EMPLOYEE OWNERSHIP
Your
ESOP Understanding Your Ownership
THINK SMART. BUILD SMART. ESOP@BAYLANDBUIDINGS.COM
100% Employee-Owned Bayland Buildings, Inc. is employee-owned through its ESOP (Employee Stock Ownership Plan). The plan gives eligible employees an ownership interest in the company and creates an opportunity to build long-term value through company performance.
What the ESOP Owns The ESOP owns shares of Bayland Buildings, Inc. stock. Since Bayland is a private company, our stock isn’t bought and sold on the public stock market. As Bayland grows and the value of the company changes, the value of the stock can change too. Things like the overall economy and business conditions can also play a role. Because Bayland is privately held, there isn’t a daily stock price. The Value of your shares is determined through an annual stock valuation process.
How Shares Get Into Your Account Each year, your eligible pay and your time with Bayland help determine how many points you earn. Those points are used to allocate shares to your account. Once you’re eligible for the ESOP, you’ll receive an account in the plan. Over time, the company may contribute shares of Bayland stock to the ESOP. How many shares are added to your account is based on the plan’s allocation rules. As the value of Bayland stock increases, the value of your ESOP account can increase too.
ESOP Particpant Eligibilty
Be at least 21 years old. Complete one year of service, including at least 1,000 hours worked during 12 consecutive months.
Once those requirements are met, participation begins on the next January 1 or July 1.
How Your ESOP Shares Are Determined A full plan year generally means working at least 1,000 hours during the year. Each year, the plan looks at things like how long you’ve been with Bayland and your eligible pay to help determine how many shares are added to your ESOP account. In simple terms: Your time with Bayland and your eligible pay both play a role in how your ESOP account grows. You get: 10 points for every year of service, and 1 point for every $1,000 of your annual pay (while you’re in the plan).
Your points ÷ All participants’ points = Your % Your % x # of shares released = Your # of shares In simple terms: Your points help determine your portion of the shares available that year. The longer you’re with Bayland and the more eligible pay you earn, the more points you can build. Those points help determine your share of the stock added to your ESOP account.
Your Time. Your Pay. Your Ownership.
How Your ESOP Account Grows and Becomes Yours As you build your ESOP account, you also build your ownership over time. Vesting determines how much of the company contributions in your ESOP account you get to keep if you leave Bayland. The longer you’re with Bayland, the more of your account becomes yours: Years of Service Less than 2 Eligible Points 2
Vested Percentage 0% 20%
3
40%
4
60%
5
80%
6 or more
100%
An Exception to the Terms: You’re automatically 100% vested if you reach age 65 or if your employment ends because of death or disability.
The longer you’re with Bayland, the more your ESOP account has the opportunity to grow.
Your Bayland Stock Your Future Your ESOP account is primarily invested in Bayland Buildings, Inc. stock. As you get closer to retirement, you may have an opportunity to diversify a portion of your account into other investments. HERE’S WHAT YOU NEED TO KNOW: AGE 55 + 10 YEARS
6-YEAR OPPORTUNITY
UP TO 25% / 50%
WE’LL NOTIFY YOU
You must be at least 55 and have been in the ESOP for 10 years.
Once eligible, you have six years to diversify.
Up to 25% in years 1–5 and up to 50% in year 6. Previous amounts diversified are taken into account.
You’ll receive information when you’re eligible, including how much you can diversify.
The Big Picture Your ESOP gives you an opportunity to build retirement savings through ownership in Bayland Buildings, Inc. Diversification is one option available to eligible participants as they plan for the next chapter of their retirement journey.
Leaving Bayland
WHEN YOU RECEIVE YOUR ESOP BENEFIT Because Bayland is privately held, your ESOP shares aren’t sold on the public stock market. When you become eligible to receive your ESOP benefit, Bayland purchases the shares from the plan so your benefit can be paid to you. When payments may begin: Retirement at age 65 or older, death, or disabiity: Payment may begin up to one year after your employment ends.
Other reasons for leaving Bayland: Payment may begin two years after your employment ends.
The stock valuation process typically takes about four to six months. ESOP distributions are generally processed once a year, typically during the fourth quarter. In simple terms: Leaving Bayland doesn’t mean your ESOP benefit is paid out right away. There is a process to determine the value of your account and prepare your payment, so it will take some time before you receive your benefit.
What Happens After the Waiting Period Once you reach the point where your ESOP benefit can be paid, there are a few steps to keep in mind: WATCH FOR YOUR DISTRIBUTION INFORMATION You’ll receive instructions on how to request your payment, so it’s important to keep your mailing address up to date. YOUR VESTED BALANCE IS WHAT YOU RECEIVE Only the portion of your ESOP account that you’ve earned through vesting is payable to you. PAYMENTS ARE SPREAD OVER THREE YEARS Your ESOP benefit is paid in annual installments rather than as one lump-sum payment. If your ESOP balance is less than $1,000 it is automatically paid to you in 1 installment a year after your employment ends. YOU HAVE OPTIONS FOR YOUR PAYMENT You can generally choose to receive the payment, subject to applicable taxes, or roll the eligible amount into another retirement plan or an Individual Retirement Account (IRA)
In simple terms: Once your ESOP benefit becomes payable, you’ll receive information about your options and how your payments will be made.
What Your ESOP Account Can Look Like Over Time Your ESOP account can grow over the course of your career with Bayland. These are average account balances of current employees as of Dec 31, 2025.
Average Account Values*
based on years of service, eligible pay & stock value growth
$1,102,612.37
$795,493.29 $417,413.009 $229,133.57 $75,274.00
10 years
15 years
20 years
25 years
30+ years
*Example only: These figures are illustrative average and are not prediction or guarantee of your actual ESOP account value.
Your ownership story starts with you. Your plan has a points formula. These values are not only based on years of service but we’re using that as a benchmark to show growth over time. Pay is another important factor, as well as changes in stock value.
THINK SMART. BUILD SMART.
You’re not just an Employee. You’re an Owner. Questions about distributions: Human Resources or during the distribution period, you can call Principal® 1.800.547.7754 7:00 am to 9:00 pm CT, M-F
This information is meant to provide a simple overview of how the ESOP works. The official ESOP plan document and plan rules are what determine your actual benefits.