Finding Good Employees &
Succession Planning
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Panelists
• Nancy Geary – Partner, ECS Financial
Services, Inc.
• Randy Haug – Sr. Vice President/Partner,
LeaseTeam, Inc.
• Daryn Lecy – VP of Operations, Stearns
Bank Equipment Finance Division
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Finding Employees
• Recruiting Strategies & Methods
– Lucky we can stay local
• local advertising
• benefits of small town
– Take advantage of Star Performers & the
schools they came from
• Referrals
– Major source for us
– Speeds up the process
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Finding Employees
• Experience vs. Fresh Blood
– Experience is good, but for many
positions, fresh is better!
– No bad habits to break
– Typically savvier with technology
– Source of new ideas & perspectives
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Finding Employees
• Recruiting Strategies & Methods
– Email
• Effective Publications/sites/social
media
• Referrals
• Local Advertising
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Interviewing
• Interview process
– Matter of perspective
– One of my favorite things
– Opportunity to tell our story
– Explain the process & expectations
– Let them see and taste the job to
eliminate surprises
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Interviewing
• Interview process
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Review resumes
Phone screening
Employment tests
Personal interview
Meet various levels of staff; multiple office
visits.
– Evaluate professional expertise and ability to fit
into corporate culture/atmosphere.
– Be honest about your expectations.
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Employee Training & Retention
• Training Programs
– Combination training – books/videos/job
shadowing
– Personally directed development – employees
enjoy and want control (Library of resources)
• Keeping Employees Engaged
– Let them lead
– Let them speak – don’t always be the voice of the
division, process, project, etc.
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Employee Training & Retention
• Employee Performance Reviews
– Don’t save up – timely interventions
– Be prompt
– Don’t rush through them
• Thanking Employees
– Sincerely and often
– Little things – handwritten thank-you notes
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Employee Training & Retention
• Training Programs (What & When)
• Keeping Employees Engaged
• Employee Performance Reviews
• Thanking Employees
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
LeaseTeam, Inc. guiding employee
principals!
• 1. Listening
• "When people talk, listen completely. Most people
never listen." - Ernest Hemingway
• 2. Storytelling
• "Storytelling is the most powerful way to put ideas into
the world today." -Robert McAfee Brown
• 3. Authenticity
• "I had no idea that being your authentic self could
make me as rich as I've become. If I had, I'd have done
it a lot earlier." – Oprah Winfrey
• 4. Transparency
• "As a small businessperson, you have no greater
leverage than the truth." – Russ Hallberg
• 5. Team Playing
• "Individuals play the game, but teams beat the
odds." -SEAL Team Saying
• 6. Responsiveness
• "Life is 10% what happens to you and 90% how
you react to it." -Charles Swindoll
• 7. Adaptability
• "When you're finished changing, you're finished." -Ben
Franklin
• 8. Passion
• "The only way to do great work is to love the work you
do." -Steve Jobs
• 9. Surprise and Delight
• "A true leader always keeps an element of surprise up
his sleeve, which others cannot grasp but which keeps
his public excited and breathless." -Charles de Gaulle
• The Golden Rule: Above all else, treat others
as you’d like to be treated.
• By showing others the same courtesy you
expect from them, you will gain more respect
from coworkers, customers, and business
partners. Holding others in high regard
demonstrates your company’s likeability and
motivates others to work with you.
Employing Family
• Expectations from both sides
• No promises clause
• Keeping it fair to all
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Succession Planning
• Options
– Selling the business (or portfolio)
– Develop staff into future owners
• Costs
– Time (identify buyer, develop staff)
– Consultant costs (legal fees, accountant advice)
• Implementation Time
– Long term; a “fire sale” isn’t going to draw the best deal!
• When to start thinking about it? NOW
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Succession Planning
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•
Options
Costs
Implementation Time
When to start thinking about it?
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Succession Planning
• LeaseTeam Case Study
– How our ESOP plan works
– Win-Win
– Key Employees – taking care of the right
people
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Employee Stock Ownership
Plan (ESOP)
Fundamentals
ESOP Fundamentals
History of ESOPs
 Mechanics of an ESOP, what it is and how
it works
 Reasons for implementing and ESOP,
advantages and disadvantages
 Future of ESOPs, research and trends

History of ESOPs
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Concept was developed in the 1950’s by lawyer and
investment banker Louis Kelso.
In 1956, he implemented for a San Francisco newspaper
the first ownership transfer to Employees by means of
what later became known as the “The Kelso Plan”.
He argued that the capitalist system would be stronger if
all workers, not just a few stockholders could share in
owning capital-producing assets. He felt this would
increase company productivity and create tax breaks for
the company.
Companies didn’t buy the idea because there were no
clear IRS regulations and they were concerned that the
courts would rule it improper.
History of ESOPs
In 1973, Kelso convinced Senator Russell Long,
chairman of the tax-writing Senate Finance Committee,
of the benefits and soon after federal legislation
promoting ESOP’s appeared.
 Employee Retirement Income Security Act of 1974
(ERISA) – governs employee benefit plans and
established a statutory framework for ESOPs.
 Other legislation includes the Tax Reform Acts of 1984
and 1986, Small Business Job Protection Act of 1996,
Taxpayer Relief Act of 1997, and the Economic Growth
and Tax Relief Reconciliation Act of 2001.
 With the support of legislation, ESOPs have expand
dramatically, from 200 in 1974 to over 13,000 in 2009
covering nearly 14 million employees in the US.

Mechanics of an ESOP
What is it?
An ESOP is a company-paid “qualified”
retirement plan. Qualified means the plan
adheres to the ESOP rules established by the
IRS.
The ESOP will invest primarily in the stock of
LeaseTeam and the benefits you receive from
the ESOP is directly related to the future
financial performance of LeaseTeam.
Mechanics of an ESOP
What is it really?
• To the business owner: a buyer of stock
and a means of succession planning
• To the Company: an alternative to a
merger/buyout and a means to increase
productivity
• To the Employee: a company funded
qualified retirement plan and an incentive to
affect their own personal wealth
Mechanics of an ESOP
How does it work?
• The ESOP operates through a trust, setup by the
company, that accepts tax deductible contributions
from the company to purchase company stock.
• The contributions made by the company are distributed
to individual employee accounts within the trust.
• The amount of contributions each individual receives will
vary according to salary.
• At a specified time in the future, their will be a ‘stock
sale’ in which the ESOP contributions will be used to
purchase Company stock.
Mechanics of an ESOP
How does it work?
• The employees may ‘cash out’ after vesting in the
program or when they leave the company. The amount
they may cash out depends on the vesting requirements.
• Employees receive the vested portion of their accounts
at either termination, disability, death, or retirement.
These distributions may be made in a lump sum or in
installments over a period of years. If employees
become disabled or die, they or their beneficiaries
receive the vested portion of their ESOP accounts right
away.
Reason’s for Implementing an
ESOP
Advantages
• Easy Succession Plan: less stressful than having a
larger shock to the Company from death or
retirement
• Increase in Employee Productivity: idea that
people work best when they work for themselves,
concept is to have employees think like an owner and
if it benefits the company than it benefits them
• Increases Company Cash Flow: reduces taxes and
increases cash flow all while providing a retirement
benefit
Reason’s for Implementing an
ESOP
Advantages
• Creates Diversification for the Owners: ESOP
creates a market to sell the shares, allows owners to
sell all or part of their shares over years and involves
no 3rd party or change of control.
• Creates a Qualified Retirement Plan: Employees
receive a retirement plan that is fully funded by the
Employer, a benefit that costs nothing to the
Employee.
ESOP Companies grow faster: By 60 percent
over the past decade, versus flat employment in
the economy as a whole.[23]

Reason’s for Implementing an
ESOP
Disadvantages
• Company Stock is a speculative investment:
Both the value of Company stock and Company
contributions are dependant upon the success of the
Company
• S-Corp Limitations: Sellers will have to pay capital
gains taxes on any sale of stock to the ESOP
• Contribution Limit: Interest, forfeitures and other
qualified retirement contributions are included in the
25% company contribution limit.
Reason’s for Implementing an
ESOP
Disadvantages
• Must obtain financing: Either by incurring debt
with a loan or funding the ESOP prior to a stock sale
which could take years.
• Liquidity: If the value of the stock appreciates
substantially, the ESOP and/or the company may not
have sufficient funds to repurchase stock, upon
employees’ retirement or termination.
Future of ESOPs
Research & Trends
• Numerous studies have been conducted over the last 20
years and ALL have concluded that ESOP’s increase
company performance overall.
• 1987 – National Center for Employee Ownership (NCEO)
• Stated that ESOP Companies with active Employee participation
programs had on average higher sales growth of 8-11%
compared to non-ESOP Companies.
• 2004 – Department of Labor
• The annual rate of return for ESOPs with more than 100
participants during the 10 year period from 1990-1999 was
approximately 10% higher than for 401k plans with more than
100 participants.
Future of ESOPs
• More than 50 years later, Louis Kelso’s vision
for employee ownership has been fulfilled.
• Millions of Employees now hold an ownership
interest in the Company that employs them.
• Since 1974, twenty-four different laws have
been passed to strengthen ESOP’s
• As long as congress continues to believe in
tax subsidies for ownership transfers to
employees, ESOPs will continue to survive.
ESOP Fundamentals
Most of the information shared today can be
found on the following websites:
www.nceo.org
www.esopassociation.org
Please visit these sites for additional
information.
Q&A
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM
Top 5 Reasons to Live in the
Midwest
•
Number 5: Dripping Mustard on your shirt often gets comments from girls like. "Wow,
you look really pretty good in yellow."
•
Number 4: We talk to our neighbors
•
Number 3: We know where to get the best beer, cheese, or pizza in the country.
Sometimes all three.
•
Number 2: Discovering what you think is a Moose in your backyard and finding out
later that it was just your spouse taking out the trash !
•
•
And the Number 1 Best Reason to Live in the Midwest…..
Oh man, can we hold our liquor… Ya know!
Soar to New Heights!
2013 National Equipment Finance Summit, Albuquerque, NM