Employer Stock

[Guest TCP]

Regarding acquisiiton of employer obligations by a individual account plan (profit sharing plan in this case)the provisions of ERISA 407 provide that:

Immediately following the acquisition of such an obligation ( part of a new issue of employer stock in this case), 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. Also, after the acquisition, the plan may not have more than 25% of its assets invested in obligations of the employer or its affiliates.

Can someone help me with the illusive defintion of "persons independent of the issuer" ? All of the new issue will likely be subscribed by current sharehlders, some of who are officers and directors. Would current directors, current shareholders, officers, etc. be excluded or included in that definintion ?

[Kirk Maldonado]

I think that DOL Ad. Op. 78-25A provides some useful guidance.

[Guest TCP]

I think that DOL Ad. Op. 78-25A provides some useful guidance.

Kirk,

I appreciate the suggestion. I have been unable to locate that DOL Ad. Op. Have searched DOL site as well as a couple of research libraries. Can you tell me where I might locate it ?

[WDIK]

http://erisaadvisoryopinions.com/index.php...es_num/78_index