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[Federal Register Volume 77, Number 62 (Friday, March 30, 2012)]
[Notices]
[Pages 19338-19340]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7703]

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DEPARTMENT OF LABOR

Employee Benefits Security Administration

[Application No. D-11679]

Notice of Amendment to Proposed Exemption Sammons Enterprises, 
Inc. Employee Stock Ownership Plan (the ESOP); Located in Dallas, TX

AGENCY: Employee Benefits Security Administration, U.S. Department of 
Labor.

ACTION: Notice of amendment to proposed exemption.

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[[Page 19339]]

SUMMARY: This document contains a notice of pendency before the 
Department of Labor (the Department) of an amendment to a proposed 
individual exemption from certain prohibited transaction restrictions 
of the Employee Retirement Income Security Act of 1974, as amended 
(ERISA), and the Internal Revenue Code of 1986, as amended (the Code). 
The proposed transactions involve Sammons Enterprises, Inc. (Sammons). 
The proposed exemption, if granted, would affect the ESOP for which 
Sammons is the sponsor, and the participants and beneficiaries of the 
ESOP.
    Temporary Nature of Exemption: This exemption, if granted, will 
expire at the earlier of (i) the first day of the first fiscal year of 
Sammons next following the fiscal year in which falls the fifth 
anniversary of the date of grant of the exemption; and (ii) the first 
day upon which the ESOP fails to own at least 99% of the issued and 
outstanding shares of Sammons.
    Written Comments and Hearing Requests: All interested persons are 
invited to submit written comments and/or requests for a hearing on the 
proposed exemption within forty five (45) days from the date of the 
publication of this Federal Register Notice. Comments and requests for 
a hearing should state: (1) The name, address and telephone number of 
the person making the comment or the request for a hearing and (2) the 
nature of the person's interest in the proposed exemption and the 
manner in which the person would be adversely affected by the proposed 
exemption. A request for a hearing must also state the issues to be 
addressed at the requested hearing and include a general description of 
the evidence to be presented at the requested hearing.

ADDRESSES: All written comments and requests for a public hearing 
concerning the proposed exemption should be sent to the Office of 
Exemption Determinations, Employee Benefits Security Administration, 
Room N-5700, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 202010, Attention: Application No. D-11679. Interested 
persons are also invited to submit comments and/or hearing requests to 
the Employee Benefits Security Administration by email or FAX. Any such 
comments or requests should be sent either to: [email protected], 
or by FAX to (202) 219-0204 by the end of the scheduled comment period. 
The application for exemption and the comments received will be 
available for inspection in the Public Documents Room of the Employee 
Benefits Security Administration, U.S. Department of Labor, Room N-
1513, 200 Constitution Avenue NW., Washington, DC 20210.
    Warning: If you submit written comments or hearing requests, do not 
include any personally-identifiable or confidential business 
information that you do not want to be publicly-disclosed. All comments 
and hearing requests are posted on the Internet exactly as they are 
received, and they can be retrieved by most Internet search engines. 
The Department will make no deletions, modifications or redactions to 
the comments or hearing requests received, as they are public records.

FOR FURTHER INFORMATION CONTACT: Gary H. Lefkowitz, Office of Exemption 
Determinations, Employee Benefits Security Administration, U.S. 
Department of Labor, telephone (202) 693-8546. (This is not a toll-free 
number.)

SUPPLEMENTARY INFORMATION: This document contains a notice of amendment 
to a proposed individual exemption from the restrictions of ERISA 
406(a)(1)(A) and (D), 406(b)(1), and 406(b)(2), and the sanctions 
resulting from the application of section 4975 of the Code, by reason 
of section 4975(c)(1)(A), (D) and (E) of the Code. The proposed 
exemption has been requested by GreatBanc Trust Company (GreatBanc), 
the independent fiduciary for the ESOP, pursuant to ERISA section 
408(a) and Code section 4975(c)(2), and in accordance with the 
procedures set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 
32847, August 10, 1990). Effective December 31, 1978, section 102 of 
the Reorganization Plan No. 4 of 1978, (43 FR 47713, October 17, 1978) 
transferred the authority of the Secretary of the Treasury to issue 
exemptions of the type requested to the Secretary of Labor. 
Accordingly, this proposed exemption is being issued solely by the 
Department.
    On November 14, 2011, the Department of Labor (the Department) 
published in the Federal Register (76 FR 70503) a notice of proposed 
exemption (the Notice) for a transaction involving the ESOP. The entity 
that requested the exemption, GreatBanc, the independent fiduciary for 
the ESOP, as well as the ESOP's sponsor, Sammons, have now requested a 
clarification with respect to the conditions that appeared in the 
Notice.
    Condition (f) of the Notice reads: ``(f) Shares of Sammons stock 
are held in an ESOP suspense account, and are allocated each year to 
each eligible ESOP participant at the maximum level permitted under the 
Code;'' and Representation (f) in Paragraph 16 of the Summary of Facts 
and Representations of the Notice reads the same way.
    GreatBanc represents that this statement was likely the product of 
the following representation made in the original application submitted 
to the Department and repeated in Paragraph 5 of the Notice: ``Although 
the ESOP is not leveraged, under a special structure established 
pursuant to Section 664(g) of the Code, the shares acquired from the 
[Sammons] charitable remainder trust are held in an ESOP suspense 
account, and are currently allocated each year to each eligible ESOP 
participant at the maximum level permitted under Code Section 
664(g)(7), i.e., 25% of compensation (up to a maximum allocation of 
$45,000).''
    GreatBanc confirms that the representations in the exemption 
application concerning the level of current allocations to ESOP 
participants are entirely accurate. Participants received the maximum 
allocations permitted under the Code for the 2010 Plan year (the first 
Plan year for which Code Section 664(g)(7) applied to the ESOP), and 
will receive the maximum level of allocations for the 2011 Plan year as 
well. It was not, however, the intention of GreatBanc nor Sammons to 
represent to the Department, nor to offer as a condition for the 
granting of an exemption, that the ESOP would provide the maximum 
permitted allocations to ESOP participants during each Plan year for 
which the exemption proposed herein would be in effect, but rather to 
represent that the allocations made to ESOP participants would at all 
times be made in accordance with the applicable provisions of Code 
Section 664(g).
    The Department has accepted this request for clarification by 
GreatBanc and Sammons and has accordingly amended the Notice so that 
condition (f) now reads: ``(f) Shares of Sammons stock are held in an 
ESOP suspense account, and are allocated each year to each eligible 
ESOP participant in accordance with the applicable provisions of the 
Code;'' and the Department notes that Representation 16, subsection (f) 
of the Notice is similarly amended.

Notice of Amendment to Proposed Exemption

    The Department of Labor (the Department) is considering granting an 
exemption under the authority of section 408(a) of the Act in 
accordance with procedures set forth in 29 CFR Part 2570, Subpart B (55 
FR 32836, 32847, August 10, 1990). If the proposed exemption is 
granted, the restrictions of

[[Page 19340]]

sections 406(a)(1)(A) and (D), 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), (D) and (E) of the Code, 
shall not apply to the personal holding company consent dividend 
election (the Consent) with respect to Sammons Enterprises, Inc. 
(Sammons), by the trustee of the ESOP, provided that the following 
conditions are satisfied:
    (a) The trustee of the ESOP is an independent, qualified fiduciary 
(the I/F), acting on behalf of the ESOP, which determines prior to 
entering into the transaction that the transaction is feasible, in the 
interest of, and protective of the ESOP and the participants and 
beneficiaries of the ESOP;
    (b) Before the ESOP enters into the proposed transaction, the I/F 
reviews the transaction, and determines whether or not to approve the 
transaction, in accordance with the fiduciary provisions of the Act;
    (c) The I/F monitors compliance with the terms and conditions of 
this proposed exemption, as described herein, and ensures that such 
terms and conditions are at all times satisfied;
    (d) Sammons provides to the I/F, in a timely fashion, all 
information reasonably requested by the I/F to assist it in making its 
decision whether or not to approve the transaction;
    (e) The consent dividend will represent no more than two percent 
(2%) of the ESOP's assets in any taxable year within the timeframe of 
the exemption proposed herein;
    (f) Shares of Sammons stock are held in an ESOP suspense account, 
and are allocated each year to each eligible ESOP participant in 
accordance with the applicable provisions of the Code;
    (g) All of the requirements of section 565 of the Code are met with 
respect to the Consent; and
    (h) All shareholders of Sammons are requested to consent to the 
dividend in the manner prescribed under section 565 of the Code.
    Notice to Interested Persons: The applicant represents that notice 
to interested persons will be provided by first class mail within 15 
days of the publication of this Notice of Amendment to Proposed 
Exemption in the Federal Register. This notification to interested 
persons will include both a copy of the November 14, 2011 Notice and a 
copy of this Notice of Amendment to Proposed Exemption.

    Signed at Washington, DC, this 27th day of March 2012.
Lyssa E. Hall,
Acting Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. 2012-7703 Filed 3-29-12; 8:45 am]
BILLING CODE 4510-29-P
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