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Mini-cast 134: NCEO’s Virtual Learning Series - EOTs

"The Employee Ownership Trust: An ESOP Alternative" presented by the NCEO Employee Ownership Virtual Learning Series

Bret Keisling is joined by Chris Michael of EOT Advisors who talks about NCEO’s upcoming webinar on Employee Ownership Trusts and previews his appearance on Episode 151 of The ESOP Podcast.


Mini-cast 134 Transcript

Bret Keisling: [00:00:08] Welcome to the ESOP Mini-cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Today, you're going to hear about a great webinar on employee ownership trusts that will be held Tuesday, May 18th, 2021, as part of NCEO's [the National Center for Employee Ownership's] virtual learning series.

The webinar is presented by Chris Michael and two others whose companies have formed employee ownership trusts. It caught my eye because coincidentally Episode 151 of our primary EO/ESOP podcast also drops Tuesday, May 18th and it's a long form conversation with Chris Michael, who shares all about employee ownership trusts and how they're gaining ground in the United States and also in Canada.

I speak frequently on the podcast about NCEO's annual conferences, as well as conferences held by other EO and ESOP organizations. I haven't talked a whole lot about NCEO's virtual learning series, and it's a shame because they're really putting out informative, interesting, and important information.

NCEO puts so much of their EO research and information out in the public domain, but like their conferences, the virtual learning series is for members [join here] only. It's important to note it's free to members, but I promise you if you even participate in just a couple of virtual seminars a year NCEO's reasonable membership fees will be more than worth their cost.

Even though Episode 151 with Chris Michael hasn't aired yet, when I saw he was doing the NCEO webinar, I reached out and asked him to come on the podcast and tell us about the webinar. With that, as a prelude to Episode 151 of our podcast, here's Chris Michael talking about his upcoming NCEO virtual learning series webinar about employee ownership trusts.


Bret Keisling: [00:02:05] Let's get down to a little bit of podcast business here. You're hosting a webinar through NCEO's virtual learning series. It's about employee ownership trusts. First of all, again, on Episode 151, you and I go deep for about 45, 50 minutes on all about employee ownership trust and your path. So I want my listeners to catch that episode next week, but give us before you talk about the webinar, just give us the one minute take on employee ownership trusts.

Chris Michael: [00:02:41] Gladly. Employee ownership trusts are a non-ERISA form of employee ownership; the Department of Labor is not involved, and it's not a retirement plan. It's a simplified form of employee ownership that still allows a seller to exit, right? Just like an ESOP transaction, you'd take a note and the shares of the company wind up in a trust.

It's just done in a way that is extremely flexible, as far as the design of the employee ownership. It's very private, you're not negotiating with a third party trustee and I think you know quite a bit about that part of things.

Bret Keisling: [00:03:13] I do, sure

Chris Michael: [00:03:14] For these reasons, it's much less costly to implement and maintain. And it's also just easier for everyone to understand, from the seller themselves who doesn't, might not want to spend a year learning about ESOPs as much as we might like to geek out on all that stuff, but it's not for everybody. And it's much easier for the employee owners to understand as well, I think.

Bret Keisling: [00:03:33] I appreciate that, and again, on Episode 151, you're going to go deep about employee ownership. On your webinar, and I said, Tuesday, May 18th, 9:30 AM Pacific time, 12:30 PM Eastern time, and other times if you're in the middle.

You're joined by Melinda Paras of Paras and Associates and Rick Plympton of Optimax. Can you tell us a little bit about them? I understand that they have set up employee ownership trusts?

Chris Michael: [00:03:59] Yes, both fantastic people. Two former clients, set up an EOT for each of them. Paras and Associates, Melinda's company, is absolutely fantastic. Long background and health services and health advocacy.

She was a health commissioner in San Francisco , decades ago. She saw a need for more communication between hospitals to facilitate translation for languages that aren't spoken in certain parts of the country. One example she gives is if somebody in Pennsylvania needs Hmong dialect of Vietnamese or something like that, from Vietnam, they might have nobody on staff, of course, in any given hospital that speaks that dialect. But she was able to create a national non-profit network that would link together translators from hospitals who are stationed physically in hospitals throughout the country to be able to facilitate remote translation between care providers and patients.

She then created, as an entrepreneur on top of that, that she then created the backend, private, for-profit company that was the technology solution for this national non-profit network. And so that's what Paras and Associates is. It's the backend technology, IT solution for this national non-profit network that she also created. So we converted that to an EOT.

Rick Plympton, is CEO of Optimax systems. They're based in upstate New York. Their company is one of the top optics manufacturers in the entire planet.

Bret Keisling: [00:05:28] Wow.

Chris Michael: [00:05:28] Their optical lenses are in the Mars Rover and in all of the other, I don't know all the names, all of these other probes that we're sending out to like, Saturn or to, beyond the solar, like outside of the solar system, like these have Optimax lenses in them. Big workforce, about four to 500 people and hiring incredibly impressive company.

Bret Keisling: [00:05:56] So in terms of the webinars, you've brought together two founders and CEOs of two companies that converted to the employee ownership trust. And I assume you're going to talk, first of all, about what the trust is at length and also their process and probably why they chose it and how they got to have the trust.

Who are you hoping is in the audience for the webinar? And NCEO members, let me just add, can log in, sign up and register for it. Who is it you're hoping to educate or reach?

Chris Michael: [00:06:22] Naturally, the first, the ideal audience member might be a owner of a privately held business anywhere between a million dollars in value up to $25 or $50 million value. And they're looking for an exit solution and maybe they liked the idea of employee ownership but they want maybe a little more privacy in their transaction. They don't want, maybe, they're not stuck to an employee ownership program that also functions as a retirement plan. And that's the ideal audience, of course, as we go into a lot of depth into this on the webinar that we did together or the podcast that we did together.

But you know, I'm a huge advocate of the ESOP. I wrote a 300 page PhD dissertation saying how cool ESOPs are and a lot of my friends and mentors are people who've been doing ESOPs for decades, help build the industry. I hope some of my friends are, I am an ESOP person as well, so hope some of my friends are also attending just to learn a little bit more about what the EOT is.

Bret Keisling: [00:07:21] Chris. I hope that you get a attendance from both ESOP professionals and advocates, and the reason is, and as you've alluded to I was an ESOP trustee for seven years. I'm with the podcast amplify and celebrate all forms of employee ownership, but my my foundation was developed on the ESOP side of things.

But the reality is ESOPs don't fit every company. And sometimes the company's too small. Sometimes there are some of the factors that you've discussed, and again, we actually had this conversation on the full podcast so I'll ask people to listen. But whether it's comfort level of the owners, the complications of it, that sort of thing, for other reasons, or whatever the reasons EOTs may be a better fit. And here's where I say loudly and strongly, I want more employee owners. And if they're ESOP employee owners, great. Co-ops, collectives, or employee ownership trust employee owners, you're helping to spread employee ownership.

And by the way, if you're an ESOP lawyer, I don't mean to get preachy, I understand you're looking for ESOP transactions, but if you go on Chris's webinar and learn some stuff, maybe one of your clients ends up with an EOT. But you've still served your client by bringing them a good solution. So the education to me is just a very important part and I do hope the practitioners and the advocates check out your webinar and just learn more about employee ownership trusts.

Chris Michael: [00:08:50] I appreciate that and it's a good thing that you mentioned advocates as well. I know the EOX [Employee Ownership Expansion Network] group and NCEO have been supporting the growth of state centers and I know of at least one state center that's told me that we're going to be joining the webinar.

And I'm super excited to share this more and more with the state center advocates as well.

Bret Keisling: [00:09:06] So before we go, Chris, I do want to chat. As as we've talked off and on in the last month, I am big on Clubhouse and I'm working to build an ecosystem of employee ownership advocates, employee owners on Clubhouse. And I'm hoping that you will join me before too long. And this isn't on the air to say that.

Here's why I bring it up, Chris and it's to end my podcast with a little bit of silliness. On Mini-cast 130, which we aired April 16th, I laid out my EO vision for Clubhouse and I talked about one of the rooms that has grown to have a lot of meaning for me. The club is called Blueprint4Joy and the woman who runs it, Lara Parrish, is just wonderful. She does a lot of mindfulness, a lot of gratitude work, et cetera course in miracle type work. And I just find it very refreshing.

One of her regular rooms is called Life Hacks for Night Owls and it's really cool. I've gotten in the habit. It's a midnight room and you talk about your daily gratitudes. You talk about reframing anything that's gone bad. You talk about having a word for the day and it turns out it doesn't change anybody's sleep patterns, but you'd go to sleep more rested because you've cleaned out the day.

About a week ago, and I was thinking about this, and this is why I'm talking about the Blueprint4Joy room. Somebody was coming up with a word of the day and they were trying to find a word that summed up both productive and serendipitous and Lara, and a few people in the room came up with "producdipitous."


And Chris, the reason I say this at the podcast is we were all set to air your episode next Tuesday and then a day or two ago, I saw that NCEO was running your webinar and I reached out and said, Chris, can you come on really quick? And you said, yes. And that, my friend, is an example of producdipitous. It is productive, but it was serendipitous.

Thank you for indulging me. Thank you so much for your time. I really hope that people are going to check out Episode 151 of the ESOP podcast and, again, register for your webinar. They can find it on NCEO's website.

Chris Michael: [00:11:07] Thank you so much, Bret.

Bret Keisling: [00:11:09] With that, we will wrap up today's Mini-cast. As I've been saying since the pandemic got started, folks, the light is at the end of the tunnel. We're not quite there yet. Our country, our world, we're all going through an awful lot together. And that's how we'll get through it, together, which is in the best spirit of employee ownership.

Thank you so much for listening. This is Bret Keisling; be well.


Bitsy McCann: [00:11:32] We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Descript, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.


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