What is an Employee Stock Ownership Plan?
What is an Employee Stock Ownership Plan?
SPLASH has been a proud employee-owned company since 2018. The vehicle that allows employee-owners like you to share in our growth and prosperity is our Employee Stock Ownership Plan, or ESOP. We make yearly contributions of stock or cash to the ESOP on behalf of our employee-owners.
No action is required to join, and there is no cost to you whatsoever. You will automatically become a member of the ESOP once you have worked for the company for one year and logged at least 1,000 hours in that 12-month period.
What is vesting?
Your ESOP account is subject to vesting. Vesting is the percentage of your ESOP account that is yours and cannot be taken back. The longer you stay at SPLASH, the more you vest, and this means that if you leave SPLASH before you are 100% vested, all or part of the balance will be forfeited.
All ESOP SPLASH participants have the same vesting schedule:
| Years of Vesting | 1 | 2 | 3 | 4 | 5 | 6 |
| Percentage Vested | 0% | 20% | 40% | 60% | 80% | 100% |
Technically, an ESOP is a retirement plan, similar to a 401(k). However, unlike a 401(k):
You pay nothing
for your shares. SPLASH makes all the contributions to your ESOP account.
Your account balance
is tied to the share value of SPLASH, not external securities.
All shares
are held in a trust governed by an administrator, called a trustee.
What are the Benefits?
Every year, we contribute to your ESOP account. Your account grows from these annual contributions and from the reallocation of any forfeitures (the non-vested balances) of employees who leave SPLASH. The annual contribution is discretionary and is allocated to participants based on a formula that takes into account hours worked, years of service, and compensation.
How does the company’s performance affect your benefits?
The operating financial performance of SPLASH, as well as prospects for the future of the company, are factors used to determine the value of the stock owned by the ESOP. Your account value is impacted by changes in SPLASH’s stock value, and, as a result, the value of your account can go up or down and, in an extreme case, could potentially be worth nothing.
Remember, each ESOP member plays an important role in helping SPLASH achieve success.
The better we do, the more it benefits your ESOP account.
How will you know what benefits you have earned under the ESOP?
Once a year
you will receive an account statement — usually in the fall.
The account statement
will show the benefits you have earned and the value of those benefits.
The value of your benefits
is determined once a year by an independent appraiser.
That value
is what is used to determine the value of your shares.
Payment of Benefits
When/how are benefits paid?
The ESOP benefits are for retirement, so you generally cannot be paid your benefit until after employment ends. Keep in mind that:
- You are only paid to the extent vested.
- Payment will begin no later than the sixth (6th) year after employment ends and will generally be paid out in five (5) equal installments.
- The distribution rules are subject to change, and there are some exceptions to the 6th year rule, such as in the case of normal retirement at age 65, disability, or death.
Are you able to keep your stock when you leave the company?
SPLASH is intended to be owned by the current employees, so once you leave, the company has the option (though NOT the requirement) to convert your ESOP account to a cash-based investment.
What happens if you die?
If you die before you receive all of your benefits, your designated beneficiary will receive your ESOP account.
For more information about the ESOP, please see the Summary Plan Description. In the event of a discrepancy between information provided herein and the Plan Document, the Plan Document shall prevail.