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W W W. M A I N E B I Z . B I Z 23 M AY 3 0 , 2 0 1 6 H R & R E C R U I T M E N T F O C U S A long-term plan VIA's ESOP off ers employees new opportunities for equity ownership in addition to participation in the profi t- sharing bonus program that has been in place since the company began. If the company meets yearly targets for profi tability, growth and perfor- mance, Coleman and his wife Linda (a co-owner of the company) will issue up to 9% of the value of the company into a pool of options. Each of the company's 100 employees will receive a portion of this options pool, which gives them the right to purchase shares at a specifi c price in the future. e number of options each employee gets is determined by his or her responsibility at the company as well a pro-rata portion of base salary. If the company is sold, each employee can convert their options to shares and sell them. If an employee leaves after the options have been converted to shares, they can sell those shares back to the company. However, if the employee leaves while they still hold options, those options are forfeited. Coleman says that a conventional qualifi ed IRS ESOP model was too infl exible, costly and complex for what he hoped to accomplish. For example, he wanted to transfer equity against specifi c criteria while maintaining full control of the company. "I wanted to have the ability to make decisions as the transition happened," he says. "Before I started transferring control to employees, I wanted to design a program that I believe is going to be good for the associates, the shareholders and the future of the company." He also wanted to motivate employ- ees to stay for the long term. After all, the longer they stay — and the better the company performs — the greater the potential fi nancial upside. "A longer-term transition plan will allow the associates to slowly learn how to run and govern the agency most eff ectively," says Coleman. "I wanted to the ability to make decisions as the transition happened. Before I started transferring control to employees, I wanted to design a program that I believe is going to be good for the asso- ciates and the future of the company." Gary Bergeron, vice president and fi nancial advisor with e Breakwater Group at Morgan Stanley, advised Coleman during the planning process. He says that while structuring the ESOP in this way may have involved some trade-off s in terms of tax Jonathan Shapiro, Mindy Caterine, Eric Uhl, David Strock and Shiloh Theberge One Monument Square | Suite 600 | Portland, ME 04101 | 207.774.6001 littler.com Littler offers the full array of legal services related to the employer-employee relationship, and we are prepared to provide clients with counseling and representation on all topics that arise. We don't just specialize in labor and employment law—we specialize within it. MaineBiz ad_6.625x5.5_HR Focus.indd 1 5/20/16 12:06 PM JUNE 16 Bowdoin College, Brunswick 7:30–10:30am For more information contact Rebekah Roy at 207.761.8379 x341 or rroy@mainebiz.biz Understanding an ESOP as part of a succession plan Register for a table of 10 people and save 10% off the ticket price. Tickets are $30 and include breakfast. R E G I S T E R T O DAY ! mainebiz.biz/Insights16 T H I S Y E A R ' S T O P I C FOLLOW US @MBEVENTS #MBInsights16 SP ONSORED BY PA N E L I S T S MODERATOR Steve Tenney Senior Vice President of Wealth Management, UBS David Colter CEO, GAC Chemical Corporation Susan Scherbel Founder, Bellview Associates Mark Adams CEO, Sebago Technics Kevin French Vice President, Landry/ French Construction Co. C O N T I N U E D O N F O L L OW I N G PA G E »