BUILDING WEALTH WITH THE ESOP

It’s a Great Time To Be an Employee Owner.

Alamon contributed approximately 6% of an employee’s salary to the ESOP in 2023. You benefit from that annual contribution, but you also benefit from Alamon’s traditionally strong share price growth. Over the past 7 years, investing with Alamon versus the general stock market has provided a much higher return. When comparing Alamon’s annual returns to the Russell 2000 Index over the prior 7-year period, Alamon delivered a total return of 290% compared to 64% for the Russell 2000. Alamon’s compound annual return was 21%, while the Russell 2000 was just 7%

WATCH THE 2023 ESOP TOWN HALL

EMPLOYEE-OWNER ADVANTAGES

Why are ESOP Companies Better for Employees?

ESOP account balances are three to five times higher on average than 401(k) plan balances.*
Employees of ESOP companies typically have 2.5 times the assets than if they worked at a non-ESOP company with a traditional retirement plan.*
Over 70% of Alamon’s company stock is devoted to non-management employees.

*Statistics courtesy NCEO.org. Past performance is no guarantee of future results.

STRONG ESOP PERFORMANCE

Alamon has been a Good Investment.

Alamon is Resilient

Alamon has been on an amazing run. Looking at recent numbers, the share price in FY23 increased to $82.94, which is 45% over last year’s share price. The compounded annual growth rate over the last seven years is 21%*.

Retirement Account Increases

Alamon has outperformed other retirement account investment options.

*As with all investments, past performance is no guarantee of future results.

ESOP Questions & Answers

What is an ESOP?

An Employee Stock Ownership Plan (ESOP) is a qualified retirement plan designed to invest in company stock for the benefit of employees. The ESOP:

Builds wealth for employee-owners over time
Creates a market for company stock
Allows employees to share in the equity ownership of the company

How common are ESOP companies?

The National Center for Employee Ownership estimates there are approximately 6,500 Employee Stock Ownership Plans covering nearly 14 million participants.

Here are a few ESOP companies you may be familiar with: Proctor & Gamble, Publix Supermarkets and WinCo Foods.

How do I join the plan?

Effective July 1, 2022, as a new employee, you must work 1,000 hours within the fiscal year (July 1st through June 30th). To join the plan in year one, a new employee has to be employed on the final day of the fiscal year, June 30. After completing these requirements, you will enter on the first day of the plan year.

How do I fund my plan?

You don’t add money to your account. Alamon contributes approximately 6% of your annual salary to your plan each year on your behalf.

What makes my account balance increase?

Generally speaking, the best way to increase your account balance is to think and act like an owner and help Alamon perform at its best, in order to increase the company’s share value. When the company succeeds, you share in the financial rewards that come with it.

Specifically, here are several factors that affect your account balance:

Your number of shares
Alamon’s annual contribution to your plan
Your share of amounts forfeited by other participants
Your compensation/salary
Your years of vesting service
The value of Alamon’s stock

Is the money mine right away?

You must become “vested” in your account balance before it is yours for good. You will receive a year of service for vesting for any plan year in which you work 1,000 hours or more. ESOP participants at Alamon are vested over a six year period, reaching 100% vested after six years. Here is the ESOP vesting schedule:

1 Year – 10%
2 Years – 20%
3 Years – 40%
4 Years – 60%
5 Years – 80%
6 Years – 100%

Here is an example to help you understand vesting. If you have been employed two years, you are 20% vested. If you have an ESOP account balance of $5,000, 20% of that amount ($1,000) is yours to keep if you leave Alamon. If you leave before you are 100% vested (six years of employment at Alamon), whatever portion of your account that is not vested will be forfeited and shared by the remaining plan participants.

After six years, you are 100% vested, and your full balance is yours to keep if you leave Alamon.

Who decides how much Alamon stock is worth?

The ESOP Trustees determine the stock value by engaging a third-party appraiser who is in the business of valuing companies for ESOP purposes. Stock valuations are conducted annually as of the last day of each plan year (June 30th).

Among other things, the appraiser determines the value of our stock by looking at the following: current earnings, company assets, company debt, projected profitability and industry trends.

How do I retire under the ESOP?

You retire under the ESOP when you reach the normal retirement age of 65. For those employees hired by Alamon in their early sixties, these employees could vest at 100% on the anniversary of 5 years of plan participation after reaching the age of 65.

ESOP RESOURCES

Useful Links and ESOP Contact Information

ESOPConnection Website (plan portal where you can check your balance and find additional ESOP information)
Visit https://www.esopconnection.com/alamon

New users: enter first name, last name and Social Security Number to access the site. After logging in, change the password to one of your own choosing.
You have access to information about your own individual ESOP account through this website.

Please note: a plan participant only has an account balance once they vest.

Contact Colleen Lillie, Chief Financial Officer

Email: colleen@alamon.com
Phone: 406.752.8838, ext 1120

Alamon Chief Financial Officer Colleen Lillie is a great resource when you have ESOP questions.