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ESOP (Employee Stock
Ownership Plan)
What is an Employee Stock Ownership Plan (ESOP)?
An ESOP is another type of qualified retirement plan (like a
401K or profit sharing plan). The purpose of the plan is to enable
you to participate in the growth and prosperity of the company
by making you a stockholder. As a stockholder you are an owner
of the company. Your efforts, added to the efforts of all other
employees, contribute to the profitability and growth of the company
and thereby increase the value of Hoss's stock and your benefits.
Consequently, the employer contributions will be invested primarily
in Company Stock. If the company does well, and the value of Hoss's
stock increases, you will share in its improved performance.
Who Can Participate?
Participation in the plan is open to employees who:
* Have attained age 21
* Have completed 1 year of service, as defined by the plan
* Worked 1,000 hours in the previous 12-month period prior to
Open Season
The plan does not allow participation by employees who are:
* Covered by a collective bargaining agreement with the company
* Leased employees
When Can You Join?
Employees may join the plan on January 1 or July 1 following
the date that they meet the eligibility requirements. The Human
Resources Department will notify you when you meet eligibility
requirements.
How Does The Plan Work?
The plan's operation is simple:
* Hoss's will make contributions to the plan on your behalf.
* You pay no current income tax on the amounts Hoss's contributes.
* You pay no current income tax on the earnings your account generates.
* You only pay tax when you withdraw money from your account.
* Your plan is an Employee Stock Ownership Plan; therefore, your
account will be primarily invested in Hoss's Steak and Sea House,
Inc., stock.
Contributions:
* Hoss's will make a discretionary contribution on an annual
basis to each eligible participant. Effective January 1, 2006,
you must be actively employed on the last day of the plan year
and you must have completed 1,000 hours of service during the
plan year in order to share in that year's contribution. Participants
that fail to achieve the hours requirement or fail to be employed
on the last day of the plan year due to Death, Disability, or
Normal Retirement will still share in an allocation of contributions
for the plan year in which they terminate.
* Your share of Hoss's contribution will be determined based
on your compensation during the year for which the contribution
is made. See below:
* Your company contribution for a given year is $100,000;
your compensation is $20,000; the compensation of all participants
eligible to share in the contribution is $1,000,000. Your share
of the contribution would be $2,000 ($100,000 x $20,000 / $1,000,000
= $2,000)
* Generally, you will be allocated $2,000 worth of Hoss's stock
and not cash.
* Additionally, you may be allocated stock dividends within your
ESOP account.
* Your account will be separately accounted for and you
will receive an annual statement displaying the contributions
made for the year on your behalf, the number of shares you own
as of the statement date, and the value of those share on that
date and the difference in value since your last statement.
Investment Direction:
When you have completed ten (10) years of service as a participant
and attained age fifty-five (55), you will have the right to direct
the investment of a portion of your account attributable to company
stock. The Plan Administrator will advise you of any such rights
at the appropriate time.
Vesting of Your Plan Account:
* You are always 100% vested in your rollovers/transfers and
any earnings they generate.
* You will be vested in company contributions, as follows:
For eligible employees who have at least one hour of service with the Employer on or after January 1, 2010, the following schedule will apply to your Plan account attributable to the Employer's contributions:
Years of Service Vesting
Percentage
0
0%
1 0%
2 20%
3 40%
4 60%
5 100%
For eligible employees whose employment ended prior to January 1, 2010, the following vesting schedule will apply to your Plan account attributable to the Employer's contribution:
Years of Service Vesting
Percentage
Less than 5 years
0%
5 years or more 100%
For purposes of this requirement, years of service prior to
the inception of this plan (January 1, 2004) are excluded.
Employees who terminate employment prior to becoming vested
will be paid out after a one-year break in service. (For purposes
of this Section 7.4 of the plan document, if the value of a terminated
participant's vested benefit is zero, the terminated participant
shall be deemed to have received a distribution of such vested
benefit.) Basically, this means that employees who are not fully
vested have no cash value in their account and will not receive
a distribution. All monies in their account will be forfeited
and reallocated to other participants in the ESOP.
Participants become fully vested upon their Death, their Disability
or the attainment of their Normal Retirement Date.
Withdrawals:
The plan is designed to encourage you to stay with us until retirement.
The value of your plan account may only be distributed in these
events:
* Attainment of your Normal Retirement Date: (the first day of
the month coinciding with or next following your 65th birthday).
* Death
* Disability
*Termination of Employment
More detailed information is provided within the plan's Summary
Plan Description. Additionally, our distribution policies and
your distribution options are more fully described in our plan's
"Distribution Policy."
Summary Plan Description:
More detailed information is provided within the plan's Summary
Plan Description (SPD). To request a copy of the SPD
or if you have further questions, please contact the Human Resources
Department.
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