 |
ESOP
CANDIDATE CHECKLIST
| Yes |
No |
|
Notes
|
| ___ |
___ |
1. The
company is a corporation taxed in the normal manner. Please
check type of corporation.
"C"
Corp. ___ "S" Corp. ___ Professional Corp. ___ Other
___.
|
|
|
| ___ |
___ |
2. The
company is closely held, or publicly traded with significant
ownership in a few hands.
|
|
|
| ___ |
___ |
3. The
company has sales and payroll adequate to support an ESOP; current
and projected payroll as a percentage of sales is 20% or greater.
|
|
|
| ___ |
___ |
4. The
company has a strong earnings or cash flow record over the previous
five years.
|
|
|
| ___ |
___ |
5. The
company expects to pay substantial federal income taxes over
the next few years.
|
|
|
| ___ |
___ |
6. The
company has paid substantial federal income taxes during the
past three years.
|
|
|
| ___ |
___ |
7. At
least some stockholders have a reason why they might be interested
in selling some stock; e.g., planning for retirement, liquidating
an estate, entering a new business venture, children not involved
in business, etc.
|
|
|
| ___ |
___ |
8. If
one or more principal executives will be departing in connection
with the sale, there is strong management available to take
their place(s).
|
|
|
| ___ |
___ |
9. The
company customarily makes payments to a profit sharing or other
employee benefit plan that could in the future be diverted to
an ESOP.
|
|
|
| ___ |
___ |
10. The
owners are psychologically willing to share ownership with their
employees, assuming an attractive deal can be arranged. (Difficult
to assess, in advance, but critical.)
|
|
|
No mechanical
approach can be perfect, but this list is a good start. A company
with six or more "Yes" answers is a good candidate.
A company with eight "Yes" answers should immediately
review The ESOP AlternativeTM. A company with 10 "Yes"
answers is probably making a mistake if it doesn't have an ESOP.
09001894
ESOP
CANDIDATE CHECKLIST
(same list with more space for notes)
| ___
___ |
1.
The company is a corporation taxed in the normal manner.
Please check type of corporation.
"C"
Corp. ___ "S" Corp. ___ Professional Corp. ___
Other ___.
|
|
|
| ___
___ |
2.
The company is closely held, or publicly traded with significant
ownership in a few hands.
|
|
|
| ___
___ |
3.
The company has sales and payroll adequate to support an
ESOP; current and projected payroll as a percentage of sales
is 20% or greater.
|
|
|
| ___
___ |
4.
The company has a strong earnings or cash flow record over
the previous five years.
|
|
|
| ___
___ |
5.
The company expects to pay substantial federal income taxes
over the next few years.
|
|
|
| ___
___ |
6.
The company has paid substantial federal income taxes during
the past three years.
|
|
|
| ___
___ |
7.
At least some stockholders have a reason why they might
be interested in selling some stock; e.g., planning for
retirement, liquidating an estate, entering a new business
venture, children not involved in business, etc.
|
|
|
| ___
___ |
8.
If one or more principal executives will be departing in
connection with the sale, there is strong management available
to take their place(s).
|
|
|
| ___
___ |
9.
The company customarily makes payments to a profit sharing
or other employee benefit plan that could in the future
be diverted to an ESOP.
|
|
|
| ___
___ |
10.
The owners are psychologically willing to share ownership
with their employees, assuming an attractive deal can be
arranged. (Difficult to assess, in advance, but critical.)
|
|
|
No mechanical
approach can be perfect, but this list is a good start. A company
with six or more "Yes" answers is a good candidate.
A company with eight "Yes" answers should immediately
review The ESOP AlternativeTM. A company with 10 "Yes"
answers is probably making a mistake if it doesn't have an ESOP.
09001894a
|
|
