16848 Federal Register / Vol. 75, No. 63 / Friday, April 2, 2010 / Notices 

organization or individual ceases to be 

an Independent Fiduciary, or negotiates 

any such transaction during the period 

that such organization or individual 

serves as Independent Fiduciary. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the notice of 

proposed exemption published on 

December 22, 2009 at 74 FR 68106. 

Written Comments and Hearing 

Requests 

During the comment period, the 

Department received approximately 30 

telephone calls and three written 

comments in response to the notice of 

proposed exemption, one of which also 

requested a hearing. The request for a 

hearing was subsequently withdrawn. 

The telephone calls and written 

comments raised no substantive issues, 

but rather reflected the commenters’ 

failure to fully understand the notice of 

proposed exemption or the effect of the 

proposed exemption on the 

commenters’ health care benefits. The 

Department provided explanations to 

each of the commentators by telephone, 

and each was satisfied with the 

responses provided by the Department. 

The Department has given full 

consideration to the entire record, 

including the comment letters received. 

Because the comments were not 

germane to the subject matter of the 

proposed exemption, the Department 

has determined to grant the exemption 

as it was proposed. 

FOR FURTHER INFORMATION CONTACT: Gary 

H. Lefkowitz of the Department, 

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

a toll-free number.) 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

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

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which among other things 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(B) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) This exemption is supplemental to 

and not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transactional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(3) The availability of this exemption 

is subject to the express condition that 

the material facts and representations 

contained in the application accurately 

describes all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 30th day of 

March, 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–7446 Filed 4–1–10; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

Application Nos. and Proposed 

Exemptions; D–11533 and D–11534; 

CUNA Mutual Pension Plan for NonRepresented Employees (Together, the 

Plans); and D–11565; Citizens Bank 

Wealth Management, N.A., et al. 

AGENCY: Employee Benefits Security 

Administration, Labor. 

ACTION: Notice of Proposed Exemptions. 

SUMMARY: This document contains 

notices of pendency before the 

Department of Labor (the Department) of 

proposed exemptions from certain of the 

prohibited transaction restrictions of the 

Employee Retirement Income Security 

Act of 1974 (ERISA or the Act) and/or 

the Internal Revenue Code of 1986 (the 

Code). 

Written Comments and Hearing 

Requests 

All interested persons are invited to 

submit written comments or requests for 

a hearing on the pending exemptions, 

unless otherwise stated in the Notice of 

Proposed Exemption, within 45 days 

from the date of 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 request, and (2) the nature 

of the person’s interest in the exemption 

and the manner in which the person 

would be adversely affected by the 

exemption. A request for a hearing must 

also state the issues to be addressed and 

include a general description of the 

evidence to be presented at the hearing. 

ADDRESSES: All written comments and 

requests for a hearing (at least three 

copies) should be sent to the Employee 

Benefits Security Administration 

(EBSA), Office of Exemption 

Determinations, Room N–5700, U.S. 

Department of Labor, 200 Constitution 

Avenue, NW., Washington, DC 20210. 

Attention: Application No.ll, stated 

in each Notice of Proposed Exemption. 

Interested persons are also invited to 

submit comments and/or hearing 

requests to EBSA via e-mail or FAX. 

Any such comments or requests should 

be sent either by e-mail to: 

‘‘moffitt.betty@dol.gov’’, or by FAX to 

(202) 219–0204 by the end of the 

scheduled comment period. The 

applications for exemption and the 

comments received will be available for 

public inspection in the Public 

Documents Room of the Employee 

Benefits Security Administration, U.S. 

Department of Labor, Room N–1513, 

200 Constitution Avenue, NW., 

Washington, DC 20210. 

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. 

Notice to Interested Persons 

Notice of the proposed exemptions 

will be provided to all interested 

persons in the manner agreed upon by 

the applicant and the Department 

within 15 days of the date of publication 

in the Federal Register. Such notice 

shall include a copy of the notice of 

proposed exemption as published in the 

Federal Register and shall inform 

interested persons of their right to 

comment and to request a hearing 

(where appropriate). 

SUPPLEMENTARY INFORMATION: The 

proposed exemptions were requested in 

applications filed pursuant to section 

408(a) of the Act and/or section 

4975(c)(2) of the Code, and in 

accordance with procedures set forth in 

29 CFR Part 2570, Subpart B (55 FR 

32836, 32847, August 10, 1990). 

Effective December 31, 1978, section 

102 of Reorganization Plan No. 4 of 

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

the authority of the Secretary of the 

Treasury to issue exemptions of the type 

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Federal Register / Vol. 75, No. 63 / Friday, April 2, 2010 / Notices 16849 

1The ten private equity Funds in which each of 

the Plans acquired interests were: (1) AIG Highstar 

Capital III; (2) Audax Mezzanine Fund II LP; (3) 

Capital Partners Private Equity Fund; (4) Citigroup 

Capital Partners II; (5) CP Lone Star; (6) Crimson 

Capital Partners III; (7) EnerVest Energy 

Institutional Fund XI; (8) New Science Ventures 

Fund I; (9) Webster Capital II; and (10) Five Arrows 

Realty Securities V, LP. 

2With respect to the co-investment arrangement 

of both the Applicant and the Plans in the Funds, 

the Department notes that if a plan fiduciary causes 

a plan to enter into a transaction where, by the 

terms or nature of the transaction, a conflict of 

interest between the plan and the fiduciary (or 

persons in which the fiduciary has an interest) 

exists or will arise in the future, that transaction 

would violate section 406(a)(1)(D) and 406(b)(1) of 

the Act (or the parallel provisions under the Code). 

In this connection, the fiduciary must not rely upon 

and cannot be otherwise dependent upon the 

participation of the plan in order for the fiduciary 

(or persons in which the fiduciary has an interest) 

to undertake or to continue his or her share of the 

investment. Furthermore, even if at its inception the 

transaction did not involve a violation, if a 

divergence of interests develops between the plan 

and the fiduciary (or persons in which the fiduciary 

has an interest), the fiduciary must take steps to 

eliminate the conflict of interest in order to avoid 

engaging in a prohibited transaction. See ERISA 

Advisory Opinion Letter 2000–10A (July 27, 2000). 

3Section 404 of the Act requires, among other 

things, that a plan fiduciary act prudently, solely in 

the interest of the plan’s participants and 

beneficiaries, and for the exclusive purpose of 

providing benefits to participants and beneficiaries 

when making decisions on behalf of a plan. 

Accordingly, the Department is not expressing an 

opinion herein as to whether any investment 

decisions or other actions taken by the Committee 

regarding the acquisition and subsequent holding of 

the interests in the Funds by the Plans were 

consistent with, or in violation of, its fiduciary 

obligations under Part 4 of Title I of the Act. 

requested to the Secretary of Labor. 

Therefore, these notices of proposed 

exemption are issued solely by the 

Department. 

The applications contain 

representations with regard to the 

proposed exemptions which are 

summarized below. Interested persons 

are referred to the applications on file 

with the Department for a complete 

statement of the facts and 

representations. 

CUNA Mutual Pension Plan for 

Represented Employees and CUNA Mutual 

Pension Plan for Non-Represented 

Employees (together, the Plans), Located in 

Madison, Wisconsin. 

[Application Nos. D–11533 and 11534, 

Respectively] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and section 4975(c)(2) of the Code and 

in accordance with the procedures set 

forth in 29 CFR Part 2570, Subpart B (55 

FR 32836, 32847, August 10, 1990). If 

the exemption is granted, the 

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

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

(b)(2) of the Act, and the sanctions 

resulting from the application of section 

4975 of the Code, by reason of section 

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

shall not apply to: (i) The February 20, 

2009 cash sale (the Sale), at aggregate 

cost basis plus interest, by each of the 

Plans of interests in certain private 

equity funds (the Funds) to the CUNA 

Mutual Insurance Society (the 

Applicant), the sponsor of the Plans and 

a party in interest with respect to the 

Plans, pursuant to a contract between 

the Applicant and the trustee of the 

Plans concluded on that same date; (ii) 

the September 14, 2009 payment by the 

Applicant of certain additional cash 

amounts, including interest (the Top-Up 

Payments); to the Plans pursuant to the 

terms of the foregoing contract; and (iii) 

the extension of credit between the 

Plans and the Applicant from the date 

of the Sale (February 20, 2009) to the 

date of the Top-Up Payments 

(September 14, 2009), provided that the 

following conditions were satisfied: 

(a) An independent fiduciary 

reviewed the terms and conditions of 

the Sale and of the Top-Up Payments 

prior to their execution, and determined 

that both were protective of the interests 

of the Plans; 

(b) The independent fiduciary 

determined that the terms and 

conditions of both the Sale and of the 

Top-Up Payments were at least as 

favorable to the Plans as those that 

would have been obtained in an arm’s 

length transaction between unrelated 

parties; 

(c) The terms and conditions of both 

the Sale and of the Top-Up Payments 

were at least as favorable to the Plans as 

those that would have been obtained in 

an arm’s length transaction between 

unrelated parties; and 

(d) The independent fiduciary 

provided its opinion in written reports 

on behalf of the Plans as to the fairness 

and reasonableness of the Sale of the 

Plans’ interests in the Funds to the 

Applicant, and determined that the 

terms of the original Sale and 

subsequent Top-Up Payments were 

especially beneficial to each of the Plans 

because: (i) On February 20, 2009, the 

Plans received a return of their aggregate 

cost basis of their interests in the Funds 

(which cost basis was determined by the 

independent fiduciary to exceed the 

aggregate fair market value of the Plans’ 

interests in the Funds as of October 31, 

2008), plus interest accrued on the 

Funds from their date of acquisition by 

each Plan through the date of the Sale; 

and (ii) On September 14, 2009, the 

independent fiduciary determined that, 

in instances where the fair market value 

of any Fund on December 31, 2008 

exceeded its original cost basis, each of 

the Plans received a Top-Up Payment 

on September 14, 2009 comprised of the 

increased value of such Fund, plus 

interest accrued on such increased value 

from December 31, 2008 to the date of 

the Top-Up Payments (September 14, 

2009). 

Summary of Facts and Representations 

1. The Applicant is the parent of each 

of the companies forming the CUNA 

Mutual Group, which is a leading 

provider of financial services to 

cooperatives, credit unions, their 

members, and other customers. The 

Applicant represents that its primary 

products include group credit life and 

group credit disability products sold to 

credit unions; retirement plans and 

group life and disability products sold 

to credit union employees; and health, 

life, and annuity policies for credit 

union members. 

2. The Applicant sponsors the Plans, 

each of which is a defined benefit 

pension plan. The Applicant represents 

that, as of December 31, 2008, the 

CUNA Mutual Pension Plan for 

Represented Employees had 1,271 

participants and assets of $90,282,987. 

The Applicant also represents that, as of 

December 31, 2008, the CUNA Mutual 

Pension Plan for Non-Represented 

Employees had 5,749 participants and 

assets of $326,563,333. The trustee 

(Trustee) of each of the Plans is the State 

Street Bank and Trust Company of 

Boston, Massachusetts. 

3. The Applicant represents that, 

during the years 2006 and 2007, both it 

and the Plans co-invested their 

respective assets in ten private equity 

Funds.1 The Applicant further 

represents the decision of each Plan to 

invest in the Funds 2 was made by the 

Employee Benefit Plan Administrative 

Committee (the Committee), the named 

fiduciary of both of the Plans, and that 

no additional interests in the Funds 

were acquired by the Plans after the year 

2007.3 The Applicant also states that, as 

of November of 2008, the Plans’ interest 

in the Funds represented a relatively 

small portion (i.e., less than 7%) of the 

Applicant’s overall position in the 

Funds, and that the Applicant’s overall 

interest in each Fund in turn 

represented only a small portion of the 

overall funding commitments to each 

Fund. 

4. On November 25, 2008, the 

Committee contracted with U.S. Trust, 

Bank of America Private Wealth 

Management (U.S. Trust) to serve as an 

independent fiduciary (the Independent 

Fiduciary) on behalf of the Plans to 

determine whether the terms of the 

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16850 Federal Register / Vol. 75, No. 63 / Friday, April 2, 2010 / Notices 

4 It is represented that, in accordance with this 

contractual arrangement, Evercore Trust Company 

N.A. (a subsidiary of Evercore LP) assumed all of 

U.S. Trust’s existing obligations as the Independent 

Fiduciary with respect to the Plans as a 

consequence of the May 1, 2009 sale of U.S. Trust’s 

Special Fiduciary Services business to Evercore LP. 

5The Applicant represents that the interest paid 

to the Plans incident to the February 20, 2009 Sale 

was calculated based upon the Plans’ original cost 

basis in the Funds, plus interest accrued from the 

date of the Plans’ capital contribution to each Fund 

through the date of the Sale. Specifically, the per 

annum interest rate utilized was 5.49% for capital 

contributions made by the Plans in 2006 and 5.52% 

for capital contributions made in 2007. This interest 

rate reflects the credited interest rate paid by the 

Applicant’s general account over the relevant time 

periods. 

proposed Sale of the Plans’ interests in 

the Funds to the Applicant would be in 

the interest of the Plans.4 The Applicant 

represents that both U.S. Trust and its 

eventual successor as Independent 

Fiduciary, Evercore Trust Company 

N.A. (Evercore) are experienced and 

qualified fiduciaries with extensive trust 

and management capabilities such as 

discretionary asset management, asset 

allocation and diversification, 

investment advice, securities trading, 

and the performance of independent 

fiduciary assignments for plans covered 

by the Act. In addition, U.S. Trust and 

Evercore each represent that less than 

1% of their annual revenues during 

their respective periods of service as 

Independent Fiduciary were derived 

from the Applicant and its affiliates. 

In its engagement letter dated 

December 5, 2008, the original 

Independent Fiduciary, U.S. Trust, 

agreed to: (1) Review and evaluate the 

consideration to be paid to the Plans in 

connection with the Sale to determine 

whether such consideration is fair and 

reasonable and in the interests of the 

Plans; (2) review and evaluate the terms 

of the Sale to determine whether they 

are at least as favorable to the Plans as 

terms that would have been agreed to 

between unrelated parties; (3) determine 

whether the Plans should enter into the 

Sale on such terms; (4) direct the trustee 

of the Plans whether or not to enter into 

the Sale; and (5) provide a written 

opinion on behalf of the Plans 

concerning the fairness and 

reasonableness of the Sale. 

5. In order to assist it in rendering its 

decision, the Independent Fiduciary 

engaged LCB Capital LLC (LCB) of 

Chicago, Illinois to perform an analysis 

of the Funds and to provide U.S. Trust 

with an initial report (the Initial LCB 

Report) detailing its conclusions. LCB 

represents that it receives less than 1% 

of its revenue directly from the 

Applicant and its affiliates. A 

supplement to the Initial LCB Report 

also states that the LCB managing 

director who conducted the valuation 

analysis of the Funds, Mr. Daniel 

Bayston, founded LCB in 2008 after a 

25-year career with the financial 

services and business valuation firm of 

Duff & Phelps. The Applicant represents 

that during his career, Mr. Bayston 

managed a wide range of corporate 

finance and business valuation 

assignments for publicly-traded and 

privately-held corporate clients and 

ERISA fiduciaries, and that such 

assignments have included merger and 

acquisition analyses, fairness opinions, 

shareholder liquidity analyses, private 

equity and debt placements, and 

corporate valuation matters. The 

Applicant also represents that Mr. 

Bayston is a member of the CFA 

Institute and the Business Valuation 

Association. In December of 2008, the 

Initial LCB Report was issued to the 

Independent Fiduciary. In the executive 

summary of this report, LCB stated that 

it had examined all relevant information 

that was provided by the Fund 

managers, including the amount and 

date of the original investment, current 

valuation information provided by the 

Fund managers, as well as business 

descriptions and relevant industry 

classifications. 

6. Subsequent to the issuance of the 

Initial LCB Report, the Independent 

Fiduciary issued a report on January 15, 

2009 (the Initial I/F Report) detailing its 

analysis and opinion regarding the 

proposed Sale of the Plans’ interests in 

the Funds. The Independent Fiduciary 

represented that the valuation analysis 

contained in the Initial LCB Report 

focused on specific industry and 

financial market trends which were 

likely to have had an impact on the 

value of the Funds. The Independent 

Fiduciary further represented in the 

Initial I/F Report that it had reviewed 

the content of the Initial LCB Report, 

and determined that the assumptions, 

methodology, and conclusions 

contained in the report were reasonable 

and reliable. The Initial I/F Report 

stated that the comparison by LCB of 

market conditions at the end of 2008 

relative to those prevailing in 2006 and 

2007 when the interests in the Funds 

were acquired by the Plans provided 

compelling evidence that the value of 

the Funds had declined significantly 

from their original cost. 

7. Taking into account the foregoing 

contents of the Initial LCB Report, the 

Independent Fiduciary determined in 

its Initial I/F Report that a purchase by 

the Applicant of the Plans’ interests in 

the Funds at their original cost was fair 

and reasonable to, and in the interest of, 

the Plans. The Independent Fiduciary 

represented in this report that it had 

concluded that there was no separate 

benefit to the Applicant in engaging in 

the Sale transaction, and that the only 

discernible benefit was enabling the 

Plans to liquidate, at original cost, a 

series of investments which had lost 

money. Pursuant to its determination 

that the proposed Sale was in the 

interest of the Plans, the Independent 

Fiduciary issued a letter to the Trustee 

of the Plans on February 18, 2009 

directing the Trustee to sell the Plans’ 

interests in the Funds to the Applicant. 

In connection with the Independent 

Fiduciary’s direction, the Applicant and 

the Trustee of each of the Plans entered 

into agreements (the Transfer 

Agreements) on February 20, 2009, 

pursuant to which all of the interests in 

the Funds held by each Plan were sold 

on that same date to the Applicant. In 

addition to determining the price paid 

by the Applicant for the Plans’ interests 

in the Funds, each of the Transfer 

Agreements contained a provision (the 

Top-Up Provision) stipulating that in 

the event that year-end (i.e., December 

31, 2008) stated valuations of any of the 

Funds in which the Plans held an 

interest exceeded the Plans’ original 

cost, the Trustee of each of the Plans 

would be entitled to receive on behalf 

of the Plans the difference between the 

December 31, 2008 valuation and the 

original cost. In accordance with the 

requirements of the Top-Up Provision, 

the Independent Fiduciary stated at the 

conclusion of the Initial I/F Report that 

it would update its analysis to reflect 

year-end December 31, 2008 Fund data 

as soon as it became available from the 

Fund managers. 

The Applicant represents that, on 

February 20, 2009, the cash Sale of the 

Plans’ interests in the Funds to the 

Applicant was consummated. The total 

cash payment to the Plans incident to 

the Sale was the higher of (i) the 

aggregate cost basis of the Plans’ 

interests in the Funds as of October 31, 

2008 or (ii) the aggregate stated fair 

market value of the interests in the 

Funds held by the Plans as of October 

31, 2008. The Independent Fiduciary 

further represented that the total cash 

Sale price of $20,754,736.58 was 

comprised of the Plans’ aggregate cost 

basis in the Funds ($19,168,999.58) plus 

interest ($1,585,737.00).5 The Applicant 

further represents that the total cash 

Sale price was allocated between the 

Plans, with $4,981,186.84 being paid to 

the CUNA Mutual Pension Plan for 

Represented Employees and 

$15,773,549.74 being paid to the CUNA 

Mutual Pension Plan for NonRepresented Employees. 

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6This Top-Up Payment figure was the sum of (1) 

an aggregate gain of $37,495 experienced by the 

Plans from their investment in New Science 

Ventures Fund I, (2) an aggregate gain of $55,613 

experienced by the Plans from their investment in 

the CP Lone Star Fund, plus (3) the $3,475 interest 

payment described above. 

7 In this connection, the Applicant represents 

that, on September 14, 2009, it made a Top-Up 

Payment of $23,180 (including $834 in interest 

accrued from December 31, 2008 to September 14, 

2009) to the CUNA Mutual Pension Plan for 

Represented Employees and a Top-Up Payment of 

$73,403 (including $2,641 in interest accrued from 

December 31, 2008 to September 14, 2009) to the 

CUNA Mutual Pension Plan for Non-Represented 

Employees. The Applicant represents that the 

interest component of the Top-Up Payments was 

calculated at the rate of 5.28%, which was the rate 

of interest credited to the Plans when the Applicant 

purchased the Plans’ interests in the Funds on 

February 20, 2009. 

8. In September of 2009, immediately 

after the completion of the audits of the 

2008 financial statements of the Funds 

(and in accordance with Top-Up 

Provisions of the Transfer Agreements), 

the Independent Fiduciary (which, as of 

July 1, 2009, was Evercore) issued an 

updated analysis of the Sale transaction 

(the Updated I/F Report) to determine, 

as of December 31, 2008, whether the 

fair market value of any of the Funds 

held by the Plans was greater than the 

Plans’ cost basis in the Funds at the time 

of their acquisition. The Updated I/F 

Report relied upon an August 2009 

written valuation analysis prepared by 

LCB (the Updated LCB Report) which, 

according to the Independent Fiduciary, 

utilized a valuation approach that was 

identical to that employed by LCB in its 

Initial Report. In the Updated LCB 

Report, LCB stated that it examined 

information such as the date and 

amount of the original investment by 

the Plans, relevant industry 

classification, and any available current 

valuation information provided by the 

Fund manager. LCB then determined 

the appropriate industry valuation 

multiple at or near the time of the 

investment and compared that with the 

same industry valuation multiple as of 

December 31, 2008. The Updated LCB 

Report also noted that industry 

valuation metrics and earnings 

multiples for virtually all industries had 

declined significantly from the time of 

the Plans’ original investments in the 

Funds through December 31, 2008. 

Utilizing the updated information 

provided by the managers of the Funds 

and contained in the Updated LCB 

Report, the Independent Fiduciary 

noted in its Updated I/F Report that the 

December 31, 2008 fair market value of 

eight of the ten Funds in which the 

Plans held an interest on that date 

remained below the Plans’ original cost 

basis in those Funds. However, the 

Updated I/F Report also stated that the 

December 31, 2008 stated fair market 

value of two of the Funds (i.e., CP Lone 

Star and New Science Venture Fund I) 

exceeded the Plans’ cost basis in these 

Funds. The aggregate valuation gains 

(and losses) experienced by the Plans’ 

combined holdings in the Funds 

through December 31, 2008, as 

compiled in the Updated I/F Report, are 

summarized below in the following 

chart: 

Funds in which the plans held interests 

Date of acquisition 

of interests in 

each fund by the 

plans 

Aggregate amount 

invested in each 

fund by the plans 

(cost basis) 

Value of each 

fund as stated by 

the fund 

managers as of 

12/31/08 

Aggregate gains 

(or losses) experienced by the 

plans based upon 

the 12/31/08 stated value of each 

fund 

AIG Highstar Capital III ............................................................ 5/25/07 $2,490,691 $2,297,321 ($193,370) 

Audax Mezzanine Fund II LP .................................................. 11/30/06 914,682 873,787 (40,894) 

Capital Partners Private Equity Fund ...................................... 5/3/07 1,128,158 1,022,935 (105,223) 

Citigroup Capital Partners II .................................................... 11/15/06 8,709,246 5,532,666 (3,176,579) 

CP Lone Star ........................................................................... 5/3/07 666,667 722,280 55,613 

Crimson Capital Partners III .................................................... 9/28/07 278,275 153,390 (124,885) 

EnerVest Energy Institutional Fund XI .................................... 6/22/07 1,496,003 1,190,539 (305,464) 

Five Arrows Realty Securities V, LP ....................................... 8/23/07 358,123 342,081 (16,042) 

New Science Ventures Fund I ................................................. 10/31/06 2,452,255 2,489,795 37,495 

Webster Capital II .................................................................... 5/11/07 675,000 587,378 (87,622) 

9. The Independent Fiduciary’s 

Updated I/F Report determined that a 

purchase price of the Plans’ interests in 

the Funds at original cost plus interest 

(with additional Top-Up Payments plus 

interest to the Plans for those individual 

Funds whose December 31, 2008 fair 

market value exceeded their cost basis) 

was fair and reasonable to, and in the 

interest of, the Plans. Accordingly, the 

Independent Fiduciary further 

determined that, for those Funds whose 

stated fair market value was greater than 

cost, the Plans were entitled to receive 

Top-Up Payments totalling $96,583, 

comprised of $93,108 plus an interest 

payment of $3,475.6 On September 14, 

2009, pursuant to the direction of the 

Independent Fiduciary and in 

accordance with the provisions of the 

February 20, 2009 Transfer Agreements 

between the Applicant and the Trustee 

of the Plans, the Top-Up Payments were 

made to the Plans.7 The Independent 

Fiduciary reaffirmed in its Updated I/F 

Report that there was no separate 

benefit to the Applicant of engaging in 

the Sale. Instead, the Independent 

Fiduciary represented that the only 

discernible benefit was to enable the 

Plans to liquidate a series of 

investments which had lost money at 

their original cost. 

10. The Applicant represents that the 

Sale of the Plans’ interests in the Funds 

was beneficial to, and in the interest of, 

each of the Plans for several reasons. 

First, the Applicant represents that the 

Sale allowed the Plans to sell illiquid 

assets for a price that, in the aggregate, 

exceeded the fair market value of those 

assets. Second, the Applicant represents 

that the Sale allowed the Plans to 

reduce their exposure to a class of 

investments with an uncertain future. 

Third, the Applicant represents that the 

Sale allowed the Plans to obtain cash for 

their respective interests in the Funds, 

thereby permitting allocation of the 

assets of the Plans to more favorable 

investment vehicles. Fourth, in 

instances where the fair market value of 

any Fund on December 31, 2008 

exceeded its original cost basis, each of 

the Plans received a Top-Up Payment 

on September 14, 2009 comprised of the 

increased value of such Fund, plus 

interest accrued on such increased value 

from December 31, 2008 to the date of 

the Top-Up Payments. 

11. In summary, the Applicant 

represents that the past transactions 

described herein for which exemptive 

relief is sought satisfied the statutory 

criteria of section 408(a) of the Act 

because: (a) The Independent Fiduciary 

mstockstill on DSKH9S0YB1PROD with NOTICES

16852 Federal Register / Vol. 75, No. 63 / Friday, April 2, 2010 / Notices 

1On February 13, 2009, SoundExchange filed 

with the Judges separate notices of intent to audio 

reviewed the terms and conditions of 

the Sale and of the Top-Up Payments 

and determined that both were 

protective of the interests of the Plans; 

(b) The Independent Fiduciary 

determined that the terms and 

conditions of both the Sale and the TopUp Payments were at least as favorable 

to the Plans as those that would have 

been obtained in an arm’s length 

transaction between unrelated parties; 

(c) The terms and conditions of both the 

Sale and of the Top-Up Payments were 

at least as favorable to the Plans as those 

that would have been obtained in an 

arm’s length transaction between 

unrelated parties; and (d) The 

Independent Fiduciary provided its 

opinion in written reports on behalf of 

the Plans as to the fairness and 

reasonableness of the Sale of the Plans’ 

interests in the Funds to the Applicant, 

and determined that the terms of the 

original Sale and subsequent Top-Up 

Payments were especially beneficial to 

each of the Plans because: (i) On 

February 20, 2009, the Plans received a 

return of their aggregate cost basis of 

their interests in the Funds (which cost 

basis was determined by the 

Independent Fiduciary to exceed the 

aggregate fair market value of the Plans’ 

interests in the Funds as of October 31, 

2008), plus interest accrued on the 

Funds from their date of acquisition by 

each Plan through the date of the Sale; 

and (ii) On September 14, 2009, the 

Independent Fiduciary determined that, 

in instances where the fair market value 

of any Fund on December 31, 2008 

exceeded its original cost basis, each of 

the Plans received a Top-Up Payment 

on September 14, 2009 comprised of the 

increased value of such Fund, plus 

interest accrued on such increased value 

from December 31, 2008 to the date of 

the Top-Up Payments (September 14, 

2009). 

Notice to Interested Persons: Notice of 

the proposed exemption shall be given 

to all interested persons in the manner 

agreed upon by the Applicant and the 

Department within 15 days of the date 

of publication in the Federal Register. 

Comments and requests for a hearing are 

due forty-five (45) days after publication 

of the notice in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Judge of the Department at (202) 

693–8550. (This is not a toll-free 

number). 

General Information 

The attention of interested persons is 

directed to the following: 

(1) The fact that a transaction is the 

subject of an exemption under section 

408(a) of the Act and/or section 

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

a fiduciary or other party in interest or 

disqualified person from certain other 

provisions of the Act and/or the Code, 

including any prohibited transaction 

provisions to which the exemption does 

not apply and the general fiduciary 

responsibility provisions of section 404 

of the Act, which, among other things, 

require a fiduciary to discharge his 

duties respecting the plan solely in the 

interest of the participants and 

beneficiaries of the plan and in a 

prudent fashion in accordance with 

section 404(a)(1)(b) of the Act; nor does 

it affect the requirement of section 

401(a) of the Code that the plan must 

operate for the exclusive benefit of the 

employees of the employer maintaining 

the plan and their beneficiaries; 

(2) Before an exemption may be 

granted under section 408(a) of the Act 

and/or section 4975(c)(2) of the Code, 

the Department must find that the 

exemption is administratively feasible, 

in the interests of the plan and of its 

participants and beneficiaries, and 

protective of the rights of participants 

and beneficiaries of the plan; 

(3) The proposed exemptions, if 

granted, will be supplemental to, and 

not in derogation of, any other 

provisions of the Act and/or the Code, 

including statutory or administrative 

exemptions and transitional rules. 

Furthermore, the fact that a transaction 

is subject to an administrative or 

statutory exemption is not dispositive of 

whether the transaction is in fact a 

prohibited transaction; and 

(4) The proposed exemptions, if 

granted, will be subject to the express 

condition that the material facts and 

representations contained in each 

application are true and complete, and 

that each application accurately 

describes all material terms of the 

transaction which are the subject of the 

exemption. 

Signed at Washington, DC, this 30th day of 

March 2010. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. 2010–7447 Filed 4–1–10; 8:45 am] 

BILLING CODE 4510–29–P 

LIBRARY OF CONGRESS 

Copyright Royalty Board 

Notice of Intent To Audit 

AGENCY: Copyright Royalty Board, 

Library of Congress. 

ACTION: Public notice. 

SUMMARY: The Copyright Royalty Judges 

are announcing receipt of notices of 

intent to audit the 2009 statements of 

account submitted by Sirius Satellite 

Radio Inc. and XM Satellite Radio Inc. 

FOR FURTHER INFORMATION CONTACT: 

Richard Strasser, Senior Attorney, or 

Gina Giuffreda, Attorney Advisor, by 

telephone at (202) 707–7658 or by email at crb@loc.gov. 

SUPPLEMENTARY INFORMATION: Section 

106(6) of the Copyright Act, title 17 of 

the United States Code, gives a 

copyright owner of sound recordings an 

exclusive right to perform the 

copyrighted works publicly by means of 

a digital audio transmission. This right 

is limited by section 114(d), which 

allows certain non-interactive digital 

audio services, including preexisting 

satellite digital audio radio services, to 

make digital transmissions of a sound 

recording under a compulsory license. 

Moreover, these services may make any 

necessary ephemeral reproductions to 

facilitate the digital transmission of the 

sound recording under a second license 

set forth in section 112(e) of the 

Copyright Act. 

Licensees may operate under these 

licenses provided they pay the royalty 

fees and comply with the terms of the 

licenses set by the Copyright Royalty 

Judges (‘‘Judges’’). On January 24, 2008, 

the Judges issued their final 

determination setting rates and terms for 

the section 112 and 114 licenses for the 

period 2007–2012. 73 FR 4080, affirmed 

in part, remanded in part, 

SoundExchange v. Librarian of 

Congress, 571 F.3d 1220 (DC Cir. 2009). 

As part of the terms set for these 

licenses, the Judges designated 

SoundExchange, Inc., as the 

organization charged with collecting the 

royalty payments and statements of 

account and distributing the royalties to 

the copyright owners and performers 

entitled to receive such royalties under 

the section 112 and 114 licenses. 37 

CFR 382.13(b)(1). As the designated 

Collective, SoundExchange may 

conduct a single audit of a licensee for 

any calendar year for the purpose of 

verifying their royalty payments. 

SoundExchange must first file with the 

Judges a notice of intent to audit a 

licensee and serve the notice on the 

licensee to be audited. 37 CFR 

382.15(b), (c). 

On March 23, 2010, pursuant to 37 

CFR 382.15(c), SoundExchange filed 

with the Judges separate notices of 

intent to audit Sirius Satellite Radio Inc. 

(‘‘Sirius’’) and XM Satellite Radio Inc. 

(‘‘XM’’) for the year 2009.1 Section 

mstockstill on DSKH9S0YB1PROD with NOTICES