Employee Stock Ownership Plans
Since December 1999, we the employees of Brookshire Brothers have had incentive to make our Company more successful because we purchased approximately 70% of the outstanding equity through the Employee Stock Ownership Plan, (“ESOP”).
For many years we have emphasized we must have our actions and attitudes align with the principles of ownership as opposed to those of only an employee of a Company.
This is now even more important since on April 26, 2006, we are now officially 100% employee owned. On this date we successfully completed a refinancing of our debt, which not only allowed us to reduce our interest rate but, it also allowed us to borrow additional funds to purchase the remaining equity owned by stockholders other than the ESOP.
The success of our Company since December 1999 contributed greatly to our ability to access the financial markets and have banks extend offers to loan us more money than we actually were requesting. Though we did not borrow more funds than we needed, this was a great compliment to you as employee owners.
The remaining approximate 1.6 million shares of unallocated shares of stock will be allocated to eligible employees accounts over the next 14 years. As more shares are allocated and the stock price increases, each of you, as employee owners will benefit from larger ESOP retirement balances.
Let’s all work together to continue improving the performance of “OUR” Company.
What is an ESOP?
An ESOP or Employee Stock Ownership Plan is a special type of employee benefit plan designed to enable each eligible employee to become owners of stock in their company. There are approximately 10,000 ESOPs in the United States with 10 million employee-owners. That equates to 10% of the American work force.
What does Employee-Owned mean?
After more than 80 years as a family-owned independent supermarket chain, many of the original stockholders were reaching retirement. The leaders of our company decided to form an ESOP and buy the company. This would allow each eligible employee to share ownership and be rewarded through yearly stock allocations. The present management and owners of the company wanted employees to have an opportunity to create individual wealth for themselves and their families. At present, we are 6 years into our ESOP and continually building the ownership culture.
It has often been said at Brookshire Brothers that “our employees are our most important asset”. Being employee-owned means that while growing our business is top priority, creating a loyal employee base is equally important. Each year, Brookshire Brothers allocates stock to each of its eligible ESOP participants, which at retirement will enhance their individual wealth.
Why is the ESOP important now if it's a retirement benefit?
Each and every person at Brookshire Brothers is considered an owner because the ESOP and its employees own the vast majority of the company, therefore making each person an owner. Each employee owner is actually a working partner, and as such, is motivated to be aware of and involved in the day-to-day operation of our business. It is this involvement that has been and will be the largest factor of our prosperity and growth as we head into the future.
Whether their area of expertise is transportation, stocking, deli, produce or corporate support, their service and commitment to excellence is what drives this company. Without each person taking their ownership responsibility very seriously, we cannot succeed. It could be something as small as picking up a grape that has fallen off a produce rack so that our customers do not have an accident or something substantial like a truck driver focusing completely on his job so that those around his vehicle are safe and accident free.
By incorporating the ESOP ownership culture into the framework of our existence, as employee owners, we are empowered to do our part in the success and future of this company.
How do I become an eligible participant?
Employees must be eighteen years of age and complete at least one year of eligibility service. A “year of eligibility service” is when an employee is credited with at least 1,000 hours of service during your first 12 consecutive months of employment. If they are not credited with 1,000 hours of service during this 12-month period, they will complete a year of eligibility service at the end of any Plan Year beginning after their date of hire during which you are credited with at least 1,000 hours of service.
Once an employee meets the participation requirements, they automatically become a participant in the Plan on the earlier of the first day of the Plan Year or the day which is six months after the first day of the Plan Year coinciding with or immediately following the date they satisfy the Plan’s eligibility requirements. The “Plan Year” is the twelve-month period beginning on the Sunday following the last Saturday in April and ending on the last Saturday in April of the following year.
For further information, visit one of the following Web sites:
401k Contact Information:
- ESOP/Profit Sharing #706751
- 401(k) #521021
If you have any other questions, please email:
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