Exemption From Certain Prohibited Transaction Restrictions Involving the Unit Corporation Employees' Thrift Plan (the Plan or the Applicant) Located in Tulsa, Oklahoma, 45928-45932 [2023-15144]
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Federal Register / Vol. 88, No. 136 / Tuesday, July 18, 2023 / Notices
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Overview of This Information
Collection
Dated: July 12, 2023.
Darwin Arceo,
Department Clearance Officer for PRA, U.S.
Department of Justice.
BILLING CODE 4410–29–P
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Employee Benefits Security
Administration
[Prohibited Transaction Exemption 2023–
16; Exemption Application No. D–12026]
1. Type of Information Collection:
Extension of a previously approved
collection.
2. Title of the Form/Collection:
Application for Certificates of Pardon
for the Offense of Simple Possession of
Marijuana.
3. Agency form number, if any, and
the applicable component of the
Department of Justice sponsoring the
collection: There is no agency form
number for this collection. The
applicable component within the
Department of Justice is the Office of the
Pardon Attorney.
4. Affected public who will be asked
or required to respond, as well as a brief
abstract: Affected Public: Individuals or
households. The obligation to respond
is voluntary.
Abstract: The purpose of this
collection is to gather information
necessary to enable the Office of the
Pardon Attorney, U.S. Department of
Justice to expeditiously administer the
provisions of the Executive Order
10467, a proclamation granting pardons
to individuals charged or convicted of
simple possession of marijuana. The
collection will enable individuals to
apply for certificates of pardon,
restoring political, civil, and other rights
by implementing a process to provide
certificates of pardon as provided by the
order.
5. Obligation to Respond: Voluntary.
6. Total Estimated Number of
Respondents: 20,000.
7. Estimated Time per Respondent: 2
hours.
8. Frequency: Once a year.
9. Total Estimated Annual Time
Burden: 40,000 hours.
10.Total Estimated Annual Other
Costs Burden: $0.
If additional information is required,
contact: Darwin Arceo, Department
Clearance Officer, Policy and Planning
Staff, Justice Management Division,
United States Department of Justice,
Two Constitution Square, 145 N Street
NE, 4W–218 Washington, DC 20530.
[FR Doc. 2023–15111 Filed 7–17–23; 8:45 am]
DEPARTMENT OF LABOR
Exemption From Certain Prohibited
Transaction Restrictions Involving the
Unit Corporation Employees’ Thrift
Plan (the Plan or the Applicant)
Located in Tulsa, Oklahoma
Employee Benefits Security
Administration, Labor.
ACTION: Notice of exemption.
AGENCY:
This document contains a
notice of exemption issued by the
Department of Labor (the Department)
from certain of the prohibited
transaction restrictions of the Employee
Retirement Income Security Act of 1974
(ERISA or the Act) and/or the Internal
Revenue Code of 1986 (the Code). This
exemption permits the acquisition and
holding by the Plan participants’
accounts 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 certain ‘‘Released
Parties’’ (the Transactions).
DATES: The exemption will be in effect
on the date that this grant notice is
published in the Federal Register and
will continue until the date all Warrants
are exercised, sold, or expire.
FOR FURTHER INFORMATION CONTACT: Mr.
Joseph Brennan of the Department at
(202) 693–8456. (This is not a toll-free
number.)
SUPPLEMENTARY INFORMATION: On
February 9, 2023, the Department
published a notice of proposed
exemption in the Federal Register 1
permitting the acquisition and holding
by the participants’ accounts of the
Warrants in connection with the
Bankruptcy Filing in exchange for the
participants’ waiver of claims against
the Released Parties.2 The Department
makes the requisite findings under
SUMMARY:
FR 8463 (February 9, 2023).
Corporation’s Reorganization Plan states
that the Released Parties include: (a) Unit
Corporation; (b) the Reorganized Unit Corporation;
(c) the Debtor-in-possession Agent; (d) the Debtorin-possession Lenders; (e) the RBL Agent (the agent
for secured parties holding First-Priority Lien
Obligations); (d) the RBL Lenders (a type of assetbased 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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2 Unit
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ERISA section 408(a) that the exemption
is (1) administratively feasible, (2) in the
interest of the plan and its participants
and beneficiaries, and (3) protective of
the rights of the plan’s participants and
beneficiaries, so long as all of the
exemption conditions are met. This
exemption provides only the relief
specified in its text and does not
provide relief from violations of any law
other than the prohibited transaction
provisions of ERISA expressly stated
herein. Accordingly, affected parties
should be aware that the conditions
incorporated in this exemption are,
taken as a whole, necessary for the
Department to grant the relief requested
by the Applicant. Absent these or
similar conditions, the Department
would not have granted this exemption.
The Applicant requested an
individual exemption pursuant to
ERISA section 408(a) in accordance
with the procedures set forth in 29 CFR
part 2570, subpart B (76 FR 66637,
66644, October 27, 2011).
Background
Unit Corporation. As discussed in
further detail in the proposed
exemption, Unit Corporation is an
energy company engaged in oil and
natural gas exploration. 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).
The Plan. The Plan is a participantdirected 401(k) individual account plan
that covers 472 participants and holds
approximately $70,127,000 in total
assets. Fidelity Management Trust
Company (Fidelity) 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.
Unit Common Stock. As of September
3, 2020, the Plan held 4,932,864 shares
of Unit common stock (Old Unit
Common Stock), which then comprised
0.68% of the Plan’s total assets.3 Plan
participants who held Old Unit
Common Stock as of September 3, 2020,
are hereinafter referred to as ‘‘Invested
Participants.’’ Provisions of the Trust
Agreement covering the voting of
Employer Stock 4 state that: ‘‘Each
3 At the time, the Plan’s 4,932,864 shares
represented approximately 9% of all outstanding
Old Unit Common Stock.
4 For purposes of this trust provision, the term
‘‘Employer Stock’’ refers to shares of both Old Unit
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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.’’
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).5 On May 26, 2020,
the New York Stock Exchange (NYSE)
suspended trading in Old Unit Common
Stock because of the Bankruptcy Filing.
On June 19, 2020, Unit Corporation
filed a Debtors’ First Revised Proposed
Joint Chapter 11 Plan of Reorganization
(the Reorganization Plan). Subsequently,
on July 30, 2020, the Bankruptcy Court
confirmed Unit Corporation’s
Reorganization Plan and Unit
Corporation emerged from bankruptcy
protection on September 3, 2020, at
which time shares of Old Unit Common
Stock were canceled.
The Warrants. Under the Bankruptcy
Reorganization Plan, Unit Corporation
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.
Acceptance or Rejection of the
Warrants. As holders of the Old Unit
Common Stock, Invested Participants
qualify to receive the Warrants under
the Reorganization Plan. The Warrants
will be issued to the Plan after the
Department grants this final exemption.
To accept the Warrants, an Invested
Participant must agree to release
potential claims against Unit
Corporation and its affiliates (i.e., the
Released Parties). 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, including the Plan.6
Common Stock and New Unit Common Stock that
are held in participants’ accounts.
5 Jointly administered under Case No. 20–327401.
6 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 debtorin-possession to operate its business free from
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This proposed exemption requires the
Liability Release to be described to the
Invested Participants in a clearly written
communication from Unit Corporation.
As a condition of this 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 Invested
Participant must receive the same
proportionate number of Warrants based
on the number of shares of Old Unit
Common Stock held by each
shareholder.
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 their Warrants
only during an Exercise Period, which
will begin on the effective date of this
final exemption 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,
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 at that time. Each
Warrant that is not exercised during the
Exercise Period will expire upon the
conclusion of the Exercise Period. To
protect Invested Participants, this
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 upon the conclusion of the
Exercise Period.
Selling 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.
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
potential claims arising pre-bankruptcy, so long as
all similarly situated creditors and other claimants
are treated equivalently.
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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. On
September 23, 2020, Unit Corp and the
Committee retained Newport Trust
Company (Newport) to serve as the
Independent Plan Fiduciary. Newport
represents that: (a) it does not have any
prior relationship with any parties in
interest to the Plan; (b) the total fee it
has received from any party in interest
to the Plan does not exceed 1% of
Newport’s annual revenues from all
sources based upon its prior income tax
year; and (c) 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.
Independent Fiduciary Report. On
January 29, 2021, Newport completed
its Independent Fiduciary Report,
wherein it determined that the
Transactions are prudent, in the interest
of, and protective of, the Plan and the
Invested Participants. Newport states
that its recommendation to the
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.
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 passthrough empowers Invested Participants
to make an election that is consistent
with their particular economic interests.
Newport asserts that Invested
Participants who choose to accept the
Warrants can realize value through the
future exercise or sale of the Warrants,
while Invested Participants who choose
to reject the Warrants would maintain
their legal right to bring claims against
Unit Corporation.
Statutory Findings. As required by
ERISA section 408(a), the Department is
granting this exemption, because it finds
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that the favorable terms of the
Transactions together with the
protective conditions included herein
are appropriately protective and in the
interest of the Plan and its participants
and beneficiaries. In this regard, the
Department notes that (i) the
Independent Fiduciary must represent
the interests of the Plan for all purposes
with respect to the Transactions; (ii) the
Invested Participants who choose to
accept the Warrants could realize value
through the future exercise or sale of the
Warrants, while Invested Participants
who choose to reject the Warrants
would maintain their legal right to bring
claims against Unit Corporation; and
(iii) Invested Participants will pay no
fees or commissions and will only be
allowed to exercise the Warrants for
economic gain. Absent the receipt of
Warrants, the Department notes that the
Invested Participants may not receive
any value for the shares of Old Unit
Common Stock they held before the
Bankruptcy Filing.7
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Written Comments
In the proposed exemption, the
Department invited all interested
persons to submit written comments
and/or requests for a public hearing
with respect to the notice of proposed
exemption. All comments and requests
for a hearing were due to the
Department by March 27, 2023. The
Department received only one written
comment, which was from the
Applicant, and did not receive any
requests for a public hearing.
Comments From Unit Corporation
Comment 1: Exercising the Warrants.
Section 8 of the proposed exemption
states, in relevant part: ‘‘An Invested
Participant may exercise all or any
whole number of their Warrants at any
time during the Exercise Period . . .’’
The Applicant clarifies that on a
quarterly basis, Unit Corporation will
instruct Fidelity to exercise Warrants for
Invested Participants seeking to exercise
their warrants, and Fidelity will sell
existing holdings in the Invested
Participants’ accounts to create the
liquidity needed to exercise the
Warrants. In this regard, Fidelity will
sell investments on a pro-rata basis
across the participant’s current
investments and deposit the proceeds
into a money market fund. After the
assets are deposited into the money
market fund, they will be sent to the
Transfer Agent collectively for all
participants who are exercising the
7 The Department notes that by granting this
exemption it is not expressing any views regarding
whether Invested Participants should ultimately
accept or reject the Warrants.
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warrants on a quarterly basis. Invested
Participants will not be able to move
money in or out of the money market
fund as it will be used only to facilitate
the payment of the Warrants.
Department’s Response. The
Department acknowledges and accepts
the Applicant’s factual clarifications.
Comment 2: Selling the Warrants.
Section 8 of the proposed exemption
states, in relevant part: ‘‘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.’’
The Applicant clarifies that according
to Fidelity, Invested Participants with
Warrants in their Plan account will be
allowed to place a trade any time.
However, these requests will be bundled
with other Invested Participants’
requests and the actual trades will occur
as a monthly block trade. The Applicant
states that Fidelity will provide ‘‘best
efforts’’ to liquidate the Warrants, which
will trade on the over-the-counter
market, and the trading volume may not
fully support the potential sales volume.
The Applicant states that different
strategies will be used such as spreading
the sales volume over time to minimize
the impact of the volume as well as
contacting wholesalers to sell a block of
Warrants.
Department’s Response. The
Department acknowledges and accepts
the Applicant’s factual clarifications.
Comment 3: Name of the Independent
Fiduciary. The proposed exemption in
Section 13 and Section I(e) refers to the
Independent Fiduciary as ‘‘Newport
Trust Company of New York, NY.’’ The
Applicant requests that the Department
instead refer to the Independent
Fiduciary as ‘‘Newport Trust
Company.’’
Department’s Response. The
Department acknowledges and accepts
the Applicant’s factual clarification.
Comment 4: Exchange where the
Warrants will be Sold. Section III(f) of
the proposed exemption states, ‘‘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 . . .’’
The Applicant requests that the
Department change ‘‘New York Stock
Exchange’’ to ‘‘over-the-counter’’.
Department’s Response. The
Department acknowledges and accepts
the Applicant’s factual correction.
The complete application file (D–
12026) is available for public inspection
in the Public Disclosure Room of the
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Employee Benefits Security
Administration, Room N–1515, U.S.
Department of Labor, 200 Constitution
Avenue NW, Washington, DC 20210.
For a more complete statement of the
facts and representations supporting the
Department’s decision to grant this
exemption, please refer to the notice of
proposed exemption published in the
Federal Register on February 9, 2022, at
88 FR 8463.
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 ERISA
section 408(a) does not relieve a
fiduciary or other party in interest from
certain requirements of other ERISA
provisions, including any prohibited
transaction provisions to which the
exemption does not apply and the
general fiduciary responsibility
provisions of ERISA section 404, which,
among other things, require a fiduciary
to discharge their duties respecting the
plan solely in the interest of the plan’s
participants and beneficiaries and in a
prudent fashion in accordance with
ERISA section 404(a)(1)(B).
(2) As required by ERISA section
408(a), the Department hereby finds that
the exemption is: (a) administratively
feasible; (b) in the interests of the
affected plan and its participants and
beneficiaries; and (c) protective of the
rights of the participants and
beneficiaries of such plan.
(3) This exemption is supplemental
to, and not in derogation of, any other
ERISA provisions, 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 determining whether
the transaction is in fact a prohibited
transaction.
(4) The availability of this exemption
is subject to the express condition that
the material facts and representations
contained in the application accurately
describe all material terms of the
transactions that are the subject of the
exemption are true and accurate at all
times.
Accordingly, after considering the
entire record developed in connection
with the Applicant’s exemption
application, the Department has
determined to grant the following
exemption under the authority of ERISA
section 408(a), and in accordance with
the procedures set forth in 29 CFR part
2570, subpart B: 8
8 76
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FR 66637, 66644 (October 27, 2011).
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Exemption
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
that 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
(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%)
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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
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’’
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; 9 (7)
the Consenting Noteholders; (8) the Exit
Facility Agent; (9) the Exit Facility
Lenders; and (10) the Subordinated
Notes Indenture Trustee.
(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
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. In
order to receive such relief, the
conditions in Section III must be met in
conformance with the definitions set
forth in Section I.
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stands for ‘‘Reserve Based Lending.’’
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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 in over-the-counter
(OTC) markets, 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
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45932
Federal Register / Vol. 88, No. 136 / Tuesday, July 18, 2023 / Notices
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;
(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 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 have received 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
VerDate Sep<11>2014
19:16 Jul 17, 2023
Jkt 259001
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 at all times. 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: The exemption will be
in effect on the date that this grant
notice is published in the Federal
Register and will continue until the date
all Warrants are exercised, sold, or
expire.
Signed at Washington, DC, this 11th day of
July 2023.
George Christopher Cosby,
Director Office of Exemption Determinations,
Employee Benefits Security Administration,
U.S. Department of Labor.
[FR Doc. 2023–15144 Filed 7–17–23; 8:45 am]
BILLING CODE 4510–29–P
DEPARTMENT OF LABOR
Agency Information Collection
Activities; Submission for OMB
Review; Comment Request; Derricks
Standard
Notice of availability; request
for comments.
ACTION:
The Department of Labor
(DOL) is submitting this Occupational
Safety & Health Administration (OSHA)sponsored information collection
request (ICR) to the Office of
Management and Budget (OMB) for
review and approval in accordance with
the Paperwork Reduction Act of 1995
(PRA). Public comments on the ICR are
invited.
DATES: The OMB will consider all
written comments that the agency
receives on or before August 17, 2023.
ADDRESSES: Written comments and
recommendations for the proposed
information collection should be sent
within 30 days of publication of this
notice to www.reginfo.gov/public/do/
PRAMain. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function.
Comments are invited on: (1) whether
the collection of information is
necessary for the proper performance of
the functions of the Department,
including whether the information will
have practical utility; (2) the accuracy of
the agency’s estimates of the burden and
cost of the collection of information,
SUMMARY:
PO 00000
Frm 00051
Fmt 4703
Sfmt 9990
including the validity of the
methodology and assumptions used; (3)
ways to enhance the quality, utility and
clarity of the information collection; and
(4) ways to minimize the burden of the
collection of information on those who
are to respond, including the use of
automated collection techniques or
other forms of information technology.
FOR FURTHER INFORMATION CONTACT:
Nicole Bouchet by telephone at 202–
693–0213, or by email at DOL_PRA_
PUBLIC@dol.gov.
SUPPLEMENTARY INFORMATION: The
paperwork provisions of the Standard
specify requirements for marking the
rated load on derricks, preparing
certification records to verify the
inspection of derrick ropes, and posting
warning signs while the derrick is
undergoing adjustments and repairs.
Certification records must be
maintained and disclosed upon request.
For additional substantive information
about this ICR, see the related notice
published in the Federal Register on
February 28, 2023 (88 FR 12699).
This information collection is subject
to the PRA. A Federal agency generally
cannot conduct or sponsor a collection
of information, and the public is
generally not required to respond to an
information collection, unless the OMB
approves it and displays a currently
valid OMB Control Number. In addition,
notwithstanding any other provisions of
law, no person shall generally be subject
to penalty for failing to comply with a
collection of information that does not
display a valid OMB Control Number.
See 5 CFR 1320.5(a) and 1320.6.
DOL seeks PRA authorization for this
information collection for three (3)
years. OMB authorization for an ICR
cannot be for more than three (3) years
without renewal. The DOL notes that
information collection requirements
submitted to the OMB for existing ICRs
receive a month-to-month extension
while they undergo review.
Agency: DOL–OSHA.
Title of Collection: Derricks Standard.
OMB Control Number: 1218–0222.
Affected Public: Private Sector—
Businesses or other for-profits.
Total Estimated Number of
Respondents: 500.
Total Estimated Number of
Responses: 7,750.
Total Estimated Annual Time Burden:
1,336 hours.
Total Estimated Annual Other Costs
Burden: $0.
(Authority: 44 U.S.C. 3507(a)(1)(D))
Nicole Bouchet,
Acting Departmental Clearance Officer.
[FR Doc. 2023–15145 Filed 7–17–23; 8:45 am]
BILLING CODE 4510–26–P
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]]>Agencies
[Federal Register Volume 88, Number 136 (Tuesday, July 18, 2023)]
[Notices]
[Pages 45928-45932]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-15144]
=======================================================================
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DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2023-16; Exemption Application No. D-
12026]
Exemption From Certain Prohibited Transaction Restrictions
Involving the Unit Corporation Employees' Thrift Plan (the Plan or the
Applicant) Located in Tulsa, Oklahoma
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of exemption.
-----------------------------------------------------------------------
SUMMARY: This document contains a notice of exemption issued by the
Department of Labor (the Department) from certain of the prohibited
transaction restrictions of the Employee Retirement Income Security Act
of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986
(the Code). This exemption permits the acquisition and holding by the
Plan participants' accounts 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 certain ``Released Parties''
(the Transactions).
DATES: The exemption will be in effect on the date that this grant
notice is published in the Federal Register and will continue until the
date all Warrants are exercised, sold, or expire.
FOR FURTHER INFORMATION CONTACT: Mr. Joseph Brennan of the Department
at (202) 693-8456. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On February 9, 2023, the Department
published a notice of proposed exemption in the Federal Register \1\
permitting the acquisition and holding by the participants' accounts of
the Warrants in connection with the Bankruptcy Filing in exchange for
the participants' waiver of claims against the Released Parties.\2\ The
Department makes the requisite findings under ERISA section 408(a) that
the exemption is (1) administratively feasible, (2) in the interest of
the plan and its participants and beneficiaries, and (3) protective of
the rights of the plan's participants and beneficiaries, so long as all
of the exemption conditions are met. This exemption provides only the
relief specified in its text and does not provide relief from
violations of any law other than the prohibited transaction provisions
of ERISA expressly stated herein. Accordingly, affected parties should
be aware that the conditions incorporated in this exemption are, taken
as a whole, necessary for the Department to grant the relief requested
by the Applicant. Absent these or similar conditions, the Department
would not have granted this exemption.
---------------------------------------------------------------------------
\1\ 88 FR 8463 (February 9, 2023).
\2\ Unit Corporation's Reorganization Plan states that 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.
---------------------------------------------------------------------------
The Applicant requested an individual exemption pursuant to ERISA
section 408(a) in accordance with the procedures set forth in 29 CFR
part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
Background
Unit Corporation. As discussed in further detail in the proposed
exemption, Unit Corporation is an energy company engaged in oil and
natural gas exploration. 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).
The Plan. The Plan is a participant-directed 401(k) individual
account plan that covers 472 participants and holds approximately
$70,127,000 in total assets. Fidelity Management Trust Company
(Fidelity) 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.
Unit Common Stock. As of September 3, 2020, the Plan held 4,932,864
shares of Unit common stock (Old Unit Common Stock), which then
comprised 0.68% of the Plan's total assets.\3\ Plan participants who
held Old Unit Common Stock as of September 3, 2020, are hereinafter
referred to as ``Invested Participants.'' Provisions of the Trust
Agreement covering the voting of Employer Stock \4\ state that: ``Each
[[Page 45929]]
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.''
---------------------------------------------------------------------------
\3\ At the time, the Plan's 4,932,864 shares represented
approximately 9% of all outstanding Old Unit Common Stock.
\4\ For purposes of this trust provision, the term ``Employer
Stock'' refers to shares of both Old Unit Common Stock and New Unit
Common Stock that are held in participants' accounts.
---------------------------------------------------------------------------
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).\5\ On May 26, 2020,
the New York Stock Exchange (NYSE) suspended trading in Old Unit Common
Stock because of the Bankruptcy Filing.
---------------------------------------------------------------------------
\5\ Jointly administered under Case No. 20-327401.
---------------------------------------------------------------------------
On June 19, 2020, Unit Corporation filed a Debtors' First Revised
Proposed Joint Chapter 11 Plan of Reorganization (the Reorganization
Plan). Subsequently, on July 30, 2020, the Bankruptcy Court confirmed
Unit Corporation's Reorganization Plan and Unit Corporation emerged
from bankruptcy protection on September 3, 2020, at which time shares
of Old Unit Common Stock were canceled.
The Warrants. Under the Bankruptcy Reorganization Plan, Unit
Corporation 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.
Acceptance or Rejection of the Warrants. As holders of the Old Unit
Common Stock, Invested Participants qualify to receive the Warrants
under the Reorganization Plan. The Warrants will be issued to the Plan
after the Department grants this final exemption. To accept the
Warrants, an Invested Participant must agree to release potential
claims against Unit Corporation and its affiliates (i.e., the Released
Parties). 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,
including the Plan.\6\ This proposed exemption requires the Liability
Release to be described to the Invested Participants in a clearly
written communication from Unit Corporation.
---------------------------------------------------------------------------
\6\ 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 its 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 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 Invested
Participant must receive the same proportionate number of Warrants
based on the number of shares of Old Unit Common Stock held by each
shareholder.
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 their Warrants only
during an Exercise Period, which will begin on the effective date of
this final exemption 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, 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
at that time. Each Warrant that is not exercised during the Exercise
Period will expire upon the conclusion of the Exercise Period. To
protect Invested Participants, this 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 upon the
conclusion of the Exercise Period.
Selling 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.
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. On September 23, 2020, Unit Corp and the
Committee retained Newport Trust Company (Newport) to serve as the
Independent Plan Fiduciary. Newport represents that: (a) it does not
have any prior relationship with any parties in interest to the Plan;
(b) the total fee it has received from any party in interest to the
Plan does not exceed 1% of Newport's annual revenues from all sources
based upon its prior income tax year; and (c) 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.
Independent Fiduciary Report. On January 29, 2021, Newport
completed its Independent Fiduciary Report, wherein it determined that
the Transactions are prudent, in the interest of, and protective of,
the Plan and the Invested Participants. Newport states that its
recommendation to the 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.
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 asserts that Invested
Participants who choose to accept the Warrants can realize value
through the future exercise or sale of the Warrants, while Invested
Participants who choose to reject the Warrants would maintain their
legal right to bring claims against Unit Corporation.
Statutory Findings. As required by ERISA section 408(a), the
Department is granting this exemption, because it finds
[[Page 45930]]
that the favorable terms of the Transactions together with the
protective conditions included herein are appropriately protective and
in the interest of the Plan and its participants and beneficiaries. In
this regard, the Department notes that (i) the Independent Fiduciary
must represent the interests of the Plan for all purposes with respect
to the Transactions; (ii) the Invested Participants who choose to
accept the Warrants could realize value through the future exercise or
sale of the Warrants, while Invested Participants who choose to reject
the Warrants would maintain their legal right to bring claims against
Unit Corporation; and (iii) Invested Participants will pay no fees or
commissions and will only be allowed to exercise the Warrants for
economic gain. Absent the receipt of Warrants, the Department notes
that the Invested Participants may not receive any value for the shares
of Old Unit Common Stock they held before the Bankruptcy Filing.\7\
---------------------------------------------------------------------------
\7\ The Department notes that by granting this exemption it is
not expressing any views regarding whether Invested Participants
should ultimately accept or reject the Warrants.
---------------------------------------------------------------------------
Written Comments
In the proposed exemption, the Department invited all interested
persons to submit written comments and/or requests for a public hearing
with respect to the notice of proposed exemption. All comments and
requests for a hearing were due to the Department by March 27, 2023.
The Department received only one written comment, which was from the
Applicant, and did not receive any requests for a public hearing.
Comments From Unit Corporation
Comment 1: Exercising the Warrants. Section 8 of the proposed
exemption states, in relevant part: ``An Invested Participant may
exercise all or any whole number of their Warrants at any time during
the Exercise Period . . .''
The Applicant clarifies that on a quarterly basis, Unit Corporation
will instruct Fidelity to exercise Warrants for Invested Participants
seeking to exercise their warrants, and Fidelity will sell existing
holdings in the Invested Participants' accounts to create the liquidity
needed to exercise the Warrants. In this regard, Fidelity will sell
investments on a pro-rata basis across the participant's current
investments and deposit the proceeds into a money market fund. After
the assets are deposited into the money market fund, they will be sent
to the Transfer Agent collectively for all participants who are
exercising the warrants on a quarterly basis. Invested Participants
will not be able to move money in or out of the money market fund as it
will be used only to facilitate the payment of the Warrants.
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarifications.
Comment 2: Selling the Warrants. Section 8 of the proposed
exemption states, in relevant part: ``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.''
The Applicant clarifies that according to Fidelity, Invested
Participants with Warrants in their Plan account will be allowed to
place a trade any time. However, these requests will be bundled with
other Invested Participants' requests and the actual trades will occur
as a monthly block trade. The Applicant states that Fidelity will
provide ``best efforts'' to liquidate the Warrants, which will trade on
the over-the-counter market, and the trading volume may not fully
support the potential sales volume. The Applicant states that different
strategies will be used such as spreading the sales volume over time to
minimize the impact of the volume as well as contacting wholesalers to
sell a block of Warrants.
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarifications.
Comment 3: Name of the Independent Fiduciary. The proposed
exemption in Section 13 and Section I(e) refers to the Independent
Fiduciary as ``Newport Trust Company of New York, NY.'' The Applicant
requests that the Department instead refer to the Independent Fiduciary
as ``Newport Trust Company.''
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarification.
Comment 4: Exchange where the Warrants will be Sold. Section III(f)
of the proposed exemption states, ``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 . . .''
The Applicant requests that the Department change ``New York Stock
Exchange'' to ``over-the-counter''.
Department's Response. The Department acknowledges and accepts the
Applicant's factual correction.
The complete application file (D-12026) is available for public
inspection in the Public Disclosure Room of the Employee Benefits
Security Administration, Room N-1515, U.S. Department of Labor, 200
Constitution Avenue NW, Washington, DC 20210. For a more complete
statement of the facts and representations supporting the Department's
decision to grant this exemption, please refer to the notice of
proposed exemption published in the Federal Register on February 9,
2022, at 88 FR 8463.
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 ERISA section 408(a) does not relieve a fiduciary or other party
in interest from certain requirements of other ERISA provisions,
including any prohibited transaction provisions to which the exemption
does not apply and the general fiduciary responsibility provisions of
ERISA section 404, which, among other things, require a fiduciary to
discharge their duties respecting the plan solely in the interest of
the plan's participants and beneficiaries and in a prudent fashion in
accordance with ERISA section 404(a)(1)(B).
(2) As required by ERISA section 408(a), the Department hereby
finds that the exemption is: (a) administratively feasible; (b) in the
interests of the affected plan and its participants and beneficiaries;
and (c) protective of the rights of the participants and beneficiaries
of such plan.
(3) This exemption is supplemental to, and not in derogation of,
any other ERISA provisions, 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 determining whether the transaction is in fact a
prohibited transaction.
(4) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transactions
that are the subject of the exemption are true and accurate at all
times.
Accordingly, after considering the entire record developed in
connection with the Applicant's exemption application, the Department
has determined to grant the following exemption under the authority of
ERISA section 408(a), and in accordance with the procedures set forth
in 29 CFR part 2570, subpart B: \8\
---------------------------------------------------------------------------
\8\ 76 FR 66637, 66644 (October 27, 2011).
---------------------------------------------------------------------------
[[Page 45931]]
Exemption
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 that 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
(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 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'' 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; \9\ (7) the Consenting Noteholders; (8) the Exit Facility
Agent; (9) the Exit Facility Lenders; and (10) the Subordinated Notes
Indenture Trustee.
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\9\ 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
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. In order to receive
such relief, the conditions in Section III must be met in conformance
with the definitions set forth in Section I.
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 in
over-the-counter (OTC) markets, 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
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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;
(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 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 have received 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 at all
times. 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: The exemption will be in effect on the date that
this grant notice is published in the Federal Register and will
continue until the date all Warrants are exercised, sold, or expire.
Signed at Washington, DC, this 11th day of July 2023.
George Christopher Cosby,
Director Office of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. 2023-15144 Filed 7-17-23; 8:45 am]
BILLING CODE 4510-29-P
