Northwest expects that the Start Printed Page 49807board, like any board fulfilling its fiduciary duties, will seek to maximize the value of the enterprise. Webdefined benefit pension, the IAM National Pension Plan, which takes the place of the company pension plan that was frozen as part of the bankruptcy restructuring. 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. Eclat will furnish a similar valuation report with respect to each subsequent contribution. As a board, we recognize the valuable contributions our employees made to the company during the 1993-1996 wage reduction period and acknowledge the company's obligation to buy back the Series C Preferred Stock. 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. Until the ACFR grants it official status, the XML Northwest guarantees the principal attributable to the investment in Pinnacle Stock. Northwest asserts that in valuing Pinnacle Stock, there are well-established valuation methodologies available to the valuation experts to assess the value of non-public securities like Pinnacle Stock. Statement Income Company. The Proposed Exemption is part of Northwest's strategy to achieve that goal. Northwest Airlines Pension Plan For Contract Employees These guidelines contemplate that a certain amount of assets will be allocated to securities with risk and return characteristics similar to Pinnacle Stock. Start Printed Page 49801. Total cost is only $ 3. Prior to valuing the put option, Eclat's estimate of the value of Pinnacle was $333,436,072, after application of an illiquidity discount of 15% and a minority discount of 5%. The Department notes that the appointment of an independent fiduciary to represent the interests of the Plans with respect to the transactions that are the subject of the exemption request was a material factor in its determination to propose exemptive relief. 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"). 4. The goal of the Pinnacle Stock contribution is to (1) provide the Plans with a valuable security, (2) meet near term pension funding obligations, and (3) allow Northwest to preserve cash to withstand the current economic environment. 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. WebNORTHWEST AIRLINES INC and NORTHWEST AIRLINES PENSION PLAN no CONTRACT EMPLOYEES Defendants-Appellees ON next FROM. Investigates Pension Fund at Northwest Northwest noted that the Omnibus Agreement added certain valuation details that expand the discussion of the Right of First Refusal at 68 FR 2586. [8] WebCompany profile page for Northwest Airlines Pension Plan For Contract Employees including stock price, company news, press releases, executives, board members, and Northwest will make a voluntary contribution to the Pilot Plan on or before September 15, 2003 so that the funded current liability percentage for the Plan is at least 80% for the 2003 Plan Year. Several commenters requested that Northwest provide for enhanced communication with the Plan participants concerning the Exemption Transactions. WebThis booklet describes the Northwest Airlines Pension Plan forContract Employees (the Plan and the Contract PensionPlan). Once the Plans hold more than 50 percent of the Pinnacle Stock, the affirmative vote of the director designated by the Plans shall be required to approve the appointment of any new CEO of Pinnacle and compensation of any CEO, any amendments to the $200 million Note of Pinnacle Airlines, Inc. held by Northwest, the amendment of Pinnacle's charter or by-laws in certain respects, or the implementation of certain changes in Pinnacle's capital structure or the issuance of capital stock prior to an IPO. He also filed a claim for long-term disability benefits under Northwest Airlines Long Term Disability Plan ("LTD Plan"). However, audited 2002 financial statements were not available at the time of Eclat's valuation for the January 15, 2003 contribution. Use the PDF linked in the document sidebar for the official electronic format. regulatory information on FederalRegister.gov with the objective of Webthe Northwest Airlines Pension Plan for Contract Employees (Collectively, the Plans) Located in Eagan, MN AGENCY: Pension and Welfare Benefits Administration, Department of Labor. 17, 20.) Similarly, U.S. Airways did not reject its ASA with its regional airline partners Mesa and Chautauqua. Representativesconduct frequent employee meetings to explain plan provisions or recent plan changes. 04/28/2023, 244 As the Plans' independent fiduciary, Fiduciary Counselors must act prudently and in the interests of the Plans and their participants. The value of the transaction was also adjusted for the period between the exercise of the put and the Plan's receipt of the funds. Fiduciary Counselors adds that AIC, which remains a subsidiary of Aon, will continue to act as advisor in connection with this engagement. Number of retired or separated participants receiving benefits. ALPA represents that it recognizes the need for Northwest to preserve liquidity so ALPA has agreed to modify the collective bargaining agreement and the Pilot Plan to permit the Pilot Plan to acquire and hold employer securities through a voluntary contribution to the Pilot Plan. pension plan for flight attendants: American Airlines union AIC valued the Put Option at $20,680,684 using a Black-Scholes American option-pricing model. the material on FederalRegister.gov is accurately displayed, consistent with Northwest Airlines Pension Plan for Salaried Employees According to the IF Report, Eclat estimates that Pinnacle's value to the Northwest domestic system is between $520 million and $540 million annually as the carrier exists today. 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. The Omnibus Agreement provided for two contributions to be made to the Contract Plan on January 15, 2003. and services, go to No. are not part of the published document itself. Although Eclat cannot know what market conditions might be like during this settlement period, this rate also exceeds the Plan's assumed asset earnings rate. For the reasons set forth below, the Independent Fiduciary has concluded that it is prudent for the Plans to accept the Contribution and that the Contribution is in the interest of the Plans and their participants and beneficiaries: Transfer restrictions on Pinnacle Stock held by the Plans are reasonable in light of the Put Option. Northwest also believes that the value of Pinnacle Stock is less exposed to bankruptcy risk than Northwest stock. Northwest Airlines Pension Plan For Contract Employees 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. None of the named plaintiffs is a participant in the Northwest Airlines Pension Plan for Salaried Employees, although they bring this action on behalf of participants in that plan as well. Here, they assert, the purpose of the exemption, to provide the Plans with a valuable security while maintaining Northwest's liquidity, would be undermined if assets were required to be used as collateral in connection with contributions of Pinnacle Stock. Register documents. Additionally, by letter dated July 15, 2003, Fiduciary Counselors represents that in preparing the valuation for subsequent contributions, Eclat will reexamine the assumptions used in preparing the initial valuation and will continue to stress test the assumptions in its valuation model to reflect the credit-worthiness of Northwest and changing conditions in the regional jet market. In this regard, section 11.3(b) of the Omnibus Agreement now provides that at the request of a majority of Pinnacle's independent directors, a fairness opinion will be obtained from an investment bank respecting certain Affiliate Transactions. The Public Inspection page In negotiating the rights and restrictions set forth in the transfer and registration rights provisions of the Omnibus Agreement, Fiduciary Counselors balanced the need of the Plans to achieve greater diversification in light of the anticipated holdings of shares of Pinnacle Stock with the need to maximize the value of the investment in such stock. The Independent Fiduciary must prudently determine the fair market value of the Pinnacle Stock as of the date it is contributed to the Plans. WebMore information about DELTA AIR LINES, INC.. Form 5500 Filing Information Submission information for form 5500 for 401k plan NORTHWEST AIRLINES PENSION PLAN FOR CONTRACT EMPLOYEES better and aid in comparing the online edition to the print edition. In its filing for Chapter 11 bankruptcy protection, Northwest Airlines highlighted a pension deficit that's now reached $3.8 billion. Fiduciary Counselors asserts that the sale of Fiduciary Counselors will, if anything, increases their independence. This additional contribution was agreed upon as a result of a technical concern raised by Fiduciary Counselors regarding covenants in Northwest's $1.125 billion Credit and Guarantee Agreement dated October 24, 2000, as amended under which Northwest is the borrower (the Credit Agreement), with Northwest's bank lenders. northwest airlines pension Several commenters asked whether the Plan trustees should decide when to initiate a public offering since the Plans will own a majority of Pinnacle Stock. northwest airlines pension information. Minnesota law would not restrict the repurchase of Pinnacle stock by Northwest, a Minnesota corporation, which issued the Put Option. Northwest will no longer guarantee a minimum operating margin in 2008. The target margin will be reset after 2008 based on historical and expected operating costs. (d) A statement of the stock's value, the methodologies used in determining the value, the reasons for the valuation in light of the methodologies, and the reasons that the appraiser chose to apply particular valuation methods rather than others. Northwest noted that the description of the Put Option in the first and second columns at 68 FR 2580 of the Federal Register notice accurately describes the structure of the Put Option as described in Northwest's Application. Northwest represents that the final terms of the Omnibus Agreement reflect the fact that Fiduciary Counselors has represented the Plans' interests. Northwest Airlines On December 2, 2002, the Employee Stock Plan was divided into three components, which were then merged into the existing Northwest Airlines Retirement Savings Plan for Pilot Employees, Northwest Airlines Retirement Savings Plan for Contract Employees and Northwest Airlines Retirement Savings Plan for Salaried Employees. If previous valuations or analyses do not comport with these conditions, the Independent Fiduciary must perform any additional work necessary to make the valuations and analyses consistent with the conditions of this exemption. In the case of United Airlines, for example, the airline has not rejected the ASAs it has entered into with its regional airline partners Atlantic Coast Airlines, SkyWest and Air Wisconsin. 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 Northwest believes this is the best outcome for all Plan participants and beneficiaries. In addition, the Independent Fiduciary negotiated the right to engage an investment banker on behalf of the Plans in an IPO, at Northwest's expense. that agencies use to create their documents. (5) The guaranty to the Plans by Northwest Airlines Corporation of Northwest's obligation to honor the Put Option. 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. The Independent Fiduciary represents that after extensive negotiations during November and December, 2002, and January, 2003, Fiduciary Counselors and Northwest, along with Pinnacle and NWA Corp., Northwest's ultimate parent company, entered into an Omnibus Agreement, dated January 15, 2003, which sets forth the terms and conditions pursuant to which Fiduciary Counselors will accept the Pinnacle Stock (the Contribution).[6].
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