Employee Stock Ownership Plan (ESOP)

1. Introduction

Purpose of the ESOP: Remote Support LLC has implemented an Employee Stock Ownership Plan (ESOP) to give employees the opportunity to become part owners of the company. This plan is designed to reward long-term contributions to the company’s success and foster a sense of ownership among employees, aligning their interests with the company’s growth.

2. Eligibility

Who Can Participate?

• Full-time employees who have been with the company for a minimum of 1 year.
• Employees must be over the age of 21 years to participate in the ESOP.
• Participation begins after successful completion of a probationary period and based on company discretion.

3. How the ESOP Works

Stock Allocation: Each year, Remote Support LLC will allocate shares to the ESOP trust. These shares will be distributed to employees based on their salary, position, and length of service with the company.

Vesting Period:

• Employees will become fully vested after 5 years of service.
• Partial vesting may occur on a graded schedule, 20% per year after the second year of participation.

4. Benefits of the ESOP

• Ownership and Value Creation: Employees become part owners of the company, benefiting directly from its success.
• Retirement Savings: The ESOP acts as a retirement plan where employees’ shares grow in value over time.
• Tax Advantages: Contributions to the ESOP may be tax-deductible for the company, and employees can benefit from deferred taxation on their shares until sold.

5. How Shares Are Managed

ESOP Trust: The ESOP will be managed through an independent trust, which holds the shares on behalf of employees.

Employee Statements: Participants will receive annual statements detailing the number of shares they own, their vesting status, and the current value of their shares.

6. Payout and Distribution

• Retirement or Departure: Employees can sell their shares back to the company or on the open market.
• Disability or Death: Shares will be distributed to the employee or their beneficiaries.

7. Governance and Decision-Making

Voting Rights: Employees will have no voting rights on company decisions.

Plan Amendments: The ESOP plan is subject to review and amendments by the company board.

8. ESOP Dividends

Dividends represent a portion of the company’s profits and are distributed based on the number of shares an employee owns in the ESOP.

8.1 How Dividends Are Distributed

• Direct Payment to Employees
• Reinvestment in ESOP Shares
• Used to Pay for Employee Benefits

8.2 Tax Treatment of Dividends

• Dividends paid directly to employees are taxed as ordinary income.
• Dividends reinvested in the ESOP enjoy deferred taxation.

9. Key Considerations for Remote Support LLC

• Dividend Policy: Set based on company financial health.
• Clear Communication: Dividend policies and eligibility will be communicated transparently.
• Dividend Reinvestment Program: Employees can reinvest their dividends to increase their ownership stake.

10. Next Steps for Employees

• Eligible employees will receive enrollment information.
• Employees will be guided through the ESOP process.

Contact Information for ESOP Inquiries: Reach out to our CEO or plan administrator for more details.