Guide to ESOP Valuation and Financial Advisory Services,
2nd ed.

Robert F. Reilly and Robert P. Schweihs

Guide to ESOP Valuation
Guide to ESOP Valuation
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"The ESOP community finds itself operating in an increasingly dynamic environment. The convergence of various financial, business, legal and political issues has increased the current challenges faced by the individuals and organizations involved with ESOPs. Yet, it appears that the future is bright for the employee ownership movement. And many observers believe that that employee ownership, primarily in the form of ESOPs, is the wave of the future in American business." (from the Forward to this edition)

This book explores and resolves many practical issues currently facing employee stock ownership plan (ESOP) valuation analysts and other professionals within the ESOP community.

This second edition, authored by Robert F. Reilly and Robert P. Schweihs, updates and expands the Guide to ESOP Valuation and Financial Advisory Services, first published in 2005. The comprehensive, 36-chapter second edition substantially expands the authoritative discussion of current employee stock ownership plan (ESOP) stock valuation and financial advisory services issues.

Table of Contents

Section I- Structuring the ESOP Transaction
1. Employer Stock Purchase or Sale Transaction Structure
2. Structuring the Leveraged ESOP Employer Stock Purchase Transaction
3. ESOP Formation as a Close Corporation Ownership Transition/Exit Strategy
4. Using 401(k) Plan Assets to Purchase Employer Stock
5. Due Diligence Procedures in Pricing Employer Stock Acquisitions

Section II- ESOP Employer Stock Valuation Issues
6. Basic Elements of the ESOP Employer Corporation Stock Valuation
7. Valuation Issues with Regard to Employer Corporation Stock
8. Valuation Differences Between the Large Employer Corporation and the Small Employer Corporation
9. Income Normalization Adjustments in Employer Stock Valuations
10. The Use of Empirical Data to Estimate Employer Stock Valuation Discount Rates
11. Financial Statement Analysis in the Employer Stock Valuation

Section III- Advanced ESOP Valuation Issues
12. Employer Stock Valuation Long-Term Investment Perspective
13. Valuation Adjustments in the Employer Stock Valuation
14. Valuation Impact of the Employer Stock Repurchase Obligation
15. ESOP Formations in the Health Care Industry
16. Employer Stock Valuation Guidance from Internal Revenue Service Publications
17. Solvency Opinions and the Employer Leveraged Buyout Transaction

Section IV- Role of the Independent Financial Adviser
18. Role of the Independent Financial Adviser in the ESOP Fairness Process
19. Employer Stock Purchase or Sale Transaction Fairness Opinions
20. Transaction Fairness Opinions and the "Independent" Financial Advisory Firm
21. Selecting an Independent Financial Adviser and Reviewing an Employer Stock Valuation Report
22. Changing the ESOP Independent Financial Adviser
23. Financial Advisory Services for the Employer Corporation Bankruptcy

Section V- Specialized Financial Adviser Issues
24. Ethics Considerations in Employer Stock Valuations
25. Employer Stock Valuation and Fairness Opinion Due Diligence Checklist
26. Employer Stock Purchase Financing Solvency Opinion Due Diligence Checklist
27. Research Tools in ESOP Litigation Matters
28. Reasonableness of Remaining Shareholder/Executive Compensation
29. Reasonableness of Compensation Analysis of Retained Shareholder/Executive in an Employer Stock Acquisition

Section VI- Valuation and Financial Opinion Reports
30. Effective Business/Security Valuation Reports for ESOP Litigation
31. Expert Witness Testimony in ESOP Litigation Matters
32. Financial Adviser Expert Testimony Procedures in ESOP Valuation Controversies

Section VII- Valuation and Financial Opinion Reports
33. Illustrative Sample Confidential Proposed Transaction Memorandum to the ESOP Trustee
34. Illustrative Sample Employer Stock Valuation Report
35. Illustrative Sample Reasonableness of Shareholder/Executive Compensation Case Study

Section VIII- ESOP Bibliography
36. ESOP Valuation and Financial Advisory Services Bibliography

Section IX- Appendices
A. Internal Revenue Service Revenue Ruling 59-60
B. Proposed Regulation Relating to the Definition of Adequate Consideration

The price of this book is $59.95 (US), plus shipping. You may order the book by contacting Charlene Blalock at cmblalock@willamette.com, or 503-243-7509 .