...an ESOP is a win-win-win situation.
Consideration
Preliminary Analysis
No fee initial review of corporate and individual objectives and data.
Phase I: “Decision Package” Feasibility Study
Preliminary Stock Appraisal
Estimate the company’s fair-market value.
Financial Analysis
Estimate long-range effects of an ESOP on company operations under a variety of circumstances.
Repurchase Obligation Study
Conduct an analysis to establish the future payout requirements of the ESOP. Discuss options for funding repurchase obligation.
Design Study
Determine features of an ESOP that will positively affect employee motivation while implementing seller and corporate objectives.
Phase II: Installation
Financing
Structure appropriate financing for a leveraged transaction and recommend options for ESOP loan structuring.
Trustee & Independent Stock Appraisal
Board of Directors appoints ESOP trustee who then retains an independent appraiser.
ESOP Plan Implementation
Execute ESOP plan and trust documents.
Communications
Introduce the ESOP and related plans to employees with an audio-visual presentation, a “plain English” summary and a Q & A session that targets crucial employee concerns.
Administration
Facilitate ESOP record keeping services with an ESOP expert third-party administrator.
Investment Management
Recommend an investment advisor specializing in the IRC 1042 “tax-free” rollover.
Professional Liaison
Maintain liaison with attorneys, accountants, advisors, investment managers and commercial lenders to assure a smooth and efficient installation.
ESOPs have become more popular in the past few years as a way to raise capital for new and ongoing concerns, according to Ron Gilbert.
Phase III: Operation
Appraisal
Annual independent appraisal to determine current fair-market value.
Third Party Administration
Annual recordkeeping and employee statements.
Future Transaction
Assist with subsequent leveraged transaction and/or acquisition of other companies.
Financial Services
Coordinate related benefits for key executives.