Exemptions From Certain Prohibited Transaction Restrictions, 36950-36956 [2019-16163]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 84, Number 146 (Tuesday, July 30, 2019)]
[Notices]
[Pages 36950-36956]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-16163]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Exemptions From Certain Prohibited Transaction Restrictions

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Grants 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: 2019-03, The Les Schwab Tire 
Centers, D-11924; 2019-04, Principal Life Insurance Company and its 
Affiliates, D-11947; 2019-05, Seventy Seven Energy Inc. Retirement & 
Savings Plan, D-11918; 2019-06, Tidewater Savings and Retirement Plan, 
D-11940.

SUPPLEMENTARY INFORMATION: Notices were published in the Federal 
Register of the pendency before the Department of proposals to grant 
such exemptions. Each notice set forth a summary of the facts and 
representations made by the applicant for the exemption, and referred 
interested persons to the application for a complete statement of the 
facts and representations. Each application is available for public 
inspection at the Department in Washington, DC. Each notice also 
invited interested persons to submit comments on the requested 
exemption to the Department. In addition, each notice stated that any 
interested person might submit a written request that a public hearing 
be held (where appropriate). Each 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.
    Each notice of proposed exemption was issued, and each 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) and based upon 
the entire record, the Department makes the following findings:

    (a) Each exemption is administratively feasible;
    (b) Each exemption is in the interests of the plan and its 
participants and beneficiaries; and
    (c) Each exemption is protective of the rights of the 
participants and beneficiaries of the plan.

The Les Schwab Tire Centers of Washington, Inc. (Les Schwab 
Washington), the Les Schwab Tire Centers of Boise, Inc. (Les Schwab 
Boise), and the Les Schwab Tire Centers of Portland, Inc. (Les Schwab 
Portland), (Collectively, With Their Affiliates, Les Schwab or the 
Applicant) Located in Aloha, Oregon; Boise, Idaho; Centralia, 
Washington; and Other Locations [Prohibited Transaction Exemption 2019-
03; Exemption Application No. D-11924]

Written Comments

    In the Notice of Proposed Exemption (the Notice) published in the 
Federal Register on December 28, 2018 at 83 FR 67654, the Department of 
Labor (the Department) invited all interested persons to submit written 
comments and/or requests for a public hearing with respect to the 
Notice within forty-five (45) days of the date of publication. All 
comments and requests for a hearing were due by February 11, 2019.
    During the comment period, the Department received numerous 
telephone inquiries from Plan participants that generally concerned 
matters outside the scope of the exemption, and one written comment 
from an anonymous commenter that did not raise any issue that was 
material to the transaction described in the exemption. The Department 
did not receive any requests for a public hearing from any of the 
commenters.
    After full consideration and review of the entire record, the 
Department has decided to grant the exemption, as set forth above. The 
complete application file (D-11924) is available for public inspection 
in the Public Disclosure Room of the Employee Benefits Security 
Administration, Room N-1515, 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 December 28, 2018, at 83 FR 67654.

Exemption

Section I. Transactions

    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, by reason of sections 
4975(c)(1)(A), 4975(c)(1)(D) and 4975(c)(1)(E) of the Code, shall not 
apply to the sales (the Sales) by the Les Schwab Profit Sharing 
Retirement Plan (the Plan) of the following parcels of real property 
(each, a ``Parcel'' and collectively, the ``Parcels'') to the 
Applicant:
    (a) The Parcel located at 19100 SW Shaw Street, Aloha, Oregon;
    (b) The Parcel located at 2045 Broadway Avenue, Boise, Idaho;
    (c) The Parcel located at 6520 W State Street, Boise, Idaho;
    (d) The Parcel located at 1211 Harrison Avenue, Centralia, 
Washington;
    (e) The Parcel located at 36 N Market Boulevard, Chehalis, 
Washington;
    (f) The Parcels located at 1206 Canyon Road, Ellensburg, 
Washington;
    (g) The Parcel located at 1710 Monmouth Avenue, Independence, 
Oregon;
    (h) The Parcel located at 3809 Steilacoom Boulevard SW, Lakewood, 
Washington;
    (i) The Parcel located at 1420 Industrial Way, Longview, 
Washington;
    (j) The Parcel located at 8405 State Avenue, Marysville, 
Washington;
    (k) The Parcel located at 610 E North Bend Way, North Bend, 
Washington;
    (l) The Parcel located at 1625 Beavercreek Road, Oregon City, 
Oregon;
    (m) The Parcel located at 160 SE Bishop Boulevard, Pullman, 
Washington;
    (n) The Parcel located at 911 N 1st Street, Silverton, Oregon;

[[Page 36951]]

    (o) The Parcel located at 711 Avenue D, Snohomish, Washington;
    (p) The Parcel located at 16819 Pacific Avenue S, Spanaway, 
Washington;
    (q) The Parcel located at 8103 N Division Street, Spokane, 
Washington;
    (r) The Parcel located at 2420 NE Andresen Road, Vancouver, 
Washington; and
    (s) The Parcel located at 216 SE 118th Avenue, Vancouver, 
Washington;
    Where the Applicant is a party in interest with respect to the 
Plan, provided that the conditions set forth in Section II of this 
exemption are met.

Section II. General Conditions

    (a) The price paid by Les Schwab to the Plan for each Parcel is no 
less than the fair market value of each Parcel (exclusive of the 
buildings or other improvements paid for by Les Schwab, to which Les 
Schwab retains title), as determined by qualified independent 
appraisers (the Independent Appraisers), working for CBRE, Inc., in 
separate appraisal reports (the Independent Appraisals) that are 
updated on the date of each Sale.
    (b) Each Sale is a one-time transaction for cash.
    (c) The Plan does not pay any costs, including brokerage 
commissions, fees, appraisal costs, or any other expenses associated 
with each Sale.
    (d) The Independent Appraisers determine the fair market value of 
their assigned Parcel, on the date of the Sale, using commercially 
accepted methods of valuation for unrelated third-party transactions, 
taking into account the following considerations:
    (1) The fact that a lease between Les Schwab and the Plan is a 
ground lease and not a standard commercial lease;
    (2) The assemblage value of the Parcel, where applicable;
    (3) Any special or unique value the Parcel holds for Les Schwab; 
and
    (4) Any instructions from the qualified independent fiduciary (the 
Independent Fiduciary) regarding the terms of the Sale, including the 
extent to which the Independent Appraiser should consider the effect 
that Les Schwab's option to purchase a Parcel would have on the fair 
market value of the Parcel.
    (e) The Independent Fiduciary represents the interests of the Plan 
with respect to each Sale, and in doing so:
    (1) Determines that it is prudent to go forward with each Sale;
    (2) Approves the terms and conditions of each Sale;
    (3) Reviews and approves the methodology used by the Independent 
Appraiser and ensures that such methodology is properly applied in 
determining the Parcel's fair market value on the date of each Sale;
    (4) Reviews and approves the determination of the purchase price; 
and
    (5) Monitors each Sale throughout its duration on behalf of the 
Plan for compliance with the general terms of the transaction and with 
the conditions of this exemption, and takes any appropriate actions to 
safeguard the interests of the Plan and its participants and 
beneficiaries.
    (f) The terms and conditions of each Sale are at least as favorable 
to the Plan as those obtainable in an arm's length transaction with an 
unrelated party.

FOR FURTHER INFORMATION CONTACT: Scott Ness of the Department, 
telephone (202) 693-8561. (This is not a toll-free number.)

Principal Life Insurance Company (PLIC) and Its Affiliates 
(Collectively, Principal or the Applicant) Located in Des Moines, IA 
[Prohibited Transaction Exemption 2019-04; Exemption Application No. D-
11947]

Written Comments

    In the Notice of Proposed Exemption (the Notice), published in the 
Federal Register on December 28, 2018 at 83 FR 67670, the Department of 
Labor (the Department) invited all interested persons to submit written 
comments and/or requests for a public hearing with respect to the 
Notice within forty-five (45) days of the date of publication. All 
comments and requests for a hearing were due by February 11, 2019.
    During the comment period, the Department received one written 
comment from an anonymous commenter that did not raise any issue that 
was material to the transaction described in the exemption, and one 
written comment from Principal. Principal requested certain revisions 
or clarifications to the Notice, which are discussed below.
    The Department did not receive any requests for a public hearing.

1. Revisions to ``Independent Plan Fiduciary'' Definition

    Section IV(k) of the Notice provides, that: ``the term 
``Independent Plan Fiduciary'' means a fiduciary of a plan, where such 
fiduciary is independent of and unrelated to Principal. The Independent 
Plan Fiduciary will not be deemed to be independent of and unrelated to 
Principal if: (1) Such Independent Plan Fiduciary, directly or 
indirectly, through one or more intermediaries, controls, is controlled 
by, or is under common control with Principal; (2) Such Independent 
Plan Fiduciary, or any officer, director, partner, employee, or 
relative of such Independent Plan Fiduciary, is an officer, director, 
partner, or employee of Principal (or is a relative of such person); or 
(3) such Independent Plan Fiduciary, directly or indirectly, receives 
any compensation or other consideration for his or her personal account 
in connection with any transaction described in this proposed exemption 
. . .''
    Principal is primarily concerned with the second prong's reference 
to a ``relative.'' Principal states that the plan fiduciary exercising 
discretion to invest in a Fund is often the plan sponsor. Principal's 
employees may have multiple relatives who are employed by plan 
sponsors. Principal asserts that it is unable to track individuals 
employed by client plan sponsors.
    Principal states that the potential risk from a plan fiduciary's 
conflict of interest should be viewed in light of the following 
conditions of the Notice, which constrain Principal's discretion with 
respect to the purchase and management of Principal Stock: (a) Each 
Index Fund and Model-Driven will be based on a securities index created 
and maintained by an organization independent of Principal; (b) the 
acquisition or disposition of Principal Stock will be for the sole 
purpose of maintaining strict quantitative conformity with the relevant 
index upon which the Index Fund or Model-Driven Fund is based; and (c) 
on any matter for which shareholders of Principal Stock are required or 
permitted to vote, Principal will cause the Principal Stock held by an 
Index Fund or Model-Driven Fund to be voted as determined by a 
fiduciary independent of Principal. Principal states that a definition 
of ``Independent Plan Fiduciary'' should strike a balance between 
capturing relationships where a conflict of interest is likely to be 
present, and being workable for Principal.
    Principal notes that the Department did not include the 
``Independent Plan Fiduciary'' definition in similar individual 
exemptions that were previously granted. Although each of these 
exemptions requires approval from an independent plan fiduciary, 
Principal notes that the exemptions do not define the term 
``independent.''
    Finally, Principal states that the requirement for an Independent 
Plan Fiduciary in Section IV(k)(1) of the Notice is equivalent to the 
definition of ``affiliate,'' as set forth in Section IV(a)(1) of the 
Notice, and requests that the term ``affiliate'' be applied here. 
Therefore, as revised by Principal, the

[[Page 36952]]

first and second prongs in the definition of ``Independent Plan 
Fiduciary'' in Section IV(k) of the final exemption reads as follows: 
``. . . The Independent Plan Fiduciary will not be deemed to be 
independent of and unrelated to Principal if: (1) Such Independent Plan 
Fiduciary is an affiliate of Principal; (2) Such Independent Plan 
Fiduciary has an interest in Principal that could affect its judgment 
as a fiduciary; . . .''
    Department's Response: The Department's determination that this 
exemption is protective of affected plans is based, in part, on an 
Independent Plan Fiduciary's initial authorization of the plan's 
investment in an Index Fund or Model-Driven Fund (which directly or 
indirectly purchases and/or holds Principal Stock). This initial 
authorization must be performed by a person or entity that is 
sufficiently independent of Principal, notwithstanding that Principal 
may thereafter have limited discretion with respect to the purchase and 
management of Principal stock. In the Department's view, an officer, 
director, partner or employee of Principal is not sufficiently 
independent of Principal to perform the initial authorization required 
by this exemption. While the Department does not agree that a 
definition of ``Independent Plan Fiduciary'' should factor in its 
workability for Principal, the Department agrees that relatives of 
those individuals may be sufficiently independent of Principal to meet 
the Department's expectations of an Independent Plan Fiduciary 
regarding this exemption. Therefore, the Department is revising the 
definition, in part, as requested by Principal, by taking out the 
second prong's reference to relatives. The Department agrees with 
Principal that the Independent Plan Fiduciary should not otherwise have 
``an interest in Principal that could affect its judgment as a 
fiduciary,'' and the Department has added this to the second prong of 
the definition.
    The Department does not believe that substituting the first prong 
of the definition with the term ``affiliate'' enhances this exemption's 
protections for plans, and declines to make that change. Accordingly, 
the definition now reads: ``the term ``Independent Plan Fiduciary'' 
means a fiduciary of a plan, where such fiduciary is independent of and 
unrelated to Principal. The Independent Plan Fiduciary will not be 
deemed to be independent of and unrelated to Principal if: (1) Such 
Independent Plan Fiduciary, directly or indirectly, through one or more 
intermediaries, controls, is controlled by, or is under common control 
with Principal; (2) Such Independent Plan Fiduciary, or any officer, 
director, partner, or employee of such Independent Plan Fiduciary, is 
an officer, director, partner or employee of Principal, or otherwise 
has an interest in Principal that could affect its judgment as a 
fiduciary; or (3) such Independent Plan Fiduciary, directly or 
indirectly, receives any compensation or other consideration for his or 
her personal account in connection with any transaction described in 
this proposed exemption . . .''

2. Other Clarifications to the Notice

    Principal also seeks certain minor clarifications to the Notice 
that the Department does not view as relevant to the determination of 
whether to grant this exemption. These clarifications can be found in 
Principal's comment letter, which is included as part of the public 
record for Exemption Application No. D-11947.
    After full consideration and review of the entire record, the 
Department has decided to grant the exemption, as set forth above. The 
complete application file (D-11947) is available for public inspection 
in the Public Disclosure Room of the Employee Benefits Security 
Administration, Room N-1515, 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 December 28, 2018, at 83 FR 67670.

Final Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(D), 406(b)(1), and section 
406(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)(D) and (E) 
of the Code, shall not apply to the direct or indirect acquisition, 
holding, and disposition of common stock issued by Principal Financial 
Group, Inc. (PFG), and/or common stock issued by an affiliate of PFG 
(together, the Principal Stock), by index funds (Index Funds) and 
model-driven funds (Model-Driven Funds) that are managed by Principal 
Life Insurance Company (PLIC), an indirectly wholly-owned subsidiary of 
PFG, or an affiliate of PLIC (collectively, Principal), in which client 
plans of Principal invest, provided that the conditions of Sections II 
and III are met.

Section II. Exemption for the Acquisition, Holding and Disposition of 
Principal Stock

    (a) The acquisition or disposition of Principal Stock is for the 
sole purpose of maintaining strict quantitative conformity with the 
relevant Index upon which the Index Fund or Model-Driven Fund is based, 
and does not involve any agreement, arrangement or understanding 
regarding the design or operation of the Fund acquiring Principal Stock 
that is intended to benefit Principal or any party in which Principal 
may have an interest;
    (b) Whenever Principal Stock is initially added to an Index on 
which an Index Fund or Model-Driven Fund is based, or initially added 
to the portfolio of an Index Fund or Model-Driven Fund (or added to the 
portfolio of an underlying Index Fund in which another Index Fund 
invests), all purchases of Principal Stock pursuant to a Buy-up (as 
defined in Section IV(c)) occur in the following manner:
    (1) Purchases are from one or more brokers or dealers;
    (2) Based on the best available information, purchases are not the 
opening transaction for the trading day;
    (3) Purchases are not effected in the last half hour before the 
scheduled close of the trading day;
    (4) Purchases are at a price that is not higher than the lowest 
current independent offer quotation, determined on the basis of 
reasonable inquiry from non-affiliated brokers;
    (5) Aggregate daily purchases do not exceed, on any particular day, 
the greater of: (i) Fifteen (15) percent of the aggregate average daily 
trading volume for the security occurring on the applicable exchange 
and automated trading system for the previous five business days, or 
(ii) fifteen (15) percent of the trading volume for the security 
occurring on the applicable exchange and automated trading system on 
the date of the transaction, as determined by the best available 
information for the trades occurring on that date;
    (6) All purchases and sales of Principal Stock occur either: (i) On 
a recognized U.S. securities exchange (as defined in Section IV(j) 
below), (ii) through an automated trading system (as defined in Section 
IV(b) below) operated by a broker-dealer independent of Principal that 
is registered under the Securities Exchange Act of 1934 (the 1934 Act), 
and thereby subject to regulation by the Securities and Exchange 
Commission (the SEC), which provides a mechanism for customer orders to 
be matched on an anonymous basis without the participation of a

[[Page 36953]]

broker-dealer, or (iii) through an automated trading system that is 
operated by a recognized U.S. securities exchange, pursuant to the 
applicable securities laws, and provides a mechanism for customer 
orders to be matched on an anonymous basis without the participation of 
a broker-dealer; and
    (7) If the necessary number of shares of Principal Stock cannot be 
acquired within ten (10) business days from the date of the event which 
causes the particular Fund to require Principal Stock, Principal 
appoints a fiduciary, which is independent of Principal (the 
Independent Fiduciary), to design acquisition procedures and monitor 
compliance with these procedures;
    (c) For transactions subsequent to a Buy-Up, all aggregate daily 
purchases of Principal Stock by the Funds do not exceed on any 
particular day the greater of:
    (1) Fifteen (15) percent of the average daily trading volume for 
Principal Stock occurring on the applicable exchange and automated 
trading system for the previous five (5) business days, or
    (2) Fifteen (15) percent of the trading volume for Principal Stock 
occurring on the applicable exchange and automated trading system on 
the date of the transaction, as determined by the best available 
information for the trades that occurred on this date;
    (d) All transactions in Principal Stock not otherwise described 
above in Section II(b) are either:
    (1) Entered into on a principal basis in a direct, arm's length 
transaction with a broker-dealer, in the ordinary course of its 
business, where the broker-dealer is independent of Principal and is 
registered under the 1934 Act, and thereby subject to regulation by the 
SEC;
    (2) Effected on an automated trading system operated by a broker-
dealer independent of Principal that is subject to regulation by either 
the SEC or another applicable regulatory authority, or an automated 
trading system, as defined in Section IV(b), operated by a recognized 
U.S. securities exchange which, in either case, provides a mechanism 
for customer orders to be matched on an anonymous basis without the 
participation of a broker-dealer; or
    (3) Effected through a recognized U.S. securities exchange, as 
defined in Section IV(j), so long as the broker is acting on an agency 
basis;
    (e) No purchases or sales of Principal Stock by a Fund involve 
purchases from, or sales to, Principal (including officers, directors, 
or employees thereof), or any party in interest that is a fiduciary 
with discretion to invest plan assets into the Fund (unless the 
transaction by the Fund with the party in interest would otherwise be 
subject to an exemption). However, this condition would not apply to 
purchases or sales on an exchange or through an automated trading 
system (on a blind basis where the identity of the counterparty is not 
known);
    (f) No more than five (5) percent of the total amount of Principal 
Stock, that is issued and outstanding at any time, is held in the 
aggregate by Index and Model-Driven Funds managed by Principal;
    (g) Principal Stock constitutes no more than five (5) percent of 
any independent third-party Index on which the investments of an Index 
Fund or Model-Driven Fund are based;
    (h) A fiduciary of a plan which is independent of Principal (the 
Independent Plan Fiduciary, as defined in Section IV(k)) authorizes the 
investment of the plan's assets in an Index Fund or Model-Driven Fund 
which directly or indirectly purchases and/or holds Principal Stock. 
With respect to any plan holding an interest in an Index Fund or Model-
Driven Fund that intends to start investing in Principal Stock, before 
Principal Stock is purchased directly or indirectly by the Index Fund 
or Model-Driven Fund, Principal will provide the Independent Plan 
Fiduciary with a notice through email stating that if the plan 
fiduciary does not indicate disapproval of investments in Principal 
Stock within sixty (60) days, then the Independent Plan Fiduciary will 
be deemed to have consented to the investment in Principal Stock. In 
this regard: (1) Principal must obtain from such Independent Plan 
Fiduciary prior consent in writing to the receipt by such Independent 
Plan Fiduciary of such disclosure via electronic email; (2) Such 
Independent Plan Fiduciary must have provided to Principal a valid 
email address; and (3) The delivery of such electronic email to such 
Independent Plan Fiduciary is provided by Principal in a manner 
consistent with the relevant provisions of the Department's regulations 
at 29 CFR 2520.104b-1(c) (substituting the word ``Principal'' for the 
word ``administrator'' as set forth therein, and substituting the 
phrase ``Independent Plan Fiduciary'' for the phrase ``the participant, 
beneficiary or other individual'' as set forth therein). In the event 
that the Independent Plan Fiduciary disapproves of the investment, plan 
assets invested in the Index Fund or Model-Driven Fund will be 
withdrawn and the proceeds processed, as directed by the Independent 
Plan Fiduciary. For new plan investors in an Index Fund or Model-Driven 
Fund, Independent Plan Fiduciaries for the plans will consent to the 
investment in Principal Stock through execution of a subscription or 
similar agreement for the Index Funds or Model-Driven Fund that 
contains the appropriate approval language; and
    (i) On any matter for which shareholders of Principal Stock are 
required or permitted to vote, Principal will cause the Principal Stock 
held by an Index Fund or Model-Driven Fund to be voted, as determined 
by the Independent Fiduciary.

Section III. General Conditions

    (a) Principal maintains or causes to be maintained for a period of 
six (6) years from the date of the transactions, the records necessary 
to enable the persons described in paragraph (b) of this Section III to 
determine whether the conditions of this exemption have been met, 
except that: (1) A prohibited transaction will not be considered to 
have occurred if, due to circumstances beyond the control of Principal, 
the records are lost or destroyed prior to the end of the six year 
period, and (2) no party in interest, other than Principal, shall be 
subject to the civil penalty that may be assessed under section 502(i) 
of the Act or to the taxes imposed by section 4975(a) and (b) of the 
Code if the records are not maintained or are not available for 
examination as required by paragraph (b) below.
    (b)(1) Except as provided in paragraph (b)(2) of this Section III 
and notwithstanding any provisions of section 504(a)(2) and (b) of the 
Act, the records referred to in paragraph (a) of this Section III 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 SEC;
    (B) Any fiduciary of a plan participating in an Index Fund or 
Model-Driven Fund, who has authority to acquire or dispose of the 
interests of the plan, or any duly authorized employee or 
representative of the fiduciary;
    (C) Any contributing employer to any plan participating in an Index 
Fund or Model-Driven Fund or any duly authorized employee or 
representative of the employer; and
    (D) Any participant or beneficiary of any plan participating in an 
Index Fund or Model-Driven Fund, or a representative of the participant 
or beneficiary; and
    (2) None of the persons described in subparagraphs (B) through (D) 
of this

[[Page 36954]]

Section III(b)(1) shall be authorized to examine trade secrets of 
Principal or commercial or financial information which are considered 
confidential.

Section IV. Definitions

    (a) An ``affiliate'' of Principal includes:
    (1) Any person, directly or indirectly, through one or more 
intermediaries, controlling, controlled by or under common control with 
the person;
    (2) Any officer, director, employee or relative of the person, or 
partner of any the person; and
    (3) Any corporation or partnership of which the person is an 
officer, director, partner or employee;
    (b) The term ``automated trading system'' means an electronic 
trading system that functions in a manner intended to simulate a 
securities exchange by electronically matching orders on an agency 
basis from multiple buyers and sellers, such as an ``alternative 
trading system'' within the meaning of the SEC's Reg. ATS (17 CFR part 
242.300), as this definition may be amended from time to time, or an 
``automated quotation system'' as described in Section 3(a)(5l)(A)(ii) 
of the 1934 Act (15 U.S.C. 8c(a)(5 l)(A)(ii));
    (c) The term ``Buy-up'' means an initial acquisition of Principal 
Stock by an Index Fund or Model-Driven Fund which is necessary to bring 
the Fund's holdings of Principal Stock either to its capitalization-
weighted or other specified composition in the relevant index (the 
Index), as determined by the independent organization maintaining the 
Index, or to its correct weighting as determined by the model which has 
been used to transform the Index;
    (d) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual;
    (e) The term ``Fund'' means an Index Fund (as described in Section 
IV(a)) or a Model-Driven Fund (as described in Section III(b))
    (f) The term ``Index'' means a securities index that represents the 
investment performance of a specific segment of the public market for 
equity or debt securities, but only if:
    (1) The organization creating and maintaining the Index is:
    (A) Engaged in the business of providing financial information, 
evaluation, advice, or securities brokerage services to institutional 
clients; or
    (B) A publisher of financial news or information; or
    (C) A public stock exchange or association of securities dealers; 
and
    (2) The Index is created and maintained by an organization 
independent of Principal; and
    (3) The Index is a generally-accepted standardized index of 
securities which is not specifically tailored for the use of Principal;
    (g) The term ``Index Fund'' means any investment fund, trust, 
insurance company separate account, separately managed account, or 
portfolio, sponsored, maintained, trusteed, or managed by Principal, in 
which one or more investors invest, and:
    (1) Which is designed to track the rate of return, risk profile and 
other characteristics of an independently- maintained securities index, 
as described in Section IV(c) below, by either: (i) Investing directly 
in the same combination of securities which compose the Index or in a 
sampling of the securities, based on objective criteria and data, or 
(ii) investing in one or more other Index Funds to indirectly invest in 
the same combination of securities which compose the Index, or in a 
sampling of the securities based on objective criteria and data;
    (2) For which all assets held outside of any liquidity buffer are 
invested without Principal using its discretion, or data within its 
control, to affect the identity or amount of securities to be purchased 
or sold, and the liquidity buffer, if any, does not hold any Principal 
Stock;
    (3) That contains ``plan assets'' subject to the Act;
    (4) That involves no agreement, arrangement, or understanding 
regarding the design or operation of the Fund, which is intended to 
benefit Principal or any party in which Principal may have an interest.
    (h) The term ``Model-Driven Fund'' means any investment fund, 
trust, insurance company separate account, separately managed account, 
or portfolio, sponsored, maintained, trusteed, or managed by Principal, 
in which one or more investors invest, and:
    (1) For which all assets held outside of any liquidity buffer 
consist of securities the identity of which and the amount of which are 
selected by a computer model that is based on prescribed objective 
criteria using independent third-party data, not within the control of 
Principal, to transform an independently-maintained Index, as defined 
in Section IV(c) below, and the liquidity buffer, if any, does not hold 
any Principal Stock;
    (2) That contains ``plan assets'' subject to the Act; and
    (3) That involves no agreement, arrangement, or understanding 
regarding the design or operation of the Fund or the utilization of any 
specific objective criteria which is intended to benefit Principal or 
any party in which Principal may have an interest;
    (i) The term ``Principal'' refers to Principal Life Insurance 
Company, its indirect parent and holding company, Principal Financial 
Group, Inc., and any current or future affiliate, as defined above in 
Section IV(a);
    (j) The term ``recognized U.S. securities exchange'' means a U.S. 
securities exchange that is registered as a ``national securities 
exchange'' under Section 6 of the 1934 Act (15 U.S.C. 78f), as this 
definition may be amended from time to time, which performs with 
respect to securities the functions commonly performed by a stock 
exchange within the meaning of definitions under the applicable 
securities laws (e.g., 17 CFR part 240.3b-16); and
    (k) The term ``Independent Plan Fiduciary'' means a fiduciary of a 
plan, where such fiduciary is independent of and unrelated to 
Principal. The Independent Plan Fiduciary will not be deemed to be 
independent of and unrelated to Principal if:
    (1) Such Independent Plan Fiduciary, directly or indirectly, 
through one or more intermediaries, controls, is controlled by, or is 
under common control with Principal;
    (2) Such Independent Plan Fiduciary, or any officer, director, 
partner, or employee of such Independent Plan Fiduciary, is an officer, 
director, partner or employee of Principal, or otherwise has an 
interest in Principal that could affect its judgment as a fiduciary; or
    (3) Such Independent Plan Fiduciary, directly or indirectly, 
receives any compensation or other consideration for his or her 
personal account in connection with any transaction described in this 
exemption.

FOR FURTHER INFORMATION CONTACT: Scott Ness of the Department, 
telephone (202) 693-8561. (This is not a toll-free number.)

Seventy Seven Energy Inc. Retirement & Savings Plan (the Plan) Located 
in Oklahoma City, OK [Prohibited Transaction Exemption 2019-05; 
Exemption Application Nos. D-11918]

Written Comments

    In the Notice of Proposed exemption published in the Federal 
Register on December 28, 2018 at 83 FR 67664 (the Notice), the 
Department invited all interested persons, including all participants 
in the Plan, former employees with vested account balances in the Plan, 
all retirees and beneficiaries

[[Page 36955]]

currently receiving benefits from the Plan, all employers with 
employees participating in the Plan, all unions with members 
participating in the Plan (of which there are none), and all Plan 
fiduciaries to submit written comments and/or requests for a hearing to 
the Department within 40 days of the date of the publication. During 
the comment period, the Department received one favorable comment from 
an anonymous commenter and no hearing requests.
    After full consideration and review of the entire record, the 
Department has determined to grant the exemption. The complete 
application file (D-11918) is 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 facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice published in the Federal Register on December 28, 2018 at 83 
FR 67664.

Exemption

    The restrictions of sections 406(a)(1)(E), 406(a)(2), and 
407(a)(1)(A) of the shall not apply, effective August 1, 2016 through 
April 20, 2017, to: (1) The acquisition by the participant accounts in 
the Plan (the Accounts) of warrants (the Warrants), issued by Seventy 
Seven Energy, Inc. (SSE), the Plan sponsor, in connection with SSE's 
bankruptcy; and (2) the holding of the Warrants by the Plan.
    This exemption is subject to the following conditions:
    (a) The Plan acquired the Warrants automatically in connection with 
the plan of reorganization entered into on May 9, 2016, by SSE and all 
of its wholly-owned subsidiaries with certain lenders, under which all 
holders of shares of SSE common stock, including the Plan, were treated 
in the same manner;
    (b) The Plan acquired the Warrants without any unilateral action on 
its part;
    (c) The Plan did not pay any fees or commissions in connection with 
the acquisition or holding of the Warrants;
    (d) Had the Warrants not expired unexercised, all decisions 
regarding the exercise or sale of the Warrants acquired by the Plan 
would have been made by the Plan participants in whose Plan Accounts 
the Warrants were allocated, in accordance with the terms of the 
Warrant agreement, dated as of August 1, 2016, and in accordance with 
the Plan provisions and regulations pertaining to the individually-
directed investment of the Plan Accounts; and
    (e) The Plan trustee did not allow Plan participants to exercise 
the Warrants held by their Plan Accounts because the fair market value 
of SSE common stock following SSE's emergence from bankruptcy on August 
1, 2016 did not, at any time prior to the date that the Warrants 
expired, exceed the exercise price of the Warrants.
    Effective Date: This exemption is effective as of August 1, 2016 
through April 20, 2017.

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

Tidewater Savings and Retirement Plan (the Plan) Located in New 
Orleans, LA [Prohibited Transaction Exemption 2019-06; Exemption 
Application No. D-11940]

Written Comments

    In the Notice of Proposed Exemption (the Notice), published in the 
Federal Register on December 27, 2018 at 83 FR 67667, the Department of 
Labor (the Department) invited all interested persons to submit written 
comments and requests for a hearing within forty-five (45) days of the 
date of publication. All comments and hearing requests were due by 
February 11, 2019.
    During the comment period, the Department received one favorable 
comment from an anonymous commenter, and no requests for a public 
hearing.
    After giving full consideration to the entire record, the 
Department has determined to grant the exemption, as noted above. The 
complete application file (D-11940) is available for public inspection 
in the Public Disclosure Room of the Employee Benefits Security 
Administration, Room N-1515, 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 in the Federal Register on December 28, 2018 at 83 
FR 67667.

Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(E), 406(a)(2), and 
407(a)(1)(A) of the Act will not apply, effective July 31, 2017, to: 
(1) The acquisition in the Tidewater Savings and Retirement Plan (the 
Plan), by the participant-directed accounts (the Accounts) of certain 
participants, of Series A Warrants and Series B Warrants (collectively, 
the Equity Warrants) of Tidewater, Inc. (Tidewater), the Plan sponsor 
and a party in interest with respect to the Plan; and (2) the holding 
of the Equity Warrants by the Accounts, provided that the conditions 
set forth in Section II below are or were satisfied.

Section II. Conditions for Relief

    (a) The acquisition of the Equity Warrants by the Accounts of Plan 
participants occurred in connection with Tidewater's bankruptcy 
proceeding;
    (b) The Equity Warrants were acquired pursuant to, and in 
accordance with, provisions under the Plan for individually-directed 
investments of the Accounts by the individual participants in the Plan, 
a portion of whose Accounts in the Plan held shares of old Tidewater 
common stock (the Old Common Stock);
    (c) Each shareholder of the Old Common Stock, including each 
Account of an affected Plan participant, was issued the same 
proportionate shares of the Equity Warrants based on the number of 
shares of the Old Common Stock held by the shareholder as of July 31, 
2017;
    (d) All holders of the Equity Warrants, including the Accounts, 
were treated in a like manner;
    (e) The decisions with regard to the acquisition, holding or 
disposition of the Equity Warrants by an Account were made by each Plan 
participant whose Account received the Equity Warrants;
    (f) The Accounts did not pay any brokerage fees, commissions, or 
other fees or expenses to any related broker in connection with the 
acquisition and holding of the Equity Warrants, nor did the Accounts 
pay any brokerage fees or commissions in connection with the sale of 
the Equity Warrants;
    (g) Each sale transaction involving the Equity Warrants was for 
cash, and no sale would enrich the Plan fiduciaries;
    (h) Plan participants could: (1) Acquire shares of the New Common 
Stock for their Plan Accounts by exercising their purchase rights under 
the Equity Warrants; or (2) direct Merrill Lynch to sell the Equity 
Warrants held in their Accounts, at any time; and
    (i) Plan participants were notified when the Committee approved the 
sale of the Equity Warrants.
    Effective Date: This exemption is effective for the period 
beginning July 31, 2017, and ending whenever the Equity Warrants are 
exercised by Plan participants or they expire.

FOR FURTHER INFORMATION CONTACT: Blessed Chuksorji-Keefe of the 
Department, telephone (202) 693-8567. (This is not a toll-free number.)

[[Page 36956]]

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) These exemptions are supplemental to and not in derogation of, 
any other provisions of the Act and/or the Code, including statutory or 
administrative exemptions and transactional rules. Furthermore, the 
fact that a transaction is subject to an administrative or statutory 
exemption is not dispositive of whether the transaction is in fact a 
prohibited transaction; and
    (3) The availability of these exemptions is subject to the express 
condition that the material facts and representations contained in the 
application accurately describes all material terms of the transaction 
which is the subject of the exemption.

    Signed at Washington, DC.
Lyssa Hall,
Director, Office of Exemption Determinations, Employee Benefits 
Security Administration, U.S. Department Of Labor.
[FR Doc. 2019-16163 Filed 7-29-19; 8:45 am]
 BILLING CODE 4510-29-P