Question 1

What is an ESOP?

Accepted Answer

An ESOP stands for Employee Stock Ownership Plan. Employee stock ownership, also referred to as employee share ownership, represents a distinct approach where the driving force of a company is rooted in the collective ownership held by its employees. This engagement is achieved through a carefully designed share option plan. This model transforms employees into stakeholders, nurturing a sense of partnership that fuels a mutual pursuit of excellence and prosperity.

Question 2

How can we increase the value of the ESOP?

Accepted Answer

Value expands by continued growth, managing expenses, not spending unnecessary $, doing jobs right the first time, taking care of equipment, employee retention, acting like owners, etc.

Question 3

How is the price of the stock in the ESOP determined? How often is it valued?

Accepted Answer

Our trustee, SCJ, represents over 125 ESOP companies and determines the value annually. Additionally, a third-party valuation firm looks at the
cash flow projected over the coming years comparable to other similar companies and how much they sold for comparable to Fitzwater, looking
at the balance sheet, cash and debt. As debt is paid down or cash accumulates, it increases the value of the ESOP dollar for dollar. This is
typically a function of profitability --- so increased profitability ultimately drives value.

Question 4

How are shares released?

Accepted Answer

Shares are awarded annually. You receive ESOP shares based on your W-2 year-end earnings.
The calculation: [your compensation] ÷ [total eligible participants’ compensation] x [shares released] = [your number of shares].

Question 5

How often will my ESOP account balance change?

Accepted Answer

A contribution is made once a year on the last day of the year on December 31 to the ESOP which then pays down the internal loan to release shares. Audited financial statements and due diligence is then performed and in turn a valuation of the share price is provided to the third party administrator, Principal Financial Group. They compile allocations, do testing and provide statements and the annual report which are distributed between June and August dependent on the timeline progression of each party involved.

Question 6

What is the vesting schedule? What happens at age 65?

Accepted Answer

0 – 1 years of service – 0% vested
2 years of service – 20%
3 years of service – 40%
4 years of service – 60%
5 years of service – 80%
6 or more years of service 100%

You will also become 100% vested upon death, disability, or Normal Retirement Age, regardless of your years of vesting service.

If you leave Fitzwater before you are 100% vested, the non-vested portion of your account is forfeited and reallocated to eligible participants.

100% Employee Owned

The Key to Success is a Shared Vision

Strong Roots Grown on Generations of Trust

Frequently Asked Questions