Understanding ESOPs: From the Commercial Lender & Bank-Employer Perspective
The program will begin with a diagram of the basic transaction, take the attendee through the pros and cons of different leveraged and non-leveraged structures, and then focus upon the core drivers of an ESOP, which include the HR, tax, and corporate governance drivers.
Learn how an Employee Stock Ownership Plan (ESOP) can provide a number of advantages, including:
- Implementation of a sale transaction whereby the selling shareholder achieves immediate liquidity and access to cash without currently paying capital gains;
- A simpler management transition implementation;
- Increasing the bank’s cash flow;
- Creating an internal liquid market;
- Acting as a device for loan officers to attract new commercial relationships and commercial loan originations; and
- Increasing employee morale
The purpose of this webinar is to discuss how an ESOP can simultaneously satisfy the needs from a variety of perspectives, including:
- From the Selling Shareholder perspective – How an ESOP could result in: (i) a deferral of capital gains that otherwise would be triggered if the selling shareholder were to sell the underlying stock in a non-ESOP third party sale, (ii) immediate cash liquidity to the selling shareholder without regard to whether an industry “buyer” exists, (iii) wealth diversification, (iv) phased retirement for the selling shareholder, (v) a continuation of the selling shareholder’s legacy, and (vi) a transition of the ownership structure without an adversarial process (and no earnouts/holdbacks).
- From the Bank-Employer/HR perspective – How an ESOP could be used to: (i) create an internal liquid market for the sale of Bank stock that is otherwise not liquid in the hands of executives and employees, (ii) help fund the retirement of bank employees while simultaneously increasing the bank’s cash flow, and (iii) increase employee morale.
- From the Bank-Entity perspective – How an ESOP could be used to increase the bank’s cash flow in order to fund business endeavors, such as an expansion of the bank’s business model, opening a new facility, etc.
- From the Bank-Commercial Lender perspective – How an ESOP could be used to find and attract new commercial loan originations outside of the actual ESOP loan.
Board members, executive officers, business owners, legal and HR professionals and commercial loan officers.
Anthony (“Tony”) Eppert is a Shareholder in Winstead’s Compensation & Benefits Practice Group. His legal practice focuses on executive compensation and employee benefit arrangements in the United States and internationally. Tony received his undergraduate and law degrees from Michigan State University. He is a graduate of the LL.M. Program (Taxation) at New York University School of Law. And Tony was a judicial clerk to the Honorable Richard F. Suhrheinrich of the United States Court of Appeals (Sixth Circuit).
Institute of Certified Bankers: Visit http://www.icbmembers.org/login.aspx for instructions regarding self-reporting. Estimated credits: 2 hours HRCI Credit.
Member price: $265.00 | Non member price $530.00
Member price: $280.00 | Non member price $560.00
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