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What is an ESOP Transactional Trustee?

Newly formed or existing Employee Stock Ownership Plans (ESOPs) are occasionally faced with major decisions that may dramatically affect the ESOP and its participants. The decision may be whether or not to purchase shares of stock, to sell some or all of its shares of stock to unrelated or related parties or perhaps to consider a refinancing or restructuring of ESOP debt. For any given transaction, an on-going trustee of an ESOP, who is often a corporate officer, may have a conflict of interest or, in light of the Department of Labor’s close scrutiny of ESOPs, may not want the responsibility of making the decision. This presents a dilemma for the ESOP. To address the dilemma, the ESOP may consider engaging a Transactional Trustee who will serve as ESOP Trustee for the sole purpose of evaluating a proposed transaction and rendering a decision. After the transaction is either consummated or rejected, the Transactional typically resigns as Trustee of the ESOP and is replaced by an on-going Trustee.

What qualifications should an ESOP Transactional Trustee possess?

Obviously, with sometimes millions of dollars and hundreds of employees’ retirement investment funds at risk, an ESOP Transactional Trustee needs to have sound business judgement. His primary focus has to be on making decisions which above all else are in the best interests of the ESOP’s participants, both current and future. The ESOP Transactional Trustee should have a thorough understanding of not only ESOPs but also of business valuations, financial reporting, income taxes and business acquisitions and sales. In addition, an ESOP Transactional Trustee should possess certain knowledge that can only be obtained from years of experience as a professional business advisor.

Resume: Michael N. Mulkey


5339 Virginia Beach Blvd., Ste. 201

Virginia Beach, VA  23462

(757) 456-0908


BS Old Dominion University 1974 (Accounting)

Certified Public Accountant - Virginia 1977 Cert. #4703 North Carolina 1994 Cert. #21811

Instructor - Accounting & Income Taxes, Tidewater Community College 1979-1985

Instructor - Income Taxes - 1980 - 1981 Ernst & Young National Training School, Washington, D.C.      

Minimum of 40 hours per year continuing education in accounting, auditing, income taxes and ESOPs since 1974

Certified as a Business Valuation Analyst - 1997 - 2000


Eight years with international accounting firms Ernst & Young and Laventhol & Horwath

Accounting, auditing, income taxes and small business consulting

Thirty-three years as President, Mulkey & Company, P.C., CPAs,

Accounting, auditing, income taxes, estate planning, business valuations, small business consulting and trustee services

Experience includes auditing retirement plans, including ESOPs, and serving as independent ESOP trustee, usually on a temporary basis, to fulfill a specific need.


Trustee, Cape Henry Collegiate School, 1984 - 1999

Served as Treasurer, Finance Committee Chairman and Chairman of Annual Giving

Trustee, Virginia Beach Community Trust, 1996 - Present - Serve as Treasurer

Past President - Norfolk Sports Club - 1988

Member, American Institute of Certified Public Accountants


Served as transactional trustee on over 60 engagements in Virginia, Maryland, North Carolina, Alabama, Georgia and Washington D.C.  Engagements involved sales to ESOPs, termination of ESOPs, analysis of proposed related-party transactions, reevaluation of initial stock price, sales of ESOP shares to competitors and mergers of two ESOP

companies.  Deal sizes ranged from $100,000 to $100,000,000 for 100 percent of  the company’s stock.


ESOP Attorneys:

Richard C. Mapp, Kaufman & Canoles, PC, Norfolk, VA  (757) 624-3000

William R. Whitehurst, Womble Carlyle Sandridge & Rice PLLC, Winston-Salem, NC  (336) 721-3653

William Gust, Gentry Locke  Rakes & Moore, Roanoke, VA  (540) 983-9305