SES-4003_BrochureC.qxp 7/15/04 1:59 PM Page 2 MAKING SENSE OUT OF ESOPS… Business owners should consider ESOPs as part of a discussion ESOPS are unrivaled tax efficient vehicles for achieving liquidity. around liquidity and succession for their closely-held company. Owners may, in a properly organized ESOP transaction, ESOPs are a flexible, tax-favored, tool to create an internal market indefinitely defer capital gains tax on a sale of company stock. The for company shareholders to achieve liquidity. company may fund an ESOP purchase from an owner with tax- deductible dollars. An ESOP is perhaps the only legal corporate Many business owners have multiple goals in determining a transaction where a dollar of corporate income becomes a dollar of liquidity and succession strategy for their companies. In addition to shareholder investment without taxation for either the corporation maximizing after-tax financial rewards, business owners often seek or the shareholder. to control the timing and process of succession and to create opportunities and rewards for key management and employees. And finally, ESOP transactions are completed among people who ESOPs may be created to buy an incremental block of company have contributed most to the business’ success – its employees. It stock, allowing an owner-entrepreneur to manage the liquidity has been demonstrated time and time again that this makes good process and avoid an immediate transfer of operating control to an financial sense, since companies with broad-based employee outside party. ownership outperform comparable companies without employee ownership. Structured properly, ESOPs provide owners with liquidity and succession at a controlled pace and a management and employee focused company. SES Advisors has worked extensively since 1988 is to structure ESOPs properly to help companies achieve sustainable financial, tax, and organizational objectives.
SES-4003_BrochureC.qxp 7/15/04 1:59 PM Page 4 THE PROCESS… Our clients tell us that the most critical first step for any business owner If an ESOP may make sense, we will conduct a detailed ESOP is to match liquidity and succession tools to liquidity and succession study of your situation for you. In the course of conducting this objectives. We will help you consider whether an ESOP is appropriate to study, we will determine the various ways an ESOP can be address your goals and concerns. ESOPs can be complex, but the process structured to meet your various personal and financial goals while of deciding if they will work for you doesn’t have to be. SES Advisors taking into consideration the company’s financial capabilities. We will explain: consider: How ESOPs work The optimal tax structures for sale to an ESOP and the company’s What tax savings are available and how they are used operations How companies are valued The company’s estimated value How lenders decide to provide financing The company’s debt capacity What technical issues you will face The appropriate transaction size The equity incentives for key employees On the basis of preliminary discussions with you, we will conduct an initial assessment which will give you a good sense of whether or not an We will describe to you the range of viable options and suggest a ESOP is worth exploring in more detail. roadmap for completing an ESOP transaction that best fits your goals. We will work closely with you to execute all financial and legal aspects of the ‘deal’. While many firms focus their energies exclusively on the activities surrounding the creation and funding of the ESOP, we see these initial steps as only the beginning of a long relationship. After creation, an ESOP requires tending to in precise ways to comply with applicable laws and to maximize the organizational benefit. We provide complete record keeping and advisory services to meet our clients’ ongoing ESOP needs.
SES-4003_BrochureC.qxp 7/15/04 1:59 PM Page 6 WA N T T O K N O W M O R E … ? ABOUT US… SES Advisors is a full-service consulting and advisory firm focused exclusively on ESOPs. The principals have been helping company owners and their administrators evaluate, design, fund and maintain ESOPs throughout the United States for more than a combined 88 years. We offer our clients a turnkey solution to their ESOP needs. Our staff has been uniquely configured to provide a depth of expertise at each and every aspect of the ESOP over the entirety of its life span. We also work closely with our clients’ accountants, financial advisors, and attorneys. This allows SES Advisors to develop ESOP strategies that are best suited to the particular circumstances and goals of each of our clients. Our collaborative approach produces better results in the near term, as well as over the long run. Our team of professionals has extensive experience in the ESOP community; including the areas of finance, banking, tax and law. We serve as officers and long-time members of the ESOP Association, the National Center for Employee Ownership and other industry organizations. We frequently contribute articles for publication, and are often called upon to lecture on topics for professional groups, as well as trade associations.