When an ESOP-sponsoring company appoints the Aegis team as trustee for a purchase transaction, Aegis is responsible for making the fiduciary decision to acquire the stock of that company from its owners. In so doing, Aegis is required to act in the best interests of the employees. As the legal owner of the stock, the Aegis team negotiates all the terms of the ESOP transaction, mindful that ERISA prohibits it from paying more than fair market value for the stock. Aegis also services as transaction trustee when a company decides to terminate the ESOP or when a third party buyer decides to acquire the ESOPs stock. In either event, Aegis’s fiduciary duty requires that the ESOP not sell its stock for less than fair market value. When Aegis services as the transactional trustee to purchase the stock or to sell the stock, Aegis’s experienced team of professionals follow a proven, rigorous internal process that surpasses its competitors and far exceeds the standards imposed by the Department of Labor, ensuring that Aegis fulfills its fiduciary duties to the employees.
At the conclusion of the ESOP purchase transaction, the Aegis team performs ongoing work on behalf of the ESOP. Several times a year, Aegis meets or confers with the management of the ESOP-sponsored company to monitor its operations and financial performance. At the end of each year, Aegis must value the sponsoring Company stock. Aegis’s experienced fiduciary committee and independent financial advisor review the company’s financial statements and other pertinent information to determine the appropriate value of the stock. As a result of the process, the employees will know the value of the stock allocated to their respective accounts.
Administration of a newly formed or mature ESOP can be a daunting task. ERISA requires strict adherence to its many rules. Our team of professionals helps plan sponsors comply with these rules.
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