Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Key Employee Retention Plan Attract, Retain, and Reward Your Best Employees The information contained in this presentation is being provided with the understanding that it is not intended to be interpreted as specific legal or tax advice. Individuals are encouraged to seek the guidance of their own personal legal or tax counsel.

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Company Benefits You may offer a variety of benefits to your employees such as a retirement plan, health insurance, legal insurance, paid vacation, etc. However, most employers offer a basic package of benefits to all employees, and usually the employer cannot be selective to whom the benefits are offered. In order to help you retain your key employees, selective benefits, which are offered on top of your basic company benefits, can be offered to your best employees to keep them working for you.

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Who is a Key Employee? A key employee can be anyone who: Is responsible for management decisions Is highly paid Has a significant impact on sales Has a special rapport with customers and creditors

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # What is a Key Employee Retention Plan? An alternate non-qualified benefit program for highly compensated employees and/or owners that can be used in conjunction with a 401(k) plan or other retirement program A way for owners and highly compensated employees to save more for retirement A program that can be designed to attract, retain, and reward key managers and/or highly compensated employees by providing them compensation in the future for services rendered today A “golden handcuffs” program designed to keep your best employees working for you

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Why Implement A Key Employee Retention Plan? The employer wishes to benefit a select, highly compensated employee or a select group of highly compensated employees The employer has a need to attract, retain, or reward one or more employees The employee is “maxed out” on contributions to or benefits from a qualified retirement plan The employer has no qualified retirement plan in place and does not wish to establish one

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Important Facts about a Key Employee Retention Plan This type of program can be added on top of an existing retirement plan or can be used instead of a retirement plan The agreement and benefits are determined by the company and can be different for different employees The establishment of this type of program creates future financial liabilities for the company since employees will be entitled to their money at some point if they meet the terms of the agreement or retire Since these types of benefit programs can’t be formally funded for tax reasons, the company will need to make sure it has the cash to make payouts when they come due

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # How is a Key Employee Retention Plan Created? The company and the employee enter into an agreement that outlines what the employee needs to do to, if anything, to fulfill the terms of the agreement (work with company for 10 more years, etc.) If the employee fulfills the terms of the agreement, the employee will receive cash benefits If the employee leaves the employment of the company before fulfilling the terms of the agreement, the employee’s benefits are forfeited and the company can recover most, if not all, of its money back

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # How is a Key Employee Retention Plan Funded? Since a selective benefit program cannot be formally funded to obtain the desired tax benefits, High Early Cash Value Life Insurance is used to informally fund our programs The company makes an annual contribution on an employee’s behalf which will pay the premium for a life insurance policy bought on the employee’s life. (The insurance premium is not deductible) The company is the owner and beneficiary of this policy The cash value of this policy builds up quickly and is used to make the payouts / retirement benefits promised to your employee (Payouts to the employee are deductible)

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Benefits of Funding with High Early Cash Value Insurance The company can recover most, if not all, of the cost to fund this program The cash value in the life insurance policy is an asset on your company’s balance sheet The cash value builds up fast so money is readily available to pay promised benefits There is virtually no administrative hassle and no approval from IRS or ERISA needed

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # How Can the Business Owner Recover the Costs of Funding this Program? If employee TERMINATES –Owner can terminate the policy and keep the cash value for the company –The cash value is approximately 90% of your premium payment after the 1 st year If employee DIES –Owner receives a lump sum death benefit of which he or she can keep any portion as outlined in the agreement If employee BECOMES DISABLED –Owner no longer has to make premium payments for the policy to stay in force. Policy will stay in force for the length of time specified in the agreement. At that time, the owner can keep any portion of the cash value as outlined in the agreement If employee MEETS OBLIGATIONS or RETIRES –Owner can keep any portion of the accrued cash value benefit as outlined in the agreement

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # What Happens if the Employee Terminates Employment and Does Not Meet the Terms of the Agreement? The OWNER can choose to give the employee any portion of the accrued benefits OR surrender the insurance policy and keep the accrued benefits for the company OR transfer this program to another employee and benefits will continue to accrue using the new employee as the insured The EMPLOYEE may or may not receive any benefits based on the terms of the agreement

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # What Happens if the Employee Dies Before Meeting the Agreement? The OWNER receives the death benefit from the life insurance policy tax-free and can pay all or any portion of the death benefit to the employee’s family The OWNER takes a tax deduction on any payments made to the employee’s family The EMPLOYEE’S FAMILY will receive a lump sum of cash or a stream of income provided by the owner as outlined in the agreement

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # What Happens if the Employee Becomes Disabled and Can’t Meet the Terms of the Agreement? The OWNER will not have to make any more premium payments since the disability waiver of premium provision in the life insurance contract will come into play. All benefits will continue accruing just as if the owner was making the premium payments. The EMPLOYEE will continue to accrue benefits and will be paid out according to the terms of the agreement with the owner as if he or she was never disabled.

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # What Happens if the Employee Meets the Terms of the Agreement? The OWNER can use the cash value of the life insurance policy to pay the employee a supplemental retirement or cash benefit The OWNER takes a tax deduction on any payments made to the employee The EMPLOYEE will receive a lump sum of cash or a stream of income provided by the owner as outlined in the agreement

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Steps to Establish a Key Employee Retention Plan Decide which employees you want to participate in this plan and what annual dollar amount you are willing to contribute for each one. An owner can set this up just for him/her and spouse as an alternative retirement program, or they can set it up for key employees as well to reward and retain them. Complete life insurance applications on all participants Wait to receive the policy contracts on the participants Meet with your legal counsel to create an agreement that outlines what is required of the employee in order to receive the benefit Pay premiums on the life insurance to keep the policy in force. Premiums can be paid annually, semi-annually, quarterly, monthly bank draft, or list bill in which all participants are listed on a bill and sent to the owner

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Advantages to the Business Owner This type of plan can be used as an alternative retirement program for owners to put more money away for retirement This type of plan will help attract, reward, and retain valuable key employees You can select who participates and can fund this program differently and in different amounts for different employees This program does not require IRS approval or ERISA requirements This program can be added on top of an existing retirement plan or can be used instead of a retirement plan You can choose to add new employees to this program at any time You can choose to terminate the key employee retention plan at any time You can recover most, if not all, of the money you have contributed to fund this plan

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Advantages to the Employee This program provides or supplements the employee’s retirement income This program provides cash or income to the spouse or children of the employee if the employee dies Net income from this type of selective benefit arrangement is often greater for the employee than income from other types of benefits This program will make employees feel valued and appreciated

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # The Next Step Employee’s NameDate of BirthSexTobacco User (Yes or No) Annual Dollar Amount You May Like to Contribute We can help you determine if a key employee retention plan may be right for you. If you are interested in learning more, please provide us with the following information on any key employee you may be interested in including in a Key Employee Retention Plan:

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # The Next Step (con’t) We will then send you a proposal which will outline the death benefit and the cash benefit payout available each year based on the company’s annual dollar contribution for an employee. From there, we can help you determine how this program may work for your company.

Attract & Retain Your Employees Build & Preserve Your Business Protect Your Family Larry Ricke and Mike Ricke are registered representatives offering securities products through MML Investors Services, Inc Woodfield Crossing, Suite 220, Indianapolis, IN (317) Ricke & Associates is not a subsidiary or affiliate of MML Investor Services, Inc. Tracking # Summary By offering a progressive Selective Benefits Program to vital employees and desirable candidates, you’re taking an important first step towards securing their services. Call or e- mail us today to see if this plan makes sense for you. For More Information, Please Contact: Ricke & Associates 425 Bank Street New Albany, IN Phone: (812) , Fax: (812)