34466 Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices

least the same measure of protection as

the existing standard.

10. Peabody Energy, Rivers Edge

Mining, Inc.

[Docket No. M–2001–060–C]

Peabody Energy, Rivers Edge Mining,

Inc., 202 Laidley Tower, P.O. Box 1233,

Charleston, West Virginia 25324–1233

has filed a petition to modify the

application of 30 CFR 75.1002 (location

of trolley wires, trolley feeder wires,

high-voltage cables and transformers) to

its Rivers Edge Mine (I.D. No. 46–08890)

located in Boone County, West Virginia.

The petitioner proposes to use highvoltage 2,400 volt trailing cables in the

last open crosscut at the working

continuous miner section(s). The

petitioner asserts that the proposed

alternative method would provide at

least the same measure of protection as

the existing standard.

11. Cumberland River Coal Company

[Docket No. M–2001–061–C]

Cumberland River Coal Company,

Pardee Complex, P.O. Drawer 109,

Appalachia, Virginia 24216 has filed a

petition to modify the application of 30

CFR 75.364(b)(2) & (4) (weekly

examination) to its Band Mill Mine (I.D.

No. 44–06816) located in Wise County,

Virginia. Due to deteriorating roof

conditions in certain areas of the return

air course, traveling the affected area in

its entirety to conduct weekly

examinations would be unsafe. The

petitioner proposes to establish two

monitoring stations to evaluate the air

entering and leaving the affected area of

the return air course, and have a

certified person examine the monitoring

stations on a weekly basis and record

the date, his/her initials, time of

examination, and the quantity and

quality of air in a book or on a date

board that would be maintained on the

surface of the mine and made accessible

to all interested parties. The petitioner

asserts that the proposed alternative

method would provide at least the same

measure of protection as the existing

standard.

12. Eastern Associated Coal Corp.

[Docket No. M–2001–062–C]

Eastern Associated Coal Corp., 1970

Barrett Court, P.O. Box 1990,

Henderson, Kentucky 42420 has filed a

petition to modify the application of 30

CFR 75.1700 (oil and gas wells) to its

Harris No. 1 Mine (I.D. No. 46–01271)

located in Boone County, West Virginia.

The petitioner proposes to plan to clean

out and prepare oil and gas wells for

plugging and to plug all wells that are

encountered during normal operations

at the Harris No. 1 Mine. The petitioner

asserts that the proposed alternative

method would provide at least the same

measure of protection as the existing

standard.

13. Tilden Mining Company L.C.

[Docket No. M–2001–003–M]

Tilden Mining Company, L.C., One

Oxford Centre, 301 Grant Street, 20th

Floor, Pittsburgh, Pennsylvania 15219–

1410 has filed a petition to modify the

application of 30 CFR 56.14131 (seat

belts for haulage trucks) to its Tilden

Mine (I.D. No. 20–00422) located in

Marquette County, Michigan. The

petitioner requests a modification of the

existing standard to permit an alternate

method of compliance for labeling seat

belts. The petitioner proposes to equip

its haul trucks with seatbelt/driver

restraint systems which are

manufactured, installed, and labeled in

conformance with SAE J800C, SAE J386,

subsequent amendments to those

recommendations, or any other SAE

recommendations applicable to seat

belt/driver restraint systems. The

petitioner asserts that the proposed

alternative method would provide at

least the same measure of protection as

the existing standard.

Request for Comments

Persons interested in these petitions

are encouraged to submit comments via

e-mail to ‘‘comments@msha.gov,’’ or on

a computer disk along with an original

hard copy to the Office of Standards,

Regulations, and Variances, Mine Safety

and Health Administration, 4015

Wilson Boulevard, Room 627,

Arlington, Virginia 22203. All

comments must be postmarked or

received in that office on or before July

30, 2001. Copies of these petitions are

available for inspection at that address.

Dated at Arlington, Virginia this 21st day

of June 2001.

David L. Meyer,

Director, Office of Standards, Regulations,

and Variances.

[FR Doc. 01–16274 Filed 6–27–01; 8:45 am]

BILLING CODE 4510–43–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Exemption Application No. D–10942, et al.]

Prohibited Transaction Exemption

2001–21; Grant of Individual

Exemptions; Bank of America (BofA) et

al.

AGENCY: Pension and Welfare Benefits

Administration, Labor.

ACTION: Grant of individual exemptions.

SUMMARY: This document contains

exemptions issued by the Department of

Labor (the Department) from certain of

the prohibited transaction restrictions of

the Employee Retirement Income

Security Act of 1974 (the Act) and/or

the Internal Revenue Code of 1986 (the

Code).

Notices were published in the Federal

Register of the pendency before the

Department of proposals to grant such

exemptions. The notices set forth a

summary of facts and representations

contained in each application for

exemption and referred interested

persons to the respective applications

for a complete statement of the facts and

representations. The applications have

been available for public inspection at

the Department in Washington, DC. The

notices also invited interested persons

to submit comments on the requested

exemptions to the Department. In

addition the notices stated that any

interested person might submit a

written request that a public hearing be

held (where appropriate). The

applicants have represented that they

have complied with the requirements of

the notification to interested persons.

No public comments and no requests for

a hearing, unless otherwise stated, were

received by the Department.

The notices of proposed exemption

were issued and the exemptions are

being granted solely by the Department

because, effective December 31, 1978,

section 102 of Reorganization Plan No.

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

transferred the authority of the Secretary

of the Treasury to issue exemptions of

the type proposed to the Secretary of

Labor.

Statutory Findings

In accordance with section 408(a) of

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

Code and the procedures set forth in 29

CFR Part 2570, Subpart B (55 FR 32836,

32847, August 10, 1990) and based upon

the entire record, the Department makes

the following findings:

(a) The exemptions are

administratively feasible;

(b) They are in the interests of the

plans and their participants and

beneficiaries; and

(c) They are protective of the rights of

the participants and beneficiaries of the

plans.

Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices 34467

1 In the case of multiple plans maintained by a

single employer or a single group of employers

treated as a single employer under Sections 414(b),

414(c), 414(m), and 414(o) of the Code, the assets

of which are invested on a commingled basis (e.g.,

through a master trust), this $100 million threshold

will be applied to the aggregate assets of all such

plans.

Bank of America (BofA) Located in

Bethesda, Maryland

[Prohibited Transaction Exemption 2001–21;

Exemption Application No. D–10942]

Exemption

The restrictions of section 406(a) of

the Act and the sanctions resulting from

the application of section 4975 of the

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

through (D) of the Code, shall not apply

to (1) the granting to BofA by the

Westbrook Real Estate Fund IV, L.P.

(LP), a Delaware Limited Partnership, of

a first, exclusive, and prior security

interest in the capital commitments,

reserve amounts and capital

contributions (Capital Contributions),

whether now owned or after-acquired,

of certain employee benefit plans

(Plans) investing in the LP; (2) the

collateral assignment and pledge by the

LP to BofA of its security interest in

each Plan’s limited partnership interest,

whether now owned or after-acquired;

(3) the granting by the LP of a first,

exclusive, and prior security interest in

a borrower collateral account to which

all Capital Contributions will be

deposited when paid; (4) the granting to

BofA by Westbrook Real Estate Partners

Management IV, L.L.C., a Delaware

limited liability company and the

general partner of the LP (the General

Partner), of its right to make calls for

cash contributions (Drawdowns) under

the Amended and Restated Agreement

of Limited Partnership of Westbrook

Real Estate Fund IV, L.P., dated as of

September 15, 2000, where BofA is the

representative of certain lenders (the

Lenders) that will fund a so-called

‘‘credit facility’’ (Credit Facility)

providing credit to the LP, and the

Lenders are parties in interest with

respect to the Plans; and (5) the

execution of a partner agreement and

estoppel (Estoppel) under which the

Plans agree to honor the Drawdowns;

provided that (i) the proposed grants,

assignments, and Estoppels are on terms

no less favorable to the Plans than those

which the Plans could obtain in arm’slength transactions with unrelated

parties; (ii) the decisions on behalf of

each Plan to invest in the LP and to

execute such Estoppels in favor of BofA,

for the benefit of each Lender, are made

by a fiduciary which is not included

among, and is independent of and

unaffiliated with, the Lenders and BofA;

(iii) with respect to Plans that may

invest in the LP in the future, such Plans

will have assets of not less than $100

million1 and not more than 5% of the

assets of such Plan will be invested in

the LP; (iv) the General Partner is

unrelated to any Plan and any Lender;

and (v) on or after December 31, 2000,

this exemption is not applicable for any

direct or indirect transaction between

the AT&T Management Pension Plan

and the AT&T Pension Plan and J.P.

Morgan Chase & Co. (or any affiliate of

J.P. Morgan Chase & Co. that is a party

in interest with respect to the AT&T

Plans).

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 (the Notice)

published on March 21, 2001 at 66 FR

15897.

Effective Date: This exemption is

effective September 15, 2000.

Written Comments

The Department received one

comment letter with respect to the

Notice. The comment letter was

submitted by BofA (the Applicant) to

report certain facts that had changed

since the exemption application was

filed.

The Applicant stated that the

following six employee benefit plan

trusts acquired limited partnership

interests in the LP in addition to the

trusts listed in the original application:

(i) The White Plaza Group Trust; (ii) the

UPS Retirement Plan Master Trust; (iii)

Leeway & Co., as nominee for the LongTerm Investment Trust; (iv) the U.S.

Steel and Carnegie Pension Fund, as

Trustee for the Marathon Oil Group

Trust; (v) the U.S. Steel and Carnegie

Pension Fund, as Trustee for the U.S.

Steel Union Trust; and (vi) the U.S.

Steel and Carnegie Pension Fund, as

Trustee for the U.S. Steel Non-Union

Trust.

The following employee benefit plans

which are invested in the LP hold assets

in these Trusts:

White Plaza Group Trust

1. General Motors Retirement Program

for Salaried Employees

2. Delphi Automotive Systems

Retirement Program for Salaried

Employees

3. General Motors Hourly-Rate Pension

Plan

4. Delphi Automotive Systems HourlyRate Employees Pension Plan

5. Employees Retirement Plan for

GMAC Mortgage Corporation

6. Saturn Individual Savings Plan for

Represented Members

7. Saturn Personal Choices Retirement

Plan for Non-Represented Team

Members

UPS Retirement Plan Master Trust

1. UPS Retirement Plan

Leeway & Co., as Nominee for the LongTerm Investment Trust

1. AT&T Management Pension Plan

2. AT&T Pension Plan

U.S. Steel and Carnegie Pension Fund,

as Trustee for the Marathon Oil Group

Trust

1. Retirement Plan of Marathon Oil

Company

2. Marathon Ashland Petroleum LLC

Retirement Plan

U.S. Steel and Carnegie Pension Fund,

as Trustee for U.S. Steel Union Trust

1. United States Steel Corporation Plan

for Employee Pension Benefits

(Revision of 1950)

U.S. Steel and Carnegie Pension Fund,

as Trustee for U.S. Steel Non-Union

Trust

1. United States Steel Corporation Plan

for Non-Union Employee Pension

Benefits (Revision of 1998)

The Applicant represented that by

April 20, 2001, representatives of the

fiduciaries of each of the above Plans

were given notice of the proposed

exemption, provided with a copy of the

Notice, and informed that they had the

opportunity to submit comments for a

period of 35 days. Accordingly, the

Applicant represented that the comment

period was extended until May 25,

2001.

The Applicant also wished to clarify

that Morgan Guaranty Trust Company

(MGT) was the fiduciary who exercised

the discretionary authority to cause the

AT&T Management Pension Plan and

the AT&T Pension Plan (together, the

AT&T Plans) to invest in the LP and to

execute the Estoppel through Leeway &

Company (Leeway), as Nominee for the

Long Term Investment Trust (the Long

Term Trust). At the time of the

investment, MGT was a wholly-owned

subsidiary of J.P. Morgan & Co. (J.P.

Morgan). J.P. Morgan was independent

of all the Lenders. However, J.P. Morgan

subsequently merged (the Merger) with

The Chase Manhattan Corporation on

December 31, 2000. As a result of the

Merger, MGT is now a wholly-owned

subsidiary of the surviving entity: J.P.

Morgan Chase & Co. (Morgan Chase).

The Chase Manhattan Bank (Chase) is

the co-syndication agent and a Lender

participating in the Credit Facility. At

34468 Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices

2See 29 CFR 2510.3–101(c); Definition of ‘‘plan

assets’’—plan investments.

the time of the investment by the Long

Term Trust in the LP, Chase was a

wholly-owned subsidiary of the Chase

Manhattan Corporation. As a result of

the Merger, MGT is now a whollyowned subsidiary of Morgan Chase.

Accordingly, MGT and Chase are

included in a brother-sister group of

trades or businesses as described in

section 1.414(c) of the federal income

tax regulations.

The Notice requires as a condition of

the proposed exemption that the

decisions on behalf of each Plan (as

defined in the Notice and including the

AT&T Plans) to invest in the Partnership

and to execute the Estoppel in favor of

BofA, for the benefit of each Lender

participating in the Credit Facility, be

made by a fiduciary which is not

included among, and which is

independent of and unaffiliated with,

the Lenders and BofA. To avoid the

need to consider whether the Merger

raises any issues in respect of this

condition, the affected parties to the

Credit Facility have determined that

BofA, as administrative agent, will

continue the allocation of collateral set

forth in Section 5.1(c) of the Credit

Facility in a manner that the AT&T

collateral will not be used as collateral

for, or the payment of, Chase’s interest,

fees, or the portion of the Credit Facility

attributable to Chase’s lending

commitment under the Credit Facility.

The effect of such allocation of

collateral will be that the interests and

rights granted by the AT&T Plans

pursuant to Section 5.1(b) of the Credit

Facility (the Partner Collateral) will be

allocated by BofA in such a manner that

Chase will not hold any security interest

or lien in the Partner Collateral

attributable to the AT&T Plans, and will

not receive any payment of its portion

of the Credit Facility or any interest or

fees from capital contributions

attributable to the AT&T Plans.

Moreover, any claim for the payment of

the Credit Facility, interest or fees

brought against the AT&T Plans will be

brought by BofA, as administrative

agent for the benefit of the Lenders.

Thus, Chase will not receive any benefit

from the Estoppel executed at the

direction of MGT by Leeway & Co., as

nominee for the Long Term Trust, on

behalf of the AT&T Plans.

In connection with the Credit Facility,

Chase could earn interest, an unused

commitment fee, and administrative

fees. Interest and the unused

commitment fee are paid to all Lenders

in the Credit Facility on a pro rata basis.

The unused commitment fee is similar

to interest. It reflects in part the

opportunity costs incurred by the

Lenders in committing funds to the

Credit Facility, just as interest reflects in

part the Lenders’ opportunity costs in

actually funding the Credit Facility. The

amount of the unused commitment fee

is based on the difference between the

money actually borrowed and the

amount which the Lenders have

committed under the Credit Facility.

Chase had already been paid its cosyndication fees prior to the date of the

Merger. In the event there was to be a

material amendment to the Credit

Facility, Chase, as well as other Lenders,

could be paid additional interest and/or

administrative fees, including a cosyndication fee. However, as a result of

the allocation of collateral as described

above and the factors described below,

the Applicant represents that no

prohibited transactions would be

created by the payment of such interest

or fees.

As suggested in Representation 11 of

the Summary of Facts and

Representations contained in the Notice

(the Summary), the exemption

application assumes that the LP is an

‘‘operating company’’ under the

Department’s Plan Asset Regulations.2

Based on such assumption and the

allocation of collateral described above,

no amounts which will be received or

accrued by Chase in its role as cosyndication agent and Lender were or

will be paid from Plan assets; all interest

and fees paid to Chase in any capacity

in connection with the Credit Facility

are usually paid by the LP. In the

unlikely event any amount is paid by

the limited partners, including the

AT&T Plans, then BofA, as

administrative agent for the benefit of

the Lenders, will allocate the AT&T

Plans’ capital commitments in a manner

to ensure that none of Chase’s interest

or fees will be paid by assets of the

AT&T Plans.

In addition, from and after the date of

the Merger, the AT&T Plans’ investment

(or any decision by MGT to retain the

AT&T Plans’ investment) in the LP will

have no effect on Chase’s receipt of any

interest or fees. The collateral that

secures the Credit Facility sufficiently

exceeds the amount customarily

required by lenders in similar

transactions with similar lending terms.

As a result of such over-collateralization

and the allocation of collateral, neither

the investment by the AT&T Plans in

the LP nor their withdrawal from the LP

increase or decrease the interest or fees

received by Chase in connection with

the Credit Facility. Accordingly, Chase

will earn any interest or fees arising in

connection with the Credit Facility

without regard to whether the AT&T

Plans remain as a limited partner of the

LP.

The Applicant also made an

additional clarification regarding the

information contained in the Summary.

The fourth sentence of Representation

10 of the Summary should be deleted

and replaced with the following:

In this regard, such Plan must be

represented by an independent fiduciary, and

the General Partner or BofA must receive

from the Plan one of the following:

(1) a representation letter from the

applicable fiduciary with respect to such

Plan substantially identical to the

representation letter submitted by the

fiduciaries of the other Plans, in which case

this proposed exemption, if granted, will

apply to the investments made by such Plan

if the conditions required herein are met; or

(2) evidence that such Plan is eligible for

a class exemption or has obtained an

individual exemption from the Department

covering the potential prohibited transactions

which are the subject of this proposed

exemption.

The Applicant requested that the

sentence be deleted and replaced with

the above in order to provide that the

documentation described in items (1)

and (2) may be received by either the

General Partner or the Applicant. Thus,

as a result of this clarification, BofA

may also receive the representation

letter from the independent fiduciaries

of the Plans.

The Applicant requested that the

exemption be made retroactive to

September 15, 2000, to cover any

executions of Estoppels that may have

occurred prior to the granting of the

exemption.

Finally, the Applicant represented

that it is not requesting relief for any

direct or indirect transaction between

the AT&T Plans and Morgan Chase (or

any affiliate of Morgan Chase that is a

party in interest with respect to the

AT&T Plans). However, the exemption

will cover any transaction between the

AT&T Plans and the other Lenders.

Accordingly, based on the entire

record, the Department has determined

to grant the exemption as clarified

herein.

For Further Information Contact: Gary

H. Lefkowitz of the Department,

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

a toll-free number.)

Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices 34469

Phoenix Home Life Mutual Insurance

Company (Phoenix) Located in

Hartford, CT.

[Prohibited Transaction Exemption 2001–22;

Exemption Application No. D–10943]

Exemption

Section I. Covered Transactions

The restrictions of section 406(a) of

the Act and the sanctions resulting from

the application of section 4975 of the

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

through (D) of the Code, shall not apply

effective as of June 8, 2001, to (1) the

receipt of common stock (Stock) of The

Phoenix Companies, Inc. (the Holding

Company), the parent of Phoenix, or (2)

the receipt of cash (Cash) or Policy

Credits, by or on behalf of any Eligible

Policyholder of Phoenix which is an

employee benefit plan (a Plan),

including any Eligible Policyholder that

is a Plan maintained by Phoenix or its

affiliates (Phoenix Plan), in exchange for

such Eligible Policyholder’s

membership interest in Phoenix, in

accordance with the terms of a plan of

reorganization (the Plan of

Reorganization) adopted by Phoenix and

implemented pursuant to Section 7312

of the New York Insurance Law.

In addition, effective as of June 8,

2001, the restrictions of section

406(a)(1)(E) and (a)(2) and section

407(a)(2) of the Act shall not apply to

the receipt and holding of the Stock, by

a Phoenix Plan, whose fair market value

exceeds 10 percent of the value of the

total assets held by such Plan.

The exemption is subject to the

following conditions set forth below in

Section II.

Section II. General Conditions

(a) The Plan of Reorganization is

subject to approval, review and

supervision by the Superintendent of

Insurance of the State of New York (the

Superintendent) and is implemented in

accordance with procedural and

substantive safeguards that are imposed

under New York law.

(b) The Superintendent reviews the

terms and options that are provided to

Eligible Policyholders of Phoenix as part

of such Superintendent’s review of the

Plan of Reorganization and the

Superintendent only approves the Plan

of Reorganization following a

determination that the Plan of

Reorganization is fair and equitable to

Eligible Policyholders and is not

detrimental to the general public.

(c) Each Eligible Policyholder has an

opportunity to vote to approve the Plan

of Reorganization after full written

disclosure is given to the Eligible

Policyholder by Phoenix.

(d) Any determination to receive

Stock, Cash or Policy Credits by an

Eligible Policyholder which is a Plan,

pursuant to the Plan of Reorganization,

is made by one or more Plan fiduciaries

which are independent of Phoenix and

its affiliates and neither Phoenix nor

any of its affiliates exercises any

discretion or provides investment

advice, within the meaning of 29 CFR

2510.3–21(c), with respect to such

decisions.

(e) In the case of the Phoenix Plans,

an independent fiduciary with respect

to the Phoenix Plans:

(1) Exercises its authority and

responsibility to vote on behalf of the

Phoenix Plans at the special meeting of

Eligible Policyholders on the proposal

to approve the Plan of Reorganization;

(2) Monitors, on behalf of the Phoenix

Plans, the acquisition and holding of

any Stock, Cash or Policy Credits

received;

(3) Makes determinations on behalf of

the Phoenix Plans with respect to the

voting and continued holding of any

Stock held by such Plans until such

holding is reduced so that it does not

exceed the limits of section 407(a) of the

Act;

(4) Disposes of Stock exceeding the

limits of section 407(a) of the Act within

six months of the effective date of the

Plan of Reorganization.

(5) Provides the Department with a

complete and detailed final report as it

relates to the Phoenix Plans prior to the

effective date of the demutualization.

(f) After each Eligible Policyholder

entitled to receive Stock is allocated 37

shares of Stock (subject to possible

adjustment as provided in the Plan of

Reorganization), additional

consideration is allocated to each

Eligible Policyholder who owned

participating policies based on actuarial

formulas that take into account each

participating policy’s contribution to the

surplus of Phoenix, which formula has

been approved by the Superintendent.

(g) All Eligible Policyholders that are

Plans participate in the transactions on

the same basis as all Eligible

Policyholders that are not Plans.

(h) No Eligible Policyholder pays any

brokerage commissions or fees in

connection with the receipt of Stock or

in connection with the implementation

of the commission-free purchase and

sale program.

(i) All of Phoenix’s policyowner

obligations remain in force and are not

affected by the Plan of Reorganization.

(j) The terms of the transaction are at

least as favorable to the Plans as an

arm’s-length transaction with an

unrelated party.

Section III. Definitions

For purposes of this exemption:

(a) An ‘‘affiliate’’ of Phoenix

includes—

(1) Any person directly or indirectly

through one or more intermediaries,

controlling, controlled by, or under

common control with Phoenix. (For

purposes of this paragraph, the term

‘‘control’’ means the power to exercise

a controlling influence over the

management or policies of a person

other than an individual), and

(2) Any officer, director or partner in

such person.

(b) The term ‘‘Eligible Policyholder’’

means a person who is (or collectively,

persons who are) the owner(s) of one or

more policies that are in force on the

date of the adoption of the Plan of

Reorganization.

(c) The term ‘‘Phoenix’’ means

Phoenix Home Life Mutual Insurance

Company and any of its affiliates, as

defined in paragraph (a) of this Section

III.

(d) The term ‘‘Policy Credit’’ means

(a) for an individual or joint

participating whole life insurance

policy, the crediting of paid-up

additions which will increase the cash

value and death benefit of the policy; (b)

for supplementary contracts issued

under optional modes of settlement or

annuities in the course of installment

payment without a defined account

value and that provide for the payment

of additional interest, the crediting of an

additional amount in the form of

additional interest; (c) for

supplementary contracts issued under

optional modes of settlement or

annuities in the course of installment

payment without a defined account

value not providing for the payment of

additional interest, an increase in the

installment payment amount; and (d) for

all other individual or joint life policies

and annuities, (i) if the policy or

contract has a defined account value, an

increase in the account value, to which

the Company will apply no sales,

surrender or similar charges, or that will

be further increased in value to offset

any of these charges, or (ii) if the policy

or contract does not have a defined

account value, the crediting of

dividends under the policy or contract.

Effective Date: This exemption is

effective June 8, 2001.

Written Comments

The Department received seven

written comments with respect to the

proposed exemption. Six comments

were submitted by Plan policyholders of

Phoenix. The seventh comment was

submitted by Phoenix, and contained

34470 Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices

only technical corrections to update

factual information provided in the

Summary of Facts and Representations

included as part of the proposed

exemption. The policyholders’

comments, as well as the comments

submitted by Phoenix, are discussed

below.

Policyholder’s Comments

As noted above, six policyholders

submitted comments with respect to the

proposed exemption. Three of the

policyholders indicated concern that the

demutualization would affect retirement

benefits owed to them under Phoenix

policies. In response, Phoenix

emphasizes that the demutualization

will not in any way cause a loss or a

reduction in the benefits paid pursuant

to Phoenix policies.

One policyholder expressed doubts as

to the benefit to Phoenix of the plan of

demutualization. In response, Phoenix

states that converting to a stock life

company will increase Phoenix’s

potential for long-term growth and

financial strength in ways not available

to it as a mutual company. Phoenix

acknowledges that, as in all business

ventures, there are risks. However,

Phoenix asserts that as a stock company,

it will be better able to attract needed

capital and offer additional financial

products and services to its

policyholders. In sum, Phoenix states

that the demutualization will make it a

stronger, more flexible company.

One policyholder commented that the

disclosure information provided by

Phoenix did not describe with sufficient

clarity the transaction with respect to

which Phoenix desires an exemption. In

response, Phoenix references the

Policyholder Information Booklet, Part I,

which contains the following

description of the transaction:

Section 406 of ERISA and Section

4975 of the Code prohibit employee

benefit plans from engaging in certain

transactions with ‘‘parties in interest’’

and ‘‘disqualified persons.’’ If Phoenix

is a ‘‘party in interest’’ with respect to

an employee benefit plan under ERISA

or a ‘‘disqualified person’’ under the

Code, the receipt of Compensation in

exchange for the Policyholders’

Membership Interests owned by an

Eligible Policyholder with respect to

such employee benefit plan could be

viewed as prohibited. Phoenix has

applied to the U.S. Department of Labor

for an administrative exemption to

cover such transactions.

Finally, one policyholder submitted a

comment that was determined not to be

germane to the requested exemption.

Phoenix’s Comment

The Department notes the following

clarifications made to the Summary of

Facts and Representations by Phoenix:

1. Representation 1. In the fourth

paragraph of Representation 1, it is

stated that Holdings has an approximate

60% ownership interest in publicly

traded Phoenix Investment Partners,

Ltd. (PXP). Phoenix wishes to clarify

this to state that Holdings is now the

sole owner of PXP.

2. Representation 2. Phoenix wishes

to revise the fourth paragraph of

Representation 2 in a number of

respects. Phoenix clarifies that the

Phoenix Plans are employee benefit

plans sponsored by Phoenix, PXP and a

PXP subsidiary, Pasadena Capital

Corporation. Phoenix states that, with

respect to subparagraphs (e) and (f), the

actuaries have determined that the

Phoenix Home Life Mutual Insurance

Company Employee Group Life

Insurance Plan and the Phoenix Home

Life Mutual Insurance Company Agent

Group Life Insurance Plan were not be

entitled to any demutualization

compensation. Therefore they should

not be included in the list of Phoenix

Plans which are expected to be Eligible

Policyholders. With respect to

subsection (g) (redesignated as (e)

below), Phoenix notes that the Phoenix

Investment Partners Ltd. Group Profit

Sharing Plan and Trust was terminated

effective March 19, 2001, and that the

demutualization proceeds will be used

to pay a small portion of the legal

expenses for obtaining an IRS

determination letter. With respect to

subsections (h) and (i) (redesignated as

(f) and (g) below), Phoenix states that

the Phoenix Investment Partners, Ltd.

Group Life Insurance Plan and the

Phoenix Investment Partners, Ltd.

Group Long Term Disability Plan were

terminated effective December 31, 2000,

and the demutualization proceeds

received by those plans which

constitute plan assets will be used to

reduce participants contributions under

essentially similar plans maintained by

Phoenix and in which PXP employees

participate. Finally, Phoenix adds the

Pasadena Capital Corporation Major

Medical and Dental Treatment Plans

(the Pasadena Plans), welfare plans, to

the listing of plans which are

considered Phoenix Plans. As of

December 31, 1999, the Pasadena Plans

had 87 participants.

Accordingly, as revised, the fourth

paragraph of Representation 2 reads as

follows:

Phoenix, PXP, and a PXP subsidiary,

Pasadena Capital Corporation, sponsor

the following Plans, which are expected

to be Eligible Policyholders (collectively

referred to herein as the ‘‘Phoenix

Plans’’):

(a) The Phoenix Home Life Mutual

Insurance Company Employee Pension

Plan (the Pension Plan) is a defined

benefit pension plan. As of December

31, 1999, the Pension Plan had

approximately 6,160 participants.

(b) The Phoenix Home Life Mutual

Insurance Company Savings and

Investment Plan (the Savings Plan) is a

defined contribution plan. As of

December 31, 1999, the Savings Plan

had 3,002 participants.

(c) The Phoenix Home Life Mutual

Insurance Company Agent Pension Plan

(the Agent Pension Plan) is a defined

contribution plan. As of December 31,

1999, the Agent Pension Plan had 1,024

participants.

(d) The Phoenix Home Life Mutual

Insurance Company Agent Savings and

Investment Plan (the Agent Savings

Plan) is a defined contribution plan. As

of December 31, 1999, the Agent

Savings Plan had 535 participants.

(e) The Phoenix Investment Partners,

Ltd. Group Profit Sharing Plan and

Trust (the PXP Profit Sharing Plan) is a

defined contribution plan. As of

December 31, 1999, the PXP Profit

Sharing Plan had 193 participants. The

PXP Profit Sharing Plan was terminated

effective March 19, 2001. The

anticipated distribution will be used to

pay a small portion of the legal expenses

for obtaining an IRS determination

letter.

(f) The Phoenix Investment Partners,

Ltd. Group Life Insurance Plan (the PXP

Group Life Plan) is a welfare benefit

plan. As of December 31, 1999, the PXP

Group Life Plan had 493 participants.

The PXP Group Life Plan was

terminated effective December 31, 2000.

Consideration received by the plan

which constitutes plan assets will be

used to reduce participants’

contributions under essentially similar

plans maintained by Phoenix and in

which PXP employees participate.

(g) The Phoenix Investment Partners,

Ltd. Group Long Term Disability Plan

(the PXP Long Term Disability Plan) is

a welfare benefit plan. As of December

31, 1999, the PXP Long Term Disability

Plan had 359 participants. The PXP

Long Term Disability Plan was

terminated effective December 31, 2000.

Consideration received by the plan

which constitutes plan assets will be

used to reduce participants’

contributions under essentially similar

plans maintained by Phoenix and in

which PXP employees participate.

(h) The Pasadena Capital Corporation

Major Medical and Dental Treatment

Plans (the Pasadena Plans) are welfare

Federal Register / Vol. 66, No. 125 / Thursday, June 28, 2001 / Notices 34471

benefit plans. As of December 31, 1999,

the Pasadena Plans had 87 participants.

After giving full consideration to the

entire record, including the written

comments, the Department has decided

to grant the exemption. In this regard,

the comment letters submitted to the

Department have been included as part

of the public record of the exemption

application. The complete application

file, including all supplemental

submissions received by the

Department, is made available for public

inspection in the Public Disclosure

Room of the Pension and Welfare

Benefits Administration, Room N–1513,

U.S. Department of Labor, 200

Constitution Avenue, N.W.,

Washington, D.C. 20210.

For Further Information Contact:

Karen Lloyd of the Department,

telephone (202) 219–8194. (This is not

a toll-free number).

General Information

The attention of interested persons is

directed to the following:

(1) The fact that a transaction is the

subject of an exemption under section

408(a) of the Act and/or section

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

a fiduciary or other party in interest or

disqualified person from certain other

provisions to which the exemptions

does not apply and the general fiduciary

responsibility provisions of section 404

of the Act, which among other things

require a fiduciary to discharge his

duties respecting the plan solely in the

interest of the participants and

beneficiaries of the plan and in a

prudent fashion in accordance with

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

it affect the requirement of section

401(a) of the Code that the plan must

operate for the exclusive benefit of the

employees of the employer maintaining

the plan and their beneficiaries;

(2) These exemptions are

supplemental to and not in derogation

of, any other provisions of the Act and/

or the Code, including statutory or

administrative exemptions and

transactional rules. Furthermore, the

fact that a transaction is subject to an

administrative or statutory exemption is

not dispositive of whether the

transaction is in fact a prohibited

transaction; and

(3) The availability of these

exemptions is subject to the express

condition that the material facts and

representations contained in each

application accurately describes all

material terms of the transaction which

is the subject of the exemption.

Signed at Washington, DC, this 25th day of

June, 2001.

Ivan Strasfeld,

Director of Exemption Determinations,

Pension and Welfare Benefits Administration,

Department of Labor.

[FR Doc. 01–16236 Filed 6–27–01; 8:45 am]

BILLING CODE 4510–29–P

DEPARTMENT OF LABOR

Pension and Welfare Benefits

Administration

[Application No. D–10935, et al.]

Proposed Exemptions; The Walston &

High, P.A. Profit Sharing Plan (the

Plan) et al.

AGENCY: Pension and Welfare Benefits

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 (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 request 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

request for a hearing (at least three

copies) should be sent to the Pension

and Welfare Benefits Administration,

Office of Exemption Determinations,

Room N–5649, U.S. Department of

Labor, 200 Constitution Avenue, NW.,

Washington, DC 20210. Attention:

Application No. lll, stated in each

Notice of Proposed Exemption. The

applications for exemption and the

comments received will be available for

public inspection in the Public

Documents Room of the Pension and

Welfare Benefits Administration, U.S.

Department of Labor, Room N–5638,

200 Constitution Avenue, NW.,

Washington, DC 20210.

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

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.

The Walston & High, P.A. Profit Sharing

Plan (the Plan) Located in Wilson,

North Carolina

[Application No. D–10935]

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), 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 the Sale (the Sale) by

the Plan to A.J. Walston and Arthur T.

High, the trustees of the Plan (the

Trustees), of three parcels of improved

real property (the Parcels). This

proposed exemption is conditioned

upon adherence to the material facts

and representations described herein