Rules and Regulations. Notice of proposed exemptions

Agency: Employee Benefits Security Administration, Labor
Action: Notice of proposed exemptions
Citation: FR Doc. 03-15928 · Application No. D-11079, et al.

Summary

This document contains notices of pendency before the Department of Labor (the Department) of proposed exemptions from certain of the prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974 (the Act) and/or the Internal Revenue Code of 1986 (the Code). Written Comments and Hearing Requests All interested persons are invited to submit written comments or requests for a hearing on the pending exemptions, unless otherwise stated in the Notice of Proposed Exemption, within 45 days from the date of publication of this Federal Register Notice. Comments and requests for a hearing should state: (1) The name, address, and telephone number of the person making the comment or request, and (2) the nature of the person's interest in the exemption and the manner in which the person would be adversely affected by the exemption. A request for a hearing must also state the issues to be addressed and include a general description of the evidence to be presented at the hearing.

Supplementary Information

The proposed exemptions were requested in applications filed pursuant to section 408(a) of the Act and/or section 4975(c)(2) of the Code, and in accordance with procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990). Effective December 31, 1978, section 102 of Reorganization Plan No. 4 of 1978, 5 U.S.C. App. 1 (1996), transferred the authority of the Secretary of the Treasury to issue exemptions of the type requested to the Secretary of Labor. Therefore, these notices of proposed exemption are issued solely by the Department. The applications contain representations with regard to the proposed exemptions which are summarized below. Interested persons are referred to the applications on file with the Department for a complete statement of the facts and representations. Kinder Morgan, Inc., Located in Houston, Texas [Exemption Application Number D-11079] Proposed Exemption The Department is considering the grant of the following exemption under the authority of section 408(a) of the Act and section 4975(c)(2) of the Code, and in accordance with the procedures set forth in 29 CFR part 2570, subpart B (55 FR 32836, 32847, August 10, 1990). Section I—Transactions Involving Contributions In-Kind If the proposed exemption is granted, the restrictions of sections 406(a)(1)(E), 407(a)(2), 406(b)(1), and 406(b)(2) of the Act shall not apply to: (1) The acquisition of publicly traded Employer Stock by the Trusts through the voluntary in-kind contribution (the Contribution) of such Stock by the Employer for the purpose of pre-funding welfare benefits provided by the Plans; and (2) the holding by the Trusts of Employer Stock acquired pursuant to a Contribution, provided that: (a) Each Contribution is authorized pursuant to, and made in conformity with, all relevant provisions of each affected Plan; (b) The Plans and/or Trusts do not pay any amount or type of consideration whether in cash or other property (including the diminution of any Employer obligation to fund a Plan) for Employer Stock contributed in-kind by the Employer; (c) Each Contribution is voluntary and unrelated to any Employer obligation to fund a Plan; (d) The Plans do not cede any right to receive a cash contribution from the Employer as a result of any Contribution made to any Plan; (e) The Plans and/or Trusts do not pay any fees or commissions in connection with any Contribution; and (f) Each condition set forth below in Section II is satisfied. Section II—Conditions The exemption is conditioned upon the adherence by the Employer to the material facts and representations described in this notice of proposed exemption and upon the satisfaction of the following requirements: (a) Only Employer Stock that constitutes “qualifying employer securities” (QES), as such term is set forth in section 407(d)(5) of the Act, will be transferred by the Employer to a Trust pursuant to a Contribution; 1 1 Section 407(d)(5) of the Act provides that the term “qualifying employer security” means an employer security that is stock or a marketable obligation (as defined in subsection (e)). After December 17, 1987, in the case of a plan other than an individual account plan, stock is considered a “qualifying employer security” only if such stock satisfies the requirements of subsection 407(f)(1) of the Act. Section 407(f)(1) of the Act provides that stock satisfies such requirement if, immediately following the acquisition of such stock—(A) no more than 25 percent of the aggregate amount of stock of the same class issued and outstanding at the time of acquisition is held by the plan, and (B) at least 50 percent of the aggregate amount referred to in subparagraph (A) is held by persons independent of the issuer. (b) Employer Stock transferred by the Employer on behalf of a Plan will thereafter be held by the Trust (or Trusts) for the purpose of funding welfare benefits for the participants and beneficiaries of such Plan; (c) Employer Stock contributed to, or otherwise acquired by, a Trust will be held in a separate account (an Account) under such Trust; (d) The appropriate fair market value of any Employer Stock contributed by the Employer to a Trust will be established by an Independent Fiduciary, as such term is defined in section III(c) of this proposed exemption; (e) The Independent Fiduciary will represent the interests of the Plans for all purposes related to each Contribution for the duration of the Trust's holding of such Employer Stock, and will authorize the trustee of each Trust to accept Employer Stock pursuant to a Contribution only after such Independent Fiduciary determines, at the time of the transaction, that such transaction is feasible, in the interest of the affected Plans, and protective of the participants and beneficiaries of such Plans; (f) The Independent Fiduciary will: (1) Verify that the price of Employer Stock contributed by the Employer is appropriate and, thereafter, monitor the Employer Stock and have sole responsibility for the ongoing management of the Accounts; and (2) take whatever action is necessary to protect the rights of the Plans funded by the Trusts, including, but not limited to, the making of all decisions regarding the acceptance and acquisition of Employer Stock contributed by the Employer, the retention and any disposition of such Stock, and the exercise of any voting rights associated with such Stock; (g) With certain exceptions described in paragraphs (h) and (i) below, the total amount of: (1) Employer Stock; (2) qualifying employer real property (QERP), as defined by section 407(d)(4) of the Act; and (3) QES other than the Employer Stock (collectively, the Limited Assets) held by each Plan shall not comprise more than twenty-five percent (25%) of the fair market value of the assets held by such Plan as determined on the date of each such transaction; (h) For purposes of calculating the percentage limitation described in paragraph (g) of this section, and to the extent the conditions of Prohibited Transaction Exemption (PTE) 91-38 have been met, 2 Employer Stock will not constitute a “Limited Asset” to the extent that such Employer Stock: 2 PTE 91-38 (56 FR 31966 (July 12, 1991)) requires, among other things, that the interests of a plan in an unrelated common or collective trust fund may not exceed ten percent (10%) of the total of all assets in such common or collective trust fund. (1) Is held by an unrelated common or collective trust fund maintained by an independent bank in which any of the Plans through the Trusts may invest; and (2) Has a total fair market value that does not exceed five percent (5%) of the fair market value of each such common or collective trust fund; (i) Notwithstanding the requirement set forth in paragraph (g) above, the amount of Limited Assets held by a Plan may exceed 25% of the total assets held by such Plan solely by reason of: (1) The Limited Assets appreciate in value at a rate that is greater than the rate attributable to the Plan's non-Limited Assets, and such difference in rates causes the value of the Limited Assets to exceed 25% of the Plan's total asset value; or (2) The non-Limited Assets have declined in value at a rate that is greater than the rate attributable to the Plan's Limited Assets, and such difference in rates causes the value of the Limited Assets to exceed 25% of the Plan's total asset value; and (j) At no time will any of the assets of the Trusts revert to the use or benefit of the Employer. Section III. Definitions (a) The term “Employer” means Kinder Morgan, Inc., any successor to Kinder Morgan, Inc., and/or any affiliates of Kinder Morgan, Inc.; (b) The term “Employer Stock” means shares of publicly traded common stock of the Employer and includes any replacement publicly traded shares of such stock; (c) The term “Independent Fiduciary” means a fiduciary with respect to a Plan who is: (1) Qualified as an investment manager; (2) independent of and unrelated to the Employer; and (3) appointed to act on behalf of the Plans with respect to each Contribution. For purposes of this exemption, if granted, a fiduciary will not be deemed to be independent of and unrelated to the Employer if (i) such fiduciary directly or indirectly controls, is controlled by or is under common control with the Employer; or (ii) the Employer pays such fiduciary an amount of income during the fiduciary's current tax year that exceeds one percent (1%) of such fiduciary's gross income (for federal income tax purposes) over its prior tax year; (d) The term “Plan” means an employee welfare benefit plan maintained by the Employer; and (e) The term “Trust” means a trust which is qualified under Section 501(c)(9) of the Code, and established for the purpose of funding life, sickness, accident, and other welfare benefits for the participants and beneficiaries of the Plans. Summary of Facts and Representations 1. Kinder Morgan, Inc. (hereinafter, either the Employer or the Applicant) is an energy company that operates more than 30,000 miles of natural gas and products pipelines in various states. The Employer is the sole owner of Natural Gas Pipeline Company of America (NGPL), KN Energy Retail Division, Kinder Morgan Power Company, and KM International Services, Inc. The Employer also owns Kinder Morgan G.P., Inc., the general partner of Kinder Morgan Energy Partners, L.P. (KMP). The Employer had annual operating revenues of $1,054,918,000 in 2001 and the book value of the Employer's assets as of December 31, 2001 was $9,533,085,000. The Employer Stock is common stock issued by the Employer. The Applicant represents that the Employer Stock is widely held, publicly traded, and may be freely exchanged on the New York Stock Exchange (NYSE symbol: KMI). The applicant states further that the Employer Stock qualifies as a “qualifying employer security”, as defined by section 407(d)(5) of the Act, and also satisfies the requirements of section 407(f)(1) of the Act. 2. The Employer sponsors the Plans. The Plans provide various types of welfare benefits to current and/or former employees of the Employer. 3 Included in the Plans is the Retiree Plan, a welfare benefit plan that provides health, life, and disability benefits to all full-time salaried, non-union hourly, and union hourly retirees of the Employer. 4 In addition, the Retiree Plan provides disability benefits and life insurance benefits for a small, closed group of individuals currently employed by the Employer. The Applicant estimates that, as of March 1, 2002, the Retiree Plan had 4,891 participants and beneficiaries and $67,268,272 in net assets as of January 31, 2002. The Applicant represents that any of the assets held by the Trusts on behalf of the Retiree Plan may be used to support any of the payments made in connection with the benefits provided by the Retiree Plan. 3 Currently, the Plans are: (1) The Retiree Medical Plan covering the United Mine Workers of America; (2) Western Alfalfa Corporation Retiree Medical Plan; (3) Kinder Morgan, Inc. Medical Plan; (4) Kinder Morgan Bulk Terminals, Inc. Health Benefit Plan; (5) Kinder Morgan, Inc. for Elizabeth River Terminals Employees; (6) Kaiser Foundation Health Plans, Inc. (Northern-Southern California); (7) Mountain Medical Affiliates (Colorado) Plan; (8) Health Net of California; (9) Kinder Morgan, Inc. Master Employee Welfare Benefit Plan; (10) Kinder Morgan, Inc. Dental Plan; (11) Kinder Morgan, Inc. Life Insurance Plan; (12) Kinder Morgan, Inc. Group Business Travel Insurance Plan; (13) Kinder Morgan, Inc. Accidental Death & Dismemberment Insurance Plan; (14) Kinder Morgan, Inc. Long Term Disability Insurance Plan; (15) Kinder Morgan, Inc. Flexible Spending Account Plan; (16) Kinder Morgan, Inc. Weekly Accident and Sickness Plan for Liquid Terminals Employees; (17) Kinder Morgan, Inc. Life Insurance Plan for Elizabeth River Terminals Employees; (18) Kinder Morgan, Inc. Weekly Accident and Sickness and Accidental Death and Dismemberment Insurance Plan for Elizabeth River Terminals Employees; (19) Kinder Morgan, Inc. Long Term Disability Insurance Plan for Elizabeth River Terminals Employees; (20) Kinder Morgan, Inc. Dental Expense Insurance Benefit Plan for Elizabeth River Terminals Employees; (21) Kinder Morgan, Inc. Severance Plan; and (22) Kinder Morgan, Inc. Vision Plan. 4 The Employer currently anticipates pre-funding only the Retiree Plan to the extent this proposed exemption is granted. According to the Applicant, the assets of the Retiree Plan are not invested in loans to any party in interest involved in the transactions described herein. However, the Applicant notes that less than one-half of one percent of the Retiree Plan's assets held in the Trusts may be invested indirectly (through certain funds maintained by an independent bank) in securities of the Employer that constitute QES. The Applicant represents that such investment is permitted by section 407(a) and 408(e) of the Act. 5 5 The Department is expressing no opinion herein as to whether the securities of the Employer held by the Trusts constitute “qualifying employer securities”, as defined in section 407(d)(5) of the Act. The Department is also expressing no opinion herein as to whether the acquisition or holding of such securities is permitted by section 407(a) of the Act or covered by the statutory exemption provided by section 408(e) of the Act. Further, the Department is offering no relief herein for transactions other than those described in section I of this proposed exemption. 3. The Trusts are voluntary employees' beneficiary association trusts (VEBAs). The following Trusts are used to fund the Retiree Plan (the Retiree Plan Trusts): (1) The KMI Post-Retirement VEBA Trust (Bargained VEBA); (2) the KMI Post-Retirement Non-Bargaining VEBA Trust (Nonbargained Medical VEBA); (3) the KMI Retiree Life Insurance VEBA Trust (Life Insurance VEBA); and (4) the KMI Retiree Contributions VEBA Trust (Retiree Contribution Funding VEBA). The Applicant states that each Trust is intended to meet the requirements of section 501(c)(9) of the Code. As such, the trust agreement with respect to each Retiree Plan Trust or any other Trust prohibits the reversion to the Employer of the assets held by such Trust. The Applicant states that the assets held by the Bargained VEBA are used to provide benefits to participants in the Retiree Plan that are covered under collective bargaining agreements. The assets held by the Nonbargained Medical VEBA, meanwhile, are used to provide benefits to participants in the Retiree Plan that are not covered under a collective bargaining agreement. The assets held by the Life Insurance VEBA are used to provide death benefits to both bargained and nonbargained Retiree Plan participants. The assets held by the Retiree Contribution Funding VEBA are used to provide certain benefits to former bargained and nonbargained employees of the Employer and their dependents. 4. The transactions described in this proposed exemption involve the pre-funding of the Retiree Plan by the Employer. 6 The Applicant states that the Employer is not required to make minimum contributions to the Retiree Plan other than the contributions required under certain rate agreements (discussed below). Nevertheless, the Employer now seeks to pre-fund the Retiree Plan Trusts to a combined level of 100% of the accumulated post-retirement benefit obligation of the Retiree Plan, which is an amount redetermined annually by the third-party administrator of the Retiree Plan, based on the Retiree Plan's future obligations (determined in accordance with Financial Accounting Statement 106). 6 However, the Applicant notes that other Plans may be affected since the manner in which welfare benefits are provided to the Employer's current and former employees is subject to periodic restructuring. The Applicant believes that the Retiree Plan, and any other affected Plan, will benefit from the proposed Contributions. In this regard, the Applicant represents that certain opportunities for expansion, acquisition, and debt reduction in the energy industry has re-prioritized the use of cash available to the employer. At no time in the foreseeable future does the Employer anticipate the future funding of retiree welfare benefits through the making of substantial cash contributions to its Retiree Plan (other than those amounts as required under the Rate Agreements). Rather, the Applicant states that the Contributions offer a practical means of pre-funding the Retiree Plan and will make the benefits offered by such Plan more secure. Initially, the Contributions will involve the transfer of specific amounts of Employer Stock to the Retiree Plan Trusts. With respect to the Bargained VEBA, the Employer seeks to contribute approximately $3,882,358 in Employer Stock and $3,430,041 in cash. To the extent this proposed exemption is granted, approximately 50% of the total assets held by the Bargained VEBA will be in the form of Employer Stock. Additionally, with respect to the Nonbargained Medical VEBA, the Employer intends to contribute approximately $11,920,891 in Employer Stock and approximately $767,457 in cash. To the extent this proposed exemption is granted, approximately 15.8% of the total assets held by the Nonbargained Medical VEBA will be in the form of Employer Stock. Further, with respect to the Life Insurance VEBA, the Employer intends to contribute approximately $4,480,667 in Employer Stock and approximately $2,037,024 in cash. To the extent this proposed exemption is granted, approximately 50% of the total assets held by the Life Insurance VEBA will be in the form of Employer Stock. 7 7 The Retiree Contribution Funding VEBA is funded through contributions derived from participants in the Retiree Plan. As such, this VEBA will not receive any Employer Stock pursuant to the Contribution. Thereafter, if granted, the proposed exemption could affect other Plans that provide welfare benefits. In this regard, the Applicant states that Plans other than the Retiree Plan may prospectively hold Employer Stock contributed by the Employer. The Applicant notes that any Contribution to a Plan other than the Retiree Plan and/or any holding of Employer Stock by such Plan will be subject to the same conditions as those applicable to the Retiree Plan. 5. The Applicant states that each Contribution will be voluntary. In this regard, the Applicant represents that the receipt by a Plan of Employer Stock pursuant to a Contribution will not affect the right of such Plan to receive cash contributions from the Employer. The Applicant notes that the Employer is currently subject to two rate agreements (the Rate Agreements) entered into between the Federal Energy Regulatory Commission and NGPL and Kinder Morgan Interstate Gas Transmission LLC. Both Rate Agreements require the Employer to contribute a specified amount annually to a Trust for an indefinite period of time. The Applicant states that all of the contributions made by the Employer to satisfy the funding requirements under the Rate Agreements will be accounted for separately, and only cash contributions by the Employer will be used to satisfy the funding requirements under the Rate Agreements. The Applicant notes that subsequent to the contribution of cash to the Retiree Plan pursuant to any Rate Agreement, such cash is not thereafter segregated from any of the assets held under the Retiree Plan. Therefore, the collective assets of the Retiree Plan are used to pay all Retiree Plan participant benefits as they become due. The Applicant represents that to the extent the Retiree Plan is not sufficiently funded at the time a participant's benefits are due, regardless of the reason for the insufficient funding, the Employer will pay from its general assets the benefits owed to such participant. 6. Each Contribution will be subject to several conditions designed to protect the Retiree Plan and any other affected Plans (hereinafter, either, a Plan). In this regard, Employer Stock transferred to a Trust will be held in the Accounts, which are separate accounts under such Trust, for the sole purpose of funding benefits provided by the Plan. Accordingly, at no time will such Employer Stock revert to the use or benefit of the Employer. In addition, each Contribution must be authorized by the appropriate Plan and made in conformity with the terms of such Plan. Further, no Plan will pay any consideration for the Employer Stock nor any fees or commissions that arise in connection with the Contributions. The Applicant notes that the transactions described herein require the oversight of an Independent Fiduciary. In this regard, a Plan fiduciary who is independent of the Employer and qualified as an investment manager must authorize each contribution of Employer Stock only after such Independent Fiduciary determines at the time of the transaction that such transaction is feasible, in the interest of the affected Plans, and protective of the participants and beneficiaries of such Plans. The Applicant represents that, to date, no Independent Fiduciary has been chosen. However, the Applicant states that the Employer may not pay any Independent Fiduciary that is chosen, or any successor thereto, an amount of income during the fiduciary's current tax year that exceeds one percent (1%) of such fiduciary's gross income (for federal income tax purposes) over its prior tax year. In addition, any Independent Fiduciary chosen by the Employer will acknowledge, in writing, that it: (1) Will act prudently and in the interest of the Plan's participants and beneficiaries with respect to the proposed transactions; and (2) fully understands that risks and benefits associated with the transactions discussed herein. The Applicant represents that any fees or costs associated with the Independent Fiduciary will be borne, either directly or indirectly, by the Trusts. The Applicant represents that the Independent Fiduciary will establish the appropriate fair market value for the Employer Stock. In this regard, the Independent Fiduciary will: (1) Determine the recorded New York Stock Exchange closing price (the Closing Price) for the Employer Stock for the day on which such Employer Stock is contributed to a Trust; and (2) determine whether to discount the Closing Price by analyzing the percentage of issued and outstanding Employer Stock represented by the Contribution. 8 8 According to the Applicant, the Independent Fiduciary will discount the Closing Price of the Employer Stock contributed by the Employer to the Trusts if the Independent Fiduciary determines that such amount of Stock may not be sold at the Closing Price within a reasonable period of time from the date of the Contribution. Prior to approving any Contribution, the Independent Fiduciary will evaluate the appropriateness of the Trust(s)' acceptance of such Contribution given the investment needs of the affected Plan, the nature of the Contribution, and the impact of the Contribution on the risk and return characteristics of such Plan's portfolio. 9 With respect to the nature of the Contribution, the Applicant states that the Independent Fiduciary will perform an analysis of both the Employer Stock and the Employer for the purpose of: (1) Valuing such Employer Stock; and (2) analyzing the acquisition of such Employer Stock in light of the overall portfolio of the affected Plan. The Employer will provide the Independent Fiduciary with access to all information on the Employer that the Independent Fiduciary reasonably requires to make these analyses, including financial statements, annual reports, materials filed with the Securities and Exchange Commission, and independent research and reports. 9 This analysis will include: (1) A review the Investment Guidelines to determine whether investment in Employer Stock is appropriate; (2) a determination as to whether acceptance of the Employer Stock is within the Investment Guidelines with respect to the percentage of Plan assets that may be committed to Employer Stock; (3) a determination as to the value of the Plan's assets committed to equities at the time of the proposed Contribution; (4) a determination as to whether the Plan can accept the proposed Contribution without exceeding the Investment Guidelines relating to equity investments; (5) a determination as to whether the proposed Contribution would have a detrimental effect on the ability of the Retiree Plan to meet its liquidity needs; and (6) a confirmation that the proposed Contribution would not be in lieu of any required asset or cash contributions. The Applicant represents that the Independent Fiduciary will also have full discretion to accept or reject any Contribution, and to otherwise manage the Accounts subject to the specific investment allocation policies and guidelines of the Plan (the Investment Guidelines) as mutually agreed between the Employer and the Independent Fiduciary. These Guidelines will be re-evaluated at least annually by the Independent Fiduciary and the Employer. The Investment Guidelines may prohibit investment of assets in certain types of investments. Notwithstanding the Investment Guidelines mutually agreed to by the parties, the Independent Fiduciary and any successor Independent Fiduciary will remain subject to the fiduciary responsibility provisions of Section 404 of ERISA. The Applicant represents that the Independent Fiduciary will analyze the impact of the Contribution on the risk and return characteristics of the affected Plan's portfolio. In analyzing such impact, the Independent Fiduciary will review: The expected return of the portfolio; the overall volatility of the portfolio; and the beta risk level or market risk of the portfolio. The Independent Fiduciary will compare the performance of modeled portfolios that include the Employer Stock with the performance of comparable portfolios that do not include the Employer Stock. Based on the results of the Independent Fiduciary's analysis, the Independent Fiduciary must determine, prior to its authorization of a Contribution, that the risk/return tradeoff of accepting the Contribution would be at least as favorable, if not more favorable, to the affected Plan(s) than without such Contribution. The Applicant notes that subsequent to a Contribution, the Independent Fiduciary will periodically monitor, and have the ability to so monitor, the Employer Stock. Accordingly, the ongoing management of the Employer Stock will be subject to the sole discretion of the Independent Fiduciary. Finally, the Independent Fiduciary will make all of the decisions regarding the retention and any disposition of the Employer Stock, and the exercise of any voting rights associated with such Stock. 7. The amount of Employer Stock contributed to the Trusts will be limited. In this regard, with limited exceptions, the aggregate fair market value of the Employer Stock will not exceed 25% of the fair market value of the assets of an affected Plan. 10 A Plan may hold and continue to hold Employer Stock in excess of 25% solely in situations where the Employer Stock: Appreciates at a greater rate than that of the other assets held under the Plan ( i.e., other than the Employer Stock); or depreciates at a rate that is less than that of the other assets held under the Plan. However, in no case will a Contribution be made to a Plan that contemporaneously holds an amount of Employer Stock that exceeds 25% of its total assets at the time of the Contribution. 10 This percentage limitation will generally be applied without regard to amounts of Employer Stock held by unrelated common or collective trust funds maintained by independent managers, so long as the Employer Stock held in such unrelated fund does not exceed five percent (5%) of the value of each such common or collective trust fund, and the Plan's interest in such fund does not exceed ten percent (10%) of the total assets in such common or collective trust fund. The Applicant states that the Contributions will benefit the Retiree Plan, and any other Plan so affected. In this regard, the Applicant states that, subsequent to a Contribution, the Employer Stock will not be subject to any restrictions with respect to its marketability. Accordingly, the Employer Stock will be fully transferable at the discretion of the Independent Fiduciary. Further, the Applicant anticipates that Employer Stock contributed by the Employer will appreciate in value and, therefore, will provide security to current and former employees of the Employer with respect to their receipt of welfare benefits through an affected Plan. 9. In summary, the Applicant represents that with respect to the transactions described herein, the requirements of section 408(a) of the Act have been met since, among other things: (a) Each Contribution will be authorized pursuant to, and made in conformity with, all relevant provisions of each affected Plan; (b) The Plans and/or Trusts will not pay any amount or type of consideration whether in cash or other property (including the diminution of any Plan funding obligation of the Employer) for Employer Stock contributed in-kind by the Employer; (c) Each Contribution will be voluntary and unrelated to any current or future Employer obligation to fund a Plan; (d) The Plans will not cede any right to receive a cash contribution from the Employer in connection with any Contribution made to any Plan; (e) The Plans and/or Trusts do not pay any fees or commissions in connection with any Contribution; (f) Only Employer Stock that constitutes QES will be transferred by the Employer to a Trust pursuant to a Contribution; (g) The appropriate fair market value of any Employer Stock contributed by the Employer to a Trust will be established by an Independent Fiduciary; (h) An Independent Fiduciary will represent the interests of the Plans for all purposes related to each Contribution for the duration of the Trust's holding of such Employer Stock and will authorize the trustee of each Trust to accept Employer Stock pursuant to a Contribution only after such Independent Fiduciary determines, at the time of the transaction, that such transaction is feasible, in the interest of the affected Plans, and protective of the participants and beneficiaries of such Plans; (i) The Independent Fiduciary will: (1) Monitor the Employer Stock and have sole responsibility for the ongoing management of the Accounts; and (2) take whatever action is necessary to protect the rights of the Plans funded by the Trusts, including, but not limited to, the making of all decisions regarding the acceptance and acquisition of Employer Stock contributed by the Employer, the retention and any disposition of such Stock, and the exercise of any voting rights associated with such Stock; (j) With certain exceptions, the total amount of the Limited Assets held by each Plan shall not comprise more than 25% of the fair market value of the assets held by such Plan; and (k) At no time will any of the assets of the Trusts revert to the use or benefit of the Employer. Notice to Interested Persons: The applicant represents that notice will be provided within sixty (60) calendar days from the date of publication of this Notice in the Federal Register to all active employees of the Employer by means of a posting at those locations within the principal places of employment of the Employer which are customarily used for notices regarding labor-management matters for review and by an electronic mailing ( i.e. , e-mail) to all active employees. Such posting will contain a copy of the Notice, as it appears in the Federal Register on the date of publication, and a copy of the supplemental statement (the Supplemental Statement), as required, pursuant to 29 CFR 2570.43(b)(2), which will advise such interest persons of their right to comment and to request a hearing. All retirees of the Employer (including both those retirees who participate in a Plan and those terminated participants in a Plan who are not yet receiving retirement benefits) will be notified in a separate first class mailing by Silverstone Group, Inc., within sixty (60) calendar days of the date of publication of the notice of the proposed exemption in the Federal Register . Such newsletter will contain a copy of the Notice, as it appears in the Federal Register on the date of publication, and a copy of the Supplemental Statement, as required, pursuant to 29 CFR 2570.43(b)(2), which will advise such interested persons of their right to comment and to request a hearing.