40 years of DAI

in the ESOP were distributed through annual
contributions by the company. They could not
be bought and sold, except when an employee
left the company, at which time the individual
would be paid out in full, over a few years, for
the value of his or her shares. ESOP participation
had spread to approximately 350 people by
2005.
There were questions, however, about the future
of the stock that was individually held. Between
them, Mickelwait and Barclay owned 20 percent
of the 33 percent, while the remaining 13
percent was spread in much smaller amounts
among 68 other individuals. The shares were
valued each year, and the trend line was very
positive, with an increase from $23/share in
1995 to more than $200/share in 2004. Counterbalancing
this good news was the fact that
both of the two big shareholders planned to sell
their shares over the next several years. The
company would have to find the money to buy
them out.
Historically, this is the point at which many
private firms disappear. Founders typically take
their equity out by selling to a larger entity, or
the company goes public with outside investors
replacing employee owners. In DAI’s case, neither
path held much appeal because the priorities
set by outside owners might clash with the
mission, culture, and values developed over the
preceding 35 years. Dennis Fransen, the CFO,
believed that an internal solution to the problem
could come from the ESOP, which he described
as an underutilized asset. Barclay and Fransen
DAI’s workforce has changed dramatically over the years in terms of
experience and ethnicity. Above, team members of the trade acceleration
and reform program in Vietnam. Below, the Palestine Facility for New Market
Development team.
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