September 19, 2007

Q: With the modifications made to the 401K plan why are we not seeing the Roth 401K option as that is now a permanent option in the tax code. I have read that 22% of all companies currently offer the option with another 9% implementing the option as of the writing of the question. 51% of companies are currently considering offering it, but I haven't heard anything about this at Greenheck.

A: The Greenheck Fan Corp 401(k) Plan currently does not allow for
deferrals into a Roth 401(k). Greenheck is currently considering adding
a Roth 401(k) option for 2008.

September 11, 2007

Q: Can the ESOP pay out be used to pay off an existing 401K loan?

A: No. Your ESOP account value will be merged with your 401(k) and cannot be used as cash to pay off an existing 401(k) loan.

Q: An answer to an earlier question stated there will be one statement containing all 401K balances. But, how many actual 401K summary plans will there be?

A: There will be one Summary Plan Description for your 401(k) account and one 401(k) account statement. Your statement will include your current Greenheck 401(k) account value plus future contributions and the ESOP rollover amount, which will be stated separately.

Q: I understand the penalties of taking cash instead of rolling it over to a 401K but can I take cash for 10% of my balance?

A: No. The IRS does not allow cash withdrawals of this money while you are employed by Greenheck. You can borrow money from your 401(k) account, however, there are some restrictions that were discussed last week on this Web site. When you retire after age 59 ½, you can withdraw cash and not pay a penalty, but the money will be subject to income taxes at that time.

Q: When will our new account statements be available?

A: As stated previously, we hope to have statements of individual account balances available in mid to late October. Because the transaction appears to be moving forward on schedule, it’s likely the statements will be ready by mid-October (unless some unforeseen issues arise).

Q: How can I start making contributions to the 401(k) Plan or change my investments?

A: Employees that started with Greenheck on or after May, 2001 can sign on to the Wells Fargo website using their social security number as their username, and their 6-digit birth date for their password. Employees hired prior to May, 2001 received a letter from Wells Fargo stating their username and password. Once you are signed on to your account you can select a deferral rate and choose which fund(s) your deferrals will be invested in. If you are unable to access your account for any reason, please call the Wells Fargo Benefits Helpline at 1-888-319-9451.

September 6, 2007

Q: Will this deal be finalized in time for me to get a loan by November 1st?

A: We don’t know yet when the transaction will be finalized. The merged ESOP dollars will be available for loans under the same provisions that are applied to the current 401(k) plan. However, it’s simply too soon to predict when those dollars would be available because this transaction is still in progress. Of course, employees always can borrow from their existing 401(k) account balances at any time for any reason. There are some restrictions. The minimum loan amount is $1,000 and the maximum loan amount is 50% of your vested account balance up to $50,000. Loans must be paid back via payroll deduction at the interest rate of Prime +1%. There is a $50 set-up fee for the loan and you can only have one outstanding loan at one time. You can contact the HR department for more information about borrowing from your existing 401(k) account. 

Q: What consideration is going to be given to ensure our wages and other benefits are competitive with the market place?

A: The Human Resources department at Greenheck continuously compares salaries and benefits to the competitive market place across the country, and is confident that we will continue to provide a very competitive economic package for current and prospective employees.

Q: What will the company contribute as part of the enhanced 401(k) plan?

A:  Our intent is to have two contribution components within the enhanced 401(k) Plan. The first component would be a fixed percent of your qualified compensation and would be deposited into your account on a per pay period basis. This component would NOT be tied to either your individual deferral rate or the company's performance. The second component would be a match tied to both your individual deferral rate and the company's performance. 

Q: When would we receive the matching contribution if the company meets its goals?

A: The matching component of the enhance 401(k) plan would be deposited in your account on an annual basis after the close of the fiscal year.  This matching component tied to the performance of the company would help preserve your status as a "stakeholder" in the company's success.

Q: What is qualified compensation?

Qualified 401(k) Compensation includes all types of Regular Pay, including Overtime, Double-time, Holiday, Sick, Vacation, Personal Day, Bereavement, and Profit Sharing.

Q: Will our ESOP rollover amounts and our 401(k) account values be combined into one statement?

A: After the transaction takes place, you will receive one Greenheck 401(k) account statement that would include your current and future Greenheck 401(k) account values and contributions plus the ESOP rollover amount. The ESOP rollover amount will always be stated separately on your account statement, however.

Q: What investment fund options will we have and where can we begin to review those options?

A: All of the funds that are currently available in the current Greenheck 401(k) Plan would continue to be available in the future. Greenheck employees and spouses can learn more about these investment options at the Wells Fargo site at www.wellsfargo.com/retirementplanning or from the Home page on the Greenheck Intranet. When accessing the site from the Greenheck Intranet, simply click on 'Benefits' (found near the upper left hand corner), then click on '401(k) Plan/Wells Fargo website' (found near the lower right corner).

August 28, 2007

Q: Should I start making contributions now?

A: It’s always a good idea to contribute to your 401(k) plan, and frankly, the sooner the better. The advantages of making your own contributions to the 401(k) plan as soon as possible are that you’ll defer federal and state income taxes immediately on the dollars you contribute plus your savings will have more time to grow. Even if you can only save a small amount in the early years, don't delay. Consider these three examples:

Employee A: Begins saving for retirement during the final 15 years of her career. She saved $333 per month and retired with $116,000.

Employee B: Begins saving for retirement with 20 years to go and saves $250 per month. His retirement savings grew to $148,000.

Employee C: Started her retirement savings as early as possible. She contributed $125 per month for 40 years and, at retirement, her savings totaled $439,000.

The lesson to be learned - start early! Put the power of compounding to work for you.

Q: Does the six year vesting schedule mean we all start over or will we be 100% vested if we have six or more years in the company at this point?

A: If you have six or more years of service at Greenheck, you will be 100% vested. If you have worked at Greenheck less than six years, you will become 100% vested at the end of your sixth year of service.

Q: How can I learn more about 401(k) plans?

A: Greenheck employees and spouses can learn more about the value of 401(k) plans at the Wells Fargo site at www.wellsfargo.com/retirementplanning or from the Home page on the Greenheck Intranet. When accessing the site from the Greenheck Intranet, simply click on 'Benefits' (found near the upper left hand corner), then click on '401(k) Plan/Wells Fargo website' (found near the lower right corner).

Q: How can I start making contributions to the 401(k) Plan or change my investments?

A: Employees that started with Greenheck on or after May, 2001 can sign on to the Wells Fargo website using their social security number as their username, and their 6-digit birth date for their password. Employees hired prior to May, 2001 received a letter from Wells Fargo stating their username and password. Once you are signed on to your account you can select a deferral rate and choose which fund(s) your deferrals will be invested in. If you are unable to access your account for any reason, please call the Wells Fargo Benefits Helpline at 1-888-319-9451.

Wednesday, August 22, 2007

Thank you for the many questions you have submitted. Keep them coming. They are helping us prepare for the upcoming employee meetings in October where we will provide more information about the enhanced 401(k) benefits you will receive.

When new information becomes available in the coming weeks, we will continue to use this site and the bulletin boards to keep you informed. In the meantime, here are a few of the most common questions that have been asked:

Q: When will our new account statements be available?

A: We hope to have statements of individual account balances available in mid to late October.

Q: Will we have the same 401(k) investment options?

A: Yes. The existing 401(k) plan will continue to offer the same investment options. We are enhancing the existing 401(k) with new features, and will share those details with you at the October employee meetings.

Friday, August 17, 2007

When new information becomes available in the coming weeks, we will continue to use this site and the bulletin boards to keep you informed.

Wednesday, August 8, 2007

Is Greenheck going to provide any financial planning and follow up information to employees or their spouses?

While Greenheck cannot provide financial advice or recommendations to employees, Wells Fargo, who is our 401(k) plan administrator, will be holding a series of informational meetings for employees and their spouses, and will provide significant amounts of information on investment strategy.  These meetings will occur once the transaction is finalized and information on the new plan design is available. Also, at that point in time, we should have more information available for employees regarding the value of their ESOP accounts and what amounts will be rolled into the 401(k) plan.

Is the final year of our current union contract in Wisconsin going to be honored? How long will the new contract be for?

Friday, August 3, 2007

Because many similar questions have been submitted, the questions stated here are representative of several similar questions and not necessarily the actual wording of the question you may have submitted. Specific information for some questions submitted may not yet be available, but we will address those as soon as possible.

1. Who would own the Company after this happens, and what will be the future direction for Greenheck?

Greenheck would continue to be locally controlled and locally owned as it has been for the previous 60 years.  Robert C. Greenheck, his family and Dwight Davis are leaving their equity in the business to make the ESOP redemption possible.  The company would  continue to be governed by the current Board of Directors, with Dwight Davis serving as Chairman, President and Chief Executive Officer.  Together, they will provide for leadership succession as necessary over time as was the case previously. 

As both Bob and Dwight indicated in their video message, their hopes and desires are for Greenheck to remain a strong, growing company that provides good jobs in all the communities in which we have operations.  They also want the company to continue to be a good business partner with our many customers and sales partners, our reps and their employees, as well as with the suppliers from whom we purchase goods and services.

If that was not the desire of Bob Greenheck and his family and that of Dwight Davis, the company has had many opportunities to be sold and that could have happened at any point in time.  Fortunately, for our employees and others who benefit from Greenheck’s success, that is not the legacy that Dwight nor the Greenhecks desire.

There have been a number of questions regarding the future direction and whether or not Greenheck would ever become a public company.  One of the key objectives of the announced plan is to keep Greenheck locally owned, growing, profitable and a private company. While we cannot say that the company will never go public, it is not our plan at present.  As a private company, we can be much more strategic with future-oriented investments in the business.  If we were a public company, we would have to let quarterly earnings drive our business decisions.

2. How is the ESOP transaction being financed?

To fund the redemption of the ESOP accounts, the company is arranging debt financing--and the Greenheck family along with Dwight Davis, are leaving equity in the company.  In this transaction structure, the Greenheck family and Dwight Davis would own the company and assume the business risk associated with that ownership.  There is a strong desire on the part of Dwight Davis and the Greenheck family to keep the company growing profitably because they realize that employees and their families, our sales partners, our suppliers and the communities in which we operate are dependent on Greenheck’s success.

Bob and Dwight have publicly stated they want to do everything practical to prevent a sale of the company, feeling that, as has happened to so many other companies, jobs could be lost and the business values might change.

3.  How and when will my final ESOP account balance be determined? What about  vesting?

Your final ESOP balance would include the number of shares from your FY06 statement, plus your FY07 contribution (total retirement contribution was 6% of qualified compensation), plus your portion of the unallocated shares held in the ESOP trust.  All of these shares would be valued at the transaction price of $88 per share.  We expect a final ESOP statement would be generated for you in late-September or early-October.

Unallocated shares would be allocated to participant accounts based on the ratio of the number of shares in your account compared to the total number of allocated shares.  For example, if your account contains .1% of all allocated shares, you would be entitled to receive .1% of the unallocated shares. 

After 04/01/07, contributions would be made to your 401(k) account instead of the ESOP. 

The final value of your ESOP account would be rolled over into your 401(k) account as soon as possible after conclusion of the transaction.

All employees would be considered 100% vested in their full ESOP balance, even if you have been employed by Greenheck for less than 7 years. 

4. Can you explain how the enhanced 401(k) Plan would work and how it  

would impact my existing account?

The details of the enhanced 401(k) Plan will need to be negotiated with the individual unions within the next few weeks.  Our intent is to have two contribution components within the enhanced 401(k) Plan.  The first component would be a fixed percent of your qualified compensation and would be deposited into your account on a per pay period basis.  This component would NOT be tied to either your individual deferral rate or the company's performance.  The second component would be a match tied to both your individual deferral rate and the company's performance.  This component would be deposited in your account on an annual basis after the close of the fiscal year.  This second component would help preserve your status as a "stakeholder" in the company's success.

After this transaction, you would only have one Greenheck 401(k) account that would include your current Greenheck 401(k) account value plus future contributions and the ESOP rollover amount, which would be stated separately.

All of the funds that are currently available in the current Greenheck 401(k) Plan would continue to be available in the future.

Qualified 401(k) Compensation includes all types of Regular Pay, including Overtime, Double-time, Holiday, Sick, Vacation, Personal Day, Bereavement, and Profit Sharing.

You would continue to be 100% vested in your deferrals.  There would be a vesting schedule associated with future company contributions but that schedule has not been finalized. 

Greenheck has paid the administrative fees associated with the 401(k) plan since its inception.  The only charge employees have paid is the internal fund management fees charged against the specific funds earnings.  These fees are presently an average of .72 basis points across all funds. It’s possible, with the merger of the ESOP into the 401(K), that the fees could be even lower. 

5. After this transaction, would Greenheck continue to operate as a Sub-chapter S Corporation?

This has not been determined yet, however Greenheck may remain a Sub-chapter S Corporation in the future.

6. If I leave the company at some point in the future, assuming the transaction was completed, what options would I have regarding my Greenheck 401(k) account?

If you chose to leave the company, you would have many options regarding your 401(k) account.  You could choose to rollover your balance into your new employer's 401(k) plan, or you could choose to rollover your balance into an IRA, or you could choose to take a cash distribution, or you could simply leave your account with Wells Fargo.  If you chose to take a cash distribution, the full amount would then become taxable to you.  Also, since 401(k) and IRA accounts are in an individual's name, they cannot be rolled into a spouse's 401(k) or IRA account.

7. What will happen to our opportunity to earn profit sharing once this transaction is completed?

The board of directors has, for a number of years, provided a discretionary profit sharing payment to all employees tied to achieving or exceeding our budgeted earnings objectives for the year.  While no one can totally predict the future and the events that shape it, at present it is the desire of the board of directors and senior management to continue that profit sharing component of everyone’s compensation tied to our ability to meet or exceed our EBITDA earnings’ targets for the year.

8. If this transition occurs and the ESOP merges into the 401(k), would I have the ability to retain any of my ownership in the company, or could I invest my own money in the company?

It is the intent that the ESOP shares will be purchased by the company and the future ownership will be Dwight Davis and the Robert C. Greenheck family.  It would be a private, closely held corporation with no additional investors other than those that have been previously disclosed.  Your opportunity to continue participating in the ongoing success of the organization would come from a number of sources, a 401(k) that has increased contributions tied to performance, profit sharing and the security of a good job with competitive pay and benefits.

9. Why are we not being given an option of taking the ESOP value in cash instead of rolling it into the 401(k)?

The ESOP was created as a retirement plan for the benefit of Greenheck employees.  The company feels it is in the best interest of all employees to maintain the tax advantage of a qualified plan for all employees.  Taking cash distributions from a qualified plan would expose those assets to income taxes and penalties that will often result in upwards of 50% of the account value being lost to the federal and state government. You do have loan provisions in the 401(k) plan and can access those funds if necessary through an internal plan loan that is managed by our 401(k) administrator. 

10. With the change in direction on the retirement program for Greenheck, what consideration is going to be given to ensure our wages and other benefits are competitive with the market place?

Greenheck compares salaries and benefits to the competitive market place across the country on a continuing basis.  We believe that we provide a very competitive economic package for current and prospective employees.  Because we hire employees in a number of markets across the country, it is very important that we maintain that position.