Bloomington, MN: September 23-24,

2010

Characteristics of Successful
ESOP Companies

Jim Ahern Rich Armstrong Dave Horvath

Managing Director President Director
ComStock Advisors The Great Game of Business Crowe Horwath LLP
Introduction
 How do we define success?

 Does an ESOP make it more or less difficult to

be successful?

 Are there any industries where it is easier for an

ESOP company to be successful?

2
Success Factors
 Corporate Governance and Management
 Experienced Management Team

 Active Board of Directors, including outsiders

 Transparent and Open Communications

 Teamwork

 Learning and Development

3
Success Factors
 Business Characteristics
 Business operates in market with growth
opportunities

 Products or Services are diversified

 Customers are diversified

 Brand resides with company, not individuals

 Trust and respect in workplace

4
Success Factors
 Financial Characteristics
 Profitable

 Sound Balance Sheet

 Debt levels reasonable

 Reward structure makes sense with ESOP

 Future capital spending can be accomplished with

ESOP expense

5
Success Factors
 Employee Benefit Characteristics
 Management understands ESOP cost in employee
benefit framework for short and long term

 Employee benefit cost reasonable

6
Questions

Dave Horvath, Crowe Horwath

One Mid America Plaza, Suite 700
Oak Brook, IL
630-586-5117
David.Horvath@crowehorwath.com

Rich Armstrong, The Great Game of Business

3055 East Division Street
Springfield, MO
417-829-8222
rarmstrong@ggob.com

Jim Ahern, Comstock Advisors

129 West Wesley Street
Wheaton, IL
630.462.9100
jahern@comstockadvisors.com