By: E&P Staff
Tribune Co. executives announced Tuesday that the company will end its employee stock ownership plan (ESOP) when the company emerges from bankruptcy.
Michael Oneal reports that instead of an ESOP, the company is setting up a new 401K plan with a 4% match for employee contributions of up to 6%. There will also be a profit-sharing program.
“When we emerge from bankruptcy, we expect that the shares of Tribune stock held by the ESOP will be extinguished and the plan terminated,” Tribune’s Chief Administrative Officer Gerry Spector wrote about the move in a memo to Tribune employees.
It is unclear whether employees will retain a piece of the company. Eliminating the ESOP Oneal wrote, “signals that Tribune management and the company’s creditors figured that the complexity of keeping the ESOP in place was more costly than paying taxes.”
The company will still distribute ESOP share allocations at the end of this year, but those shares are underwater as Tribune makes its way through Chapter 11.
Tribune was purchased in 2007 in a leverage buyout deal led by Sam Zell.