Employee Share Ownership Plans: How to Design and Implement an ESOP in Canada

Employee Share Ownership Plans (ESOPs) are a powerful new tool in a world in which it is no longer business as usual.

Whether you want to attract and retain skilled workers, create a succession plan for a family business, combat the "brain drain," recognize the contributions your employees have made to your company's success, or need a way to turn your company around through improvements in productivity and morale, an ESOP could be the win-win solution for your company.

An ESOP is a formal plan that allows employees to purchase shares in the company the work for. Employees think and act like owners because they do actually hold a very real stake in the company. Not only are ESOPs financially beneficial for employees; companies that offer these plans also reap tangible rewards in improved motivation, communication, productivity, and profitability.

Employee Share Ownership Plans is a comprehensive and practical guide to every aspect of designing and implementing ESOPs:

• Explains the various objectives of an ESOP and the types of plans that exist.
• Outlines all the processes that are at the foundation of implementing an ESOP: determining employee eligibility, financing, creating the implementation team, communicating the plan to employees, troubleshooting, and more.
• Covers the more technical aspects of setting up an ESOP, such as business valuation, tax implications, legal requirements, and creating cross-border or international ESOPs.
• Includes hands-on tools such as sample letters, shareholder agreements, and a comprehensive resource guide to ESOP professionals, web sites, and associations.
• Features case studies, checklists, questionnaires, and frequently-asked questions.

ESOPs are becoming an increasingly important component of compensation and incentive packages, particularly in the high-tech sector, knowledge-based industries, and in any company that relies on a highly skilled workforce. They are very flexible and may be used in many types of situations for a variety of purposes. Because of their adaptability, no two ESOPs are the same, and each plan may be designed and custom fit to a particular culture and type of company.

This book will help business owners and managers, as well as their professional advisors, create a competitive advantage for any organization, publicly traded or privately owned.

Perry Phillips has been a champion for the cause of ESOPs in Canada since the late 1980s. He is President of ESOP Builders Inc., a firm that specializes in the design and implementation of employee share ownership and stock option plans (for more information, visit www.esopbuilders.com).

He is a founding member of the ESOP Association of Canada, and an active promoter of the concept of employee share ownership. He has been involved with lobbying efforts before provincial and federal governments, speaks and writes frequently on employee share ownership, and is often featured or quoted in the media as an expert on the topic.

In addition to his expertise in structuring employee share ownership plans, Perry's extensive experience includes corporate reorganizations, mergers and acquisitions, financial litigation support, estate planning, buyouts, and financing.

He is a member of the Canadian Institute of Chartered Business Valuators; the Canadian Institute of Chartered Accountants; ESOP Association (Canada); the ESOP Association; the National Center for Employee Ownership; and the American Society of Appraisers.