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...ulation: ESOPs come under federal ERISA guidelines and restrictions that can ...

...ee Retirement Income Security Act (ERISA). However, an ESOP may borrow money a...areholders may prefer a rollover into bonds rather than stock. They should choose bonds with a maturity well beyond their ...

... been with the firm for a long time and are making pretty good salaries, the buyout obligations could be significant in the not too distant future. The remaining agency principals need to be careful how they spend money because their fiduciary obligation to the employees and the stock value will have to take precedence over personal goals in making management decisions on spending the agency's money. Regulation: ESOPs come under federal ERISA guidelines and restrictions that can impose a heavy fiduciary responsibility. Agency principals who are considering an ESOP should investigate the pros and cons and have a feasibility study done by a reputable financial consultant with experience in insurance agency situations. This research should include talking with the remaining agency principals in firms that instituted ESOPs several years ago. Asking the principal who sold out and got top dollar for the shares ... perpetuation or employee participation, your agency still needs strong leadership. Agencies that meet these criteria can enjoy significant advantages by adopting an ESOP: Tax benefits: A tax free (Section 1042) sale provides the single greatest benefit of an ESOP. The selling shareholder may sell at least 30% of the agency's value to an ESOP. They then borrow 90% of the amount and buy a corporate bond, which provides the funds to buy the Qualified Replacement Property (QRP) . In other words, the seller needs only 10% of the amount of the sale. Higher agency value: Sellers can obtain a better price for their shares because the ESOP will enhance the cash flow available from the agency. The reason: The appraisal is done under Revenue Ruling 59-60 of the IRS Code for ...

... the Agency. The Agency has not contributed to, nor does it have any past or present obligation to contribute to, any stock option plan or stock purchase plan or other plan designed to hold the stock of the Agency. All employee benefits plans set forth on SCHEDULE 3(l ) which are required to comply with the provisions of the Employee Retirement Income and Security Act of 1974 (" ERISA"), as amended, are in full compliance therewith, and no act or omission by the Agency as of the date hereof and continuing through the Closing Date has created, or will create, any liability of the Agency, whether absolute or contingent, with respect to said plans pursuant to ERISA or otherwise except as set forth on the books and records of the Agency. Except to ... agency. The Agency is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own its assets and to operate its business as carried on by it heretofore. The Agency is, and on the Closing Date will be, duly licensed by the Commonwealth of Massachusetts to conduct a full lines (property, casualty, bonds, life, accident and health) insurance agency business and has the lawful power and authority to conduct all of its business as now conducted. The Agency has all licenses and permits required by any and all jurisdictions in which it transacts business. The Agency has the licenses set forth and identified on SCHEDULE 3(e ), all of which are in full force and good standing with expiration ...

... the Agency. The Agency has not contributed to, nor does it have any past or present obligation to contribute to, any stock option plan or stock purchase plan or other plan designed to hold the stock of the Agency. All employee benefits plans set forth on SCHEDULE 3(l ) which are required to comply with the provisions of the Employee Retirement Income and Security Act of 1974 (" ERISA"), as amended, are in full compliance therewith, and no act or omission by the Agency as of the date hereof and continuing through the Closing Date has created, or will create, any liability of the Agency, whether absolute or contingent, with respect to said plans pursuant to ERISA or otherwise except as set forth on the books and records of the Agency. Except to ... agency. The Agency is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own its assets and to operate its business as carried on by it heretofore. The Agency is, and on the Closing Date will be, duly licensed by the Commonwealth of Massachusetts to conduct a full lines (property, casualty, bonds, life, accident and health) insurance agency business and has the lawful power and authority to conduct all of its business as now conducted. The Agency has all licenses and permits required by any and all jurisdictions in which it transacts business. The Agency has the licenses set forth and identified on SCHEDULE 3(e ), all of which are in full force and good standing with expiration ...

... the Agency. The Agency has not contributed to, nor does it have any past or present obligation to contribute to, any stock option plan or stock purchase plan or other plan designed to hold the stock of the Agency. All employee benefits plans set forth on SCHEDULE 3(l ) which are required to comply with the provisions of the Employee Retirement Income and Security Act of 1974 (" ERISA"), as amended, are in full compliance therewith, and no act or omission by the Agency as of the date hereof and continuing through the Closing Date has created, or will create, any liability of the Agency, whether absolute or contingent, with respect to said plans pursuant to ERISA or otherwise except as set forth on the books and records of the Agency. Except to ... agency. The Agency is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own its assets and to operate its business as carried on by it heretofore. The Agency is, and on the Closing Date will be, duly licensed by the Commonwealth of Massachusetts to conduct a full lines (property, casualty, bonds, life, accident and health) insurance agency business and has the lawful power and authority to conduct all of its business as now conducted. The Agency has all licenses and permits required by any and all jurisdictions in which it transacts business. The Agency has the licenses set forth and identified on SCHEDULE 3(e ), all of which are in full force and good standing with expiration ...

... the Agency. The Agency has not contributed to, nor does it have any past or present obligation to contribute to, any stock option plan or stock purchase plan or other plan designed to hold the stock of the Agency. All employee benefits plans set forth on SCHEDULE 3(l ) which are required to comply with the provisions of the Employee Retirement Income and Security Act of 1974 (" ERISA"), as amended, are in full compliance therewith, and no act or omission by the Agency as of the date hereof and continuing through the Closing Date has created, or will create, any liability of the Agency, whether absolute or contingent, with respect to said plans pursuant to ERISA or otherwise except as set forth on the books and records of the Agency. Except to ... agency. The Agency is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own its assets and to operate its business as carried on by it heretofore. The Agency is, and on the Closing Date will be, duly licensed by the Commonwealth of Massachusetts to conduct a full lines (property, casualty, bonds, life, accident and health) insurance agency business and has the lawful power and authority to conduct all of its business as now conducted. The Agency has all licenses and permits required by any and all jurisdictions in which it transacts business. The Agency has the licenses set forth and identified on SCHEDULE 3(e ), all of which are in full force and good standing with expiration ...

... the Agency. The Agency has not contributed to, nor does it have any past or present obligation to contribute to, any stock option plan or stock purchase plan or other plan designed to hold the stock of the Agency. All employee benefits plans set forth on SCHEDULE 3(l ) which are required to comply with the provisions of the Employee Retirement Income and Security Act of 1974 (" ERISA"), as amended, are in full compliance therewith, and no act or omission by the Agency as of the date hereof and continuing through the Closing Date has created, or will create, any liability of the Agency, whether absolute or contingent, with respect to said plans pursuant to ERISA or otherwise except as set forth on the books and records of the Agency. Except to ... agency. The Agency is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts with full corporate power and authority to own its assets and to operate its business as carried on by it heretofore. The Agency is, and on the Closing Date will be, duly licensed by the Commonwealth of Massachusetts to conduct a full lines (property, casualty, bonds, life, accident and health) insurance agency business and has the lawful power and authority to conduct all of its business as now conducted. The Agency has all licenses and permits required by any and all jurisdictions in which it transacts business. The Agency has the licenses set forth and identified on SCHEDULE 3(e ), all of which are in full force and good standing with expiration ...

... Income and Security Act of 1974 ("ERISA"), as amended, are in full compliance...ith respect to said plans pursuant to ERISA or otherwise except as set forth o...