Employee Stock Ownership Plans

Maximize Tax Advantage, Maintain Effective Management Control, and Structure Compensation to Enhance Performance

An Employee Stock Ownership Plan (ESOPs) is an ingenuitive and important business, tax, financial, and succession planning tool; they are also a means by which employees can acquire ownership interest through the acquisition of company stock. An ESOP can enable company founders/owners to develop succession plans that meet their estate planning and financial goals, while keeping their businesses strong and viable and leaving a legacy for employees to prosper from. Whether a transition involves a partial ESOP sale or a complete transfer of ownership to an ESOP, it requires the experienced business and regulatory guidance that Dean Mead offers to all parties at the ESOP table: owners, ESOP trustees, lenders, investors (such as private equity funds), and employees.

At Dean Mean, our decades of experience help Florida-based businesses and nationwide organizations achieve their ESOP objectives by guiding them through the transition to employee ownership and helping ensure long-term success. Our firm’s ESOP practice works with local counsel around the country. We address federal law issues for ESOP creation, structuring corporate transactions, preparing IRS filings for tax qualification and plan termination, resolving fiduciary matters, and advising on the various tax opportunities and incentives associated with ESOP transactions. 

We stay up-to-date on the latest ESOP developments through our active roles in organizations like The ESOP Association and the National Center for Employee Ownership.

“ESOPs are crucial transition plans for owners, allowing them to create an incentivized and productive workforce,” said Jay Van Heyde, shareholder and lead attorney for the firm’s ESOP Group. “The benefits of employee ownership and its empowering effect have been seen repeatedly in longstanding, successful ESOPs.”

Representative Experience

The below representative examples of ESOP transactions that Dean Mead has structured and closed illustrate sophisticated transactions we have helped clients with:

• Transferring 30% of a general contractor’s issued and outstanding common stock from the selling shareholders to a newly created ESOP.
• Redeeming 100% of the issued and outstanding common stock of a specialty contractor and simultaneously selling 100% of its newly issued common stock to an ESOP on a seller-financed basis.
• Converting 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 through seller and bank financing.
• Redeeming 100% of the issued and outstanding common stock of a manufacturing company and simultaneously selling 100% of its newly issued common stock to an ESOP on a seller-financed basis.
• Selling 51% of a specialty contractor’s issued and outstanding common stock to an ESOP.
• Representing the ESOP of a publicly-traded NASDAQ company, including the ESOP’s underwritten sale of a portion of its employer securities.
• Representing the ESOP trustee in the sale of the company stock owned by the ESOP to an unrelated third party.
• Representing the ESOP trustee in a second stage transaction in which the ESOP moves from owning a minority interest in the company to a majority or a 100% ownership position.