Employee Stock Ownership Plan Services

Experienced, well-connected ESOP establishment and operations guidance

Capabilities at a glance

• Experienced team of corporate and employee benefits attorneys with diverse experience and valuable connections to a network of specialists.
• Effectively combine our technical legal knowledge with a focus on understanding your operational considerations in administering employee stock ownership plans (ESOP).

A dedicated partner to ensure effective implementation and administration of ESOP

Our ESOP team provides clients with an experienced team of corporate and employee benefits attorneys who have decades of ESOP experience.

We know the law and understand your operational considerations in administering ESOP plans. In addition, through the professional relationships our team has cultivated in the ESOP community, Quarles connects you with a network of specialists to guide you through every phase of the ESOP lifecycle — from its formation and early years, through maturity and the occasional sale of the company to a strategic or financial buyer.

Our diversity of experience also helps us advise on fiduciary best practices and compliance with Internal Revenue Code and ERISA regulations. We have the experience to protect you in the face of regulatory audits and other claims.

Counsel for the full spectrum of ESOP stakeholders

Our team is equipped to advise all potential stakeholders in an ESOP. We support:

• Owners who built a business and want to consider an exit strategy that leaves control and ownership of the company in the hands of those who helped build it.
• Lenders who need insight into the nuances of lending in the ESOP context and assurance that their credit facility is properly secured over the life of the ESOP.
• Trustees who seek counsel fulfilling their fiduciary duties in the high-stakes arena of purchases by ESOP trusts and sales of companies held in ESOPs, as well as how to proceed with and document decisions that owner/shareholders must make on a day-to-day basis.
• Third-party administrators who desire assistance in compliance with ESOP plan contribution and dividend allocation rules as well as share-release calculations and anti-abuse laws.
• Strategic and financial buyers who need perspective on the hurdles of acquiring a company held in full or in part by an ESOP.
• Plan sponsors and management teams who:
  • Need to explain the benefits of employee ownership to employees, management and outside
  • Seek to balance competing duties as managers of their business and fiduciary responsibilities to employee-owners.
  • Are considering whether converting to S Corporation status will maximize company value.
  • Must determine how and when to reshuffle or reallocate shares among current and future participants.
  • Are developing a strategy to manage the ultimate goal of liquidity for employee-owners at retirement.
  • Are managing independent trustee relationships or working directly with ESOP valuation firms.
  • Must ensure that the ESOP remains tax-qualified in form, through adoption of required amendments and operation.
• Boards of directors that wish to implement competitive pay structures, including cash deferred compensation and equity-based incentives, while avoiding synthetic equity traps.