ESOP Quick Guide

As we roll out ESOP month, we want to cover just a few things about the program, just so that everyone is on the same page!

October 5, 2018

As we roll out ESOP month, we want to cover just a few things about the program, just so that everyone is on the same page!

Education is the most urgent need in order for employee owners to embrace the plan and adopt an owner mindset. Education includes understanding the ESOP plan, as well as how our business works (interconnected departments/functions). We must improve efficiencies immediately to realize increased profitability, and each department must communicate items/processes/repeated errors that negatively impact the company’s profitability. Payroll is our biggest expense, so streamlining work processes to reduce overtime is necessary.

Our ESOP was created based on the 2017-year financial valuation, which translated to a per share value of $5.95. The more profitable we make DAS, the better our financial valuations becomes, and the more valuable our shares become!

Below is a list of facts about the ESOP to help you better understand the program:

- The DAS ESOP plan was created in 2017 and rolled out on 12/31/2017
- The ESOP plan was constructed based on a 10-15-year timeline for long term stability (not a quick growth plan).
- The DAS ESOP is a very unique plan (only one other ESOP is similar)!
- 100% Employee Owned
- Shares were disbursed immediately to eligible employee owners (not held or contingent on outstanding debt)
- Eligibility to enter the DAS ESOP plan is 160 hours worked.
- Eligibility for vesting is 1000 hours worked in previous calendar year (which allows rights to shares) with full vesting after 6 years (or age 65, or death)
- Employee owners are Beneficial Share Owners, meaning they do not have voting rights.
- Current shares outstanding is 750K. New shares contributed to the plan will be based on the annual company valuation and profitability of previous year.
- BKD is our TPA (Third Party Administrator); Husch is our legal representation; Board members: Doug Schukar, Linda Pring, Ron Mueller, Andrew Friedman, Larry Potashnick.
- Value of the shares and plan is determined via the following process/timeline:
- DAS Annual Audit (30-60 days) scheduled for January, early February
- Valuation firm reviews the audit details to determine value of the company and plan (45 days)
- The Trustee (Lance Studdard) and BKD review and approve the valuation report to create employee statements (30-45 days) to be available on/about June annually.
- The ESOP is exempt from Federal and MO taxes; however, employees’ tax liability is still in place.

We know that the ESOP is going to make DAS an even better place to work and we look forward to all of the value it is going to bring to the company!