Employee Stock Ownership Plans
Dean Mead’s Employee Benefits Practice Group counsels clients on all aspects of Employee Stock Ownership Plans (ESOPs), including the creation and administration of an ESOP; the use of an ESOP as a business succession and/or estate planning tool for shareholders; structuring, tax planning for and closing purchases of employer securities by an ESOP; tax planning for limited liability companies and similar entities to convert to corporate status and adopt an ESOP; and the representation of ESOP trustees and fiduciaries with respect to ESOP transactions and ongoing ESOP administration issues.
Our lawyers assist clients at each stage of the development, implementation and ongoing operation of an ESOP, including the preparation of the ESOP document and its submission to the Internal Revenue Service; determination of the best tax and employee benefit structure for an ESOP transaction; negotiations with bonding companies for construction industry ESOPs; the review and/or preparation of bank financing documents for ESOP transactions; preparation of all documentation for an ESOP stock purchase and sale transaction; tax planning for Code Section 1042 tax deferral transactions; and ongoing administration, compliance and corporate governance work.
Dean Mead’s ESOP Team is comprised of experienced attorneys from a wide range of disciplines including employee benefits, tax, corporate, banking, real estate and estate planning, all working in concert to achieve our clients’ ESOP goals.
The Dean Mead ESOP attorneys have structured and closed numerous ESOP transactions, including:
- Sale of 30% of a general contractor’s issued and outstanding common stock from selling shareholders to a newly created ESOP.
- Redemption of 100% of the issued and outstanding common stock of a specialty contractor and simultaneous sale of 100% of its newly issued common stock to an ESOP on a seller financed basis.
- Conversion of a limited liability company into a corporation followed by a partial redemption and partial sale to a newly created ESOP of 100% of the issued and outstanding common stock of a specialty contractor on a partial seller financed and partial bank financed basis.
- Redemption of 100% of the issued and outstanding common stock of a manufacturing company and simultaneous sale of 100% of its newly issued common stock to an ESOP on a seller financed basis.
- Sale of 51% of a specialty contractor’s issued and outstanding common stock to an ESOP.
In addition, attorneys in the ESOP Practice Group have done the following:
- Represented the ESOP of a publicly traded NASDAQ company including the ESOP’s sale of a portion of its employer securities on an underwritten basis.
- Represented numerous ESOP independent trustees and fiduciaries with respect to their ESOP purchase of employer securities from selling shareholders or the sponsoring corporation.
