[Federal Register Volume 80, Number 193 (Tuesday, October 6, 2015)]
[Notices]
[Pages 60492-60510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-25254]



[[Page 60491]]

Vol. 80

Tuesday,

No. 193

October 6, 2015

Part IV





Department of Labor





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Employee Benefits Security Administration





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 Exemptions From Certain Prohibited Transaction Restrictions; Notice

  Federal Register / Vol. 80 , No. 193 / Tuesday, October 6, 2015 / 
Notices  

[[Page 60492]]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Exemptions From Certain Prohibited Transaction Restrictions

AGENCY: Employee Benefits Security Administration, Labor.

ACTION: Grant of individual exemptions.

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SUMMARY: This document contains exemptions issued by the Department of 
Labor (the Department) from certain of the prohibited transaction 
restrictions of the Employee Retirement Income Security Act of 1974 
(ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). 
This notice includes the following: 2015-16, Red Wing Shoe Company 
Pension Plan for Hourly Wage Employees, Red Wing Shoe Company 
Retirement Plan, and the S.B. Foot Tanning Company Employees' Pension 
Plan, D-11763, D-11764, D-11765; 2015-17, Frank Russell Company and 
Affiliates, D-11781; 2015-18, The Les Schwab Tire Centers of 
Washington, Inc. et al, D-11788 thru D-11792; 2015-19, New England 
Carpenters Training Fund, L-11795; 2015-20, Virginia Bankers 
Association Defined Contribution Plan for First Capital Bank, D-11818; 
2015-21 Idaho Veneer Company/Ceda-Pine Veneer, Inc. Employees' 
Retirement Plan, D-11823; 2015-22, United States Steel and Carnegie 
Pension Fund, D-11825; and 2015-23, Roberts Supply, Inc. Profit Sharing 
Plan and Trust, D-11836.

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

Statutory Findings

    In accordance with section 408(a) of the Act and/or section 
4975(c)(2) of the Code and the procedures set forth in 29 CFR part 
2570, subpart B (76 FR 66637, 66644, October 27, 2011) \1\ and based 
upon the entire record, the Department makes the following findings:
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    \1\ The Department has considered exemption applications 
received prior to December 27, 2011 under the exemption procedures 
set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 
10, 1990).
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    (a) The exemption is administratively feasible;
    (b) The exemption is in the interests of the plan and its 
participants and beneficiaries; and
    (c) The exemption is protective of the rights of the participants 
and beneficiaries of the plan.
Red Wing Shoe Company Pension Plan for Hourly Wage Employees, the Red 
Wing Shoe Company Retirement Plan and the S.B. Foot Tanning Company 
Employees' Pension Plan (collectively, the Plans) Located in Red Wing, 
MN, [Prohibited Transaction Exemption 2015-16; Application Nos. D-
11763, D-11764, and D-11765]

Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(B), 
406(a)(1)(D), 406(a)(1)(E), 406(a)(2), 406(b)(1), 406(b)(2), and 407(a) 
of the Employee Retirement Income Security Act of 1974, as amended (the 
Act), and the sanctions resulting from the application of section 
4975(a) and (b) of the Internal Revenue Code of 1986, as amended (the 
Code), by reason of section 4975(c)(1)(A), (B), (D) and (E) of the 
Code,\2\ shall not apply to: (1) The in-kind contribution (the 
Contribution) of shares (the Shares) in Red Wing International, Ltd. 
(RWI) to the Plans by Red Wing Shoe Company, Inc. (Red Wing or the 
Applicant), a party in interest with respect to the Plans; (2) the sale 
of the Shares by the Plans to Red Wing or an affiliate of Red Wing in 
connection with the exercise of the Terminal Put Option, the Call 
Option, or the Liquidity Put Option in accordance with the terms 
thereof; and (3) the deferred payment of: (i) The price of the Shares 
by Red Wing or its affiliate to the Plans in connection with the 
exercise of the Liquidity Put Option, the Terminal Put Option and the 
Call Option; and (ii) any Make-Whole Payments by Red Wing; provided 
that the conditions described in Section II below have been met.
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    \2\ For purposes of this exemption, references to the provisions 
of Title I of the Act, unless otherwise specified, refer to the 
corresponding provisions of the Code.
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Section II. Conditions for Relief

    (a) The Plans acquire the Shares solely through one or more in-kind 
Contributions by Red Wing;
    (b) An Independent Fiduciary acts on behalf of the Plans with 
respect to the acquisition, management and disposition of the Shares. 
Specifically, such Independent Fiduciary will: (1) Determine, prior to 
entering into any of the transactions described herein, that each such 
transaction, including the Contribution, is in the interest of the 
Plans; (2) negotiate and approve, on behalf of the Plans, the terms of 
the Contribution Agreements, and the terms of any of the transactions 
described herein; (3) manage the holding and sale of the Shares on 
behalf of the Plans, taking whatever actions it deems necessary to 
protect the rights of the Plans with respect to the Shares; and (4) 
ensure that all of the conditions of this exemption are met;
    (c) An Independent Appraiser selected by the Independent Fiduciary 
determines the fair market value of the Shares contributed to each Plan 
as of the date of the Contribution, and for purposes of the Make-Whole 
Payments, the Terminal Put Option, the Liquidity Put Option, and the 
Call Option;
    (d) Immediately after the Contribution, the aggregate fair market 
value of the Shares held by any Plan will represent no more than 10 
percent (10%) of the fair market value of such Plan's assets;
    (e) The Plans incur no fees, costs or other charges in connection 
with any of the transactions described herein;
    (f) For as long as the Plans hold the Shares, Red Wing makes the 
Periodic Make-Whole Payments and, if applicable, a Terminal Make-Whole 
Payment to the Plans in accordance with the terms thereof;
    (g) The Liquidity Put Option and the Terminal Put Option are 
exercisable by the Independent Fiduciary in its sole discretion in 
accordance with the terms thereof;
    (h) Each year, Red Wing will make a cash contribution to each Plan 
that is the greater of: (1) The minimum required contribution, as 
determined by section 430 of the Code; or (2) the lesser of: (i) The 
minimum required

[[Page 60493]]

contribution, as determined by section 430 of the Code, as of the 
Plan's valuation date, except that the value of the assets will be 
reduced by an amount equal to the value of a Share, multiplied by the 
number of Shares in the Plan at the end of the Plan year, and (ii) the 
contribution that would result in the respective Plan attaining a 100% 
FTAP funded status (reflecting assets reduced by the credit balance) at 
the valuation date determining the contributions based on the value of 
all Plan assets, including the Shares. Any cash contributions in excess 
of the minimum required contribution described above will not be used 
to create additional prefunding credit balance;
    (i) The terms of any transactions between the Plans and Red Wing 
are no less favorable to the Plans than terms negotiated at arm's-
length under similar circumstances between unrelated third parties.

Section III. Definitions

    (a) ``affiliate'' means:
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person;
    (2) Any officer, director, employee, relative, or partner in any 
such person; or
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee. For the purposes of clause 
(a)(1) above, the term ``control'' means the power to exercise a 
controlling influence over the management or policies of a person other 
than an individual.
    (b) ``Contribution Agreement'' means the written agreement 
governing the contribution of Shares to a Plan, by and between Red Wing 
and State Street Bank & Trust Company, to be executed prior to any 
Contribution to which such agreement relates.
    (c) ``Commission Agreement'' means the written Sales Agent Contract 
between Red Wing and RWI, to be executed prior to the Contributions, 
that governs the relationship between the parties and obligates RWI to 
act as a sales agent for Red Wing with respect to sales of certain Red 
Wing products for a ten-year term.
    (d) ``Make-Whole Payments'' means either Periodic Make-Whole 
Payments or Terminal Make-Whole Payments.
    (e) ``Periodic Make-Whole Payments'' means periodic payments made 
to each Plan every five years as follows:
    (1) Each periodic payment shall be made in an amount equal to the 
excess, if any, of:
    (A) a presumed 7.5% annual return, compounded annually, on the 
value of the Shares calculated from the beginning of the Holding 
Period, less
    (B) the sum of (i) the after-tax total return on such Shares (i.e., 
appreciation of the Shares' fair market value (whether realized or 
unrealized) plus after-tax dividend income), plus (ii) any Periodic 
Make-Whole Payments previously made to each Plan over the Holding 
Period with respect to such Shares. For purposes of calculating this 
reduction, any realized gains on the Shares will be credited with a 
presumed 7.5% annual return, compounded annually, calculated from the 
date the cash was received by the Plan. The after-tax dividend amounts 
and any previously paid Periodic Make-Whole Payments will be credited 
at the Plan's actual rate of return on its investments, compounded 
annually, calculated from the date the cash was received by the Plan.
    (2) A separate Periodic Make-Whole Payment will be calculated with 
respect to each Contribution to a Plan, every five years as of the 
anniversary date of such Contribution.
    (3) Each Periodic Make-Whole Payment will be due and payable to 
each Plan 60 days after the five-year anniversary date of the 
Contribution to which it relates. During the 60-day period, any unpaid 
portion of a Periodic Make-Whole Payment will accrue interest, 
compounded annually, at the average of Red Wing's regular corporate 
borrowing rate (but at a rate no less than LIBOR plus 1%), to be 
confirmed by the Independent Fiduciary, over the period from the five-
year anniversary date of the Contribution to which it relates to the 
date of payment.
    (4) The amount of any Make-whole Payment otherwise payable at any 
five-year term will be reduced (but not below zero) to the extent all 
or any portion of the Make-Whole Payment then payable would cause a 
Plan's ``funding target attainment percentage,'' as determined under 
section 430 of the Code and as calculated by its enrolled actuary and 
confirmed by the Independent Fiduciary immediately following such 
Contribution, to exceed: (A) 110%; or (B) if an amendment is adopted to 
terminate the Plan pursuant to the Plan's governing document, that 
Plan's termination liability as determined by its enrolled actuary and 
confirmed by the Independent Fiduciary.
    (f) ``Terminal Make-Whole Payment'' means a one-time cash 
contribution made to the Plans in the event of a Catastrophic Loss of 
Value of the Shares arising from a termination of the Commission 
Agreement between Red Wing and RWI, due and payable to each Plan 90 
days after the date of a written demand by the Independent Fiduciary 
(the demand date) as follows:
    (1) The Terminal Make-Whole Payment, if triggered, will terminate 
Red Wing's obligation to make Periodic Make-Whole Payments calculated 
as of any date that is after the Catastrophic Loss of Value.
    (2) The amount of the Terminal Make-Whole Payment will be 
calculated as the excess, if any, of:
    (A) the fair market value of the Shares as of the date of 
Contribution of such Shares to each Plan increased by a 7.5% annual 
growth rate, compounded annually, over the Holding Period, less
    (B) the sum of (i) the amount of the after-tax dividends on the 
Shares received during such Shares' Holding Period, and (ii) any 
Periodic Make-Whole Payments made to each Plan with respect to the 
Shares, further subtracted by
    (C) any previous realized gains on such Shares during their Holding 
Period.
    For purposes of calculating this reduction, any realized gains on 
the Shares will be credited with a presumed 7.5% annual return, 
compounded annually, calculated from the date the cash was received by 
the Plan. The after-tax dividend amounts and any previously paid 
Periodic Make-Whole Payments will be credited at the Plan's actual rate 
of return on its investments, compounded annually, calculated from the 
date the cash was received by the Plan.
    (3) The Terminal Make-Whole Payment will be further reduced by any 
remaining fair market value of the Shares after the Catastrophic Loss 
of Value.
    (4) In the event of Catastrophic Loss of Value, the Shares held by 
a Plan will be subject to a put option (the Terminal Put Option) 
exercisable by the Independent Fiduciary to sell the Shares back to Red 
Wing at the Shares' fair market value as of the demand date as 
determined by the Independent Fiduciary; provided that, if the fair 
market value of the Shares is equal to $0.00 as a result of the 
Catastrophic Loss of Value, the Shares shall be transferred to Red Wing 
upon payment of the Terminal Make-Whole Payment.
    (5) The Terminal Make-Whole Payment, as well as the exercise price 
on the Terminal Put Option (if any) subsequently exercised by the 
Independent Fiduciary, can be paid in five equal annual installments. 
Any unpaid portion of the Terminal Make-Whole Payment or exercise price 
of the Terminal Put Option will accrue interest (compounded annually as 
of the

[[Page 60494]]

anniversary of the demand date or the exercise date of the Terminal Put 
Option, as applicable) at the average of Red Wing's regular corporate 
borrowing rate (but at a rate no less than LIBOR plus 1%), to be 
confirmed by the Independent Fiduciary, over each 12-month period.
    (6) The amount of any Terminal Make-Whole Payment will also be 
reduced (but not below zero) to the extent all or any portion of the 
Terminal Make-Whole Payment then payable would cause a Plan's ``funding 
target attainment percentage'' as determined under Code section 430, 
and as calculated by its enrolled actuary to exceed: (A) 110%; or (B) 
if an amendment is adopted to terminate the Plan pursuant to the Plan's 
governing document, that Plan's termination liability as determined by 
its enrolled actuary and confirmed by the Independent Fiduciary).
    (g) ``Holding Period'' means, for purposes of calculating the Make-
Whole Payments with respect to certain Shares, the period of time over 
which each Plan has held such Shares, beginning from the date such 
Shares were received by each Plan through the date of calculation of 
such Periodic Make-Whole Payment.
    (h) ``Catastrophic Loss of Value'' means, for purposes of 
triggering the Terminal Make-Whole Payment, any diminution of the value 
of the Shares held by the Plans arising from a termination of the 
Commission Agreement.
    (i) ``Liquidity Put Option'' means a put option granting each Plan 
the right to require Red Wing to purchase some or all of the Shares 
from the Plan at the Shares' fair market value as of the date of 
exercise, payable in cash no later than 60 days following the date of 
exercise. During this 60-day period, any unpaid portion of the purchase 
price for the Shares payable by Red Wing in connection with the 
exercise of the Liquidity Put Option will accrue interest, compounded 
annually, at the average of Red Wing's regular corporate borrowing rate 
(but at a rate no less than LIBOR plus 1%), to be confirmed by the 
Independent Fiduciary, over the period from the date of exercise of the 
Liquidity Put Option to the date of payment of such unpaid portion of 
the purchase price. The Liquidity Put Option is exercisable as follows:
    (1) For a period of 60 days following a Change of Control, the 
Liquidity Put Option will be exercisable by the Independent Fiduciary 
on behalf of the Plans; and
    (2) Upon a Plan becoming entitled to receive a Periodic Make-Whole 
Payment, the Independent Fiduciary may exercise the Liquidity Put 
Option on behalf of the Plan with respect to as much as 20% of the 
original number of Shares to which the Periodic Make-Whole Payment 
relates, no later than 45 days following the five-year anniversary date 
of the Contribution, as follows:
    (A) If the Plan elects to exercise its Liquidity Put Option with 
respect to any of the Shares to which the Periodic Make-Whole Payment 
relates in the first year in which the Liquidity Put Option is 
exercisable, the Plan will be able to exercise a Liquidity Put Option 
for as much as an additional 20% of the original number of Shares to 
which the Periodic Make-Whole Payment relates upon each of the four 
succeeding anniversaries of the Contribution to the Plan, but no later 
than 45 days following each such anniversary; and
    (B) The exercise of a Liquidity Put Option for any of the Shares to 
which the Periodic Make-Whole Payment applies in the first year that 
the Liquidity Put Option is exercisable will eliminate the Plan's right 
to that Periodic Make-Whole Payment with respect to all Shares to which 
the Periodic Make-Whole Payment in that year relates, but any Shares 
for which the Liquidity Put Option is not exercised will continue to be 
eligible for future Periodic Make-Whole Payments.
    (3) Upon the occurrence of the tenth anniversary (the Anniversary 
Date) of a Contribution to a Plan, the Independent Fiduciary on behalf 
of the Plan will be able to exercise the Liquidity Put Option with 
respect to as much as 20% of the number of Shares to which such 
Contribution relates, in each year following the Anniversary Date.
    (4) Upon the effective date of a Plan's termination and at any time 
until the final distribution date of the Plan's assets, the Plan will 
have the right to exercise the Liquidity Put Option for any or all 
Shares remaining in the Plan, and Red Wing will have the right to 
exercise the Call Option.
    (j) ``Call Option'' means Red Wing's right to cause a Plan to sell 
any or all remaining Shares held in the Plan to Red Wing, exercisable 
upon the effective date of a Plan's termination, in exchange for cash 
at the Shares' fair market value on the date of exercise. The Plan will 
transfer its Shares to Red Wing and Red Wing will pay cash for such 
Shares no later than 60 days after Red Wing exercises the Call Option. 
During this 60-day period, any unpaid portion of the purchase price for 
the Shares payable by Red Wing in connection with its exercise of the 
Call Option will accrue interest, compounded annually, at the average 
of Red Wing's regular corporate borrowing rate (but at a rate no less 
than LIBOR plus 1%), to be confirmed by the Independent Fiduciary.
    (k) ``Change of Control'' means, for purposes of triggering the 
Liquidity Put Option, the sale or other transfer for value of all or 
substantially all of Red Wing's assets in a transaction or series of 
related transactions to a Third Party purchaser, or a transaction or 
series of transactions in which a Third Party acquires more than 50% of 
the voting power of Red Wing's outstanding shares. A ``Third Party'' 
for this purpose is an individual or entity other than: (1) (i) A 
current shareholder of Red Wing, or a spouse or issue of such 
shareholder, (ii) a trust created for the shareholder, his spouse, or 
his issue, or (iii) a shareholder of a shareholder; or (2) an entity 
controlled by an individual or entity described in (1), or an entity 
under common control with such an entity.
    (l) ``Independent Fiduciary'' means Gallagher Fiduciary Advisors, 
LLC (GFA) or another fiduciary of the Plans who: (1) Is independent of 
or unrelated to Red Wing and its affiliates, and has the appropriate 
training, experience, and facilities to act on behalf of the Plan 
regarding the covered transactions in accordance with the fiduciary 
duties and responsibilities prescribed by ERISA (including, if 
necessary, the responsibility to seek the counsel of knowledgeable 
advisors to assist in its compliance with ERISA); and (2) if relevant, 
succeeds GFA in its capacity as Independent Fiduciary to the Plans in 
connection with the transactions described herein. The Independent 
Fiduciary will not be deemed to be independent of and unrelated to Red 
Wing and its affiliates if: (i) Such Independent Fiduciary directly or 
indirectly controls, is controlled by or is under common control, with 
Red Wing and its affiliates; (ii) such Independent Fiduciary directly 
or indirectly receives any compensation or other consideration in 
connection with any transaction described in this exemption other than 
for acting as Independent Fiduciary in connection with the transactions 
described herein, provided that the amount or payment of such 
compensation is not contingent upon, or in any way affected by, the 
Independent Fiduciary's ultimate decision; and (iii) the annual gross 
revenue received by the Independent Fiduciary, during any year of its 
engagement, from Red Wing and its affiliates, exceeds two percent (2%) 
of the Independent Fiduciary's annual gross revenue from all sources 
(for federal income tax purposes) for is prior tax year.

[[Page 60495]]

    (m) ``Independent Appraiser'' means an individual or entity meeting 
the definition of a ``Qualified Independent Appraiser'' under 
Department Regulation 25 CFR 2570.31(i) retained to determine, on 
behalf of the Plans, the fair market value of the Shares as of the date 
of the Contributions and while the Shares are held on behalf of the 
Plans, and may be the Independent Fiduciary, provided it satisfies the 
definition of Independent Appraiser herein.

Written Comments

    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 (the Notice), published on July 27, 2015, 
at 80 FR 44728. All comments and requests for hearing were due by 
September 15, 2015. During the comment period, the Department received 
two written comments in response to the Notice, one from GFA in its 
capacity as Independent Fiduciary, and the other from Red Wing. 
Furthermore, during the comment period, the Department received several 
phone inquiries that generally concerned matters outside the scope of 
the exemption. A summary of GFA's comment and Red Wing's comment 
follows below, although the Department has omitted certain of those 
comments which the Department believes are non-substantive. Any 
capitalized terms used herein that are not otherwise defined have the 
meanings ascribed to them in the Summary of Facts and Representations 
in the Notice (the Summary).

GFA's Comment

1. GFA's Duties With Respect to Valuation of the Shares
    GFA seeks to clarify Paragraph 44 of the Summary, which provides 
that ``GFA has complete discretion to determine the valuation 
methodologies as well as the ultimate value of the Shares contributed 
to the Plans.'' GFA clarifies that, while it does retain the ultimate 
discretion to determine the value of the Shares contributed to the 
Plans, Lincoln or a successor Independent Appraiser engaged by GFA will 
determine the methodology or methodologies to be employed in the 
valuation and describe such methodology or methodologies in the 
valuation report. GFA, in turn, will ensure that the methodology or 
methodologies used by the Independent Appraiser is appropriate and 
adequately explained in the valuation report, and that the Independent 
Appraiser has justified its decision not to employ alternative 
valuation methods.
2. Lincoln's Appraisal of the Shares
    Paragraph 55 of the Summary provides that any uncertainty with 
respect to the long-term outlook of RWI's tax treatment and potential 
volatility in international sales ``would be offset by the value 
protection provisions.'' According to GFA's comment, Lincoln notes that 
the aforementioned uncertainties may be ``partially offset'' by the 
value protection provision included in this exemption.
    The Department takes note of the foregoing clarifications to the 
Summary.

Red Wing's Comment

1. Factual Updates to the Notice
    Red Wing notes that Section III(b) of the proposed exemption, as 
well as Paragraphs 8, 11, 14, and 20 of the Summary, identify Vanguard 
as the Plans' trustee. Furthermore, Paragraph 8 of the Summary provides 
that Vanguard Institutional Advisory Services, which was engaged as the 
Plans' investment advisor, is one of the Plans' fiduciaries. Red Wing 
states that Vanguard has been replaced by State Street Bank & Trust 
Company (State Street) as the Plans' trustee, and Mercer Investment 
Management, Inc. has been engaged as the Plans' investment advisor in 
place of Vanguard Institutional Advisory Services.
    The Department takes note of Red Wing's updates to Paragraphs 8, 
11, 14, and 20 of the Summary and has modified Section III(b) of the 
exemption to reflect State Street's role as trustee.
2. Designation of the Shares as ``Employer Securities''
    Paragraph 38 of the Summary provides that the Shares constitute 
``employer securities,'' as defined in section 407(d)(1) of the Act, 
because RWI (although not an employer of employees covered by the 
Plans) can be considered an affiliate of Red Wing. The Summary notes 
that the stock ownership attribution rules set forth in section 1563(a) 
of the Code could cause the Sweasy family to own both RWI and Red Wing. 
In this regard, the largest percentages of Red Wing stock and RWI 
Shares, attributing Shares owned by Red Wing to Red Wing shareholders, 
are owned by five members of the Sweasy family or trusts established by 
or for the benefit of such individuals.
    In its comment, Red Wing now states that the Shares may not 
constitute ``employer securities,'' as defined in section 407(d)(1) of 
the Act, because Red Wing and RWI are not currently affiliates. 
However, Red Wing represents that, due to the ownership of Red Wing and 
the Shares by members of the Sweasy family or trusts either controlled 
by, or benefiting, members of the Sweasy family, and application of 
certain ownership attribution rules that are based on circumstances 
subject to change (such as age), RWI may be an affiliate of Red Wing at 
the time of a Contribution. The Department takes note of the 
Applicant's clarification.
3. GFA's Duties as Qualified Independent Fiduciary
    Paragraph 48 of the Summary provides that ``[t]he Applicant 
represents that GFA is. . . an ``investment manager'' within the 
meaning of section 3(38) of the Act and the Investment Advisers Act of 
1940, and with respect to its duties, GFA will be a fiduciary as 
defined in section 3(21)(A) of the Act.'' Paragraph 48 provides further 
that, ``[t]he Applicant represents that GFA will take whatever actions 
it deems necessary to protect the rights of the Plans with respect to 
the Shares and will act prudently and for the exclusive benefit and in 
the sole interest of the Plans and their participants and 
beneficiaries.'' In its comment, Red Wing states that the 
representations in Paragraph 48 described above, that were attributed 
to the Applicant, were actually made by GFA. The Department takes note 
of Red Wing's clarification to Paragraph 48 of the Summary.
4. Exercise of the Liquidity Put Option
    Red Wing seeks to modify Section III(i)(1) of the proposed 
exemption, which provides that, ``[for] a period of 60 days leading up 
to a Change of Control, the Liquidity Put Option will be exercisable by 
the Independent Fiduciary on behalf of the Plans.'' Red Wing states 
that, in actuality, the Liquidity Put Option will be exercisable for a 
period of 60 days following a Change of Control. The Department concurs 
with the requested change has modified Section III(i)(1) of this 
exemption accordingly.
5. Name of the Hourly Plan
    Red Wing notes that the proper name for the Hourly Plan is the 
``Red Wing Shoe Company Pension Plan for Hourly Wage Employees.'' The 
Department concurs and has modified the title of this final exemption 
accordingly.
    Accordingly, after giving full consideration to the entire record, 
the Department has decided to grant the exemption subject to the 
modifications described above. The complete application file 
(Application Nos. D-

[[Page 60496]]

11763, D-11764, and D-11765), including all supplemental submissions 
received by the Department, is available for public inspection in the 
Public Disclosure Room of the Employee Benefits Security 
Administration, Room N-1515, U.S. Department of Labor, 200 Constitution 
Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice published on July 27, 2015, at 80 FR 44728.

FOR FURTHER INFORMATION CONTACT: Mr. Scott Ness of the Department, 
telephone (202) 693-8561. (This is not a toll-free number.)
Frank Russell Company and Affiliates, (Russell or the Applicants), 
Located in Seattle, WA, [Prohibited Transaction Exemption 2015-17; 
Exemption Application No. D-11781]

Exemption

Section I. Transactions

    The restrictions of sections 406(a)(1)(D) and 406(b) of the Act (or 
ERISA) and the taxes resulting from the application of section 4975 of 
the Code, by reason of sections 4975(c)(1)(D) through (F) of the 
Code,\3\ shall not apply, effective June 1, 2014, to:
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    \3\ For purposes of this exemption reference to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
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    (a) The receipt of a fee by Russell, as Russell is defined below in 
Section IV(a), from an open-end investment company or open-end 
investment companies (Affiliated Fund(s)), as defined below in Section 
IV(e), in connection with the direct investment in shares of any such 
Affiliated Fund, by an employee benefit plan or by employee benefit 
plans (Client Plan(s)), as defined below in Section IV(b), where 
Russell serves as a fiduciary with respect to such Client Plan, and 
where Russell:
    (1) Provides investment advisory services, or similar services to 
any such Affiliated Fund; and
    (2) Provides to any such Affiliated Fund other services (Secondary 
Service(s)), as defined below in Section IV(i); and
    (b) In connection with the indirect investment by a Client Plan in 
shares of an Affiliated Fund through investment in a pooled investment 
vehicle or pooled investment vehicles (Collective Fund(s)) \4\, as 
defined below in Section IV(j), where Russell serves as a fiduciary 
with respect to such Client Plan, the receipt of fees by Russell from:
---------------------------------------------------------------------------

    \4\ The Department, herein, is expressing no opinion in this 
exemption regarding the reliance of the Applicants on the relief 
provided by section 408(b)(8) of the Act with regard to the purchase 
and with regard to the sale by a Client Plan of an interest in a 
Collective Fund and the receipt by Russell, thereby, of any 
investment management fee, any investment advisory fee, and any 
similar fee (a Collective Fund-Level Management Fee), as defined 
below in Section IV(n)), where Russell serves as an investment 
manager or investment adviser with respect to such Collective Fund 
and also serves as a fiduciary with respect to such Client Plan, nor 
is the Department offering any view as to whether the Applicants 
satisfy the conditions, as set forth in section 408(b)(8) of the 
Act.
---------------------------------------------------------------------------

    (1) An Affiliated Fund for the provision of investment advisory 
services, or similar services by Russell to any such Affiliated Fund; 
and
    (2) An Affiliated Fund for the provision of Secondary Services by 
Russell to any such Affiliated Fund; provided that the conditions, as 
set forth below in Section II and Section III, are satisfied, as of 
June 1, 2014 and thereafter.

Section II. Specific Conditions

    (a)(1) Each Client Plan which is invested directly in shares of an 
Affiliated Fund either:
    (i) Does not pay to Russell for the entire period of such 
investment any investment management fee, or any investment advisory 
fee, or any similar fee at the plan-level (the Plan-Level Management 
Fee), as defined below in Section IV(m), with respect to any of the 
assets of such Client Plan which are invested directly in shares of 
such Affiliated Fund; or
    (ii) Pays to Russell a Plan-Level Management Fee, based on total 
assets of such Client Plan under management by Russell at the plan-
level, from which a credit has been subtracted from such Plan-Level 
Management Fee, where the amount subtracted represents such Client 
Plan's pro rata share of any investment advisory fee and any similar 
fee (the Affiliated Fund Level Advisory Fee), as defined below in 
Section IV(o), paid by such Affiliated Fund to Russell.
    If, during any fee period, in the case of a Client Plan invested 
directly in shares of an Affiliated Fund, such Client Plan has prepaid 
its Plan Level Management Fee, and such Client Plan purchases shares of 
an Affiliated Fund directly, the requirement of this Section 
II(a)(1)(ii) shall be deemed met with respect to such prepaid Plan-
Level Management Fee, if, by a method reasonably designed to accomplish 
the same, the amount of the prepaid Plan-Level Management Fee that 
constitutes the fee with respect to the assets of such Client Plan 
invested directly in shares of an Affiliated Fund:
    (A) Is anticipated and subtracted from the prepaid Plan-Level 
Management Fee at the time of the payment of such fee; or
    (B) Is returned to such Client Plan, no later than during the 
immediately following fee period; or
    (C) Is offset against the Plan-Level Management Fee for the 
immediately following fee period or for the fee period immediately 
following thereafter.
    For purposes of Section II(a)(1)(ii), a Plan-Level Management Fee 
shall be deemed to be prepaid for any fee period, if the amount of such 
Plan-Level Management Fee is calculated as of a date not later than the 
first day of such period.
    (2) Each Client Plan invested in a Collective Fund the assets of 
which are not invested in shares of an Affiliated Fund:
    (i) Does not pay to Russell for the entire period of such 
investment any Plan-Level Management Fee with respect to any assets of 
such Client Plan invested in such Collective Fund.
    The requirements of this Section II(a)(2)(i) do not preclude the 
payment of a Collective Fund-Level Management Fee by such Collective 
Fund to Russell, based on the assets of such Client Plan invested in 
such Collective Fund; or
    (ii) Does not pay to Russell for the entire period of such 
investment any Collective Fund-Level Management Fee with respect to any 
assets of such Client Plan invested in such Collective Fund.
    The requirements of this Section II(a)(2)(ii) do not preclude the 
payment of a Plan-Level Management Fee by such Client Plan to Russell, 
based on total assets of such Client Plan under management by Russell 
at the plan-level; or
    (iii) Such Client Plan pays to Russell a Plan-Level Management Fee, 
based on total assets of such Client Plan under management by Russell 
at the plan-level, from which a credit has been subtracted from such 
Plan-Level Management Fee (the ``Net'' Plan-Level Management Fee), 
where the amount subtracted represents such Client Plan's pro rata 
share of any Collective Fund-Level Management Fee paid by such 
Collective Fund to Russell.
    The requirements of this Section II(a)(2)(iii) do not preclude the 
payment of a Collective Fund-Level Management Fee by such Collective 
Fund to Russell, based on the assets of such Client Plan invested in 
such Collective Fund.
    (3) Each Client Plan invested in a Collective Fund, the assets of 
which are invested in shares of an Affiliated Fund:
    (i) Does not pay to Russell for the entire period of such 
investment any Plan-Level Management Fee (including

[[Page 60497]]

any ``Net'' Plan-Level Management Fee, as described, above, in Section 
II(a)(2)(ii)), and does not pay directly to Russell or indirectly to 
Russell through the Collective Fund for the entire period of such 
investment any Collective Fund-Level Management Fee with respect to the 
assets of such Client Plan which are invested in such Affiliated Fund; 
or
    (ii) Pays indirectly to Russell a Collective Fund-Level Management 
Fee, in accordance with Section II(a)(2)(i) above, based on the total 
assets of such Client Plan invested in such Collective Fund, from which 
a credit has been subtracted from such Collective Fund-Level Management 
Fee, where the amount subtracted represents such Client Plan's pro rata 
share of any Affiliated Fund-Level Advisory Fee paid to Russell by such 
Affiliated Fund; and does not pay to Russell for the entire period of 
such investment any Plan-Level Management Fee with respect to any 
assets of such Client Plan invested in such Collective Fund; or
    (iii) Pays to Russell a Plan-Level Management Fee, in accordance 
with Section II(a)(2)(ii) above, based on the total assets of such 
Client Plan under management by Russell at the plan-level, from which a 
credit has been subtracted from such Plan-Level Management Fee, where 
the amount subtracted represents such Client Plan's pro rata share of 
any Affiliated Fund-Level Advisory Fee paid to Russell by such 
Affiliated Fund; and does not pay directly to Russell or indirectly to 
Russell through the Collective Fund for the entire period of such 
investment any Collective Fund-Level Management Fee with respect to any 
assets of such Client Plan invested in such Collective Fund; or
    (iv) Pays to Russell a ``Net'' Plan-Level Management Fee, in 
accordance with Section II(a)(2)(iii) above, from which a further 
credit has been subtracted from such ``Net'' Plan-Level Management Fee, 
where the amount of such further credit which is subtracted represents 
such Client Plan's pro rata share of any Affiliated Fund-Level Advisory 
Fee paid to Russell by such Affiliated Fund.
    Provided that the conditions of this proposed exemption are 
satisfied, the requirements of Section II(a)(1)(i)-(ii) and Section 
II(a)(3)(i)-(iv) do not preclude the payment of an Affiliated Fund-
Level Advisory Fee by an Affiliated Fund to Russell under the terms of 
an investment advisory agreement adopted in accordance with section 15 
of the Investment Company Act of 1940 (the Investment Company Act). 
Further, the requirements of Section II(a)(1)(i)-(ii) and Section 
II(a)(3)(i)-(iv) do not preclude the payment of a fee by an Affiliated 
Fund to Russell for the provision by Russell of Secondary Services to 
such Affiliated Fund under the terms of a duly adopted agreement 
between Russell and such Affiliated Fund.
    For the purpose of Section II(a)(1)(ii) and Section II(a)(3)(ii)-
(iv), in calculating a Client Plan's pro rata share of an Affiliated 
Fund-Level Advisory Fee, Russell must use an amount representing the 
``gross'' advisory fee paid to Russell by such Affiliated Fund. For 
purposes of this paragraph, the ``gross'' advisory fee is the amount 
paid to Russell by such Affiliated Fund, including the amount paid by 
such Affiliated Fund to sub-advisers.
    (b) The purchase price paid and the sales price received by a 
Client Plan for shares in an Affiliated Fund purchased or sold 
directly, and the purchase price paid and the sales price received by a 
Client Plan for shares in an Affiliated Fund purchased or sold 
indirectly through a Collective Fund, is the net asset value per share 
(NAV), as defined below in Section IV(f), at the time of the 
transaction, and is the same purchase price that would have been paid 
and the same sales price that would have been received for such shares 
by any other shareholder of the same class of shares in such Affiliated 
Fund at that time.\5\
---------------------------------------------------------------------------

    \5\ The selection of a particular class of shares of an 
Affiliated Fund as an investment for a Client Plan indirectly 
through a Collective Fund is a fiduciary decision that must be made 
in accordance with the provisions of section 404(a) of the Act.
---------------------------------------------------------------------------

    (c) Russell, including any officer and any director of Russell, 
does not purchase any shares of an Affiliated Fund from, and does not 
sell any shares of an Affiliated Fund to, any Client Plan which invests 
directly in such Affiliated Fund, and Russell, including any officer 
and director of Russell, does not purchase any shares of any Affiliated 
Fund from, and does not sell any shares of an Affiliated Fund to, any 
Collective Fund in which a Client Plan invests indirectly in shares of 
such Affiliated Fund.
    (d) No sales commissions, no redemption fees, and no other similar 
fees are paid in connection with any purchase and in connection with 
any sale by a Client Plan directly in shares of an Affiliated Fund, and 
no sales commissions, no redemption fees, and no other similar fees are 
paid by a Collective Fund in connection with any purchase, and in 
connection with any sale, of shares in an Affiliated Fund by a Client 
Plan indirectly through such Collective Fund. However, this Section 
II(d) does not prohibit the payment of a redemption fee, if:
    (1) Such redemption fee is paid only to an Affiliated Fund; and
    (2) The existence of such redemption fee is disclosed in the 
summary prospectus for such Affiliated Fund in effect both at the time 
of any purchase of shares in such Affiliated Fund and at the time of 
any sale of such shares.
    (e) The combined total of all fees received by Russell is not in 
excess of reasonable compensation within the meaning of section 
408(b)(2) of the Act, for services provided:
    (1) By Russell to each Client Plan;
    (2) By Russell to each Collective Fund in which a Client Plan 
invests;
    (3) By Russell to each Affiliated Fund in which a Client Plan 
invests directly in shares of such Affiliated Fund; and
    (4) By Russell to each Affiliated Fund in which a Client Plan 
invests indirectly in shares of such Affiliated Fund through a 
Collective Fund.
    (f) Russell does not receive any fees payable pursuant to Rule 12b-
1 under the Investment Company Act in connection with the transactions 
covered by this proposed exemption;
    (g) No Client Plan is an employee benefit plan sponsored or 
maintained by Russell.
    (h)(1) In the case of a Client Plan investing directly in shares of 
an Affiliated Fund, a second fiduciary (the Second Fiduciary), as 
defined below in Section IV(h), acting on behalf of such Client Plan, 
receives, in writing, in advance of any investment by such Client Plan 
directly in shares of such Affiliated Fund, a full and detailed 
disclosure via first class mail or via personal delivery of (or, if the 
Second Fiduciary consents to such means of delivery, through electronic 
email, in accordance with Section II(q), as set forth below) 
information concerning such Affiliated Fund, including but not limited 
to the items listed below:
    (i) A current summary prospectus issued by each such Affiliated 
Fund;
    (ii) A statement describing the fees, including the nature and 
extent of any differential between the rates of such fees for:
    (A) Investment advisory and similar services to be paid to Russell 
by each Affiliated Fund;
    (B) Secondary Services to be paid to Russell by each such 
Affiliated Fund; and
    (C) All other fees to be charged by Russell to such Client Plan and 
to each such Affiliated Fund and all other fees to be paid to Russell 
by each such Client Plan and by each such Affiliated Fund;
    (iii) The reasons why Russell may consider investment directly in 
shares of such Affiliated Fund by such Client

[[Page 60498]]

Plan to be appropriate for such Client Plan;
    (iv) A statement describing whether there are any limitations 
applicable to Russell with respect to which assets of such Client Plan 
may be invested directly in shares of such Affiliated Fund, and if so, 
the nature of such limitations; and
    (v) Upon the request of the Second Fiduciary acting on behalf of 
such Client Plan, a copy of the Notice of Proposed Exemption (the 
Notice), a copy of the final exemption, if granted, and any other 
reasonably available information regarding the transactions which are 
the subject of this proposed exemption.
    (2) In the case of a Client Plan whose assets are proposed to be 
invested in a Collective Fund after such Collective Fund has begun 
investing in shares of an Affiliated Fund, a Second Fiduciary, acting 
on behalf of such Client Plan, receives, in writing, in advance of any 
investment by such Client Plan in such Collective Fund, a full and 
detailed disclosure via first class mail or via personal delivery (or, 
if the Second Fiduciary consents to such means of delivery, through 
electronic email, in accordance with Section II(q), as set forth below) 
of information concerning such Collective Fund and information 
concerning each such Affiliated Fund in which such Collective Fund is 
invested, including but not limited to the items listed, below:
    (i) A current summary prospectus issued by each such Affiliated 
Fund;
    (ii) A statement describing the fees, including the nature and 
extent of any differential between the rates of such fees for:
    (A) Investment advisory and similar services to be paid to Russell 
by each Affiliated Fund;
    (B) Secondary Services to be paid to Russell by each such 
Affiliated Fund; and
    (C) All other fees to be charged by Russell to such Client Plan, to 
such Collective Fund, and to each such Affiliated Fund and all other 
fees to be paid to Russell by such Client Plan, by such Collective 
Fund, and by each such Affiliated Fund;
    (iii) The reasons why Russell may consider investment by such 
Client Plan in shares of each such Affiliated Fund indirectly through 
such Collective Fund to be appropriate for such Client Plan;
    (iv) A statement describing whether there are any limitations 
applicable to Russell with respect to which assets of such Client Plan 
may be invested indirectly in shares of each such Affiliated Fund 
through such Collective Fund, and if so, the nature of such 
limitations;
    (v) Upon the request of the Second Fiduciary, acting on behalf of 
such Client Plan, a copy of the Notice, a copy of the final exemption, 
if granted, and any other reasonably available information regarding 
the transactions which are the subject of this proposed exemption; and
    (vi) A copy of the organizational documents of such Collective Fund 
which expressly provide for the addition of one or more Affiliated 
Funds to the portfolio of such Collective Fund.
    (3) In the case of a Client Plan whose assets are proposed to be 
invested in a Collective Fund before such Collective Fund has begun 
investing in shares of any Affiliated Fund, a Second Fiduciary, acting 
on behalf of such Client Plan, receives, in writing, in advance of any 
investment by such Client Plan in such Collective Fund, a full and 
detailed disclosure via first class mail or via personal delivery (or, 
if the Second Fiduciary consents to such means of delivery through 
electronic email, in accordance with Section II(q), as set forth below) 
of information, concerning such Collective Fund, including but not 
limited to, the items listed below:
    (i) A statement describing the fees, including the nature and 
extent of any differential between the rates of such fees for all fees 
to be charged by Russell to such Client Plan and to such Collective 
Fund and all other fees to be paid to Russell by such Client Plan, and 
by such Collective Fund;
    (ii) Upon the request of the Second Fiduciary, acting on behalf of 
such Client Plan, a copy of the Notice, a copy of the final exemption, 
if granted, and any other reasonably available information regarding 
the transactions which are the subject of this proposed exemption; and
    (iii) A copy of the organizational documents of such Collective 
Fund which expressly provide for the addition of one or more Affiliated 
Funds to the portfolio of such Collective Fund.
    (i) On the basis of the information, described above in Section 
II(h), a Second Fiduciary, acting on behalf of a Client Plan:
    (1) Authorizes in writing the investment of the assets of such 
Client Plan, as applicable:
    (i) Directly in shares of an Affiliated Fund;
    (ii) Indirectly in shares of an Affiliated Fund through a 
Collective Fund where such Collective Fund has already invested in 
shares of an Affiliated Fund; and
    (iii) In a Collective Fund which is not yet invested in shares of 
an Affiliated Fund but whose organizational document expressly provides 
for the addition of one or more Affiliated Funds to the portfolio of 
such Collective Fund; and
    (2) Authorizes in writing, as applicable:
    (i) The Affiliated Fund-Level Advisory Fee received by Russell for 
investment advisory services and similar services provided by Russell 
to such Affiliated Fund;
    (ii) The fee received by Russell for Secondary Services provided by 
Russell to such Affiliated Fund;
    (iii) The Collective Fund-Level Management Fee received by Russell 
for investment management, investment advisory, and similar services 
provided by Russell to such Collective Fund in which such Client Plan 
invests;
    (iv) The Plan-Level Management Fee received by Russell for 
investment management and similar services provided by Russell to such 
Client Plan at the plan-level; and
    (v) The selection by Russell of the applicable fee method, as 
described, above, in Section II(a)(1)-(3).
    All authorizations made by a Second Fiduciary pursuant to this 
Section II(i) must be consistent with the responsibilities, 
obligations, and duties imposed on fiduciaries by Part 4 of Title I of 
the Act;
    (j)(1) Any authorization, described above in Section II(i), and any 
authorization made pursuant to negative consent, as described below in 
Section II(k) and in Section II(l), made by a Second Fiduciary, acting 
on behalf of a Client Plan, shall be terminable at will by such Second 
Fiduciary, without penalty to such Client Plan (including any fee or 
charge related to such penalty), upon receipt by Russell via first 
class mail, via personal delivery, or via electronic email of a written 
notification of the intent of such Second Fiduciary to terminate any 
such authorization.
    (2) A form (the Termination Form), expressly providing an election 
to terminate any authorization, described above in Section II(i), or to 
terminate any authorization made pursuant to negative consent, as 
described below in Section II(k) and in Section II(l), with 
instructions on the use of such Termination Form, must be provided to 
such Second Fiduciary at least annually, either in writing via first 
class mail or via personal delivery (or if such Second Fiduciary 
consents to such means of delivery through electronic email, in 
accordance with Section II(q), as set forth below). However, if a 
Termination

[[Page 60499]]

Form has been provided to such Second Fiduciary pursuant to Section 
II(k) or pursuant to Section II(l) below, then a Termination Form need 
not be provided pursuant to this Section II(j), until at least six (6) 
months, but no more than twelve (12) months, have elapsed, since the 
prior Termination Form was provided;
    (3) The instructions for the Termination Form must include the 
following statements:
    (i) Any authorization, described above in Section II(i), and any 
authorization made pursuant to negative consent, as described below in 
Section II(k) or in Section II(l), is terminable at will by a Second 
Fiduciary, acting on behalf of a Client Plan, without penalty to such 
Client Plan, upon receipt by Russell via first class mail or via 
personal delivery or via electronic email of the Termination Form, or 
some other written notification of the intent of such Second Fiduciary 
to terminate such authorization;
    (ii) Within 30 days from the date the Termination Form is sent to 
such Second Fiduciary by Russell, the failure by such Second Fiduciary 
to return such Termination Form or the failure by such Second Fiduciary 
to provide some other written notification of the Client Plan's intent 
to terminate any authorization, described in Section II(i), or intent 
to terminate any authorization made pursuant to negative consent, as 
described below in Section II(k) or in Section II(l), will be deemed to 
be an approval by such Second Fiduciary;
    (4) In the event that a Second Fiduciary, acting on behalf of a 
Client Plan, at any time returns a Termination Form or returns some 
other written notification of intent to terminate any authorization, as 
described above in Section II(i), or intent to terminate any 
authorization made pursuant to negative consent, as described below in 
Section II(k) or in Section II(l);
    (i)(A) In the case of a Client Plan which invests directly in 
shares of an Affiliated Fund, the termination will be implemented by 
the withdrawal of all investments made by such Client Plan in the 
affected Affiliated Fund, and such withdrawal will be effected by 
Russell within one (1) business day of the date that Russell receives 
such Termination Form or receives from the Second Fiduciary, acting on 
behalf of such Client Plan, some other written notification of intent 
to terminate any such authorization;
    (B) From the date a Second Fiduciary, acting on behalf of a Client 
Plan that invests directly in shares of an Affiliated Fund, returns a 
Termination Form or returns some other written notification of intent 
to terminate such Client Plan's investment in such Affiliated Fund, 
such Client Plan will not be subject to pay a pro rata share of any 
Affiliated Fund-Level Advisory Fee and will not be subject to pay any 
fees for Secondary Services paid to Russell by such Affiliated Fund, or 
any other fees or charges;
    (ii)(A) In the case of a Client Plan which invests in a Collective 
Fund, the termination will be implemented by the withdrawal of such 
Client Plan from all investments in such affected Collective, and such 
withdrawal will be implemented by Russell within such time as may be 
necessary for withdrawal in an orderly manner that is equitable to the 
affected withdrawing Client Plan and to all non-withdrawing Client 
Plans, but in no event shall such withdrawal be implemented by Russell 
more than five business (5) days after the day Russell receives from 
the Second Fiduciary, acting on behalf of such withdrawing Client Plan, 
a Termination Form or receives some other written notification of 
intent to terminate the investment of such Client Plan in such 
Collective Fund, unless such withdrawal is otherwise prohibited by a 
governmental entity with jurisdiction over the Collective Fund, or the 
Second Fiduciary fails to instruct Russell as to where to reinvest or 
send the withdrawal proceeds; and
    (B) From the date Russell receives from a Second Fiduciary, acting 
on behalf of a Client Plan, that invests in a Collective Fund, a 
Termination Form or receives some other written notification of intent 
to terminate such Client Plan's investment in such Collective Fund, 
such Client Plan will not be subject to pay a pro rata share of any 
fees arising from the investment by such Client Plan in such Collective 
Fund, including any Collective Fund-Level Management Fee, nor will such 
Client Plan be subject to any other charges to the portfolio of such 
Collective Fund, including a pro rata share of any Affiliated Fund-
Level Advisory Fee and any fee for Secondary Services arising from the 
investment by such Collective Fund in an Affiliated Fund.
    (k)(1) Russell, at least thirty (30) days in advance of the 
implementation of each fee increase (Fee Increase(s)), as defined below 
in Section IV(l), must provide in writing via first class mail or via 
personal delivery (or if the Second Fiduciary consents to such means of 
delivery through electronic email, in accordance with Section II(q), as 
set forth below), a notice of change in fees (the Notice of Change in 
Fees) (which may take the form of a proxy statement, letter, or similar 
communication which is separate from the summary prospectus of such 
Affiliated Fund) and which explains the nature and the amount of such 
Fee Increase to the Second Fiduciary of each affected Client Plan. Such 
Notice of Change in Fees shall be accompanied by a Termination Form and 
by instructions on the use of such Termination Form, as described above 
in Section II(j)(3);
    (2) Subject to the crediting, interest-payback, and other 
requirements below, for each Client Plan affected by a Fee Increase, 
Russell may implement such Fee Increase without waiting for the 
expiration of the 30-day period, described above in Section II(k)(1), 
provided Russell does not begin implementation of such Fee Increase 
before the first day of the 30-day period, described above in Section 
II(k)(1), and provided further that the following conditions are 
satisfied:
    (i) Russell delivers, in the manner described in Section II(k)(1), 
to the Second Fiduciary for each affected Client Plan, the Notice of 
Change of Fees, as described in Section II(k)(1), accompanied by the 
Termination Form and by instructions on the use of such Termination 
Form, as described above in Section II(j)(3);
    (ii) Each affected Client Plan receives from Russell a credit in 
cash equal to each such Client Plan's pro rata share of such Fee 
Increase to be received by Russell for the period from the date of the 
implementation of such Fee Increase to the earlier of:
    (A) The date when an affected Client Plan, pursuant to Section 
II(j), terminates any authorization, as described above in Section 
II(i), or, terminates any negative consent authorization, as described 
in Section II(k) or in Section II(l); or
    (B) The 30th day after the day that Russell delivers to the Second 
Fiduciary of each affected Client Plan the Notice of Change of Fees, 
described in Section II(k)(1), accompanied by the Termination Form and 
by the instructions on the use of such Termination Form, as described 
above in Section II(j)(3).
    (iii) Russell pays to each affected Client Plan the cash credit, 
described above in Section II(k)(2)(ii), with interest thereon, no 
later than five (5) business days following the earlier of: (A) The 
date such affected Client Plan, pursuant to Section II(j), terminates 
any authorization, as described above in Section II(i), or terminates, 
any negative consent authorization, as described in Section II(k) or in 
Section II(l); or
    (B) The 30th day after the day that Russell delivers to the Second 
Fiduciary

[[Page 60500]]

of each affected Client Plan, the Notice of Change of Fees, described 
in Section II(k)(1), accompanied by the Termination Form and 
instructions on the use of such Termination Form, as described above in 
Section II(j)(3);
    (iv) Interest on the credit in cash is calculated at the prevailing 
Federal funds rate plus two percent (2%) for the period from the day 
Russell first implements the Fee Increase to the date Russell pays such 
credit in cash, with interest thereon, to each affected Client Plan;
    (v) An independent accounting firm (the Auditor) at least annually 
audits the payments made by Russell to each affected Client Plan, 
audits the amount of each cash credit, plus the interest thereon, paid 
to each affected Client Plan, and verifies that each affected Client 
Plan received the correct amount of cash credit and the correct amount 
of interest thereon;
    (vi) Such Auditor issues an audit report of its findings no later 
than six (6) months after the period to which such audit report 
relates, and provides a copy of such audit report to the Second 
Fiduciary of each affected Client Plan; and
    (3) Within 30 days from the date Russell sends to the Second 
Fiduciary of each affected Client Plan, the Notice of Change of Fees 
and the Termination Form, the failure by such Second Fiduciary to 
return such Termination Form and the failure by such Second Fiduciary 
to provide some other written notification of the Client Plan's intent 
to terminate the authorization, described in Section II(i), or to 
terminate the negative consent authorization, as described in Section 
II(k) or in Section II(l), will be deemed to be an approval by such 
Second Fiduciary of such Fee Increase.
    (l) Effective upon the date that the final exemption is granted, in 
the case of (a) a Client Plan which has received the disclosures 
detailed in Section II(h)(2)(i), II(h)(2)(ii)(A), II(h)(2)(ii)(B), 
II(h)(2)(ii)(C), II(h)(2)(iii), II(h)(2)(iv), II(h)(2)(v), and 
II(h)(2)(vi), and which has authorized the investment by such Client 
Plan in a Collective Fund in accordance with Section II(i)(1)(ii) 
above, and (b) a Client Plan which has received the disclosures 
detailed in Section II(h)(3)(i), II(h)(3)(ii), and II(h)(3)(iii), and 
which has authorized investment by such Client Plan in a Collective 
Fund, in accordance with Section II(i)(1)(iii) above, the authorization 
pursuant to negative consent in accordance with this Section II(l), 
applies to:
    (1) The purchase, as an addition to the portfolio of such 
Collective Fund, of shares of an Affiliated Fund (a New Affiliated 
Fund) where such New Affiliated Fund has not been previously authorized 
pursuant to Section II(i)(1)(ii), or, as applicable, Section 
II(i)(1)(iii), and such Collective Fund may commence investing in such 
New Affiliated Fund without further written authorization from the 
Second Fiduciary of each Client Plan invested in such Collective Fund, 
provided that:
    (i) The organizational documents of such Collective Fund expressly 
provide for the addition of one or more Affiliated Funds to the 
portfolio of such Collective Fund, and such documents were disclosed in 
writing via first class mail or via personal delivery (or, if the 
Second Fiduciary consents to such means of delivery, through electronic 
email, in accordance with Section II(q)) to the Second Fiduciary of 
each such Client Plan invested in such Collective Fund, in advance of 
any investment by such Client Plan in such Collective Fund;
    (ii) At least thirty (30) days in advance of the purchase by a 
Client Plan of shares of such New Affiliated Fund indirectly through a 
Collective Fund, Russell provides, either in writing via first class or 
via personal delivery (or if the Second Fiduciary consents to such 
means of delivery through electronic email, in accordance with Section 
II(q)) to the Second Fiduciary of each Client Plan having an interest 
in such Collective Fund, full and detailed disclosures about such New 
Affiliated Fund, including but not limited to:
    (A) A notice of Russell's intent to add a New Affiliated Fund to 
the portfolio of such Collective Fund. Such notice may take the form of 
a proxy statement, letter, or similar communication that is separate 
from the summary prospectus of such New Affiliated Fund to the Second 
Fiduciary of each affected Client Plan;
    (B) Such notice of Russell's intent to add a New Affiliated Fund to 
the portfolio of such Collective Fund shall be accompanied by the 
information described in Section II(h)(2)(i), II(h)(2)(ii)(A), 
II(h)(2)(ii)(B), II(h)(2)(ii)(C), II(h)(2)(iii), II(h)(2)(iv), and 
II(2)(v) with respect to each such New Affiliated Fund proposed to be 
added to the portfolio of such Collective Fund; and
    (C) A Termination Form and instructions on the use of such 
Termination Form, as described in Section II(j)(3); and
    (2) Within 30 days from the date Russell sends to the Second 
Fiduciary of each affected Client Plan, the information described above 
in Section II(l)(1)(ii), the failure by such Second Fiduciary to return 
the Termination Form or to provide some other written notification of 
the Client Plan's intent to terminate the authorization described in 
Section II(i)(1)(ii), or, as appropriate, to terminate the 
authorization, described in Section II(i)(1)(iii), or to terminate any 
authorization, pursuant to negative consent, as described in this 
Section II(l), will be deemed to be an approval by such Second 
Fiduciary of the addition of a New Affiliated Fund to the portfolio of 
such Collective Fund in which such Client Plan invests, and will result 
in the continuation of the authorization of Russell to engage in the 
transactions which are the subject of this proposed exemption with 
respect to such New Affiliated Fund.
    (m) Russell is subject to the requirement to provide within a 
reasonable period of time any reasonably available information 
regarding the covered transactions that the Second Fiduciary of such 
Client Plan requests Russell to provide.
    (n) All dealings between a Client Plan and an Affiliated Fund, 
including all such dealings when such Client Plan is invested directly 
in shares of such Affiliated Fund and when such Client Plan is invested 
indirectly in such shares of such Affiliated Fund through a Collective 
Fund, are on a basis no less favorable to such Client Plan, than 
dealings between such Affiliated Fund and other shareholders of the 
same class of shares in such Affiliated Fund.
    (o) In the event a Client Plan invests directly in shares of an 
Affiliated Fund, and, as applicable, in the event a Client Plan invests 
indirectly in shares of an Affiliated Fund through a Collective Fund, 
if such Affiliated Fund places brokerage transactions with Russell, 
Russell will provide to the Second Fiduciary of each such Client Plan, 
so invested, at least annually a statement specifying:
    (1) The total, expressed in dollars of brokerage commissions that 
are paid to Russell by each such Affiliated Fund;
    (2) The total, expressed in dollars, of brokerage commissions that 
are paid by each such Affiliated Fund to brokerage firms unrelated to 
Russell;
    (3) The average brokerage commissions per share, expressed as cents 
per share, paid to Russell by each such Affiliated Fund; and
    (4) The average brokerage commissions per share, expressed as cents 
per share, paid by each such Affiliated Fund to brokerage firms 
unrelated to Russell.
    (p)(1) Russell provides to the Second Fiduciary of each Client Plan 
invested directly in shares of an Affiliated Fund with the disclosures, 
as set forth below,

[[Page 60501]]

and at the times set forth below in Section II(p)(1)(i), II(p)(1)(ii), 
II(p)(1)(iii), II(p)(1)(iv), and II(p)(1)(v), either in writing via 
first class mail or via personal delivery (or if the Second Fiduciary 
consents to such means of delivery, through electronic email, in 
accordance with Section II(q) as set forth below);
    (i) Annually, with a copy of the current summary prospectus for 
each Affiliated Fund in which such Client Plan invests directly in 
shares of such Affiliated Fund;
    (ii) Upon the request of such Second Fiduciary, a copy of the 
statement of additional information for each Affiliated Fund in which 
such Client Plan invests directly in shares of such Affiliated Fund 
which contains a description of all fees paid by such Affiliated Fund 
to Russell;
    (iii) With regard to any Fee Increase received by Russell pursuant 
to Section II(k)(2), a copy of the audit report referred to in Section 
II(k)(2)(v) within sixty (60) days of the completion of such audit 
report;
    (iv) Oral or written responses to the inquiries posed by the Second 
Fiduciary of such Client Plan, as such inquiries arise; and
    (v) Annually, with a Termination form, as described in Section 
II(j)(1), and instructions on the use of such form, as described in 
Section II(j)(3), except that if a Termination Form has been provided 
to such Second Fiduciary, pursuant to Section II(k) or pursuant to 
Section II(l), then a Termination Form need not be provided again 
pursuant to this Section II(p)(1)(v) until at least six (6) months but 
no more than twelve (12) months have elapsed since a Termination Form 
was provided.
    (2) Russell provides to the Second Fiduciary of each Client Plan 
invested in a Collective Fund, with the disclosures, as set forth 
below, and at the times set forth below in Section II(p)(2)(i), 
II(p)(2)(ii), II(p)(2)(iii), II(p)(2)(iv), II(p)(2)(v), II(p)(2)(vi), 
II(p)(2)(vii), and II(p)(2)(viii), either in writing via first class 
mail or via personal delivery (or if the Second Fiduciary consents to 
such means of delivery, through electronic email, in accordance with 
Section II(q);
    (i) Annually, with a copy of the current summary prospectus for 
each Affiliated Fund in which such Client Plan invests indirectly in 
shares of such Affiliated Fund through each such Collective Fund;
    (ii) Upon the request of such Second Fiduciary, a copy of the 
statement of additional information for each Affiliated Fund in which 
such Client Plan invests indirectly in shares of such Affiliated Fund 
through each such Collective Fund which contains a description of all 
fees paid by such Affiliated Fund to Russell;
    (iii) Annually, with a statement of the Collective Fund-Level 
Management Fee for investment management, investment advisory or 
similar services paid to Russell by each such Collective Fund, 
regardless of whether such Client Plan invests in shares of an 
Affiliated Fund through such Collective Fund;
    (iv) A copy of the annual financial statement of each such 
Collective Fund in which such Client Plan invests, regardless of 
whether such Client Plan invests in shares of an Affiliated Fund 
through such Collective Fund, within sixty (60) days of the completion 
of such financial statement;
    (v) With regard to any Fee Increase received by Russell pursuant to 
Section II(k)(2), a copy of the audit report referred to in Section 
II(k)(2)(v) within sixty (60) days of the completion of such audit 
report;
    (vi) Oral or written responses to the inquiries posed by the Second 
Fiduciary of such Client Plan as such inquiries arise;
    (vii) For each Client Plan invested indirectly in shares of an 
Affiliated Fund through a Collective Fund, a statement of the 
approximate percentage (which may be in the form of a range) on an 
annual basis of the assets of such Collective Fund that was invested in 
Affiliated Funds during the applicable year; and
    (viii) Annually, with a Termination Form, as described in Section 
II(j)(1), and instructions on the use of such form, as described in 
Section II(j)(3), except that if a Termination Form has been provided 
to such Second Fiduciary, pursuant to Section II(k) or pursuant to 
Section II(l), then a Termination Form need not be provided again 
pursuant to this Section II(p)(2)(viii) until at least six (6) months 
but no more than twelve (12) months have elapsed since a Termination 
Form was provided.
    (q) Any disclosure required herein to be made by Russell to a 
Second Fiduciary may be delivered by electronic email containing direct 
hyperlinks to the location of each such document required to be 
disclosed, which are maintained on a Web site by Russell, provided:
    (1) Russell obtains from such Second Fiduciary prior consent in 
writing to the receipt by such Second Fiduciary of such disclosure via 
electronic email;
    (2) Such Second Fiduciary has provided to Russell a valid email 
address; and
    (3) The delivery of such electronic email to such Second Fiduciary 
is provided by Russell in a manner consistent with the relevant 
provisions of the Department's regulations at 29 CFR 2520.104b-1(c) 
(substituting the word ``Russell'' for the word ``administrator'' as 
set forth therein, and substituting the phrase ``Second Fiduciary'' for 
the phrase ``the participant, beneficiary or other individual'' as set 
forth therein).
    (r) The authorizations described in paragraphs II(k) or II(l) may 
be made affirmatively, in writing, by a Second Fiduciary, in a manner 
that is otherwise consistent with the requirements of those paragraphs.
    (s) All of the conditions of Prohibited Transaction Exemption (PTE) 
77-4 (42 FR 18732, April 8, 1977), as amended and/or restated, are met. 
Notwithstanding this, if PTE 77-4 is amended and/or restated, the 
requirements of paragraph (e) therein will be deemed to be met with 
respect to authorizations described in section II(l) above, but only to 
the extent the requirements of section II(l) are met. Similarly, if PTE 
77-4 is amended and/or restated, the requirements of paragraph (f) 
therein will be deemed to be met with respect to authorizations 
described in section II(k) above, if the requirements of section II(k) 
are met.
    (t) Standards of Impartial Conduct. If Russell is a fiduciary 
within the meaning of section 3(21)(A)(i) or (ii) of the Act, or 
section 4975(e)(3)(A) or (B) of the Code, with respect to the assets of 
a Client Plan involved in the transaction, Russell must comply with the 
following conditions with respect to the transaction: (1) Russell acts 
in the Best Interest of the Client Plan; (2) all compensation received 
by Russell in connection with the transaction is reasonable in relation 
to the total services the fiduciary provides to the Client Plan; and 
(3) Russell's statements about recommended investments, fees, material 
conflicts of interest,\6\ and any other matters relevant to a Client 
Plan's investment decisions are not misleading.
---------------------------------------------------------------------------

    \6\ A ``material conflict of interest'' exists when a fiduciary 
has a financial interest that could affect the exercise of its best 
judgment as a fiduciary in rendering advice to a Client Plan. For 
this purpose, Russell's failure to disclose a material conflict of 
interest relevant to the services it is providing to a Client Plan 
Plan, or other actions it is taking in relation to a Client Plan's 
investment decisions, is deemed to be a misleading statement.
---------------------------------------------------------------------------

    For purposes of this section, Russell acts in the ``Best Interest'' 
of the Client Plan when Frank Russell acts with the care, skill, 
prudence, and diligence under the circumstances then prevailing

[[Page 60502]]

that a prudent person would exercise based on the investment 
objectives, risk tolerance, financial circumstances, and needs of the 
plan or IRA, without regard to the financial or other interests of the 
fiduciary, any affiliate or other party.

Section III. General Conditions

    (a) Russell maintains for a period of six (6) years the records 
necessary to enable the persons, described below in Section III(b), to 
determine whether the conditions of this proposed exemption have been 
met, except that:
    (1) A prohibited transaction will not be considered to have 
occurred, if solely because of circumstances beyond the control of 
Russell, the records are lost or destroyed prior to the end of the six-
year period; and
    (2) No party in interest other than Russell shall be subject to the 
civil penalty that may be assessed under section 502(i) of the Act or 
to the taxes imposed by section 4975(a) and (b) of the Code, if the 
records are not maintained or are not available for examination, as 
required below by Section III(b).
    (b)(1) Except as provided in Section III(b)(2) and notwithstanding 
any provisions of section 504(a)(2) of the Act, the records referred to 
in Section III(a) are unconditionally available at their customary 
location for examination during normal business hours by--
    (i) Any duly authorized employee or representative of the 
Department or the Internal Revenue Service, or the Securities & 
Exchange Commission;
    (ii) Any fiduciary of a Client Plan invested directly in shares of 
an Affiliated Fund, any fiduciary of a Client Plan who has the 
authority to acquire or to dispose of the interest in a Collective Fund 
in which a Client Plan invests, any fiduciary of a Client Plan invested 
indirectly in an Affiliated Fund through a Collective Fund where such 
fiduciary has the authority to acquire or to dispose of the interest in 
such Collective Fund, and any duly authorized employee or 
representative of such fiduciary; and
    (iii) Any participant or beneficiary of a Client Plan invested 
directly in shares of an Affiliated Fund or invested in a Collective 
Fund, and any participant or beneficiary of a Client Plan invested 
indirectly in shares of an Affiliated Fund through a Collective Fund, 
and any representative of such participant or beneficiary; and
    (2) None of the persons described in Section III(b)(1)(ii) and 
(iii) shall be authorized to examine trade secrets of Russell, or 
commercial or financial information which is privileged or 
confidential.

Section IV. Definitions

    For purposes of this exemption:
    (a) The term ``Russell'' means Frank Russell Company and any 
affiliate thereof, as defined below in Section IV(c).
    (b) The term ``Client Plan(s)'' means a 401(k) plan(s), an 
individual retirement account(s), other tax-qualified plan(s), and 
other plan(s) as defined in the Act and Code, but does not include any 
employee benefit plan sponsored or maintained by Russell.
    (c) An ``affiliate'' of a person includes:
    (1) Any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person;
    (2) Any officer, director, employee, relative, or partner in any 
such person; and
    (3) Any corporation or partnership of which such person is an 
officer, director, partner, or employee.
    (d) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (e) The term ``Affiliated Fund(s)'' means any diversified open-end 
investment company or companies registered with the Securities and 
Exchange Commission under the Investment Company Act, as amended, 
established and maintained by Russell now or in the future for which 
Russell serves as an investment adviser.
    (f) The term ``net asset value per share'' and the term ``NAV'' 
mean the amount for purposes of pricing all purchases and sales of 
shares of an Affiliated Fund, calculated by dividing the value of all 
securities, determined by a method as set forth in the summary 
prospectus for such Affiliated Fund and in the statement of additional 
information, and other assets belonging to such Affiliated Fund or 
portfolio of such Affiliated Fund, less the liabilities charged to each 
such portfolio or each such Affiliated Fund, by the number of 
outstanding shares.
    (g) The term ``relative'' means a relative as that term is defined 
in section 3(15) of the Act (or a member of the family as that term is 
defined in section 4975(e)(6) of the Code), or a brother, a sister, or 
a spouse of a brother or a sister.
    (h) The term ``Second Fiduciary'' means the fiduciary of a Client 
Plan who is independent of and unrelated to Russell. For purposes of 
this proposed exemption, the Second Fiduciary will not be deemed to be 
independent of and unrelated to Russell if:
    (1) Such Second Fiduciary, directly or indirectly, through one or 
more intermediaries, controls, is controlled by, or is under common 
control with Russell;
    (2) Such Second Fiduciary, or any officer, director, partner, 
employee, or relative of such Second Fiduciary, is an officer, 
director, partner, or employee of Russell (or is a relative of such 
person); or
    (3) Such Second Fiduciary, directly or indirectly, receives any 
compensation or other consideration for his or her personal account in 
connection with any transaction described in this proposed exemption.
    If an officer, director, partner, or employee of Russell (or 
relative of such person) is a director of such Second Fiduciary, and if 
he or she abstains from participation in:
    (i) The decision of a Client Plan to invest in and to remain 
invested in shares of an Affiliated Fund directly, the decision of a 
Client Plan to invest in shares of an Affiliated Fund indirectly 
through a Collective Fund, and the decision of a Client Plan to invest 
in a Collective Fund that may in the future invest in shares of an 
Affiliated Fund;
    (ii) Any authorization in accordance with Section II(i), and any 
authorization, pursuant to negative consent, as described in Section 
II(k) or in Section II(l); and
    (iii) The choice of such Client Plan's investment adviser, then 
Section IV(h)(2) above shall not apply.
    (i) The term ``Secondary Service(s)'' means a service or services 
other than an investment management service, investment advisory 
service, and any similar service which is provided by Russell to an 
Affiliated Fund, including but not limited to custodial, accounting, 
administrative services, and brokerage services. Russell may also serve 
as a dividend disbursing agent, shareholder servicing agent, transfer 
agent, fund accountant, or provider of some other Secondary Service, as 
defined in this Section IV(i).
    (j) The term ``Collective Fund(s)'' means a separate account of an 
insurance company, as defined in section 2510.3-101(h)(1)(iii) of the 
Department's plan assets regulations,\7\ maintained by Russell, and a 
bank-maintained common or collective investment trust maintained by 
Russell.
---------------------------------------------------------------------------

    \7\ 51 FR 41262 (November 13, 1986).
---------------------------------------------------------------------------

    (k) The term ``business day'' means any day that
    (1) Russell is open for conducting all or substantially all of its 
business; and

[[Page 60503]]

    (2) The New York Stock Exchange (or any successor exchange) is open 
for trading.
    (l) The term ``Fee Increase(s)'' includes any increase by Russell 
in a rate of a fee previously authorized in writing by the Second 
Fiduciary of each affected Client Plan pursuant to Section II(i)(2)(i)-
(iv) above, and in addition includes, but is not limited to:
    (1) Any increase in any fee that results from the addition of a 
service for which a fee is charged;
    (2) Any increase in any fee that results from a decrease in the 
number of services and any increase in any fee that results from a 
decrease in the kind of service(s) performed by Russell for such fee 
over an existing rate of fee for each such service previously 
authorized by the Second Fiduciary, in accordance with Section 
II(i)(2)(i)-(iv) above; and
    (3) Any increase in any fee that results from Russell changing from 
one of the fee methods, as described above in Section II(a)(1)-(3), to 
using another of the fee methods, as described above in Section 
II(a)(1)-(3).
    (m) The term ``Plan-Level Management Fee'' includes any investment 
management fee, investment advisory fee, and any similar fee paid by a 
Client Plan to Russell for any investment management services, 
investment advisory services, and similar services provided by Russell 
to such Client Plan at the plan-level. The term ``Plan-Level Management 
Fee'' does not include a separate fee paid by a Client Plan to Russell 
for asset allocation service(s) (Asset Allocation Service(s)), as 
defined below in Section IV(p), provided by Russell to such Client Plan 
at the plan-level.
    (n) The term ``Collective Fund-Level Management Fee'' includes any 
investment management fee, investment advisory fee, and any similar fee 
paid by a Collective Fund to Russell for any investment management 
services, investment advisory services, and any similar services 
provided by Russell to such Collective Fund at the collective fund 
level.
    (o) The term ``Affiliated Fund-Level Advisory Fee'' includes any 
investment advisory fee and any similar fee paid by an Affiliated Fund 
to Russell under the terms of an investment advisory agreement adopted 
in accordance with section 15 of the Investment Company Act.
    (p) The term ``Asset Allocation Service(s)'' means a service or 
services to a Client Plan relating to the selection of appropriate 
asset classes or target-date ``glidepath'' and the allocation or 
reallocation (including rebalancing) of the assets of a Client Plan 
among the selected asset classes. Such services do not include the 
management of the underlying assets of a Client Plan, the selection of 
specific funds or manager, and the management of the selected 
Affiliated Funds or Collective Funds.
    Effective Date: If granted, this exemption will be effective as of 
June 1, 2014.

Written Comments

    In the Notice of Proposed Exemption (the Notice), published in the 
Federal Register on July 27, 2015 at 80 FR 44738, the Department 
invited all interested persons to submit written comments and requests 
for a hearing within forty-five (45) days of the date of the 
publication. All comments and requests for a hearing were due by 
September 10, 2015.
    During the comment period, the Department received one comment and 
no requests for a public hearing. The comment, which was submitted by 
the Applicants in an email message dated August 5, 2015, requests 
clarifications to page 44750 of the Notice in the ``Notice to 
Interested Persons'' section. The Applicants cite the first sentence of 
this section, which states: ``Those persons who may be interested in 
the publication in the Federal Register of the Notice include each 
Client Plan invested directly in shares of an Affiliated Fund, each 
Client Plan invested indirectly in shares of an Affiliated Fund through 
a Collective Fund, and each plan for which Russell provides 
discretionary management services at the time the proposed exemption is 
published in the Federal Register.''
    The Applicants believe that an inclusion of ``all plans to which 
Russell provides discretionary management services'' may be overly-
broad in this context. The Applicants explain that they have numerous 
discretionary advisory clients, some of which are subject to ERISA, and 
state that they only intend to rely upon the exemption with respect to 
a subset of these clients, specifically those clients which have 
engaged Russell to provide ``Asset Allocation Services'' for a fee, as 
described in the Notice. With respect to their other discretionary 
clients, the Applicants explain that they either (1) do not need 
exemptive relief, or (2) will continue to rely upon other exemptions, 
such as PTE 77-4. In the event that Applicants determine to rely upon 
this exemption for their other discretionary clients, or with respect 
to new clients, the Applicants will provide a copy of the Notice and 
the final exemption, to such clients, and will amend the applicable 
client contract to anticipate the requirements of this exemption.
    The Department notes this clarification to the Notice, and concurs 
that the notification requirements will be deemed to be satisfied if 
performed in the manner described herein by the Applicants.
    Accordingly, after full consideration and review of the entire 
record, including the comment letter filed by the Applicants, the 
Department has determined to grant the exemption, as set forth above. 
The Applicants' comment email has been included as part of the public 
record of the exemption application. The complete application file (D-
11781) is available for public inspection in the Public Disclosure Room 
of the Employee Benefits Security Administration, Room N-1515, U.S. 
Department of Labor, 200 Constitution Avenue NW., Washington DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption refer to 
the Notice published on July 27, 2015 at 80 FR 44738.

FOR FURTHER INFORMATION CONTACT: Mr. Joseph Brennan of the Department, 
telephone (202) 693-8456. (This is not a toll-free number.)
    The Les Schwab Tire Centers of Washington, Inc. (Les Schwab 
Washington), the Les Schwab Tire Centers of Idaho, Inc. (Les Schwab 
Idaho), and the Les Schwab Tire Centers of Portland, Inc. (Les Schwab 
Portland), (collectively, with their Affiliates, Les Schwab or the 
Applicant), Located in Bothell, Washington; Lacey, Washington; Renton, 
Washington; Twin Falls, Idaho; and Sandy, Oregon, [Prohibited 
Transaction Exemption 2015-18; Exemption Application Nos. D-11788, D-
11789, D-11790, D-11791, and D-11792]

Exemption

Section I. Transactions

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(D), 406(b)(1) 
and 406(b)(2) of the Employee Retirement Income Security Act of 1974, 
as amended (ERISA or the Act), and the sanctions resulting from the 
application of section 4975 of the Internal Revenue Code of 1986, as 
amended (the Code), by reason of sections 4975(c)(1)(A), 4975(c)(1)(D) 
and 4975(c)(1)(E) of the Code, shall not apply to the sales (the Sales) 
by the Les Schwab Profit Sharing Retirement Plan (the Plan) of the 
following parcels of real property (each, a ``Parcel'' and together, 
``the Parcels'') to the Applicant:

[[Page 60504]]

    (a) The Parcel located at 19401 Bothell Everett Highway in Bothell, 
Washington;
    (b) The Parcel located at 150 Marvin Road, SE Lacey, Washington;
    (c) The Parcel located at 354 Union Ave. NE., Renton, Washington;
    (d) The Parcel located at 21 Blue Lakes Boulevard North Twin Falls, 
Idaho; and
    (e) The Parcel located at 37895 Highway 26, Sandy, Oregon; where 
the Applicant is a party in interest with respect to the Plan, provided 
that the conditions set forth in Section II of this exemption are met.

Section II. General Conditions

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

Written Comments

    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 (the Notice) that was published in the 
Federal Register on July 27, 2015, at 80 FR 44702. All comments and 
requests for hearing were due on or before September 10, 2015.
    During the comment period, the Department received 38 telephone 
inquiries from Plan participants, concerning matters that were outside 
the scope of the exemption, but no written comments or requests for a 
public hearing from such participants.
    The Department also received a written comment from the Applicant. 
The Applicant notes that the application numbers cited in the proposed 
exemption refer to the prior exemption request, which was subsequently 
withdrawn. The Exemption Application Numbers now read as follows: 
``Application Nos. D-11788, D-11789, D-11790, and D-11791.'' In the 
comment letter, the Applicant made comments which the Department has 
determined to be non-substantive.
    Accordingly, after giving full consideration to the entire record, 
the Department has decided to grant the exemption. The complete 
application file (Application Nos. D-17888, D-11789, D-11790, D-11791, 
and D-11792), including the Applicant's comment, is available for 
public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, Room N-1515, U.S. Department of 
Labor, 200 Constitution Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice published in the Federal Register on July 27, 2015, at 80 FR 
44702.

FOR FURTHER INFORMATION CONTACT: Ms. Jennifer Erin Brown or Mr. Joseph 
Brennan of the Department at (202) 693-8352 or (202) 693-8456, 
respectively. (These are not toll-free numbers.)
New England Carpenters Training Fund (the Plan or the Applicant), 
Located in Millbury, Massachusetts, [Prohibited Transaction 2015-19; 
Exemption Application No. L-11795]

Exemption

    The restrictions of section 406(a)(1)(A) and (D) of the Act shall 
not apply to the purchase (the Purchase), by the Plan, of a parcel of 
improved real property (the Property) from the Connecticut Carpenters 
Local 24 (Local 24), a party in interest with respect to the Plan; 
provided that the following conditions are satisfied:
    (1) The Purchase price paid by the Plan for the Property is the 
lesser of $1,280,000 or the fair market value of such Property, as 
determined by an independent, qualified appraiser (the Appraiser), as 
of the date of the Purchase;
    (2) The Purchase is a one-time transaction for cash;
    (3) The terms and conditions of the Purchase are no less favorable 
to the Plan than those obtainable by the Plan under similar 
circumstances when negotiated at arm's-length with unrelated third 
parties;
    (4) Prior to entering into the Purchase, an independent, qualified 
fiduciary (the I/F) determines that the Purchase is in the interest of, 
and protective of the Plan and of its participants and beneficiaries;
    (5) The I/F: (a) Has negotiated, reviewed, and approved the terms 
of the Purchase prior to the consummation of such transaction; (b) has 
reviewed and approved the methodology used by the Appraiser; (c) 
ensures that such methodology is properly applied in determining the 
fair market value of the Property at the time the transaction occurs, 
and determines whether it is prudent to go forward with the proposed 
transaction; and (d) represents the interests of the Plan at the time 
the proposed transaction is consummated;
    (6) Immediately following the Purchase, the fair market value of 
the Property does not exceed 3 percent (3%) of the fair market value of 
the total assets of the Plan; and
    (7) The Plan does not incur any fees, costs, commissions, or other 
charges as a result of engaging in the Purchase, other than the 
necessary and reasonable fees payable to the I/F and to the Appraiser, 
respectively.

[[Page 60505]]

Written Comments

    In the notice of proposed exemption (the Notice), the Department 
invited all interested persons to submit written comments within 
thirty-seven (37) days of the date of the publication of the Notice in 
the Federal Register on July 27, 2015. All comments were due by 
September 2, 2015. During the comment period, the Department received 
no comments from interested persons.
    Accordingly, after giving full consideration to the entire record, 
the Department has decided to grant the exemption. The complete 
application file (Exemption Application No. L-11795) is available for 
public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, Room N-1515, U.S. Department of 
Labor, 200 Constitution Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the Notice published in the Federal Register on July 27, 2015 at 80 FR 
44709.

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

Virginia Bankers Association Defined Contribution Plan for First 
Capital Bank (the Plan), Located in Glen Allen, VA, [Prohibited 
Transaction Exemption 2015-20; Application No. D-11818]

Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(E), 406(a)(2), 
406(b)(1), 406(b)(2), and 407(a)(1)(A) of the Act and the sanctions 
resulting from the application of section 4975 of the Code, by reason 
of sections 4975(c)(1)(A) and 4975(c)(1)(E) of the Code,\8\ shall not 
apply to: (1) The acquisition of certain warrants (the Warrants) to 
purchase a half-share of common stock (the Stock) of First Capital 
Bancorp, Inc. (First Capital) by the participant-directed accounts (the 
Accounts) of certain participants in the Plan (the Participants) in 
connection with a rights offering (the Rights Offering) of shares of 
Stock by First Capital, a party in interest with respect to the Plan; 
and (2) the holding of the Warrants received by the Accounts, provided 
that the conditions set forth in Section II below were satisfied for 
the duration of the acquisition and holding.
---------------------------------------------------------------------------

    \8\ For purposes of this exemption, references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
---------------------------------------------------------------------------

Section II. Conditions for Relief

    (a) The acquisition of the Warrants by the Accounts of the 
Participants occurred in connection with the exercise of subscription 
rights to purchase Stock and Warrants (the Subscription Rights) 
pursuant to the Rights Offering, which was made available by First 
Capital to all shareholders of Stock, including the Plan;
    (b) The acquisition of the Warrants by the Accounts of the 
Participants resulted from their participation in the Rights Offering, 
an independent corporate act of First Capital;
    (c) Each shareholder of Stock, including each of the Accounts of 
the Participants, was entitled to receive the same proportionate number 
of Warrants, and this proportionate number of Warrants was based on the 
number of shares of Stock held by each such shareholder on the record 
date of the Rights Offering;
    (d) The Warrants were acquired pursuant to, and in accordance with, 
provisions under the Plan for individually-directed investments of the 
Accounts by the individual participants in the Plan, a portion of whose 
Accounts in the Plan held the Stock;
    (e) The decisions with regard to the acquisition, holding, and 
disposition of the Warrants by an Account have been made, and will 
continue to be made, by the individual Participant whose Account 
received the Subscription Right in respect of which such Warrants were 
acquired;
    (f) The trustee of the Plan's fund maintained to hold Stock, the 
First Capital Stock Fund, will not allow Participants to exercise the 
Warrants unless the fair market value of the Stock exceeds the exercise 
price of the Warrants on the date of exercise; and
    (g) No brokerage fees, commissions, or other fees or expenses were 
paid or will be paid by the Plan in connection with the acquisition, 
holding and/or exercise of the Subscription Right or the Warrants.
    Effective Date: This exemption is effective for the period 
beginning on April 30, 2012, until the date the Warrants are exercised 
or expire.

Written Comments

    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, published on July 27, 2015, at 80 FR 
44712. All comments and requests for hearing were due by September 10, 
2015. During the comment period, the Department received one telephone 
inquiry that generally concerned matters outside the scope of the 
exemption. Furthermore, the Department received no comments and no 
requests for a hearing from interested persons. Accordingly, after 
giving full consideration to the entire record, the Department has 
decided to grant the exemption. The complete application file 
(Application No. D-11818), including all supplemental submissions 
received by the Department, is available for public inspection in the 
Public Disclosure Room of the Employee Benefits Security 
Administration, Room N-1515, U.S. Department of Labor, 200 Constitution 
Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on July 27, 2015, at 80 FR 
44712.

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

Idaho Veneer Company/Ceda-Pine Veneer, Inc. Employees' Retirement Plan, 
Located in Post Falls, ID, [Prohibited Transaction Exemption 2015-21; 
Application No. D-11823]

Exemption

Section I. Covered Transactions

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(D), 406(b)(1), 
and 406(b)(2) of the Act and the sanctions resulting from the 
application of section 4975(a) and (b) of the Code, by reason of 
section 4975(c)(1)(A), (D) and (E) of the Code, shall not apply to the 
in-kind contribution (the Contribution) by Idaho Veneer Company (Idaho 
Veneer or the Applicant) of unimproved real property (the Property) to 
the Idaho Veneer Company/Ceda-Pine Veneer, Inc. Employees' Retirement 
Plan (the Plan), provided that the conditions in Section II have been 
met.

Section II. Conditions for Relief

    (a) The Property is contributed to the Plan at the greater of 
either: (1) $1,249,000; or (2) the fair market value of the Property, 
as determined by a qualified independent appraiser, in an appraisal 
(the Appraisal) that is updated on the date of the Contribution;
    (b) A qualified independent fiduciary (the Independent Fiduciary), 
acting on behalf of the Plan, represents the interests of the Plan and 
its participants and beneficiaries with respect to the Contribution, 
and in doing so: (1)

[[Page 60506]]

Determines that the Contribution is in the interests of the Plan and of 
its participants and beneficiaries and is protective of the rights of 
participants and beneficiaries of the Plan; (2) reviews the Appraisal 
to approve of the methodology used by the appraiser and to verify that 
the appraiser's methodology was properly applied; and (3) ensures 
compliance with the terms of the Contribution and the conditions for 
the exemption;
    (c) All rights exercisable in connection with any existing third-
party lease for billboard space (the Lease) on the Property are 
transferred to the Plan along with the Property;
    (d) The Plan does not incur any expenses with respect to the 
Contribution;
    (e) As of the date of the Contribution, there are no adverse 
claims, liens or debts to be levied against the Property, and Idaho 
Veneer is not aware of any pending adverse claims, liens or debts to be 
levied against the Property;
    (f) On the date of the Contribution, and to the extent that the 
value of the Property as of the date of the Contribution is less than 
the cumulative cash contributions Idaho Veneer would have been required 
to make to the Plan in the absence of the Contribution, Idaho Veneer 
will make a cash contribution to the Plan equal to the difference 
between the value of the Property at the date of the Contribution and 
the outstanding required cash contributions;
    (g) The Property represents no more than 20% of the fair market 
value of the total assets of the Plan at the time it is contributed to 
the Plan; and
    (h) The terms and conditions of the Contribution are no less 
favorable to the Plan than those the Plan could negotiate in an arms-
length transaction with an unrelated third party.
    Effective Date: This exemption is effective as of September 15, 
2015.

Written Comments

    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, published on July 27, 2015, at 80 FR 
44715. All comments and requests for hearing were due by September 10, 
2015. During the comment period, the Department received several phone 
inquiries that generally concerned matters outside the scope of the 
exemption. Furthermore, the Department received no written comments and 
no requests for a hearing from interested persons. Accordingly, after 
giving full consideration to the entire record, the Department has 
decided to grant the exemption, with one minor modification. The 
Department has modified the effective date in the proposed exemption to 
provide that the final exemption is effective as of September 15, 2015.
    The complete application file (Application No. D-11823), including 
all supplemental submissions received by the Department, is available 
for public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, Room N-1515, U.S. Department of 
Labor, 200 Constitution Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on July 27, 2015, at 80 FR 
44715.

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

United States Steel and Carnegie Pension Fund, (UCF or the Applicant), 
Located in New York, New York, [Prohibited Transaction Exemption 2015-
22; [Exemption Application No. D-11835]

Exemption

Section I. Covered Transactions

    If the exemption is granted, the restrictions of section 
406(a)(1)(A) through (D) of the Act and the sanctions resulting from 
the application of section 4975 of the Code, by reason of section 
4975(c)(1)(A) through (D) of the Code,\9\ shall not apply, effective 
from January 1, 2015, through December 31, 2016, to a transaction 
between a party in interest with respect to Former U.S. Steel Related 
Plan(s), as defined in Section II(e), and an investment fund, as 
defined in Section II(k), in which such plans have an interest (the 
Fund), provided that UCF has discretionary authority or control with 
respect to the plan assets involved in the transaction, and the 
following conditions are satisfied:
---------------------------------------------------------------------------

    \9\ For purposes of this exemption references to specific 
provisions of Title I of the Act, unless otherwise specified, refer 
also to the corresponding provisions of the Code.
---------------------------------------------------------------------------

    (a) UCF is an investment adviser registered under the Investment 
Advisers Act of 1940 (the 1940 Act) that has, as of the last day of its 
most recent fiscal year, total client assets, including in-house plan 
assets (the In-House Plan Assets), as defined in Section II(g), under 
its management and control in excess of $100,000,000 and equity, as 
defined in Section II(j), in excess of $1,000,000 (as measured yearly 
on UCF's most recent balance sheet prepared in accordance with 
generally accepted accounting principles); and provided UCF has 
acknowledged in a written management agreement that it is a fiduciary 
with respect to each Former U.S. Steel Related Plan that has retained 
it;
    (b) At the time of the transaction, as defined in Section II(m), 
the party in interest, as defined in Section II(h), or its affiliate, 
as defined in Section II(a), does not have the authority to--
    (1) Appoint or terminate UCF as a manager of any of the plan assets 
of the Former U.S. Steel Related Plans, or
    (2) Negotiate the terms of the management agreement with UCF 
(including renewals or modifications thereof) on behalf of the Former 
U.S. Steel Related Plans.
    (c) The transaction is not described in--
    (1) Prohibited Transaction Exemption 2006-16 (PTE 2006-16),\10\ 
relating to securities lending arrangements (as amended or superseded);
---------------------------------------------------------------------------

    \10\ 71 FR 63786, October 31, 2006.
---------------------------------------------------------------------------

    (2) Prohibited Transaction Exemption 83-1 (PTE 83-1),\11\ relating 
to acquisitions by plans of interests in mortgage pools (as amended or 
superseded), or
---------------------------------------------------------------------------

    \11\ 48 FR 895, January 7, 1983.
---------------------------------------------------------------------------

    (3) Prohibited Transaction Exemption 88-59 (PTE 88-59),\12\ 
relating to certain mortgage financing arrangements (as amended or 
superseded);
---------------------------------------------------------------------------

    \12\ 53 FR 24811, June 30, 1988.
---------------------------------------------------------------------------

    (d) The terms of the transaction are negotiated on behalf of the 
Fund by, or under the authority and general direction of, UCF, and 
either UCF, or (so long as UCF retains full fiduciary responsibility 
with respect to the transaction) a property manager acting in 
accordance with written guidelines established and administered by UCF, 
makes the decision on behalf of the Fund to enter into the transaction;
    (e) At the time the transaction is entered into, and at the time of 
any subsequent renewal or modification thereof that requires the 
consent of UCF, the terms of the transaction are at least as favorable 
to the Fund as the terms generally available in arm's-length 
transactions between unrelated parties;
    (f) Neither UCF nor any affiliate thereof, as defined in Section 
II(b), nor any owner, direct or indirect, of a 5 percent (5%) or more 
interest in UCF is a person who, within the ten (10) years immediately 
preceding the transaction has been either convicted or released from 
imprisonment, whichever is later, as a result of:
    (1) Any felony involving abuse or misuses of such person's employee

[[Page 60507]]

benefit plan position or employment, or position or employment with a 
labor organization;
    (2) Any felony arising out of the conduct of the business of a 
broker, dealer, investment adviser, bank, insurance company, or 
fiduciary;
    (3) Income tax evasion;
    (4) Any felony involving the larceny, theft, robbery, extortion, 
forgery, counterfeiting, fraudulent concealment, embezzlement, 
fraudulent conversion, or misappropriation of funds or securities; 
conspiracy or attempt to commit any such crimes or a crime in which any 
of the foregoing crimes is an element; or
    (5) Any other crimes described in section 411 of the Act.
    For purposes of this Section I(f), a person shall be deemed to have 
been ``convicted'' from the date of the judgment of the trial court, 
regardless of whether the judgment remains under appeal;
    (g) The transaction is not part of an agreement, arrangement, or 
understanding designed to benefit a party in interest;
    (h) The party in interest dealing with the Fund:
    (1) Is a party in interest with respect to the Former U.S. Steel 
Related Plans (including a fiduciary) solely by reason of providing 
services to the Former U.S. Steel Related Plans, or solely by reason of 
a relationship to a service provider described in section 3(14)(F), 
(G), (H), or (I) of the Act;
    (2) Does not have discretionary authority or control with respect 
to the investment of plan assets involved in the transaction and does 
not render investment advice (within the meaning of 29 CFR 2510.3-
21(c)) with respect to those assets; and
    (3) Is neither UCF nor a person related to UCF, as defined, in 
Section II(i).
    (i) UCF adopts written policies and procedures that are designed to 
assure compliance with the conditions of this exemption;
    (j) An independent auditor, who has appropriate technical training 
or experience and proficiency with the fiduciary responsibility 
provisions of the Act, and who so represents in writing, conducts an 
exemption audit, as defined in Section II(f) of this exemption, on an 
annual basis. Following completion of each such exemption audit, the 
independent auditor must issue a written report to the Former U.S. 
Steel Related Plans that engaged in such transactions, presenting its 
specific findings with respect to the audited sample regarding the 
level of compliance with the policies and procedures adopted by UCF, 
pursuant to Section I(i) of this exemption, and with the objective 
requirements of this exemption. The written report also shall contain 
the auditor's overall opinion regarding whether UCF's program as a 
whole complies with the policies and procedures adopted by UCF and the 
objective requirements of this exemption. The independent auditor must 
complete each such exemption audit and must issue such written report 
to the administrators, or other appropriate fiduciary of the Former 
U.S. Steel Related Plans, within six (6) months following the end of 
the year to which each such exemption audit and report relates; and
    (k)(1) UCF or an affiliate maintains or causes to be maintained 
within the United States, for a period of six (6) years from the date 
of each transaction, the records necessary to enable the persons 
described in Section I(k)(2) to determine whether the conditions of 
this exemption have been met, except that (A) a separate prohibited 
transaction will not be considered to have occurred if, due to 
circumstances beyond the control of UCF and/or its affiliates, the 
records are lost or destroyed prior to the end of the six (6) year 
period, and (B) no party in interest or disqualified person other than 
UCF shall be subject to the civil penalty that may be assessed under 
section 502(i) of the Act, or to the taxes imposed by section 4975(a) 
and (b) of the Code, if the records are not maintained, or are not 
available for examination as required by Section I(k)(2), of this 
exemption;
    (2) Except as provided in Section I(k)(3), and notwithstanding any 
provisions of subsections (a)(2) and (b) of section 504 of the Act, the 
records referred to in Section I(k)(1), of this exemption are 
unconditionally available for examination at their customary location 
during normal business hours by:
    (A) Any duly authorized employee or representative of the 
Department of Labor (the Department) or of the Internal Revenue 
Service;
    (B) Any fiduciary of any of the Former U.S. Steel Related Plans 
investing in the Fund or any duly authorized representative of such 
fiduciary;
    (C) Any contributing employer to any of the Former U.S. Steel 
Related Plans investing in the Fund or any duly authorized employee 
representative of such employer;
    (D) Any participant or beneficiary of any of the Former U.S. Steel 
Related Plans investing in the Fund, or any duly authorized 
representative of such participant or beneficiary; and
    (E) Any employee organization whose members are covered by such 
Former U.S. Steel Related Plans;
    (3) None of the persons described in Section I(k)(2)(B) through 
(E), of this exemption shall be authorized to examine trade secrets of 
UCF or its affiliates or commercial or financial information which is 
privileged or confidential.

Section II. Definitions

    (a) For purposes of Section I(b) of this exemption, an 
``affiliate'' of a person means--
    (1) Any person directly or indirectly, through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person,
    (2) Any corporation, partnership, trust, or unincorporated 
enterprise of which such person is an officer, director, five percent 
(5%) or more partner, or employee (but only if the employer of such 
employee is the plan sponsor), and
    (3) Any director of the person or any employee of the person who is 
a highly compensated employee, as defined in section 4975(e)(2)(H) of 
the Code, or who has direct or indirect authority, responsibility, or 
control regarding the custody, management, or disposition of plan 
assets.
    A named fiduciary (within the meaning of section 402(a)(2) of the 
Act) or a plan, with respect to the plan assets and an employer any of 
whose employees are covered by the plan will also be considered 
affiliates with respect to each other for purposes of Section I(b), if 
such employer or an affiliate of such employer has the authority, alone 
or shared with others, to appoint or terminate the named fiduciary or 
otherwise negotiate the terms of the named fiduciary's employment 
agreement.
    (b) For purposes of Section I(f), of this exemption, an 
``affiliate'' of a person means--
    (1) Any person directly or indirectly through one or more 
intermediaries, controlling, controlled by, or under common control 
with the person,
    (2) Any director of, relative of, or partner in, any such person,
    (3) Any corporation, partnership, trust, or unincorporated 
enterprise of which such person is an officer, director, or a 5 percent 
(5%) or more partner or owner, and
    (4) Any employee or officer of the person who--
    (A) Is a highly compensated employee (as defined in section 
4975(e)(2)(H) of the Code) or officer (earning 10 percent (10%) or more 
of the yearly wages of such person) or

[[Page 60508]]

    (B) Has direct or indirect authority, responsibility or control 
regarding the custody, management, or disposition of plan assets.
    (c) For purposes of Section II(e) and (g), of this exemption, an 
``affiliate'' of UCF includes a member of either:
    (1) A controlled group of corporations, as defined in section 
414(b) of the Code, of which United States Steel Corporation (U.S. 
Steel) is a member, or
    (2) A group of trades or business under common control, as defined 
in section 414(c) of the Code of which U.S. Steel is a member; provided 
that ``50 percent'' shall be substituted for ``80 percent'' wherever 
``80 percent'' appears in section 414(b) or 414(c) or the rules 
thereunder.
    (d) The term ``control'' means the power to exercise a controlling 
influence over the management or policies of a person other than an 
individual.
    (e) ``Former U.S. Steel Related Plan(s)'' mean:
    (1) The Marathon Petroleum Retirement Plan and the Speedway 
Retirement Plan (the Marathon Plans);
    (2) The Pension Plan of RMI Titanium Company, the Pension Plan of 
Eligible Employees of RMI Titanium Company, the Pension Plan for 
Eligible Salaried Employees of RMI Titanium Company, and the TRADCO 
Pension Plan;
    (3) Any plan the assets of which include or have included assets 
that were managed by UCF as an in-house asset manager, pursuant to 
Prohibited Transaction Class Exemption 96-23 (PTE 96-23) \13\ but as to 
which PTE 96-23 is no longer available because such assets are not held 
under a plan maintained by an affiliate of UCF (as defined in Section 
II(c) of this exemption); and
---------------------------------------------------------------------------

    \13\ 61 FR 15975, April 10, 1996.
---------------------------------------------------------------------------

    (4) Any plan (an Add-On Plan) that is sponsored or becomes 
sponsored by an entity that was, but has ceased to be, an affiliate of 
UCF (as defined in Section II(c), of this exemption; provided that:
    (A) The assets of the Add-On Plan are invested in a commingled fund 
(the Comingled Fund), as defined in Section II(n) of this exemption, 
with the assets of a plan or plans, described in Section II(e)(1)-(3) 
of this exemption and
    (B) The assets of the Add-On Plan in the Commingled Fund do not 
comprise more than 25 percent (25%) of the value of the aggregate 
assets of such fund, as measured on the day immediately following the 
initial commingling of their assets (the 25% Test). For purposes of the 
25% Test, as set forth in Section II(e)(4);
    (i) In the event that less than all of the assets of an Add-On Plan 
are invested in a Commingled Fund on the date of the initial transfer 
of such Add-On Plan's assets to such fund, and if such Add-On Plan 
subsequently transfers to such Commingled Fund some or all of the 
assets that remain in such plan, then for purposes of compliance with 
the 25% Test, the sum of the value of the initial and each additional 
transfer of assets of such Add-On Plan shall not exceed 25 percent 
(25%) of the value of the aggregate assets in such Commingled Fund, as 
measured on the day immediately following the addition of each 
subsequent transfer of such Add-On Plan's assets to such Commingled 
Fund;
    (ii) Where the assets of more than one Add-On Plan are invested in 
a Commingled Fund with the assets of plans described in Section 
II(e)(1)-(3) of this exemption, the 25% Test will be satisfied, if the 
aggregate amount of the assets of such Add-On Plans invested in such 
Commingled Fund do not represent more than 25 percent (25%) of the 
value of all of the assets of such Commingled Fund, as measured on the 
day immediately following each addition of Add-On Plan assets to such 
Commingled Fund;
    (iii) If the 25% Test is satisfied at the time of the initial and 
any subsequent transfer of an Add-On Plan's assets to a Commingled 
Fund, as provided in Section II(e), this requirement shall continue to 
be satisfied notwithstanding that the assets of such Add-On Plan in the 
Commingled Fund exceed 25 percent (25%) of the value of the aggregate 
assets of such fund solely as a result of:
    (AA) A distribution to a participant in a Former U.S. Steel Related 
Plan;
    (BB) Periodic employer or employee contributions made in accordance 
with the terms of the governing plan documents;
    (CC) The exercise of discretion by a Former U.S. Steel Related Plan 
participant to re-allocate an existing account balance in a Commingled 
Fund managed by UCF or to withdraw assets from a Commingled Fund; or
    (DD) An increase in the value of the assets of the Add-On Plan held 
in such Commingled Fund due to investment earnings or appreciation;
    (iv) If, as a result of a decision by an employer or a sponsor of a 
plan, described in Section II(e)(1)-(3) of this exemption, to withdraw 
some or all of the assets of such plan from a Commingled Fund, the 25% 
Test is no longer satisfied with respect to any Add-On Plan in such 
Commingled Fund, then the exemption will immediately cease to apply to 
all of the Add-On Plans invested in such Commingled Fund; and
    (v) Where the assets of a Commingled Fund include assets of plans 
other than Former U.S. Steel Related Plans, as defined in Section II(e) 
of this exemption, the 25% Test will be determined without regard to 
the assets of such other plans in such Commingled Fund.
    (f) An ``Exemption Audit'' of any of the Former U.S. Steel Related 
Plans must consist of the following:
    (1) A review by an independent auditor of the written policies and 
procedures adopted by UCF, pursuant to Section I(i), for consistency 
with each of the objective requirements of this exemption (as described 
in Section II(f)(5)).
    (2) A test of a representative sample of the subject transactions 
during the audit period that is sufficient in size and nature to afford 
the auditor a reasonable basis:
    (A) To make specific findings regarding whether UCF is in 
compliance with
    (i) The written policies and procedures adopted by UCF pursuant to 
Section I(i) of the exemption and
    (ii) The objective requirements of the exemption; and
    (B) To render an overall opinion regarding the level of compliance 
of UCF's program with this Section II(f)(2)(A)(i) and (ii) of the 
exemption;
    (3) A determination as to whether UCF has satisfied the 
requirements of Section I(a), of this exemption;
    (4) Issuance of a written report describing the steps performed by 
the auditor during the course of its review and the auditor's findings; 
and
    (5) For purposes of Section II(f) of this exemption, the written 
policies and procedures must describe the following objective 
requirements of the exemption and the steps adopted by UCF to assure 
compliance with each of these requirements:
    (A) The requirements of Section I(a) of this exemption regarding 
registration under the 1940 Act, total assets under management, and 
equity;
    (B) The requirements of Section I(d) of this exemption regarding 
the discretionary authority or control of UCF with respect to the 
assets of the Former U.S. Steel Related Plans involved in the 
transaction, in negotiating the terms of the transaction, and with 
regard to the decision on behalf of the Former U.S. Steel Related Plans 
to enter into the transaction;
    (C) That any procedure for approval of the transaction meets the 
requirements of Section I(d);

[[Page 60509]]

    (D) The transaction is not entered into with any person who is 
excluded from relief under Section I(h)(1) of this exemption or Section 
I(h)(2), to the extent that such person has discretionary authority or 
control over the plan assets involved in the transaction, or Section 
I(h)(3); and
    (E) The transaction is not described in any of the class exemptions 
listed in Section I(c) of this exemption.
    (g) ``In-house Plan Assets'' mean the assets of any plan maintained 
by an affiliate of UCF, as defined in Section II(c) of this exemption, 
and with respect to which UCF has discretionary authority of control.
    (h) The term ``party in interest'' means a person described in 
section 3(14) of the Act and includes a ``disqualified person,'' as 
defined in section 4975(e)(2) of the Code.
    (i) UCF is ``related'' to a party in interest for purposes of 
Section I(h)(3) of this exemption, if the party in interest (or a 
person controlling, or controlled by, the party in interest) owns a 5 
percent (5%) or more interest in U.S. Steel, or if UCF (or a person 
controlling, or controlled by UCF) owns a 5 percent (5%) or more 
interest in the party in interest.
    For purposes of this definition:
    (1) The term ``interest'' means with respect to ownership of an 
entity--
    (A) The combined voting power of all classes of stock entitled to 
vote or the total value of the shares of all classes of stock of the 
entity if the entity is a corporation;
    (B) The capital interest or the profits interest of the entity if 
the entity is a partnership; or
    (C) The beneficial interest of the entity if the entity is a trust 
or unincorporated enterprise; and
    (2) A person is considered to own an interest held in any capacity 
if the person has or shares the authority--
    (A) To exercise any voting rights or to direct some other person to 
exercise the voting rights relating to such interest, or
    (B) To dispose or to direct the disposition of such interest.
    (j) For purposes of Section I(a) of this exemption, the term 
``equity'' means the equity shown on the most recent balance sheet 
prepared within the two (2) years immediately preceding a transaction 
undertaken pursuant to this exemption, in accordance with generally 
accepted accounting principles.
    (k) ``Investment Fund'' includes single customer and pooled 
separate accounts maintained by an insurance company, individual trust 
and common collective or group trusts maintained by a bank, and any 
other account or fund to the extent that the disposition of its assets 
(whether or not in the custody of UCF) is subject to the discretionary 
authority of UCF.
    (l) The term ``relative'' means a relative as that term is defined 
in section 3(15) of the Act, or a brother, sister, or a spouse of a 
brother or sister.
    (m) The ``time of the transaction'' is the date upon which the 
transaction is entered into. In addition, in the case of a transaction 
that is continuing, the transaction shall be deemed to occur until it 
is terminated. If any transaction is entered into on or after the 
effective date of this Final Exemption or a renewal that requires the 
consent of UCF occurs on or after such effective date and the 
requirements of this exemption are satisfied at the time the 
transaction is entered into or renewed, respectively, the requirements 
will continue to be satisfied thereafter with respect to the 
transaction. Nothing in this subsection shall be construed as 
authorizing a transaction entered into by an Investment Fund which 
becomes a transaction described in section 406(a) of the Act or section 
4975(c)(1)(A) through (D) of the Code while the transaction is 
continuing, unless the conditions of this exemption were met either at 
the time the transaction was entered into or at the time the 
transaction would have become prohibited but for this exemption. In 
determining compliance with the conditions of this exemption at the 
time that the transaction was entered into for purposes of the 
preceding sentence, Section I(h) of this exemption will be deemed 
satisfied if the transaction was entered into between a plan and a 
person who was not then a party in interest.
    (n) ``Commingled Fund'' means a trust fund managed by UCF 
containing assets of some or all of the plans described in Section 
II(e)(1)-(3) of this exemption, plans other than Former U.S. Steel 
Related Plans, and if applicable, any Add-On Plan, as to which the 25% 
Test provided in Section II(e)(4) of this exemption has been satisfied; 
provided that:
    (1) Where UCF manages a single sub-fund or investment portfolio 
within such trust, the sub-Fund or portfolio will be treated as a 
single Commingled Fund; and
    (2) Where UCF manages more than one sub-fund or investment 
portfolio within such trust, the aggregate value of the assets of such 
sub-funds or portfolios managed by UCF within such trust will be 
treated as though such aggregate assets were invested in a single 
Commingled Fund.
    Effective Date: This exemption will be effective for the period 
beginning on January 1, 2015, and ending on the day which is two (2) 
years from the effective date.

Written Comments

    In the Notice of Proposed Exemption (the Notice), published in the 
Federal Register on July 27, 2015 at 80 FR 44720, the Department 
invited all interested persons to submit written comments and requests 
for a hearing within forty-five (45) days of the date of the 
publication. All comments and requests for a hearing were due by 
September 10, 2015. During the comment period, the Department received 
no comments and no requests for a hearing from interested persons.
    For the purpose of consistency, the Department has amended Section 
I with respect to the effective dates of the exemption. The Department 
has changed the end date of the effective period from December 31, 
2017, as stated in the exemption, to December 31, 2016. This change 
accurately reflects the intended 24 month effective period, as set out 
in the exemption.
    Accordingly, after full consideration and review of the entire 
record, the Department has determined to grant the exemption, as set 
forth above. The complete application file (D-11835) is available for 
public inspection in the Public Disclosure Room of the Employee 
Benefits Security Administration, Room N-1515, U.S. Department of 
Labor, 200 Constitution Avenue NW., Washington, DC 20210.
    For a more complete statement of the facts and representations 
supporting the Department's decision to grant this exemption refer to 
the Notice published on July 27, 2015 at 80 FR 44720.

FOR FURTHER INFORMATION CONTACT: Joseph Brennan of the Department 
telephone (202) 693-8456. (This is not a toll-free number.)

Roberts Supply, Inc. Profit Sharing Plan and Trust (the Plan) Located 
in Winter Park, FL [Prohibited Transaction Exemption 2015-23; Exemption 
Application No. D-11836]

Exemption

    The restrictions of sections 406(a)(1)(A), 406(a)(1)(D), 406(b)(1), 
and 406(b)(2) of the Employee Retirement Income Security Act of 1974, 
as amended (the Act),\14\ shall not apply to the cash sale (the Sale) 
by the Plan of

[[Page 60510]]

a parcel of improved real property located at 7457 Aloma Avenue, Winter 
Park, Florida (the Property) to Roberts Brothers Development, LLC 
(Roberts Development), a party in interest with respect to the Plan, 
provided that the following conditions are satisfied:
---------------------------------------------------------------------------

    \14\ For purposes of this exemption, references to Section 406 
of the Act should be read to refer as well to the corresponding 
provisions of Section 4975 of the Internal Revenue Code of 1986, as 
amended.
---------------------------------------------------------------------------

    (a) The Sale is a one-time transaction for cash;
    (b) The Plan receives an amount of cash in exchange for the 
Property, equal to the greater of $900,000, or the current fair market 
value of the Property as determined by a qualified independent 
appraiser in a written appraisal that is updated on the date the Sale 
is consummated;
    (c) The Plan incurs no real estate fees, commissions, or other 
expenses in connection with the Sale, aside from the appraisals; and
    (d) The terms and conditions of the Sale are at least as favorable 
to the Plan as those obtainable in an arms-length transaction with an 
unrelated third party.

Written Comments

    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, published on July 27, 2015, at 80 FR 
44726. All comments and requests for a hearing were due by September 
10, 2015. During the comment period, the Department received no 
comments and no requests for a hearing from interested persons. 
Accordingly, after giving full consideration to the entire record, the 
Department has decided to grant the exemption. The complete application 
file (Application No. D-11836), including all supplemental submissions 
received by the Department, 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 complete statement of the facts and representations 
supporting the Department's decision to grant this exemption, refer to 
the notice of proposed exemption published on July 27, 2015 in the 
Federal Register at 80 FR 44726.

FOR FURTHER INFORMATION CONTACT: Ms. Erica R. Knox of the Department, 
telephone (202) 693-8644. (This is not a toll-free number.)

General Information

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

    Signed at Washington, DC, this 29th day of September, 2015.
Lyssa E. Hall,
Director of Exemption, Determinations Employee Benefits Security 
Administration, U.S. Department of Labor.
[FR Doc. 2015-25254 Filed 10-5-15; 8:45 am]
 BILLING CODE 4510-29-P