MONEYSOFT RESPONDS TO GROWING INTEREST IN ESOPs WITH ESOPlan IMPLEMENTATION
ANALYSIS SOFTWARE

ESOPlan Helps Employers Study Feasibility Of Creating An ESOP

PHOENIX, Ariz., December 1, 1994 -- MoneySoft announces the release of
ESOPlan Version 6.0, a new software system designed to help users
determine the costs and benefits of establishing an Employee Stock
Ownership Plan (ESOP). "We developed ESOPlan with the goal of promoting
ESOPs by providing a cost-effective tool that will allow more companies to
evaluate the appropriateness of an ESOP," said Robert B. Machiz, president
of MoneySoft.

Although the concept of employee ownership dates back to the late 19th
century, Congress formally recognized ESOPs in 1974 with the passage of
the Employee Retirement Income Security Act (ERISA). According to Corey
Rosen, executive director of the National Center for Employee Ownership,
the number of ESOPs has grown to approximately 11,000 companies since the
passage of ERISA. "Employee stock ownership has become one of the most
significant developments in American business, both for corporate finance
and for organizational innovation," Rosen said.

An ESOP is a tax-qualified employee benefit plan similar to a 401(K) or
profit sharing plan. However, unlike other tax qualified plans, ESOPs are
designed to invest primarily in the stock of the employer-company and can
borrow money in order to do so. There are two basic types of ESOPs: Stock
Bonus ESOPs and Leveraged ESOPs. Under the Stock Bonus ESOP, the employer
makes tax-deductible contributions in the form of stock or cash (used to
purchase employer stock). With a Leveraged ESOP, the ESOP or the employer
borrow money which is used to purchase employer stock from the company or
an existing shareholder.

"In the right situation, a leverage ESOP can be an extremely efficient tool
for corporate financing," Machiz said. "Interest rates on ESOP loans are
generally priced below-market. In addition to the standard deduction on
interest, the company is allowed to take a tax deduction on principal
payments (up to 25 percent of the payroll to plan participants). In
exchange for providing employees with a stake in their company, the
company gets to lower the cost of capital and conserve its cash -- this
has the potential to be a win-win transaction.

In addition to being a legitimate financing technique, an ESOP can create
an instant market for shares in a closely-held company. The ESOP can
acquire shares from the company or an existing shareholder. If an existing
shareholder sells their shares to an ESOP, the shareholder may be able to
indefinitely defer the gain on the sale. "An ESOP can make sense when you
have an owner who wants to cash out, has a low basis in their stock, and
there is no readily apparent buyer," Machiz said.

In spite of the advantages, an ESOP may not be appropriate for all
companies. Before rushing into an ESOP, management and its advisors should
carefully evaluate the costs and savings that an ESOP might provide as
well as its impact on the financial statements and culture of the
company.

ESOPlan Helps Perform An In-Depth Feasibility Assessment

MoneySoft's ESOPlan is designed to prepare a management study that
considers such factors as the projected financial position of the company,
an internal estimate of value, and an examination of the various tax
benefits compared to the costs for establishing an ESOP under a variety of
structures. The program helps the user answer questions such as: What are
the tax benefits and savings that an ESOP offers the company? How much
will it cost to establish and maintain an ESOP? How does an ESOP compare
to a traditional transaction? How will the ESOP impact the future
financial performance of the company? How does the ESOP benefit employees?
What is the impact on the value of shares held by remaining shareholders?

There are two main components to ESOPlan: the Analysis Section and the
Report Writer. In the Analysis Section, the user enters historic financial
data, analyzes the data and walks through a series of ESOP structure and
financing issues in order to evaluate the impact of various "what if..."
scenarios on the company, shareholders, employees and lenders. ESOPlan
automatically "crunches the numbers" to prepare the feasibility evaluation
and lay the foundation for a board room-quality management report or
funding document.

The Report Writer takes the results of the feasibility evaluation and
compiles it into a "smart" narrative report that can be edited with any
popular word processor. The Report Writer lets the user put the finishing
touches on the ESOP feasibility evaluation and combine it with an
explanation of the user's assumptions and other appropriate business
information to create a formal presentation for management, shareholders
and prospective funding sources.

ESOPlan is retail priced at $695, with an introductory price of $395
through June 30, 1995. The 330 page Users Guide includes 42 pages on the
"Principles of Employee Stock Ownership Plans." System requirements
includes an IBM PC or compatible with 2 MB on hard disk and 1 MB of RAM.
For more information on ESOPlan, call MoneySoft at (800) 966-7797.

MoneySoft, Inc.

With headquarters located in Phoenix, Ariz., MoneySoft, Inc. is a
developer, publisher and distributor of software for business and
financial applications.

MoneySoft, Inc.
One East Camelback Rd, Suite 550
Phoenix, AZ 85012
602-266-7710

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