Unregistered Tender Offers

[Guest halka]

We have recently received several "unregistered tender offers" -- typically first come, first serve offers to purchase less than 5% of outstanding shares at less than current market value. As a plan trustee, is it proper/safe to adopt a policy of NOT passing along such tender offers to participants in a self-directed 401k plan? Would the answer be different if the tender was for employer stock in a traditional 401k?

[Kirk Maldonado]

This one is pretty easy. As a fiduciary, it would take very compelling facts to sell the stock at below fair market value. Also, if the purchaser is a party in interest, selling it to the purchaser at below fair market value would be a prohibited transaction.

However, I recommend that you obtain the services of a competent ERISA attorney as well as a competent securities attorney) to advise you on these matters, if they come up frequently.