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9As described by KSW’s Arsenic, Lead, & 

Cadmium Control Program. 

10Examples of safe-work practices include use of 

personal-protective equipment (including 

respirators, gloves, protective clothing) as defined 

by (a) KSW’s Respiratory Protection Program; (b) 

provisions of KSW’s Arsenic, Lead, & Cadmium 

Control Program; and (c) provisions of KSW’s Safe 

Job Procedure. 

11For example, § 1910.1025(n)(1)(iii) and 

(n)(2)(iv) require employers to retain lead exposuremonitoring records and medical records for at least 

40 years or for the duration of employment plus 20 

years, whichever is longer. 

1 In the notice of proposed exemption published 

with respect to the exemption granted herein (74 FR 

47963, September 18, 2009), the Department 

referred to UAW GM Retiree Medical Benefits Plan 

as ‘‘the New GM VEBA Plan’’ and collectively 

referred to the New GM VEBA Plan and the VEBA 

Trust as the ‘‘VEBA.’’ At the request of the 

Applicant, the Department has substituted the 

terms ‘‘the New UAW-GM Retirees Plan’’ and ‘‘the 

New Plan,’’ respectively, therefor. 

2 74 FR 47963. 

and has an accuracy (to a confidence 

level of 95 percent) within ±15 percent 

or 6 μg/100 ml, whichever is greater. 

(b) Ensure that blood-lead results 

remain at or below 40 μg lead/100 g 

whole blood. 

(c) Whenever the employer assigns a 

new worker to perform the crane motorcleaning operation, conduct biological 

monitoring of the worker prior to the 

worker beginning the cleaning 

operation. 

(d) Not assign any worker to the crane 

motor-cleaning operation who declines 

to undergo the biological-monitoring 

procedures. 

5. Notifications 

(a) The employer must: 

(1) Provide written notification to 

affected workers of the results of their 

individual personal-exposure and 

biological-monitoring results in 

accordance with the requirements of the 

arsenic and lead standards (29 CFR 

1910.1018(e)(5), 29 CFR 

1910.1018(n)(6)(iii), 29 CFR 

1910.1025(d)(8), and 29 CFR 

1910.1025(j)(3)(v)(A)(4)) within 15 

working days from receipt of the results. 

(2) Whenever personal-exposure 

monitoring results are at or above the 

action levels for lead (30 μg/m3) or 

arsenic (5 μg/m3), or blood-lead 

monitoring results are above 20 μg lead/ 

100 g whole blood, provide these results 

to OSHA’s Peoria, IL, Area Office, 

OSHA’s Chicago, IL, Regional Office, 

and OSHA’s Office of Technical 

Programs and Coordination Activities 

within 15 working days of receiving the 

results, along with a written plan 

describing how the employer will 

reduce exposure levels or blood-lead 

levels. 

(3) At least 15 calendar days prior to 

commencing any operation that 

involves using compressed air to clean 

crane motors, inform OSHA’s Peoria, IL, 

Area Office and OSHA’s Chicago, IL, 

Regional Office of the date and time the 

operation will commence. 

(b) Notify in writing OSHA’s Office of 

Technical Programs and Coordination 

Activities as soon as the employer 

knows that it will: 

(1) Cease to do business; or 

(2) Transfer the activities covered by 

this grant to a successor company. 

6. Training 

The employer must implement the 

worker-training programs described in 

29 CFR 1910.1018(o) and 29 CFR 

1910.1025(l), including: 

(a) Initial training of new workers 

prior to their beginning a crane motorcleaning operation; 

(b) Yearly refresher training of all 

other workers involved in crane motorcleaning operations; 

(c) Documentation of this training; 

and 

(d) Maintenance of the training 

records.9

7. Miscellaneous Program Conditions 

The employer must implement the: 

(a) Respiratory Protection Program 

that meets the requirements specified by 

29 CFR 1910.134, and 29 CFR 

1910.1025(f), and 29 CFR 1910.1018(h); 

(b) Provisions of the employer’s 

Arsenic, Lead, & Cadmium Control 

Program; and 

(c) Provisions of the Safe Job 

Procedure. 

8. Monitoring Work Practices 

The employer must ensure that 

supervisors: 

(a) Observe and enforce applicable 

safe-work practices 10 while workers are 

cleaning crane motors; 

(b) Document these supervisor 

observations and enforcement activities; 

and 

(c) Maintain these records. 

9. Record Retention and Availability 

The employer must: 

(a) Retain any records generated 

under the conditions specified in this 

grant for a minimum period of five 

years, unless an applicable OSHA 

standard specifies a longer period; 11

and 

(b) Make these records available to 

OSHA, affected workers, and worker 

representatives on request. 

VI. Authority and Signature 

David Michaels, PhD, MPH, Assistant 

Secretary of Labor for Occupational 

Safety and Health, U.S. Department of 

Labor, 200 Constitution Ave., NW., 

Washington, DC, directed the 

preparation of this notice. OSHA is 

issuing this notice under the authority 

specified by Section 6(d) of the 

Occupational Safety and Health Act of 

1970 (29 U.S.C. 655), Secretary of 

Labor’s Order No. 4–2010 (75 FR 

55355), and 29 CFR part 1905. 

Signed in Washington, DC, on October 7, 

2010. 

David Michaels, 

Assistant Secretary of Labor for Occupational 

Safety and Health. 

[FR Doc. 2010–25739 Filed 10–12–10; 8:45 am] 

BILLING CODE 4510–26–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Prohibited Transaction Exemption No. 

2010–30; Application No. L–11568] 

Individual Exemption Involving 

General Motors Company, General 

Motors Holdings LLC, and General 

Motors LLC, Located in Detroit, MI 

AGENCY: Employee Benefits Security 

Administration, U.S. Department of 

Labor. 

ACTION: Grant of individual exemption. 

SUMMARY: This document contains an 

exemption from certain prohibited 

transaction restrictions of the Employee 

Retirement Income Security Act of 1974 

(the Act or ERISA). The transactions 

involve the UAW GM Retiree Medical 

Benefits Plan (the New UAW-GM 

Retirees Plan) and its associated UAW 

Retiree Medical Benefits Trust (the 

VEBA Trust) (collectively the New 

Plan).1 The exemption will affect the 

New Plan, and its participants and 

beneficiaries. 

DATES: Effective Date: This exemption is 

effective as of July 10, 2009. 

SUPPLEMENTARY INFORMATION: On 

September 18, 2009, the Department 

published in the Federal Register a 

notice of proposed individual 

exemption from the restrictions of 

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

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

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

(the Notice).2 The proposed exemption 

was requested in an application filed by 

General Motors Corporation (Old GM) 

pursuant to section 408(a) of ERISA and 

in accordance with the procedures set 

forth in 29 CFR 2570, Subpart B (55 FR 

32836, August 10, 1990). Subsequent to 

the submission of its application, Old 

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3Effective December 31, 1978, section 102 of 

Reorganization Plan No. 4 of 1978 (43 FR 47713, 

October 17, 1978), transferred the authority of the 

Secretary of the Treasury to issue exemptions of the 

type requested to the Secretary of Labor. 

Accordingly, this final exemption is being issued 

solely by the Department. 

4As described in the Notice, the Old GM Plan 

provided benefits to, among others, individuals 

who ultimately became covered by the New Plan. 

The New GM Plan provided benefits to most of 

those same individuals from the date of the Section 

363 Sale to the date of implementation of the New 

Plan. 

5As described in more detail below, General 

Motors LLC is a newly-created indirect whollyowned subsidiary of New GM. 

6The Committee sought and received a one-week 

extension of the comment period, to November 9, 

2009. On March 16, 2010, with the Department’s 

permission, the Committee filed an additional 

comment. On April 12, 2010, New GM submitted 

a response to the Committee’s March 16, 2010 

comment. During this time frame, the Department 

also accepted additional submissions from plan 

participants. 

7According to the comment, these corporate 

changes were accompanied by the requisite 

resolutions, stockholder consents, certificate of 

incorporation and by-law changes, stock 

conversions etc. as applicable. Each share of prereorganization New GM Common Stock was 

converted into a right to acquire a share of common 

stock issued by post-reorganization New GM, with 

the same features. 

GM sold substantially all of its assets to 

General Motors Company (New GM).3

Background 

On July 5, 2009, the U.S. Bankruptcy 

Court for the Southern District of New 

York approved a sale under Section 363 

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

New GM succeeded to certain assets and 

liabilities of Old GM (the Section 363 

Sale). The bankruptcy court also 

approved an agreement, known as the 

Modified Settlement Agreement, 

between Old GM and the International 

Union, United Automobile, Aerospace 

and Agricultural Implement Workers of 

America (UAW), which governed the 

provision of post-retirement medical 

benefits by New GM to certain 

employees and retirees. Pursuant to the 

Modified Settlement Agreement, New 

GM was required to transfer the 

following to the New Plan: (i) New GM 

common stock (the New GM Common 

Stock) representing 17.5% of New GM’s 

common equity, (ii) $6.5 billion of New 

GM preferred stock (the Preferred 

Stock), (iii) a note with a principal 

amount of $2.5 billion (the Note), (iv) 

warrants entitling the New Plan to 

acquire an additional 2.5% of New GM 

Common Stock (the Warrants) and (v) 

assets of two pre-existing VEBAs, the 

Mitigation VEBA and the UAW-Related 

Account of the GM Internal VEBA, 

established by Old GM. 

Old GM submitted an application for 

relief from the prohibited transaction 

provisions of ERISA for two sets of 

transactions. The first set of transactions 

involves the transfer of the securities 

described above to the New Plan and 

the subsequent holding and 

management of such securities. The 

second set of transactions involves asset 

transfers to and from the New Plan 

necessitated by the transition of benefit 

payment responsibility from certain 

predecessor plans (the Old GM Plan and 

the New GM Plan) to the New Plan,4 or 

due to mistaken deposits into the New 

Plan. 

Written Comments and Hearing 

Requests 

In the Notice, the Department invited 

interested persons to submit written 

comments and requests for a hearing on 

the proposed exemption. All comments 

and requests for a hearing were due 

November 2, 2009. During the comment 

period, the Department received more 

than 200 telephone calls, approximately 

100 letters, emails and faxes, and 15 

requests for a public hearing from New 

Plan participants. The Department 

additionally received written comments 

from General Motors LLC,5 the 

committee that is the plan administrator 

and named fiduciary of the New Plan 

(the Committee), and the Independent 

Fiduciary retained to manage the New 

GM securities held by the New Plan.6

Participant Comments 

The great majority of participants who 

contacted the Department either by 

telephone or written comment 

(commenters) expressed difficulty in 

understanding the Notice or the effect of 

the exemption on the commenters’ 

benefits. A few commenters supported 

the exemption. Many other commenters 

raised questions and concerns regarding 

the transactions described in the Notice. 

Specifically, some of the commenters 

were opposed to the transfer of the New 

GM securities to the New Plan due to 

the uncertain value and current lack of 

marketability of the securities. Some 

commenters were concerned that the 

New Plan would not be able to provide 

benefits for the duration of their 

lifetimes. A number of commenters 

raised concerns that are beyond the 

scope of the exemption. These concerns 

included the perceived unfair treatment 

of retirees within the UAW; lack of 

participation afforded to retirees in the 

process of approving the Modified 

Settlement Agreement; the validity of 

Old GM’s bankruptcy; and concerns 

about the rising costs of maintaining 

healthcare coverage under the New 

Plan. The commenters who requested a 

public hearing shared these same 

concerns. However, none of the 

commenters offered any information 

regarding the substance of the subject 

transactions. 

In responding to commenters’ 

concerns as to the funding of the New 

Plan, General Motors LLC notes that the 

funding of the New Plan was 

determined after lengthy, arms-length 

negotiations that included GM and the 

UAW as both the representative of the 

active employees and as the authorized 

representative under Section 1114 of the 

U.S. Bankruptcy Code of those persons 

receiving retiree health care benefits. 

Class Counsel for the retirees also 

played a role in these negotiations and 

acknowledged and confirmed his 

agreement to the terms of the Modified 

Settlement Agreement. In addition, 

representatives of the U.S. Treasury 

participated in the negotiations. Further, 

General Motors LLC points out that the 

Modified Settlement Agreement was 

approved by an order of the federal 

bankruptcy court, which stated that the 

terms and conditions of the Modified 

Settlement Agreement (including but 

not limited to those relating to the 

funding of the New Plan) were ‘‘fair, 

reasonable, and in the best interests of 

the retirees.’’ 

General Motors Comments 

General Motors LLC submitted a 

comment disclosing certain corporate 

changes since the date of the exemption 

application. According to the comment, 

on August 11, 2009, New GM created 

three new entities under Delaware law: 

(1) General Motors Holding Company 

(‘‘Holdco’’), a corporation formed as a 

direct and wholly-owned subsidiary of 

New GM, (2) General Motors Holdings 

LLC (‘‘Holdings’’), a limited liability 

company formed as a direct and whollyowned subsidiary of Holdco; and (3) GM 

Merger Subsidiary, Inc. (‘‘Merger 

Subsidiary’’), a corporation formed as a 

direct and wholly-owned Delaware 

corporate subsidiary of Holdings. 

The comment disclosed that during 

the period October 15, 2009, through 

November 2, 2009, New GM underwent 

a corporate reorganization. On October 

15, 2009, Merger Subsidiary merged 

with and into New GM, with New GM 

as the surviving corporation, as a 

wholly-owned subsidiary of Holdings. 

On October 16, 2009, New GM 

converted to a limited liability company 

under the name General Motors LLC. 

Immediately thereafter, Holdco changed 

its name to General Motors Company 

(New GM). On October 19, 2009, 

General Motors LLC assigned its 

indebtedness to the U.S. Treasury and 

the New Plan to Holdings.7

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8The Department has determined to add the 

words ‘‘if any’’ after the phrase ‘‘the dollar amount 

of mispayments made’’ in Section III(a) as well. 

9The GM Separate Retiree Account is the 

separate retiree account of the VEBA Trust designed 

to segregate payments to the VEBA Trust 

attributable to GM pursuant to the Modified 

Settlement Agreement. 

General Motors LLC provided the 

following graphic illustration of the 

merger process: 

In this regard, General Motors LLC 

provided certain revisions to its 

representations. First, the applicant is 

now identified as General Motors LLC, 

although the comment stated that 

General Motors LLC would not object if 

the exemption were issued to New GM, 

Holdings and General Motors LLC 

collectively. Second, the Note issued to 

the New Plan by New GM became an 

obligation of Holdings. Accordingly, 

with regard to the exemption for the 

acquisition and holding of the Note, the 

direct parties to the transactions are 

Holdings and the New Plan. With regard 

to the exemptions for the acquisition 

and holding of the New GM Common 

Stock, the Preferred Stock, and the 

Warrants, the direct parties are New GM 

and the New Plan. With regard to the 

exemption for the transition payments, 

the direct parties to the transactions are 

General Motors LLC, Old GM (i.e, 

General Motors Corporation, which has 

changed its name to Motors Liquidation 

Company), the Old GM Plan, the New 

GM Plan and the New Plan. 

General Motors LLC provided the 

following explanation of the reason for 

the corporate reorganization: 

The decision to create Holdings as an 

intermediate corporate layer and place the 

debt obligations in Holdings was prompted 

by a suggestion from [the United States 

Treasury]. Given the holding company 

structure, the ‘‘issuer’’ of the other 

securities—the Common Stock, Preferred 

Stock, and the Warrants—must be [New GM], 

the holding company. [General Motors LLC], 

the third-tier subsidiary, is an LLC and not 

a suitable issuer of securities that are 

intended to be widely held and publicly 

traded. In addition, the 100% ownership in 

the chain would not be possible if the 

Common Stock were not issued by New GM. 

Moreover, the stock is far more desirable if 

issued by the top-tier company in the 

structure than if issued by a second-tier or 

third-tier company. For the debt, however, 

the reason for making Holdings the obligor 

(as opposed, for example, to [New GM]) was 

to place the obligor as close to the underlying 

assets as possible. And [General Motors LLC] 

itself could not be the obligor because the 

guarantors on the Notes are not only [General 

Motors LLC] and its U.S. subsidiaries, but 

also the non-U.S. auto subsidiaries of 

Holdings. Further, it is contemplated that 

Holdings will be the obligor on any future 

financings. 

General Motors LLC further 

represented that ‘‘the rights of [the New 

Plan] under the Amended and Restated 

Secured Note Agreement of August 14, 

2009 (‘‘Note’’) remain just as they were 

under the Secured Note Agreement of 

July 10, 2009 (‘‘Original Note’’) before 

the reorganization occurred, 

notwithstanding the substitution of 

General Motors Holdings LLC 

(‘‘Holdings’’) for General Motors 

Company as obligor on the Note * * * 

The terms of the Note remain the same 

in all material respects as they were 

under the Original Note.’’ 

General Motors LLC also requested 

some minor wording changes to the 

operative language of the exemption, to 

which the Department agreed. 

Specifically, the Department revised: 

• Section I(a) to add a new subsection 

(1)(v) to separately set forth relief for the 

acquisition of New GM Common Stock 

pursuant to the exercise of the Warrants 

or through a corporate transaction, for 

avoidance of confusion, and to delete 

subsection (2) as duplicative of the new 

subsection (1)(v), and to renumber the 

remaining subsections; 

• Section II(c) to state that the 

Independent Fiduciary must determine 

that the transaction is ‘‘protective of the 

rights of participants and beneficiaries 

***’’ in order to more closely track 

ERISA section 408(a); and 

• Section III(b) to add the words ‘‘as 

applicable’’ after the word 

‘‘administrator(s)’’ and the words ‘‘if any’’ 

after the phrase ‘‘the dollar amount of 

mispayments made.’’ 8

Additionally, the Department deleted 

the first clause of section V(b) (‘‘(1) 

Except as provided in section (2) of this 

paragraph’’), as unnecessary in light of 

the fact that there is no section V(b)(2). 

At General Motors LLC’s request, the 

Department further revised section V of 

the final exemption. The section, which 

addresses recordkeeping, was tailored to 

take into account the fact that multiple 

parties have recordkeeping 

responsibilities under the exemption. 

Finally, on March 12, 2010, General 

Motors LLC represented to the 

Department that all assets described in 

the application as transferring to the GM 

Separate Retiree Account 9 of the VEBA 

Trust had been transferred, with the 

exception of approximately $20.7 

million of cash in the GM Internal 

VEBA, held back for the payment of 

expenses (primarily, investment 


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62882 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

10With respect to the payment by the GM Internal 

VEBA of expenses for the services of Promark, an 

affiliate of New GM, General Motors LLC clarified 

that Promark charges for its services only direct 

expenses permitted under the Department’s 

regulations at 29 CFR §§ 2550.408b–2(e)(3) and 

.408c–2(b)(3). The Department notes that this 

exemption does not provide relief for any services 

provided to the GM Internal VEBA by Promark, nor 

to the payment of compensation for such services. 

Lastly, we note that section 408(b)(2) of ERISA does 

not provide relief for acts described in ERISA 

section 406(b). 

11The Committee suggests that an investment 

bank performing valuation or investment consulting 

and advisory services will often be paid a flat or 

asset-based fee, while an investment bank 

performing underwriting and brokerage services 

will be paid a transaction-based fee as a percentage 

of the overall sale. Additionally, the Committee 

notes that it is not anticipated that the Independent 

Fiduciary likely would retain a separate consulting 

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

appropriate). 

12According to the Committee, the most likely 

reason that an investment bank would propose 

going to market under this scenario is if the overall 

market itself is booming, such that there is ample 

appetite for the securities. In the event that a plan 

needs liquidity in a falling market, the Committee 

is more likely to explore other options, including 

reducing benefits or seeking alternative sources of 

capital such as through borrowing. 

manager fees and expenses for custody, 

legal, and Promark Global Advisors, Inc. 

(Promark) services) accrued before the 

GM Internal VEBA assets were 

transferred.10 Regarding this hold-back, 

General Motors LLC expects to furnish 

an initial reconciliation to the VEBA 

Trust by mid-summer 2010. The 

Department notes that the Applicant 

disclosed in its initial application that 

this hold-back would occur. 

Committee Comments 

The Committee, which is the named 

fiduciary of the New Plan, submitted a 

comment suggesting certain 

modifications to the Summary of Facts 

and Representations of the Notice and to 

the operative language of the proposed 

exemption, and requesting certain 

clarifications from the Department. The 

Committee’s comments were submitted 

after consultation with the Independent 

Fiduciary. 

Number of Investment Banks 

As set forth in the Notice, the VEBA 

Trust has three separate retiree accounts 

(the Separate Retiree Accounts) 

designed to segregate payments to the 

VEBA Trust attributable to GM, Ford 

and Chrysler, pursuant to the terms of 

each company’s settlement agreement 

with the UAW and each respective 

class. In this regard, the Committee 

represented that, in the event that a 

single Independent Fiduciary represents 

two or more Separate Retiree Accounts: 

A separate investment bank will be 

retained with respect to each of the three 

plans comprising the VEBA Trust. The 

investment bank’s initial recommendations 

will be made solely with the goal of 

maximizing the returns for the single plan 

that owns the securities for which the 

investment bank is responsible. 

In its initial discussions with the 

Department, the Committee made the 

argument that the arrangement for 

retention of separate investment banks 

would minimize the likelihood of an 

immediate transactional conflict 

inherent wherein one Independent 

Fiduciary managing more than one 

Separate Retiree Account would be 

immediately confronted by the need to 

dispose of the securities of each 

company. 

The Committee has retained Fiduciary 

Counselors Inc. (FCI) as the 

Independent Fiduciary with respect to 

the securities held in the GM Separate 

Retiree Account, and has currently 

retained separate independent 

fiduciaries with respect to the Chrysler 

and Ford Separate Retiree Accounts. As 

noted, however, it is conceivable at 

some future date any or all three 

Independent Fiduciary engagements 

may be consolidated and the foregoing 

conditions would then come into play. 

In such event, the Committee argues 

that the requirement for different 

investment banks for each Separate 

Retiree Account would not be in the 

interest of the New Plan and would not 

advance the goal of reducing potential 

fiduciary conflicts. The Committee 

contends that the need to retain 

multiple investment banks should be at 

the discretion of the Independent 

Fiduciary and the investment banks 

themselves, or that such a requirement 

should be limited to investment banks 

performing a traditional underwriting 

role and being paid on a transactional 

basis, not those retained for ongoing 

valuation or investment consulting 

services.11

The Committee points out that, as a 

threshold matter, the term ‘‘investment 

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

precise term, but refers to a range of 

services including investment valuation, 

investment consulting and advice, and 

brokerage or underwriting performed 

under the authority and supervision of 

one or more regulators (including, but 

not limited to the Federal Reserve and/ 

or the Securities and Exchange 

Commission). The Committee maintains 

that typically, though not necessarily, 

an investment bank engaged to provide 

a regular valuation will not be the same 

as an investment bank engaged to assist 

the Independent Fiduciary in 

connection with a large private sale or 

an initial public offering, and even in 

the latter event, different investment 

banks may be employed for different 

markets (public versus private, 

international versus domestic, 

institutional versus retail). 

The Committee suggests that, 

particularly in the case of an investment 

bank engaged only to provide valuation 

or investment advice, the Independent 

Fiduciary may conclude that there is no 

potential conflict in retaining a single 

investment bank with respect to two or 

more Separate Retiree Accounts. 

Furthermore, the Committee believes 

that retaining a single investment bank 

may in fact provide potential benefits in 

the form of experience, cost savings, and 

communication. 

The Committee proffers that GM, 

Chrysler, and Ford are at vastly different 

stages of marketability, are competing 

for capital in different markets 

(including public versus private), and 

are not competing against each other so 

much as they are part of a huge global 

automobile market with many other 

competitors.12 The Committee notes 

that a conflict could arise in the 

unlikely event that the Independent 

Fiduciary proposes to sell large blocks 

of stock of two or more car companies 

in the same market at the exact same 

time. In that case, the Committee 

suggests that the Independent Fiduciary 

would probably (though not necessarily) 

engage separate investment bankers at 

that time to underwrite the sales. 

Furthermore, the Committee contends 

that it would maintain safeguards to 

mitigate the risk of conflicts. For 

example, the Committee notes that it 

would still appoint a conflicts monitor 

and perform its own monitoring of the 

Independent Fiduciary, and it would 

continue to raise any questions about 

potential conflicts. 

Accordingly, the Committee proposes 

to replace the above-referenced text 

with the following representation: 

In the event that a single Independent 

Fiduciary is retained to represent two or 

more plan Accounts, and it proposes to sell 

securities from two or more such Accounts 

at the same time, a separate investment bank 

(if any) will be retained for each Account 

with respect to the marketing or underwriting 

of the securities. For this purpose, an 

investment bank will be considered as having 

been retained to market or underwrite 

securities if it is compensated on the success 

of the offering and/or as a percentage of the 

offering or sales proceeds. The foregoing does 

not preclude the engagement of a single 

investment bank to provide valuation 

services or long-term investment consulting 

on behalf of two or more plan Accounts, 

provided that (1) the fees of the investment 

bank are not contingent upon the success or 

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

plan Account, the investment bank’s 

recommendations are made solely with the 

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13 In reaching this conclusion, it is the 

Department’s understanding, based on the 

Committee’s representations, that the fees paid to a 

single investment bank to provide valuation 

services or long-term investment consulting on 

behalf of two or more Separate Retiree Accounts 

will not be contingent upon the success or size of 

an offering or sale, and for each Separate Retiree 

Account, the investment bank’s recommendations 

are made solely with the goal of maximizing the 

returns for such Account. 

goal of maximizing the returns for such 

Account. 

In addition, the Committee explains 

that there may be some confusion as to 

whether two different Independent 

Fiduciaries may retain the same 

investment bank. The Committee states 

that there should be no limitations on 

the number of investment banks that the 

Independent Fiduciary must retain 

other than general fiduciary principles. 

According to the Committee, although it 

is unlikely that an Independent 

Fiduciary would consider, or that an 

investment bank would accept, an 

engagement that might involve 

marketing securities of two different 

companies in the same market at the 

same time, it would not be unusual, for 

instance, to retain the same investment 

bank to make a private offering of 

securities in the domestic market and a 

public offering of different securities in 

a foreign market, where such investment 

bank is best qualified to do so. 

Accordingly, the Committee suggests 

that the proposed exemption be 

modified to include the following: 

To the extent two Accounts are represented 

by different Independent Fiduciaries, nothing 

herein shall prohibit the Independent 

Fiduciaries from retaining the same 

investment bank with respect to the 

Accounts which they manage if they 

determine that it is in the interest of their 

respective Accounts to do so. 

The Committee further notes that the 

Independent Fiduciary may not in all 

cases have discretion over the selection 

of the investment bank(s) that may 

participate in an underwriting/sale of 

New GM securities. The Committee 

points to section 2.1.4 of the Equity 

Registration Rights Agreement, which 

provides that the U.S. Treasury 

generally has the right to select the lead 

underwriter in the case of a demand 

registration (and New GM the right to 

select co-managing underwriters) and 

section 2.2.3 of the Equity Registration 

Rights Agreement, which provides that 

New GM generally has the right to select 

the investment bank(s) in the case of a 

piggyback offering. In any such case 

where the Independent Fiduciary is not 

selecting the investment bank(s), in the 

Committee’s view, none of the 

exemption conditions regarding 

investment banks should apply. 

The Department concurs with the 

Committee that, in the event that one 

Independent Fiduciary represents two 

or more Separate Retiree Accounts, and 

it proposes to sell securities from two or 

more such Accounts at the same time, 

then a separate investment bank (if any) 

will be retained for each Separate 

Retiree Account with respect to the 

marketing or underwriting of the 

securities. Notwithstanding the above, 

nothing in the final exemption would 

preclude the Independent Fiduciary of 

two or more Separate Retiree Accounts 

from retaining the same investment 

banker to provide valuation services or 

long-term investment consulting on 

behalf of two or more of such Separate 

Retiree Accounts.13 Furthermore, with 

respect to the Committee’s suggestion 

that, to the extent that two Separate 

Retiree Accounts are represented by 

different Independent Fiduciaries, 

nothing herein shall prohibit the 

Independent Fiduciaries from retaining 

the same investment bank with respect 

to the Separate Retiree Accounts which 

they manage if they determine that it is 

in the interest of their respective 

Separate Retiree Accounts to do so, the 

Department is of the view that a 

separate investment bank (if any) must 

be retained to represent each such 

Separate Retiree Account with respect 

to the marketing or underwriting of the 

securities. 

Lastly, the Department concurs with 

the Committee that the restrictions 

applicable to investment banks would 

not apply in the event that the 

Independent Fiduciary does not have 

discretion with respect to the selection 

of an investment banker. In the 

Department’s view, the likelihood of 

conflicts in the case where an 

investment bank is selected by the U.S. 

Treasury or New GM is lower than in a 

situation where an offering of New GM 

securities is underwritten by an 

investment bank retained to sell the 

securities of one or more of the other 

Separate Retiree Accounts, because the 

interests of the New Plan appear to align 

more closely with the interests of New 

GM in the marketing and selling of the 

underwritten securities. Therefore, 

subject to these limitations, the 

Department concurs with the 

Committee’s requested clarifications. 

Reporting Deviations From an 

Investment Bank’s Recommendations 

If a single Independent Fiduciary is 

retained with respect to more than one 

Separate Retiree Account, the Summary 

of Facts and Representations of the 

Notice provides that the Independent 

Fiduciary shall report each instance in 

which it proposes to ‘‘deviate’’ from a 

‘‘recommendation’’ of the investment 

bank. The Committee initially 

represented to the Department that such 

arrangement would help to minimize 

the likelihood of a conflict inherent in 

retaining one Independent Fiduciary to 

manage the securities of more than one 

Separate Retiree Account. 

However, the Committee now proffers 

that this requirement may not be 

practical, in light of information gained 

during the process of interviewing and 

selecting the Independent Fiduciaries in 

connection with the GM, Chrysler and 

Ford exemption applications. The 

Committee notes that, typically, an 

investment bank will not ‘‘recommend’’ 

a single, specific course of action, but 

through a dialogue with the 

Independent Fiduciary will present, 

discuss, modify and refine various 

options and scenarios that the 

Independent Fiduciary ultimately will 

use in making its decisions as a 

fiduciary. Thus, the Committee argues 

that it would not be feasible for the 

Independent Fiduciary to report back to 

the Committee when it proposes to 

deviate from a specific 

recommendation, given that interactions 

between the Independent Fiduciary and 

an investment bank generally lack a 

single, identifiable ‘‘recommendation’’ 

(either orally or in writing) that the 

Independent Fiduciary does or does not 

intend to follow. 

Moreover, the Committee contends 

that some investment banker 

recommendations are unlikely ever to 

raise conflict issues. For instance, the 

Committee notes that an investment 

bank may develop a preliminary 

valuation of certain GM securities of 

$xx, and after thorough consideration, 

the Independent Fiduciary may 

determine that such securities are 

actually worth $yy. In such event, the 

Committee asserts that the Independent 

Fiduciary’s valuation might be viewed 

as a ‘‘deviation’’ from the initial 

recommendation but is unlikely to raise 

any conflict vis-a`-vis any securities held 

by the VEBA Trust. 

The Committee is also concerned that 

the requirement for the Committee to 

review the reported deviations will 

cause the Committee to interpose itself 

between the two parties before such 

parties have reached a consensus. In 

this event, the Committee is concerned 

that it may have an implied obligation 

to substitute its judgment for that of the 

Independent Fiduciary. 

The Department concurs with the 

Committee’s comment that their initial 

representation that the Independent 

Fiduciary would report any deviations 

from the recommendation of the 

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investment bank raises operational 

issues. Nevertheless, the Department 

notes that the Independent Fiduciary 

and the Committee are not relieved from 

their fiduciary duties under ERISA in 

carrying out their respective 

responsibilities. There may be 

circumstances where the Independent 

Fiduciary has a responsibility under 

ERISA to inform the conflicts monitor or 

the Committee of a deviation from the 

investment bank’s recommendations, 

and the Committee, as part of its 

oversight responsibility, may need to 

take appropriate action based on such 

disclosure. Subject to the caveat above, 

the Department takes note of these 

clarifications and updates to the 

Summary of Facts and Representations 

of the Notice. 

Conditions Applicable in the Event 

That the Committee Appoints a Single 

Independent Fiduciary 

The Committee requested 

confirmation that certain terms and 

conditions described in the Summary of 

Facts and Representations of the Notice 

and incorporated into Sections II(b)(1) 

through (3) of the proposed exemption 

would apply only if and to the extent 

that the same Independent Fiduciary is 

appointed to represent two or more 

Separate Retiree Accounts. 

Sections II(b)(1) through (3) of the 

proposed exemption provide that the 

Committee will take certain steps to 

mitigate potential conflicts of interest, 

including the appointment of a conflicts 

monitor, the adoption of procedures to 

facilitate prompt replacement of the 

Independent Fiduciary due to a conflict 

of interest, the adoption of a written 

policy by the Independent Fiduciary 

regarding conflicts, and the periodic 

reporting of actual or potential conflicts. 

Additionally, the Summary of Facts and 

Representations provides that a separate 

investment bank will be retained with 

respect to each Separate Retiree 

Account, and in the event that the 

Independent Fiduciary deviates from 

the ‘‘initial recommendations’’ of an 

investment bank, ‘‘it would find it 

necessary to explain why it deviated 

from a recommendation.’’ 

The Department concurs with the 

Committee, that the terms and 

conditions described above will apply 

only if and to the extent that the same 

Independent Fiduciary is appointed to 

represent two or more Separate Retiree 

Accounts. Notwithstanding the above, 

nothing in the final exemption would 

preclude the Committee from adopting 

procedures similar to those described in 

Sections II(b)(1) through (3) of the 

proposed exemption in furtherance of 

its oversight responsibilities. However, 

the Department believes that the 

requirement that the Independent 

Fiduciary retain separate investment 

banks with respect to each Separate 

Retiree Account, subject to the 

limitations described above, applies 

regardless of how many Separate Retiree 

Accounts are represented by the same 

Independent Fiduciary. 

Investment Bank’s Acknowledgement 

That the New Plan Is Its Ultimate Client 

Section II(e) of the proposed 

exemption provides that ‘‘any contract 

between the Independent Fiduciary and 

an investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA Plan.’’ In 

assisting the Department in formulating 

the conditions of the proposed 

exemption, the Committee represented 

to the Department that such 

acknowledgement would be helpful in 

the event that the Committee is forced 

to replace the Independent Fiduciary 

(such as in the event of an irreconcilable 

conflict). The Committee reasoned that 

this requirement would ensure that, in 

the event the Independent Fiduciary 

was replaced, the investment banker 

would continue to represent the New 

Plan and work with the replacement 

Independent Fiduciary. 

After conducting interviews and 

consulting with numerous parties in its 

search for an independent fiduciary to 

manage the securities received by the 

New Plan, the Committee has raised 

concerns regarding such condition. The 

Committee has requested that the 

Department confirm that this condition 

will not cause the investment bank to 

become a fiduciary or otherwise obligate 

the investment bank or the Independent 

Fiduciary to provide to the Committee 

any of the investment bank’s work 

product except upon request, nor will it 

obligate the Committee to request or 

review any such work product. The 

Committee contends that the 

Independent Fiduciary is both a named 

fiduciary and an investment manager, 

thus it should be free within the 

parameters of its contract to determine 

what information it shares with the 

Committee. 

The Department confirms that the 

requirement that the investment banker 

acknowledge that its ultimate client is 

the New Plan will not, by itself, make 

the investment banker a fiduciary of the 

New Plan. Rather, whether an 

investment banker referred to in Section 

II of the exemption becomes a fiduciary 

as a result of its provision of services 

depends on whether it meets the 

definition of a ‘‘fiduciary’’ as set forth in 

section 3(21) of ERISA and the 

regulations promulgated thereunder. 

Obligation of the Committee To Review 

the Investment Banker Reports 

As described in the Summary of Facts 

and Representations of the Notice, 

several safeguards are provided to 

reduce the risk of conflict in the event 

that a single independent fiduciary is 

retained with respect to more than one 

Separate Retiree Account. Specifically, 

in assisting the Department to formulate 

these procedures, the Committee had 

suggested that a ‘‘conflicts monitor’’ 

would develop a process for identifying 

potential conflicts. As a result, the 

Department added Section II(b)(1)(ii) of 

the proposed exemption, which 

provides that a conflicts monitor 

appointed by the Committee ‘‘regularly 

review the * * * investment banker 

reports * * * to identify the presence of 

factors that could lead to a conflict[.]’’ 

After conducting interviews with 

candidates for the Independent 

Fiduciary position, the Committee has 

raised a concern regarding the conflicts 

monitor’s duties. The Committee has 

requested confirmation that Section 

II(b)(1)(ii) does not independently 

impose any obligation on the Committee 

to provide (or request) ‘‘investment 

banker reports’’ as a matter of course 

(i.e., beyond ERISA’s general fiduciary 

requirements). In its comment letter, the 

Committee notes that it may be 

appropriate for the conflicts monitor or 

the Committee (or any subcommittee 

with delegated authority) to review 

investment banker reports when 

provided to them by the Independent 

Fiduciary, or to request such reports 

under certain circumstances. However, 

the Committee maintains that such 

reports may contain information that is 

confidential or proprietary, or 

preliminary, or simply irrelevant to its 

responsibilities. Furthermore, according 

to the Committee, it is not clear what 

constitutes a ‘‘report,’’ with the result 

that informal notes and/or emails may 

fall under the definition. 

The Department concurs with the 

Committee that Section II(b)(1)(ii) of the 

exemption does not independently 

impose an affirmative obligation on the 

Committee to provide (or request) 

‘‘investment banker reports’’ as a matter 

of course beyond ERISA’s general 

fiduciary requirements. 

Definition of ‘‘Securities’’ 

The Committee sought written 

clarification and confirmation from the 

Department as to the scope of the 

exemptive relief provided under the 

proposed exemption with respect to 

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14As noted above, at the request of New GM and 

in the interests of clarity, the Department has in this 

final exemption merged Section I(a)(1) and (2) of 

the proposed exemption, and renumbered the 

remaining subsections of Section I(a). Therefore, 

Section I(a)(4) of the proposed exemption has been 

renumbered Section I(a)(3) in this final exemption. 

15The Committee states that any such transaction 

would be entered into only after the Independent 

Fiduciary has met all the conditions precedent to 

entering into such a transaction as set forth in 

Section II of the exemption, including, but not 

limited to determining that the transaction is 

feasible, in the interests of the New Plan, and 

protective of the rights of the participants and 

beneficiaries of the New Plan. The Committee also 

represents that the Independent Fiduciary would 

obtain a valuation of any securities involved in the 

transaction. 

16The Committee notes that it is not suggesting 

that transactions which would fundamentally alter 

the terms of the Modified Settlement Agreement are 

being contemplated. 

17Old GM received 50,000,000 shares of New GM 

Common Stock, or 10% of New GM’s common 

equity, in the Section 363 Sale. 

certain transactions involving securities 

held by the New Plan. 

Section I(a)(1)–(3) of the proposed 

exemption provides relief from the 

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

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

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

for the New Plan’s acquisition and 

holding of the New GM Common Stock, 

the Preferred Stock, the Note, the 

Warrants, and additional shares of New 

GM Common Stock acquired pursuant 

to exercise of the Warrants (collectively 

defined as the Securities) if the 

proposed exemption is granted by the 

Department. Additionally, Section 

I(a)(4) of the proposed exemption 

provides relief for the disposition of the 

Securities by the Independent 

Fiduciary, if the exemption is granted.14

The term ‘‘Securities’’ is defined in 

Section VI(o) as ‘‘(i) The New GM 

Common Stock; (ii) the Preferred Stock; 

(iii) the Note; (iv) the Warrants; and (v) 

additional shares of New GM Common 

Stock acquired pursuant to exercise of 

the Warrants.’’ The term Warrants is 

defined in Section VI(q) as ‘‘warrants to 

acquire shares of New GM Common 

Stock, par value $0.01 per share, issued 

by New GM.’’ The Committee questions 

whether the relief proposed would 

include securities of New GM such as 

warrants, common stock, notes and 

other New GM securities (Other GM 

Securities) that are acquired and held by 

the New Plan as a result of disposition 

of some or all of the Securities by the 

Independent Fiduciary, in a transaction 

in which the consideration the New 

Plan receives consists in whole or in 

part of Other GM Securities or in 

exchange for some or all of the 

Securities currently held by the New 

Plan.15 For example, the Committee 

states that the Independent Fiduciary 

may find it in the interest of the New 

Plan and its participants and 

beneficiaries to sell Warrants to New 

GM in exchange for cash and 

replacement warrants of shorter/longer 

duration or with a different strike 

price.16 The Committee also sought to 

clarify whether the exemption would 

cover (i) New GM Common Stock 

acquired through exercise of Warrants, 

and (ii) other securities of New GM in 

exchange for all or some of the 

Securities then held by the New Plan 

due to a corporate transaction or 

restructuring of GM. The Committee 

notes that the Independent Fiduciary 

does not have the authority to vote the 

New GM Common Stock, and therefore, 

the Independent Fiduciary may have 

little, if any, ability to affect the 

negotiation and ultimate approval of 

any such corporate transaction. 

In response to the above-reference 

comments, the Department confirms 

that the exemption provides relief for 

other New GM-issued warrants acquired 

in exchange for Warrants held by the 

New Plan at the direction of the 

Independent Fiduciary, and such relief 

also extends to additional shares of New 

GM Common Stock or other New GMissued warrants acquired in exchange 

for New GM Common Stock or Warrants 

held by the New Plan in connection 

with a restructuring, recapitalization, 

merger or other corporate transaction 

involving New GM. The Department has 

revised Section I(a)(1) and the 

definitions of Securities and Warrants in 

Section VI of the final exemption to 

incorporate this clarification. The 

Department further confirms that the 

exemption provides relief for the 

acquisition, holding and disposition of 

additional shares of New GM Common 

Stock acquired through exercise of 

Warrants. 

Old GM Bonds 

In its March 16, 2010 comment, the 

Committee informed the Department 

that a very small percentage of Old GM 

senior corporate debt (Old GM Bonds) 

was transferred to the VEBA Trust as 

part of the transfer of assets from the 

existing GM Internal VEBA. The Old 

GM Bonds were held in a fund known 

as CCM Pension-C, L.L.C., managed by 

Contrarian Capital Management, LLC 

(Contrarian). The VEBA Trust is the sole 

limited partner in the fund with an 

approximately 99.4% interest while 

Contrarian, as the general partner, holds 

a 0.6% interest. As of March 31, 2010, 

the estimated overall net asset value of 

the fund was $128,842,109. The Old GM 

Bonds were valued at $787,705 in total, 

and therefore represented 0.61% of the 

portfolio. The Committee stated that 

although attempts were made to 

determine the exact composition of 

underlying assets of each fund held by 

the GM Internal VEBA, in some cases 

complete portfolio information was not 

available until after the closing of the 

transfer. The Committee subsequently 

informed the Department that the Old 

GM Bonds were sold by Contrarian on 

April 16, 2010. 

The Committee requested that relief 

be provided for the acquisition and 

holding of the Old GM Bonds by the 

New Plan retroactive to January 1, 2010, 

through April 16, 2010. The Old GM 

Bonds were held in the GM Separate 

Retiree Account of the VEBA Trust; at 

no time were they held in the GM 

Employer Security Sub-Account thereof. 

The Committee made the point that 

Contrarian, which it understands to be 

independent of General Motors, acted as 

an independent fiduciary with respect 

to the continued holding of the Old GM 

Bonds. The Committee further noted 

that Contrarian alone made the decision 

to sell the Old GM bonds. 

New GM responded to the 

Committee’s comment by asserting that 

the Old GM Bonds should not be 

considered employer securities for 

which relief would be required under 

ERISA sections 406 and 407, as Old GM 

has not had hourly employees at any 

time since the assets were transferred to 

the New Plan, and New GM did not 

assume the Old GM Bonds or any 

liability associated therewith in the 

Section 363 Sale. Notwithstanding New 

GM’s response, Old GM appears to be a 

party in interest to the New Plan under 

ERISA section 3(14)(H) by virtue of its 

ownership of 10% of more of the equity 

securities of New GM,17 and the New 

Plan’s holding of debt of Old GM is 

prohibited under ERISA section 

406(a)(1)(B). Accordingly, exemptive 

relief is required. As the Department 

intended to provide relief necessary to 

maximize the funding of the New Plan 

in accordance with the Modified 

Settlement Agreement, the Department 

has modified Section I of the exemption 

to specifically incorporate relief for the 

acquisition and holding of the Old GM 

Bonds retroactive to January 1, 2010, 

through April 16, 2010. 

Independent Fiduciary Comment 

Fiduciary Counselors Inc. (FCI) was 

selected as the Independent Fiduciary 

for the New GM securities held by the 

New Plan. FCI repeated concerns 

identified by the Committee with 

respect to the role of the Independent 

Fiduciary and the investment bank in 

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18Because the New Plan will not be qualified 

under section 401 of the Internal Revenue Code of 

1986, there is no jurisdiction under Title II of the 

Act pursuant to section 4975 of the Code. However, 

there is jurisdiction under Title I of the Act. 

the event that a single Independent 

Fiduciary is appointed for the employer 

securities of more than one Separate 

Retiree Account comprising the VEBA 

Trust. Specifically, FCI was concerned 

about the requirement that a separate 

investment bank will be retained with 

respect to each of the three plans. FCI 

indicated that requiring separate 

investment banks in all circumstances 

could be unnecessarily costly to the 

plans involved. It requested flexibility 

in deciding whether to retain a separate 

investment bank, or in the event the 

separate investment bank requirement 

was retained, that the Department 

clarify that the Independent Fiduciary 

has the authority to determine when it 

is necessary to retain an investment 

bank. According to FCI, having an 

investment bank on retainer, when no 

transactions are contemplated, would 

needlessly drive up the VEBA Trust’s 

expenses. The Department responded to 

some of FCI’s concerns in its discussion 

of the Committee’s comment, above. 

The Department additionally confirms 

that the exemption does not require that 

the Independent Fiduciary retain an 

investment bank at all times. 

FCI also expressed concern that, 

despite the VEBA Trust possessing 

certain information rights under the 

various agreements, including the right 

to financial statement information, it 

did not believe that it would have 

access to all of the information 

necessary to evaluate and value the New 

GM Securities during the period before 

the New GM securities are publicly 

traded. FCI requested that the 

Department include a requirement in 

the final exemption that New GM 

provide the Independent Fiduciary with 

such information as the Independent 

Fiduciary reasonably requests to fulfill 

its duties to the VEBA Trust under the 

exemption, for so long as the New GM 

Securities are not publicly traded. FCI 

indicated willingness to enter into 

appropriate confidentiality agreements 

to protect any non-public information. 

In the period since FCI submitted this 

comment, the Department understands 

that New GM and FCI have negotiated 

at length in an effort to reach agreement 

on the extent of the information that 

would be provided by New GM to FCI 

for purposes of valuing the Securities. 

New GM declined to provide certain of 

the requested information sought by FCI 

on grounds of confidentiality and 

sensitivity of the information sought. In 

the absence of agreement on the specific 

information to be provided, the parties 

attempted to agree on a process by 

which an independent third party 

would make a determination as to the 

necessity for valuation purposes of the 

information being sought by FCI. The 

parties entertained the possibility that 

one of the ‘‘Big Four’’ public accounting 

firms would make such determination 

but could not agree on the scope of the 

assignment. 

In response to FCI’s comment, the 

Department has determined to include a 

condition in the final exemption which 

specifically addresses the disclosure of 

financial information by New GM for 

FCI’s use in valuing the New GM 

Securities. In this regard, the 

Department has determined that it 

would be appropriate for one of the ‘‘Big 

Four’’ public accounting firms to 

determine whether the information 

sought by the Independent Fiduciary is 

necessary, pursuant to applicable 

accounting standards, for valuing 

securities of a privately-held company. 

Under this requirement, in the event 

that New GM declines to provide 

financial information requested by the 

Independent Fiduciary for valuation 

purposes, New GM will engage, at its 

expense, one of the ‘‘Big Four’’ public 

accounting firms that is acceptable to 

the Independent Fiduciary (Accountant) 

to determine whether the information 

sought by the Independent Fiduciary is 

necessary for valuation purposes. The 

Department expects that the Accountant 

will base its conclusion on whether or 

not the information in question would 

be necessary to provide an opinion as to 

the fair value of the Securities as of the 

relevant date, consistent with ASC 820 

on Fair Value Measurements and the 

AICPA Statement on Valuation Services. 

New GM will provide such information 

to the Independent Fiduciary as the 

Accountant determines necessary for 

valuation purposes according to the 

standard set forth above. The 

Department expects that the parties will 

work to ensure that any dispute 

regarding the disclosure of information 

will be resolved as expeditiously as 

possible in order to ensure that the 

Independent Fiduciary has timely 

access to information deemed necessary 

for valuation. 

Finally, FCI noted that, prior to FCI’s 

appointment as Independent Fiduciary, 

New GM underwent a corporate 

reorganization and certain adjustments 

were made in the New GM Securities to 

reflect the reorganization of the GM 

controlled group. FCI requested that the 

Department clarify that FCI, as 

Independent Fiduciary, has 

responsibility only for transactions 

related to the New GM securities that 

occurred after its appointment. The 

Department concurs with this statement. 

Conclusion 

The Department has carefully 

considered the issues expressed by the 

commenters both in written comments 

and telephone calls. After consideration 

of all the participant comments and 

documentation provided, the 

Department has concluded that no 

‘‘material factual issues’’ were identified 

by the commenters that would warrant 

a public hearing under the Department’s 

regulations at 29 CFR § 2570.46. After 

giving full consideration to the entire 

record, the Department has determined 

to grant the exemption subject to the 

modifications and clarifications 

described herein. For a more complete 

statement of the facts and 

representations supporting the 

Department’s decision to grant this 

exemption, refer to the Notice, at 74 FR 

47963 (September 18, 2009). 

Exemption 

Section I—Covered Transactions 18

(a) The restrictions of sections 

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

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

of ERISA shall not apply, effective July 

10, 2009, to: 

(1) The acquisition by the UAW GM 

Retiree Medical Benefits Plan (the New 

UAW–GM Retirees Plan) and its 

associated UAW Retiree Medical 

Benefits Trust (the VEBA Trust) (the 

New Plan) of: (i) 87,500,000 shares of 

common stock of General Motors 

Company (New GM) (the New GM 

Common Stock) representing 17.5% of 

New GM equity; (ii) $6.5 billion of 

Series A Fixed Rate Cumulative 

Perpetual Preferred stock of New GM 

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

by New GM and assigned to General 

Motors Holdings LLC with a principal 

amount of $2.5 billion (the Note); (iv) 

warrants to acquire New GM Common 

Stock representing 2.5% of New GM 

equity (the Warrants); and (v) additional 

shares of New GM Common Stock 

acquired pursuant to (A) the 

Independent Fiduciary’s exercise of the 

Warrants, and (B) an adjustment, 

substitution, conversion or other 

modification of New GM Common Stock 

in connection with a reorganization, 

restructuring, recapitalization, merger, 

or similar corporate transaction, 

provided that each holder of New GM 

Common Stock is treated in an identical 

manner (collectively, the Securities), 

transferred by New GM and deposited 

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19OPEB means Other Post-Employment Benefits, 

and typically includes retiree healthcare benefits, 

life insurance, tuition assistance, day care, legal 

Continued 

Account of the GM Separate Retiree 

Account of the VEBA Trust. 

(2) The holding by the New Plan of 

the Securities in the GM Employer 

Security Sub-Account of the GM 

Separate Retiree Account of the VEBA 

Trust; and 

(3) The disposition of the Securities. 

(b) The restrictions of sections 

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

406(b)(2) of ERISA shall not apply, 

effective July 10, 2009, to: 

(1) The payment by Old GM, New 

GM, the Old GM Plan, the New GM Plan 

or the New Plan of a benefit claim that 

was the responsibility and legal 

obligation, under the terms of the 

applicable plan documents, of one of 

the other parties listed in this 

paragraph; and 

(2) The reimbursement by Old GM, 

New GM, the Old GM Plan, the New GM 

Plan, or the New Plan, of a benefit claim 

that was paid by another party listed in 

this paragraph, which was not legally 

responsible for the payment of such 

claim, plus interest. 

(c) The restrictions of sections 

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

406(b)(2) of ERISA shall not apply, 

effective July 10, 2009, to the return to 

New GM of assets deposited or 

transferred to the New Plan by mistake, 

plus interest. 

(d) The restrictions of sections 

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

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

shall not apply, effective January 1, 

2010, through April 16, 2010, to the 

acquisition and holding by the New 

Plan of Old GM senior corporate debt 

held in the CCM Pension-C, L.L.C. fund 

managed by Contrarian Capital 

Management, LLC. 

Section II–Conditions Applicable to 

Section I(a) 

(a) The Committee appoints a 

qualified Independent Fiduciary to act 

on behalf of the New Plan for all 

purposes related to the transfer of the 

Securities to the New Plan for the 

duration of the New Plan’s holding of 

the Securities. Such Independent 

Fiduciary will have sole discretionary 

responsibility relating to the holding, 

ongoing management and disposition of 

the Securities, except for the voting of 

the New GM Common Stock. The 

Independent Fiduciary has determined 

or will determine, before taking any 

actions regarding the Securities, that 

each such action or transaction is in the 

interest of the New Plan. 

(b) In the event that the same 

Independent Fiduciary is appointed to 

represent the interests of one or more of 

the other plans comprising the VEBA 

Trust (i.e., the UAW Chrysler Retiree 

Medical Benefits Plan and/or the UAW 

Ford Retiree Medical Benefits Plan) 

with respect to employer securities 

deposited into the VEBA Trust, the 

Committee takes the following steps to 

identify, monitor and address any 

conflict of interest that may arise with 

respect to the Independent Fiduciary’s 

performance of its responsibilities: 

(1) The Committee appoints a 

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

process for identifying potential 

conflicts; (ii) regularly review the 

Independent Fiduciary reports, 

investment banker reports, and public 

information regarding the companies, to 

identify the presence of factors that 

could lead to a conflict; and (iii) further 

question the Independent Fiduciary 

when appropriate. 

(2) The Committee adopts procedures 

to facilitate prompt replacement of the 

Independent Fiduciary if the Committee 

in its sole discretion determines such 

replacement is necessary due to a 

conflict of interest. 

(3) The Committee requires the 

Independent Fiduciary to adopt a 

written policy regarding conflicts of 

interest. Such policy shall require that, 

as part of the Independent Fiduciary’s 

periodic reporting to the Committee, the 

Independent Fiduciary includes a 

discussion of actual or potential 

conflicts identified by the Independent 

Fiduciary and options for avoiding or 

resolving the conflict. 

(c) The Independent Fiduciary 

authorizes the trustee of the New Plan 

to dispose of the New GM Common 

Stock (including additional shares of 

New GM Common Stock acquired 

pursuant to exercise of the Warrants), 

the Preferred Stock, and/or the Note, or 

exercise the Warrants, only after the 

Independent Fiduciary determines, at 

the time of the transaction, that the 

transaction is feasible, in the interest of 

the New Plan, and protective of the 

rights of participants and beneficiaries 

of the New Plan. 

(d) The Independent Fiduciary 

negotiates and approves on behalf of the 

New Plan any transactions between the 

New Plan and any party in interest 

involving the Securities that may be 

necessary in connection with the subject 

transactions (including but not limited 

to the registration of the securities 

contributed to the New Plan). 

(e) Any contract between the 

Independent Fiduciary and an 

investment banker includes an 

acknowledgement by the investment 

banker that the investment banker’s 

ultimate client is an ERISA plan. 

(f) The Independent Fiduciary 

discharges its duties consistent with the 

terms of the New Plan, the trust 

agreement, the Independent Fiduciary 

Agreement, and any other documents 

governing the employer securities, such 

as the Registration Rights Agreement. 

(g) The New Plan incurs no fees, costs 

or other charges (other than described in 

the trust agreement and the Modified 

Settlement Agreement) as a result of the 

transactions exempted herein. 

(h) The terms of any transaction 

exempted herein are no less favorable to 

the New Plan than the terms negotiated 

at arms’ length under similar 

circumstances between unrelated 

parties. 

(i) New GM furnishes the financial 

information necessary for the 

Independent Fiduciary to value the 

Securities for the period before the New 

GM securities are publicly traded. 

Notwithstanding the foregoing, if New 

GM declines to furnish the financial 

information requested by the 

Independent Fiduciary, New GM will 

engage, at its own expense, one of the 

‘‘Big Four’’ public accounting firms that 

is acceptable to the Independent 

Fiduciary (Accountant), to determine 

whether, pursuant to applicable 

accounting standards, the requested 

information is necessary for valuing 

securities of a privately-held company. 

New GM will furnish such financial 

information to the Independent 

Fiduciary as the Accountant deems 

necessary for the valuation. 

Section III–Conditions Applicable to 

Section I(b) 

(a) The Committee and the New Plan’s 

third party administrator will review the 

benefits paid during the transition 

period and determine the dollar amount 

of mispayments made, if any, subject to 

the review of the VEBA Trust’s 

independent auditor. The results of this 

review will be made available to Old 

GM and New GM. 

(b) Old GM and New GM and their 

respective plans’ third party 

administrator(s), as applicable, will 

review the benefits paid during the 

transition period and determine the 

dollar amount of mispayments made, if 

any, subject to the review of the 

respective plans’ independent auditor. 

The results of this review will be made 

available to the Committee. 

(c) Interest on any reimbursed 

mispayment will accrue from the date of 

the mispayment to the date of the 

reimbursement. 

(d) Interest will be determined using 

the applicable OPEB discount rate.19

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62888 Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 

services and the like. The OPEB discount rate is a 

rate used to discount projected future OPEB 

benefits payment cash flows to determine the 

present value of the OPEB obligation. 

(e) If there is a dispute as to the 

amount of a reimbursement requested, 

the parties will enter into a dispute 

procedure set forth in section 26D of the 

Modified Settlement Agreement. 

Section IV–Conditions Applicable to 

Section I(c) 

(a) New GM must make a claim to the 

Committee regarding the specific 

deposit or transfer made in error or 

made in an amount greater than that to 

which the New Plan was entitled. 

(b) The claim is made within the 

Verification Time Period, as defined in 

Section VI(r). 

(c) Interest on any mistaken deposit or 

transfer will accrue from the date of the 

mistaken payment to the date of the 

repayment. 

(d) Interest will be determined using 

the applicable OPEB discount rate. 

(e) If there is a dispute as to the 

amount of a mistaken payment, the 

parties will enter into a dispute 

procedure set forth in section 26D of the 

Modified Settlement Agreement. 

Section V–Conditions Applicable to 

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

(a) The Committee and the 

Independent Fiduciary maintain for a 

period of six years from (i) the date the 

Securities are transferred to the New 

Plan, and (ii) the date the shares of New 

GM Common Stock are acquired by the 

New Plan through the exercise of the 

Warrants, the records necessary to 

enable the persons described in 

paragraph (b) below to determine 

whether the conditions of this 

exemption have been met, except that (i) 

a separate prohibited transaction will 

not be considered to have occurred if, 

due to circumstances beyond the control 

of the Committee and/or the 

Independent Fiduciary, the records are 

lost or destroyed prior to the end of the 

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

interest other than the Committee or the 

Independent Fiduciary shall be subject 

to the civil penalty that may be assessed 

under ERISA section 502(i) if the 

records are not maintained, or are not 

available for examination as required by 

paragraph (b) below; and 

(b) Except as provided in paragraph 

(c) below and notwithstanding any 

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

of ERISA section 504, the records 

referred to in paragraph (a) above shall 

be unconditionally available at their 

customary location during normal 

business hours to: 

(1) Any duly authorized employee or 

representative of the Department; 

(2) New GM or any duly authorized 

representative of New GM; 

(3) The UAW or any duly authorized 

representative of the UAW; 

(4) In the case of records maintained 

by the Committee, the Independent 

Fiduciary or any duly authorized 

representative of the Independent 

Fiduciary; 

(5) In the case of records maintained 

by the Independent Fiduciary, the 

Committee or any duly authorized 

representative of the Committee; and 

(6) Any participant or beneficiary of 

the New Plan or any duly authorized 

representative of such participant or 

beneficiary. 

(c)(1) As to records maintained by the 

Independent Fiduciary relating to the 

conditions applicable to Section I(a), the 

UAW, Committee and any participant or 

beneficiary of the New Plan, including 

any duly authorized representatives of 

each, shall not be authorized to examine 

trade secrets of New GM, or New GM 

commercial or financial information 

that is privileged or confidential, 

including but not limited to records 

described as ‘‘Confidential Information’’ 

in the Confidentiality Agreement 

between New GM and the New Plan, 

unless New GM approves of their 

disclosure. Should New GM refuse to 

approve the disclosure of such 

information, New GM shall, by the close 

of the thirtieth (30th) day following the 

request, provide written notice advising 

that person of the reason for the refusal 

and that the Department may request 

such information. 

(2) As to records maintained by the 

Committee, the Independent Fiduciary, 

UAW, and any participant or 

beneficiary of the New Plan, including 

any duly authorized representatives of 

each, shall not be authorized to examine 

the trade secrets of New GM, or New 

GM commercial or financial information 

that is privileged or confidential, unless 

New GM approves of the disclosure. 

Should New GM refuse to approve the 

disclosure of information pursuant to 

this paragraph, New GM shall, by the 

close of the thirtieth (30th) day 

following the request, provide written 

notice advising that person of the reason 

for the refusal and that the Department 

may request such information. 

Section VI—Definitions 

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

person directly or indirectly, through 

one or more intermediaries, controlling, 

controlled by, or under common control 

with such other person; (2) Any officer, 

director, partner, or employee in any 

such person, or relative (as defined in 

section 3(15) of ERISA) of any such 

person; or (3) Any corporation, 

partnership or other entity of which 

such person is an officer, director or 

partner. (For purposes of this definition, 

the term ‘‘control’’ means the power to 

exercise a controlling influence over the 

management or policies of a person 

other than an individual.) 

(b) The ‘‘Committee’’ means the eleven 

individuals consisting of six 

independent members and five UAW 

appointed members who will serve as 

the plan administrator and named 

fiduciary of the New Plan. 

(c) The term ‘‘New GM Common 

Stock’’ means the shares of common 

stock, par value $0.01 per share, issued 

by New GM. 

(d) The term ‘‘GM Employer Security 

Sub-Account of the GM Separate Retiree 

Account of the VEBA Trust’’ means the 

sub-account established in the GM 

Separate Retiree Account of the VEBA 

Trust to hold New GM securities on 

behalf of the New Plan. 

(e) The term ‘‘Implementation Date’’ 

means December 31, 2009. 

(f) The term ‘‘Independent Fiduciary’’ 

means a fiduciary that is (i) independent 

of and unrelated to Old GM, New GM, 

the UAW, the Committee, and their 

affiliates, and (ii) appointed to act on 

behalf of the New Plan with respect to 

the holding, management and 

disposition of the Securities. In this 

regard, the fiduciary will not be deemed 

to be independent of and unrelated to 

Old GM, New GM, the UAW, the 

Committee, and their affiliates if (1) 

Such fiduciary directly or indirectly 

controls, is controlled by, or is under 

common control with Old GM, New 

GM, the UAW, the Committee or their 

affiliates, (2) such fiduciary directly or 

indirectly receives any compensation or 

other consideration from Old GM, New 

GM, the UAW or any Committee 

member in his or her individual 

capacity in connection with any 

transaction contemplated in this 

exemption (except that an independent 

fiduciary may receive compensation 

from the Committee or the New Plan for 

services provided to the New Plan in 

connection with the transactions 

discussed herein if the amount or 

payment of such compensation is not 

contingent upon or in any way affected 

by the independent fiduciary’s ultimate 

decision), and (3) the annual gross 

revenue received by the fiduciary, in 

any fiscal year, from Old GM, New GM, 

the UAW or a member of the Committee 

in his or her individual capacity, 

exceeds 3% of the fiduciary’s annual 

gross revenue from all sources (for 

federal income tax purposes) for its 

prior tax year. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 197 / Wednesday, October 13, 2010 / Notices 62889 

20 In the notice of proposed exemption, the term 

‘‘the VEBA’’ was used to define collectively the 

UAW GM Retiree Medical Benefits Plan (the New 

UAW–GM Retirees Plan) and its associated UAW 

Retiree Medical Benefits Trust (the VEBA Trust). 

1Please note that all times in this notice are in 

the Eastern Time zone. 

(g) The term ‘‘Modified Settlement 

Agreement’’ means The UAW Retiree 

Settlement Agreement between New GM 

and the UAW dated July 10, 2009. 

(h) The term ‘‘New GM’’ means 

General Motors Company, the company 

that acquired certain assets and 

liabilities of Old GM pursuant to the 

Section 363 Sale. 

(i) The term ‘‘Note’’ means the note 

issued by General Motors Company and 

assigned to General Motors Holdings 

LLC with a principal amount of $2.5 

billion. 

(j) The term ‘‘New GM Plan’’ means 

the retiree medical benefits plan 

maintained by New GM that provides 

benefits to most of the same individuals 

as are covered by the Old GM Plan, from 

the date of the Section 363 Sale until the 

Implementation Date of the New Plan. 

(k) The term ‘‘Old GM’’ means the 

company that remains in bankruptcy 

protection after the Section 363 Sale. 

(l) The term ‘‘Old GM Plan’’ means the 

retiree medical benefits plan maintained 

by Old GM that provided benefits to, 

among others, those who will be 

covered by the New Plan. 

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

shares of Series A Fixed Rate 

Cumulative Perpetual Preferred Stock, 

par value $0.01 per share, issued by 

New GM. 

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

a sale under section 363 of Title 11 of 

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

2009, New GM succeeded to certain 

assets and liabilities of Old GM. 

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

New GM Common Stock; (ii) the 

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

Warrants; and (v) additional shares of 

New GM Common Stock acquired in 

accordance with the transactions 

described in Section I(a)(1)(v). 

(p) The term ‘‘UAW’’ means the 

International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America. 

(q) The term ‘‘Warrants’’ means 

warrants to acquire shares of New GM 

Common Stock, par value $0.01 per 

share, issued by New GM. For purposes 

of this definition, the term ‘‘Warrants’’ 

includes additional warrants to acquire 

New GM Common Stock acquired in 

partial or complete exchange for, or 

adjustment to, the warrants described in 

the preceding sentence, at the direction 

of the Independent Fiduciary or 

pursuant to a reorganization, 

restructuring or recapitalization of New 

GM as well as a merger or similar 

corporate transaction involving New 

GM (each, a corporate transaction), 

provided that, in such corporate 

transaction, similarly suited 

warrantholders, if any, will be treated 

the same to the extent that the terms of 

such warrants and/or rights of such 

warrantholders are the same. 

(r) The term ‘‘Verification Time 

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

Securities other than the Note, the 

period beginning on the date of 

publication of this final exemption in 

the Federal Register and ending 60 

calendar days thereafter; (ii) with 

respect to each payment pursuant to the 

Note, the period beginning on the date 

of the payment and ending 90 calendar 

days thereafter; (iii) with respect to the 

UAW-Related Account of the Internal 

VEBA, the period beginning on the date 

of publication of this final exemption in 

the Federal Register (or, if later, the date 

of the transfer of the UAW-Related 

Account to the New Plan) and ending 

180 calendar days thereafter; and (iv) 

with respect to the Mitigation VEBA, the 

period beginning on the date of 

publication of this final exemption in 

the Federal Register and ending 60 

calendar days thereafter. 

(s) The term ‘‘New Plan’’ means the 

UAW GM Retiree Medical Benefits Plan 

(the New UAW–GM Retirees Plan) and 

its associated UAW Retiree Medical 

Benefits Trust (the VEBA Trust).20

(t) The term ‘‘Registration Rights 

Agreement’’ means the Equity 

Registration Rights Agreement by and 

among New GM, the U.S. Treasury, 

Canada, the VEBA Trust and Old GM, 

entered into on July 10, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Karen E. Lloyd, Office of Exemption 

Determinations, Employee Benefits 

Security Administration, U.S. 

Department of Labor, telephone (202) 

693–8554. (This is not a toll-free 

number.) 

Signed at Washington, DC, this 6th day of 

October 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–25686 Filed 10–12–10; 8:45 am] 

BILLING CODE 4510–29–P 

LEGAL SERVICES CORPORATION 

Sunshine Act Meetings 

DATE AND TIME: The Legal Services 

Corporation Board of Directors will 

meet on October 18–19, 2010. On 

Monday, October 18, the meeting will 

commence at 2 p.m., Eastern Time. On 

Tuesday, October 19, the first meeting 

will commence at 8 a.m., Eastern Time. 

On each of these two days, each meeting 

other than the first meeting of the day 

will commence promptly upon 

adjournment of the immediately 

preceding meeting. 

LOCATION: The Hyatt Regency Hotel, 320 

West Jefferson Street, Louisville, 

Kentucky 40202. 

PUBLIC OBSERVATION: Unless otherwise 

noticed, all meetings of the LSC Board 

of Directors are open to public 

observation. Members of the public that 

are unable to attend but wish to listen 

to a public proceeding may do so by 

following the telephone call-in 

directions given below. You are asked to 

keep your telephone muted to eliminate 

background noises. From time to time 

the presiding Chair may solicit 

comments from the public. 

Call-In Directions For Open Sessions: 

• Call toll-free number: 1 (866) 451– 

4981; 

• When prompted, enter the 

following numeric pass code: 

5907707348; 

• When connected to the call, please 

‘‘MUTE’’ your telephone immediately. 

MEETING SCHEDULE

Time 1

Monday, October 18, 2010 

1. Promotion & Provision for the Delivery of Legal Services Committee (‘‘Promotion & Provision Committee’’) ........................... 2 p.m. 

2. Governance & Performance Review Committee 

3. Finance Committee 

mstockstill on DSKH9S0YB1PROD with NOTICES