ESOP Valuations

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Because ERISA requires that Employee Stock Ownership Plans ("ESOPs") pay no more than "adequate consideration" when investing in employer securities, one of the crucial inputs in establishing an ESOP is determining and documenting the fair market value of the employer securities. Strategic Valuation Group possesses the requisite expertise and experience to value stock held in an ESOP, and is knowledgeable in unique issues that can arise, such as:

•  Assessment of the Company's ability to fund the re-purchase liability, and

•  Analysis of the marketability of the plan's shares, which often possess a put option.

While Strategic Valuation Group acts as an independent valuation advisor, rather than acting solely in a compliance role, we strive to add value for the ESOP Company and its shareholders. In line with this, our professionals frequently:

•  Are involved during the planning stages to determine viability of the ESOP alternative

•  Establish and document fair market value through a comprehensive formal appraisal at the formation of the ESOP and annually thereafter

•  Perform follow-up annual valuations with informative meetings to explain our value conclusions to management and employees

•  Offer consultative advise to management and employees on strategies that could enhance value

The professionals at Strategic Valuation Group have a solid base of experience in this area, meeting the Department of Labor's qualification requirements and satisfying the ESOP trustees' fiduciary duty to the plan participants.