ESOP CANDIDATE CHECK LIST

Yes / No

___ ___ 1. The entity is a corporation taxed in the normal manner. Please check type of corporation.

"C" Corp. ___ "S" Corp. ___ Professional Corp. ___ Other ___.

___ ___ 2. The company is closely held, or publicly traded with significant ownership in a few hands.

___ ___ 3. The company has payroll adequate to support an ESOP (Minimum $1,000,000).

___ ___ 4. The company has a strong pretax, pre-distribution/bonus earnings and cash flow over the previous few years.

___ ___ 5. The company expects to have strong pretax, pre-distribution/bonus earnings over the next few years ($1,000,000+).

___ ___ 6. The company has paid substantial federal income taxes during the past few years.

___ ___ 7. At least some stockholders are motivated to sell some stock; e.g., planning for retirement, liquidating an estate, entering a new business venture, children not involved in business, etc.

___ ___ 8. If one or more principal executives will be departing in connection with the sale, there is strong management available to take their place(s).

___ ___ 9. The company customarily makes payments to a 401(k) or profit sharing or other employee benefit plan that could in the future be made to an ESOP.

___ ___ 10. The owners are psychologically willing to share ownership with their employees, assuming an attractive transaction can be arranged.