BORDER STATES ELECTRICSupply Chain Solutions

Midwest ESOP ConferenceMilwaukee, WI

September 12, 2013

Darin ShervaPayroll and Benefits Supervisor

Sherri Sandvig VP Human Resources

ESOP Governance

ESOP committee

ESOP advisors/partners • ESOP Auditor – Grant Thornton• Trustee – Alerus Financial• Stock valuation – Chartwell Capital Solutions• Record keeper – Principal Financial • Legal counsel – Gray Plant Mooty

Communication committee

ESOP Administration

ESOP project plan• Timeline for all administration activities

– Keeps us on track – meeting deadlines

• Milestones‒ Census ‒ Stock valuation‒ Certificate distribution/celebration‒ Distribution/diversifications

It’s not just communicating, it’s working to bring the benefits of the

ESOP alive.

Communication/Education

What we must communicate:• Summary plan description (SPD)

• Summary of Material Modifications (SMM)

• Annual ESOP statements

• Summary Annual Report (SAR)

• Distribution info to eligible participants

Communication/Education

What we want to communicate:• Open book management

• Strategic plan

• Ownership responsibilities for all employees

• How company profitability affects ESOP

• How our ESOP works− Eligibility − Vesting− Contributions− Eligible compensation− Valuation process − Distributions and diversifications

Communication/Education

How we plan to communicate: • Created “Communication Project Plan”

− Monthly

− Quarterly

− Yearly

Communication/Education

Our communications: • Weekly newsletter

• Monthly supervisor newsletter

• Monthly meetings

• Monthly video

Communication/Education

How we communicate: (cont.)

• SharePoint newsfeeds

• Ownership celebrations/meetings

• Supervisor and manager training

• ESOP brochure for applicants

• Onboarding process

Communication/Education

Ideas to communicate/educate/celebrate:• ESOPtoberfest

• Annual ESOP statement celebration

• “Guess the Stock Price” contest

Communication/Education

Ideas to communicate/educate/celebrate:• Articles from upcoming retirees

• ESOP calculator

Communication/Education

Ideas to communicate/educate/celebrate• Desk drops

• Articles from employees

• 20% vested recognition

• 100% vested celebration

Communication/Education

Ideas: (cont.)

• Giving back− food drives− sponsor walks and runs− blood drives− buy gifts and bell ringing during the holidays− volunteer time at nonprofits− filling sandbags− donating baby supplies for annual baby shower− donating backpacks and school supplies− serve on boards and committees of nonprofits

Legislative meetings

Employee engagement survey

Succession planning

Mentoring

Referral bonus

Challenges

What challenges do you have?

Team Consult

What unique ideas have you used to communicate or educate your employees

about the ESOP?

Wrap up

Employee-owners

Owners meetings

Tie profits/expenses to ESOP contributions

Competitive pay and benefits

Profit sharing bonuses

Questions