Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30631 

9Because each IRA has only one Participant, 

there is no jurisdiction under 29 CFR 2510.3–3(b). 

However, there is jurisdiction under Title II of the 

Act pursuant to section 4975 of the Code. 

Department, telephone (202) 693–8540 

(This is not a toll-free number). 

Individual Retirement Accounts (the 

IRAs) for Ralph Hartwell, Harold Latin, 

Kenlon Johnson, Carol Johnson, Shanon 

Taylor, Michael Ball, Dianne Barkas, 

Roy Barkas, Harry DeWall, Alice Pike, 

Steven Larsen, C. Timothy Hopkins, 

Wayne Meuleman, Robert L. Miller, 

and Richard T. Scott (Collectively, the 

Participants), Located in Idaho Falls, 

Idaho, and Elsewhere 

[Prohibited Transaction Exemption 2009–17; 

Exemption Application Numbers D–11536 

through D–11550] 

Exemption 

The sanctions resulting from the 

application of section 4975 of the Code, 

by reason of sections 4975(c)(1)(A),(D), 

and (E) of the Code, shall not apply to 

the cash sales (the Sales) of certain 

shares of closely held common stock 

(the Stock) of the Bank of Idaho Holding 

Company (the Company) by the IRAs 9

to the Participants, disqualified persons 

with respect to their respective IRAs, 

provided that the following conditions 

are satisfied: 

(a) The Sale of the Stock by each IRA 

is a one-time transaction for cash; 

(b) The terms and conditions of each 

Sale are at least as favorable to each IRA 

as those obtainable in an arm’s length 

transaction with an unrelated party; 

(c) Each IRA receives the fair market 

value of the Stock on the date of the 

Sale as determined by a qualified, 

independent appraiser; and 

(d) Each IRA does not pay any 

commissions, costs, or other expenses in 

connection with each Sale. 

For a more complete statement of the 

facts and representations supporting the 

Department’s decision to grant this 

exemption, refer to the text of the Notice 

of Proposed Exemption published in the 

Federal Register on March 26, 2009 at 

74 FR 13258. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Mark Judge of the Department, 

telephone (202) 693–8339 (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 

describe all material terms of the 

transaction which is the subject of the 

exemption. 

Signed at Washington, DC, this 22nd day 

of June, 2009. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. E9–15158 Filed 6–25–09; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employee Benefits Security 

Administration 

[Application Nos. and Proposed 

Exemptions; D–11432, Iron Workers Local 

17 Pension Fund (the Plan); D–11483 

Urology Clinics of North Texas, P.A. 401(k) 

Profit Sharing Plan and Trust (The Plan); 

and L–11451, Ford Motor Corporation and 

Its Affiliates (collectively, Ford), et al.] 

Notice of Proposed Exemptions 

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. lll 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. 

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). 

30632 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

1The Department is not proposing any exemptive 

relief herein for these past prohibited transactions, 

whose background is described in greater detail in 

Facts and Representations #5, below. 

2PTE 76–1 (41 FR 12740, March 26, 1976) is a 

class exemption that provides relief from sections 

406(a) and 407(a) of the Act (and section 

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

certain conditions, for the leasing of office space by 

a multiple employer plan to a participating 

employee organization, participating employer, 

participating employer association, or another 

multiple employer plan, which is a party in interest 

or disqualified person with respect to the plan. PTE 

77–10 (42 FR 33918, July 1, 1977) is a class 

exemption that provides relief from section 

406(b)(2) of the Act, under certain conditions, for 

the leasing of office space by a multiple employer 

plan to a participating employee organization, 

participating employer (without regard to whether 

the office space constitutes ‘‘qualifying employer 

real property’’), participating employer association, 

or another multiple employer plan, which is a party 

in interest with respect to the plan or to which it 

is related by virtue of having common trustees. The 

Department expresses no opinion herein as to 

whether the Plan’s leases to its ‘‘sister plans’’ satisfy 

the terms and conditions of PTEs 76–1 and 77–10. 

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. 

Iron Workers Local 17 Pension Fund 

(the Plan) Located in Cleveland, Ohio 

[Application No. D–11432] 

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 proposed exemption is granted, the 

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

406(a)(1)(D), and 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 sections 

4975(c)(1)(A) and 4975(c)(1)(D) through 

(E) of the Code, shall not apply to the 

sale of a leasehold interest, which 

includes an office building (the 

Building) and certain rights pursuant to 

a ground lease, held by the Plan, to the 

Bridge, Structural and Ornamental Iron 

Workers Local Union No. 17 (the 

Union), a party in interest with respect 

to the Plan, provided that the following 

conditions are satisfied: 

(a) The terms and conditions of the 

sale are at least as favorable to the Plan 

as those that the Plan could obtain in an 

arm’s length transaction with an 

unrelated party; 

(b) The Plan receives the greater of 

$285,000 or the fair market value of the 

Building and lot on which the Building 

is located (the Lot), as of the date of the 

sale, as determined by a qualified, 

independent appraiser; 

(c) The sale is a one-time transaction 

for cash; 

(d) The Plan pays no commissions, 

costs, or other expenses in connection 

with the sale (other than fees associated 

with the retention of a qualified, 

independent appraiser and the retention 

of a qualified, independent fiduciary); 

(e) The Board of Trustees retains a 

qualified, independent fiduciary, who 

will review and approve the 

methodology used by the qualified, 

independent appraiser, will ensure that 

such methodology is properly applied 

in determining the fair market value of 

the Building and Lot as of the date of 

the sale, and will determine whether it 

is prudent to go forward with the 

proposed transaction; and 

(f) Prior to the publication of a final 

exemption, if granted, in the Federal 

Register, regarding the transaction that 

is the subject of this proposed 

exemption, the Union: Files Form 5330 

(Return of Excise Taxes Related to 

Employee Benefit Plans) with the 

Internal Revenue Service and pays all 

applicable excise taxes that are due by 

reason of its prohibited past leasing to 

the Plan of the Lot on which the subject 

Building was constructed by the Plan; 

and Provides a copy of the cancelled 

check and other documentary evidence 

to the Department indicating that the 

taxes were correctly computed and paid. 

Summary of Facts and Representations 

1. The Plan is a multi-employer, 

defined benefit pension plan, created 

and maintained pursuant to collective 

bargaining agreements between the 

Union and the Construction Employers 

Association (CEA). The Plan is 

administered by a Board of Trustees (the 

Trustees), consisting of three trustees 

appointed by the Union and three, by 

the CEA. As of April 30, 2008, the Plan 

had approximately 2,180 participants 

and beneficiaries and total assets of 

approximately $115,313,797. 

2. Among the assets of the Plan is its 

leasehold interest in a property located 

at 1564 East 23rd Street, Cleveland, 

Ohio. A one-story office building (the 

Building), measuring 4114 square feet, 

sits on a 51′ x 147′ lot belonging to the 

Union (the Lot) that is currently being 

leased to the Plan. The lease provides 

for an initial term of 99 years until 2084 

and a rental rate of $200 per month. 

Under the lease terms, the Plan also has 

an option to terminate the lease at any 

time, to extend the term of the lease 

indefinitely at the same rental rate, or to 

purchase the Lot for $20,000. The 

Building is adjacent to, and shares a 

common wall with, the Union’s 

building at 1544 East 23rd Street, 

Cleveland, Ohio. There is a parking lot 

consisting of eight parking spaces in 

front of the Building. The immediate 

neighborhood is a mixed-use 

commercial area. 

The Building was constructed on the 

Lot by the Plan in 1986, pursuant to a 

feasibility study by Coopers & Lybrand 

commissioned by the Trustees; Coopers 

& Lybrand opined that it would be more 

cost-effective in the long run for the 

Plan to construct its own office space 

rather than to continue renting, as it had 

been doing. Subsequently, the Plan 

entered into a lease for the Lot with the 

Union, made retroactive to September 

1985 but without the benefit of an 

administrative prohibited transaction 

exemption.1

The Plan uses the Building for 

administrative office space and also 

leases office space to its ‘‘sister plans,’’ 

the Iron Workers Local 17 Annuity 

Fund and the Iron Workers Local 17 

Insurance Benefit Fund, pursuant to 

Prohibited Transaction Exemption (PTE) 

76–1 and PTE 77–10.2 According to the 

applicant, shared expenses are allocated 

on a pro rata basis, with the Plan 

consistently receiving an allocation of 

approximately 40% of shared expenses. 

3. The Building and Lot were 

appraised by James P. Prosek, SRA, and 

Aaron Baaske, CRA, CREA, independent 

appraisers located in Amherst, Ohio. 

Mr. Prosek and Mr. Baaske are 

experienced real estate appraisers 

licensed in the state of Ohio and are 

members of recognized societies that 

award professional designations in their 

field. In their appraisal report, Mr. 

Prosek and Mr. Baaske utilized the Sales 

Comparison Approach and the Income 

Approach, with greater reliance on the 

former, to arrive at an estimated value 

of $285,000, as of November 14, 2008, 

for the fee simple interest of the 

Building and Lot (as a unified property). 

They then opined that the value of the 

Union’s leased fee interest in the 

property, belonging to the Union as the 

lessor, is $20,000, or the amount 

specified in the Plan’s option to 

purchase the Lot under the terms of the 

ground lease. To isolate the value of the 

Plan’s leasehold interest in the property, 

they then subtracted $20,000 from the 

value of the fee simple interest 

Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30633 

3The Department’s review of correspondence 

with the Cincinnati Regional Office revealed that 

the field office had advised their counsel that the 

ground lease was a prohibited transaction and that 

an administrative prohibited transaction exemption 

should be sought to cover it. The regulation at 29 

CFR 2550.408b–2 clarifies that section 408(b)(2) 

provides relief for payments by a plan for leases of 

office space. It also limits the scope of the 

exemptive relief to section 406(a) so that relief from 

section 406(b), which prohibits, among other things, 

self-dealing by plan fiduciaries, is not provided. 

4The request for retroactive prohibited 

transaction relief for the ground lease was 

withdrawn. The Department’s standard for 

obtaining a retroactive prohibited transaction 

exemption is set forth in ERISA Technical Release 

85–1. 

5The Department expresses no opinion herein as 

to whether the cost overruns paid by the Plan 

violated any of the provisions of part 4 of Title I 

of the Act. 

($285,000), so that the value of the 

Plan’s interest is $265,000, as of 

November 14, 2008. Although the Plan 

does not own the whole property but 

only the leasehold interest, the Union is 

willing to pay a purchase price 

encompassing the fair market value of 

both the Building and Lot as a unified 

property. 

Mr. Prosek and Mr. Baaske also 

determined that no premium is due 

from the Union to the Plan, as a term of 

the proposed sale, for any assemblage 

value resulting from the adjacency of 

the Union’s building to the Plan’s 

Building. The appraisers state, ‘‘A study 

of the influence of incremental size on 

office property values in this market 

does not reveal a premium being paid, 

on a price per square foot basis, for 

larger properties. In fact, some tendency 

toward diminishing return on size is 

evident * * *.’’ The report continues, 

‘‘Further, the subject building was 

designed and built for a single user 

* * *. It was not designed to be 

incorporated with the neighboring 

building and combining the two might 

result in a larger building that offers less 

than optimum utility.’’ The report 

concludes, ‘‘[T]he highest and best use 

of the subject property is a continuation 

of its current use as an independent 

office facility.’’ 

In regard to the fair market rental 

value of the Building, Mr. Prosek and 

Mr. Baaske state, ‘‘The observed leasing 

activity produces a fairly tight range of 

contract and asking rents, generally 

from about $9.00 to $12.00 per square 

foot of building area * * *. These leases 

and offerings suggest rent, assuming the 

described market expense structure, 

near $10.50 per square foot per year as 

appropriate for the subject space.’’ 

4. The Trustees have retained Ms. 

Nell Hennessy, President and Chief 

Executive Officer of Fiduciary 

Counselors Inc. (FCI) to act as an 

independent fiduciary on behalf of the 

Plan. Ms. Hennessy has headed FCI 

since its incorporation in 1999. From 

1993 to 1998, she served as Deputy 

Executive Director and Chief Negotiator 

of the Pension Benefit Guaranty 

Corporation (PBGC), the federal agency 

that guarantees private defined benefit 

pensions. Prior to Ms. Hennessy’s 

employment at the PBGC, Ms. Hennessy 

was a partner in the law firm of Willkie 

Farr & Gallagher, where she advised 

clients on a wide range of benefit, 

investment, and corporate governance 

issues. Ms. Hennessy will review and 

approve the methodology used by the 

appraisers to ensure that such 

methodology is properly applied in 

determining the fair market value of the 

Building and Lot, to be updated as of 

the date of the sale. She also will 

determine whether it is prudent to go 

forward with the proposed transaction. 

5. At the Department’s request, the 

applicant provided background on the 

Union’s past and on-going lease of the 

Lot to the Plan. According to the 

applicant, the Cincinnati Regional 

Office opened an investigation of the 

Plan in 1985, which continued until 

1989. The investigator advised the 

Union that, because the Plan did not 

have separate title to the Building, use 

of the Plan assets to construct the 

Building on Union land was a 

prohibited transaction. 

Upon the advice of counsel, the 

Union, on July 10, 1987, entered into a 

lease of the Lot located at 1564 East 

23rd Street to the Plan, with a 

retroactive effective date of September 

1, 1985, pursuant to the terms described 

in Facts and Representations #2, above. 

The Trustees represent that they were 

advised by counsel, at that time, that the 

ground lease was covered by the 

statutory exemption contained in 

section 408(b)(2) of the Act.3 The 

Trustees, however, were unable to 

locate and produce contemporaneous 

written documentation of the advice 

from an ERISA counsel regarding the 

applicability of section 408(b)(2) to the 

lease.4 The applicant has agreed, as a 

condition of this proposed exemption, 

to file Form 5330 and pay all applicable 

excise taxes that are due by reason of its 

prohibited past leasing to the Plan of the 

Lot on which the subject Building was 

constructed. 

6. The Trustees have determined that 

the proposed sale to the Union of the 

Plan’s leasehold interest, which 

includes the Building, a right of first 

refusal to purchase the Lot, a purchase 

option for the Lot, and an option to 

renew for successive terms, is in the 

best interests of the Plan. According to 

the applicant, the Plan and its ‘‘sister 

plans’’ have reduced the size of their 

respective office staffs over the past few 

years and thus their need for office 

space. Although the Plan’s leasehold 

interest represents less than three-tenths 

of one percent of the Plan’s assets, the 

Trustees believe that it is in the best 

interests of the Plan to divest itself of 

this illiquid asset. Further, the Plan will 

eliminate the operating and 

maintenance expenses associated with 

the Building. It is represented that the 

Plan will realize savings by renting the 

smaller amount of office space it needs 

rather than continuing to occupy the 

Building, as explained below. 

All three of the Iron Workers Local 17 

plans will rent nearby office space from 

an unrelated party following the sale of 

the Plan’s leasehold interest to the 

Union. The three plans will split the 

monthly rental cost of $1,125 per 

month. Based upon the Plan’s current 

expense allocation of 40% of the overall 

cost, the Plan will pay rent of $450 per 

month, or $5,400 per year. The Plan’s 

expense allocation in 2007 in 

connection with the Building that it 

currently occupies (for holding costs, 

such as the land lease, utilities, and 

taxes) was $10,383 per year, the amount 

not offset by rent payments from the 

Plan’s sister plans. Thus, according to 

the Trustees, the move to different office 

space will yield annual savings to the 

Plan of $4,983, approximately 47%. 

Although the Plan owns only the 

leasehold interest, the Union is willing 

to pay the greater of $285,000 or the fair 

market value for the fee simple interest 

of the Building and Lot as a unified 

property (as previously stated in Facts 

and Representations #3, above); the fair 

market value is to be updated as of the 

date of the sale by a qualified, 

independent appraiser. The Plan’s cost 

of construction for the Building was 

initially quoted at $231,900, but, due to 

cost overruns, came to a total of 

$321,738.5 Nevertheless, the Trustees 

represent that the Plan saved 

approximately $16,830 in rental costs 

from owning the Building, which also 

has generated rental income for the 

Plan. Although the minimum $285,000 

sales price will not enable the Plan to 

recoup its construction and holding 

costs of $640,631, the Trustees state that 

the Plan has had use of the Building for 

the past 22 years and the imputed value 

of the rental income it did not have to 

pay is estimated to be $367,463. 

7. The Trustees represent that the 

subject sale will be a one-time 

transaction for cash and that the Plan 

will incur no fees, commissions, or 

other expenses in connection with the 

sale (other than fees associated with the 

30634 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

retention of a qualified, independent 

appraiser and the retention of a 

qualified, independent fiduciary). The 

Union is also bearing the costs of the 

exemption application and of notifying 

interested persons. 

8. In summary, the applicant 

represents that the proposed transaction 

satisfies the statutory criteria for an 

exemption under section 408(a) of the 

Act for the following reasons: (a) The 

terms and conditions of the sale will be 

at least as favorable to the Plan as those 

that the Plan could obtain in an arm’s 

length transaction with an unrelated 

party; (b) the Plan will receive the 

greater of $285,000 or the fair market 

value of the Building and Lot as of the 

date of the sale, as determined by a 

qualified, independent appraiser; (c) the 

sale will be a one-time transaction for 

cash; (d) the Plan will pay no 

commissions, costs, or other expenses in 

connection with the sale (other than fees 

associated with the retention of a 

qualified, independent appraiser and 

the retention of a qualified, independent 

fiduciary); and (e) the Trustees have 

retained a qualified, independent 

fiduciary, who will review and approve 

the methodology used by the qualified, 

independent appraiser, will ensure that 

such methodology is properly applied 

in determining the fair market value of 

the Building and Lot as of the date of 

the sale, and will determine whether it 

is prudent to go forward with the 

proposed transaction. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Karin Weng of the Department, 

telephone (202) 693–8557. (This is not 

a toll-free number). 

Urology Clinics of North Texas, P.A. 

401(k) Profit Sharing Plan and Trust 

(The Plan) Located in Dallas, TX 

[Application No. D–11483] 

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, 

will not apply to the proposed sale (the 

Sale) of a 2.52 percent ownership 

interest comprising five (5.0) Class I 

Units (the Units) issued by the Center 

for Pediatric Surgery (CPS), an unrelated 

party, by the individually directed 

account in the Plan (the Account) of 

David Ewalt, M.D. (Dr. Ewalt), to Dr. 

Ewalt, a party in interest with respect to 

the Plan. 

This proposed exemption is subject to 

the following conditions: 

(a) The Sale is a one-time transaction 

for cash; 

(b) the closing of the Sale (the Closing 

Date) occurs within 60 days of the 

Department’s grant of the final 

exemption; 

(c) the Units are sold to Dr. Ewalt at 

the greater of the fair market value of the 

Units as of the Closing Date, as 

determined by a qualified, independent 

appraiser or for $441,000 for the 2.52 

percent interest of ownership of CPS; 

(d) in addition to the sale price 

described above, the Account will have 

received $408,954.00 in consideration 

for the reduction of the Account’s 

interest in CPS as a result of an 

investment by Cook Children’s Health 

Care System (Cook) in CPS; 

(e) the proceeds from the Sale are 

credited to the Account simultaneously 

with the transfer of the Units’ title to Dr. 

Ewalt; 

(f) neither the Plan nor the Account 

pay any fees, commissions, or other 

costs or expenses associated with the 

Sale; and 

(g) the terms and conditions of the 

Sale remain at least as favorable to the 

Account as the terms and conditions 

obtainable under similar circumstances 

negotiated at arm’s length with an 

unrelated party. 

Summary of Facts and Representations 

1. Urology Clinics of North Texas, 

P.A. (the Employer) has its principal 

office and place of business in Dallas, 

TX. The Employer has 27 physician 

partners including Dr. Ewalt. 

2. The Plan is a defined contribution 

profit sharing plan and has 147 

participants and beneficiaries. As of 

December 31, 2007, the Plan’s assets 

were valued at $20,190,735.00. The 

Plan’s trustees consist of four 

physicians. Dr. Ewalt is one of the 

trustees of the Plan and is also a 

member of the Plan’s administrative 

committee. The value of the Account as 

of May 8, 2009 is $1,336,000.00. 

3. In 2002, the Plan purchased 4.63 

percent (4.63%) interest in CPS for the 

benefit of the Account from the Plano 

Pediatric Surgery Center (Plano Center). 

The Plano Center was the entity that 

originally established CPS and it is not 

affiliated in any way with the Employer, 

the Plan or Dr. Ewalt. The Account paid 

$43,500 for the 4.63% interest in CPS. 

The acquisition of the Units occurred at 

the time of the original capitalization of 

CPS. 

4. CPS was formed in 2005 as an 

outpatient surgery facility in Plano, 

Texas. Construction on CPS’ facility was 

completed in 2006. CPS currently 

performs cases in the following medical 

specialties: GI, Dermatology, 

Ophthalmology, Dental Surgery, 

Orthopedic Surgery, ENT, General 

Surgery, Plastic Surgery, and Urology. 

5. Since 2006, the Units have 

generated Unrelated Business Taxable 

Income (UBTI) under Code section 511. 

It is represented that the Plan has paid 

income taxes equal to $74,789 in 2006 

and $58,937.00 in 2007 resulting from 

the UBTI. It is estimated that for the 

2008 tax year, the Plan will pay $59,000 

in income tax based on the UBTI. It is 

represented that the Account has borne 

the entire tax burden on behalf of the 

Plan. Due to the burden on the Account 

for paying taxes generated by the UBTI, 

Dr. Ewalt determined that selling the 

Units was in the best interest of the 

Account. Following the Sale, the 

Account would no longer be subject to 

UBTI liability. Because CPS is a medical 

provider, only physicians or entities 

representing physicians could purchase 

the Units. Moreover, the general partner 

of CPS must also approve any sales of 

the Units to any outside physicians or 

entities that represent physicians. 

Accordingly, Dr. Ewalt proposes to 

purchase the Units from the Account. 

6. The Employer hired Vincent 

Kickirillo (the Appraiser) of VMG 

Health, LLC, to appraise the value of the 

Units. He is a member of the 

Association for Investment Management 

and Research, the National Association 

of Certified Valuation Analysts and the 

Dallas Society of Financial Analysts. In 

addition, he holds a Chartered Financial 

Analyst designation. Neither the 

Appraiser nor VMG Health, LLC have 

any affiliation with the Employer and 

less than one percent of the income 

received by VMG Health, LLC is 

generated from services rendered to the 

Plan or any party in interest with 

respect to the Plan. The Appraiser 

applied a minority discount to the Units 

of 25 percent when compared to a 

controlling interest stake. The Appraiser 

valued each one percent interest of 

ownership of CPS at $175,000 as of 

January 9, 2008. Since the Units 

represent a 4.63% interest in CPS, the 

value of the Units as of January 9, 2008 

was $810,250 ($175,000 x 4.63). 

7. On August 1, 2008, Cook Children’s 

Health Care System (Cook) completed a 

capital investment in CPS that resulted 

in Cook’s ownership of 51 percent of the 

aggregate ownership interest CPS. Cook 

is not a party in interest to the Plan. The 

Cook investment did not represent an 

actual purchase from the Account of any 

Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30635 

6Nuetttera was engaged to provide management 

services for the surgery center. Nuettera held an 

ownership interest in CPS, but that interest was 

represented by units of a different class (Class II 

units) than those held by the physician 

practitioners who owned the remaining interests in 

CPS (Class I units). When Cook acquired its interest 

in CPS in 2008, it acquired both Class I and Class 

II units. The dilution of Nuettera’s interest in CPS 

was proportionately greater than the dilution of the 

physicians’ interests because Cook acquired 

seventy-five percent (75%) of the Class II units. In 

contrast, the aggregate ownership of the physicians 

was diluted by roughly fifty-four percent (54%) 

following the Cook investment. The reason the 

relative dilution of the two groups was different 

was a result of the fact that the two groups owned 

different classes of units. 

of the Units. Instead, the Cook 

investment represented an injection of 

capital into CPS which resulted in the 

issuance of additional ownership units 

to Cook and dilution of the then existing 

investors of CPS. 

8. Prior to the investment by Cook, 

individual investors, including the 

Account, together held an 81 percent 

aggregate interest in CPS, while the 

remaining 19 percent interest was held 

by Nuettera Holdings, LLC, (Nuettera) 

the entity providing business 

management services to CPS. Following 

the investment by Cook, the individual 

investors’ aggregate interest in CPS has 

been reduced to 44 percent and the 

interest held by Nuettera Holdings, LLC 

has been reduced to five percent.6 Due 

to the Cook investment and the resulting 

dilution and reduction of the ownership 

of the individual investors, the 

Account’s aggregate interest in CPS 

decreased from 4.63 percent to 2.52 

percent. As consideration for this 

dilution of their ownership interest, the 

previous investors received a special 

cash distribution from CPS. The 

Account’s share of this cash 

consideration was $408,954.00. This 

amount was deposited in the Account 

and invested in accordance with Dr. 

Ewalt’s directions. On March 30, 2009, 

the Appraiser updated his appraisal 

concerning the value of a one percent 

ownership interest in CPS as a result of 

the Cook investment. The Appraiser 

determined that a one percent interest 

in CPS is valued at $175,000. Therefore, 

the current value of the Units which 

now represent a 2.52% interest in CPS 

is valued at $441,000 (2.52 x $175,000). 

9. In summary, it is represented that 

the Sale satisfies the statutory criteria 

for an exemption under Section 408(a) 

of the Act for the following reasons: (a) 

The Sale to Dr. Ewalt is a one-time 

transaction for cash; (b) the Closing Date 

occurs within 60 days of grant of the 

final exemption; (c) the Units will be 

sold to Dr. Ewalt at the greater of the fair 

market value of the Units as of the 

Closing Date, as determined by a 

qualified, independent appraiser, or 

$441,000; (d) In addition to the sale 

price described above, the Account will 

have received $408,954.00 from Cook in 

consideration for the reduction of the 

Account’s interest in CPS; (e) the Sale 

proceeds from the transaction are 

credited simultaneously to Dr. Ewalt’s 

Account as the transfer of the Units’ title 

to Dr. Ewalt; (f) the Account pays no 

fees, commissions or other costs and 

expenses associated with the Sale; (g) 

The terms and conditions of the Sale 

remain at least as favorable to the 

Account as the terms and conditions 

obtainable under similar circumstances 

negotiated at arm’s length with an 

unrelated party. 

Notice to Interested Parties: Notice of 

the proposed exemption shall be given 

to all interested persons in the manner 

agreed upon by the Employer and 

Department within 15 days of the date 

of publication of this notice of proposed 

exemption in the Federal Register. 

Comments and requests for a hearing are 

due forty-five (45) days after publication 

of this notice in the Federal Register. 

FOR FURTHER INFORMATION CONTACT: 

Anh-Viet Ly of the Department, 

telephone (202) 693–8648 (this is not a 

toll-free number). 

Ford Motor Corporation and Its 

Affiliates (Collectively, Ford) Located in 

Detroit, MI 

[Application No. L–11451] 

Proposed Exemption 

The Department is considering 

granting an exemption under the 

authority of section 408(a) of the Act 

and in accordance with the procedures 

set forth in 29 CFR part 2570, subpart 

B (55 FR 32836, 32847, August 10, 

1990). 

Section I. Covered Transactions 

If the exemption is granted, the 

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

406(a)(1)(D), 406(b)(1), and 406(b)(2) of 

the Act shall not apply, effective July 

13, 2006, to: (1) Monthly cash advances 

to Ford by the Independent Health Care 

Trust for UAW Retirees of Ford Motor 

Company (the DC VEBA), as defined in 

section III(f), below, of this exemption, 

to reimburse Ford for the estimated 

mitigation of certain health care 

expenses (the Mitigation), as defined in 

section III(h), below, of this exemption, 

and during the period from July 14, 

2006 through February 28, 2007, for the 

payment of dental expenses incurred by 

participants in the DC VEBA; and (2) an 

annual ‘‘true-up’’ of the Mitigation 

payments and dental expenses against 

the actual expenses incurred, with the 

result that: (a) if Ford has been 

underpaid by the DC VEBA, Ford 

receives the balance outstanding from 

the DC VEBA with interest, or (b) if the 

DC VEBA has overpaid Ford, Ford 

reimburses the DC VEBA for the amount 

overpaid, with interest. 

Section II. Conditions 

This proposed exemption is 

conditioned upon adherence to the 

material facts and representations 

described herein and upon satisfaction 

of the following conditions: 

(a) A committee (the Committee), as 

defined in section III(d), below, of this 

exemption, acting as a fiduciary 

independent of Ford, has represented 

and will continue to represent the DC 

VEBA and its participants and 

beneficiaries for all purposes with 

respect to the Mitigation process under 

the settlement agreement (the DC VEBA 

Settlement Agreement or the Settlement 

Agreement), as defined in section III(g), 

below, of this exemption. 

(b) The Committee for the DC VEBA 

has discharged and will continue to 

discharge its duties consistent with the 

terms of the DC VEBA and the 

Settlement Agreement. 

(c) The Committee and actuaries 

retained by the Committee have 

reviewed and approved and will 

continue to review and approve the 

estimation process involved in the 

Mitigation, which results in the monthly 

Mitigation amount paid to Ford. 

(d) Outside auditors retained by the 

Committee, along with an 

administrative company that is partly 

owned by the DC VEBA, have audited 

and will audit the calculation of the 

true-up to determine whether there are 

any differences between the estimated 

Mitigation and actual Mitigation 

amounts and have made and will make 

such information available to Ford. 

(e) Ford has provided various reports 

and records to the Committee 

concerning dental care reimbursements 

for the period from July 14, 2006, 

through February 28, 2007, which were 

subject to review and audit by the 

Committee, and Ford has provided and 

will continue to provide various reports 

and records to the Committee 

concerning the Mitigation required 

under the Settlement Agreement which 

were and will continue to be subject to 

review and audit by the Committee. 

(f) The terms of the covered 

transactions are no less favorable and 

will continue to be no less favorable to 

the DC VEBA than the terms negotiated 

at arm’s length under similar 

circumstances between unrelated third 

parties. 

(g) The interest rate applied to any 

true-up payments is a reasonable rate, as 

30636 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

set forth in the DC VEBA Settlement 

Agreement, and will continue to be a 

reasonable rate that runs from the 

beginning of the year being trued up and 

does not and will not present a windfall 

or detriment to either party. 

(h) The DC VEBA has not incurred 

and will continue not to incur any fees, 

costs, or other charges (other than those 

described in the DC VEBA and the DC 

VEBA Settlement Agreement) as a result 

of the covered transactions described 

herein. 

(i) Ford and the Committee have 

maintained and will continue to 

maintain for a period of six (6) years 

from the date of any of the covered 

transactions, any and all records 

necessary to enable the persons 

described in section II(j), below, of this 

exemption to determine whether 

conditions of this exemption have been 

and will continue to be met, except that 

(1) a prohibited transaction will not be 

considered to have occurred if, due to 

circumstances beyond the control of 

Ford or the Committee, the records are 

lost or destroyed prior to the end of the 

six-year period, and (2) no party in 

interest other than Ford or the 

Committee shall be subject to the civil 

penalty that may be assessed under 

section 502(i) of the Act if the records 

are not maintained, or are not available 

for examination as required by section 

II(j), below, of this exemption. 

(j)(1) Except as provided in section 

II(j)(2), below, of this exemption and 

notwithstanding any provisions of 

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

of the Act, the records referred to in 

section II(i), above, of this exemption 

have been or will be unconditionally 

available at their customary location 

during normal business hours to: 

(A) Any duly authorized employee or 

representative of the Department; 

(B) The International Union, United 

Automobile, Aerospace and Agricultural 

Implement Workers of America (the 

UAW) or any duly authorized 

representative of the UAW; 

(C) Ford or any duly authorized 

representative of Ford; and 

(D) Any participant or beneficiary of 

the DC VEBA, or any duly authorized 

representative of such participant or 

beneficiary. 

(2) None of the persons described in 

section II(j)(1)(B) or (D), above, in this 

exemption is authorized to examine the 

trade secrets of Ford, or commercial or 

financial information that is privileged 

or confidential. 

Section III. Definitions 

For purposes of this proposed 

exemption, the term— 

(a) ‘‘Ford’’ means Ford Motor 

Company and its affiliates. 

(b) ‘‘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, or partner, 

employee or relative (as defined in 

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

person; or 

(3) Any corporation, partnership or 

other entity of which such other person 

is an officer, director or partner. (For 

purposes of this definition, the term 

‘‘control’’ means the power to exercise 

a controlling influence over the 

management or policies of a person 

other than an individual.) 

(c) ‘‘Class’’ or ‘‘Class Members’’ mean 

all persons who, as of the ratification 

date (the Ratification Date), as defined 

in section I(a) of the Settlement 

Agreement, (i.e., December 22, 2005) 

were: (1) Ford/UAW hourly employees 

who had retired from Ford with 

eligibility to participate in retirement in 

the Hospital-Surgical-Medical-DrugDental-Vision Program (the Original 

Plan), as in effect prior to the 

Ratification Date, or (2) the spouses, 

surviving spouses, and dependents of 

Ford/UAW hourly employees, who, as 

of the Ratification Date, were eligible for 

post-retirement or surviving spouse 

health care coverage under the Original 

Plan as a consequence of a Ford/UAW 

hourly employee’s retirement from Ford 

or death prior to retirement. Active 

employees, as defined in section I(A) of 

the Settlement Agreement, are not 

members of the Class. 

(d) ‘‘Committee’’ means the seven (7) 

individuals, consisting of two classes: 

(1) The UAW with three members, and 

(2) the public class with four members, 

who act as the named fiduciary and 

administrator of the DC VEBA. 

(e) ‘‘Court’’ or ‘‘Michigan District 

Court’’ means the United States District 

Court for the Eastern District of 

Michigan. 

(f) ‘‘DC VEBA’’ means the defined 

contribution—Voluntary Employees’ 

Beneficiary Association trust 

established by Ford pursuant to the 

Settlement Agreement and the trust 

agreement (the Trust Agreement). 

(g) ‘‘DC VEBA Settlement Agreement’’ 

or the ‘‘Settlement Agreement’’ means 

the agreement, dated February 13, 2006, 

which was entered into between Ford, 

the UAW, and class representatives, on 

behalf of a class of plaintiffs in a class 

action suit cited as Int’l Union, UAW, et. 

al. v. Ford Motor Company (Civil Case 

No. 05–74730 (E.D. Mich. July 13, 2006), 

aff’d, 497 F.3d 615 (6th Cir. 2007) 

(hereinafter referred to as the Hardwick 

I Case). 

(h) ‘‘Mitigation’’ means the reduction 

of monthly contributions, deductibles, 

out-of-pocket maximums, co-insurance 

payments, or any other payment in 

accordance with section 14 of the 

Settlement Agreement to the extent 

payments from the DC VEBA are made, 

as directed by the Committee, to Ford 

and/or to providers, insurance carriers 

and other agreed-upon entities. 

(i) ‘‘OPEB’’ means Other PostEmployment Benefits. The OPEB 

Valuation is an actuarially developed 

valuation of a company’s post 

retirement benefit obligations, other 

than for pension and other retirement 

income plans. The OPEB Valuation is 

based on a set of uniform financial 

reporting standards promulgated by the 

Financial Accounting Standards Board 

and embodied in Financial Accounting 

Standard 106, as revised from time to 

time. The types of benefits addressed in 

an OPEB Valuation typically are retiree 

healthcare (medical, dental, vision, 

hearing) life insurance, tuition 

assistance, and legal services 

(j) ‘‘Shares’’ or ‘‘Stock’’ refers to the 

common stock of Ford for which the par 

value is $.01. 

(k) ‘‘UAW’’ means the International 

Union, United Automobile, Aerospace 

and Agricultural Implement Workers of 

America or the United Auto Workers, if 

shortened. 

(l) ‘‘VEBA’’ means a voluntary 

employees’ beneficiary association. 

(m) ‘‘Defined Contribution Plan’’ or 

‘‘the Defined Contribution Plan of the 

Independent Health Care Trust for UAW 

Retirees of Ford Motor Company’’ 

means the defined contribution welfare 

benefit plan funded by the DC VEBA 

following the effective date (the 

Effective Date), as defined in section 

I(A) of the Settlement Agreement (i.e., 

July 13, 2006), which will include the 

requirement to make contributions to 

the DC VEBA, as set forth in section 13 

of the Settlement Agreement. 

Effective Date: If granted, this 

proposed exemption will be effective as 

of July 13, 2006. 

Summary of Facts and Representations 

1. Ford is primarily engaged in 

automotive production and marketing 

operations. Ford designs, manufactures, 

and markets vehicles worldwide, with 

its largest operating presence in North 

America. As of December 31, 2005, Ford 

had approximately 131,000 active 

employees in the United States, of 

whom approximately 86,000 are 

represented by the UAW and other 

unions. Approximately 590,000 retirees 

and dependents in the U.S. receive 

Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30637 

retiree health benefits from Ford, and of 

this total, as of January 1, 2006, 

approximately 170,000 are hourly 

retirees and spouses, surviving spouses, 

and eligible dependents. 

Ford is a corporation organized under 

the laws of the State of Delaware and 

maintains its headquarters in Dearborn, 

Michigan. As of December 17, 2007, 

Ford had total assets of 

$279,264,000,000, as reported in the 

consolidated balance sheet in Ford’s 

Form 10–k filed for the fiscal year ended 

December 31, 2007. 

2. The DC VEBA Settlement 

Agreement, dated February 13, 2006, 

was entered into among Ford, the UAW, 

and class representatives, on behalf of 

plaintiffs (i.e., the Class Members), in 

the Hardwick I Case. The Settlement 

Agreement was approved by the United 

States District Court for the Eastern 

District of Michigan in an order dated 

July 13, 2006, and was affirmed by the 

United States Court of Appeals for the 

6th Circuit in 2007. The Hardwick I 

Case contested whether Ford had the 

right to unilaterally modify retiree 

welfare benefits for hourly retired Ford 

employees who had been represented by 

the UAW. The settlement of the 

Hardwick I Case provided Ford with the 

opportunity to address its retiree health 

care costs in an agreed-upon fashion 

without compromising the future rights 

of Ford, the UAW, and the hourly 

retired Ford employees. 

3. Ford’s spiraling retiree health care 

costs were at the heart of the Hardwick 

I Case. Ford and the UAW engaged in 

discussions regarding the impact of 

rising health care costs on Ford’s 

financial condition. In conjunction 

therewith, Ford provided the UAW and 

the Class with extensive information as 

to its financial condition and its health 

care expenditures. Separate teams of 

investment bankers, actuaries, and legal 

experts reviewed Ford’s information 

and provided an assessment to the UAW 

and to the Class as to the state of Ford’s 

financial condition. Upon completion of 

such review, the UAW, the 

representatives of the Class, and counsel 

to the Class concluded that, without the 

Settlement Agreement, Ford’s ability to 

provide retiree health care benefits to 

Class Members would be unlikely over 

the long term. 

4. The Settlement Agreement modifies 

the health plan that Ford sponsors for 

its hourly retirees and their enrolled 

spouses and dependents. The modified 

plan imposes new cost sharing 

requirements with respect to retiree 

health benefits. Specifically, the Ford 

modified retiree health plan will require 

hourly retiree participants to make 

monthly contributions toward the cost 

of their retiree health coverage, and also 

imposes annual deductibles, out-ofpocket maximums, and certain coinsurance payments on participants and 

beneficiaries. 

In order to soften the impact of these 

new cost sharing obligations, the 

Settlement Agreement created a new 

employee welfare benefit plan, as 

described in section 3(1) of the Act. The 

new welfare benefit plan is called the 

Defined Contribution Plan of the 

Independent Health Care Trust for UAW 

Retirees of Ford Motor Company (the 

Defined Contribution Plan). The 

purpose of the Defined Contribution 

Plan is to provide mitigation to the 

affected Ford retirees of the costs shifted 

to them and no longer to be paid by the 

Ford modified health plan. 

5. The Defined Contribution Plan 

Mitigation benefits will be paid from a 

new voluntary employee beneficiary 

trust, the DC VEBA, controlled by a 

seven (7) member Committee which is 

independent of Ford. The DC VEBA 

qualifies as a ‘‘voluntary employees’ 

beneficiary association’’ within the 

meaning of section 501(c)(9) of the 

Code. The DC VEBA was established on 

July 18, 2006, through a welfare benefit 

trust (the Trust), as described under 

section 419(A)(f)(5)(A) of the Code. The 

Trust was established by the Trust 

Agreement between State Street Bank 

and Trust (the Trustee) and Ford. 

Under the terms of the Settlement 

Agreement, Ford is required to make 

certain contributions to the DC VEBA. 

In this regard, Ford is obligated to make 

a contribution in cash in the amount of 

$30 million as soon as practicable 

following the Effective Date (i.e., July 

13, 2006) of the Settlement Agreement. 

It is represented that on August 10, 

2006, the initial cash contribution in the 

amount of $30 million was paid into the 

DC VEBA. Ford is obligated to make a 

second contribution in cash in the 

amount of $35 million on the third 

anniversary of the first contribution and 

to make a third contribution in cash in 

the amount of $43 million in 2011, on 

the anniversary of the first contribution. 

It is represented that Ford’s obligation to 

make the second contribution and, if 

necessary, the third contribution, will 

be moved up to the extent necessary in 

order to enable the DC VEBA to 

continue paying mitigation at the initial 

mitigation level. 

In addition, monthly cash 

contributions relating to certain wage 

increases and COLA amounts for active 

hourly employees will be diverted into 

the DC VEBA. Further, a series of 

contributions in cash (the Contribution 

Obligation) based on the increase in the 

notional value of 8,750,000 shares of 

common stock of Ford (the Notional 

Shares) will be made. Each of these cash 

contributions will be equal to the value 

of any appreciation in the share price of 

Ford common stock over a value based 

on a share price of $8.145. One third of 

the Notional Shares shall be taken into 

account on the Effective Date of the 

Settlement Agreement (i.e., July 13, 

2006); one third on the first anniversary 

of the Effective Date; and the final third 

on the second anniversary of the 

Effective Date. The right to such cash 

contributions is non-transferable, and 

the DC VEBA shall have no shareholder 

rights with respect to such cash 

contributions based on Notional Shares. 

It is represented that the calculation of 

such cash contribution will be based on 

the average price per share of Ford 

common stock for the five (5) 

consecutive trading days ending on the 

day preceding the applicable of the 

three (3) calculation dates. In the event 

of a special dividend issued by Ford 

prior to the third anniversary of the 

Effective Date, Ford will be obligated to 

make a contribution in cash equal to the 

per share dividend times the total 

number of Notional Shares minus the 

number of Notional Shares with respect 

to which Ford has already made a cash 

contribution based on such Notional 

Shares. 

Under section 13.C of the Settlement 

Agreement, no contributions are payable 

by Ford to the DC VEBA, unless and 

until Ford has received either 

assurances that such contributions are 

covered by an exemption issued by the 

Department, or do not violate section 

406 and 407 of the Act. In this regard, 

with respect to the value of the Notional 

Shares, as of the Effective Date of the 

Settlement Agreement (i.e., July 13, 

2006), Ford’s common stock had not 

increased above the base value as set 

forth in section 13.C of the Settlement 

Agreement, and, as a result, no 

contribution was due to the DC VEBA 

with respect to that measurement date. 

As of the first anniversary of the 

Effective Date, (i.e., July 13, 2007), 

Ford’s common stock had increased 

over the base value; however, based on 

section 13.C of the Settlement 

Agreement, Ford declined to make a 

contribution at that time. In this regard, 

pursuant to section 13.C, Ford and the 

UAW have the option to agree upon a 

contribution to replace the Contribution 

Obligation, as set forth therein, if certain 

alternatives had not been satisfied by 

the first anniversary of the Effective 

Date of the Settlement Agreement. 

Because neither of the alternatives were 

satisfied by such date, Ford and the 

UAW agreed in the Memorandum of 

30638 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

7 It is represented that ‘‘Final Effective Date’’ 

means the later of the date on which the U.S. 

District Court enters the approval order or the date 

on which Ford has completed, on a basis reasonably 

satisfactory to Ford, its discussions with the staff of 

the SEC regarding certain accounting treatment 

with respect to the New VEBA and Ford’s postemployment retiree health obligation for the 

covered group. 

Understanding on Post Retirement 

Medical Care, dated November 3, 2007, 

(the MOU) (as subsequently embodied 

in a settlement agreement, dated March 

28, 2008, (the New Settlement 

Agreement), that Ford shall satisfy its 

Contribution Obligation, pursuant to 

section 13.C, by making an aggregate 

cash contribution of $33 million to the 

DC VEBA, within five (5) days of the 

‘‘Final Effective Date’’ (as defined in the 

New Settlement Agreement) 7 in full 

satisfaction of Ford’s obligations 

thereunder. 

6. The Committee acts as the named 

fiduciary and administrator for the 

Defined Contribution Plan and is 

responsible for the administration, 

operation, management and 

interpretation of the Trust, as set forth 

in the Trust Agreement. In this regard, 

the Committee appoints (and may 

remove) the Trustee, the investment 

managers of the DC VEBA’s assets, and 

other suitable professionals and agents 

to provide advice and services to the 

Committee or the Trust. The 

Committee’s duties include directing 

the investment of the assets of the Trust, 

except and to the extent that the 

Committee has invested such authority 

in the Trustee or has appointed an 

investment manager. In addition the 

Trust may be amended in writing at any 

time and from time to time, in whole or 

in part, by the action of the Committee. 

It is represented that Ford has no right 

to amend the Trust at any time. 

The Committee is comprised of seven 

individuals, consisting of two classes, 

the ‘‘UAW class,’’ and the ‘‘public 

class.’’ The UAW Class has three (3) 

members which are appointed by the 

UAW and serve at the discretion of the 

UAW. The members of the UAW class 

may be removed or replaced at any time 

by written notice by the President of the 

UAW to the members of the Committee. 

The public class has four (4) members 

who serve terms of four (4) years, except 

that the initial members serve terms, as 

set forth in the Trust Agreement. In the 

event of a vacancy in the public class, 

whether by expiration of a term, 

resignation, removal, incapacity, death 

or otherwise, the public class will elect 

a new member of the public class by 

majority vote of the continuing public 

class members, excluding such member 

vacating his or her seat. A public class 

member can be removed by the 

affirmative vote of any five (5) other 

members of the Committee at any time. 

One of the members of the public 

class serves as the Chair of the 

Committee. William E. Spriggs serves in 

the capacity as Chairman of the 

Committee. The Committee Chair serves 

for a term of two (2) years. Any 

successor Committee Chair will be 

elected by a majority vote of the 

Committee. 

All of the members of the Committee 

are independent of Ford. The members 

of the Committee do not include any 

Ford representative, and Ford does not 

have any authority to select members of 

the Committee. No member of the 

Committee may be an affiliate of Ford, 

as the term, ‘‘Affiliate,’’ is defined in 

section III(b), above of this exemption, 

including a current or former officer, 

director or salaried employee of Ford. 

No member of the public class may be 

an active employee or retiree of the 

UAW, nor may any member of the 

public class have any financial or 

institutional relationship with Ford, 

with the Committee or any Committee 

member that the Committee, in its sole 

discretion determines to be material. 

The Committee handles 

administrative tasks on behalf of the DC 

VEBA and the Defined Contribution 

Plan which is funded by the DC VEBA, 

as described in the Settlement 

Agreement, through Retiree Health 

Administration Company, LLC (RHAC). 

RHAC is a limited liability company set 

up to administer the Defined 

Contribution Plan on behalf of the 

Committee. RHAC is jointly owned by 

the UAW–GM VEBA and the DC VEBA. 

RHAC has joined and will continue to 

join with the Committee’s outside 

auditors in auditing the calculation of 

the true-up in connection with the 

Defined Contribution Plan. 

RHAC also administers the provision 

of dental coverage to eligible retirees by 

the DC VEBA. For the plan year 

beginning in July 2006 and for January 

and February of 2007, Ford provided 

dental coverage for UAW–Ford retirees 

and surviving spouses and their 

dependents, and the DC VEBA 

reimbursed Ford for the claims and 

premiums attributable to this group. 

From and after March 1, 2007, dental 

benefits are provided by the DC VEBA 

to eligible groups separate and apart 

from Ford, without Mitigation or 

reimbursement arrangement of any 

kind. The DC VEBA has contracted 

directly with carriers for dental services 

and has paid the applicable claims and 

premiums directly. Claims processing is 

contracted out to Blue Cross Blue Shield 

of Michigan. Maintaining eligibility 

records is contracted to Ford’s National 

Employee Service Center which also 

provides a call center to respond to 

participant needs. RHAC pays the bills, 

negotiates and monitors outside vendor 

contracts, audits claims and eligibility, 

coordinates the activities of outside 

professionals, and provides for certain 

other needs of the Committee with 

respect to the provision of dental 

benefits. 

The Committee has retained George 

Johnson & Company as its outside 

auditor responsible for the audit of the 

financial statements for the DC VEBA 

and the Defined Contribution Plan, 

including preparation of certain annual 

form filings. The Committee has also 

retained Plante & Morgan, L.L.P. 

(Plante) as its outside auditor 

responsible for assisting the staff of the 

Committee with the review of 

differences between estimated and 

actual Mitigation amounts. As such, 

Plante has audited the calculation of the 

true-up and has made and will continue 

to make, such information available to 

Ford. 

The Committee has retained 

Milliman, Inc. (Milliman), as its actuary. 

The Committee and Milliman have 

reviewed and approved the estimation 

process which results in the monthly 

Mitigation amounts paid to Ford and 

will continue to do so. 

7. As of December 31, 2006, the DC 

VEBA had cash of approximately $119 

million. The DC VEBA uses its assets to 

mitigate the cost sharing requirements 

imposed on the retirees by the 

Settlement Agreement. Initial levels of 

Mitigation are set forth in the Settlement 

Agreement, and may be modified later 

by the Committee in accordance with 

the terms of the Settlement Agreement 

and the Trust Agreement. 

8. The initial Mitigation levels 

provide for Mitigation of monthly 

retiree contributions down to $10 per 

individual and $21 per family (from $50 

per individual, and $105 per family). 

Deductibles will be mitigated down to 

an annual maximum of $150 per 

individual (from $300 per individual) 

and $300 per family (from $600 per 

family). The out-of-pocket maximum 

will be mitigated so that it is capped for 

in-network benefits at $250 per 

individual per year (from $500 per 

individual) and $500 per family per year 

(from $1,000 per family), and capped for 

out-of-network benefits at $500 per 

individual (from $1,000 per individual) 

and $1,000 per family (from $2,000 per 

family). It is represented that the 

Mitigation provided by the Defined 

Contribution Plan through the DC VEBA 

provides a significant benefit to 

participants who would otherwise be 

Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30639 

8The OPEB interest rate, as defined in section 

13(D) of the Settlement Agreement, is the discount 

rate used by Ford’s health care actuaries in 

accordance with the Financial Accounting Standard 

106 (FAS 106) actuarial valuation for the applicable 

period. Ford has also represented that the OPEB 

interest rate is the discount rate that a company 

uses to value ‘‘Other Post-Retirement Employee 

Benefits’’ for FAS 106 accounting reporting. The 

discount rate is based on market yields, as of a 

plan’s annual measurement date, on high quality 

fixed income securities of duration similar to the 

benefit obligation. For purposes of Ford’s retiree 

health obligation, its OPEB interest rate is 

developed each year in consultation with its 

outside accountants. Ford used an OPEB interest 

rate of 5.75% in 2005, of 5.75% in 2004, and of 

6.25% in 2003 relating to retiree health. 

9Ford relies on the relief provided by the 

statutory exemption, pursuant to section 408(b)(2) 

of the Act, in connection with Ford’s providing the 

DC VEBA with monthly administrative services, 

maintaining eligibility records, and providing a call 

center to respond to participant needs. The 

Department, herein, is offering no view, as to 

whether the provision of such services rendered by 

Ford to the DC VEBA is covered by the statutory 

exemption provided in section 408(b)(2) of the Act 

and the Department’s regulations, thereunder, 

pursuant to 29 CFR 2550.408(b)-2. Further the 

Department is not providing, herein, any relief with 

respect to the provision of such services to the DC 

VEBA by Ford. 

required to make these payments out of 

their own pockets. 

In addition, dental benefits were 

provided from July 2006 through 

February 2007, pursuant to a 

reimbursement arrangement with Ford. 

Since March 1, 2007, however, the DC 

VEBA has been the sole source of dental 

benefits for eligible groups. 

9. In order to reduce the 

administrative burden on the DC VEBA, 

and avoid having participants initially 

pay the costs and subsequently request 

reimbursement upon submission of 

documentation, the Settlement 

Agreement contemplates having Ford 

act as the conduit through which the DC 

VEBA will make Mitigation. 

Specifically, Ford will make certain 

payments that hourly retirees and their 

enrolled dependents would otherwise 

be required to make out of their own 

pockets. Ford will then accept 

Mitigation payments from the DC VEBA 

and apply such payments in accordance 

with the direction and instruction of the 

Committee for the benefit of the 

participants in the Defined Contribution 

Plan. 

This reimbursement process 

anticipates monthly advance payments 

to Ford from the DC VEBA of the 

actuarially anticipated cost of the initial 

Mitigation amounts, with a true-up no 

later than December 23 of the following 

calendar year. 

Specifically, the Mitigation process 

will work as follows: Annually, no later 

than May 1 of the preceding year, the 

Committee will inform Ford of the 

Mitigation levels for the following 

calendar year. Thereafter, no later than 

September 1 of the year preceding the 

forthcoming Mitigation year, Ford will 

provide the Committee with a 

preliminary estimate of the annual 

mitigation amount for the following 

calendar year. On December 1 of the 

preceding year, Ford will provide the 

Committee with the actuariallydetermined, final estimated annual 

mitigation amount. Both the preliminary 

and final estimated mitigation amounts 

need to be agreed to by the Committee. 

Then, as of the beginning of the 

calendar year of Mitigation, the DC 

VEBA will pay to Ford on a monthly 

basis an amount equal to 1⁄12 of the final 

estimated annual mitigation amount. 

No later than December 1 following 

the calendar year in which the monthly 

estimated mitigation payments have 

been made, Ford and the DC VEBA will 

engage in a true-up process. Ford will 

provide the Committee an actuarial 

report that determines the actual annual 

Mitigation amount and compares it to 

the estimated annual Mitigation 

payments that Ford received during the 

prior year. No later than December 23 of 

the year following the year being truedup, a true-up payment either will be 

paid by the DC VEBA to Ford, or by 

Ford back to the DC VEBA. Interest for 

any late payments, or for any true-up 

payment (whether from Ford back to the 

DC VEBA or from the DC VEBA to Ford) 

will be paid at the interest rate 8 for 

Other Post-Employment Benefits (the 

OPEB), as defined in section III(i) of this 

exemption. In addition, Ford is required 

to provide detailed quarterly reports to 

the Committee detailing retiree health 

claims experience, and the Committee 

shall have the right to request a 

reasonable audit of Ford’s books and 

records with respect to Mitigation 

payments made to Ford by the DC 

VEBA. The amount of any true-up 

payment will need to be approved by 

the Committee. If there is a dispute as 

to the true-up report or the amount of 

the true-up payment, undisputed 

amounts will be paid and the parties 

will enter into an arbitration dispute 

process, as set forth in the Settlement 

Agreement, which involves 

independent decision-makers who will 

resolve any true-up dispute. 

10. It is represented that the DC VEBA 

has made estimated Mitigation 

payments for health care to Ford for 

every month beginning with August 

2006 and continuing to the present. The 

DC VEBA has separately reimbursed 

Ford for dental claims and premiums 

that Ford paid on behalf of the 

participants in the DC VEBA for the 

period from July 14, 2006, through 

February 28, 2007. As stated previously 

in this proposed exemption, beginning 

March 1, 2007, the DC VEBA has 

contracted directly for dental services 

for its participants. It is represented that 

the amount of the dental reimbursement 

payments for 2006 and 2007 do not 

include the monthly administrative fee 

paid to Ford for maintaining eligibility 

records and providing a call center to 

respond to participant needs.9 For the 

period July 2006, through December 

2006, the DC VEBA made total 

Mitigation reimbursement payments to 

Ford for health care and dental benefits 

of approximately $30,755,460 and 

$16,141,185, respectively. For the 

period January 2007, through December 

2007, the DC VEBA made total 

Mitigation reimbursement payments to 

Ford for health care and dental benefits 

of approximately $83,900,004 and 

$14,891,491, respectively. For the 

period January 2008, through March 

2008, the DC VEBA made total 

Mitigation reimbursement payments to 

Ford solely for health care benefits of 

approximately $22,375,000. For the 

period April 2008, through April 2009, 

the DC VEBA made total Mitigation 

reimbursement payments to Ford solely 

for health care benefits of approximately 

$30,873,428. 

On February 7, 2008, Ford paid to the 

DC VEBA a 2006 true-up payment in the 

amount of $866,387. In addition, Ford 

paid to the DC VEBA interest in the 

amount of $74,929.91 in two (2) 

payments dated February 7, 2008, and 

April 17, 2008, of approximately 

$72,777 and $2,153, respectively. The 

total true-up payment for the year 2006, 

including interest, was $941,316.91. The 

total true-up payment for the year 2007, 

including interest of $46,368, was 

$492,305. The true-up amount for 2008 

will not be determined until the fall of 

2009. 

11. Ford requests a retroactive 

administrative exemption from the 

Department with respect to the 

following transactions: (a) monthly cash 

advances to Ford by the DC VEBA to 

reimburse Ford for the estimated 

Mitigation of certain health care 

expenses and for the payment of certain 

dental expenses incurred by 

participants in the DC VEBA; and (b) an 

annual true-up of such Mitigation 

payments and such dental expenses. 

Further, in this regard, if Ford is 

underpaid by the DC VEBA, it would 

receive the balance outstanding from the 

DC VEBA, with interest. Conversely, if 

the DC VEBA overpaid Ford, Ford 

would reimburse the DC VEBA for the 

amount overpaid, with interest. 

Accordingly, Ford requests retroactive 

30640 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

10The Department further believes that the 

Contribution Obligation is not an ‘‘employer 

security: Within the meaning of section 407(d)(1) of 

the Act. Since it appears that the Contribution 

Obligation does not result in the acquisition or 

holding by the DC VEBA of an ‘‘employer security,’’ 

the Department has not proposed separate 

exemptive relief herein with respect to such 

obligation. 

relief from sections 406(a)(1)(B), and 

406(a)(1)(D), respectively, because these 

transactions could be deemed to 

constitute the lending of money or 

extension of credit between the DC 

VEBA and Ford, a party in interest, or 

could be viewed as the use by or for the 

benefit of a party in interest of plan 

assets. 

With respect to violations of section 

406(b) of the Act, in the opinion of Ford, 

the involvement in such transactions by 

the Committee, a fiduciary of the 

Defined Contribution Plan and the DC 

VEBA that is independent of Ford, 

eliminates any issues under section 

406(b) of the Act. However, to eliminate 

any uncertainty respecting the issue, 

Ford seeks retroactive relief under 

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

If granted, the exemption would be 

effective as of July 13, 2006. 

As discussed in paragraph 5, above of 

the Summary of Facts and 

Representations of this proposed 

exemption, the Settlement Agreement 

grants to the DC VEBA a right to receive, 

and obligates Ford to make 

contributions that are based on the 

increase in the notional value of 

8,750,000 shares of Ford common stock. 

Such contributions will be nontransferable cash contributions 

determined on each of (i) the Effective 

Date of the Settlement Agreement (i.e., 

July 13, 2006), (ii) the first anniversary 

of the Effective Date, and (iii) the second 

anniversary of the Effective Date. The 

Department is not providing exemptive 

relief herein with respect to the 

Contribution Obligation because, in the 

view of the Department, the 

Contribution Obligation is merely a 

contractual provision evidenced in the 

DC VEBA Settlement Agreement which 

is designed to determine the amount of 

additional cash contributions that must 

be made to the DC VEBA.10

12. It is represented that the 

Mitigation payments significantly 

benefit the interests of Ford hourly 

retirees and their covered dependents. 

Having the Mitigation paid directly from 

the DC VEBA would otherwise involve 

significant delays and out of pocket 

expenditures by plan participants. 

13. Without an administrative 

exemption, Ford states that the DC 

VEBA would be required to establish a 

costly administrative scheme to 

reimburse participants in the DC VEBA. 

In this regard, Ford retirees’ would be 

charged the full costs of the monthly 

contributions, co-pays, and deductibles. 

These retirees would then have to apply 

for reimbursement payments, via a 

claim form, from the DC VEBA or its 

retained third party administrator. This 

alternative would have the dual effect of 

significantly delaying payments to the 

retirees and placing large and expensive 

administrative burdens on the DC 

VEBA, and hardship on the retirees 

themselves. 

14. It is represented that the proposed 

exemption is administratively feasible 

with terms clearly established in the 

Settlement Agreement and the Trust 

document. Further, implementation of 

the covered transactions provides the 

resolution to the Hardwick I Case, 

enabling Ford to fund the DC VEBA and 

provide Mitigation amounts to the 

retirees. 

15. The proposed exemption contains 

sufficient safeguards in that Ford and 

the UAW negotiated at arm’s length over 

the terms of the covered transaction and 

such terms were memorialized in a 

court-approved Settlement Agreement 

involving both the UAW and Class 

Counsel. In addition, the UAW, which 

represents the interests of the Ford 

hourly retirees and their dependents, 

fully supports the requested exemption. 

Further the terms of the Settlement 

Agreement, including the Mitigation 

payment process and the DC VEBA 

contribution rules, were subject to a 

fairness hearing and a judicial 

determination that it is fair and 

reasonable to Ford hourly retirees. 

It is represented that the calculation 

of the Mitigation payments is subject to 

the strict scrutiny of actuaries retained 

by the DC VEBA and requires the 

ultimate approval of the Committee. The 

process by which the Mitigation 

payments are established ensures that 

the monthly Mitigation payments will 

reflect an actuarially sound estimate of 

the projected mitigation costs. 

The Committee, acting as 

independent fiduciary of the Defined 

Contribution Plan and the DC VEBA, 

ensures that the cash contributions 

based on the value of Notional Shares 

are correctly calculated and timely 

contributed to the DC VEBA. 

Finally, the interest rate used to 

calculate the true-up payments is a 

reasonable rate, as set forth in the DC 

VEBA Settlement Agreement and does 

not present a windfall or detriment to 

either Ford or the DC VEBA. 

16. Ford and the Committee will each 

maintain records of covered transactions 

for a period of six (6) years. The 

Committee maintains records of 

payments made or received by the DC 

VEBA, quarterly reports, and dental 

claims records, but no other health 

benefit claims records. Ford has 

provided the reports required under the 

Settlement Agreement with respect to 

the estimated Mitigation and the trueup. Ford will continue to provide all 

reports and records concerning the 

Mitigation required under the 

Settlement Agreement, and such reports 

have been and will continue to be 

subject to review and audit by the 

Committee, as provided in the 

Settlement Agreement. 

17. It is represented that ultimately, 

the DC VEBA will be terminated and its 

assets transferred to a new VEBA (the 

New VEBA). However, several steps will 

occur before this happens. These steps 

were first described in the MOU, dated 

November 3, 2007, and agreed to by 

Ford and the UAW. The terms of the 

MOU were subsequently embodied in 

the New Settlement Agreement between 

Ford and the UAW, and the Class 

representatives, on behalf of the 

applicable class in: (a) The class action 

of Int’l Union, UAW, et. al. v. Ford 

Motor Company, Civil Action No. 07– 

14845 (E.D. Mich. filed Nov. 9, 2007) 

and/or (b) the class action of the 

Hardwick I Case. The New Settlement 

Agreement resolves and settles any and 

all claims for Ford contributions to the 

DC VEBA, and provides for the 

termination of the DC VEBA and the 

transfer of all assets and liabilities of the 

DC VEBA to the New VEBA. In the 

event of an inconsistency between the 

New Settlement Agreement and any 

prior agreements or documents, 

including the MOU, the New Settlement 

Agreement will control. 

In the negotiations leading to the 

MOU and the New Settlement 

Agreement, Ford advised the UAW of its 

intent to terminate the Hardwick I Case 

Settlement Agreement in accordance 

with its terms in 2011 and exercise its 

right to terminate and/or modify retiree 

health coverage for all UAW retirees and 

their dependents, and the UAW 

reasserted its position that postretirement medical coverage for current 

UAW retirees is vested and unalterable. 

The New Settlement Agreement 

provides that as of the day following the 

‘‘Implementation Date’’ (as defined in 

the New Settlement Agreement), the 

‘‘New Plan’’ (as defined in the New 

Settlement Agreement) and the New 

VEBA shall be the employee welfare 

benefit plan and trust that are 

exclusively responsible for all retiree 

medical benefits for which Ford, the 

Ford Retiree Health Plan (as defined in 

the New Settlement Agreement), and 

any other Ford entity or benefit plan 

Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 30641 

formerly would have been responsible 

with regard to the class and covered 

group. 

With regard to the DC VEBA, section 

12.C of the New Settlement Agreement 

states that the ‘‘Approval Order’’ (as 

defined in the New Settlement 

Agreement) shall direct the Committee 

and the Trustee of the DC VEBA to 

transfer all assets and liabilities of the 

DC VEBA to the New VEBA and 

terminate the DC VEBA within fifteen 

(15) days after the Implementation Date. 

This transfer of assets and liabilities 

shall include, but not be limited to, the 

transfer of all rights and obligations 

granted to or imposed on the DC VEBA 

under section 14.C of the Settlement 

Agreement. Further, Ford agrees that, on 

the day following the Implementation 

Date, the New VEBA shall be 

substituted for the DC VEBA for such 

purposes. The Approval Order shall 

further provide that the DC VEBA shall 

be terminated after this payment is 

made. 

In addition, the New Settlement 

Agreement makes certain provisions 

with respect to the wage and COLA 

deferrals and other contributions 

payable to the DC VEBA, and further 

provides that Ford shall satisfy the 

Contribution Obligation, set forth in 

section 13.C of the Settlement 

Agreement by making an aggregate cash 

contribution of $33 million to the DC 

VEBA within five (5) days of the Final 

Effective Date in full satisfaction of its 

obligations thereunder. 

18. In summary, Ford represents that 

the transactions have satisfied and will 

continue to satisfy the statutory criteria 

for an exemption under section 408(a) of 

the Act because: 

(a) The Committee, acting as a 

fiduciary independent of Ford, has 

represented and will continue to 

represent the DC VEBA and its 

participants and beneficiaries for all 

purposes with respect to the Mitigation 

process under the Settlement 

Agreement. 

(b) The Committee for the DC VEBA 

has discharged and will continue to 

discharge its duties consistent with the 

terms of the Settlement Agreement. 

(c) The Committee and actuaries 

retained by the Committee have 

reviewed and approved and will 

continue to review and approve the 

estimation process involved in the 

Mitigation, which results in the monthly 

Mitigation amount paid to Ford. 

(d) Outside auditors retained by the 

Committee, along with an 

administrative company that is partly 

owned by the DC VEBA, have audited 

and will audit the calculation of the 

true-up to determine whether there are 

any differences between the estimated 

Mitigation and actual Mitigation 

amounts and have made and will make 

such information available to Ford. 

(e) Ford has provided various report 

and records to the Committee 

concerning dental care reimbursements 

for the period from July 14, 2006 

through February 28, 2007, which were 

subject to review and audit by the 

Committee, and Ford has provided and 

will continue to provide various reports 

and records to the Committee 

concerning the Mitigation required 

under the Settlement Agreement which 

were and will continue to be subject to 

review and audit by the Committee. 

(f) The terms of the covered 

transactions are no less favorable and 

will continue to be no less favorable to 

the DC VEBA than the terms negotiated 

at arm’s length under similar 

circumstances between unrelated third 

parties. 

(g) The interest rate applied to any 

true-up payments is a reasonable rate, as 

set forth in the DC VEBA Settlement 

Agreement, and will continue to be a 

reasonable rate that runs from the 

beginning of the year being trued up and 

does not and will not present a windfall 

or detriment to either party. 

(h) The DC VEBA has not incurred 

and will continue not to incur any fees, 

costs or other charges (other than those 

described in the DC VEBA and the DC 

VEBA Settlement Agreement) as a result 

of the covered transactions described 

herein. 

(i) Ford and the Committee have 

maintained and will continue to 

maintain for a period of six (6) years 

from the date of any of the covered 

transactions, any and all records 

necessary to determine whether 

conditions of this exemption have been 

and will continue to be met. 

Notice to Interested Persons 

Ford will provide notice of the 

proposed exemption to: (1) The UAW; 

and (2) persons who on or after 

December 22, 2005, and prior to the date 

of the filing of the application for 

exemption (i.e., November 27, 2007) 

were: (a) Ford/UAW hourly employees 

who had retired from Ford with 

eligibility to participate during 

retirement in the Ford health plan, or (b) 

spouses or surviving spouses of Ford/ 

UAW hourly employees, who on or after 

December 22, 2005, were eligible for 

post-retirement or surviving spouse 

health care coverage from Ford 

(collectively, Interested Persons) within 

twenty (20) calendar days of the 

publication of the notice of proposed 

exemption in the Federal Register. Such 

notice will be provided to Interested 

Persons by first-class mail, at the last 

known mailing address of such 

Interested Persons and will include a 

photocopy of the notice of proposed 

exemption as published in the Federal 

Register as well as a supplemental 

statement, as required pursuant to 29 

CFR 2570.43(b)(2). The supplemental 

statement will inform interested persons 

of their right to comment on and/or to 

request a hearing. Comments and 

requests for a hearing with respect to the 

proposed exemption are due within fifty 

(50) calendar days of the publication of 

this pendency notice in the Federal 

Register. If you decide to submit written 

comments to the Department, your 

comments should be limited to the 

transactions described in this proposed 

exemption. However, if you have 

concerns about your retiree health 

benefits or any other administrative 

issues relating to your benefits, you 

should contact NESC, by phone at 1– 

800–248–4444, by mail P.O. Box 6214, 

Dearborn, MI 48121, or by e-mail at 

nesc@ford.com. 

FOR FURTHER INFORMATION CONTACT: 

Angelena C. Le Blanc of the Department, 

at e-mail address ford@dol.gov, or at 

telephone number 202–693–8547 (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; 

30642 Federal Register / Vol. 74, No. 122 / Friday, June 26, 2009 / Notices 

(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 is the subject of the 

exemption. 

Signed at Washington, DC, this 22nd day 

of June, 2009. 

Ivan Strasfeld, 

Director of Exemption Determinations, 

Employee Benefits Security Administration, 

U.S. Department of Labor. 

[FR Doc. E9–15159 Filed 6–25–09; 8:45 am] 

BILLING CODE 4510–29–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,922] 

Seton Identification Products, Inc., 

Branford, CT; Notice of Termination of 

Investigation 

Pursuant to Section 221 of the Trade 

Act of 1974, as amended, an 

investigation was initiated on May 15, 

2009 in response to a petition filed on 

behalf of workers at Seton Identification 

Products, Inc., Branford, Connecticut. 

The workers are engaged in activities 

related to the production of signs, tags 

and labels. 

The petitioners have requested that 

the petition be withdrawn. 

Consequently, the investigation has 

been terminated. 

Signed in Washington, DC, this 26th day of 

May 2009. 

Richard Church 

Certifying Officer, Division of Trade 

Adjustment Assistance. 

[FR Doc. E9–15221 Filed 6–26–09; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,921] 

Newport Corporation, Irvine, CA; 

Notice of Termination of Investigation 

Pursuant to Section 221 of the Trade 

Act of 1974, as amended, an 

investigation was initiated on May 15, 

2009 in response to a worker petition 

filed by the State Workforce Office on 

behalf of workers at Newport 

Corporation, Irvine, California. 

The petitioner has requested that the 

petition be withdrawn. Consequently, 

the investigation has been terminated. 

Signed at Washington, DC, this 27th day of 

May 2009. 

Linda G. Poole, 

Certifying Officer, Division of Trade 

Adjustment Assistance. 

[FR Doc. E9–15220 Filed 6–26–09; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,920] 

Toyal America, Inc., Lockport, IL; 

Notice of Termination of Investigation 

In accordance with Section 221 of the 

Trade Act of 1974, as amended, an 

investigation was initiated on May 15, 

2009 in response to a petition filed by 

a company official on behalf of workers 

of Toyal America, Inc., Lockport, 

Illinois. 

The petitioner has requested that the 

petition be withdrawn. Consequently, 

the investigation has been terminated. 

Signed in Washington, DC, this 18th day of 

May 2009. 

Richard Church, 

Certifying Officer, Division of Trade 

Adjustment Assistance. 

[FR Doc. E9–15219 Filed 6–26–09; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,913] 

Performance Powder Coatings LLC, 

Kokomo, IN; Notice of Termination of 

Investigation 

Pursuant to Section 221 of the Trade 

Act of 1974, as amended, an 

investigation was initiated on May 12, 

2009 in response to a worker petition 

filed by a company official on behalf of 

workers at Performance Powder 

Coatings, LLC, Kokomo, Indiana. 

The petitioner has requested that the 

petition be withdrawn. Consequently, 

the investigation has been terminated. 

Signed at Washington, DC, this 22nd day 

of May 2009. 

Richard Church, 

Certifying Officer, Division of Trade 

Adjustment Assistance. 

[FR Doc. E9–15218 Filed 6–26–09; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,912] 

L and L Products, Romeo, MI; Notice 

of Termination of Investigation 

Pursuant to Section 221 of the Trade 

Act of 1974, as amended, an 

investigation was initiated on May 12, 

2009 in response to a petition filed on 

behalf of workers of L and L Products, 

Romeo, Michigan. 

The petitioners have requested that 

the petition be withdrawn. 

Consequently, the investigation has 

been terminated. 

Signed at Washington, DC, this 15th day of 

May 2009. 

Elliott S. Kushner, 

Certifying Officer, Division of Trade 

Adjustment Assistance. 

[FR Doc. E9–15217 Filed 6–26–09; 8:45 am] 

BILLING CODE 4510–FN–P 

DEPARTMENT OF LABOR 

Employment and Training 

Administration 

[TA–W–65,908] 

DJ Fashions, LLC, New York, NY; 

Notice of Termination of Investigation 

Pursuant to Section 221 of the Trade 

Act of 1974, as amended, an 

investigation was initiated on May 11, 

2009 in response to a petition filed by 

a company official on behalf of the 

workers at DJ Fashions, LLC, New York, 

New York. 

The petitioner has requested that the 

petition be withdrawn. Consequently, 

the investigation has been terminated.