Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56201

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Prohibited Transaction Exemption 97–56;

Exemption Application No. D–10437, et al.]

Grant of Individual Exemptions; UNUM

Life Insurance Company of America

AGENCY: Pension and Welfare Benefits

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 (the Act) and/or

the Internal Revenue Code of 1986 (the

Code).

Notices were published in the Federal

Register of the pendency before the

Department of proposals to grant such

exemptions. The notices set forth a

summary of facts and representations

contained in each application for

exemption and referred interested

persons to the respective applications

for a complete statement of the facts and

representations. The applications have

been available for public inspection at

the Department in Washington, D.C. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

being granted solely by the Department

because, effective December 31, 1978,

section 102 of Reorganization Plan No.

4 of 1978 (43 FR 47713, October 17,

1978) transferred the authority of the

Secretary of the Treasury to issue

exemptions of the type 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 (55 FR 32836,

32847, August 10, 1990) and based upon

the entire record, the Department makes

the following findings:

(a) The exemptions are

administratively feasible;

(b) They are in the interests of the

plans and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of the

plans.

UNUM Life Insurance Company of

America (UNUM), Located in Portland,

Maine

[Prohibited Transaction Exemption 97–56;

Exemption Application No. D–10437]

Exemption

Section I—Exemption for Certain

Transactions Involving the Management

of Investments Shared by Two or More

Accounts Maintained by UNUM

The restrictions of certain sections of

the Act and the sanctions resulting from

the application of certain parts of

section 4975 of the Code shall not apply

to the following transactions if the

conditions set forth in Section IV are

met:

(a) Transfers Between Accounts

(1) The restrictions of section

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

the sale or transfer of an interest in a

shared investment (including a shared

joint venture interest) between two or

more Accounts (except the General

Account), provided that each ERISACovered Account pays no more, or

receives no less, than fair market value

for its interest in a shared investment.

(2) The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the sale or transfer of an interest in

a shared investment (including a shared

joint venture interest) between ERISACovered Accounts and the General

Account, provided that such transfer is

made pursuant to stalemate procedures,

described in the notice of proposed

exemption, adopted by the independent

fiduciary for the ERISA-Covered

Account, and provided further that the

ERISA-Covered Account pays no more

or receives no less than fair market

value for its interest in a shared

investment.

(b) Joint Sales of Property—The

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

and 406(b)(2) of the Act and the

sanctions resulting from the application

of section 4975 of the Code by reason of

section 4975(c)(1)(A) through (E) of the

Code shall not apply to the sale to a

third party of the entire interest in a

shared investment (including a shared

joint venture interest) by two or more

Accounts, provided that each ERISACovered Account receives no less than

fair market value for its interest in the

shared investment.

(c) Additional Capital Contributions—

The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

either to the making of a pro rata equity

capital contribution by one or more of

the Accounts to a shared investment; or

to the making of a Disproportionate [as

defined in Section V(e)] equity capital

contribution by one or more of such

Accounts which results in an

adjustment in the equity ownership

interests of the Accounts in the shared

investment on the basis of the fair

market value of such interests

subsequent to such contribution,

provided that each ERISA-Covered

Account is given an opportunity to

make a pro rata contribution.

(d) Lending of Funds—The

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

and 406(b)(2) of the Act and the

sanctions resulting from the application

of section 4975 of the Code by reason of

section 4975(c)(1)(A) through (E) of the

Code shall not apply to the lending of

funds from the General Account to an

ERISA-Covered Account to enable the

ERISA-Covered Account to make an

additional pro rata contribution,

provided that such loan—

(A) Is unsecured and non-recourse

with respect to participating plans,

(B) Bears interest at a rate not to

exceed the prevailing rate on 90-day

Treasury Bills,

(C) Is not callable at any time by the

General Account, and

(D) Is prepayable at any time without

penalty.

Section II—Exemption for Certain

Transactions Involving the Management

of Joint Venture Interests Shared by Two

or More Accounts Maintained by

UNUM

The restrictions of certain sections of

the Act and the sanctions resulting from

the application of certain parts of

section 4975 of the Code shall not apply

to the following transactions resulting

from the sharing of an investment in a

real estate joint venture between two or

more Accounts, if the conditions set

forth in Section IV are met:

(a) Additional Capital Contributions—

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

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the making of additional pro rata

equity capital contributions by one or
56202 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

more Accounts participating in the joint

venture.

(2) The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the lending of funds from the General

Account to an ERISA-Covered Account

to enable the ERISA-Covered Account to

make an additional pro rata capital

contribution, provided that such loan—

(A) Is unsecured and non-recourse

with respect to the participating plans,

(B) Bears interest at a rate not to

exceed the prevailing rate on 90-day

Treasury Bills,

(C) Is not callable at any time by the

General Account, and

(D) Is prepayable at any time without

penalty.

(3) The restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975 (c)(1)(A)

through (E) of the Code shall not apply

to the making of Disproportionate [as

defined in section V(e)] additional

equity capital contributions (or the

failure to make such additional

contributions) in the joint venture by

one or more Accounts which result in

an adjustment in the equity ownership

interests of the Accounts in the joint

venture on the basis of the fair market

value of such joint venture interests

subsequent to such contributions,

provided that each ERISA-Covered

Account is given an opportunity to

provide its proportionate share of the

additional equity capital contributions;

and

(4) In the event a co-venturer fails to

provide all or any part of its pro rata

share of an additional equity capital

contribution, the restrictions of sections

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

and the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the making of Disproportionate

additional equity capital contributions

to the joint venture by the General

Account and an ERISA-Covered

Account up to the amount of such

contribution not provided by the coventurer which result in an adjustment

in the equity ownership interests of the

Accounts in the joint venture on the

basis provided in the joint venture

agreement, provided that such ERISACovered Account is given an

opportunity to participate in all

additional equity capital contributions

on a proportionate basis.

(b) Third Party Purchase Offers—(1)

In the case of an offer by a third party

to purchase any property owned by the

joint venture, the restrictions of sections

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

and the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the acquisition by the Accounts,

including one or more ERISA-Covered

Account[s], on either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with a decision on behalf of

such Accounts to reject such purchase

offer, provided that each ERISA-Covered

Account is first given an opportunity to

participate in the acquisition on a

proportionate basis; and

(2) The restrictions of section

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

any acceptance by UNUM on behalf of

two or more Accounts, including one or

more ERISA-Covered Account[s], of an

offer by a third party to purchase a

property owned by the joint venture

even though the independent fiduciary

for one (but not all) of such ERISACovered Account[s] has not approved

the acceptance of the offer, provided

that such declining ERISA-Covered

Account[s] are first afforded the

opportunity to buy out both the coventurer and ‘‘selling’’ Account’s

interests in the joint venture.

(c) Rights of First Refusal—(1) In the

case of the right to exercise a right of

first refusal described in a joint venture

agreement to purchase a co-venturer’s

interest in the joint venture at the price

offered for such interest by a third party,

the restrictions of sections 406(a),

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

the sanctions resulting from the

application of section 4975 of the Code

by reason of section 4975(c)(1)(A)

through (E) of the Code shall not apply

to the acquisition by such Accounts,

including one or more ERISA-Covered

Account[s], on either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with the exercise of such a

right of first refusal, provided that each

ERISA-Covered Account is first given an

opportunity to participate on a

proportionate basis; and

(2) The restrictions of section

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

any decision by UNUM on behalf of the

Accounts not to exercise such a right of

first refusal even though the

independent fiduciary for one (but not

all) of such ERISA-Covered Accounts

has approved the exercise of the right of

first refusal, provided that none of the

ERISA-Covered Accounts that approved

the exercise of the right of first refusal

decides to buy-out the co-venturer on its

own.

(d) Buy-Sell Options—(1) In the case

of the exercise of a buy-sell option set

forth in the joint venture agreement, the

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

and 406(b)(2) of the Act and the

sanctions resulting from the application

of section 4975 of the Code by reason of

section 4975(c)(1)(A) through (E) of the

Code shall not apply to the acquisition

by one or more of the Accounts on

either a proportionate or

Disproportionate basis of a co-venturer’s

interest in the joint venture in

connection with the exercise of such a

buy-sell option, provided that each

ERISA-Covered Account is first given

the opportunity to participate on a

proportionate basis; and

(2) The restrictions of section

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

any decision by UNUM on behalf of two

or more Accounts, including one or

more ERISA-Covered Account[s], to sell

the interest of such Accounts in the

joint venture to a co-venturer even

though the independent fiduciary for

one (but not all) of such ERISA-Covered

Account[s] has not approved such sale,

provided that such disapproving ERISACovered Account is first afforded the

opportunity to purchase the entire

interest of the co-venturer.

Section III—Exemption for Transactions

Involving a Joint Venture or Persons

Related to a Joint Venture

The restrictions of section 406(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)

through (D) of the Code shall not apply,

if the conditions in Section IV are met,

to any additional equity capital

contributions to a joint venture by an

ERISA-Covered Account that is

participating in an interest in the joint

venture, where the joint venture is a

party in interest solely by reason of the

ownership on behalf of the General

Account of a 50 percent or more interest

in such joint venture.

Section IV—General Conditions

(a) Each contractholder or prospective

contractholder in an ERISA-Covered

Account which shares or proposes to

share real estate investments is provided

with a written description of potential

conflicts of interest that may result from

the sharing, a copy of the notice of

pendency, and a copy of this exemption.

(b) An independent fiduciary must be

appointed on behalf of each ERISACovered Account participating in the

sharing of investments. The

independent fiduciary shall be either
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56203

(1) A business organization which has

at least five years of experience with

respect to commercial real estate

investments, or

(2) A committee composed of three to

five individuals who each have at least

five years of experience with respect to

commercial real estate investments.

(c) The independent fiduciary or

independent fiduciary committee

member shall not be or consist of

UNUM or any of its affiliates.

(d) No organization or individual may

serve as an independent fiduciary for an

ERISA-Covered Account for any fiscal

year if the gross income (other than

fixed, non-discretionary retirement

income) received by such organization

or individual (or any partnership or

corporation of which such organization

or individual is an officer, director, or

ten percent or more partner or

shareholder) from UNUM, its affiliates

and the ERISA-Covered Accounts for

that fiscal year exceeds five percent of

its or his or her annual gross income

from all sources for the prior fiscal year.

If such organization or individual had

no income for the prior fiscal year, the

five percent limitation shall be applied

with reference to the fiscal year in

which such organization or individual

serves as an independent fiduciary.

The income limitation will include

income for services rendered to the

Accounts as independent fiduciary

under any prohibited transaction

exemption(s) granted by the

Department.

In addition, no organization or

individual who is an independent

fiduciary, and no partnership or

corporation of which such organization

or individual is an officer, director or

ten percent or more partner or

shareholder, may acquire any property

from, sell any property to, or borrow any

funds from, UNUM, its affiliates, or any

Account maintained by UNUM or its

affiliates, during the period that such

organization or individual serves as an

independent fiduciary and continuing

for a period of six months after such

organization or individual ceases to be

an independent fiduciary, or negotiate

any such transaction during the period

that such organization or individual

serves as independent fiduciary.

(e) The independent fiduciary will

approve the initial allocation of a shared

investment to an ERISA-Covered

Account. In addition, the independent

fiduciary acting on behalf of an ERISACovered Account shall have the

responsibility and authority to approve

or reject recommendations made by

UNUM or its affiliates for each of the

transactions in this exemption. In the

case of a possible transfer or exchange

of any interest in a shared investment

between the General Account and an

ERISA-Covered Account, the

independent fiduciary shall also have

full authority to negotiate the terms of

the transfer. UNUM shall involve the

independent fiduciary in the

consideration of contemplated

transactions prior to the making of any

decisions, and shall provide the

independent fiduciary with whatever

information may be necessary in making

its determinations.

In addition, the independent fiduciary

shall review on an as-needed basis, but

not less than twice annually, the shared

real estate investments in the ERISACovered Account to determine whether

the shared real estate investments are

held in the best interest of the ERISACovered Account.

(f) UNUM maintains for a period of

six years from the date of the transaction

the records necessary to enable the

persons described in paragraph (g) of

this Section to determine whether the

conditions of this exemption have been

met, except that a prohibited transaction

will not be considered to have occurred

if, due to circumstances beyond the

control of UNUM or its affiliates, the

records are lost or destroyed prior to the

end of the six-year period.

(g)(1) Except as provided in paragraph

(2) of this subsection (g) and

notwithstanding any provisions of

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

of the Act, the records referred to in

subsection (f) of this Section are

unconditionally available at their

customary location for examination

during normal business hours by—

(A) Any duly authorized employee or

representative of the Department or the

Internal Revenue Service,

(B) Any fiduciary of a plan

participating in an ERISA-Covered

Account who has authority to acquire or

dispose of the interests of the plan, or

any duly authorized employee or

representative of such fiduciary,

(C) Any contributing employer to any

plan participating in an ERISA-Covered

Account or any duly authorized

employee or representative of such

employer, and

(D) Any participant or beneficiary of

any plan participating in an ERISACovered Account, or any duly

authorized employee or representative

of such participant or beneficiary.

(2) None of the persons described in

subparagraphs (B) through (D) of this

subsection (g) shall be authorized to

examine trade secrets of UNUM, any of

its affiliates, or commercial or financial

information which is privileged or

confidential.

Section V—Definitions

For the purposes of this exemption:

(a) An ‘‘affiliate’’ of UNUM includes—

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with UNUM,

(2) Any officer, director or employee

of UNUM or person described in section

V(a)(1), and

(3) Any partnership in which UNUM

is a partner.

(b) An ‘‘Account’’ means the General

Account (including the general accounts

of UNUM affiliates), any separate

account of UNUM or its affiliate, or any

investment advisory account, trust,

limited partnership or other investment

account or fund managed by UNUM.

(c) The ‘‘General Account’’ means the

general asset account of UNUM and any

of its affiliates which are insurance

companies licensed to do business in at

least one State as defined in section

3(10) of the Act.

(d) An ‘‘ERISA-Covered Account’’

means any Account (other than the

General Account) which consists solely

of the UNUM Plan or other plans

maintained by UNUM or its affiliates.

(e) ‘‘Disproportionate’’ means not in

proportion to an Account’s existing

equity ownership interest in an

investment, joint venture or joint

venture interest.

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

August 1, 1997 at 62 FR 41441.

FOR FURTHER INFORMATION CONTACT: Gary

H. Lefkowitz of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

NatWest Securities Corporation,

NatWest Securities Limited, Located in

New York, New York

[Prohibited Transaction Exemption 97–57;

Exemption Application Nos. D–10464, D–

10465]

Exemption

Section I—Transactions

A. Effective May 22, 1997, the

restrictions of section 406(a)(1) (A)

through (D) of the Employee Retirement

Income Security Act of 1974 (the Act)

and the taxes imposed by section 4975

(a) and (b) of the Internal Revenue Code

of 1986 (the Code), by reason of section

4975 (c)(1) (A) through (D) of the Code,

shall not apply to any purchase or sale

of a security between an employee

benefit plan and a broker-dealer

affiliated with NatWest Securities

Corporation and subject to British law
56204 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

(NatWest/UK Affiliate), if the following

conditions, and the conditions of

Section II, are satisfied:

(1) The NatWest/UK Affiliate

customarily purchases and sells

securities for its own account in the

ordinary course of its business as a

broker-dealer.

(2) Such transaction is on terms at

least as favorable to the plan as those

which the plan could obtain in an arm’s

length transaction with an unrelated

party.

(3) Neither the NatWest/UK Affiliate

nor an affiliate thereof has discretionary

authority or control with respect to the

investment of the plan assets involved

in the transaction, or renders investment

advice (within the meaning of 29 CFR

2510.3–21(c)) with respect to those

assets, and the NatWest/UK Affiliate is

a party in interest or disqualified person

with respect to the plan assets involved

in the transaction solely by reason of

section 3(14)(B) of the Act or section

4975(e)(2)(B) of the Code, or by reason

of a relationship to a person described

in such sections. For purposes of this

paragraph, the NatWest/UK Affiliate

shall not be deemed to be a fiduciary

with respect to a plan solely by reason

of providing securities custodial

services for a plan.

B. Effective May 22, 1997, the

restrictions of section 406(a)(1) (A)

through (D) of the Act and the taxes

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

the Code, by reason of section 4975(c)(1)

(A) through (D) of the Code, shall not

apply to the lending of securities that

are assets of an employee benefit plan

to an NatWest/UK Affiliate if the

following conditions, and the

conditions of Section II, are satisfied:

(1) Neither the NatWest/UK Affiliate

(the Borrower) nor an affiliate of the

Borrower has discretionary authority or

control with respect to the investment of

the plan assets involved in the

transaction, or renders investment

advice (within the meaning of 29 CFR

2510.3–21(c)) with respect to those

assets;

(2) The plan receives from the

Borrower, either by physical delivery or

by book entry in a securities depository

located in the United States, by the

close of business on the day on which

the securities lent are delivered to the

Borrower, collateral consisting of U.S.

currency, securities issued or

guaranteed by the United States

Government or its agencies or

instrumentalities, or irrevocable United

States bank letters of credit issued by a

person other than the Borrower or an

affiliate thereof, or any combination

thereof, having, as of the close of

business on the preceding business day,

a market value (or, in the case of letters

of credit, a stated amount) equal to not

less than 100 percent of the then market

value of the securities lent. The

collateral referred to in this Section

I(B)(2) must be held in the United

States;

(3) Prior to the making of any such

loan, the Borrower shall have furnished

the following items to the fiduciary for

the plan who is making decisions on

behalf of the plan with respect to the

lending of securities (the Lending

Fiduciary): (1) the most recent available

audited statement of the Borrower’s

financial condition, (2) the most recent

available unaudited statement of the

Borrower’s financial condition (if more

recent than such audited stated), and (3)

a representation that, at the time the

loan is negotiated, there has been no

material adverse change in the

Borrower’s financial condition since the

date of the most recent financial

statement furnished to the plan that has

not been disclosed to the Lending

Fiduciary. Such representation may be

made by the Borrower’s agreement that

each such loan shall constitute a

representation by the Borrower that

there has been no such material adverse

change;

(4) The loan is made pursuant to a

written loan agreement, the terms of

which are at least as favorable to the

plan as those which the plan could

obtain in an arm’s-length transaction

with an unrelated party. Such

agreement may be in the form of a

master agreement covering a series of

securities-lending transactions;

(5) The plan (1) receives a reasonable

fee that is related to the value of the

borrowed securities and the duration of

the loan, or (2) has the opportunity to

derive compensation through the

investment of cash collateral. Where the

plan has that opportunity, the plan may

pay a loan rebate or similar fee to the

Borrower, if such fee is not greater than

the plan would pay an unrelated party

in an arm’s-length transaction;

(6) The plan receives the equivalent of

all distributions made to holders of the

borrowed securities during the term of

the loan, including, but not limited to,

cash dividends, interest payments,

shares of stock as a result of stock splits

and rights to purchase additional

securities;

(7) If the market value of the collateral

on the close of trading on a business day

is less than 100 percent of the market

value of the borrowed securities at the

close of trading on that day, the

Borrower shall deliver, by the close of

business on the following business day,

an additional amount of collateral (as

described in paragraph (2)) the market

value of which, together with the market

value of all previously delivered

collateral, equals at least 100 percent of

the market value of all the borrowed

securities as of such preceding day.

Notwithstanding the foregoing, part of

the collateral may be returned to the

Borrower if the market value of the

collateral exceeds 100 percent of the

market value of the borrowed securities,

as long as the market value of the

remaining collateral equals at least 100

percent of the market value of the

borrowed securities;

(8) The loan may be terminated by the

plan at any time, whereupon the

Borrower shall deliver certificates for

securities identical to the borrowed

securities (or the equivalent thereof in

the event of reorganization,

recapitalization or merger of the issuer

of the borrowed securities) to the plan

within (1) the customary delivery period

for such securities, (2) three business

days, or (3) the time negotiated for such

delivery by the plan and the Borrower,

whichever is lesser; and

(9) In the event the loan is terminated

and the Borrower fails to return the

borrowed securities or the equivalent

thereof within the time described in

paragraph (8) above, then (i) the plan

may, under the terms of the loan

agreement, purchase securities identical

to the borrowed securities (or their

equivalent as described above) and may

apply the collateral to the payment of

the purchase price, any other

obligations of the Borrower under the

agreement, and any expenses associated

with the sale and/or purchase, and (ii)

the Borrower is obligated, under the

terms of the loan agreement, to pay, and

does pay to the plan, the amount of any

remaining obligations and expenses not

covered by the collateral plus interest at

a reasonable rate. Notwithstanding the

foregoing, the Borrower may, in the

event the Borrower fails to return

borrowed securities as described above,

replace non-cash collateral with an

amount of cash not less than the then

current market value of the collateral,

provided such replacement is approved

by the Lending Fiduciary.

(10) If the Borrower fails to comply

with any condition of this exemption, in

the course of engaging in a securitieslending transactions, the plan fiduciary

who caused the plan to engage in such

transaction shall not be deemed to have

caused the plan to engage in a

transaction prohibited by section

406(a)(1) (A) through (D) of the Act

solely by reason of the Borrower’s

failure to comply with the conditions of

the exemption.

C. Effective May 22, 1997, the

restrictions of sections 406(a)(1) (A)
Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices 56205

through (D) and 406(b)(2) of the Act and

the taxes imposed by section 4975 (a)

and (b) of the Code shall not apply to

any extension of credit to an employee

benefit plan by an NatWest/UK Affiliate

to permit the settlement of securities

transactions or in connection with the

writing of options contracts provided

that the following conditions are met:

(a) The NatWest/UK Affiliate is not a

fiduciary with respect to any assets of

such plan, unless no interest or other

consideration is received by such

fiduciary or any affiliate thereof in

connection with such extension of

credit; and

(b) Such extension of credit would be

lawful under the Securities Exchange

Act of 1934 and any rules or regulations

thereunder if such act, rules or

regulations were applicable.

Section II—General Conditions

A. The NatWest/UK Affiliate is

registered as a broker-dealer with the

Securities and Futures Authority of the

United Kingdom (the S.F.A.);

B. The NatWest/UK Affiliate is in

compliance with all requirements of

Rule 15a–6 (17 CFR 240.15a–6) under

the Securities and Exchange Act of

1934, which provides for foreign brokerdealers a limited exemption from U.S.

registration requirements;

C. Prior to the transaction, the

NatWest/UK Affiliate enters into a

written agreement with the plan in

which the NatWest/UK Affiliate

consents to the jurisdiction of the courts

of the United States with respect to the

transactions covered by this exemption;

D. (1) The NatWest/UK Affiliate

maintains or causes to be maintained

within the United States for a period of

six years from the date of such

transaction such records as are

necessary to enable the persons

described in this section to determine

whether the conditions of this

exemption have been met; except that a

party in interest with respect to an

employee benefit plan, other than the

NatWest/UK Affiliate, shall not be

subject to a civil penalty under section

502(i) of the Act or the taxes imposed

by section 4975 (a) or (b) of the Code,

if such records are not maintained, or

are not available for examination as

required by this section, and a

prohibited transaction will not be

deemed to have occurred if, due to

circumstances beyond the control of the

NatWest/UK Affiliate, such records are

lost or destroyed prior to the end of

such six year period;

(2) The records referred to in

subsection (1) above are unconditionally

available for examination during normal

business hours by duly authorized

employees of (a) the Department of

Labor, (b) the Internal Revenue Service,

(c) plan participants and beneficiaries,

(d) any employer of plan participants

and beneficiaries, and (e) any employee

organization any of whose members are

covered by such plan; except that none

of the persons described in (c) through

(e) of this subsection shall be authorized

to examine trade secrets of NatWest

Securities Corporation or the NatWest/

UK Affiliate or any commercial or

financial information which is

privileged or confidential.

Section III—Definitions

‘‘Affiliate’’ of a person shall include:

(i) Any person directly or indirectly,

through one or more intermediaries,

controlling, controlled by, or under

common control with such other

person; (ii) any officer, director, or

partner, employee or relative (as defined

in section 3(15) of the Act) of such other

person; and (iii) any corporation or

partnership of which such other person

is an officer, director or partner. For

purposes of this definition, the term

‘‘control’’ means the power to exercise

a controlling influence over the

management or policies of a person

other than an individual.

‘‘Security’’ shall include equities,

fixed income securities, options on

equity and on fixed income securities,

government obligations, and any other

instrument that constitutes a security

under U.S. securities laws. The term

‘‘security’’ does not include swap

agreements or other notional principal

contracts.

EFFECTIVE DATE: This exemption is

effective as of May 22, 1997.

For a more complete statement of the

summary of facts and representations

supporting the Department’s decision to

grant this exemption refer to the Notice

of Proposed Exemption published on

September 5, 1997 at 62 FR 47060.

FOR FURTHER INFORMATION CONTACT:

Ronald Willett of the Department,

telephone (202) 219–8881. (This is not

a toll-free number.)

Carl M. Callaway Individual

Retirement Account (IRA), Located in

Huntington, West Virginia; [Prohibited

Transaction Exemption No. 97–58;

Application No. D–10469]

Exemption

The sanctions resulting from the

application of section 4975 of the Code,

by reason of section 4975(c)(1)(A)

through (E) of the Code, shall not apply

to the transaction involving a sale or

exchange of certain securities (the Sale)

by the IRA to Carl M. Callaway and his

wife, Marianna F. Callaway, both

disqualified persons with respect to the

IRA; provided the following conditions

are satisfied: (a) the sale or exchange is

a one-time transaction constituting an

exchange of securities approximately

equal in value and any difference in

value occurring is immediately

eradicated with cash payments by either

the Callaways or the IRA, in order to

equalize the value of the exchanged

assets, (b) the IRA incurs no

commissions or other expenses in

connection with the transaction, (c) the

transaction involves only securities that

have a fair market value on the date of

the exchange which is objectively

determinable through independently

and regularly published market prices

and quotations, and (d) the IRA tenders

as consideration stock valued at an

amount equal to the reported closing

price of the stock on the date of the Sale

and the IRA receives U. S. Treasury

notes valued at the reported closing bid

on the date of the Sale, plus the accrued

interest the notes earned to the date of

the Sale.

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

September 5, 1997 at 62 FR 47604.

FOR FURTHER INFORMATION CONTACT: Mr.

C. E. Beaver of the Department,

telephone (202) 219–8881. (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 exemptions

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
56206 Federal Register / Vol. 62, No. 209 / Wednesday, October 29, 1997 / Notices

administrative or statutory exemption is

not dispositive of whether the

transaction is in fact a prohibited

transaction; and

(3) The availability of these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application accurately describes all

material terms of the transaction which

is the subject of the exemption.

Signed at Washington, D.C., this 23rd day

of October, 1997.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

U.S. Department of Labor.

[FR Doc. 97–28593 Filed 10–28–97; 8:45 am]

BILLING CODE 4510–29–P

FEDERAL MINE SAFETY AND HEALTH

REVIEW COMMISSION

Sunshine Act Meeting

October 23, 1997.

TIME AND DATE: 10:00 a.m., Thursday,

October 30, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Open.

MATTERS TO BE CONSIDERED: The

Commission will hear oral argument on

the following:

1. Secretary of Labor v. Berwind

Natural Resources Corp., et al., Docket

Nos. KENT 94–574, etc. (Issues include

whether the judge correctly determined

that to qualify as an ‘‘operator’’ under

the Mine Act an entity must directly or

indirectly substantially participate in

the operation, control, or supervision of

the day-to-day operations of the mine,

or have authority to do so; correctly

rejected the Secretary’s claim that the

cited parent and its cited subsidiaries

constituted a ‘‘unitary operator’’ under

the Mine Act; and correctly determined

that one of those subsidiaries was an

‘‘operator,’’ while the parent and two

other subsidiaries were not).

TIME AND DATE: 2:00 p.m., Thursday,

October 30, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Closed [Pursuant to 5 U.S.C.

552b(c)(10)].

MATTERS TO BE CONSIDERED: It was

determined by a unanimous vote of a

quorum of the Commission that the

Commission consider and act upon the

following in closed session:

1. Secretary of Labor v. Berwind

Natural Resources Corp., et al., Docket

Nos. KENT 94–574–R, etc. (See oral

argument listing, supra, for issues).

TIME AND DATE: 10:00 a.m., Thursday,

November 6, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Open.

MATTERS TO BE CONSIDERED: The

Commission shall consider and act

upon the following:

1. Secretary of Labor v. Gouverneur

Talc Co., Docket No. YORK 95–70–M

(Issues include whether the judge erred

in determining that the operator did not

violate 30 C.F.R. § 57.4362, which

requires that, following evacuation of a

mine in a fire emergency, only persons

wearing and trained in the use of mine

rescue apparatus shall participate in

rescue and firefighting operations in

advance of the fresh air base).

TIME AND DATE: 10:00 a.m., Thursday,

November 13, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Open.

MATTERS TO BE CONSIDERED: The

Commission will hear oral argument on

the following:

1. Secretary of Labor v. Extra Energy,

Inc., Docket No. WEVA 96–13 (Issues

include whether the judge erred in

finding that the Secretary properly cited

the operator for its independent

contractor’s violation of 30 C.F.R.

§ 77.404(a)’s requirement that mobile

equipment and machinery be

maintained in safe operating condition

and properly found that the operator

violated 50 C.F.R. § 50.10’s requirement

that the Mine Safety and Health

Administration be notified of accidents).

TIME AND DATE: 2:00 p.m., Thursday,

November 13, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Closed [Pursuant to 5 U.S.C.

§ 552b(c)(10)].

MATTERS TO BE CONSIDERED: It was

determined by a unanimous vote of a

quorum of the Commission that the

Commission consider and act upon the

following in closed session:

1. Secretary of Labor v. Extra Energy,

Inc., Docket No. WEVA 96–13 (See oral

argument listing, supra, for issues).

TIME AND DATE: 10:00 a.m., Thursday,

November 20, 1997.

PLACE: Room 6005, 6th Floor, 1730 K

Street, N.W., Washington, D.C.

STATUS: Open.

MATTERS TO BE CONSIDERED: The

Commission shall consider and act

upon the following:

1. Secretary of Labor v. REB

Enterprises, Inc. Docket No. CENT 95–

29–M, etc. (Issues include whether the

judge erred in concluding that the

operator’s violations of 30 C.F.R.

57.14107(a), 57.14130(g), and

57.14131(a) were not the result of

unwarrantable failure based on his

refusal to assign any probative weight to

hearsay testimony adduced by the

Secretary; erred in concluding that two

individuals were not personally liable

for violations of 30 C.F.R. 57.14130(g);

erred in concluding that a violation of

30 C.F.R. 14130(a)(3) was not

established because it was not

demonstrated that a backhoe

unequipped with a seat belt was a

‘‘wheel loader’’ or ‘‘wheel tractor’’

within the meaning of that standard;

and erred in dismissing an order on the

basis that it alleged a violation of the

wrong standard, even though it was

amended prior to hearing to allege a

violation of the correct standard).

Any person attending oral argument

or an open meeting who requires special

accessibility features and/or auxiliary

aids, such as sign language interpreters,

must inform the Commission in advance

of those needs. Subject to 29 C.F.R.

§ 2706.150(a)(3) and § 2706.160(d).

CONTACT PERSON FOR MORE INFO: Jean

Ellen (202) 653–5629 / (202) 708–9300

for TDD Relay / 1–800–877–8339 for toll

free.

Jean H. Ellen,

Chief Docket Clerk.

[FR Doc. 97–28711 Filed 10–24–97; 4:03 pm]

BILLING CODE 6735–01–M

NATIONAL SCIENCE FOUNDATION

Special Emphasis Panel in Chemistry;

Notice of Meeting

In accordance with the Federal

Advisory Committee Act (Pub. L. 92–

463, as amended), the National Science

Foundation announces that the Special

Emphasis Panel in Chemistry (1191)

will be holding panel meetings for the

purpose of reviewing proposals

submitted to the Faculty Early Career

Development (CAREER) Program. In

order to review the large volume of

proposals, panel meetings will be held

on November 13–14, November 17–18,

November 20–21, and December 8–9.

All meetings will be closed to the public

and will be held at the National Science

Foundation, 4201 Wilson Blvd.,

Arlington, VA from 8:30 AM to 5:00 PM

each day.

Contact Person: Dr. Margaret A.

Cavanaugh, Program Director, Inorganic,

Bioinorganic and Organometallic program,

Chemistry Division, Room 1055, National

Science Foundation, 4201 Wilson Boulevard,

Arlington, VA 22230, Telephone: (703) 306–

1842.