Employee Stock Ownership Plan ESOP II - Urbanknowledge.urbanengineers.com/assets/ESOP - ESOP II -...
Transcript of Employee Stock Ownership Plan ESOP II - Urbanknowledge.urbanengineers.com/assets/ESOP - ESOP II -...
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Employee Stock Ownership Plan
ESOP II
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Agenda
1. Ownership History
2. Why ESOP II?
3. ESOP II Details
4. ESOP Account Rules - Changes /
Differences
5. Corporate Governance
6. Looking to the Future
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Urban Engineers, Inc.Stock Ownership
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Urban Engineers, Inc.Stock Ownership
ESOP I
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Urban Engineers, Inc.Stock Ownership
100%
ESOP II
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Urban Engineers, Inc.Stock Ownership
ESOP I ESOP II TOTAL
ESOT Ownership 42% 58% 100%
ESOT Shares Purchased 57,500 72,031 129,531
(ESOT = Employee Stock Ownership Trust)
(ESOP = Employee Stock Ownership Plan)
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Why ESOP II?
� Tax advantages to both:
– Selling Shareholders &
– Urban
� Retain culture of Urban Engineers
– Reinforces commitment to company
� Provides a Secondary Retirement vehicle to our employees
– Allows NEW shares to be allocated
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ESOP II - Details
� Transaction was completed December 30, 2013
� Transaction Debt incurred
� Bank Loan (External) is for five (5) yrs (like a mortgage)
� ESOP Acquisition Loan (Internal) is for eight (8) yrs
� Notes issued to other selling shareholders
� ESOP Trust (owner of shares)
� External ESOP Trustee engaged
� Urban Engineers, Inc.’s Board of Directors� Two (2) additional EXTERNAL Directors added
� by June 30, 2014
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ESOP Acquired Shares ReleaseESOP I
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57,500
shares
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ESOP Acquired Shares ReleaseESOP I & ESOP II (planned)
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72,031
shares
57,500
shares
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ESOP Acquired Shares ReleaseESOP I & ESOP II (estimated)
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72,031 shares57,500 shares
26,900
shares
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Changes – Differences(In the Plan)
N O N E(to speak of)
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ESOP Account Rules
� Eligibility / Allocations / Vesting / Distributions
All the same Rules
� Statement format and content MAY change – To account for the two (2) separate Blocks of Shares
– Required to maintain separate records for each block of stock purchased by the Trust
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Eligibility
Still the same
� Be 18 years or older
� Complete 1,000 hours during the plan yearThat is all there is to it……
� When do you Enter?
– Depends……
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ESOP Eligibility Timeline:Hired Early in the Year
1/1/14 1/1/15
4/15/13:Hire Date
Enter ESOP on January 1, 2013
~10/15/13:Completes
1,000+ Hours,Age 18+
1/1/13
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ESOP Eligibility Timeline:Hired Late in the Year
1/1/14 1/1/15
8/15/13:Hire Date
Enter ESOP onJanuary 1, 2014
~6/30/14:Completes
1,000+ Hours,Age 18+
1/1/13
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Allocations
Still the same
� Need to be eligible
� Then receive allocation for any Plan Year in which:
– Work 1,000 hours AND
– Either: you are employed on Sept 1 or Dec 31 • Or: in the year of your retirement, death, or disability
� How many shares depends on:• Your earnings in proportion to gross earnings &
• The number of shares being allocated
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Vesting
Again - - Still the same ******� Vesting on ESOP I shares transfers to
the new ESOP II shares� You do not start at zero for ESOP II
� Shares become vested based on years of service
− 1 year of service is 1,000 hrs worked in a plan year
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Vesting Schedule:6-Year “Scaled”
Years of Service
Vesting %
Less than 2
2
3
4
56 or more
0%
20%
40%
60%
80%100%
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Distributions
� You receive your benefit only after you are
no longer employed by Urban
– One set of rules applies for retirement, death or disability
– Second set of rules applies for resignation or termination
� Separate presentation for Distributions
NOTE: Only your vested amount is available for distribution
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Disclosure Requirements
Still the Same� Annually
� Participant Statement
� Summary Annual Report (SAR)
� ESOP Plan Document− Available for review by any Participant
� Summary Plan Description (SPD)− Brief description of the ESOP Plan Document
− Provided to all current participants and to new participants after they are eligible
− On file and available on K@U
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Selecting a Beneficiary
� Fill out a beneficiary form and identify who is to receive your ESOP benefit in the event of your death – MUST SIGN Form
� Spouse is beneficiary unless s/he consents to someone else on the beneficiary form (in writing)
– Form is available with new hire packet or on K@U and MUST be returned to HR
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Corporate Governance
No Change here either
ROLES have NOT changed - just the parties responsible for them
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Corporate GovernanceBefore
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Senior Leaders
Board of Directors
elect
hire and oversee
Shareholders
Employees
CEO: Ed D’Alba
hire and oversee
ESOPParticipants
when meeteligibility
requirements
Ed &Joe
MinorityShareholders
appoint and oversee
ESOT(Trustee) > 51%
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Corporate GovernanceNow
� Shareholder(s) of Urban Engineers, Inc.� Principals, Associates are replaced by the 100% owner - the
ESOT
� Board of Directors – Ed & Joe are still directors but additional directors will be added
� Urban Management – Management team still in control of the corporate decisions (day to day operations)
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Where does the ESOP fit?
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Senior Leaders
Board of Directors
elect
hire and oversee
ESOT (Shareholder)
Employees
CEO: Ed D’Alba
hire and oversee
ESOPParticipants
when meeteligibility
requirements
ESOPTrustee
select
appoint and oversee
100%
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Where does the ESOP fit?
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Senior Leaders
Board of Directors
elect
hire and oversee
Shareholder
Employees
CEO: Ed D’Alba
hire and overseeESOPParticipants
when meeteligibility
requirements
ESOPTrustee
select
appoint and overseeDay-to-Day:constantly
improve the
business
ESOP
CommunicationCommittee
advise
select
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Bottom Line
� ESOT owns 100% of Urban Engineers, Inc.
– All profits/equity goes to the Trust
– ESOP participants receive the entire profit
� The ESOP creates an opportunity to share wealth YOU help create – even more than before
� The data is on your side: it can be very successful
� No guarantees, success depends on company’s ability to thrive
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The Challenge Ahead
� Opportunity to build and MAINTAIN wealth
� How can YOU help?
– Become a valuable asset to company performance
– Utilize all resources Urban provides
– Motivate and help others to succeed
– Maintain a vast perspective about problem solving
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End of Presentation
QUESTIONS
?
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