Notice2023-15144
Exemption From Certain Prohibited Transaction Restrictions Involving the Unit Corporation Employees' Thrift Plan (the Plan or the Applicant) Located in Tulsa, Oklahoma
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 18, 2023
Issuing agencies
Labor DepartmentEmployee Benefits Security Administration
Abstract
This document contains a notice of exemption issued by the Department of Labor (the Department) from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986 (the Code). This exemption permits the acquisition and holding by the Plan participants' accounts of warrants (the Warrants) issued by Unit Corporation, the Plan sponsor, in connection with Unit Corporation's chapter 11 bankruptcy filing (the Bankruptcy Filing) in exchange for the participants' waiver of claims against certain "Released Parties" (the Transactions).
Full Text
<html>
<head>
<title>Federal Register, Volume 88 Issue 136 (Tuesday, July 18, 2023)</title>
</head>
<body><pre>
[Federal Register Volume 88, Number 136 (Tuesday, July 18, 2023)]
[Notices]
[Pages 45928-45932]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-15144]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF LABOR
Employee Benefits Security Administration
[Prohibited Transaction Exemption 2023-16; Exemption Application No. D-
12026]
Exemption From Certain Prohibited Transaction Restrictions
Involving the Unit Corporation Employees' Thrift Plan (the Plan or the
Applicant) Located in Tulsa, Oklahoma
AGENCY: Employee Benefits Security Administration, Labor.
ACTION: Notice of exemption.
-----------------------------------------------------------------------
SUMMARY: This document contains a notice of exemption issued by the
Department of Labor (the Department) from certain of the prohibited
transaction restrictions of the Employee Retirement Income Security Act
of 1974 (ERISA or the Act) and/or the Internal Revenue Code of 1986
(the Code). This exemption permits the acquisition and holding by the
Plan participants' accounts of warrants (the Warrants) issued by Unit
Corporation, the Plan sponsor, in connection with Unit Corporation's
chapter 11 bankruptcy filing (the Bankruptcy Filing) in exchange for
the participants' waiver of claims against certain ``Released Parties''
(the Transactions).
DATES: The exemption will be in effect on the date that this grant
notice is published in the Federal Register and will continue until the
date all Warrants are exercised, sold, or expire.
FOR FURTHER INFORMATION CONTACT: Mr. Joseph Brennan of the Department
at (202) 693-8456. (This is not a toll-free number.)
SUPPLEMENTARY INFORMATION: On February 9, 2023, the Department
published a notice of proposed exemption in the Federal Register \1\
permitting the acquisition and holding by the participants' accounts of
the Warrants in connection with the Bankruptcy Filing in exchange for
the participants' waiver of claims against the Released Parties.\2\ The
Department makes the requisite findings under ERISA section 408(a) that
the exemption is (1) administratively feasible, (2) in the interest of
the plan and its participants and beneficiaries, and (3) protective of
the rights of the plan's participants and beneficiaries, so long as all
of the exemption conditions are met. This exemption provides only the
relief specified in its text and does not provide relief from
violations of any law other than the prohibited transaction provisions
of ERISA expressly stated herein. Accordingly, affected parties should
be aware that the conditions incorporated in this exemption are, taken
as a whole, necessary for the Department to grant the relief requested
by the Applicant. Absent these or similar conditions, the Department
would not have granted this exemption.
---------------------------------------------------------------------------
\1\ 88 FR 8463 (February 9, 2023).
\2\ Unit Corporation's Reorganization Plan states that the
Released Parties include: (a) Unit Corporation; (b) the Reorganized
Unit Corporation; (c) the Debtor-in-possession Agent; (d) the
Debtor-in-possession Lenders; (e) the RBL Agent (the agent for
secured parties holding First-Priority Lien Obligations); (d) the
RBL Lenders (a type of asset-based lending (ABL) commonly used in
the oil and gas sector, reserve based loans are made against, and
secured by, an oil and gas field or a portfolio of undeveloped or
developed and producing oil and gas assets; (e) the Consenting
Noteholders; (f) the Exit Facility Agent; (g) the Exit Facility
Lenders; and (h) the Subordinated Notes Indenture Trustee.
---------------------------------------------------------------------------
The Applicant requested an individual exemption pursuant to ERISA
section 408(a) in accordance with the procedures set forth in 29 CFR
part 2570, subpart B (76 FR 66637, 66644, October 27, 2011).
Background
Unit Corporation. As discussed in further detail in the proposed
exemption, Unit Corporation is an energy company engaged in oil and
natural gas exploration. Unit Corporation stock is currently traded on
the over-the-counter marketplace following its delisting from the New
York Stock Exchange as a result of its Bankruptcy Filing (as discussed
in more detail below).
The Plan. The Plan is a participant-directed 401(k) individual
account plan that covers 472 participants and holds approximately
$70,127,000 in total assets. Fidelity Management Trust Company
(Fidelity) serves as directed trustee and recordkeeper for the Plan.
The Unit Corporation Benefits Committee (the Benefits Committee) serves
as the Plan Administrator with overall responsibility for the operation
and administration of the Plan and as the named fiduciary for purposes
of investment-related matters.
Unit Common Stock. As of September 3, 2020, the Plan held 4,932,864
shares of Unit common stock (Old Unit Common Stock), which then
comprised 0.68% of the Plan's total assets.\3\ Plan participants who
held Old Unit Common Stock as of September 3, 2020, are hereinafter
referred to as ``Invested Participants.'' Provisions of the Trust
Agreement covering the voting of Employer Stock \4\ state that: ``Each
[[Page 45929]]
participant with an interest in the Stock Fund shall have the right to
direct the Trustee as to the manner in which the Trustee is to vote
(including not to vote) that number of shares of Employer Stock that is
credited to his account.''
---------------------------------------------------------------------------
\3\ At the time, the Plan's 4,932,864 shares represented
approximately 9% of all outstanding Old Unit Common Stock.
\4\ For purposes of this trust provision, the term ``Employer
Stock'' refers to shares of both Old Unit Common Stock and New Unit
Common Stock that are held in participants' accounts.
---------------------------------------------------------------------------
The Bankruptcy Filing. On May 22, 2020, Unit Corporation and
certain of its affiliates filed voluntary petitions for relief under
Chapter 11 of Title 11 of the United States Code in the United States
Bankruptcy Court for the Southern District of Texas, Houston Division
under Case No. 20-327401 (the Bankruptcy Filing).\5\ On May 26, 2020,
the New York Stock Exchange (NYSE) suspended trading in Old Unit Common
Stock because of the Bankruptcy Filing.
---------------------------------------------------------------------------
\5\ Jointly administered under Case No. 20-327401.
---------------------------------------------------------------------------
On June 19, 2020, Unit Corporation filed a Debtors' First Revised
Proposed Joint Chapter 11 Plan of Reorganization (the Reorganization
Plan). Subsequently, on July 30, 2020, the Bankruptcy Court confirmed
Unit Corporation's Reorganization Plan and Unit Corporation emerged
from bankruptcy protection on September 3, 2020, at which time shares
of Old Unit Common Stock were canceled.
The Warrants. Under the Bankruptcy Reorganization Plan, Unit
Corporation exchanged Old Unit Common Stock for the Warrants. Each
Warrant entitles its registered holder to receive from Unit Corporation
one share of newly-issued common stock in Unit Corporation (New Unit
Common Stock) upon the exercise of the Warrant through the payment of
an Exercise Price during an Exercise Period. The exchange rate for the
Warrants is 1 to .03460447, where one share of Old Unit Common Stock
converts to .03460447 Warrants.
Acceptance or Rejection of the Warrants. As holders of the Old Unit
Common Stock, Invested Participants qualify to receive the Warrants
under the Reorganization Plan. The Warrants will be issued to the Plan
after the Department grants this final exemption. To accept the
Warrants, an Invested Participant must agree to release potential
claims against Unit Corporation and its affiliates (i.e., the Released
Parties). The Applicant represents that this liability release (the
Liability Release) was imposed by the Bankruptcy Court and the
creditors and applies to all former holders of Old Unit Common Stock,
including the Plan.\6\ This proposed exemption requires the Liability
Release to be described to the Invested Participants in a clearly
written communication from Unit Corporation.
---------------------------------------------------------------------------
\6\ The Applicant states that such releases, which are generally
applied to creditors in exchange for cash and other property
(including warrants), are common in the context of bankruptcy
reorganizations. Liability releases allow the debtor-in-possession
to operate its business free from potential claims arising pre-
bankruptcy, so long as all similarly situated creditors and other
claimants are treated equivalently.
---------------------------------------------------------------------------
As a condition of this exemption, the acquisition of the Warrants
by the accounts of the Invested Participants must be implemented on the
same material terms as the acquisition of the Warrants by all
shareholders of Old Unit Common Stock. Further, each Invested
Participant must receive the same proportionate number of Warrants
based on the number of shares of Old Unit Common Stock held by each
shareholder.
Exercising the Warrants. The Applicant states that the final
exercise price for the Warrants is $63.74. Decisions regarding the
exercise or sale of the Warrants can be made only by the individual
Invested Participants in whose accounts the Warrants are allocated. In
this regard, an Invested Participant can exercise their Warrants only
during an Exercise Period, which will begin on the effective date of
this final exemption and end on the earliest of: (a) September 3, 2027;
(b) the consummation of a cash sale (as defined in the Warrant
Agreement); or (c) the consummation of a liquidation, dissolution or
winding up of Unit Corporation.
The Plan Trustee will not allow Invested Participants to exercise
the Warrants held in their Plan accounts if the fair market value of
New Unit Common Stock is less than the exercise price of the Warrants
at that time. Each Warrant that is not exercised during the Exercise
Period will expire upon the conclusion of the Exercise Period. To
protect Invested Participants, this exemption requires Unit Corporation
to notify and inform each Invested Participant in writing at least
thirty days before the conclusion of the Exercise Period that each
Warrant held in the Invested Participant's account will expire upon the
conclusion of the Exercise Period.
Selling the Warrants. The Invested Participants may also sell the
Warrants in over-the-counter (OTC) markets where sale prices for the
Warrants will be determined by supply and demand and not by any
independent valuation of the Warrants.
Disclosures Associated with the Warrants. As a condition of this
exemption, the terms of the Warrants Offering must be described to the
Invested Participants in clearly written communications containing all
material terms provided by the Applicant. In addition to the prospectus
for the Warrant Offering, Invested Participants must receive a separate
communication from the Applicant that clearly explains all aspects of
the Warrants Offering, including: (a) that Unit Corporation is granting
the Warrants to former holders of Old Unit Common Stock; (b) how the
Warrants work; (c) that the decision regarding whether to accept or
reject the Warrants is the decision of the Invested Participant; and
(d) the liability release described above.
The Independent Fiduciary. On September 23, 2020, Unit Corp and the
Committee retained Newport Trust Company (Newport) to serve as the
Independent Plan Fiduciary. Newport represents that: (a) it does not
have any prior relationship with any parties in interest to the Plan;
(b) the total fee it has received from any party in interest to the
Plan does not exceed 1% of Newport's annual revenues from all sources
based upon its prior income tax year; and (c) no party related to Unit
Corporation has, or will, indemnify Newport in whole or in part for
negligence and/or for any violation of state or federal law that may be
attributable to Newport in performing its duties as Independent
Fiduciary on behalf of the Plan.
Independent Fiduciary Report. On January 29, 2021, Newport
completed its Independent Fiduciary Report, wherein it determined that
the Transactions are prudent, in the interest of, and protective of,
the Plan and the Invested Participants. Newport states that its
recommendation to the Committee to pass through the decision whether to
accept or reject the Warrants to Invested Participants comports with
the Plan's standard practice of granting Invested Participants
individual discretion over shareholder matters and with the Plan's
standing practice for corporate actions.
Newport further states that allowing the Plan to hold the Warrants
places Invested Participants on equal footing with other non-Plan
shareholders of Old Unit Common Stock and that this pass-through
empowers Invested Participants to make an election that is consistent
with their particular economic interests. Newport asserts that Invested
Participants who choose to accept the Warrants can realize value
through the future exercise or sale of the Warrants, while Invested
Participants who choose to reject the Warrants would maintain their
legal right to bring claims against Unit Corporation.
Statutory Findings. As required by ERISA section 408(a), the
Department is granting this exemption, because it finds
[[Page 45930]]
that the favorable terms of the Transactions together with the
protective conditions included herein are appropriately protective and
in the interest of the Plan and its participants and beneficiaries. In
this regard, the Department notes that (i) the Independent Fiduciary
must represent the interests of the Plan for all purposes with respect
to the Transactions; (ii) the Invested Participants who choose to
accept the Warrants could realize value through the future exercise or
sale of the Warrants, while Invested Participants who choose to reject
the Warrants would maintain their legal right to bring claims against
Unit Corporation; and (iii) Invested Participants will pay no fees or
commissions and will only be allowed to exercise the Warrants for
economic gain. Absent the receipt of Warrants, the Department notes
that the Invested Participants may not receive any value for the shares
of Old Unit Common Stock they held before the Bankruptcy Filing.\7\
---------------------------------------------------------------------------
\7\ The Department notes that by granting this exemption it is
not expressing any views regarding whether Invested Participants
should ultimately accept or reject the Warrants.
---------------------------------------------------------------------------
Written Comments
In the proposed exemption, the Department invited all interested
persons to submit written comments and/or requests for a public hearing
with respect to the notice of proposed exemption. All comments and
requests for a hearing were due to the Department by March 27, 2023.
The Department received only one written comment, which was from the
Applicant, and did not receive any requests for a public hearing.
Comments From Unit Corporation
Comment 1: Exercising the Warrants. Section 8 of the proposed
exemption states, in relevant part: ``An Invested Participant may
exercise all or any whole number of their Warrants at any time during
the Exercise Period . . .''
The Applicant clarifies that on a quarterly basis, Unit Corporation
will instruct Fidelity to exercise Warrants for Invested Participants
seeking to exercise their warrants, and Fidelity will sell existing
holdings in the Invested Participants' accounts to create the liquidity
needed to exercise the Warrants. In this regard, Fidelity will sell
investments on a pro-rata basis across the participant's current
investments and deposit the proceeds into a money market fund. After
the assets are deposited into the money market fund, they will be sent
to the Transfer Agent collectively for all participants who are
exercising the warrants on a quarterly basis. Invested Participants
will not be able to move money in or out of the money market fund as it
will be used only to facilitate the payment of the Warrants.
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarifications.
Comment 2: Selling the Warrants. Section 8 of the proposed
exemption states, in relevant part: ``Invested Participants will have
the right to sell the Warrants allocated to their Plan accounts on the
open market at any time before the Warrant expiration date in the same
manner as other holders of the Warrants.''
The Applicant clarifies that according to Fidelity, Invested
Participants with Warrants in their Plan account will be allowed to
place a trade any time. However, these requests will be bundled with
other Invested Participants' requests and the actual trades will occur
as a monthly block trade. The Applicant states that Fidelity will
provide ``best efforts'' to liquidate the Warrants, which will trade on
the over-the-counter market, and the trading volume may not fully
support the potential sales volume. The Applicant states that different
strategies will be used such as spreading the sales volume over time to
minimize the impact of the volume as well as contacting wholesalers to
sell a block of Warrants.
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarifications.
Comment 3: Name of the Independent Fiduciary. The proposed
exemption in Section 13 and Section I(e) refers to the Independent
Fiduciary as ``Newport Trust Company of New York, NY.'' The Applicant
requests that the Department instead refer to the Independent Fiduciary
as ``Newport Trust Company.''
Department's Response. The Department acknowledges and accepts the
Applicant's factual clarification.
Comment 4: Exchange where the Warrants will be Sold. Section III(f)
of the proposed exemption states, ``If any of the Invested Participants
fail to provide the Trustee with instructions to exercise or sell the
Warrants received by July 30, 2027, the Warrants will be automatically
sold in blind transactions on the New York Stock Exchange . . .''
The Applicant requests that the Department change ``New York Stock
Exchange'' to ``over-the-counter''.
Department's Response. The Department acknowledges and accepts the
Applicant's factual correction.
The complete application file (D-12026) is available for public
inspection in the Public Disclosure Room of the Employee Benefits
Security Administration, Room N-1515, U.S. Department of Labor, 200
Constitution Avenue NW, Washington, DC 20210. For a more complete
statement of the facts and representations supporting the Department's
decision to grant this exemption, please refer to the notice of
proposed exemption published in the Federal Register on February 9,
2022, at 88 FR 8463.
General Information
The attention of interested persons is directed to the following:
(1) The fact that a transaction is the subject of an exemption
under ERISA section 408(a) does not relieve a fiduciary or other party
in interest from certain requirements of other ERISA provisions,
including any prohibited transaction provisions to which the exemption
does not apply and the general fiduciary responsibility provisions of
ERISA section 404, which, among other things, require a fiduciary to
discharge their duties respecting the plan solely in the interest of
the plan's participants and beneficiaries and in a prudent fashion in
accordance with ERISA section 404(a)(1)(B).
(2) As required by ERISA section 408(a), the Department hereby
finds that the exemption is: (a) administratively feasible; (b) in the
interests of the affected plan and its participants and beneficiaries;
and (c) protective of the rights of the participants and beneficiaries
of such plan.
(3) This exemption is supplemental to, and not in derogation of,
any other ERISA provisions, including statutory or administrative
exemptions and transitional rules. Furthermore, the fact that a
transaction is subject to an administrative or statutory exemption is
not dispositive of determining whether the transaction is in fact a
prohibited transaction.
(4) The availability of this exemption is subject to the express
condition that the material facts and representations contained in the
application accurately describe all material terms of the transactions
that are the subject of the exemption are true and accurate at all
times.
Accordingly, after considering the entire record developed in
connection with the Applicant's exemption application, the Department
has determined to grant the following exemption under the authority of
ERISA section 408(a), and in accordance with the procedures set forth
in 29 CFR part 2570, subpart B: \8\
---------------------------------------------------------------------------
\8\ 76 FR 66637, 66644 (October 27, 2011).
---------------------------------------------------------------------------
[[Page 45931]]
Exemption
Section I. Definitions
(a) The term ``Bankruptcy Filing'' means Unit Corporation's May 22,
2020 filing for relief under Chapter 11 of Title 11 of the United
States Code, in the United States Bankruptcy Court for the Southern
District of Texas, Houston Division, under Case No. 20-327401.
(b) The term ``Exercise Period'' means the period during which
Invested Participants can exercise their Warrants that will end on the
earliest of the following: (1) September 3, 2027; (2) the consummation
of a cash sale (as defined in the Warrant Agreement); or (3) the
consummation of a liquidation, dissolution or winding up of Unit
Corporation.
(c) The term ``Invested Participants'' means Plan participants who
held shares of Old Unit Common Stock as of the date of the Bankruptcy
Filing.
(d) The term ``the Plan'' means the Unit Corporation Employees'
Thrift Plan.
(e) The term ``Independent Fiduciary'' means Newport Trust Company
(Newport) or a successor Independent Fiduciary, to the extent Newport
or the successor Independent Fiduciary continues to serve in such
capacity, and who:
(1) Is not an affiliate of Unit Corporation and does not hold an
ownership interest in Unit Corporation or affiliates of Unit
Corporation;
(2) Was not a fiduciary with respect to the Plan before its
appointment to serve as the Independent Fiduciary;
(3) Has acknowledged in writing that it:
(i) Is a fiduciary with respect to the Plan and has agreed not to
participate in any decision regarding any transaction in which it has
an interest that might affect its best judgment as a fiduciary; and
(ii) Has appropriate technical training or experience to perform
the services contemplated by the exemption;
(4) Has not entered into any agreement or instrument that violates
the prohibitions on exculpatory provisions in ERISA section 410 or the
Department's regulation relating to indemnification of fiduciaries at
29 CFR 2509.75-4;
(5) Has not received gross income from Unit Corporation (including
Unit Corporation affiliates) for any fiscal year in an amount that
exceeds two percent (2%) of the Independent Fiduciary's gross income
from all sources for the prior fiscal year. This provision also applies
to a partnership or corporation of which the Independent Fiduciary is
an officer, director, or 10 percent (10%) or more partner or
shareholder, and includes as gross income amounts received as
compensation for services provided as an independent fiduciary under
any prohibited transaction exemption granted by the Department; and
(6) No organization or individual that is an Independent Fiduciary,
and no partnership or corporation of which such organization or
individual is an officer, director, or ten percent (10%) or more
partner or shareholder, may acquire any property from, sell any
property to, or borrow any funds from Unit Corporation or from
affiliates of Unit Corporation while serving as an Independent
Fiduciary. This prohibition will continue for a period of six months
after the party ceases to be an Independent Fiduciary and/or the
Independent Fiduciary negotiates any transaction on behalf of the Plan
during the period that the organization or individual serves as an
Independent Fiduciary.
(f) The term ``Released Parties'' means: (1) Unit Corporation; (2)
the Reorganized Unit Corporation; (3) the Debtor-in-possession Agent;
(4) the Debtor-in-possession Lenders; (5) the RBL Agent; (6) the RBL
Lenders; \9\ (7) the Consenting Noteholders; (8) the Exit Facility
Agent; (9) the Exit Facility Lenders; and (10) the Subordinated Notes
Indenture Trustee.
---------------------------------------------------------------------------
\9\ RBL stands for ``Reserve Based Lending.''
---------------------------------------------------------------------------
(g) The term ``Unit Corporation'' means Unit Corporation and any
affiliate of Unit Corporation.
(h) The term ``Warrants'' means the Warrants issued by Unit
Corporation in connection with the Bankruptcy Filing that entitle their
registered holders to receive the Warrants, pursuant to an exchange
rate of 1 to .03460447, where one share of Old Unit Common Stock will
convert to .03460447 Warrants, through the payment of an Exercise Price
during the Exercise Period.
Section II. Covered Transactions
The restrictions of ERISA sections 406(a)(1)(A), 406(a)(1)(E),
406(a)(2), and 407(a)(1)(A) shall not apply to: (1) the acquisition by
the Invested Participant accounts, of the Warrants issued by Unit
Corporation, the Plan sponsor, in connection with the Bankruptcy
Filing, in exchange for a waiver of claims against Released Parties;
and (2) the holding of the Warrants by the Plan. In order to receive
such relief, the conditions in Section III must be met in conformance
with the definitions set forth in Section I.
Section III. Conditions
(a) The acquisition of the Warrants by the accounts of the Invested
Participants is implemented on the same material terms as the
acquisition of the Warrants by all shareholders of Old Unit Common
Stock;
(b) The acquisition of the Warrants by the accounts of Invested
Participants resulted from an independent corporate act of Unit
Corporation;
(c) Each shareholder of Old Unit Common Stock, including each of
the accounts of the Invested Participants, receives the same
proportionate number of Warrants, and this proportionate number of
Warrants is based on the number of shares of Old Unit Common Stock held
by each shareholder;
(d) The Warrants are acquired pursuant to, and in accordance with,
provisions under the Plan for the individually-directed investment of
the accounts by the Invested Participants whose accounts in the Plan
held Old Unit Common Stock;
(e) The decision regarding the acquisition, holding and disposition
of the Warrants by the accounts of the Invested Participants have been
and will continue to be made by the Invested Participants whose
accounts received the Warrants;
(f) If any of the Invested Participants fail to provide the Trustee
with instructions to exercise or sell the Warrants received by July 30,
2027, the Warrants will be automatically sold in blind transactions in
over-the-counter (OTC) markets, and the sales proceeds will be
distributed pro-rata to the accounts of the Invested Participants whose
Warrants are sold;
(g) No brokerage fees, commissions, subscription fees, or other
charges have been paid or will be paid by the Plan or the Invested
Participants' accounts for the acquisition and holding of the Warrants,
and no commissions, fees, or expenses have been paid or will be paid by
the Plan or the Invested Participants' accounts to any related broker
in connection with the sale or exercise of any of the Warrants or the
acquisition of the New Unit Common Stock through the exercise of the
Warrants;
(h) Unit Corporation does not influence any Invested Participant's
election with respect to the Warrants;
(i) The terms of the Offering of the Warrants are described to the
Invested Participants in clearly-written communications from Unit
Corporation containing all material terms of the Warrant Offering. In
addition to the prospectus for the Warrant Offering, Invested
Participants must receive a separate communication from Unit
[[Page 45932]]
Corporation that clearly explains all aspects of the Warrants Offering,
including: (1) that Unit Corporation is granting the Warrants to former
holders of Old Unit Common Stock; (2) how the Warrants work; (3) that
the decision regarding whether to accept or reject the Warrants is made
solely by the Invested Participants; and (4) the liability release. The
Independent Fiduciary described in (j) below must review and confirm
that the communications sent to participants meet the requirements of
this exemption;
(j) An Independent Fiduciary that is unrelated to Unit Corporation
and/or its affiliates and acting solely on behalf of the Plan has
determined that:
(1) The Proposed Transactions are prudent, in the interest of, and
protective of the Plan and its participants and beneficiaries; and
(2) The Plan may enter into the Proposed Transactions in accordance
with the requirements of this exemption;
(k) The Independent Fiduciary must document its initial and final
determinations in written reports that include a detailed analysis
regarding whether the Proposed Transactions are in the interests of the
Plan and the Invested Participants, and protective of the rights of
Invested Participants of the Plan;
(l) The Independent Fiduciary or an appropriate Plan fiduciary will
monitor the holding and sale of warrants by the plan in accordance with
the obligations of prudence and loyalty under ERISA section 404(a) to
ensure that the Proposed Transactions remain prudent, protective and in
the interests of the participants.
(m) No later than 90 days after the end of the Exercise Period, the
Independent Fiduciary must submit a written statement to the Department
confirming and demonstrating that all requirements of the exemption
have been met. In its written statement, the Independent Fiduciary must
confirm that all Invested Participants have received everything to
which they are entitled pursuant to the terms of this exemption, the
Warrant Agreement, and any other documents relevant to this exemption.
(n) The Independent Fiduciary must represent that it has not and
will not enter into any agreement or instrument that violates ERISA
section 410 or 29 CFR 2509.75-4;
(o) At least thirty days before the conclusion of the Exercise
Period, Unit Corporation must notify and inform each Invested
Participant in writing that each Warrant held in the Invested
Participant's account will expire and all rights under the Warrants and
the Warrant Agreement will cease upon the conclusion of the Exercise
Period; and
(p) All of the material facts and representations set forth in the
Summary of Facts and Representations are true and accurate at all
times. If there is any material change in a transaction covered by the
exemption, or in a material fact or representation described by the
Applicant in the application, the exemption will cease to apply as of
the date of the change.
Effective Date: The exemption will be in effect on the date that
this grant notice is published in the Federal Register and will
continue until the date all Warrants are exercised, sold, or expire.
Signed at Washington, DC, this 11th day of July 2023.
George Christopher Cosby,
Director Office of Exemption Determinations, Employee Benefits Security
Administration, U.S. Department of Labor.
[FR Doc. 2023-15144 Filed 7-17-23; 8:45 am]
BILLING CODE 4510-29-P
</pre></body>
</html>Indexed from Federal Register on July 18, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.