In addition, the fiduciary obligation to act prudently requires, at a minimum, that the independent fiduciary conduct an objective, thorough, and analytical critique of the valuation. omakase strawberry seeds; marion county impact fees 2021; githens middle school yearbook These can be useful A total of 9.1 million shares of Series C Preferred Stock were contributed to the Employee Stock Plan. better and aid in comparing the online edition to the print edition. Fiduciary Counselors and its advisors negotiated with Northwest and Pinnacle concerning the ability of the Plans to transfer the Pinnacle Stock and the rights of the Plans to cause Northwest to register the shares of Pinnacle Stock under Federal and State securities laws for resale to third parties. WebNorthwest Airlines Retirees This booklet includes summaries of the benefits covered under the Northwest Retiree Benefit Trust for NWA Retirees, eligible Dependents and In this case, the Omnibus Agreement provides the Plans with a Put Option that allows Fiduciary Counselors at any time to put Pinnacle Stock back to Northwest at the greater of the price at the time the stock was contributed or the price at the time of the put. James, a former reservations agent for Northwest Airlines, was injured in a car accident and filed a claim for disability pension benefits under Northwest Airlines Pension Plan for Contract Employees (the "Pension Plan"). The right to engage an investment banker on behalf of the Plans in an IPO, at Northwest's expense. If Fiduciary Counselors and Northwest are unable to agree on the valuation expert, the Omnibus Agreement sets forth a dispute mechanism to arrive at a final determination. In its determinations, the Independent Fiduciary has also taken into account Northwest's request for a minimum funding waiver with respect to Plan contributions in 2003 and 2004, and considered the likelihood that such waiver will be granted. 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, (5) The availability of this exemption is subject to the express condition that the material facts and representations contained in the application are true and complete and accurately describe all material terms of the transactions, which are the subjects of the exemption. Northwest represents that it will make any such contributions in cash. In addition, Delaware law would not restrict NWA Corp., a Delaware corporation, from repurchasing the Pinnacle Stock as the guarantor of the Put Option. WebPortuguese products available Online we mail to all lower 48 states. Eclat was provided with Pinnacle's audited financial statements for the years 2000 and 2001. The result was a net value of $339,178,820.00 for the purposes of determining the value of the stock contributed on January 15, 2003. As a condition of the Proposed Exemption, Fiduciary Counselors, using the services of its independent appraisal firm Eclat, Start Printed Page 49802determined the value of Pinnacle Stock. Webnorthwest airlines pension plan for contract employees united states district court for the northern district of california san jose division willie f. ticzon, plaintiff, northwest airlines pension plan for contract employees, defendants. These tools are designed to help you understand the official document The notice also invited interested persons to submit comments on the proposed exemption and/or to request that a public hearing be held. Open for Comment, Applications for New Awards-American History and Civics Education National Activities Program, Economic Sanctions & Foreign Assets Control, National Oceanic and Atmospheric Administration, Salmonella in Not-Ready-To-Eat Breaded Stuffed Chicken Products, Authority To Order the Ready Reserve of the Armed Forces to Active Duty To Address International Drug Trafficking, Revitalizing Our Nation's Commitment to Environmental Justice for All, Employee Benefits Security Administration, Valuation in Connection With the Right of First Refusal, Fiduciary Counselors March 5, 2003 Comment, Fiduciary Counselors and Eclat April 25, 2003 Submissions, The Eclat Report and the January 15, 2003 Valuation, Negotiation of the Term Sheet and Omnibus Agreement, The Independent Fiduciary's Determinations, Airline Industry and Northwest Financial Condition, Collateral for Pinnacle Stock Contribution, Northwest May 20 and June 10, 2003 Comment Letters, Fiduciary Counselors' July 11, 2003 Submission, Change of Affiliation of Fiduciary Counselors, Termination of the Independent Fiduciary Agreement, Northwest and ALPA Agreement Regarding Pinnacle Stock, August 6, 2003 Northwest and Independent Fiduciary Response, Enhanced Communication with Plan Participants, https://www.federalregister.gov/d/03-21162, MODS: Government Publishing Office metadata, Current Liability using 6.65% interest rate (IRC 412(l)), Market Value of Assets (with PY02 accrued contributions), Actuarial Value of Assets (with PY02 accrued contributions). )J',^3rieAM7+%n[(PiZZ3'MC1*v The amount of the Initial Contribution is equal to the amount that was required to meet the quarterly funding requirements under ERISA section 302 and Code section 412(l) for the Contract Plan due on January 15, 2003. As also mentioned in the March 3 Comment, the Independent Fiduciary notes that at the fifth paragraph of the Voting Provisions section in the Proposed Exemption at column 2 of 68 FR 2585, the description of the required affirmative vote of the director designated by the Plans should be expanded to include the approval of: amending the Note, amending Pinnacle's charter or by-laws in certain respects, implementing certain changes in Pinnacle's capital structure, or issuing capital stock prior to an IPO, as set forth in the Omnibus Agreement. This model is designed to value firms, like Pinnacle, that are expected to go through three phases of growthan initial phase of high growth, a transitional period where the growth rate declines, and a steady-state period where growth is stable. WebLarkin are participants in the Northwest Airlines Pension Plan for Contract Employees and also worked for the airline during the class period. We discussed the Series C Preferred Stock buy back at length in our regularly scheduled April and June board meetings, and held two special meetings in July devoted exclusively to the Series C issue * * *. The January 15, 2003 Eclat valuation report (January 15, 2003 Valuation) was attached to the Independent Fiduciary's report submitted to the Department on April 25, 2003 (see below for a discussion of these documents). District 143 members at of the issuing agency. Once these growth assumptions are made, the present value of expected free cash flow is calculated. Northwest asserts that its beliefs in this regard have been independently verified. A comprehensive set of representations and warranties relating to both Pinnacle, Northwest and its affiliates. are not part of the published document itself. (l) An analysis of the market price of securities of corporations engaged in the same or similar lines of business as Pinnacle, which are actively traded on a recognized exchange or automated broker-dealer quotation system. All transactions involving the Plans in connection with the contribution of Pinnacle shares will be no less favorable to the Plans than arm's length transactions involving unrelated parties. (i) The Plans incur no fees, costs or other charges as a result of their participation in any of the transactions described herein. Fiduciary Counselors, AIC and Eclat also noted that some of the information used by Eclat for the January 15, 2003 Valuation was not available during the initial valuation in the Eclat Report. The time to employees for northwest airlines cited. 68 FR 49792 - Northwest Airlines Pension Plan for Salaried Employees (Salaried Plan), the At the time a participant exercises conversion rights, the Series C Preferred Stock is converted to Common Stock, the Common Stock is sold and cash is allocated to participant accounts. Fiduciary Counselors, AIC and Eclat represent that the ASA between Northwest and Pinnacle provided the framework for the final valuation. The drop-off in premium passenger traffic, the weak U.S. economy, and the increased presence of low-cost carriers has impacted the ability of the network carriers to generate high yield revenue. Statement Income Company. On July 23, 2003, Northwest confirmed to the Department that the modifications to the ASA referred to in the Proposed Exemption have been made. dog off leash ticket california; Income Tax. The Proposed Exemption contemplates both voluntary and required contributions to the Northwest Plans, as did the Application filed by Northwest on November 6, 2002 and the Omnibus Agreement. Northwest expects that the Start Printed Page 49807board, like any board fulfilling its fiduciary duties, will seek to maximize the value of the enterprise. Start Printed Page 49803Northwest stated [i]n the absence of an exemption, Northwest would have to consider the contribution of NWA Corp. stock or an IRS waiver. Northwest represents that the amount of shares necessary to satisfy the required contribution was based upon a final valuation of Pinnacle by Fiduciary Counselors, relying on a valuation report prepared by Eclat Consulting. In 2005, the Pension Benefit Guaranty Corp. took over four United Airlines pension plans, incurring a $7.35 billion loss. '$^CBn$A;r14RNq;{!yD6@U_)fix?R:6blXsB(FyTX(EhFv$0A|z lw)HO2 %2 Northwest has from 30 to 180 days to settle the option. (5) The guaranty to the Plans by Northwest Airlines Corporation of Northwest's obligation to honor the Put Option. grassroots elite basketball ; why does ted lasso have a southern accent . ; Eclat used the Black-Scholes option-pricing model to determine the value of the Put Option. In response to the commenters' concerns about the role of the independent fiduciary, the Department believes that it would be helpful to provide its views on the responsibilities of an independent fiduciary in connection with the in-kind contribution of property to an employee benefit plan. ). Without modifications to the pilot collective bargaining agreement, the Proposed Exemption contemplated that the other two Plans would receive a contribution of Pinnacle Stock in an amount equal to the maximum amount permitted under section 407(a)(2) of ERISA, while the Pilot Plan would receive no contributions of Pinnacle Stock. On January 17, 2003, the Department published a notice in the Federal Register (68 FR 2578) of a proposed individual exemption (the Proposed Exemption). See Omnibus Agreement at section 7.3. As of December 31, 2002, the carrier had taken possession of 51 regional jets. The Independent Fiduciary negotiated a comprehensive set of representations and warranties relating to both Pinnacle Corp. and Northwest and its affiliates relating to Northwest's ability to honor the Put Option and to the value of Pinnacle Corp. Until the ACFR grants it official status, the XML It is not an official legal edition of the Federal The Independent Fiduciary notes that the Proposed Exemption, in the first column of 68 FR 2580 (first full paragraph), makes reference to voting restrictions and limits on the ability of the Plans to dispose of the Pinnacle Stock, except pursuant to an initial public offering (IPO) initiated by Northwest or by exercise of the Put Option. Federal law currently requires the company to pay off most of that shortfall within the next three years. The third expert then determines which of the two assessed values should be assigned to such non-cash consideration. Several commenters requested that Northwest provide for enhanced communication with the Plan participants concerning the Exemption Transactions. 04/28/2023, 39 Northwest Response: Northwest represents that it did not value Pinnacle Airlines for purposes of the Exemption Transactions. In its deliberations, which included its analysis of all aspects of the transactions, the Independent Fiduciary has consistently represented for the record that no contribution of Pinnacle Stock will be accepted on behalf of the Plans unless such transactions are found by the Independent Fiduciary to be in the interests of the Plans. This change generally reduces the length of the available Deferral when the Plans hold more than $325 million in Pinnacle Stock (measured as of the date of each contribution). 2,955. The Northwest Airlines Pension Plan for Contract Employees is approximately forty percent of the Master Trust. The value of the transaction is enhanced due to the downside protection that this Put Option provides. In doing so, Fiduciary Counselors' legal obligations run exclusively to the Plans, not to Northwest. The Contract Create an Account and Draft a QDRO for This Plan. See Omnibus Agreement at section 11.2. endstream endobj 10 0 obj[/Separation/PANTONE#20186#20C/DeviceCMYK 9 0 R] endobj 11 0 obj<> endobj 12 0 obj<>stream 6. The restrictions of sections 406(a), 406(b)(1) and (b)(2), and 407(a) 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) through (E) of the Code, shall not apply to: (1) The transfer of the common shares of Pinnacle Airlines Corp. (Pinnacle Stock) to the Northwest Airlines Pension Plan for Salaried Employees, the Northwest Airlines Pension Plan for Pilot Employees, and the Northwest Airlines Pension Plan for Contract Employees (the Plans) through the in-kind contribution(s) of such shares by Northwest Airlines, Inc. (Northwest), a party in interest with respect to such Plans; (2) The holding of the Pinnacle Stock by the Plans; (3) The sale of the Pinnacle Stock by the Plans to Northwest; (4) The acquisition, holding, and exercise by the Plans of a put option (the Put Option) granted by Northwest which permits the Plans to sell the Pinnacle Stock to Northwest; and.