Employee Stock Ownership Plans:
ESOP Planning, Financing, Implementation, Law & Taxation
Robert W. Smiley, Jr., Ronald J. Gilbert, David M. Binns, Ronald L. Ludwig and Corey Rosen, Editors
(The original book was sold out and is being completely revised and updated. It will soon be available.) To reserve your 2005-2006 copy, Click Here.

Comprehensive Coverage of the Legal and Practical Ramifications of Employee Ownership

Research has shown that companies with employee stock ownership plans (ESOPs) have more highly motivated employees, greater profits, sales and employment growth, and greater ability to weather recessions than otherwise comparable companies. Employee Stock Ownership Plans provides A-to-Z coverage of ESOPs -- from what an ESOP is and how it works, to how to decide whether an ESOP makes sense for a particular company, its shareholders, officers and directors and employees.

Whether you are part of a management team wrestling with the many complex issues that impact the feasibility of an ESOP for your company, a business owner considering your exit options, or legal, accounting, investment or tax counsel, you can answer any question with assurance and accuracy when you have this book at hand. Consultants and advisors will find this book invaluable.

This is a highly readable book. Providing the right answer at the right time could help bring in one of the biggest clients of your career. Providing the right answer at the right time could help preserve and enhance client relationships. This book will help you do both.

Guidance from Plan to Implementation: Employee Stock Ownership Plans spells out everything for you in detail, taking you from a clear explanation of how ESOPs work and their many financing advantages and built-in tax breaks . . . through accounting requirements, involvement of management and employees, designing an appropriate ESOP, ESOP financing and working with lenders . . . to operating and administering an ESOP. The ESOP is a technique of corporate finance in addition to its being an employee benefit plan. As such, it has incredibly generous tax and financial benefits for all parties concerned that are unequalled anywhere in the law.
Continuing Coverage: Periodic updates, available to buyers of this book, bring Employee Stock Ownership Plans up to date on recent judicial and regulatory decisions as well as other developments in the field, including:
  • Recent legal initiatives affecting ESOPs.
  • The latest research on employee ownership.
  • International developments such as privatizations and multi-national employee ownership plans.
  • A detailed update of ESOP valuation controversies and court cases discussing significant court decisions, in which important valuation and fiduciary issues of interest to ESOP appraisers and trustees are analyzed.
  • Detailed coverage of ESOP benefit distribution rules.
  • Examples of the interaction of IRC Sections 409(o), 409(p), 401(a)(9), and 401(a)(14).
  • Coverage of joint and survivor annuity rules.
  • Practical guidelines for S corporations
  • Regulatory updates
  • Updated Case Studies
  • An Errata Section published on a website to reflect current changes

An Unprecedented Endorsement
for an ESOP Book

Smiley, Gilbert, Binns, Ludwig and Rosen’s book is more complete than anything published before on the subject of ESOPs. It combines the best of both general and technical information. I urge members of the business community and Members of Congress to study the ESOP alternative. Employee Stock Ownership Plans offers businessmen and Congressmen a great place to start studying.
Congressman Dana Rohrabacher

ABOUT THE EDITORS: The Top ESOP Experts in America

Robert W. Smiley, Jr. is the founder and chairman of The Benefit Capital Companies Inc., headquartered in Logandale in Southeastern Nevada. He is the managing general partner of Benefit Capital Partners. Mr. Smiley is a founder and past president of The ESOP Association, and a lifetime member of its Board of Governors. He is a director of The National Center for Employee Ownership, and a former trustee of the Employee Ownership Foundation. He serves on several Boards.

Ronald J. Gilbert is the founder and president of ESOP Services, Inc. in Scottsville, Virginia. Previously, he was a vice president with Kelso & Company in San Francisco. Mr. Gilbert serves on The ESOP Association's Board of Governors & the Legislative & Regulatory Committee as well as the Boards of several ESOP companies.

David M. Binns is the associate director of the Foundation for Enterprise Development in Washington, DC. He is also the immediate past executive director of The ESOP Association. A frequent author and lecturer on ESOPs, he is a former congressional aide and public relations account executive.

Ronald L. Ludwig is a retired ESOP lawyer, and resides in San Francisco. He specialized in ESOPs for almost 30 years, serving as outside ESOP counsel. He is a lifetime member of the ESOP Association, and a founding chairman of its Legislative and Regulatory Committee. He serves on a number of Boards of Directors, and is a former tax law specialist with the National Office of the Internal Revenue Service.

Corey Rosen is executive director of the National Center for Employee Ownership, which he co founded in 1981. The NCEO is a nonprofit membership, information, and research organization based in Oakland, CA. He served five years as a professional staff member in the U.S. Senate, where he helped draft legislation on employee ownership plans. He is the author or co-author of several books on employee ownership and over 100 articles. He has a Ph.D. in Political Science from Cornell University.

Partial Table of Contents

Introducing the ESOP
Financing Advantages and Tax Breaks
What Makes a Good ESOP Candidate?

Research Results and Case Studies
Research Results
Case Studies

Equity: Why Employee Ownership is Good for Business
Equity Model Brings New Levels of Profitability
How to Lead and Manage the Process

Ownership Transition Using a Leveraged ESOP
Overview of the Legal and Regulatory Framework
Attributes of a Successful ESOP LBO
The Critical Match: Transition and Objectives and Capital Structure Components

Making the Decision to Implement an ESOP: The Full Feasibility Study
Stock Valuation
Stockholders Equity Analysis
Liquidity Study
Design Study

Implementing the ESOP
Implementation Budgets
Phases of the Implementation Process

Valuation of Companies for ESOP Purposes
Fair Market Value vs. Accounting Value
Simplified Valuation Examples

ESOP Trustee & Fiduciary Considerations
What are the Rules for Fiduciaries
Perils and Pitfalls

ESOP Valuation Controversies & Court Cases
Decisions on ESOP Values
Private Letter Rulings and Technical Advice Memoranda on ESOP Stock Valuation Cases and Decisions

ESOP Financing
ESOP LBO Secured Financing
How to Structure and Complete a Cash Flow ESOP Leveraged Buyout
Pricing the ESOP Loan

ESOP Accounting Aspects
Accounting for Non-Leveraged ESOPs
Accounting for Traditional Leveraged ESOPs
Accounting for Dividends
Accounting for ESOP Leveraged Buyouts

ESOP Tax, ERISA, & Securities Issues
Corporate Objectives in Establishing ESOPs
Special Fiduciary Liability Rules Under ERISA for ESOPs

ESOP Communications to Participants
Legal Requirements
Practical Considerations

ESOP Operations in Employee-Owned Firms
How it's done
Practical Issues

ESOP Administration
A to Z and back again
Practical Considerations

Repurchase Obligation
Calculating the Repurchase Obligation
Funding the Repurchase Obligation

ESOP Distributions & Diversification
Statutory Requirements
Practical Considerations

ESOP Dividends
Statutory Requirements for Dividend Pass Through
Mitigating Participants' Adverse Tax Consequences

ESOPs for S corporations
What They Are
How They Work
Pitfalls and Traps
Abuses and Problems

ESOP Corporate Governance
How, and Why
Effect of Sarbanes-Oxley

Special Issues for Public Company ESOP
Practical Guidelines

Terminating an ESOP
How, and Why
Practical Guidelines

Global Equity Plans & ESOPs
Transforming Stakeholders into Shareholders
Challenges in Globalizing the ESOP

Building Long Term Value & a High Performance Culture
Transforming the Culture
A Road Map to Success
What to Do
What Not to Do

ESOPs & Charitable Uses
ESOPs and Charitable Planning-A Win-Win Combination

ESOPs, Family Partnerships & LLCs
Pass Through Entity Planning-Another Win-Win Combination

Overview of ESOP Legislative History
How the ESOP Tax and Financial Benefits Evolved

Legislative, Regulatory, and Case Law Developments-Seven Years in Review
A Year by Year Summary
Case Histories

Multi-Stage ESOP Transactions
Background and Current Status

Anti-Abuse Testing for S Corporations
The Nuclear Excise Tax Potential
Practical Issues and Solutions

ESOPs for Privatization & Corporatization
A Practical Means to Privatization
The Corporatization Alternative

Employee Ownership Beyond ESOPs
Employee Ownership Strategies Beyond ESOPs

Congressional Support for ESOPs
Examples of Congressional Support
Support from leading ESOP Champions

ESOP Bibliography

ESOP Glossary

Table of IRC Sections

Table of ERISA Sections

Table of Cases

Over 30 Appendices with Useful Information, Forms and Procedures

Formerly Published by Warren, Gorham & Lamont as:

Employee Stock Ownership Plans:
Business Planning, Implementation, Law & Taxation
Robert W. Smiley, Jr., Ronald J. Gilbert, and David M. Binns, Editors

Currently Published by The Beyster Institute, University of California, San Diego as:

Employee Stock Ownership Plans:
ESOP Planning, Financing, Implementation, Law & Taxation
Robert W. Smiley, Jr., Ronald J. Gilbert, David M. Binns, Ronald L. Ludwig and Corey Rosen, Editors

2005-2006 EDITION

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Published by
The Beyster Institute,
University of California, San Diego

Publication Date Winter 2005 to Spring 2006

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Cost: Approximately $395 + shipping & handling. Fully tax-deductible.

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