There is great variety in the techniques used by ESOP companies to develop a culture of ownership, to enhance productivity, profitability, and shareholder value, but several principles are common in the most successful operations:

PARTICIPATION: Institutionalized mechanisms that do not merely permit, but actively ensure employee participation.

RESPONSIBILITY: Increasingly autonomous, yet coordinated employee responsibilities within a mutually acknowledged company strategy.

OWNERSHIP: Precise reinforcement of desired results through well-balanced current compensation, long-term stock compensation and relevant feedback systems.

SYSTEM: Consistent management involvement in all facets of the program from communications to coaching.

By implementing these principles, companies accomplish more at lower cost. This is the definition of productivity.

Menke & Associates' PRO-Productivity System (tm) provides a step-by-step approach to controlled implementation of a productivity program rooted in the most fundamental economic truth--People work best when they work for themselves.

Since 1974, Menke & Associates, Inc. has been the most active firm in the nation in the design, installation, administration, communication and continuing operation of Employee Stock Ownership Plans. We are a full-service firm which conjoins under one roof all the elements required to create and run a successful ESOP.

For a free preliminary analysis of how the PRO-Productivity System (tm) could work for your company, please call 1-800-347-8357 and speak to one of our representatives.

Copyright ©1996-1999 by Laurence G. Lyon and by Menke & Associates, Inc.

All rights reserved.

SELECTED READINGS

Braun. Dr. Warren L. Braun, P.E. On the Way to Successful Employee Ownership: Enhanced Human Relations in the Workplace. Privately Printed, 1992. Available from ComSonics, Inc., P.O. Box 11 06, Harrisonburg, VA 22801.

Case. John Case. "Collective Effort" [Reflexite], Inc. (January, 1992), pp. 32-43.

Kelso. Louis 0. Kelso & Patricia Hetter Kelso. Democracy and Economic Power. Cambridge, Mass.: Ballinger Publishing Company, 1986.

Milbank. Dana Milbank. "Newly Rich: Here is One LBO Deal Where the Workers Became Millionaires" [Oregon Steel], Wall Street Journal (October 27, 1992).

Rosen. Corey Rosen, Katherine J. Klein, Karen M. Young. Employee Ownership in America. Lexington, Mass.: D.C. Heath & Company, 1986.

Rosen & Quarry. Corey Rosen and Michael Quarry, "How well is employee ownership working," Harvard Business Review (September-October, 1987), p. 126-32.

Simmons & Mares. John Simmons & William Mares. Working Together. New York: Alfred A. Knopf, 1983.

Stack. Jack Stack. "The Great Game of Business: Or, How I learned to Stop Worrying and Teach People How to Make Money," Inc. (June, 1992), pp. 53-66.

Stack & Burlingham. Jack Stack. The Great Game of Business, edited by Bo Burlingham. New York: Doubleday, 1992.

Thurow. Lester Thurow. Head to Head: The Coming Economic Battle Among Japan,

Europe, and America. New York: William Morrow and Company, Inc., 1992.

1 J. Warren Henry [Austin Industries, Dallas, TX], "One Message, Many Owners--You can Improve the Value of Your Stock," oral presentation, Proceedings of The ESOP Association 12th Annual Convention, May, 1989, p. 649. 2 Anon., "Improving Productivity Earns Dalton Foundries Senate Award," modem casting (January, 1992), p. 25. 3 Michael Conte, Ph.D., ESOPs: A Statistical Overview (Washington, D.C.: The ESOP Association, 1992). 4 Rosen & Quarry, p. 127 and Corey Rosen, "Employee Participation--Getting from There to Here," oral presentation, Proceedings of The ESOP Association 12th Annual Convention, May, 1989, p. 702. 5 Milbank. 6 Anon., "Over 1 00 Workers Become Millionaires" [Oregon Steel], The National Enquirer (February 8, 1993). 7 Derek Jones and Takao Kato, "Employee Stock Ownership Plans in Japan," The Journal of Employee Ownership Law and Finance (Winter, 1991), p. 125 citing a 1990 Nomura Securities report entitled Handbook of ESOPs. 8 John Simmons, oral presentation, Proceedings of The ESOP Association 11th Annual Convention, May, 1988. 9 cf. Simmons & Mares, Kelso, Thurow. 10 Case, p. 38. 11 Case, p. 43. 12 Stack, p. 62. 13 [Human Equations, Inc., Baltimore, MD], "Corporate Solutions: The Process of Ownership Participation," oral presentation, Proceedings of The ESOP Association 14th Annual Convention, May, 1991, p. 657. 14 Braun, p. 69. 15 Anon., "Oregon Steel Rises to the Challenge," Iron Age (June, 1989), p. 42. 16 Milbank. 17 Stack, p. 54. 18 Braun, p. 15. 19 Braun, p. 143. 20 Stack, p. 54. 21 Braun, p. 80. 22 Case, p. 43. 23 Braun, p. 77. 24 Peter B. Thompson, "How to create a climate of participation: An Example of Where to Start," oral presentation, Proceedings of The ESOP Association 14th Annual Convention, May, 1991, p. 671. 25 Stack, p. 54. 26 Case, p. 42. 27 Braun, p. 66. 28 Rosen, p. 136. 29 John Buck and Richard Heitfield, "A Model for Business Democracy," oral presentation, Proceedings of The ESOP Association 12th Annual Convention, May, 1989, p. 720.

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