Proposed Exemptions From Certain Prohibited Transaction Restrictions, 8462-8475 [2023-02703]

Agencies

• Employee Benefits Security Administration
• DEPARTMENT OF LABOR

[Federal Register Volume 88, Number 27 (Thursday, February 9, 2023)]
[Notices]
[Pages 8462-8475]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-02703]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Proposed Exemptions From Certain Prohibited Transaction 
Restrictions

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Notice of proposed exemptions.

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SUMMARY: This document contains notices of pendency before the 
Department of Labor (the Department) of proposed exemptions from 
certain of the prohibited transaction restrictions of the Employee 
Retirement Income Security Act of 1974 (ERISA or the Act) and/or the 
Internal Revenue Code of 1986 (the Code). If granted, these proposed 
exemptions allow designated parties to engage in transactions that 
would otherwise be prohibited provided the conditions stated there in 
are met. This notice includes the following proposed exemptions: Unit 
Corporation Employees' Thrift Plan, D-12026; The Liberty Media 401(k) 
Savings Plan and The Liberty Media 401(k) Savings Plan Trust, D-12023; 
The Occidental Petroleum Corporation Savings Plan and The Anadarko 
Employee Savings Plan, D-12032 and D-12033.

DATES: All interested persons are invited to submit written comments or 
requests for a hearing on the pending exemptions, unless otherwise 
stated in the Notice of Proposed Exemption, by March 27, 2023.

ADDRESSES: All written comments and requests for a hearing should be 
sent to the Employee Benefits Security Administration (EBSA), Office of 
Exemption Determinations, U.S. Department of Labor, Attention:

[[Page 8463]]

Application No. ___, stated in each Notice of Proposed Exemption via 
email to [email protected] or online through https://www.regulations.gov by 
the end of the scheduled comment period. Any such comments or requests 
should be sent by the end of the scheduled comment period. The 
applications for exemption and the comments received will be available 
for public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, U.S. Department of Labor, Room N-
1515, 200 Constitution Avenue NW, Washington, DC 20210. See 
SUPPLEMENTARY INFORMATION below for additional information regarding 
comments.

SUPPLEMENTARY INFORMATION:

Comments

    Persons are encouraged to submit all comments electronically and 
not to follow with paper copies. Comments should state the nature of 
the person's interest in the proposed exemption and the manner in which 
the person would be adversely affected by the exemption, if granted. A 
request for a hearing can be requested by any interested person who may 
be adversely affected by an exemption. A request for a hearing must 
state: (1) The name, address, telephone number, and email address of 
the person making the request; (2) the nature of the person's interest 
in the exemption and the manner in which the person would be adversely 
affected by the exemption; and (3) a statement of the issues to be 
addressed and a general description of the evidence to be presented at 
the hearing. The Department will grant a request for a hearing made in 
accordance with the requirements above where a hearing is necessary to 
fully explore material factual issues identified by the person 
requesting the hearing. A notice of such hearing shall be published by 
the Department in the Federal Register. The Department may decline to 
hold a hearing where: (1) The request for the hearing does not meet the 
requirements above; (2) the only issues identified for exploration at 
the hearing are matters of law; or (3) the factual issues identified 
can be fully explored through the submission of evidence in written 
(including electronic) form.
    Warning: All comments received will be included in the public 
record without change and may be made available online at https://www.regulations.gov, including any personal information provided, 
unless the comment includes information claimed to be confidential or 
other information whose disclosure is restricted by statute. If you 
submit a comment, EBSA recommends that you include your name and other 
contact information in the body of your comment, but DO NOT submit 
information that you consider to be confidential, or otherwise 
protected (such as Social Security number or an unlisted phone number) 
or confidential business information that you do not want publicly 
disclosed. However, if EBSA cannot read your comment due to technical 
difficulties and cannot contact you for clarification, EBSA might not 
be able to consider your comment. Additionally, the https://www.regulations.gov website is an ``anonymous access'' system, which 
means EBSA will not know your identity or contact information unless 
you provide it in the body of your comment. If you send an email 
directly to EBSA without going through https://www.regulations.gov, 
your email address will be automatically captured and included as part 
of the comment that is placed in the public record and made available 
on the internet.

Notice to Interested Persons

    Notice of the proposed exemptions will be provided to all 
interested persons in the manner agreed upon by the applicant and the 
Department, unless otherwise stated in the Notice of Proposed 
Exemption, within 15 days of the date of publication in the Federal 
Register. Such notice shall include a copy of the notice of proposed 
exemption as published in the Federal Register and shall inform 
interested persons of their right to comment and to request a hearing 
(where appropriate).
    The proposed exemptions were requested in applications filed 
pursuant to section 408(a) of the Act and/or section 4975(c)(2) of the 
Code, and in accordance with procedures set forth in 29 CFR part 2570, 
subpart B (76 FR 66637, 66644, October 27, 2011).\1\ Effective December 
31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. 
App. 1 (1996), transferred the authority of the Secretary of the 
Treasury to issue exemptions of the type requested to the Secretary of 
Labor. Therefore, these notices of proposed exemption are issued solely 
by the Department.
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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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    The applications contain representations with regard to the 
proposed exemptions which are summarized below. Interested persons are 
referred to the applications on file with the Department for a complete 
statement of the facts and representations.

Unit Corporation Employees' Thrift Plan Located in Tulsa, Oklahoma

[Application No. D-12026]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Employee Retirement Income Security 
Act of 1974, as amended (ERISA), to the Unit Corporation Employee's 
Thrift Plan (the Plan) in accordance with the Department's exemption 
procedures.\2\ This proposed exemption would permit: (1) the 
acquisition by the participants' accounts (the Accounts) in the Plan, 
of warrants (the Warrants) issued by Unit Corporation, the Plan 
sponsor, in connection with Unit Corporation's chapter 11 bankruptcy 
filing (the Bankruptcy Filing), in exchange for the participants' 
waiver of claims against ``Released Parties;'' \3\ and (2) the holding 
of the Warrants by the Plan (together, the Proposed Transactions), 
provided that the conditions set forth herein are met.
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    \2\ 29 CFR part 2570, subpart B (75 FR 66637, 66644, October 27, 
2011). For purposes of this proposed exemption, references to 
specific provisions of title I of ERISA unless otherwise specified, 
should be read to refer as well to the corresponding provisions of 
Internal Revenue Code (Code) section 4975.
    \3\ As stated in the Reorganization Plan, the Released Parties 
include: (a) Unit Corporation; (b) the Reorganized Unit Corporation; 
(c) the Debtor-in-possession Agent; (d) the Debtor-in-possession 
Lenders; (e) the RBL Agent (the agent for secured parties holding 
First-Priority Lien Obligations); (d) the RBL Lenders (a type of 
asset-based lending (ABL) commonly used in the oil and gas sector, 
reserve based loans are made against, and secured by, an oil and gas 
field or a portfolio of undeveloped or developed and producing oil 
and gas assets; (e) the Consenting Noteholders; (f) the Exit 
Facility Agent; (g) the Exit Facility Lenders; and (h) the 
Subordinated Notes Indenture Trustee.
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Summary of Facts and Representations 4
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    \4\ The Department notes that the facts and representations 
stated herein are those of the Applicant and they are assumed to be 
true for purposes of the Department's review of the application for 
an exemption. The Department cautions that the availability of this 
exemption, if granted, is subject to the express condition that the 
material facts and representations contained in application D-12026 
are true and complete, and accurately describe all material terms of 
the transactions covered by the exemption. If there is any material 
change in a transaction covered by the exemption, or in a material 
fact or representation described by the Applicant in the 
application, the exemption will cease to apply as of the date of the 
change.
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Background

    1. Unit Corporation. Unit Corporation (also referred to as the 
Applicant) is a

[[Page 8464]]

publicly-traded energy company engaged in oil and natural gas 
exploration and production, contract drilling, and midstream services. 
The Applicant is headquartered in Tulsa, Oklahoma and employs 650 
individuals. Unit Corporation stock is currently traded on the over-
the-counter marketplace following its delisting from the New York Stock 
Exchange as a result of its Bankruptcy Filing (as discussed in more 
detail below). During the year ended December 31, 2019, Unit 
Corporation recorded revenues of $674.6 million and a net loss of 
$553.9 million, or $10.48 per share.
    2. The Plan. The Plan is a participant-directed 401(k) individual 
account plan. As of December 1, 2021, the Plan covered 472 participants 
and held total assets of approximately $70,127,000. Fidelity Management 
Trust Company (the Trustee) serves as directed trustee and recordkeeper 
for the Plan. The Unit Corporation Benefits Committee (the Benefits 
Committee) serves as the Plan Administrator with overall responsibility 
for the operation and administration of the Plan and as the named 
fiduciary for purposes of investment-related matters.
    3. Unit Common Stock. As of September 3, 2020, the Plan held 
4,932,864 shares of Unit common stock (Old Unit Common Stock), which 
comprised 0.68% of the Plan's total assets.\5\ Plan-held shares of Old 
Unit Common Stock were allocated among the individual Accounts of Plan 
participants (the Invested Participants) and held in a stock fund 
within the Plan (the Stock Fund).
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    \5\ At the time, the Plan's 4,932,864 shares represented 
approximately 9% of all outstanding Old Unit Common Stock.
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    4. The Plan's Pass-Through Process. Provisions of the Trust 
Agreement covering the voting of Employer Stock state that: ``Each 
participant with an interest in the Stock Fund shall have the right to 
direct the Trustee as to the manner in which the Trustee is to vote 
(including not to vote) that number of shares of Employer Stock that is 
credited to his Account.'' As represented by the Applicant, Invested 
Participants have routinely voted their pro-rata interest in the 
Company Stock Fund on matters such as annual shareholder proxies.
    5. The Bankruptcy Filing. On May 22, 2020, Unit Corporation and 
certain of its affiliates filed voluntary petitions for relief under 
Chapter 11 of Title 11 of the United States Code in the United States 
Bankruptcy Court for the Southern District of Texas, Houston Division 
under Case No. 20-327401 (the Bankruptcy Filing).\6\ On May 26, 2020, 
the New York Stock Exchange (NYSE) suspended trading in Old Unit Common 
Stock because of the Bankruptcy Filing. On June 10, 2020, the NYSE 
filed a Securities and Exchange Commission Form 25 to delist and 
deregister Old Unit Common Stock.
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    \6\ Jointly administered under Case No. 20-327401.
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    On June 19, 2020, Unit Corporation filed a Debtors' First Revised 
Proposed Joint Chapter 11 Plan of Reorganization (the Reorganization 
Plan) and a First Revised Disclosure Statement for the Debtors' First 
Revised Proposed Joint Chapter 11 Plan of Reorganization (the 
Disclosure Statement) with the Bankruptcy Court to reduce its debt 
obligations and right-size its balance sheet for go-forward operations. 
On July 30, 2020, the Bankruptcy Court confirmed Unit Corporation's 
Reorganization Plan and on September 3, 2020, Unit Corporation 
announced that it had emerged from bankruptcy protection upon the 
completion of a financial restructuring process and the implementation 
of the Reorganization Plan. Upon Unit Corporation's emergence from 
bankruptcy, shares of Old Unit Common Stock were cancelled.
    6. The Warrants. Under the Reorganization Plan, Unit Corporation 
completed a debt-for-equity exchange with holders of its previous $650 
million, 6.625% senior subordinated notes that were due in 2021, and 
exchanged Old Unit Common Stock for the Warrants. Each Warrant entitles 
its registered holder to receive from Unit Corporation one share of 
newly-issued common stock in Unit Corporation (New Unit Common Stock) 
upon the exercise of the Warrant through the payment of an Exercise 
Price during an Exercise Period. The exchange rate for the Warrants is 
1 to .03460447, where one share of Old Unit Common Stock converts to 
.03460447 Warrants.
    7. Acceptance or Rejection of the Warrants. As holders of the Old 
Unit Common Stock, the Invested Participants qualify to receive the 
Warrants under the Reorganization Plan. However, the Warrants have not 
yet been issued to the Plan. The Warrants will be issued to the Plan if 
the Department grants a final exemption. The Applicant represents that 
the Benefits Committee has not had any involvement with the Warrants 
since Unit Corporation's emergence from bankruptcy.
    To accept the Warrants, an Invested Participant must agree to 
release potential claims against Unit Corporation and affiliates (i.e., 
the Released Parties, as described in Footnote 3 of this proposed 
exemption). The Applicant represents that this liability release (the 
Liability Release) was imposed by the Bankruptcy Court and the 
creditors and applies to all former holders of Old Unit Common Stock, 
not just the Plan. The Applicant states that such releases, which are 
generally applied to creditors in exchange for cash and other property 
(including warrants), are common in the context of bankruptcy 
reorganizations. Liability releases allow the debtor-in-possession to 
operate their business free from potential claims arising pre-
bankruptcy, so long as all similarly-situated creditors and other 
claimants are treated equivalently. As a condition of this exemption, 
the Liability Release must be described to the Invested Participants in 
a clearly written communication from Unit Corporation.
    Acceptance or rejection of the Warrants by the Invested 
Participants is a two-step process: first, the Warrants will be 
automatically accepted into the Plan by the Trustee where they will be 
held in a suspense account; and second, the Invested Participants will 
have the choice to either accept the Warrants and release their claims 
or reject the Warrants. If an Invested Participant makes no election, 
the Warrants will be deemed as having been accepted by the Invested 
Participant. However, neither step will happen unless and until the 
Department grants a final exemption.
    As a condition of this proposed exemption, the acquisition of the 
Warrants by the Accounts of the Invested Participants must be 
implemented on the same material terms as the acquisition of the 
Warrants by all shareholders of Old Unit Common Stock. Further, each 
shareholder of Old Unit Common Stock, including each of the Invested 
Participants' Account, must receive the same proportionate number of 
Warrants based on the number of shares of Old Unit Common Stock held by 
each shareholder.
    8. Exercising the Warrants. The Applicant states that the final 
exercise price for the Warrants is $63.74. Decisions regarding the 
exercise or sale of the Warrants can be made only by the individual 
Invested Participants in whose Accounts the Warrants are allocated. In 
this regard, an Invested Participant can exercise his or her Warrants 
only during an Exercise Period, which will begin after the effective 
date of a final exemption if granted by the Department, and end on the 
earliest of: (a) September 3, 2027; (b) the consummation of a cash sale 
(as defined in the Warrant Agreement); or (c) the consummation of a 
liquidation,

[[Page 8465]]

dissolution or winding up of Unit Corporation.
    The Plan Trustee will not allow Invested Participants to exercise 
the Warrants held in their Plan Accounts if the fair market value of 
New Unit Common Stock is less than the exercise price of the Warrants. 
Each Warrant that is not exercised during the Exercise Period will 
expire, and all rights under the Warrants and the Warrant Agreement 
will cease upon the conclusion of the Exercise Period. This proposed 
exemption requires Unit Corporation to notify and inform each Invested 
Participant in writing at least thirty days before the conclusion of 
the Exercise Period that each Warrant held in the Invested 
Participant's Account will expire and all rights under the Warrants and 
the Warrant Agreement will cease upon the conclusion of the Exercise 
Period.
    An Invested Participant may exercise all or any whole number of 
their Warrants at any time during the Exercise Period through: (a) 
written notice provided to Unit Corporation and the warrant agent, 
American Stock Transfer & Trust Company, LLC (the Warrant Agent); and 
(b) the Invested Participant's full payment of the Exercise Price, 
either by a transfer of funds or on a cashless basis subject to a 
cashless exercise ratio, as defined in the Warrant Agreement.\7\ The 
Applicant represents that the Warrant Agent is independent of Unit 
Corporation and the Trustee. The Applicant also represents that the 
Warrant Agent has not and will not sell the Warrants. The Invested 
Participants may also sell the Warrants in over-the-counter (OTC) 
markets where sale prices for the Warrants will be determined by supply 
and demand and not by any independent valuation of the Warrants.
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    \7\ The Applicant represents that a ``cashless basis'' 
transaction allows a warrant holder to exercise Warrants without a 
cash outlay. Under a cashless exercise, a Warrant holder may 
surrender a portion of their Warrants to cover the exercise price of 
other Warrants that they hold, rather than transferring funds to 
cover the Exercise Price.
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    9. As noted above, the Plan held 4,932,864 shares (or approximately 
9 percent) of Old Unit Common Stock before the Bankruptcy Filing. With 
the Warrant exchange rate set at 1 to .03460447, Invested Participants 
will receive approximately 170,709 Warrants.
    10. According to the Applicant, since the effective date of the 
reorganization on September 4, 2020, the Reorganized Debtors and their 
advisors have been working to reconcile claims filed in the bankruptcy 
case, file objections to certain claims, and negotiate resolutions of 
disputed claims. On June 21, 2021, the Chapter 11 cases for all debtors 
other than Unit Petroleum Company were closed and the Unit Petroleum 
Company case (Case No. 20-32738) was the only remaining open case. The 
Reorganized Debtors have now completed the claims reconciliation 
process and anticipate filing a motion to close the Unit Petroleum 
Case.
    11. Selling the Warrants. The Warrants can be sold, assigned, 
transferred, pledged, encumbered, or in any other manner transferred or 
disposed of, in whole or in part in accordance with the terms of the 
Warrant Agreement and all applicable laws.\8\ In this regard, Invested 
Participants will have the right to sell the Warrants allocated to 
their Plan Accounts on the open market at any time before the Warrant 
expiration date in the same manner as other holders of the Warrants.
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    \8\ The Department notes that relief under this exemption does 
not extend to the sale of the Warrants, which must be executed as 
``blind'' transactions.
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    12. Disclosures Associated with the Warrants. As a condition of 
this exemption, the terms of the Warrants Offering must be described to 
the Invested Participants in clearly written communications containing 
all material terms provided by the Applicant. In addition to the 
prospectus for the Warrant Offering, Invested Participants must receive 
a separate communication from the Applicant that clearly explains all 
aspects of the Warrants Offering, including: (a) that Unit Corporation 
is granting the Warrants to former holders of Old Unit Common Stock; 
(b) how the Warrants work; (c) that the decision regarding whether to 
accept or reject the Warrants is the decision of the Invested 
Participant; and (d) the liability release described above.

The Independent Fiduciary

    13. On September 23, 2020, Unit and the Committee retained Newport 
Trust Company of New York, NY (Newport) to serve as the Independent 
Fiduciary to the Plan with respect to the Proposed Transactions. 
Newport represents that it understands and acknowledges its duties and 
responsibilities under ERISA in acting as the Independent Fiduciary on 
behalf of the Plan, and that in this capacity it must act solely in the 
interest of the Invested Participants with care, skill, and prudence in 
discharging its duties.
    14. Newport represents that it does not have any prior relationship 
with any parties in interest to the Plan, including Unit Corporation, 
or any Unit Corporation affiliates. In this regard, Newport represents 
that it is independent of, and unrelated to Unit Corporation, and that: 
(a) it does not directly or indirectly control, is not controlled by, 
and is not under common control with Unit Corporation; and (b) neither 
it, nor any of its officers, directors, or employees is an officer, 
director, partner or employee of Unit Corporation (or is a relative of 
such persons). Newport also represents that (a) the payment it receives 
as Independent Fiduciary is not contingent upon, or in any way affected 
by, the contents of its Independent Fiduciary Report, and (b) the total 
fee it has received from any party in interest, including the Plan, 
Unit Corporation, or any Unit Corporation affiliates, does not exceed 
1% of its annual revenues from all sources based upon its prior income 
tax year.
    15. Newport represents: (a) that no party related to Unit 
Corporation has, or will, indemnify Newport in whole or in part for 
negligence and/or for any violation of state or federal law that may be 
attributable to Newport in performing its duties as Independent 
Fiduciary on behalf of the Plan; (b) that it has not performed any 
prior work on behalf of Unit Corporation, or on behalf of any party 
related to Unit Corporation; (c) that it has no financial interest with 
respect to its work as Independent Fiduciary, apart from the express 
fees paid to Newport to represent the Plan with respect to the Proposed 
Transactions; (d) that it has not received any compensation or entered 
into any financial or compensation arrangements with Unit Corporation, 
or any parties related to Unit Corporation; and (e) that it will not 
enter into any agreement or instrument regarding the Proposed 
Transactions that violates ERISA section 410 or the Department's 
regulations codified in 29 CFR 2509.75-4.\9\
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    \9\ ERISA section 410 provides, in relevant part, that ``except 
as provided in ERISA sections 405(b)(1) and 405(d), any provision in 
an agreement or instrument which purports to relieve a fiduciary 
from responsibility or liability for any responsibility, obligation, 
or duty under this part [meaning ERISA section 410(a)] shall be void 
as against public policy.''
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    16. Independent Fiduciary Duties. As Independent Fiduciary to the 
Plan with respect to the Proposed Transactions, Newport must: (a) 
determine whether the Proposed Transactions are in the interests of the 
Plan and the Invested Participants; (b) determine whether the Plan may 
enter into the Proposed Transactions in accordance with the 
requirements of this exemption; and (c) submit its determinations to 
the Department in a report (the Independent

[[Page 8466]]

Fiduciary Report) that includes a detailed analysis of the reasons why 
the Proposed Transactions are in the interests of, and protective of 
the rights of, the Plan and the Invested Participants, and a 
representation that the Invested Participants received all they were 
entitled to receive with respect to the Proposed Transactions. The 
Independent Fiduciary must review and confirm that the communications 
sent to participants meet the requirements of this exemption. 
Additionally, the Independent Fiduciary or an appropriate Plan 
fiduciary will monitor the holding and sale of warrants by the Plan in 
accordance with the obligations of prudence and loyalty under ERISA 
section 404(a) to ensure that the Proposed Transactions remain prudent, 
protective of, and in the interests of the participants. Finally, not 
later than 90 days after the end of the Exercise Period, the 
Independent Fiduciary must submit a written statement to the Department 
confirming and demonstrating that the Applicant has met all of the 
exemption's requirements.
    17. Independent Fiduciary Report. On January 29, 2021, Newport 
completed its Independent Fiduciary Report, wherein it determined that 
the Proposed Transactions are prudent, in the interest of, and 
protective of, the Plan and the Invested Participants. In completing 
its Independent Fiduciary Report, Newport represents that it conducted 
a thorough due diligence process to evaluate the Proposed Transactions, 
which involved discussions and correspondence with representatives of 
Unit Corporation, Unit Corporation's outside counsel, and 
representatives of the Trustee. Newport represents that it also 
reviewed information provided by Unit Corporation and the Benefits 
Committee, as well as additional publicly available information.
    In the Independent Fiduciary Report, Newport states that its 
recommendation to the Benefits Committee to pass through the decision 
whether to accept or reject the Warrants to Invested Participants 
comports with the Plan's standard practice of granting Invested 
Participants individual discretion over shareholder matters and with 
the Plan's standing practice for corporate actions within the Company 
Stock Fund. Newport further states that allowing the Plan to hold the 
Warrants places Invested Participants on equal footing with other non-
Plan shareholders of Old Unit Common Stock, and that this pass-through 
empowers Invested Participants to make an election that is consistent 
with their particular economic interests. Newport further states that 
Invested Participants have historically enjoyed the same rights and 
privileges as shareholders outside the Plan.
    Newport states that Invested Participants who choose to accept the 
Warrants could realize value through the future exercise or sale of the 
Warrants, while participants who choose to reject the Warrants would 
maintain their legal right to bring claims against Unit Corporation. 
Newport states that the terms and conditions of the Proposed 
Transactions require that no fees or commissions be paid by Invested 
Participants, and that Invested Participants will only be allowed to 
exercise the Warrants for economic gain. Newport further states that 
there is currently no public market for the Warrants or for New Unit 
Common Stock, and the terms of the Warrants do not entitle holders to 
``put'' the Warrants to the Applicant.
    Newport states that any shareholder who elects not to receive the 
Warrants would not waive any claims that could be brought against Unit 
Corporation and other Released Parties, including claims seeking 
restitution for losses on an individual or class action basis under 
securities law. Newport further states that Invested Participants who 
elect not to receive the Warrants would also not waive their right to 
file a claim seeking restitution for losses under ERISA.
    Newport represents that the methodology used by Stout to determine 
the fair market value of the Warrants was reasonable, sound, and 
consistent with good valuation practices. In this regard, Newport 
states that the Black-Scholes formula used by Stout is commonly 
employed across the financial industry to establish the fair market 
value of equity options, including rights and warrants. Newport further 
states that Stout applied this methodology in an objective manner and 
exercised professional judgment to account for the Warrants' specific 
characteristics.
    Newport notes that, as the Independent Fiduciary to the Plan with 
respect to the Proposed Transactions, it has the responsibility to 
determine whether to override the Plan's pass-through process and, 
thus, disregard participant's elections with respect to the receipt of 
the Warrants and the release of claims. Newport states that, based on 
the reported value of the Warrants and the uncertain economic value of 
the potential claims, it determined not to override the Plan's pass-
through process, and therefore not to disregard Invested Participant 
elections in connection with the receipt of Warrants and the release of 
claims.
    18. Newport states that it reviewed public information about the 
Applicant and the Plan and performed legal research related to the 
Applicant's active lawsuits to confirm that no active claims are 
pending that would potentially be released through receipt of the 
Warrants. Newport notes that, based on a review of the public record, 
there is no indication that the Applicant's financial difficulties were 
brought on by its mismanagement or any other inappropriate activities 
by the Applicant or any affiliated entity. Newport further states that 
there are no pending lawsuits or active court cases involving the 
Applicant aside from the Bankruptcy Filing.
    19. Newport concludes that, based on this analysis and the 
assumption that the Applicant provides Invested Participants with the 
appropriate disclosures described above, it would be imprudent for 
Newport to disallow participants' rights to exercise their judgment 
with respect to the Warrants by overriding the Plan's pass-through 
process and disregard the Invested Participants' selections in 
connection with the receipt of Warrants and the release of claims based 
on the facts as they existed at the time of their analysis. However, as 
noted above, the Independent Fiduciary or an appropriate Plan fiduciary 
will monitor the holding and sale of Warrants by the plan in accordance 
with its obligations of prudence and loyalty under ERISA section 404(a) 
to ensure that the Proposed Transactions remain prudent, protective of, 
and in the interests of the participants.

ERISA Analysis

    20. The acquisition and holding of the Warrants would violate 
certain prohibited transaction restrictions of ERISA. Although the 
Warrants constitute ``employer securities,'' as defined under ERISA 
section 407(d)(1), they do not satisfy the definition of ``qualifying 
employer securities,'' as defined under ERISA section 407(d)(5), 
because they are not stock or marketable debt securities. Under ERISA 
section 407(a)(1)(A), a plan may not acquire or hold any ``employer 
security'' that is not a ``qualifying employer security.'' In addition, 
ERISA section 406(a)(1)(E) prohibits the acquisition, on behalf of a 
plan, of any ``employer security in violation of section 407(a) of 
[ERISA].'' Finally, ERISA section 406(a)(2) prohibits a fiduciary who 
has authority or discretion to control or manage a plan's assets from 
permitting the plan to hold any ``employer security'' in violation of 
ERISA section 407(a). Therefore, the acquisition and holding

[[Page 8467]]

of the Warrants by the Plan would constitute prohibited transactions 
that violate ERISA sections 406(a)(1)(E) and 406(a)(2).
    21. Furthermore, the acquisition of the Warrants would violate 
ERISA section 406(a)(1)(A). In relevant part, ERISA section 
406(a)(1)(A) provides that a plan fiduciary shall not cause the plan to 
engage in a transaction if the fiduciary knows or should know that the 
transaction is a sale or exchange of any property between a plan and a 
party in interest. Because the Invested Participants who acquire the 
Warrants will release their claims against the Released Parties, the 
acquisition of the Warrants will constitute a sale or exchange of 
property between the Plan and Unit Corporation, a party in interest, in 
violation of ERISA section 406(a).

Statutory Findings

    22. ERISA section 408(a) provides, in part, that the Department may 
not grant an exemption from the prohibited transaction provisions 
unless the Department finds that the exemption is administratively 
feasible, in the interest of affected plan and of its participants and 
beneficiaries, and protective of the rights of such participants and 
beneficiaries. Each of these criteria are discussed below.
    23. The Proposed Exemption Is ``Administratively Feasible.'' The 
Department has tentatively determined that the proposed exemption is 
administratively feasible. In this regard, the Department notes that 
the Independent Fiduciary must represent the interests of the Plan for 
all purposes with respect to the Proposed Transactions and must 
determine that the Proposed Transactions, including all terms and 
conditions of the proposed exemption are in the interests of the Plan 
and the Invested Participants.
    24. The Proposed Exemption Is ``In the Interests of the Plan.'' The 
Department has tentatively determined that the proposed exemption is in 
the interests of the Plan. In this regard, the Department notes that 
Invested Participants who choose to accept the Warrants could realize 
value through the future exercise or sale of the Warrants, while 
participants who choose to reject the Warrants would maintain their 
legal right to bring claims against Unit Corporation. Further, Invested 
Participants would pay no fees or commissions and will only be allowed 
to exercise the Warrants for economic gain. Absent the receipt of 
Warrants, the Invested Participants may not receive any value for the 
shares of Old Unit Common Stock they held before the Bankruptcy 
Filing.\10\
---------------------------------------------------------------------------

    \10\ The Department notes that in proposing this exemption it is 
not expressing any views regarding whether Invested Participants 
should ultimately accept or reject the Warrants.
---------------------------------------------------------------------------

    25. The Proposed Exemption Is ``Protective of the Plan.'' The 
Department has tentatively determined that the proposed exemption is 
protective of the rights of the Invested Participants. In this regard, 
the Department notes that all decisions regarding the holding, exercise 
and disposition of the Warrants will be made by the Invested 
Participants. Further, this proposed exemption requires the terms of 
the Warrants to be described in clearly-written communications provided 
to the Invested Participants by the Applicant. Finally, the Department 
notes that the Trustee will not allow Invested Participants to exercise 
the Warrants unless the fair market value of New Unit Stock exceeds the 
exercise price of the Warrants on the date of exercise and Invested 
Participants may choose to reject the Warrants and maintain their legal 
right to bring claims against Unit Corporation.

Summary

    26. Based on the conditions included in this proposed exemption, 
the Department has tentatively determined that the relief sought by the 
Applicant would satisfy the statutory requirements for an individual 
exemption under ERISA section 408(a).

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of ERISA section 408(a) and Code section 4975(c)(2) and in 
accordance with its exemption procedures set forth in 29 CFR part 2570, 
subpart B (29 CFR part 2570, subpart B (75 FR 66637, 66644, October 27, 
2011)).

Section I. Definitions

    (a) The term ``Bankruptcy Filing'' means Unit Corporation's May 22, 
2020 filing for relief under chapter 11 of title 11 of the United 
States Code, in the United States Bankruptcy Court for the Southern 
District of Texas, Houston Division, under Case No. 20-327401.
    (b) The term ``Exercise Period'' means the period during which 
Invested Participants can exercise their Warrants, which will end on 
the earliest of the following: (1) September 3, 2027; (2) the 
consummation of a cash sale (as defined in the Warrant Agreement); or 
(3) the consummation of a liquidation, dissolution or winding up of 
Unit Corporation.
    (c) The term ``Invested Participants'' means Plan participants who 
held shares of Old Unit Common Stock as of the date of the Bankruptcy 
Filing.
    (d) The term ``the Plan'' means the Unit Corporation Employees' 
Thrift Plan.
    (e) The term ``Independent Fiduciary'' means Newport Trust Company 
of New York, NY (Newport) or a successor Independent Fiduciary, to the 
extent Newport or the successor Independent Fiduciary continues to 
serve in such capacity, and who:
    (1) Is not an affiliate of Unit Corporation and does not hold an 
ownership interest in Unit Corporation or affiliates of Unit 
Corporation;
    (2) Was not a fiduciary with respect to the Plan before its 
appointment to serve as the Independent Fiduciary;
    (3) Has acknowledged in writing that it:
    (i) Is a fiduciary with respect to the Plan and has agreed not to 
participate in any decision regarding any transaction in which it has 
an interest that might affect its best judgment as a fiduciary; and
    (ii) Has appropriate technical training or experience to perform 
the services contemplated by the exemption;
    (4) Has not entered into any agreement or instrument that violates 
the prohibitions on exculpatory provisions in ERISA section 410 or the 
Department's regulation relating to indemnification of fiduciaries at 
29 CFR 2509.75-4;
    (5) Has not received gross income from Unit Corporation (including 
Unit Corporation affiliates) for any fiscal year in an amount that 
exceeds two percent (2%) of the Independent Fiduciary's gross income 
from all sources for the prior fiscal year. This provision also applies 
to a partnership or corporation of which the Independent Fiduciary is 
an officer, director, or 10 percent (10%) or more partner or 
shareholder, and includes as gross income amounts received as 
compensation for services provided as an independent fiduciary under 
any prohibited transaction exemption granted by the Department; and
    (6) No organization or individual that is an Independent Fiduciary, 
and no partnership or corporation of which such organization or 
individual is an officer, director, or ten percent (10%) or more 
partner or shareholder, may acquire any property from, sell any 
property to, or borrow any funds from Unit Corporation or from 
affiliates of Unit Corporation while serving as an Independent 
Fiduciary. This prohibition

[[Page 8468]]

will continue for a period of six months after the party ceases to be 
an Independent Fiduciary and/or the Independent Fiduciary negotiates 
any transaction on behalf of the Plan during the period that the 
organization or individual serves as an Independent Fiduciary.
    (f) The term ``Released Parties,'' as referenced below and in 
footnote 3 above, means: (1) Unit Corporation; (2) the Reorganized Unit 
Corporation; (3) the Debtor-in-possession Agent; (4) the Debtor-in-
possession Lenders; (5) the RBL Agent; (6) the RBL Lenders; \11\ (7) 
the Consenting Noteholders; (8) the Exit Facility Agent; (9) the Exit 
Facility Lenders; and (10) the Subordinated Notes Indenture Trustee.
---------------------------------------------------------------------------

    \11\ RBL stands for ``Reserve Based Lending.''
---------------------------------------------------------------------------

    (g) The term ``Unit Corporation'' means Unit Corporation and any 
affiliate of Unit Corporation.
    (h) The term ``Warrants'' means the Warrants issued by Unit 
Corporation in connection with the Bankruptcy Filing that entitle their 
registered holders to receive the Warrants, pursuant to an exchange 
rate of 1 to .03460447, where one share of Old Unit Common Stock will 
convert to .03460447 Warrants, through the payment of an Exercise Price 
during the Exercise Period.

Section II. Covered Transactions

    If the proposed exemption is granted, the restrictions of ERISA 
sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), and 407(a)(1)(A), shall 
not apply to: (1) the acquisition by the Invested Participant Accounts, 
of the Warrants issued by Unit Corporation, the Plan sponsor, in 
connection with the Bankruptcy Filing, in exchange for a waiver of 
claims against Released Parties; and (2) the holding of the Warrants by 
the Plan, provided that the conditions set forth in section III are 
met.

Section III. Conditions

    (a) The acquisition of the Warrants by the Accounts of the Invested 
Participants is implemented on the same material terms as the 
acquisition of the Warrants by all shareholders of Old Unit Common 
Stock;
    (b) The acquisition of the Warrants by the Accounts of Invested 
Participants resulted from an independent corporate act of Unit 
Corporation;
    (c) Each shareholder of Old Unit Common Stock, including each of 
the Accounts of the Invested Participants, receives the same 
proportionate number of Warrants, and this proportionate number of 
Warrants is based on the number of shares of Old Unit Common Stock held 
by each shareholder;
    (d) The Warrants are acquired pursuant to, and in accordance with, 
provisions under the Plan for the individually-directed investment of 
the Accounts by the Invested Participants whose Accounts in the Plan 
held Old Unit Common Stock;
    (e) The decision regarding the acquisition, holding and disposition 
of the Warrants by the Accounts of the Invested Participants have been 
and will continue to be made by the Invested Participants whose 
Accounts received the Warrants;
    (f) If any of the Invested Participants fail to provide the Trustee 
with instructions to exercise or sell the Warrants received by July 30, 
2027, the Warrants will be automatically sold in blind transactions on 
the New York Stock Exchange, and the sales proceeds will be distributed 
pro-rata to the Accounts of the Invested Participants whose Warrants 
are sold;
    (g) No brokerage fees, commissions, subscription fees, or other 
charges have been paid or will be paid by the Plan or the Invested 
Participants' Accounts for the acquisition and holding of the Warrants, 
and no commissions, fees, or expenses have been paid or will be paid by 
the Plan or the Invested Participants' Accounts to any related broker 
in connection with the sale or exercise of any of the Warrants or the 
acquisition of the New Unit Common Stock through the exercise of the 
Warrants;
    (h) Unit Corporation does not influence any Invested Participant's 
election with respect to the Warrants;
    (i) The terms of the Offering of the Warrants are described to the 
Invested Participants in clearly-written communications from Unit 
Corporation containing all material terms of the Warrant Offering. In 
addition to the prospectus for the Warrant Offering, Invested 
Participants must receive a separate communication from Unit 
Corporation that clearly explains all aspects of the Warrants Offering, 
including: (1) that Unit Corporation is granting the Warrants to former 
holders of Old Unit Common Stock; (2) how the Warrants work; (3) that 
the decision regarding whether to accept or reject the Warrants is made 
solely by the Invested Participants; and (4) the liability release. The 
Independent Fiduciary described in (j) below must review and confirm 
that the communications sent to participants meet the requirements of 
this exemption;
    (j) An Independent Fiduciary that is unrelated to Unit Corporation 
and/or its affiliates and acting solely on behalf of the Plan has 
determined that:
    (1) The Proposed Transactions are prudent, in the interest of, and 
protective of the Plan and its participants and beneficiaries; and
    (2) The Plan may enter into the Proposed Transactions in accordance 
with the requirements of this exemption; and
    (k) The Independent Fiduciary must document its initial and final 
determinations in written reports that include a detailed analysis 
regarding whether the Proposed Transactions are in the interests of the 
Plan and the Invested Participants, and protective of the rights of 
Invested Participants of the Plan;
    (l) The Independent Fiduciary or an appropriate Plan fiduciary will 
monitor the holding and sale of warrants by the plan in accordance with 
the obligations of prudence and loyalty under ERISA section 404(a) to 
ensure that the Proposed Transactions remain prudent, protective of, 
and in the interests of the participants.
    (m) No later than 90 days after the end of the Exercise Period, the 
Independent Fiduciary must submit a written statement to the Department 
confirming and demonstrating that all requirements of the exemption 
have been met. In its written statement, the Independent Fiduciary must 
confirm that all Invested Participants receive everything to which they 
are entitled pursuant to the terms of this exemption, the Warrant 
Agreement, and any other documents relevant to this exemption.
    (n) The Independent Fiduciary must represent that it has not and 
will not enter into any agreement or instrument that violates ERISA 
section 410 or 29 CFR 2509.75-4;
    (o) At least thirty days before the conclusion of the Exercise 
Period, Unit Corporation must notify and inform each Invested 
Participant in writing that each Warrant held in the Invested 
Participant's Account will expire and all rights under the Warrants and 
the Warrant Agreement will cease upon the conclusion of the Exercise 
Period; and
    (p) All of the material facts and representations set forth in the 
Summary of Facts and Representations are true and accurate. If there is 
any material change in a transaction covered by the exemption, or in a 
material fact or representation described by the Applicant in the 
application, the exemption will cease to apply as of the date of the 
change.
    Effective Date: This exemption, if granted will be effective on the 
date the Department publishes a grant notice in the Federal Register 
and will continue until the date all Warrants are exercised, sold, or 
expire.

[[Page 8469]]

Notice to Interested Persons

    Those persons who may be interested in the publication in the 
Federal Register of the notice of proposed exemption (the Notice) 
include participants and beneficiaries of the Plan. The Applicant will 
provide notification to interested persons by electronic mail, and 
first-class mail within ten (10) calendar days of the date of the 
publication of the Notice in the Federal Register. The mailing will 
include a copy of the Notice, as it appears in the Federal Register on 
the date of publication, plus a copy of the Supplemental Statement, as 
required, pursuant to 29 CFR 2570.43(b)(2), which will advise 
interested persons of their right to comment and/or to request a 
hearing.
    The Department must receive all written comments and requests for a 
hearing by March 27, 2023.
    All comments will be made available to the public.
    Warning: Do not include any personally identifiable information 
(such as a name, address, Social Security number, or other contact 
information) or confidential business information that you do not want 
publicly disclosed. All comments may be posted on the internet and can 
be retrieved by most internet search engines.
    For Further Information Contact: Mr. Joseph Brennan of the 
Department, telephone (202) 693-8456. (This is not a toll-free number.)

The Liberty Media 401(k) Savings Plan and the Liberty Media 401(k) 
Savings Plan Trust Located Englewood, Colorado

[Application No. D-12023]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Employee Retirement Income Security 
Act of 1974, as amended (ERISA), and in accordance with the procedures 
set forth in 29 CFR part 2570, subpart B (76 FR 66637, 66644, October 
27, 2011). The proposed exemption would permit, for the period 
beginning May 18, 2020, and ending June 5, 2020: (1) the Liberty Media 
401(k) Savings Plan's (the Plan) acquisition of certain stock 
subscription rights (the Rights) to purchase shares of the Series C 
Liberty SiriusXM common stock (the Series C Liberty SiriusXM Stock), in 
connection with a rights offering (the Rights Offering) by Liberty 
Media Corporation (LMC); and (2) the Plan's holding of the Rights 
during the subscription period of the Rights Offering, provided that 
certain conditions are satisfied.

Summary of Facts and Representations 12
---------------------------------------------------------------------------

    \12\ The Department notes that the availability of this 
exemption, if granted, is subject to the express condition that the 
material facts and representations contained in application D-12023 
(the Application) are true and complete, and accurately describe all 
material terms of the transactions covered by the exemption. If 
there is any material change in a transaction covered by the 
exemption, or in a material fact or representation described in the 
Application, the exemption will cease to apply as of the date of the 
change.
---------------------------------------------------------------------------

Background

    1. LMC (or the Applicant) is a Delaware corporation with its 
principal place of business in Englewood, Colorado. LMC is primarily 
engaged in media, communications and entertainment businesses.
    2. LMC sponsors the Plan. The Plan is a defined contribution plan 
covering employees of LMC and qualifying subsidiaries. As of December 
31, 2020, the Plan had total assets of $161,681,000 and 1,015 
participants.
    3. The Plan is administered by an administrative committee (the 
Administrative Committee). The Plan's assets are held in the Liberty 
Media 401(k) Savings Plan Trust (the Trust). Fidelity Management Trust 
Company is the Plan's trustee (the Trustee or Fidelity), and it 
executes investment directions in accordance with Plan participants' 
written instructions.
    4. The Plan permits participants to direct the investment of their 
Plan accounts, including their 401(k) contributions, any employer 
contributions, and any rollover contributions, into one of 27 
investment alternatives, which includes certain employer securities 
issued by LMC and employer securities issued by other employers 
participating in the Plan. The Plan allows the employer to contribute 
any property to the Plan that the Trustee is authorized to invest. As 
of May 13, 2020, the Plan held a total of $7,186,824 in Series C 
Liberty SiriusXM Stock, which represented 6% of total Plan assets.
    5. Solely with respect to the Rights described below, the Plan 
permitted the Rights Offering because the Trustee was authorized to 
receive the Rights. The Administrative Committee acted as trustee of 
the temporary separate trust established to hold the Rights (the Rights 
Trust), and Fidelity acted as custodian of those Rights.

Description of Liberty SiriusXM Stock

    6. The Series A, B, or C Liberty SiriusXM stock is LMC stock that 
is intended to track and reflect the separate economic performance of 
the business, assets, and liabilities of Sirius XM Holdings. Sirius XM 
Holdings operates two audio entertainment businesses: Sirius XM and 
Pandora. As of February 10, 2020, Sirius XM Holdings' investments 
included $75 million in SoundCloud.

The Rights Offering

    7. LMC conducted the Rights Offering with holders of shares of 
Series C Liberty SiriusXM Stock. Each holder of Series A Liberty 
SiriusXM Stock, Series B Liberty SiriusXM Stock, and Series C Liberty 
SiriusXM Stock, as of May 13, 2020, received 0.0939 of a Right (rounded 
up to the nearest whole Right).\13\ Each Right entitled the holder to 
purchase one share of Series C Liberty SiriusXM Stock at a subscription 
price of $25.47, which was equal to an approximate 20% discount to the 
volume weighted average trading price of Series C Liberty SiriusXM 
Stock for the 3-day trading period ending on and including May 9, 2020. 
The Rights Offering for 231,861,714 shares of Series C Liberty SiriusXM 
Stock commenced on May 18, 2020, and remained open until June 5, 2020. 
The market closing price for each share of Series C Liberty SiriusXM 
Stock on these dates was $32.59 and $38.88, respectively.
---------------------------------------------------------------------------

    \13\ The ticker symbols for the stock were as follows: Series C 
Liberty SiriusXM Stock (``LSXMK''), Series A Liberty SiriusXM Stock 
(``LSXMA''), and Series B Liberty SiriusXM Stock (``LSXMB'').
---------------------------------------------------------------------------

    8. According to the Applicant, Plan participants were notified of 
the Rights Offering, and of the procedure for instructing Fidelity of 
the participant's desires with respect to the Rights. Plan participants 
received the following documents: (a) Questions and Answers, which 
explained the Rights issuance and participant's option to exercise or 
sell the Rights attributable to the employer securities allocated to 
the participant's Plan account; (b) the Rights Offering Instructions, 
which explained the steps for the participant to take to exercise or 
sell the Rights; and (c) the Prospectus (within LMC's Form S-3 as filed 
with the Securities and Exchange Commission on May 14, 2020), which was 
made available to all shareholders explaining the Rights issued by LMC. 
The Applicant represents that these materials were reviewed in detail 
by the Applicant, the Plan administrator, the Trustee, the outside 
counsel addressing the Rights Offering, and the Applicant's outside 
benefits counsel. All involved Plan participants were notified in 
advance of the procedure for instructing

[[Page 8470]]

Fidelity of the participants' desires with respect to the Rights.
    9. The Applicant represents that the acquisition of the Rights by 
the Plan was consistent with provisions of the Plan for the 
individually-directed investment of participant accounts. Under the 
terms of the Plan and the Trust, the Trustee passed through its right 
to vote or take action on employer securities to the Plan participants. 
Each participant could then decide whether to exercise or sell the 
Rights attributable to the shares of employer securities allocated to 
the participant's account.
    10. Due to securities law restrictions, certain participants who 
were reporting persons under Rule 16(b) \14\ of the Securities Exchange 
Act of 1934 (Rule 16(b)) with respect to LMC did not have the right to 
instruct Fidelity to either sell or exercise the Rights credited to 
their Plan Accounts. As provided by the Plan, and as directed by the 
Administrative Committee, Fidelity sold the Rights credited to these 
Rule 16(b) participant accounts, along with the Rights of other 
participants who did not elect to sell or exercise the Rights credited 
to their accounts, during the last few days of the Rights Offering 
period.
---------------------------------------------------------------------------

    \14\ Rule 16(b) requires an officer, director, or any 
shareholder holding more than 10% of the outstanding shares of a 
publicly-traded company who makes a profit on a transaction with 
respect to the company's stock during a given six month period, to 
pay the difference back to the company.
---------------------------------------------------------------------------

Temporary Investment Funds

    11. The Plan established two temporary investment funds to 
accommodate the Rights. The first fund, the ``Rights Holding Fund,'' 
was a separate fund established under the Rights Trust, to hold the 
Rights when they were issued. Rights were credited to participants' 
accounts based on their respective holdings of Series C Liberty 
SiriusXM Stock as of the record date. The second fund, the ``Rights 
Receivable Fund,'' received the Series C Liberty SiriusXM Stock shares 
following the exercise of the Rights on June 5, 2020 (the last day of 
the Rights Offering period), as directed by the Plan participants.

Participants Who Elected To Exercise Rights

    12. With the exception of those reporting persons under Rule l6(b), 
each participant in the Plan could elect to exercise any percentage of 
the Rights allocated to his or her Plan account. A participant could 
exercise the Rights by speaking to a Fidelity representative at any 
time before 4:00 p.m. Eastern Time, on June 1, 2020 (the ``Election 
Close-Out Date''). Plan participants ended up exercising 3,219 rights.
    13. For those individuals with insufficient funds to permit the 
exercise of the entire elected amount of Rights, Fidelity exercised as 
many Rights as the participant's account balance permitted.
    14. On or about June 4, 2020, the Rights to be exercised and 
necessary funds were submitted by Fidelity to Broadridge Corporate 
Issuer Solutions, Inc. (Broadridge), the subscription agent, for the 
purchase of shares. Plan participants' balances in the Rights Holding 
Fund were reduced by the number of Rights exercised on the 
participant's behalf. Upon receipt of the new shares, the Rights 
Receivable Fund was closed and the newly-received shares were allocated 
to the participants' accounts.
    15. According to the Applicant, those participants who elected to 
exercise only a portion of their Rights could later elect to exercise 
additional Rights to the extent that sufficient time existed before the 
Election Close-Out Date. In addition, on or about June 2 through June 
5, 2020, Fidelity sold 17,808 unexercised Rights on the NASDAQ Global 
Market (the NASDAQ) in ``blind transactions'' for an average price of 
$11.79 per Right for a total price $209,956.32. The proceeds from the 
sales were allocated proportionally to the relevant participants' 
accounts. Thus, all unexercised Rights were sold by Fidelity, and no 
Rights expired.\15\
---------------------------------------------------------------------------

    \15\ The Applicant represents that the brokerage services and 
fees received by either Fidelity or Broadridge in connection with 
the sale of the Rights are exempt under ERISA section 408(b)(2). 
However, the Department is not providing any relief for the receipt 
of any commissions, fees, or expenses in connection with the sale of 
the Rights in blind transactions to unrelated third parties on the 
NASDAQ, beyond that provided under ERISA section 408(b)(2). In this 
regard, the Department is not opining on whether the conditions set 
forth in ERISA section 408(b)(2) and the Department's regulations 
under 29 CFR 2550.408(b)(2), have been satisfied.
---------------------------------------------------------------------------

Participants Who Elected To Sell Rights

    16. In order to sell his or her Rights, a Plan participant was 
required to: (a) contact a Fidelity representative or log on to the 
Fidelity website for the Plan; and (b) specify the whole percentage of 
the Rights the participant desired to sell. The selling period for 
participants ran from the date that Fidelity first started accepting 
participant directions (which was May 26, 2020, through June 1, 2020). 
A total of 1,506 Rights (rounded to the nearest whole Right) were sold 
by Fidelity at Plan participants' directions.
    17. According to the Administrative Committee's Chairman, the Plan 
fiduciary or fiduciaries responsible for overseeing the Plan's 
participation in the Rights offering prudently and loyally determined 
on behalf of the Plan that: (a) the Plan's acquisition, holding and 
sale of the Rights could proceed on the terms established by such 
fiduciaries, and (b) the Plan's participants received all they were 
entitled to under the Rights arrangement (i.e., the Participants got at 
least the fair market value for the exercise and sales of the Rights).
    18. LMC represents that it filed the Exemption Application after 
the last day of the Offering Period to provide up to date information 
about the Offering Period with respect to the Rights Offering.

ERISA Analysis

    19. ERISA section 406(a)(1)(E) provides that a fiduciary with 
respect to a plan shall not cause the plan to engage in a transaction 
if he or she knows or should know that such transaction constitutes the 
acquisition, on behalf of the plan, of any employer security in 
violation of ERISA section 407(a). ERISA section 406(a)(2) provides 
that a fiduciary of a plan shall not permit the plan to hold any 
employer security if he or she knows or should know that holding such 
security violates ERISA section 407(a).
    20. ERISA section 407(a)(1)(A) provides that a plan may not acquire 
or hold any ``employer security'' which is not a ``qualifying employer 
security.'' ERISA section 407(d)(1) defines ``employer securities,'' in 
relevant part, as securities issued by an employer of employees covered 
by the plan, or by an affiliate of such employer. ERISA section 
407(d)(5) provides, in relevant part, that ``qualifying employer 
securities'' are stock or marketable obligations. Because the Rights do 
not constitute either stock or marketable obligations for indebtedness, 
the Rights are not ``qualifying employer securities.'' However, once a 
participant exercises his or her Rights and the Plan acquires the 
Series C Liberty SiriusXM Stock on behalf of such participant, then a 
violation of ERISA sections 406(a)(1)(E), 406(a)(2), and 407(a)(1)(A) 
occurs. If granted, the exemption will be effective for the period May 
18, 2020, through June 5, 2020.
    Department's Note: This proposal, if granted, does not provide an 
exemption from any other provision of ERISA or the Code, including each 
Plan fiduciary's duties of prudence and loyalty in connection with the 
exercise or sale of the rights.

[[Page 8471]]

Statutory Findings

    21. ERISA section 408(a) provides, in part, that the Department may 
not grant an exemption unless the Department finds that the exemption 
is administratively feasible, in the interest of affected plans and of 
their participants and beneficiaries, and protective of the rights of 
such participants and beneficiaries, which criteria are discussed 
below.
    a. The Proposed Exemption Is ``Administratively Feasible.'' The 
Department has tentatively determined that the proposal is 
administratively feasible because, among other things, the Plan 
participants received the Rights pursuant to LMC's independent 
corporate act in which all shareholders, including the Plan 
participants, were treated in a like manner with respect to the 
acquisition and holding of the Rights, with two minor exceptions: (1) 
the oversubscription option available under the Rights Offering was not 
available to participants in the Plan; \16\ and (2) certain 
participants deemed to be reporting persons under Rule 16(b) with 
respect to LMC did not have the right to instruct Fidelity to sell or 
exercise the Rights credited to their Plan Accounts.
---------------------------------------------------------------------------

    \16\ An oversubscription option, or privilege, allows 
shareholders (with this option or privilege) to buy shares that were 
not purchased by other shareholders.
---------------------------------------------------------------------------

    b. The Proposed Exemption Is ``In the Interest of the Plan.'' The 
Department has tentatively determined that the proposed exemption is in 
the interests of the participants and beneficiaries of the Plan 
because, among other things: each Plan participant was able to make an 
independent decision whether to liquidate his or her account assets to 
purchase additional employer securities at a discount; each Plan 
participant received their Rights at no additional cost; the 
participants who exercised their Rights paid $25.47 per share of the 
Series C Liberty SiriusXM Stock, which was equal to an approximate 20% 
discount to the volume weighted average trading price of Series C 
Liberty SiriusXM Stock for the 3-day trading period ending on and 
including May 9, 2020; and those who sold their Rights received an 
average of $11.79 for each Right.
    c. The Proposed Exemption Is ``Protective of the Plan.'' The 
Department has tentatively determined that the proposed exemption is 
protective of the rights of participants and beneficiaries because, 
among other things, the Rights were sold by Fidelity on the NASDAQ for 
a discounted market value, in arms' length transactions between 
unrelated parties, and all shareholders were treated in the same manner 
during the Rights Offering's process. Furthermore, the Plan did not pay 
any fees or commissions with respect to the acquisition or holding of 
the Rights, and it did not pay any commissions to any affiliate of LMC 
in connection therewith. Finally, the Plan did not pay any fees in 
connection with the exemption request.

Summary

    22. Based on the conditions that are included in this proposed 
exemption, the Department has tentatively determined that the relief 
sought by the Applicant would satisfy the statutory requirements for an 
individual exemption under ERISA section 408(a).

Proposed Exemption

Section I. Transactions

    If the proposed exemption is granted, for the period beginning May 
18, 2020, and ending June 5, 2020, the restrictions of ERISA sections 
406(a)(1)(E), 406(a)(2), and 407(a)(1)(A) shall not apply, to:
    (a) The acquisition by the Plan of certain stock subscription 
rights (the Rights), pursuant to a stock rights offering (the Offering) 
by Liberty Media Corporation (LMC) to purchase shares of Series C 
Liberty SiriusXM common stock; and
    (b) The holding of the Rights by the Plan during the subscription 
period of the Offering, provided the conditions set forth below in 
section II are satisfied.

Section II. Conditions

    (a) The Plan's acquisition of the Rights resulted solely from an 
independent corporate act of LMC's Board of Directors;
    (b) All holders of Series A, Series B, or Series C Liberty SiriusXM 
common stock, including the Plan, were issued the same proportionate 
number of Rights based on the number of shares of the Series A, B, or C 
Liberty SiriusXM Stock held by each such shareholder;
    (c) For purposes of the Rights Offering, all holders of Series A, 
B, or C Liberty SiriusXM Stock, including the Plan, were treated in a 
like manner, with two exceptions:
    (1) The oversubscription option available under the Rights Offering 
was not available to participants in the Plan; and
    (2) Certain participants deemed to be reporting persons under Rule 
16(b) \17\ of the Securities Exchange Act of 1934 (Rule 16(b)) with 
respect to LMC did not have the right to instruct Fidelity to either 
sell or exercise the Rights credited to their Plan Accounts;
---------------------------------------------------------------------------

    \17\ Rule 16(b) requires an officer, director, or any 
shareholder holding more than 10% of the outstanding shares of a 
publicly-traded company to disgorge any profit made on a purchase 
and sale, or sale and purchase, of the company's stock within any 
period of less than six months.
---------------------------------------------------------------------------

    (d) The acquisition of the Rights by the Plan was consistent with 
provisions of the Plan for the individually-directed investment of 
participant accounts;
    (e) The Liberty Media 401(k) Savings Plan administrative committee 
did not exercise any discretion with respect to the acquisition, 
holding or sale of the Rights by the Plan;
    (f) The Plan fiduciary or fiduciaries responsible for overseeing 
the Plan's participation in the Rights offering prudently and loyally 
determined on behalf of the Plan that: (1) the Plan's acquisition, 
holding and sale of the Rights could proceed on the terms established 
by such fiduciaries, and (2) the Plan's participants received all they 
were entitled to under the Rights arrangement (i.e., the Participants 
got at least the fair market value for the exercise and sales of the 
Rights);
    (g) Each Plan participant made an independent decision whether to 
liquidate his or her account assets in the Rights Holding Fund to 
purchase additional shares of Series C Liberty SiriusXM common stock at 
a discount;
    (h) The Plan did not pay any fees or commissions to LMC and/or its 
affiliates in connection with the acquisition, holding, or sale of the 
Rights;
    (i) The Plan did not pay any fees in connection with the exemption 
request; and
    (j) All material facts and representations set forth in the Summary 
of Facts and Representations are true and accurate.
    Effective Date: This proposed exemption, if granted, will be in 
effect from May 18, 2020, the date that the Plan received the Rights, 
through June 5, 2020, the last date the Rights were sold on the NASDAQ.

Notice to Interested Persons

    The Applicant will provide notice of the proposed exemption to all 
interested persons within 15 days of the publication of the notice of 
proposed exemption in the Federal Register. The notice will be given to 
interested persons by first class U.S. mail at their last known mailing 
address. The notice will contain a copy of the notice of proposed 
exemption, as published in the Federal Register, and a supplemental 
statement, as required pursuant to 29 CFR 2570.43(a)(2). The 
supplemental statement will inform

[[Page 8472]]

interested persons of their right to comment on the pending exemption. 
Written comments are due by March 27, 2023.
    All comments will be made available to the public.
    Warning: If you submit a comment, EBSA recommends that you include 
your name and other contact information in the body of your comment, 
but DO NOT submit information that you consider to be confidential, or 
otherwise protected (such as a Social Security number or an unlisted 
phone number) or confidential business information that you do not want 
publicly-disclosed. All comments may be posted on the internet and can 
be retrieved by most internet search engines.
    For Further Information Contact: Frank Gonzalez of the Department, 
telephone (202) 693-8553. (This is not a toll-free number.)

The Occidental Petroleum Corporation Savings Plan and the Anadarko 
Employee Savings Plan Located in Houston, TX

[Application Nos. D-12032 and D-12033, Respectively]

Proposed Exemption

    The Department is considering granting an exemption under the 
authority of section 408(a) of the Employee Retirement Income Security 
Act of 1974, as amended (ERISA). As more fully described below, this 
proposed exemption, if granted, would permit: (1) the acquisition, on 
August 3, 2020, by the Occidental Petroleum Corporation Savings Plan 
(the Oxy Plan) and the Anadarko Employee Savings Plan (the Anadarko 
Plan; together, the Plans), of warrants (the Warrants) issued by 
Occidental Petroleum Company; and (2) the holding of the Warrants by 
the Plans, provided that the conditions set forth below are met.

Summary of Facts and Representations 18
---------------------------------------------------------------------------

    \18\ The Department notes that the availability of this 
exemption, if granted, is subject to the express condition that the 
material facts and representations made by the Applicants and 
contained in applications D-12022 and D-12033 are true and complete, 
and accurately describe all material terms of the transactions 
covered by the exemption. If there is any material change in a 
transaction covered by the exemption, or in a material fact or 
representation described in the application, the exemption will 
cease to apply as of the date of the change.
---------------------------------------------------------------------------

The Applicants

    1. The Applicants are: (a) the Occidental Petroleum Corporation 
(Oxy); (b) the Anadarko Petroleum Corporation (Anadarko), a wholly 
owned subsidiary of Oxy; and (c) the Oxy Plan and the Anadarko Plan 
(the Plans), which are sponsored by Oxy and Anadarko, respectively.
    2. Oxy is an international energy company headquartered in Houston, 
Texas. Oxy common stock is publicly-traded on the New York Stock 
Exchange (the NYSE) under the ticker symbol ``OXY.'' As of July 6, 
2020, there were 29,023 stockholders of record and approximately 
918,533,498 million shares of Oxy common stock issued and outstanding.

The Plans

    3. The Oxy Plan is a participant-directed stock bonus plan that 
allows participants to invest in an investment fund holding common 
stock issued by Oxy. The Bank of New York Mellon serves as the Oxy 
Plan's directed trustee (the Trustee). As of August 28, 2020, the Oxy 
Plan had 12,604 participants and total assets having a fair market 
value of $2,055,378,936. As of that same date, the fair market value of 
the Oxy common stock held by the Oxy Plan was $170,813,875, or 8.3% of 
the fair market value of the Oxy Plan's assets.
    4. The Anadarko Plan is a participant-directed plan that permits 
participants to invest in an investment fund holding common stock 
issued by Anadarko. As of August 28, 2020, the Anadarko Plan had 3,132 
participants and total assets of $693,248,177. Fidelity Management 
Trust Company also served as the Plan's directed Trustee. On August 28, 
2020, the fair market value of Oxy common stock in the Anadarko Plan 
was $2,077,278, and it represented 0.3% of the fair market value of the 
Anadarko Plan's assets. After August 28, 2020, the Anadarko Plan was 
terminated.
    5. The Plans are administered by the Occidental Petroleum 
Corporation Pension and Retirement Plan Administrative Committee (the 
Administrative Committee). The Occidental Petroleum Corporation Pension 
and Retirement Trust and Investment Committee (the Investment 
Committee) has authority over the decisions relating to the investment 
of the Plans' assets.

Issuance of Warrants

    6. On June 26, 2020, Oxy announced that its Board of Directors had 
declared a distribution of Warrants to its common stockholders to 
purchase additional shares of Occidental's common stock, as of July 6, 
2020 (the Record Date). The Warrants have a seven-year term and expire 
on August 3, 2027. Recipients may exercise the Warrants to purchase 
additional shares of Oxy common stock at the exercise price of $22 per 
share or sell the Warrants at the prevailing market price on the 
NYSE.\19\
---------------------------------------------------------------------------

    \19\ As of the Record Date, the closing price for Oxy common 
stock on the NYSE was $18.18 per share.
---------------------------------------------------------------------------

    7. On August 3, 2020, Oxy distributed the Warrants. Stockholders of 
record, including the Plans, received 1/8th (12.5%) of a Warrant for 
each share of Oxy common stock held as of the Record Date. Each Oxy 
common stockholder, including the Plans, received the same 
proportionate number of Warrants based on the number of shares of Oxy 
common stock held as of the Record Date. The Plans and the other 
stockholders received the Warrants automatically, because of Oxy's 
unilateral and independent corporate act, and without any action on 
their part.
    8. On August 3, 2020, because of Oxy's distribution of the 
Warrants, the Oxy Plan received 1,476,172 Warrants based on its holding 
of 11,809,376 shares of Oxy common stock. The Anadarko Plan received 
26,601 Warrants based on its holding of 212,813 shares of Oxy common 
stock. Each Plan then established a Warrant account to reflect their 
respective participants' proportionate interest in the Warrants. All 
stockholders, including each Plan participant, received 1/8th of a 
Warrant for every share of common stock of which they were the record 
holder as of July 6, 2020.
    9. On August 3, 2020, the Plans provided notices \20\ to affected 
participants informing them: (a) of the Warrants, the Warrant account, 
and the engagement of Fiduciary Counselors Inc. (FCI), a qualified 
independent fiduciary within the meaning of 29 CFR 2570.31(j), as the 
independent fiduciary; (b) that FCI would determine whether the 
Warrants should be held, exercised, or sold; and (c) that Plan 
participants could obtain more information by contacting their 
respective Plan representative at the provided telephone number.
---------------------------------------------------------------------------

    \20\ Active participants were provided notices via email while 
non-active participants were provided notices at their last known 
address via the United States Postal Service First Class Mail.
---------------------------------------------------------------------------

    10. The Plans paid no fees or commissions in connection with the 
acquisition and holding of the Warrants. On August 4, 2020, the 
Warrants began regular trading on the NYSE, under the ticker symbol 
``OXY WS.'' The average of the highest and lowest trading prices of the 
Warrants on the NYSE on August 4, 2020, the first trading date 
following the distribution of the Warrants, was $4.95 per Warrant 
share. The August 4, 2020, closing price for OXY stock on the NYSE was 
$15.74. As noted above, the

[[Page 8473]]

Warrants permitted their holder to purchase OXY common stock for $22 
per share.

The Independent Fiduciary

    11. After reviewing proposals submitted by independent fiduciary 
candidates, the Investment Committee exercised its authority under the 
terms of the Plans to appoint FCI, a registered investment adviser, as 
the qualified independent fiduciary, on July 22, 2020. The Applicants 
represent that the Investment Committee selected FCI based on its 
proposal and experience in making decisions regarding the acquisition, 
holding, and disposition of warrants by plans. The Applicants also 
represent that the appointment of FCI to act as investment manager with 
respect to the acquisition, holding and disposition of the Warrants is 
consistent with the Plans' documents.
    12. Under the terms of its engagement, FCI serves as ``investment 
manager,'' as defined in ERISA section 3(38), and is a fiduciary, as 
defined in ERISA section 3(21), with responsibility to: (a) direct the 
Plans' Trustees to receive and hold the Warrants on behalf of the Plans 
and determine whether the Warrants should continue to be held; (b) 
determine whether and when to exercise some or all of the Warrants and 
direct the Plans' Trustees, accordingly; and (c) determine whether and 
when to sell some or all of the Warrants and direct the Plans' 
Trustees, accordingly.
    13. FCI represents that it is not related to or affiliated with any 
of the other parties to the transactions, and it has not previously 
been retained to perform services with respect to the Plans or any 
other employee benefit plan sponsored by Oxy or Anadarko. FCI also 
represents that: (a) it is independent of and unrelated to Oxy, 
Anadarko, and the Plans, and does not directly or indirectly control, 
is not controlled by, and is not under common control with, Oxy or 
Anadarko; (b) neither it, nor any of its officers, directors, or 
employees is an officer, director, partner, or employee of Oxy or 
Anadarko (or is a relative of such persons); (c) it does not directly 
or indirectly receive any consideration for its own account in 
connection with its services related to the Plans or the Warrants, 
except compensation from Oxy for such services; (d) its compensation 
for services is not contingent upon or in any way affected by its 
decisions; (e) the percentage of its 2020 gross revenues derived from 
any party in interest and affiliates involved in the exemption 
transactions was 2.08% of FCI's 2019 gross revenues; and (f) it 
understands and acknowledges its duties and responsibilities under 
ERISA in acting as a fiduciary on behalf of the Plans in connection 
with the Warrants.
    14. This proposal requires that FCI's Independent Fiduciary 
Engagement Agreement does not: (a) include any indemnification 
provisions that limit FCI's liability if FCI acts negligently in 
performing its duties on behalf of the Plans, nor (b) contain any 
provision that caps FCI's liability to the Plans. In addition, FCI 
represents that it has not and will not enter into any agreement or 
instrument that violates ERISA section 410 or the Department's 
Regulation section 2509.75-4.\21\
---------------------------------------------------------------------------

    \21\ ERISA section 410 provides, in part, that ``except as 
provided in ERISA sections 405(b)(1) and 405(d), any provision in an 
agreement or instrument which purports to relieve a fiduciary from 
responsibility or liability for any responsibility, obligation, or 
duty under this part [meaning ERISA section 410(a] shall be void as 
against public policy.''
---------------------------------------------------------------------------

    15. This exemption requires that no party related to this exemption 
application has, or will, indemnify FCI, in whole or in part, for 
negligence and/or for any violation of state or federal law that may be 
attributable to FCI in performing its duties. In addition, no contract 
or instrument may purport to waive any liability under state or federal 
law for any such violation.

FCI's Disposition of Warrants

    16. As documented in the Independent Fiduciary Report, FCI 
conducted a due diligence process in evaluating the Warrants on behalf 
of the Plans. This process included discussions and correspondence with 
representatives of the Plans and Oxy, the Plans' Trustees and the 
Plans' recordkeepers. FCI also reviewed publicly-available information 
and Plan-related information provided by Oxy. FCI considered four 
alternatives (separately referred to herein as an ``Alternative'' or 
collectively referred to herein as the ``Alternatives'') for the 
Warrants on behalf of the Plans: (a) holding the Warrants; (b) 
exercising the Warrants; (c) selling some Warrants on the NYSE at the 
prevailing market price and exercising the remaining Warrants; and (d) 
selling all of the Warrants on the NYSE at the prevailing market price.
    Regarding Alternative (a) above, FCI represents that holding the 
Warrants pending their sale or exercise would have resulted in the 
Plans realizing no immediate monetary benefit for the Warrants they 
received. Further, the value of the Warrants at some future date is 
highly speculative; therefore, holding the Warrants involved delay and 
unwarranted risks, including the possibility that the price of Oxy 
stock would not exceed the Warrants' $22.00 per share exercise price 
before they expired. Based on these factors, FCI determined that 
continuing to hold the Warrants was an unacceptable alternative for the 
Plans.
    FCI represents that Alternative (b) above was not feasible, because 
each Plan was amended to establish a separate Warrant account that 
initially held only the Warrants. Therefore, no cash was available to 
exercise the Warrants without selling some of them first.
    Regarding Alternative (c) above, FCI could have directed the 
Trustee for each of the Plans to sell some portion of the Warrants to 
generate cash. Then, using the cash received from the sale of the 
Warrants, the Plans could exercise the remaining Warrants to purchase 
additional Oxy common stock at a price of $22 per share. However, FCI 
determined that immediately exercising the Warrants at a price of 
$22.00 per share when the underlying stock was trading at a price well 
below that price did not make economic sense. When FCI made this 
determination, Oxy stock was trading at $15.25 per share, and by 
September 15, 2020, the price had declined to $10.91 per share. Waiting 
until the price exceeded $22.00 per share would have involved an 
indefinite delay with no assurance of when or whether that event would 
occur, including whether it would occur before Warrants expired. It 
also was possible that, exercising the Warrants at some future point 
could generate higher proceeds than simply selling the Warrants when 
the price of Oxy stock exceeded $22.00 per share.
    Regarding Alternative (d) above, the Warrants would be sold on the 
NYSE in a timely manner at prevailing market prices. Proceeds from the 
sale would then be invested in accordance with the Plans' governing 
documents. FCI determined that the benefits of selling the Warrants 
immediately included simplicity, lower overall costs and complexity, 
fewer administrative concerns, and less exposure to overall market risk 
and volatility than the Alternatives that involved holding or 
exercising any of the Warrants.
    17. FCI ultimately determined that Alternative (d), involving 
selling the Warrants, was in the best interests of the Plans and the 
affected participants, and protective of the participants' rights. FCI 
concluded that the benefits of selling the Warrants were immediate, 
because it involved lower overall costs and complexity, fewer 
administrative concerns, and less exposure to overall market risk and 
volatility than the other alternatives. Accordingly, FCI concluded that 
the sale of the Warrants

[[Page 8474]]

was in the best interests of the Plans and their participants and 
beneficiaries and protective of their rights.
    18. FCI sold the Oxy Plan's 1,476,172 Warrants in ``blind 
transactions'' on the NYSE over the course of five trading dates 
(August 6, 7, 10, 11, and 12, 2020). Gross proceeds received by the Oxy 
Plan totaled $6,332,184.28 ($6,332,222.83, including interest) and were 
fully and proportionately allocated to the Plan accounts of the 
affected participants in the Oxy Stock Fund. Oxy also paid commissions 
totaling $14,761.72, and $139.94 for SEC fees.
    19. On August 10, 2020, FCI sold the Anadarko Plan's 26,601 
Warrants in ``blind transactions'' on the NYSE, realizing a net benefit 
to the affected Anadarko Plan participants of $115,538.88.\22\
---------------------------------------------------------------------------

    \22\ Because the Anadarko Plan Oxy Stock Fund is frozen and 
unable to accept new investments or reinvestments, the Applicants 
represent that the proceeds from the sale were proportionately 
credited to the affected participants through the Anadarko Plan's 
qualified designated investment alternative.
---------------------------------------------------------------------------

ERISA Analysis

    20. The Applicants have requested an administrative exemption from 
the Department for: (a) the acquisition of the Warrants by the Plans in 
connection with the distribution; and (b) the holding of the Warrants 
by the Plans during the holding period. The Applicants represent that 
the Warrants are not ``qualifying'' employer securities because they 
are not stock, marketable obligations, or interests in a publicly-
traded partnership.
    21. ERISA section 407(a)(1)(A) provides that a plan may not acquire 
or hold any ``employer security'' which is not a ``qualifying employer 
security.'' Under ERISA section 407(d)(1), ``employer securities'' are 
defined, in relevant part, as securities issued by an employer of 
employees covered by the plan, or by an affiliate of the employer. 
ERISA section 407(d)(5) provides, in relevant part, that ``qualifying 
employer securities'' are stock or marketable obligations. ERISA 
section 406(a)(2) prohibits a plan fiduciary from permitting a plan to 
hold any employer security if he or she knows or should know that 
holding such security violates ERISA section 407(a).
    22. ERISA section 406(a)(1)(E) prohibits a plan fiduciary from 
causing the plan to engage in a transaction if he or she knows or 
should know that the transaction constitutes the acquisition, on behalf 
of the plan, of any employer security in violation of ERISA section 
407(a).

Conditions in This Proposal

    23. This proposed exemption contains conditions designed to ensure 
that covered transactions were in the interest of the Plans, and that 
the Plans' participants and beneficiaries were sufficiently protected. 
For example, the proposal requires that Oxy: (1) issued the Warrants to 
all stockholders of Oxy common stock, including the Plans; and (2) 
treated all of Oxy common stockholders, including the Plans, the same 
with respect to the acquisition and holding of the Warrants.
    24. Additionally, the proposed exemption requires Oxy to have 
issued the same proportionate number of Warrants to all Oxy common 
stockholders, including the Plans, based on the number of shares of Oxy 
common stock held by each stockholder. Moreover, the Plans' acquisition 
of the Warrants must have resulted from a unilateral and independent 
corporate act of Oxy without any participation by the Plans.
    25. Further, all decisions regarding whether to hold, sell, or 
exercise the Warrants by the Plans must have been made by FCI while 
acting solely in the interests of the Plans and their participants and 
beneficiaries, and in accordance with the Plan's provisions. The 
proposal requires that FCI's decision to sell all of the Warrants 
received by the Plans in blind transactions on the NYSE was protective 
and in the interests of the Plans and their participants and 
beneficiaries.
    26. FCI must provide a written statement to the Department 
demonstrating that the covered transactions have met all of the 
exemption conditions within 90 days after the exemption is granted. The 
proposal requires that the Plans paid no brokerage fees, commissions, 
subscription fees, or other charges to Oxy with respect to the 
acquisition and holding of the Warrants nor to any affiliate of Oxy or 
FCI with respect to the sale of the Warrants. In addition, no party 
related to this exemption request has or will, indemnify FCI, in whole 
or in part, for negligence and/or for any violation of state or federal 
law that may be attributable to FCI's performance of its duties as an 
independent fiduciary overseeing the transaction. Further, no contract 
or instrument may purport to waive FCI's liability under state or 
federal law for any such violations.
    27. The proposal also requires the Plans to provide each 
participant the entire amount they were due with respect to the 
acquisition and sale of the Warrants. Finally, all the material facts 
and representations made by the Applicants and set forth in the Summary 
of Facts and Representations must be true and accurate.

Statutory Findings

    28. Based on the conditions included in this proposed exemption, 
the Department has tentatively determined that the relief sought by the 
Applicants would satisfy the statutory requirements for an exemption 
under ERISA section 408(a) for the reasons discussed below.
    a. The Proposed Exemption Is ``Administratively Feasible.''
    The Department has tentatively determined that the proposed 
exemption is administratively feasible because, among other things, a 
qualified independent fiduciary, FCI, represented the Plans for all 
purposes with respect to the acquisition, holding and disposition of 
the Warrants, and will document its findings in a written report to the 
Department. The Department notes that, under the terms of this proposed 
exemption, FCI may not be indemnified, in whole or in part, for an act 
of negligence by FCI in performing its duties and responsibilities to 
the Plans.
    b. The Proposed Exemption Is ``In the Interests of the Plans.'' The 
Department has tentatively determined that the proposed exemption is in 
the interest of the Plans because the Warrants were automatically 
issued at no cost to Oxy common stockholders of record as of the Record 
Date, including the Plans. The proposed exemption would also permit the 
Plans' holding and disposition of the Warrants, thereby realizing their 
value, either through the exercise or sale of the Warrants in blind 
transactions on the open market.
    c. The Proposed Exemption Is ``Protective of the Plans.'' The 
Department has tentatively determined that the proposed is protective 
of the plans and their participants and beneficiaries, because the 
Warrants Offering was approved by the Oxy Board of Directors and all 
Oxy common stockholders, including the Plans, were treated the same. In 
addition, all decisions regarding whether to hold, sell, or exercise 
the Warrants were made by FCI, acting solely in the interests of the 
Plans' participants and beneficiaries, and in accordance with the 
Plans' provisions. FCI also had exclusive responsibility for 
determining whether to hold, exercise, or sell the Warrants, and 
ultimately concluded that the sales of the Warrants were in the 
interests of the Plans and their participants. Further, the market for 
the Warrants was public and listed on the NYSE; therefore, their market 
value could be readily determined. Finally, the Plans

[[Page 8475]]

did not pay any fees or commissions in connection with the acquisition 
and holding of the Warrants.

Proposed Exemption

Section I. Covered Transactions

    If this proposed exemption is granted, the restrictions of ERISA 
sections 406(a)(1)(E), 406(a)(2) and 407(a)(1)(A), shall not apply to 
the acquisition and holding by the Plans of Warrants, issued by Oxy, 
provided the conditions set forth in section II are satisfied.

Section II. Conditions

    (a) The Warrants were issued by Oxy to all Oxy common stockholders, 
including the Plans;
    (b) All Oxy common stockholders, including the Plans, were treated 
in the same manner with respect to the acquisition and holding of the 
Warrants;
    (c) All Oxy common stockholders, including the Plans, were issued 
the same proportionate number of Warrants based on the number of shares 
of Oxy common stock held by such stockholder;
    (d) The Plans' acquisition of the Warrants was a result of a 
unilateral and independent corporate act of Oxy without any 
participation by the Plans;
    (e) All decisions regarding whether to hold, sell, or exercise the 
Warrants by the Plans were made by Fiduciary Counselors Inc. (FCI), a 
qualified independent fiduciary within the meaning of 29 CFR 2570.31(j) 
while acting solely in the interests of the Plans and their 
participants and beneficiaries and in accordance with the Plan's 
provisions;
    (f) FCI determined that it was protective and in the interests of 
the Plans and their participants and beneficiaries to sell all of the 
Warrants received by the Plans in blind transactions on the NYSE;
    (g) FCI will provide a written statement to the Department 
demonstrating that the covered transactions have met all of the 
exemption conditions within 90 days after the exemption is granted;
    (h) No brokerage fees, commissions, subscription fees, or other 
charges were paid by the Plans to Oxy with respect to the acquisition 
and holding of the Warrants, nor were they paid to any affiliate of Oxy 
or FCI with respect to the sale of the Warrants;
    (i) No party related to this exemption application has or will 
indemnify FCI, in whole or in part, for negligence and/or any violation 
of state or federal law that may be attributable to FCI in performing 
its duties overseeing the transaction. In addition, no contract or 
instrument may purport to waive FCI's liability under state or federal 
law for any such violations;
    (j) Each Plan participant received the entire amount they were due 
with respect to the acquisition of the Warrants and the sale of the 
Warrants; and
    (k) All the material facts and representations made by the 
Applicants that are set forth in the Summary of Facts and 
Representations are true and accurate.
    Effective Date: If granted, the proposed exemption will be 
effective for the period beginning August 3, 2020, through and 
including August 12, 2027.

Notice to Interested Persons

    Oxy will provide notice (the Notice) of the publication of the 
proposed exemption in the Federal Register by email (where available) 
and by U.S. first class mail within fifteen (15) days after publication 
of the proposed exemption in the Federal Register. Because Anadarko no 
longer has its own website due to the Oxy and Anadarko merger, Oxy will 
post the Notice on the Oxy website beginning on the same date Oxy mails 
the Notices to interested persons. Each Notice will contain a copy of 
the proposed exemption, as it appears in the Federal Register on the 
date of publication, and a Supplemental Statement, as required under 29 
CFR 2570.43(a)(2), which will advise all interested persons of their 
right to comment and/or request a hearing with respect to the proposed 
exemption. All written comments and/or requests for a hearing must be 
received by the Department from interested persons by March 27, 2023.
    All comments will be made available to the public.
    Warning: Do not include any personally identifiable information 
(such as a name, address, or other contact information) or confidential 
business information with your comment that you do not want publicly 
disclosed. All comments may be posted on the internet and can be 
retrieved by most internet search engines.
    For Further Information Contact: Blessed Chuksorji-Keefe of the 
Department, telephone (202) 693-8567. (This is not a toll-free number.)

General Information

    The attention of interested persons is directed to the following:
    (1) The fact that a transaction is the subject of an exemption 
under section 408(a) of the Act and/or section 4975(c)(2) of the Code 
does not relieve a fiduciary or other party in interest or disqualified 
person from certain other provisions of the Act and/or the Code, 
including any prohibited transaction provisions to which the exemption 
does not apply and the general fiduciary responsibility provisions of 
section 404 of the Act, which, among other things, require a fiduciary 
to discharge his duties respecting the plan solely in the interest of 
the participants and beneficiaries of the plan and in a prudent fashion 
in accordance with section 404(a)(1)(B) of the Act; nor does it affect 
the requirement of section 401(a) of the Code that the plan must 
operate for the exclusive benefit of the employees of the employer 
maintaining the plan and their beneficiaries;
    (2) Before an exemption may be granted under section 408(a) of the 
Act and/or section 4975(c)(2) of the Code, the Department must find 
that the exemption is administratively feasible, in the interests of 
the plan and of its participants and beneficiaries, and protective of 
the rights of participants and beneficiaries of the plan;
    (3) The proposed exemptions, if granted, will be supplemental to, 
and not in derogation of, any other provisions of the Act and/or the 
Code, including statutory or administrative exemptions and transitional 
rules. Furthermore, the fact that a transaction is subject to an 
administrative or statutory exemption is not dispositive of whether the 
transaction is in fact a prohibited transaction; and
    (4) The proposed exemptions, if granted, will be subject to the 
express condition that the material facts and representations contained 
in each application are true and complete, and that each application 
accurately describes all material terms of the transaction which is the 
subject of the exemption.

    Signed at Washington, DC.
George Christopher Cosby,
Director, Office of Exemption Determinations, Employee Benefits 
Security Administration, U.S. Department of Labor.
[FR Doc. 2023-02703 Filed 2-8-23; 8:45 am]
BILLING CODE 4510-29-P