Growth Incentive Sharing Plan (GISP)
The purpose of the Growth Incentive Sharing Plan (GISP) offered by Beason & Nalley is to provide incentives to top employees in order to promote the continued growth of a Company and to share the benefits of future growth of the Company with employees who would qualify under a top hat deferred compensation plan.
Top Hat Plan and How it Works
The plan is designed to be a top hat plan whereby owners can choose to cover only a select group of management or highly compensated employees. Not only is the plan considered to be an unfunded deferred compensation plan, but is also exempt from all ERISA requirements except for minor reporting and disclose requirements.
Operations
The Company is valued on a Measurement Date. Selected employees are granted “Units” based on the value on the Measurement Date. Units are then allocated a percentage of the growth of the Company (determined by the Board). On Date of Grant, the Unit has no value, although the value of each Unit will increase (or decrease) on an annual basis. Upon a triggering event, the participants are compensated based on Unit value.
Example:
If the plan percentage is 5%, 1,000 Units are awarded on January 1, 2002 when the Company is valued at $1,000,000.
On January 2, 2002, the initial 1,000 Units have a value of $0. Then on January 1, 2003, 1,000 additional Units are awarded when the Company is valued at $2,000,000.
Then on January 2, 2003, the Units granted January 1, 2002 will have a value of $50. This amount is determined by subtracting $1,000,000 from $2,000,000, then the sum is multiplied by 5% and then divided by 1,000. The additional 1,000 Units awarded January 1, 2003 will have a value of $0.
Distributions 
Events that can trigger distributions from the Plan:
- Sale of the company assets or stock
- Merger with a publicly traded company
- Corporate liquidation
- Termination of employment by:
- Participant reaching age 65
- Total disability of participant
- The Company, if not for cause
- Death of participant
- Plan termination
Units can be converted to stock upon happening of an IPO.
Flexibility
The Plan has some flexibility to fit the needs of each individual company. If the Plan meets the top heavy qualifications, it is not subject to ERISA requirements except for minor reporting and disclose requirements. The number of Units Granted can vary for each participant. For all forms of business entities and competitive environments, the Plan can be adapted.
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