefore, 

according to AT&T, the Contribution in 

and of itself provides a significant 

source of cash to the Plan. 

In addition, AT&T represents that, as 

described above, the Plan’s decision to 

accept the Contribution is made by the 

Independent Fiduciary, in its sole 

discretion, and notes that the 

Independent Fiduciary, after taking into 

account the features of the Preferred 

Interests, concluded that it is prudent 

for the Plan to accept the Contribution 

and that the Contribution is in the best 

interests of the Plan and its participants 

and beneficiaries and protective of the 

rights of the participants and 

beneficiaries. 

As indicated elsewhere, AT&T 

believes that the Contribution represents 

a better value and less risk than a cash 

contribution of an equal amount.11 In 

this regard, AT&T opines that a cash 

contribution would present its own 

investment challenges because cash 

must be invested. For example, AT&T 

argues that the Preferred Interests have 

a significantly better risk/return profile 

than would an investment of cash in the 

Trust’s current, broad portfolio. 

According to AT&T, the Contribution 

provides to the Plan an asset with a 

value, as of the date of the Contribution, 

of approximately $9.1 billion, which is 

an amount well in excess of the amount 

that AT&T was legally required to 

contribute to the Plan for 2013 and far 

exceeds the amount of cash that AT&T 

would voluntarily agree to contribute to 

the Plan. 

(ii) Rate of Return on Preferred Interests 

and Cash Contribution 

One Commenter questioned whether 

the rate of return on AT&T Shares 

would be lower than the Plan’s 

projected returns on Plan assets based 

on performance in prior years. In 

response, AT&T notes that the securities 

contributed under the proposed 

exemption are Preferred Interests in the 

Issuer that pay a fixed rate of 

Distributions equal to $1.75 per 

Preferred Interest, or an annual amount 

of $560 million. AT&T explains that by 

comparison, the rate of return on the 

Plan’s other equity investments are 

subject to market conditions, and will 

vary from time to time. AT&T explains 

further that the Preferred Interests 

include a minimum preferred 

liquidation value that mitigates 

generally applicable market valuation 

impacts, absent a reduction in the credit 

worthiness of AT&T Mobility. AT&T 

confirms that other Plan assets are, and 

will continue to be, invested in a variety 

of securities in compliance with the 

diversification requirements of ERISA. 

As discussed above, the Trust has 

approximately $33 billion in publiclytraded, relatively liquid assets, which 

are sufficient to pay benefit claims for 

eight years, even assuming that the 

Trust earned nothing on its assets. 


emcdonald on DSK67QTVN1PROD with NOTICES
43078 Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 

In a related comment, a Commenter 

expressed concern that the Contribution 

would limit future earnings of the Plan. 

However, AT&T responds that, as 

discussed above, the Preferred Interests 

would not limit future earnings, but 

would provide a secure, above market 

rate of return for a portion of the Plan’s 

investments. 

Five Commenters expressed concern 

regarding AT&T’s ability to meet its 

obligations to the Plan. One of these 

Commenters also noted that if AT&T is 

successful, it should be able to fund the 

Plan, which the Commenter asserted 

was frozen as to new participants as of 

1999. In response, AT&T states that, in 

fact, the Plan has not been frozen and 

continues to cover newly-hired eligible 

employees. AT&T confirms that it is 

currently funding, and will continue to 

fund, the Plan. AT&T further states that 

it did not contribute the Preferred 

Interests because it lacks the capital to 

meet its minimum funding 

requirements; rather, AT&T represents 

that the purpose of the Contribution is 

to benefit the Plan and enhance the 

sound funding of the Plan while 

improving AT&T’s standing in the 

capital markets. 

(iii) Borrowing Money To Make Cash 

Contribution 

Another Commenter suggested that 

AT&T borrow money to fund the Plan, 

rather than contributing the Preferred 

Interests. AT&T states that it would not 

consider using its borrowing capacity 

for pension funding purposes. AT&T 

believes that its borrowing capacity is 

important to support the capital 

requirements of its business, which, in 

turn, strengthens the long-term viability 

of the company and ultimately the Plan. 

(iv) Sale of Preferred Interests in Public 

Market 

Three Commenters questioned why 

the Preferred Interests were being 

contributed to the Plan rather than sold 

in the public market to raise money for 

a cash contribution. AT&T notes that the 

Preferred Interests are limited liability 

company interests, and because of their 

design, there is no public market for the 

Preferred Interests or any other interests 

in the Issuer (AT&T notes that the value 

of the Preferred Interests was 

determined by the Independent 

Fiduciary, as explained in further detail 

below). AT&T represents that, as 

indicated above, it worked with the 

Independent Fiduciary to negotiate and 

design a security with unique features 

unavailable in the current market that 

represents a better value and less risk 

than a cash contribution of an equal 

amount, which in turn would have to be 

invested in other assets. 

(e) The Valuation of the Preferred 

Interests 

Two Commenters questioned how the 

Preferred Interests could be valued if 

they were not being sold in the public 

marketplace. Two other Commenters 

expressed concern that the valuations of 

the Preferred Interests would change 

over time. Specifically, one Commenter 

stated its concern that the valuations in 

the industry, which is rapidly changing 

& being eroded by new forms of 

competition, are likely to change, while 

another Commenter worried that the 

Issuer has likely peaked & the valuation 

is mostly likely inflated and will 

decline. 

In response, AT&T explains that 

private investments can be valued, even 

if they are not publicly traded. AT&T 

represents that the value of the Preferred 

Interests was, and will continue to be, 

determined by the Independent 

Fiduciary’s highly qualified and 

experienced staff. AT&T states that in its 

valuation of the Preferred Interests, the 

Independent Fiduciary applied 

generally accepted valuation 

methodologies, reviewed relevant 

investment and financial studies and 

conducted other such analyses deemed 

appropriate. 

AT&T represents that the value of the 

Preferred Interests is based on the fixed 

stated value of the Preferred Interests, 

i.e., their $8 billion liquidation 

preference, the rate of return 

represented by the Distributions, and 

the financial viability of the Issuer. 

Thus, AT&T states that the valuation of 

the Preferred Interests was $9.1 billion 

at the time of the Contribution. AT&T 

represents that, as of December 31, 

2013, the Preferred Interests were 

valued by the Independent Fiduciary at 

approximately $9.2 billion, representing 

an increase in value of approximately 

$100 million in under 4 months. 

AT&T states further that it is bound 

by the conditions of the exemption to 

pay the Lookback Amount, which could 

require AT&T to make an additional 

cash contribution to the Trust in the 

event that the actual minimum required 

contributions (calculated as if the 

Preferred Interests had not been 

contributed) are greater than the cash 

actually received (i.e., the Distributions 

and the Additional Payments). AT&T 

represents that these ‘‘safeguards’’ 

provide additional protection to the 

value of the Preferred Interests. 

(f) The Benefits of the Contribution to 

AT&T 

One Commenter expressed concern 

that the Contribution would benefit 

AT&T at the expense of its shareholders. 

This Commenter indicated that the 

Contribution would create a false 

impression of profitability, which 

would result in increased bonuses to 

management employees. In response, 

AT&T represents that it proposed the 

Contribution for the purpose of 

enhancing the Plan’s financial status, 

which, in turn, benefits Plan 

participants and the retirees, as well as 

AT&T. AT&T states that it designed the 

terms of the Preferred Interests to 

represent a better risk/reward profile 

than the assets available in the public 

market in which a cash contribution 

would be invested. AT&T represents 

that any benefits the company would 

receive are incidental to the benefits to 

the Plan and its participants. Further, 

AT&T represents that any such benefits, 

including corporate tax deductions, are 

inherent in the maintenance of a 

pension plan such as the Plan. In 

addition, AT&T represents that the 

Contribution is not intended to, and 

does not have the effect of, increasing 

management bonus payments. 

Another Commenter suggested that 

the Contribution was intended to 

provide a tax benefit to AT&T. In 

response to this comment, AT&T points 

out that its entitlement to tax 

deductions for its contributions is not 

limited to the Contribution of Preferred 

Interests, but is available for all its 

contributions. 

Another Commenter expressed 

concern that the Contribution would 

enable AT&T to declare that the Plan 

was overfunded and withdraw assets 

from the Plan. In response, AT&T 

represents that it is not legally permitted 

to withdraw assets from the Plan in this 

manner. 

Yet another Commenter indicated that 

the Contribution of Preferred Interests 

was no different than borrowing money 

from the Plan. In response, AT&T states 

that the Commenter conflated equity 

and debt, and explains that unlike a 

typical borrowing situation, AT&T did 

not receive any cash from the Plan in 

exchange for the Contribution. AT&T 

further states that, in light of the fact 

that it contributed cash to satisfy its 

$175 million minimum required 

contribution for 2013, the Contribution 

is not being used to satisfy any current 

mandatory funding obligation. AT&T 

states further that the Contribution 

involves the contribution of equity 

interests, not debt. 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 43079 

12The Department is aware that the projections 

supplied by the Applicant cover a two-year period, 

and may not accurately reflect the actual rate of 

return that will be experienced by the Plan over the 

next five-year period. To address this, the 

exemption contains a make-whole provision, 

described above, designed to ensure that AT&T 

makes additional cash contributions to the plan 

equal to the ‘‘Lookback Amount,’’ that take into 

consideration the Plan’s actual investment 

performance over such five-year period. The 

Department notes further that the Independent 

Fiduciary has a duty to manage the Trust’s holding 

of the Preferred Interests and to enforce the Plan’s 

rights with respect to the terms of the Preferred 

Interests and the Contribution Agreement, 

including AT&T’s obligations under such makewhole provisions and the calculation of the 

Lookback Amount. 

Two Commenters expressed concern 

that the Contribution might be related to 

AT&T’s recent corporate transaction 

activity involving its failed merger with 

T-Mobile and money spent on various 

corporate marketing initiatives. In 

response, AT&T states that the 

Contribution is wholly unrelated to any 

corporate transaction that it has 

undertaken, including its failed merger 

with T-Mobile. In addition, AT&T 

represents that it would not be making 

this Contribution if it did not believe 

that the Contribution is in the best 

interests of the Plan participants and its 

stockholders. 

(g) The Accuracy of the Assumptions 

Made in Estimating AT&T’s Minimum 

Funding Contributions 

One Commenter expressed concern 

about the accuracy of the assumptions 

used in the Notice to estimate AT&T’s 

anticipated minimum funding 

contributions. Specifically, the 

Commenter stated that AT&T’s 

assumptions regarding the annual 

returns (and related contribution 

amounts) on the Plan’s assets for the 

years 2013 and 2014 of 12.0 percent and 

for the years 2015 through 2019 of 7.75 

percent were of particular concern, as 

the Commenter believed these projected 

return levels to be too ‘‘optimistic.’’ The 

Commenter suggested that the 

Department should require AT&T to 

revise downward its annual return 

assumptions consistent with current 

financial realities including current 

marketplace interest rate projections 

and equity returns. The Commenter 

further suggested that the Department 

should require AT&T to revise upward, 

as necessary, the required minimum 

contribution for the years 2013 through 

2019 and also revise upward, as 

necessary, AT&T’s $700 million cash 

contribution payable over five years. 

The Commenter believed these 

suggested actions to be prudent given 

the uncertainties regarding current fiscal 

projections and the national debt level. 

In response, AT&T states that the 

assumptions that the Plan’s assets will 

earn an annual return of 12.0 percent for 

2013 and 2014 and 7.75 percent 

thereafter are based on the historical 

investment performance of the Plan’s 

assets and estimates of future 

performance. AT&T represents that for 

calendar year 2012, the Plan’s assets 

returned 12.1 percent, and for 2013, 

12.9 percent (including the Preferred 

Interests), which can be indicative, but 

certainly not a guarantee, of future 

performance.12 Further, AT&T states 

that, as discussed above, it agreed to 

contribute the Lookback Amount to 

provide additional protection to the 

Plan in the event that AT&T’s 

projections regarding investment returns 

and its minimum required contributions 

turn out to be different than these 

assumptions. 

The AT&T Comment 

1. Requested changes to Section II(b), 

Section II(d) and Section III(d) of the 

Notice. AT&T notes that a condition for 

relief in Section II(b) of the Notice 

requires that the Plan will not incur any 

fees, costs or other charges, in 

connection with the transactions 

described in the Notice, other than fees 

paid to the Independent Fiduciary. 

However, AT&T points out that, as 

provided in Representation 20 of the 

Notice at 78 FR 55108 and pursuant to 

the Independent Fiduciary Agreement 

dated May 1, 2012, the Plan can also 

pay the related expenses of the 

Independent Fiduciary, in addition to 

the specified fees. Therefore, AT&T 

suggests that the Department revise the 

relevant portion of Section II(b) of the 

Notice to read ‘‘The Plan incurs no fees, 

costs or other charges in connection 

with the transactions described in 

paragraphs (a)–(g) of Section I, other 

than fees and expenses paid by the Plan 

to the Independent Fiduciary.’’ In 

response to this comment, the 

Department has revised Section II(b) of 

the exemption to read, ‘‘The Plan incurs 

no fees, costs or other charges in 

connection with the transactions 

described in paragraphs (a)–(g) of 

Section I, other than fees and expenses 

paid by the Plan to the Independent 

Fiduciary for duties required by this 

exemption.’’ 

In addition, AT&T represents that the 

phrase ‘‘Lump Sum Payments,’’ defined 

at Representation 38 of the Notice (78 

FR 55110) and referenced in Section 

II(d)(2)(ii) of the Notice, Representations 

37, 38 and 39 of the Notice at 78 FR 

55110, and Footnote 19 of the Notice at 

78 FR 55110, represent the ‘‘Additional 

Payments,’’ defined at Section II(c) of 

the Notice, and referenced in Section 

II(d) of the Notice. For the avoidance of 

confusion, AT&T suggests replacing all 

references to ‘‘Lump Sum Payments’’ 

with ‘‘Additional Payments.’’ In 

response to this comment, the 

Department has adopted the requested 

revision to Section II(d) of the Notice. 

The Department also notes 

corresponding modifications to 

Representations 37 through 39 and 

Footnote 19 of the Notice. 

Further, Section III(d) of the Notice 

provides, in pertinent part, that the IMA 

is effective ‘‘on or about September 9, 

2013.’’ AT&T confirms that the IMA 

became effective on September 9, 2013, 

the date of the Contribution. 

Accordingly, the Department has 

changed the language in Section III(d) 

from ‘‘on or about September 9, 2013’’ 

to ‘‘on September 9, 2013’’ for the sake 

of clarity. 

2. Clarification of Certain Information 

in the Notice. AT&T notes that 

Representation 5 of the Notice at 78 FR 

55104 states that ‘‘[a]s of December 31, 

2012, there were approximately 551,187 

employees participating in the Plan.’’ 

However, AT&T clarifies that 551,187 is 

the number of participants in the Plan 

and not just the number of participating 

employees, and suggests that the 

foregoing sentence be revised to read, 

‘‘As of December 31, 2012, there were 

approximately 551,187 participants in 

the Plan.’’ The Department notes the 

clarification to Representation 5 of the 

Notice. 

In addition, AT&T notes that 

Representation 38 of the Notice, under 

the subsection ‘‘Additional Cash 

Contribution and ‘Lookback’ 

Calculation,’’ at 78 FR 55110, indicates 

that AT&T will make cash contributions 

of ‘‘$175 million paid no later than the 

due date for AT&T’s tax return for each 

of the next three years (i.e., 2014, 2015 

and 2016).’’ For the avoidance of doubt, 

AT&T would like to clarify that the 

payments will be made ‘‘no later than 

the due date for AT&T’s tax return for 

each of the next three years (i.e., the due 

date for AT&T’s tax returns for 2014, 

2015 and 2016).’’ The Department notes 

the clarification to Representation 38 of 

the Notice. 

3. Correction to the Effective Date. 

While the Notice states that the effective 

date of the exemption is September 1, 

2013, AT&T confirmed in the AT&T 

Comment that the Contribution was 

actually made on September 9, 2013, 

and has agreed to change the effective 

date to the date of the Contribution. 

Accordingly, the effective date of the 

exemption has been changed to 

September 9, 2013. 


emcdonald on DSK67QTVN1PROD with NOTICES
43080 Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 

13For purposes of this exemption, references to 

the provisions of Title I of ERISA, unless otherwise 

specified, refer also to the corresponding provisions 

of the Code. 

14For purposes of this exemption, references to 

specific provisions of Title I of the Act, unless 

otherwise specified, refer also to the corresponding 

provisions of the Code. 

Conclusion 

The Department has carefully 

considered the issues expressed by the 

Commenters. After giving full 

consideration to the entire record, 

including the comments, the 

Department has determined to grant the 

exemption subject to the modifications 

and clarifications described herein. For 

further information regarding the 

comments and other matters discussed 

herein, Interested Persons are 

encouraged to obtain copies of the 

exemption application file (Exemption 

Application No. D–11758) the 

Department is maintaining in this case. 

The complete application file, as well as 

all supplemental submissions received 

by the Department, are made available 

for public inspection in the Public 

Disclosure Room of the Employee 

Benefits Security Administration, Room 

N–1515, U.S. Department of Labor, 200 

Constitution Avenue NW., Washington, 

DC 20210. For a more complete 

statement of the facts and 

representations supporting the 

Department’s decision to grant this 

exemption, refer to the Notice published 

in the Federal Register on September 9, 

2013, at 78 FR 55103. 

FOR FURTHER INFORMATION CONTACT: 

Anna Mpras Vaughan of the 

Department, telephone (202) 693–8565. 

(This is not a toll-free number.) 

The Delaware County Bank and Trust 

Company Employee 401(k) Retirement 

Plan (the Plan) Located in Lewis Center, 

OH 

[Prohibited Transaction Exemption 2014–07; 

Application No. D–11773] 

Exemption 

Section I: Covered Transactions 

The restrictions of sections 

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

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

Employee Retirement Income Security 

Act of 1974, as amended (ERISA) and 

the sanctions resulting from the 

application of section 4975 of the 

Internal Revenue Code of 1986, as 

amended (the Code), by reason of 

section 4975(c)(1)(E) of the Code, shall 

not apply: 13

(a) To the acquisition of certain 

subscription rights (the Stock Rights) by 

the Plan in connection with an offering 

(the Offering) of shares of common stock 

(the Stock) of DCB Financial Corp 

(DCBF), a party in interest with respect 

to the Plan; and 

(b) To the holding of the Stock Rights 

received by the Plan during the 

subscription period of the Offering; 

provided that the conditions set forth in 

Section II of this exemption were 

satisfied for the duration of the 

acquisition and holding. 

Section II: Conditions 

(a) The acquisition of the Stock Rights 

by the Plan was made pursuant to terms 

that were the same for all shareholders 

of DCBF Stock; 

(b) The acquisition of the Stock Rights 

by the Plan resulted from an 

independent, corporate act of DCBF; 

(c) Each shareholder of the Stock, 

including the Plan, received the same 

proportionate number of Stock Rights, 

and this proportionate number of Stock 

Rights was based on the number of 

shares of Stock held by each such 

shareholder; 

(d) The Stock Rights were acquired 

pursuant to, and in accordance with, 

provisions under the Plan for 

individually directed investments of the 

accounts of the individual participants, 

a portion of whose accounts in the Plan 

held the Stock (the Invested 

Participants); 

(e) The decisions with regard to the 

holding and disposition of the Stock 

Rights by the Plan were made by the 

Invested Participants who received the 

Stock Rights in their Plan accounts; and 

(f) No brokerage fees, no subscription 

fees and no other charges were paid by 

the Plan with respect to the acquisition 

and holding of the Stock Rights, and no 

brokerage fees, no commissions and no 

other monies were paid by the Plan to 

any broker in connection with the 

exercise of the Stock Rights to acquire 

DCBF shares. 

DATES: Effective Date: This exemption is 

effective from October 16, 2012, to 

November 26, 2012. 

Written Comments 

The Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the notice of proposed 

exemption published in the Federal 

Register on April 9, 2014 at 79 FR 19645 

(the Notice), on or before May 24, 2014. 

During the comment period, the 

Department received no comments and 

no requests for a hearing from interested 

persons. Accordingly, after giving full 

consideration to the entire record, the 

Department has decided to grant the 

exemption, as described above. The 

complete application file (Application 

No. D–11773) is available for public 

inspection in the Public Disclosure 

Room of the Employee Benefits Security 

Administration, Room N–1515, U.S. 

Department of Labor, 200 Constitution 

Avenue NW., Washington, DC 20210. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the proposed 

exemption published in the Federal 

Register on April 9, 2014, at 79 FR 

19645. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Jennifer Erin Brown of the Department 

at (202) 693–8352. (This is not a toll-free 

number.) The Home Savings and Loan 

Company 401(k) Savings Plan (The 

Plan), United Community Financial 

Corporation (UCFC), and the Home 

Savings and Loan Company (Home 

Savings), located in Youngstown, OH. 

[Prohibited Transaction Exemption 2014–08; 

Application No. D–11780] 

Exemption 

Section I: Transactions 

Effective for the period beginning 

April 30, 2013, and ending May 31, 

2013, the restrictions of sections 

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

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

and the sanctions resulting from the 

application of section 4975 of the Code, 

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

Code,14 shall not apply: 

(a) To the acquisition of certain 

subscription right(s) (the Rights) by the 

individually-directed account(s) (the 

Account(s)) of certain participant(s) in 

the Plan (Invested Participants) in 

connection with an offering (the 

Offering) of shares of common stock (the 

Stock) of United Community Financial 

Corporation (UCFC) by UCFC, a party in 

interest with respect to the Plan; and 

(b) To the holding of the Rights 

received by the Accounts during the 

subscription period of the Offering, 

provided that the conditions, as set forth 

in Section II, below, were satisfied for 

the duration of the acquisition and 

holding. 

Section II: Conditions 

(a) The acquisition of the Rights by 

the Accounts of Invested Participants 

occurred in connection with the 

Offering, and the Rights were made 

available by UCFC to all shareholders of 

the Stock other than the Employee Stock 

Ownership Plan sponsored by UCFC; 

(b) The acquisition of the Rights by 

the Accounts of Invested Participants 

resulted from an independent corporate 

act of UCFC; 

(c) Each shareholder of Stock, 

including each of the Accounts of 


emcdonald on DSK67QTVN1PROD with NOTICES
Federal Register / Vol. 79, No. 142 / Thursday, July 24, 2014 / Notices 43081 

Invested Participants, received the same 

proportionate number of Rights, and 

this proportionate number of Rights was 

based on the number of shares of Stock 

held by each such shareholder; 

(d) The Rights were acquired pursuant 

to, and in accordance with, provisions 

under the Plan for individually-directed 

investments of the Accounts by the 

individual participants in the Plan, a 

portion of whose Accounts in the Plan 

held the Stock; 

(e) The decision with regard to the 

holding and disposition of the Rights by 

an Account was made by the Invested 

Participant whose Account received the 

Rights; and 

(f) No brokerage fees, commissions, or 

other fees or expenses were paid by the 

Plan to any related broker in connection 

with the exercise of any of the Rights, 

and no brokerage fees, commissions, 

subscription fees, or other charges were 

paid by the Plan with respect to the 

acquisition and holding of the Stock. 

DATES: Effective Date: This exemption is 

effective for the period beginning on 

April 30, 2013, the commencement date 

of the Offering, and ending on May 31, 

2013, the close of the Offering. 

Written Comments 

The Department invited all interested 

persons to submit written comments 

and/or requests for a public hearing 

with respect to the notice of proposed 

exemption, published in the Federal 

Register on April 9, 2014, at 79 FR 

19649. All comments and requests for 

hearing were due by May 26, 2014. 

During the comment period, the 

Department received no comments and 

no requests for a hearing from interested 

persons. Accordingly, after giving full 

consideration to the entire record, the 

Department has decided to grant the 

exemption. The complete application 

file (Application No. D–11780), 

including all supplemental submissions 

received by the Department, is available 

for public inspection in the Public 

Disclosure Room of the Employee 

Benefits Security Administration, Room 

N–1515, U.S. Department of Labor, 200 

Constitution Avenue NW., Washington, 

DC 20210. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published in the 

Federal Register on April 9, 2014, at 79 

FR 19649. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Erin S. Hesse of the Department, 

telephone (202) 693–8546. (This is not 

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

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

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions 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) These exemptions are 

supplemental to and not in derogation 

of, any other provisions of the Act and/ 

or the Code, including statutory or 

administrative exemptions and 

transactional 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 

(3) The availability of these 

exemptions are subject to the express 

condition that the material facts and 

representations contained in the 

applications accurately describe all 

material terms of the transaction which 

is the subject of the exemption. 

Signed at Washington, DC, this 16th day of 

July, 2014. 

Lyssa E. Hall, 

Acting Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department Of Labor. 

[FR Doc. 2014–17424 Filed 7–23–14; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

172nd Meeting of the Advisory Council 

on Employee Welfare and Pension 

Benefit Plans; Notice of Meeting 

Pursuant to the authority contained in 

Section 512 of the Employee Retirement 

Income Security Act of 1974 (ERISA), 29 

U.S.C. 1142, the 172nd open meeting of 

the Advisory Council on Employee 

Welfare and Pension Benefit Plans (also 

known as the ERISA Advisory Council) 

will be held on August 19–21, 2014. 

The three-day meeting will take place 

at the U.S. Department of Labor, 200 

Constitution Avenue NW., Washington, 

DC 20210. The meeting will run from 

9:00 a.m. to approximately 5:30 p.m. on 

August 19–20 in C5320 Room 6 and 

from 8:30 a.m. to 4:30 p.m. on August 

21 in in C5521 Room 4, with a one hour 

break for lunch each day. The purpose 

of the open meeting is for Advisory 

Council members to hear testimony 

from invited witnesses and to receive an 

update from the Employee Benefits 

Security Administration (EBSA). The 

EBSA update is scheduled for the 

morning of August 20, subject to 

change. 

The Advisory Council will study the 

following issues: (1) Outsourcing 

Employee Benefit Plan Services, (2) 

PBM Compensation and Fee Disclosure, 

and (3) Issues and Considerations 

around Facilitating Lifetime Plan 

Participation. The schedule for 

testimony and discussion of these issues 

generally will be one issue per day in 

the order noted above. Descriptions of 

these topics are available on the 

Advisory Council page of the EBSA Web 

site, at www.dol.gov/ebsa/aboutebsa/

erisa_advisory_council.html. 

Organizations or members of the 

public wishing to submit a written 

statement may do so by submitting 40 

copies on or before August 12, 2014 to 

Larry Good, Executive Secretary, ERISA 

Advisory Council, U.S. Department of 

Labor, Suite N–5623, 200 Constitution 

Avenue NW., Washington, DC 20210. 

Statements also may be submitted as 

email attachments in rich text, Word, or 

pdf format transmitted to good.larry@

dol.gov. It is requested that statements 

not be included in the body of the 

email. Statements deemed relevant by 

the Advisory Council and received on or 

before August 12 will be included in the 

record of the meeting and made 

available through the EBSA Public 

Disclosure Room, along with witness 

statements. Do not include any 

personally identifiable information 

(such as name, address, or other contact 

information) or confidential business 

information that you do not want 

publicly disclosed. Written statements 

submitted by invited witnesses will be 

posted on the Advisory Council page of 

the EBSA Web site, without change, and 

can be retrieved by most Internet search 

engines. 

Individuals or representatives of 

organizations wishing to address the 

Advisory Council should forward their 

requests to the Executive Secretary or 

telephone (202) 693–8668. Oral 

presentations will be limited to 10 

minutes, time permitting, but an 

extended statement may be submitted 


emcdonald on DSK67QTVN1PROD with NOTICES