Exemptions From Certain Prohibited Transaction Restrictions, 66955-66962 [2013-26630]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 78, Number 216 (Thursday, November 7, 2013)]
[Notices]
[Pages 66955-66962]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-26630]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Exemptions From Certain Prohibited Transaction Restrictions

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). 
This notice includes the following: 2013-10, UBS AG and Its Current and 
Future Affiliates and Subsidiaries, D-11506; 2013-11, Wells Fargo Bank, 
N.A., D-11640; 2013-12, Sears Holding Savings Plan, Sears Holdings 
Puerto Rico Savings Plan and the Lands' End, Inc. Retirement Plan, D-
11739, D-11740, and D-11741; 2013-13, American International Group, 
Inc. Incentive Savings Plan, American General Agents' & Managers' 
Thrift Plan, and Chartis Insurance Company-Puerto Rico Capital Growth 
Plan, D-11767, D-11768 and D-11769.

SUPPLEMENTARY INFORMATION: A notice was published in the Federal 
Register of the pendency before the Department of a proposal to grant 
such exemption. The notice set forth a summary of facts and 
representations contained in the application for exemption and referred 
interested persons to the application for a complete statement of the 
facts and representations. The application has been available for 
public inspection at the Department in Washington, DC The notice also 
invited interested persons to submit comments on the requested 
exemption to the Department. In addition the notice stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). The applicant has represented that it has 
complied with the requirements of the notification to interested 
persons. No requests for a hearing were received by the Department. 
Public comments were received by the Department as described in the 
granted exemption.
    The notice of proposed exemption was issued and the exemption is 
being granted solely by the Department because, effective December 31, 
1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 
(1996), transferred the authority of the Secretary of the Treasury to 
issue exemptions of the type proposed to the Secretary of Labor.

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR Part 
2570, Subpart B (76 FR 66637, 66644, October 27, 2011) \1\ and based 
upon the entire record, the Department makes the following findings:
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    \1\ The Department has considered exemption applications 
received prior to December 27, 2011 under the exemption procedures 
set forth in 29 CFR Part 2570, Subpart B (55 FR 32836, 32847, August 
10, 1990).
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    (a) The exemption is administratively feasible;
    (b) The exemption is in the interests of the plan and its 
participants and beneficiaries; and

[[Page 66956]]

    (c) The exemption is protective of the rights of the participants 
and beneficiaries of the plan.

UBS AG and Its Current and Future Affiliates and Subsidiaries 
(Collectively, UBS) Located in New York, New York [Prohibited 
Transaction Exemption 2013-10; Exemption Application No. D-11506]

Exemption

Section I. Sales of Auction Rate Securities From Plans to UBS: 
Unrelated to a Settlement Agreement

    The restrictions of section 406(a)(1)(A) and (D) and section 
406(b)(1) and (2) of the Act and the taxes imposed by section 4975 of 
the Code, by reason of section 4975(c)(1)(A), (D), and (E) of the Code, 
shall not apply, effective February 1, 2008, to the sale by a Plan (as 
defined in section V(e)) of an Auction Rate Security (as defined in 
section V(c)) to UBS, where such sale (an Unrelated Sale) is unrelated 
to, and not made in connection with, a Settlement Agreement (as defined 
in section V(f)), provided that the conditions set forth in Section II 
have been met.

Section II. Conditions Applicable to Transactions Described in Section 
I

    (a) The Plan acquired the Auction Rate Security in connection with 
brokerage or advisory services provided by UBS;
    (b) The last auction for the Auction Rate Security was 
unsuccessful;
    (c) Except in the case of a Plan sponsored by UBS for its own 
employees (a UBS Plan), the Unrelated Sale is made pursuant to a 
written offer by UBS (the Unrelated Offer) containing all of the 
material terms of the Unrelated Sale, including, but not limited to, 
the most recent rate information for the Auction Rate Security (if 
reliable information is available). Either the Unrelated Offer or other 
materials available to the Plan provide the identity and par value of 
the Auction Rate Security. Notwithstanding the foregoing, in the case 
of a pooled fund maintained or advised by UBS, this condition shall be 
deemed met to the extent each Plan invested in the pooled fund (other 
than a UBS Plan) receives written notice regarding the Unrelated Sale, 
where such notice contains the material terms of the Unrelated Sale 
(including, but not limited to, the material terms described in the 
preceding sentence);
    (d) The Unrelated Sale is for no consideration other than cash 
payment against prompt delivery of the Auction Rate Security;
    (e) The sales price for the Auction Rate Security is equal to the 
par value of the Auction Rate Security, plus any accrued but unpaid 
interest or dividends; \2\
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    \2\ This exemption does not address tax issues. The Department 
has been informed by the Internal Revenue Service and the Department 
of the Treasury that they are considering providing limited relief 
from the requirements of sections 72(t)(4), 401(a)(9), and 4974 of 
the Code with respect to retirement plans that hold Auction Rate 
Securities. The Department has also been informed by the Internal 
Revenue Service that if Auction Rate Securities are purchased from a 
Plan in a transaction described in sections I and III at a price 
that exceeds the fair market value of those securities, then the 
excess value would be treated as a contribution for purposes of 
applying applicable contribution and deduction limits under sections 
219, 404, 408, and 415 of the Code.
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    (f) The Plan does not waive any rights or claims in connection with 
the Unrelated Sale;
    (g) The decision to accept the Unrelated Offer or retain the 
Auction Rate Security is made by a Plan fiduciary or Plan participant 
or beneficial owner of an individual retirement account (an IRA, as 
described in section V(e) below) who is independent (as defined in 
section V(d)) of UBS. Notwithstanding the foregoing: (1) in the case of 
an IRA, which is beneficially owned by an employee, officer, director 
or partner of UBS, or a relative of any such persons, the decision to 
accept the Unrelated Offer or retain the Auction Rate Security may be 
made by such employee, officer, director or partner; or (2) in the case 
of a UBS Plan or a pooled fund maintained or advised by UBS, the 
decision to accept the Unrelated Offer may be made by UBS after UBS has 
determined that such purchase is in the best interest of the UBS Plan 
or pooled fund; \3\
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    \3\ The Department notes that the Act's general standards of 
fiduciary conduct also would apply to the transactions described 
herein. In this regard, section 404 requires, among other things, 
that a fiduciary discharge his duties respecting a plan solely in 
the interest of the plan's participants and beneficiaries and in a 
prudent manner. Accordingly, a plan fiduciary must act prudently 
with respect to, among other things, the decision to sell the 
Auction Rate Security to UBS for the par value of the Auction Rate 
Security, plus any accrued but unpaid interest or dividends. The 
Department further emphasizes that it expects Plan fiduciaries, 
prior to entering into any of the proposed transactions, to fully 
understand the risks associated with this type of transaction 
following disclosure by UBS of all relevant information.
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    (h) Except in the case of a UBS Plan or a pooled fund maintained or 
advised by UBS, neither UBS nor any affiliate exercises investment 
discretion or renders investment advice within the meaning of 29 CFR 
2510.3-21(c) with respect to the decision to accept the Unrelated Offer 
or retain the Auction Rate Security;
    (i) The Plan does not pay any commissions or transaction costs with 
respect to the Unrelated Sale;
    (j) The Unrelated Sale is not part of an arrangement, agreement or 
understanding designed to benefit a party in interest to the Plan;
    (k) UBS and its affiliates, as applicable, maintain, or cause to be 
maintained, for a period of six (6) years from the date of the 
Unrelated Sale, such records as are necessary to enable the persons 
described below in paragraph (l)(1), to determine whether the 
conditions of this exemption, if granted, have been met, except that--
    (1) No party in interest with respect to a Plan which engages in an 
Unrelated Sale, other than UBS and its affiliates, as applicable, shall 
be subject to a civil penalty under section 502(i) of the Act or the 
taxes imposed by section 4975(a) and (b) of the Code, if such records 
are not maintained, or not available for examination, as required, 
below, by paragraph (l)(1); and
    (2) A separate prohibited transaction shall not be considered to 
have occurred solely because, due to circumstances beyond the control 
of UBS or its affiliates, as applicable, such records are lost or 
destroyed prior to the end of the six-year period;
    (l)(1) Except as provided below in paragraph (l)(2), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to above in paragraph (k) are 
unconditionally available at their customary location for examination 
during normal business hours by--
    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service, or the U.S. Securities and 
Exchange Commission; or
    (B) Any fiduciary of any Plan, including any IRA owner, that 
engages in a Sale, or any duly authorized employee or representative of 
such fiduciary; or
    (C) Any employer of participants and beneficiaries and any employee 
organization whose members are covered by a Plan that engages in the 
Unrelated Sale, or any authorized employee or representative of these 
entities;
    (2) None of the persons described above in paragraph (l)(1)(B)-(C) 
shall be authorized to examine trade secrets of UBS, or commercial or 
financial information which is privileged or confidential; and
    (3) Should UBS refuse to disclose information on the basis that 
such information is exempt from disclosure, UBS shall, by the close of 
the thirtieth (30th) day following the request,

[[Page 66957]]

provide a written notice advising that person of the reasons for the 
refusal and that the Department may request such information.

Section III. Sales of Auction Rate Securities From Plans to UBS: 
Related to a Settlement Agreement

    The restrictions of section 406(a)(1)(A) and (D) and section 
406(b)(1) and (2) of ERISA and the taxes imposed by section 4975 of the 
Code, by reason of section 4975(c)(1)(A), (D) and (E) of the Code, 
shall not apply, effective February 1, 2008, to the following 
transactions: (a) The acquisition by a Plan, as described in section 
V(e), of certain rights issued to owners of Auction Rate Securities by 
UBS AG (ARS Rights) in connection with a Settlement Agreement, (b) the 
sale of an Auction Rate Security to UBS pursuant to such ARS Rights, 
where such sale (a Settlement Sale) is related to, and made in 
connection with, a Settlement Agreement, and (c) the sale of an Auction 
Rate Security to UBS where such sale is made pursuant to Section 15 of 
the Texas Settlement Agreement (the Section 15 Texas Settlement Sale), 
provided that the conditions set forth in Section IV below are met.

Section IV. Conditions Applicable to Transactions Described in Section 
III

    (a) The terms and delivery of the offer of ARS Rights (the ARS 
Rights Offer) are consistent with the requirements set forth in the 
Settlement Agreement;
    (b) UBS sends notice of the ARS Rights Offer to the Plans, 
including an explanatory cover letter and prospectus for the ARS Rights 
under the Securities Act of 1933 (the Securities Act), as amended. 
Notwithstanding the above, notice is not required to be sent to the 
underlying investors in pooled funds maintained or advised by UBS (but 
shall be provided to the pooled funds);
    (c) Under the terms of the ARS Rights Offer, over certain periods 
of time described below (the Exercise Periods), Eligible Customers who 
accept the ARS Rights Offer are entitled to put (i.e., sell), for par 
value (plus accrued but unpaid interest or dividends), any of their 
Auction Rate Securities to UBS at a time of their choosing, and UBS is 
entitled to call any of those Auction Rate Securities at any time, for 
par value (plus accrued but unpaid interest or dividends).
    (d) Eligible Customers holding ARS Rights who validly accept the 
ARS Rights Offer will grant to UBS the sole discretion and right to 
sell or otherwise dispose of, and/or enter orders in the auction 
process with respect to, the Eligible Customers' eligible Auction Rate 
Securities on their behalf until the expiration date of the related ARS 
Right, without prior notification, so long as the Eligible Customers 
receive a payment of par plus accrued but unpaid interest or dividends 
upon any sale or disposition;
    (e) Plans pay no commissions or transaction costs in connection 
with the acquisition of ARS Rights;
    (f) In the case of a UBS Plan or pooled fund advised by UBS, the 
decision to accept the ARS Rights Offer and any subsequent decision to 
put Auction Rate Securities to UBS or, under the Texas Settlement, sell 
the Auction Rate Securities to UBS, may be made by UBS after UBS has 
determined that such transaction is in the best interest of the UBS 
Plan or pooled fund.
    (g) In the case of an IRA owned by an employee, officer, director 
or partner of UBS or a relative of any such persons, the IRA owner 
makes an independent determination whether to accept the ARS Rights 
Offer and any subsequent decision to put Auction Rate Securities to UBS 
or, under the Texas Settlement, sell the Auction Rate Securities to 
UBS;
    (h) In the case of Plans not described in paragraph IV(f) or IV(g) 
above, a person independent of UBS makes the determination whether to 
accept the ARS Rights Offer and any subsequent decision to put Auction 
Rate Securities to UBS during the applicable Exercise Period or, under 
the Texas Settlement, sell the Auction Rate Securities to UBS, except 
with respect to permitted calls under the ARS Rights, consistent with a 
registration statement under the Securities Act, as amended;
    (i) The ARS Rights Offer, or other documents available to the Plan, 
specifically describe, among other things:
    (1) How a Plan may determine: the Auction Rate Securities held by 
the Plan with UBS, the purchase dates for the Auction Rate Securities, 
and (if reliable information is available) the most recent rate 
information for the Auction Rate Securities;
    (2) The number of shares and par value of the Auction Rate 
Securities available for purchase under the ARS Rights Offer;
    (3) The background of the ARS Rights Offer;
    (4) That participating in the ARS Rights Offer will not result in 
or constitute a waiver of any claim of the tendering Plan;
    (5) The methods and timing by which Plans may accept the ARS Rights 
Offer;
    (6) The purchase dates, or the manner of determining the purchase 
dates, for Auction Rate Securities tendered pursuant to the ARS Rights 
Offer;
    (7) The timing for acceptance by UBS of tendered Auction Rate 
Securities;
    (8) The timing of payment for Auction Rate Securities accepted by 
UBS for payment;
    (9) The expiration date of the ARS Rights Offer;
    (10) The fact that UBS may make purchases of Auction Rate 
Securities outside of the ARS Rights Offer and may otherwise buy, sell, 
hold or seek to restructure, redeem or otherwise dispose of the Auction 
Rate Securities;
    (11) A description of the risk factors relating to the ARS Rights 
Offer as UBS deems appropriate;
    (12) How to obtain additional information concerning the ARS Rights 
Offer; and
    (13) The manner in which information concerning material amendments 
or changes to the ARS Rights Offer will be communicated to affected 
Plans;
    (j) The terms of any Settlement Sale or Section 15 Texas Settlement 
Sale are consistent with the requirements set forth in the applicable 
Settlement Agreement and, where applicable, the terms set forth in the 
ARS Rights prospectus.
    (k) All of the conditions in Section II have been met with respect 
to the ARS Rights Offer; and
    (l) All of the conditions in Section 15 of the Texas Settlement 
Agreement have been met with respect to any Section 15 Texas Settlement 
Sale.

Section V. Definitions

    For purposes of this exemption:
    (a) The term affiliate means: Any person directly or indirectly, 
through one or more intermediaries, controlling, controlled by, or 
under common control with such other person;
    (b) The term control means: The power to exercise a controlling 
influence over the management or policies of a person other than an 
individual;
    (c) The term Auction Rate Security means a security that:
    (1) Is either a debt instrument (generally with a long-term nominal 
maturity) or preferred stock; and
    (2) Has an interest rate or dividend that is reset at specific 
intervals through a Dutch Auction process;
    (d) A person is independent of UBS if the person is:
    (1) Not UBS or an affiliate; and
    (2) not a relative (as defined in ERISA section 3(15)) of the party 
engaging in the transaction;
    (e) The term Plan means: an individual retirement account or 
similar account described in section 4975(e)(1)(B) through (F) of the 
Code (an

[[Page 66958]]

IRA); an employee benefit plan as defined in section 3(3) of ERISA; or 
an entity holding plan assets within the meaning of 29 CFR 2510.3-101, 
as modified by ERISA section 3(42); and
    (f) The term Settlement Agreement means: A written legal settlement 
agreement involving UBS and a U.S. state or federal authority (a 
Settlement) that provides for the purchase of an Auction Rate Security 
by UBS from a Plan and/or the issuance of ARS Rights.
    Effective Date: This exemption is effective as of February 1, 2008.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on July 22, 2013, at 78 FR 
43930.
Written Comments
    During the comment period, the Department received one written 
comment (the Comment) from UBS with respect to the notice of proposed 
exemption (the Proposed Exemption) and no requests for a public 
hearing. The Comment is intended to clarify certain requirements in 
sections III and IV of the Proposed Exemption. UBS's Comment and the 
Department's responses are described below.
    1. Section III Requirement that the Conditions in Section IV Be 
Met. UBS believes that the proviso at the end of Section III(c) of the 
Proposed Exemption (on page 43932), which reads, ``provided that the 
conditions set forth in Section IV below are met,'' may be understood 
in that context to require that the conditions of Section IV apply only 
to the transactions described in Section III(c), rather than to each of 
the three types of transactions described in Section III. Therefore, in 
order to clarify that all transactions described in Section III must 
meet the conditions set forth in Section IV in order to be covered by 
the Proposed Exemption, UBS requests: (i) that certain language in 
Section III, which reads, ``If the proposed exemption is granted, the 
restrictions of section 406(a)(1)(A) and (D) and section 406(b)(1) and 
(2) of ERISA and the taxes imposed by section 4975 of the Code, by 
reason of section 4975(c)(1)(A), (D) and (E) of the Code, shall not 
apply, effective February 1, 2008, to the following transactions'' be 
revised to read, ``If the proposed exemption is granted, the 
restrictions of section 406(a)(1)(A) and (D) and section 406(b)(1) and 
(2) of ERISA and the taxes imposed by section 4975 of the Code, by 
reason of section 4975(c)(1)(A), (D) and (E) of the Code, shall not 
apply, effective February 1, 2008, to the transactions described herein 
if the conditions set forth in Section IV are met'' and (ii) that the 
aforementioned proviso in Section III(c) be removed.
    In response to this comment, the Department has made the requested 
revisions in order to clarify that the conditions of Section IV apply 
to all of the transactions described in Section III.
    2. Notice Requirement in Section IV(b). UBS reads the condition in 
Section IV(b) of the Proposed Exemption, as currently written, to 
require that notice of the ARS Rights Offer be sent to all Plans as 
defined in Section V of the Proposed Exemption. As the provision 
relates to ARS Rights under particular Settlement Agreements, UBS 
suggests that it would be more accurate to require that the notice be 
sent to all plans as required by the applicable Settlement Agreements. 
Accordingly, UBS requests that the first sentence in Section IV(b), 
which reads, ``UBS sends notice of the ARS Rights Offer to the Plans, 
including an explanatory cover letter and prospectus for the ARS Rights 
under the Securities Act of 1933 (the Securities Act), as amended'' be 
revised to read, ``UBS sends notice of the ARS Rights Offer to the 
plans identified in the applicable Settlement Agreement, including an 
explanatory cover letter and prospectus for the ARS Rights under the 
Securities Act of 1933 (the Securities Act), as amended.''
    In response to this comment, the Department has made the requested 
revision to Section IV(b) of the Proposed Exemption to clarify the 
meaning of this condition and to avoid any implication that notice must 
be sent to any plans other than those identified under the terms of the 
applicable Settlement Agreement.
    Accordingly, after giving full consideration to the entire record, 
including the Comment, the Department has determined to grant the 
exemption as modified herein.
    For further information regarding the Comment and other matters 
discussed herein, Interested Persons are encouraged to obtain copies of 
the exemption application file (Exemption Application No. D-11506) the 
Department is maintaining in this case. The complete application file, 
as well as all supplemental submissions received by the Department, are 
made available for public inspection in the Public Disclosure Room of 
the Employee Benefits Security Administration, Room N-1513, U.S. 
Department of Labor, 200 Constitution Avenue NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Anna Mpras Vaughan of the Department, 
telephone (202) 693-8565. (This is not a toll-free number.)

Wells Fargo Bank, N.A. (the Bank) Located in Sioux Falls, South Dakota 
[Prohibited Transaction Exemption 2013-11; Exemption Application No. D-
11640]

Exemption

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(D), 406(b)(1), 
and 406(b)(2) of the Act and the sanctions resulting from the 
application of section 4975 of the Code,\4\ by reason of section 
4975(c)(1)(A), (D), and (E) of the Code, shall not apply, effective 
September 8, 2009, to the cash sale by four employee benefit plans (the 
Plans), whose assets were invested in the Bank's collateral pools (the 
Collateral Pools), of certain interests (the Interests) in two medium-
term notes (the Notes), for the aggregate purchase price (the Purchase 
Price) of $375,182, to the Bank, a party in interest with respect to 
the Plans.
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    \4\ For purposes of this exemption, references to section 406 of 
the Act should be read to refer as well to the corresponding 
provisions of section 4975 of the Code.
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    This exemption is subject to the following conditions:
    (a) The sale was a one-time transaction for cash;
    (b) Each Plan received an amount which was equal to the greater of 
either: (1) The current cost of its Interests in the Notes (i.e., the 
original purchase price less distributions received by the Plan through 
the purchase date); or (2) the fair market value of its Interests in 
the Notes, as determined by a valuation of the underlying assets 
performed by Stone Tower Debt Advisors LLC, an unrelated party, there 
being no market for the Notes at the time of sale;
    (c) The Plans did not pay any commissions or other expenses in 
connection with the sale;
    (d) The Bank, in its capacity as securities lending agent and 
manager of the Collateral Pools, determined that the sale of the Plans' 
Interests in the Notes was appropriate for and in the interests of the 
Plans at the time of the transaction;
    (e) The Bank took all appropriate actions necessary to safeguard 
the interests of the Plans in connection with the transaction, given 
that the Plans were not eligible to participate in an exchange offer 
(the Exchange Offer) and the Purchase Price was substantially higher 
than the fair market value of the Plans' Interests in the Notes;
    (f) If the exercise of any of the Bank's rights, claims or causes 
of action in connection with its ownership of the Notes (including the 
notes received in

[[Page 66959]]

the Exchange Offer) results in the Bank recovering from Stanfield 
Victoria Finance Ltd., the issuer of the Notes, or any third party, an 
aggregate amount that is more than the sum of:
    (1) The Purchase Price paid by the Bank to the Plans for the 
Interests in the Notes; and
    (2) The interest that would have been payable on the Notes from and 
after the date the Bank purchased the Plans' Interests in the Notes, at 
the rate specified in the Notes, the Bank will refund such excess 
amounts promptly to the Plans (after deducting all reasonable expenses 
incurred in connection with the recovery);
    (g) The Bank and its affiliates, as applicable, maintain, or cause 
to be maintained, for a period of six (6) years from the date of any 
covered transaction such records as are necessary to enable the persons 
described below in paragraph (h)(i), to determine whether the 
conditions of this exemption have been met, except that--
    (1) No party in interest with respect to a Plan which engages in 
the covered transaction, other than the Bank and its affiliates, as 
applicable, shall be subject to a civil penalty under section 502(i) of 
the Act or the taxes imposed by section 4975(a) and (b) of the Code, if 
such records are not maintained, or not available for examination, as 
required, below, by paragraph (h)(i); and
    (2) A separate prohibited transaction shall not be considered to 
have occurred solely because, due to circumstances beyond the control 
of the Bank or its affiliate, as applicable, such records are lost or 
destroyed prior to the end of the six-year period.
    (h)(1) Except as provided, below, in paragraph (h)(2), and 
notwithstanding any provisions of subsections (a)(2) and (b) of section 
504 of the Act, the records referred to, above, in paragraph (g) are 
unconditionally available at their customary location for examination 
during normal business hours by--
    (A) Any duly authorized employee or representative of the 
Department, the Internal Revenue Service, or the Securities Exchange 
Commission; or
    (B) Any fiduciary of any plan that engages in the covered 
transaction, or any duly authorized employee or representative of such 
fiduciary; or
    (C) Any employer of participants and beneficiaries and any employee 
organization whose members are covered by a plan that engages in the 
covered transaction, or any authorized employee or representative of 
these entities; or
    (D) Any participant or beneficiary of a plan that engages in the 
covered transaction, or duly authorized employee or representative of 
such participant or beneficiary;
    (ii) None of the persons described above, in paragraph (h)(1)(B)-
(D) shall be authorized to examine trade secrets of the Bank and its 
affiliates, as applicable, or commercial or financial information which 
is privileged or confidential; and
    (E) Should the Bank and its affiliates, as applicable, refuse to 
disclose information on the basis that such information is exempt from 
disclosure, the Bank and its affiliates, as applicable, shall, by the 
close of the thirtieth (30th) day following the request, provide a 
written notice advising that person of the reasons for the refusal and 
that the Department may request such information.
    Effective Date: This exemption is effective as of September 8, 
2009.
Written Comments
    In the Notice of Proposed Exemption (the Notice), the Department 
invited all interested persons to submit written comments and/or 
requests for a public hearing on the proposed exemption within 35 days 
of the date of the publication of the Notice in the Federal Register on 
July 9, 2013. All comments and requests for a hearing were due by 
August 13, 2013.
    During the comment period, the Department received no comments and 
no request for a hearing. Accordingly, after giving full consideration 
to the entire record, the Department has decided to grant the 
exemption. The complete application file (Application No. D-11640), and 
all supplemental submissions received by the Department, are available 
for public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, Room N-1513, U.S. Department of 
Labor, 200 Constitution Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published in the Federal Register on 
July 9, 2013, at 78 FR 41101.

FOR FURTHER INFORMATION CONTACT: Ms. Anna Mpras Vaughan of the 
Department, telephone (202) 693-8565. (This is not a toll-free number.)

Sears Holdings Savings Plan (the Savings Plan), Sears Holdings Puerto 
Rico Savings Plan (the PR Plan), and The Lands' End, Inc. Retirement 
Plan (the Lands' End Plan) (Collectively, the Plans) Located in Hoffman 
Estates, IL and Dodgeville, WI [Prohibited Transaction Exemption 2013-
12; Exemption Application Nos. D-11739, D-11740, and D-11741]

Exemption

Section I. Transactions

    Effective for the period beginning September 7, 2012 and ending 
October 8, 2012:
    (a) The restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 
406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the 
sanctions resulting from the application of section 4975 of the Code, 
by reason of section 4975(c)(1)(A) and 4975(c)(1)(E) of the Code,\5\ 
shall not apply:
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    \5\ For purposes of this exemption, references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
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    (1) To the acquisition of certain subscription right(s)(the Right 
or Rights) by the Savings Plan and the Lands' End Plan from Sears 
Holdings Corporation (Holdings) in connection with an offering (the 
Offering) by Holdings of shares of common stock (SHO Stock) in Sears 
Hometown and Outlet Stores, Inc. (SHO); and
    (2) To the holding of the Rights by the Savings Plan and the Lands' 
End Plan during the subscription period of the Offering; provided that 
the conditions as set forth, below, in Section II of this exemption 
were satisfied for the duration of the acquisition and holding.
    (b) The restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 
406(a)(2), 406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act \6\ shall 
not apply:
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    \6\ It is represented that the fiduciaries of the PR Plan have 
not made an election under section 1022(i)(2) of the Act, whereby 
such plan would be treated as a trust created and organized in the 
United States for purposes of tax qualification under section 401(a) 
of the Code. Further, it is represented that jurisdiction under 
Title II of the Act does not apply to the PR Plan. Accordingly, the 
Department, herein, is not providing any relief for the 
prohibitions, as set forth in Title II of the Act, for the 
acquisition and holding of the Rights by the PR Plan.
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    (1) To the acquisition of the Rights by the PR Plan from Holdings 
in connection with the Offering by Holdings of the SHO Stock; and
    (2) To the holding of the Rights by the PR Plan during the 
subscription period of the Offering; provided that the conditions as 
set forth, below, in Section II of this exemption were satisfied for 
the duration of the acquisition and holding.

[[Page 66960]]

Section II. Conditions

    (a) The receipt of the Rights by the Plans occurred in connection 
with the Offering in which all shareholders of the common stock of 
Holdings (Holdings Stock), including the Plans, were treated in the 
same manner;
    (b) The acquisition of the Rights by the Plans resulted solely from 
an independent act of Holdings, as a corporate entity;
    (c) Each shareholder of Holdings Stock, including each of the 
Plans, received the same proportionate number of Rights based on the 
number of shares of Holdings Stock held by each such shareholder;
    (d) All decisions with regard to the holding and disposition of the 
Rights by the Plans were made by an independent qualified fiduciary 
(the I/F);
    (e) The I/F determined that it would be in the interest of the 
Plans to sell all of the Rights received in the Offering by the Plans 
in blind transactions on the NASDAQ Capital Market; and
    (f) No brokerage fees, commissions, subscription fees, or other 
charges: were paid by the Plans with respect to the acquisition and 
holding of the Rights; or were paid to any broker affiliated with the 
I/F, Holdings, or SHO in connection with the sale of the Rights.
    Effective Date: This exemption is effective for the Offering 
period, beginning September 7, 2012 and ending October 8, 2012.
Written Comments
    In the Notice of Proposed Exemption (the Notice), the Department 
invited all interested persons to submit written comments and requests 
for a hearing within forty-five (45) days of the date of the 
publication of the Notice in the Federal Register on July 9, 2013. All 
comments and requests for a hearing were due initially by August 23, 
2013. With the Department's permission, the comment period was extended 
to September 6, 2013, to allow Holdings (the Applicant) additional time 
to ascertain the appropriate method of providing notice to a group of 
employees whose addresses had previously generated return mail to the 
Applicant.
    During the comment period, the Department received no requests for 
hearing. The Department did receive approximately forty-nine (49) 
telephone calls from interested persons, none of which raised 
substantive issues with respect to the transactions that are the 
subject of this exemption.
    The only written comment received by the Department during the 
comment period was submitted by the Applicant. The comment letter, 
dated September 6, 2013, incorporated comments from the I/F, Evercore 
Trust Company, N.A.
    In the comment letter, the Applicant requests the following 
clarifications/corrections to the Summary of Facts and Representations 
section of the Notice.
    1. Scope of Participation in the Plans. In the first paragraph in 
Representation 1, the Applicant requests that the sentence, ``Employees 
of Holdings and its affiliates participate in the Plans,'' be revised 
to read: ``Employees of certain affiliates of Holdings participate in 
the Plans.''
    In addition, in the first paragraph of Representation 2, the 
Applicant requests that the sentence, ``Sears, Roebuck and Co. (Sears 
Roebuck) and all of its wholly-owned (direct and indirect) subsidiaries 
(except Lands' End Inc. (Lands' End)) and Sears Holdings Management 
Corporation, with respect to certain employees, have adopted the 
Savings Plan and are employers under such plan,'' be revised to read: 
``Sears, Roebuck and Co. (Sears Roebuck) and all of its wholly-owned 
(direct and indirect) subsidiaries (except Lands' End Inc. (Lands' End) 
and Sears de Puerto Rico, Inc.), Kmart Holding Corporation and its 
wholly-owned (direct and indirect) subsidiaries (excluding employees 
residing in Puerto Rico), and Sears Holdings Management Corporation, 
with respect to certain employees, have adopted the Savings Plan and 
are employers under such plan.''
    2. Participants Holding Employer Stock. In the second paragraph of 
Representation 2, the Applicant wishes to clarify that the number of 
participants holding employer stock in the Savings Plan on the Record 
Date was 24,015, rather than 25,015. Also, the Applicant states that 
the number of participants listed in Representations 2, 3, and 4 of the 
Notice represents the number of participants in each plan holding 
employer stock as of the Record Date, rather than the number of 
participants in each plan.
    3. The PR Plan. With respect to Representation 3 of the Notice, the 
Applicant wishes to clarify that while the PR Plan is now sponsored and 
maintained by Holdings, it was originally established by Sears Roebuck, 
covers employees of Sears Roebuck and Kmart Corporation residing in 
Puerto Rico and was created by the merger of the prior Kmart Retirement 
Savings Plan for Puerto Rico Employees into the prior Sears Puerto Rico 
Savings Plan, as of March 31, 2012. In addition, the Applicant requests 
the following changes to Representation 3 of the Notice:
    (a) In the first paragraph of Representation 3, ``and Kmart 
Corporation,'' should be inserted after the phrase, ``(Sears Roebuck de 
Puerto Rico).''
    (b) In the first paragraph of Representation 3, the phrase, ``and 
was established by the merger of the prior Kmart Corporation Retirement 
Savings Plan for Puerto Rico Employees with and into the prior Sears 
Puerto Rico Savings Plan as of March 31, 2012,'' should be inserted 
after the phrase, ``Commonwealth of Puerto Rico.''
    (c) In the second paragraph of Representation 3, the phrase, ``1.4 
percent (1.4%)'' should be revised to read, approximately ``.033 
percent (.033%).''
    4. Land's End Plan. In Representation 4, the Applicant wishes to 
clarify that the Lands' End Plan was established by Lands' End and is 
sponsored and maintained by Lands' End.
    5. Sears Holdings Stock Issued and Outstanding/Holdings Stock Held 
by PR Plan. The Applicant wishes to clarify that the figure of 106 
million shares of Holdings Stock issued and outstanding, as set forth 
in Representations 2, 3, and 4 of the Notice, is an approximate figure, 
and the exact number is ``106,444,571.''
    6. Other Clarifications. In the first paragraph of Representation 
5, the Applicant wishes to clarify that the phrase, ``other than the 
Lands' End Plan,'' be inserted after the word, ``Plans,'' and that the 
word, ``Company,'' be deleted, and the word, ``Corporation,'' be 
substituted instead.
    7. Edward S. Lampert. In Representation 6, the Applicant wishes to 
clarify that Mr. Lampert became the CEO of Holdings as of February 1, 
2013.
    8. Number of SHO Stock/SHO Business. In Representation 7, the 
Applicant wishes to clarify that the number of SHO stores should read 
``1,230,'' rather than ``11,238.'' In addition, the Applicant wishes to 
clarify that SHO did not conduct business as a separate company and had 
no material assets or liabilities, prior to August 31, 2012, rather 
than through the date of the Offering.
    9. Depository Trust Company (DTC) Interim Trading. The Applicant 
wishes to clarify that in Representation 11, the DTC established an 
interim ``trading'' period, rather than an interim ``tracing'' period 
for the Rights. Further, the Applicant indicates that the report from 
the I/F states that this interim trading period continued through 
September 17, 2012, rather than September 16, 2012.
    10. Net Proceeds. The Applicant wishes to clarify that the net 
proceeds from the sale of the Rights generated for

[[Page 66961]]

the Savings Plan and the PR Plan, according to the report from the I/F, 
was $3,490,605.16, rather than $3,490,606.15, as set forth in the 
Notice.
    11. SEC Fees. The Applicant wishes to clarify that the SEC fees 
paid by the Master Trust in connection with the sale of the Rights were 
$78.63, rather than $778.63.
    The Department concurs with the Applicant's requested 
clarifications/corrections to the Notice. Accordingly, after full 
consideration and review of the entire record, including the comment 
filed by the Applicant, the Department has determined to grant the 
exemption, as set forth above. The written comment from the Applicant 
has been included as part of the public record of the exemption 
application. The complete application files (D-11739, D-11740 and D-
11741) are available for public inspection in the Public Disclosure 
Room of the Employee Benefits Security Administration, Room N-1513, 
U.S. Department of Labor, 200 Constitution Avenue NW., Washington DC 
20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption refer to 
the Notice published on July 9, 2013, at 78 FR 41110.

FOR FURTHER INFORMATION CONTACT: Ms. Angelena C. Le Blanc of the 
Department, telephone (202) 693-8551. (This is not a toll-free number.)

American International Group, Inc. Incentive Savings Plan (the Savings 
Plan), American General Agents' & Managers' Thrift Plan (the Thrift 
Plan), and Chartis Insurance Company--Puerto Rico Capital Growth Plan 
(the Chartis Plan) (Collectively, the Plans) Located in New York, NY 
and Puerto Rico [Prohibited Transaction Exemption 2013-13; Exemption 
Application Nos. D-11767, D-11768, and D-11769]

Exemption

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 
406(b)(1), 406(b)(2) and 407(a) of the Act and the sanctions resulting 
from the application of section 4975 of the Code, by reason of section 
4975(c)(1)(A) and (E) of the Code,\7\ shall not apply for the ten-year 
period, effective January 19, 2011 through January 19, 2021, to:
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    \7\ For purposes of this exemption, references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
---------------------------------------------------------------------------

    (1) The acquisition by the Savings Plan and the Thrift Plan of 
certain warrant rights (the Warrants) from American International 
Group, Inc. (AIG), a party in interest with respect to the Savings Plan 
and the Thrift Plan; and
    (2) The holding of the Warrants by the Savings Plan and the Thrift 
Plan.
    (b) The restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 
406(a)(2), 406(b)(1), 406(b)(2) and 407(a) of the Act \8\ shall not 
apply to:
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    \8\ It is represented that the fiduciaries of the Chartis Plan 
have not made an election, under section 1022(i)(2) of the Act, 
whereby such plan would be treated as a trust created and organized 
in the United States for purposes of tax qualification under section 
401(a) of the Code. Further, it is represented that jurisdiction 
under Title II of the Act does not apply to the Chartis Plan. 
Accordingly, the Department, herein, is not providing any relief 
from the prohibitions, as set forth in Title II of the Act, in 
connection with the acquisition and holding of the Warrants by the 
Chartis Plan.
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    (1) The acquisition by the Chartis Plan of the Warrants from AIG, a 
party in interest with respect to the Chartis Plan; and
    (2) The holding of the Warrants by the Plans.

Section II. Conditions

    The relief provided in this exemption is conditioned upon adherence 
to the material facts and representations set forth in the application 
file, and upon compliance with the conditions, as set forth herein.
    (a) All decisions regarding the acquisition and holding of the 
Warrants by the Plans were made by AIG;
    (b) The Plans' acquisition of the Warrants resulted from an 
independent act of AIG as a corporate entity, and without any 
participation on the part of the Plans;
    (c) The receipt of the Warrants by the Plans occurred in connection 
with a recapitalization plan approved by the Board of Directors of AIG, 
in which all holders of AIG common stock, including the Plans, were 
treated exactly the same with respect to the acquisition of the 
Warrants;
    (d) All holders of AIG common stock, including the Plans, were 
issued the same proportionate number of Warrants based on the number of 
shares of AIG common stock held by such shareholder;
    (e) The acquisition of the Warrants by the Plans was made in a 
manner that was consistent with provisions of each such Plan for the 
individually-directed investment of participant accounts;
    (f) The Plans did not pay any fees or commissions in connection 
with the acquisition of the Warrants;
    (g) The Plans did not pay, nor will the Plans pay, any fees or 
commissions in connection with the holding of the Warrants;
    (h) The Plans did not pay, nor will the Plans pay, any brokerage 
fees or commissions to any broker affiliated with AIG, Chartis, or the 
Trustees in connection with the sale of the Warrants; and
    (i) AIG will provide annual written notices to all participants in 
the Plans holding Warrants to remind them to sell their Warrants before 
such Warrants expire on January 19, 2021.
    Effective Date: This exemption is effective for the period 
commencing January 19, 2011 through January 19, 2021.
Written Comments
    In the Notice of Proposed Exemption (the Notice), the Department 
invited all interested persons to submit written comments and/or 
requests for a public hearing on the proposed exemption within 45 days 
of the date of the publication of the Notice in the Federal Register on 
July 22, 2013. All comments and requests for hearing were due by 
September 5, 2013.
    During the comment period, the Department received no requests for 
a hearing and one written comment, dated September 6, 2013. The comment 
reflected the commenter's failure to fully understand the Notice. The 
Department provided an explanation to the commenter by telephone, that 
was satisfactory to the commenter, and the comment was withdrawn.
    Accordingly, after giving full consideration to the entire record, 
including the comment, the Department has decided to grant the 
exemption. The complete application file (Application Nos. D-11767, D-
11768, and D-11769), and all supplemental submissions received by the 
Department, are available for public inspection in the Public 
Disclosure Room of the Employee Benefits Security Administration, Room 
N-1513, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice published on July 22, 2013, at 78 FR 43938.

FOR FURTHER INFORMATION CONTACT: Mr. Asrar Ahmed of the Department, 
telephone (202) 693-8557. (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

[[Page 66962]]

disqualified person from certain other provisions to which the 
exemption does not apply and the general fiduciary responsibility 
provisions of section 404 of the Act, which among other things require 
a fiduciary to discharge his duties respecting the plan solely in the 
interest of the participants and beneficiaries of the plan and in a 
prudent fashion in accordance with section 404(a)(1)(B) of the Act; nor 
does it affect the requirement of section 401(a) of the Code that the 
plan must operate for the exclusive benefit of the employees of the 
employer maintaining the plan and their beneficiaries;
    (2) This exemption is supplemental to and not in derogation of, any 
other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of this exemption is subject to the express 
condition that the material facts and representations contained in the 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed at Washington, DC, this 31st day of October, 2013.
Lyssa E. Hall,
Director of Exemption Determinations, Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. 2013-26630 Filed 11-6-13; 8:45 am]
BILLING CODE 4510-29-P