picture of Rajah

Rajah Lehal

Sleep Train ESOP Terminated after Takeover by Mattress Firm

November 29, 2015

Links from this article: Read the article here.

Under Sleep Train’s ESOP, employees acquired 26% of the shares of the company. Sleep Train had contributed funds out of its profits to purchase shares for employees under the ESOP, the intention being that this would be part of the investments for the employee retirement plan. When Mattress Firm approached Sleep Train with an offer to purchase its shares, the ESOP Board of Trustees voted unanimously in favour of the deal.

Once the acquisition was complete, the ESOP was terminated. The employees received funds which could be rolled into a qualified retirement plan. A portion of the payout was Mattress Firm stocks.

Read the article here.Take away:

  • An ESOP can be used creatively to both share company profits with employees and provide assets for a retirement plan.

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.