northwest airlines pension plan for contract employees

484 F3d 1211 Opeta v. Northwest Airlines Pension Plan for on Fiduciary Counselors asserts that the sale of Fiduciary Counselors will, if anything, increases their independence. 2. Once the Plans own 50% of the Pinnacle Stock, the Plans' director will exercise additional approval rights relating to the company's bylaws and capital structure. 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. # A1430. The Proposed Exemption is part of Northwest's strategy to achieve that goal. (a) The term independent fiduciary means a fiduciary who is: (1) independent of and unrelated to Northwest and its affiliates, and (2) appointed to act on behalf of the Plans for all purposes related to, but not limited to, (A) the in-kind contribution of the Pinnacle Stock by Northwest to the Plans, (B) the holding of the Pinnacle Stock by the Plans; (C) the acquisition, holding, and exercise by the Plans of the Put Option, and (D) any sale of the Pinnacle Stock by the Plans. documents in the last year. Employee Thus, the ALPA agreement will be formally entered into and effective on the date of the voluntary contribution. Northwest Airlines Freezes Pension Plans The closing date of the purchase and sale of shares with respect to which the Put Option has been exercised will be the 30th calendar day after such notice is given. The President of the United States manages the operations of the Executive branch of Government through Executive orders. Using the Black-Scholes American option pricing model, Eclat determined the value of the Put Option to be $20,680,684. Northwest Airlines Pension Plan for Contract The labor situation is Start Printed Page 49797stable. Fiduciary Counselors states that the Omnibus Agreement provides: Fiduciary Counselors stated that, in conjunction with Northwest's contribution of Pinnacle stock to the Plans, Northwest has provided the Plans with a Put Option to protect them from a possible decline in Pinnacle's shares' value. the official SGML-based PDF version on govinfo.gov, those relying on it for In this regard, Northwest believes that this provided even more favorable terms for the Plans than those reflected in the Term Sheet.[2]. Pension Benefit Guaranty Corporation. WebFor PBGC pension benefits Flight Attendants must call the Pension Benefit Guaranty Corporation (PBGC) at 1-800-400-7242 to initiate the pension benefit process. documents in the last year, by the Environmental Protection Agency Ioane John Opeta appeals the district court's judgment that he is not "totally and permanently" disabled, and therefore ineligible for a disability pension benefit under the Northwest Airlines Pension Plan for Contract Employees (the "Plan"), which is administered by Northwest Airlines ("Northwest") and regulated by the Employee Eclat used the Black-Scholes option-pricing model to determine the value of the Put Option. The IF Report states that Eclat expects that low-cost carriers will expand and gain share in the future but feels that Northwest is in the best shape of any network carrier to compete. NORTHWEST AIRLINES PENSION PLAN Archived News Release Caution: Information may be out of date. An Initial Contribution was made in the amount of $41,149,911. on See Omnibus Agreement at section 7.2. Pension Plan Administration UNITED STATES DISTRICT COURT SOUTHERN 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. on (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. Document page views are updated periodically throughout the day and are cumulative counts for this document. provide legal notice to the public or judicial notice to the courts. The representations and warranties must be true at the time of any Contribution. 1, 1995) transferred the authority of the Secretary of the Treasury to issue exemptions of the type requested to the Secretary of Labor. 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. Northwest notes that the board previously approved the Omnibus Agreement, which includes the Put Option, and no further action would be required of the board in the event that the Put Option is exercised by the Independent Fiduciary. The voluntary contribution to the Pilot Plan will consist entirely of Pinnacle Stock. on FederalRegister.gov His members wages at Northwest average just over $17 an hour, plus benefits. 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 * * *. See Omnibus Agreement at section 9.1(d). The Proposed Exemption further required that the independent fiduciary obtain expert valuation advice from an independent valuation firm. Northwest observed that the comments submitted to the Department raised several concerns regarding the contribution of Pinnacle Stock to the Plans, as contemplated by the Proposed Exemption. A number of commenters asked, if Pinnacle Stock is contributed to the Plans, how would this affect the manner in which other Plan assets are invested? Information about this document as published in the Federal Register. Indeed, the January 15, 2003 Valuation indicates that the Plans could receive a 20 percent IPO premium in connection with the Pinnacle Stock investment. If the markets return, substantial upside will benefit the Plans. See Omnibus Agreement at section 8.2. In considering whether to accept an in-kind contribution, the Independent Fiduciary's responsibilities include the following: 1. Participants and beneficiaries of the Plans benefit from Northwest's improved liquidity and continued viability and competitiveness in the current economic environment. Based on the Eclat and AIC valuations, the Independent Fiduciary determined that the contribution of 1,938,000 shares of Pinnacle Stock should be valued at $43,821,894 as of January 15, 2003, the date the contribution occurred. Any remaining Pinnacle stock will then be contributed to the Contract Plan. The Plans will be granted a Put Option with respect to each share of Pinnacle Stock contributed to the Plans, which may be exercised by the Independent Fiduciary at any time. Eclat's original valuation for PBGC was based on publicly available information, primarily a draft S-1 Registration Statement which contained financial information only for the first nine months of 2002. On December 11, 2007, Northwest and ALPA implemented the Money Purchase Plan for Pilot Employees (MP3), which replaced the Northwest Airlines Pension Plan for Pilot Employees. 2. As Pinnacle grows to 95 aircraft, the number of passengers and revenue will more than double. The Northwest board of directors determined that at this time the company could not legally redeem the 4.8 million shares of its Series C Preferred Stock still outstanding and made the following statement: After a thorough review of the legal restrictions applicable to the company, the board concluded that Northwest was not able to buy back the Series C Preferred Stock, at this time. Finally, the Department notes that the Independent Fiduciary's satisfaction of its obligations in connection with the determination of the fair market value of the Pinnacle Stock as previously described by the Department in the Preamble to the final exemption is a critical factor in the Department's decision to grant a final exemption. grassroots elite basketball ; why does ted lasso have a southern accent . ; The Department wishes to clarify that any replacement Independent Fiduciary must be acceptable to the Department and must assume its responsibility prior to the effective date of the removal of the predecessor Independent Fiduciary. As noted in the June 27, 2003 letter from Northwest and ALPA to the Department, Northwest states that the Letter Agreement will be executed in connection with the voluntary contribution. 1. As described in the Proposed Exemption, the current provisions of the Pilot Plan and the pilot collective bargaining agreement prohibit the Pilot Plan from acquiring or holding employer securities. Signed at Washington, DC this 14th day of August 2003. The Independent Fiduciary and its advisors analyzed the voting, transfer and put right features of the Pinnacle Stock and engaged in significant negotiations on those features with Northwest. As Northwest's track record demonstrates, Northwest agrees that the Plans need to be soundly funded. 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. Northwest expects that the Start Printed Page 49807board, like any board fulfilling its fiduciary duties, will seek to maximize the value of the enterprise. (5) The guaranty to the Plans by Northwest Airlines Corporation of Northwest's obligation to honor the Put Option. WebCompany profile page for Northwest Airlines Pension Plan For Contract Employees including stock price, company news, press releases, executives, board members, and documents in the last year, 9 Total cost is only $ 299.00. 3. Several commenters requested that Northwest provide for enhanced communication with the Plan participants concerning the Exemption Transactions. As a result of its review, certain changes were incorporated in the new Airline Services Agreement entered into on January 14, 2003 (ASA). Northwest represents that the contribution was effected after the date on which the Department had completed work on the Proposed Exemption. Air Lines (k) A statement of past transactions involving Pinnacle Stock, including dates, amounts, price, and whether the transactions were at arms-length, as well as a description of any attempts to buy or sell Pinnacle Stock over the last five years, including a description of any previous plans for initial public offerings. WebKondratowicz v. Northwest Airlines, Inc.-2-I. 6. Websurrey accident today 176 street; Servicios. The Omnibus Agreement further requires that Northwest provide regular notice of its liquidity to Fiduciary Counselors. On August 1, 2003, Northwest issued a press release that announced its decision on the Series C Preferred Stock. However, Northwest understands that some of United's airline services agreements have been renegotiated and that it has been reported that the airline services agreement between United and Atlantic Coast Airlines is the subject of current negotiations. Fiduciary Counselors adds that AIC, which remains a subsidiary of Aon, will continue to act as advisor in connection with this engagement. After that date, the Omnibus Agreement provides Fiduciary Counselors with the right to cause an IPO of Pinnacle Stock. WebRecourse obligation of north carolina; northwest airlines pension plan for contract employees get this defense? Eclat was also provided with unaudited interim and full year financial information for 2002. The Public Inspection page may also Northwest instructed State Street Bank to establish an Investment Fund in connection with the Plans' Master Trust. Northwest asserts that, if its current cash needs were not so great, Northwest would make its pension contributions in cash as it has in the past. documents in the last year, 669 Eclat states in the January 15, 2003 Valuation that the valuation includes competitive, operational and financial elements essential to validating Pinnacle's current market viability as a Northwest regional partner and as a stand-alone airline and that the valuation describes the state of the regional airline industry, delves into some of the more important issues surrounding Pinnacle specifically, provides a brief financial review of the carrier, explains the valuation methodology, compares Pinnacle to Continental Express, and comments on the stability of Northwest. Wisdom. The Employee Stock Plan was established through labor negotiations between Northwest and its unions in 1993 to hold contributions of Northwest Airlines Corporation Series C Preferred Stock. Despite the turmoil in the industry in recent years, Eclat felt that Northwest has emerged as, perhaps, the most stable airline in the industry. )J',^3rieAM7+%n[(PiZZ3'MC1*v 17, 20.) Once Pinnacle Stock is publicly traded, the Put Option will be suspended if all of the remaining shares of Pinnacle Stock held by the Plans have a market value not less than 110% of the Floor Price and such shares are freely tradable. The requirement that the director nominated by the Plans approve any changes in the ASA will ensure that any modification of those terms is done only if the changes, taken as a whole, are favorable to Pinnacle and its shareholders, including the Plans. The Independent Fiduciary was also advised on the requirements of the U.S. Department of Transportation regarding restrictions on directors of airlines. Moreover, when the IPO of Pinnacle Stock occurs, the Plans may benefit from a potentially significant IPO premium with respect to their holdings of Pinnacle Stock. Each document posted on the site includes a link to the The Series C Preferred Stock ranks senior to Common Stock with respect to liquidation and certain dividend rights. However, Northwest notes that it has received the consent of the Air Line Pilots Association (ALPA), the union representing Northwest pilots, to permit the Pilot Plan to hold Pinnacle Stock (see below for discussion of the Northwest and ALPA Letter Agreement). During the Hearing, the Department asked Northwest to provide information concerning the funded status of the Pilot Plan, Contract Plan and Salaried Plan at the end of 2002. Through reduced employment levels and other cost-cutting measures, Northwest has been able to minimize the ongoing impact of reduced revenue levels, which the Independent Fiduciary believes are likely a permanent change in the industry. Eclat furnished to the Independent Fiduciary its report and opinion as to the value of the contributed Pinnacle Stock at the time of the Initial Contribution on January 15, 2003 (January 15, 2003 Valuation). ). The original Employee Stock Plan was established in 1993. Register documents. At the conclusion of these deliberations, it was clear that the legal restrictions applicable to stock buy backs under Delaware Law did not permit Northwest to proceed at this time with the buy back of the Series C Preferred Stock. WebNorthwest Airlines Pension Plan for Contract Employees, 484 F.3d 1211 Brought to you by Free Law Project, a non-profit dedicated to creating high quality open legal information. In addition, changes to the ASA and other significant transactions must be approved by a majority of Pinnacle's directors, which majority must include the Plans' director. 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. Total cost is only $ documents in the last year, 1471 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. We devoted substantial time and effort to this issue. To exercise the Put Option, the Independent Fiduciary must provide written notice to Northwest of its election to put to Northwest any or all of the shares of Pinnacle Stock then held by the Plans. These negotiations resulted in agreements (Agreements) between Northwest and each of its unions under which Northwest would contribute to the Employee Stock Plan a newly created, special class of stock (the Series C Preferred Stock) in an amount that would equal the monetary value of certain wage and other concessions agreed to by the unions. documents in the last year, 887 Northwest reported a net loss of $46 million, with operating income of $8 million in the 3rd quarter of 2002. 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. Once all of the Pinnacle Stock in such an account has been liquidated, that subaccount may be dissolved. The Employee Stock Plan is a profit sharing plan that is tax qualified under section 401(a) of the Code and subject to ERISA. The Omnibus Agreement also provided for an Additional Initial Contribution to the Contract Plan in the amount of $2,671,983 (118,167 shares valued at $22.61 per share).

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