Employer Securities

[Guest TCP]

I have a state regulated corporation that is making a supplemental securites offering under state law (i.e., not SEC - less than 500 shareholders). The question regards purchase of some of these securities by the company's defined contribuiton profit sharing plan (no 401k features as of now).

The provisions of Sec 407 provide that:

Immediately following the acquisition of such an obligation, the plan may not hold more than 25% of the aggregate amount of the obligations issued in such issue and outstanding at the time of the acquisition and persons independent of the issuer must hold at least 50% of the aggregate amount of that issue.564 Also, after the acquisition, the plan may not have more than 25% of its assets invested in obligations of the employer or its affiliates.

What is the defintion of "persons independent of the issuer" ? Would current directors, shareholders, officers, etc. be excluded from that definintion ?