An Employee Stock Ownership Plan (ESOP) is a qualified, defined contribution employee benefit plan that primarily invests in the stock of the employer company. ESOPs can be used for many purposes, including:

• As a pure employee benefit plan
• As a component of a complete leveraged buyout
• As part of an ownership succession strategy
• To create a market for inside or outside shareholders in closely held companies
• To finance corporate acquisitions
• To enhance employee performance by creating a stronger corporate culture

This variability, plus an attractive slate of tax benefits, makes an ESOP a compelling choice in an increasing number of corporate finance and succession planning situations. ESOPs help business owners gradually begin the process of converting their closely held ownership over to liquid, diversified capital – without a tax bite. An ESOP can also help ensure the company will retain the owner’s original corporate vision by helping to retain key management teams.

However, ESOPs present unique challenges and require detailed knowledge of business valuation, business transaction dynamics, tax law and regulations. Knowledge in all these areas is required to effectively and efficiently complete an ESOP transaction. The professionals at Prairie Capital Advisors, Inc. will help you determine whether an ESOP is right for your company by performing a detailed, thorough analysis. In doing so, we consider:

• Is your corporate culture adaptable to employee ownership?
• Can your company afford an ESOP? Do the costs outweigh the benefits?
• Do you have adequate payroll to buy out an owner’s interest in the company?

For companies that already have ESOPs, we can provide long-term advisory services. Whatever your ESOP-related needs, Prairie Capital Advisors has the knowledge and industry expertise to help.