Employee Stock Ownership Plan Answer Book (ESOP), Third Edition / Edition 3

Employee Stock Ownership Plan Answer Book (ESOP), Third Edition / Edition 3

by Idelle A. Howitt, Corey Rosen
Pub. Date:
Wolters Kluwer Law & Business

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Employee Stock Ownership Plan Answer Book (ESOP), Third Edition / Edition 3

Employee Stock Ownership Plans (ESOPs) are a powerful competitive tool to help businesses attract, retain, and reward the best employees and increase their productivity.

Whether you are just beginning to consider employee stock ownership as a meaningful business strategy or are looking for ways to make your current plan more effective, turn to the Employee Stock Ownership Plan Answer Book for the facts, legal analysis and practical advice you need to make informed, strategic decisions!

The Employee Stock Ownership Plan Answer Book gives you one-stop access to the latest laws and regulations governing ESOPs, including the applicable Internal Revenue Code provisions, the Tax Reform Acts of 1984 and 1986, and the Small Business Job Protection Act. You'll learn not just what the law says, but what you must do to ensure proper administration, compliance and reporting.

Employee Stock Ownership Plan Answer Book has been updated to include answers to such questions as: ;

What is a key strategic issue that companies often overlook when considering an ESOP?

Why did the DOL promulgate new service provider regulations?

What is the advantage of appointing a temporary trustee versus having the business owner sign the contract with the business appraiser?

Why is the DOL trying to define business appraisers as ESOP fiduciaries?

Why and how are ESOP loans refinanced?

Are companies allowed to extend the life of an ESOP loan?

What are the advantages of having company officials serve as ESOP fiduciaries?

Does an ESOP fiduciary need an ERISA bond, and, if so, for how much?

Which of the ESOP trustee's responsibilities is the most important?

What is the role of the ESOP trustee when there has been a serious acquisition offer?

What are the new rules on employer stock diversification in 401(k) plans and KSOPs?

What is the most commonly used method for funding the repurchase obligation?

How many companies only fund the current year's obligation as opposed to also saving for future repurchase obligations?

What is an employee retirement stock ownership plan (ERSOP)?

Can ESOPs be used to eliminate unions?

Is the amount of executive compensation of particular importance in ESOP companies?

Are the new executive pay requirements under the Dodd-Frank Act expected to have much impact on executive pay?

Are there changes in the tax laws that might affect the use of an ESOP in estate planning?

How might changes in the tax laws affect the future of ESOPs?

How do ESOPs fit into the increasingly competitive world economy?

Product Details

ISBN-13: 9780735591172
Publisher: Wolters Kluwer Law & Business
Publication date: 09/30/2010
Pages: 726
Product dimensions: 6.50(w) x 1.50(h) x 9.50(d)

Table of Contents

1. Overview

• General Questions
• ESOPs as Retirement Vehicles
• The Future of ESOPs
• Public Company ESOPs
• 100 Percent ESOP Companies

2. Installation of an ESOP

• What Does the Employer Have to Do?
• How Long Will It Take?
• How Much Will It Cost?
• Using Preferred Stock
• Using Different Business Structures

3. Valuations and Appraisers

• When a Valuation Is Necessary
• Appraisers
• Components of a Valuation
• Premiums for Control
• Creeping Control
• Marketability Discounts
• The Effect of Debt
• Taxes
• Extraordinary Adjustments
• The Effect of the Current Economy

4. Loans

• Arranging for an ESOP Loan
• Repayment
• Refinancings
• Other Sources of Funding

5. Code Section 1042 Rollovers

• Qualifying for Code Section 1042 Treatment
• 30 Percent Ownership Requirement
• Reinvesting Proceeds from a Code Section 1042 Transaction
• Taxing Matters
• Excise Tax
• Family Attribution Rules
• Estate Taxes and Charitable Contributions
• Using Limited Liability Companies, Partnerships, and Family Limited Partnerships

6. Fiduciaries

• Determining Fiduciary Status
• Named Fiduciaries
• Other Entities as Fiduciaries
• Fiduciary Duties
• The Prudence Requirement
• Fiduciary Personal Liability
• Repercussions of Breach of Fiduciary Duty
• Protecting Against the Risk of Liability
• Selected ESOP Litigation Involving Fiduciaries

7. Prohibited Transactions

• Changes Due to Sarbanes-Oxley
• ESOP Expenses
• Liabilities and Penalties
• Voluntary Plan Corrections

8. Trustees

• Trustee Selection
• Different Types of Trustees
• The ESOP Committee as Trustee
• Trustee Due Diligence
• Trustee Missteps
• Conflicts of Interest
• Shareholder Rights of Trustees
• ESOP Trustee's Responses to Proposed Acquisitions
• Selected Litigation Involving ESOP Trustees

9. Voting

• Internal Revenue Code Voting Requirements
• ERISA Voting Requirements
• Pass-Through Voting
• Mirror Voting
• Tendering Stock

10. Contributions

• Top-Heavy Rules
• Deductibility of Contributions
• Timing
• Interaction with Other Employee Benefit Plans
• 401(k) Plans
• Penalties

11. Participation, Forfeitures, and Vesting

• Participation
• Foreign Participation
• Forfeitures
• Break-in-Service Rules
• Vesting

12. Allocations

• The Mechanics
• Interaction with Other Plans
• Limitations and Exclusions
• Omissions and Commissions
• No More Shares
• Reallocations
• Prohibited Allocations
• Penalties

13. Dividends

• A Reasonable Dividend
• Allocation of Dividends
• Repaying Loans
• The Fair Market Value Rule
• Deductibility
• A Question of Timing
• Distribution of Dividend Payments
• Designer Stock
• Dividends and 401(k) Plans
• Taxing Matters

14. Diversification

• The Diversification Requirement
• Exceptions
• Time Frames
• Operations
• Pension Protection Act of 2006

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