Employee Stock Ownership Plans (ESOPs)

Boylan Code attorneys have extensive experience in the Federal and state tax law, corporate law, banking law, securities law and ERISA requirements that govern ESOPs. We represent owners who sell to ESOPs, corporations that sponsor ESOPs, banks that lend to ESOPs and all types of ESOP trustees and fiduciaries, including inside trustees, independent trustees, institutional trustees and trustees directed by an independent fiduciary registered as Investment Adviser under the Investment Advisers Act of 1940. We have been involved in ESOP transactions ranging in size from $500,000 to over $1 billion. Boylan Code is a member of the ESOP Association and the National Center for Employee Ownership (NCEO). The Boylan Code ESOP team is led by Paul S. Fusco.

Transactions

We have extensive experience representing companies, shareholders, trustees and financial institutions in the full gamut of ESOP transactions, including sales of stock by shareholders to an ESOP, sales of stock by an ESOP to private equity firms and other third parties, acquisitions and divestitures by ESOP companies, corporate reorganizations and debt refinancings.

Compliance

The ESOP plan document is governed and regulated by Federal law, and as such needs to be monitored for ongoing legal compliance. We provide a full range of services to assist ESOP companies in maintaining the qualified status of the their plans, including tracking legislative changes that effect ESOP plans and preparing any necessary amendments to reflect such changes, preparing IRS determination letter applications, and preparing plan communications such as summary plan descriptions and distribution forms to make sure employees have up to date and accurate information. We also assist clients in complying the very stringent ERISA fiduciary rules that apply to ESOP plan fiduciaries.

From time to time, the U.S. Department of Labor or the IRS will audit the plan document as well as purchase and sale transactions involving the ESOP. Our plans and transactions have repeatedly withstood the scrutiny of these audits, and we have successfully guided clients through many government audits.

Strategic Planning for ESOP Companies

ESOP companies face unique challenges and we have helped clients create creative solutions these challenges that draw on our experience working with ESOP companies, including designing non-qualified and other equity based compensation plans that compliment the ESOP, working with company management to implement a corporate governance structure that is consistent with the employee ownership philosophy, helping clients to understand the interaction and role of the ESOP trustee and board of directors, and long-term ESOP planning and sustainability.

Paul S. Fusco ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it. ) is as an associate in the firm's Business & Corporate Practice Group, concentrating his practice on tax and employee benefits law, with a particular emphasis on all matters related to ESOPs, including their design, maintenance, correction and termination, as well as the fiduciary duties related thereto. He is a co-author of "Basic Fiduciary Guidance for the ESOP Trustee in Corporate Finance Transactions," New York University Review of Employee Benefits and Executive Compensation, Matthew Bender, 2006, and a co-author of "Insulation from Environmental Liabilities for ESOP Trustees," New York University Review of Employee Benefits and Executive Compensation, Matthew Bender, 2007. Paul received his B.A. degree, summa cum laude, from the State University of New York at Albany, and earned his law degree, cum laude, from the State University of New York at Buffalo Law School, where he was an Articles Editor for the Buffalo Law Review.

Representative Transactions:

The following is a list of some of the transactions in which Boylan Code's ESOP Team have been engaged with an indication of the size of the transaction, the nature of the representation, and the firm's role.

• Private Company: Represented $400 million ESOP in the sale of a $1.1 billion dollar employee-owned company.
• Private Company: Represented ESOP in $133 million purchase and redemption of 100% company stock.
• Private Company: Represented company in establishment of ESOP and $52 million transaction.
• Private Company: Represented independent trustee of ESOP in $43 million purchase of 100% of company stock.
• Private Company: Represented independent ESOP trustee in $14 million partially leveraged and partially seller financed purchase of 100% of company stock.
• Private Company: Corporate counsel in the $12 million purchase of a licensed medical practice by an ESOP.
• Private Company: Represented company in establishment of ESOP and $10 million purchase of company stock.
• Private Company: Represented independent trustee of ESOP in $9 million purchase of 47.5% interest in regulated health care company stock.
• Private Company: Represented company in establishment of ESOP and $8 million purchase of 100% of company stock.
• Private Company: Represented company in establishment of ESOP and $7 million purchase of company stock.
• Private Company: Represented company in establishment of ESOP and $4.375 million leveraged purchase of 22% of company stock.
• Private Company: Represented company in establishment of ESOP and $3.8 million purchase of 100% of company stock.
• Private Company: Represented company in establishment of ESOP and $3.2 million purchase of company stock.
• Private Company: Represented licensed plumbing Company in establishment of ESOP and $3 million purchase of controlling interest.
• Private Company: Represented professional engineering company in establishment of ESOP and $3 million purchase of 100% of company stock.
• Private Company: Represented company in establishment of ESOP and $2.35 million purchase of 33% of company stock.
• Private Company: Represented individual ESOP trustee in $1.6 million leveraged purchase of 24% of company stock.
• Private Company: Represented independent trustee in $1.375 million purchase of 30% of company stock.
• Private Company: Represented individual trustee of ESOP in $500,000 purchase of minority interest in company.
• Private Company: Represented individual trustee of ESOP in $244,125 purchase of remaining 10% ownership of company stock
• Private Company: Represented company in establishing non-leveraged ESOP.