LOANS TO EMPLOYEE STOCK OWNERSHIP PLANS - A BANKERS PRIMER

Employee Stock Ownership Plans (ESOPs) have become a powerful tool in reshaping corporate ownership throughout the country. It is also a com mon practice for ESOPs to borrow money with which to purchase employer securities. Addressing the various criteria lenders and ESOP borrower s should consider when contemplating a loan to an ESOP, the author foc uses on such issues as (1) ESOP loan tax law requirements; (2) how ESO P loans may be structured, (3) specific ESOP loan issues; and (4) typi cal ESOP loan documentation.