《国际企业并购》Ch9- EmployeeStockOwnershipPlans.pptVIP

* * * * * * * * * * * * * * * * * * * Chapter 9- Employee Stock Ownership Plans ESOPs are a very important way for employees to derive pension-like benefits However, they provide unique opportunities for parties to acquire stock for the purposes of acquisitions First established by ERISA – 1974 Enforced by the U.S. Department of Labor All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. Historical Growth of ESOPs The number of ESOPs grew dramatically in the 1980s See following chart All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. Number of ESOPs All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. Types of Plans Defined Benefit Plans Where future benefit amounts are designated Lately many companies have been freezing these plans Defined Contribution Plans This is where the periodic contribution is set and the employee picks the investments Profit Sharing Plans – employee puts aside a specific percentage of earnings All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. Characteristics of ESOPs Average contribution: employers contribute 8 to 10% of payroll per year But some are higher All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permission of Dr. Patrick Gaughan. Leveraged v. Unleveraged ESOPs Unleveraged ESOPs – do not borrow to but stock Leveraged ESOPs: borrow to buy shares Law provides that this can be done at attractive rates and terms All Rights Reserved. ? May not be reproduced, copied, or otherwise used without the express, written permissi