“If I accepted money, I'd have to do work,” Riden says. “That's not why I retired. Now, my business card says, ‘Available for opinions, lunch, golf, and happy hour.' For the first time in a long time, I don't really have any responsibilities, and that makes it kind of nice.”

Now that's a clean getaway.

ESOPS: A LITTLE BIT FOR EVERYONE

Once considered exotic, employee stock ownership plans, or ESOPs, are wildly popular today. They're especially useful for small companies, because they allow an owner to sell his shares to his employees while exiting the business gracefully. That was the case for Larry Sietsma, founder of Melbourne, Fla.–based Holiday Builders. “I only saw three options: Go public, sell out to a national company, or do an ESOP,” says Sietsma, who retired from the company in 1999. “I thought the first two options would create too much pressure on the staff.”

Now, Holiday is a 100 percent employee-owned company, and since Sietsma's departure, it has leapfrogged from being a regional player in Florida to holding a solid spot (No. 25) on the BUILDER 100, selling 3,819 homes with revenue of $695 million in 2005.

While navigating an ESOP can be complex, the basic structure is simple. Think of it as an escrow account between you and your employees. When you exit your business, you “sell” your shares to the ESOP itself. The ESOP then redistributes your shares to the employees over time, based on their tenure and a predetermined vesting schedule. The money that funds the original transaction may be borrowed from a bank, but in many cases the owner underwrites the note himself.

Sietsma, for instance, carried 100 percent of the note for Holiday's ESOP but says he's been fully repaid by the company now, more than 10 years ahead of schedule. “The booming market helped, I think,” Sietsma says. “But I also think, once they were all owners, everyone seemed to work a bit harder and have a better feel for the bottom line.”

ESOPs have other benefits, as well, including a 100 percent tax break if set up correctly. But they can be expensive to administer, and valuing the company is often a sticking point. Also, because the owner frequently acts as both the seller and the financier of the transaction, some financial experts steer clear of ESOPs altogether.

“We're not big fans of ESOPs,” says Kevin Short, managing partner at exit strategist Clayton Capital Partners in St. Louis. “Quite often, the seller ends up taking on too much risk. We try to recommend developing a group of key employees to buy the company instead.”

Still, for all their wrinkles, there are plenty of ESOP success stories. For Sietsma, it was the perfect way to go. “I came out OK as the seller, and it kept the staff intact,” he says. “For us, I thought it was the perfect win-win situation.”