F5.007 EMPLOYEE OWNERSHIP TRUSTS - WILLIAM EASTMAN

If you are looking for something that will set you apart from any other employer, provide you with a succession plan, and alternative method of raising capital - read on.

INTRODUCTION
Here is my best knowledge of what has been witnessed and where we are taking IBGR.

OBJECTIVE

1. Understand what an ESOT is and the difference with the other options for employee shareholders.

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WHAT YOU NEED TO KNOW
What is a Trust?
It is a financial relationship where one party (the owner or TRUSTOR) gives another party (anybody can be TRUSTEE) the right to hold the title of assets for a third party (EMPLOYEES).

Why Would You Create an Employee Trust?
One of several methods of providing ownership opportunities to employees. It is different from a ESOP (Employee Stock Option Plan) because the employees do not directly receive shares in the company and is usually part of a profit sharing plan.

TRUSTEE's take the money provided by the TRUSTOR to purchases of the company for the the EMPLOYEES. They can also use money inside the trust to raise additional funds. 

Advantages of ESOT
Very flexible and can be used in public and private companies. It reduces the need for external financing with employee benefits plan resulting in increased cash flow. 

It is perpetual by safeguarding the employees interests. The owner doesn't have to find a buyer when they are ready to depart. 

It is very flexible in terms of how the trust structure is set up to meet the unique needs of every company.

It has a lower costs to set up and participation is free for employees.

One Major Disadvantage is the employee cannot borrow money against the account.

WHAT YOU NEED TO DO
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