1. Understanding The Advantages of Safe Harbor 401(k) Plans versus SIMPLEs Presented by: Mark M. Gutrich President & CEO ePlan Services, Inc.

2. What is a Traditional 401k? B ASICS Plan Adoption Agreement Flexible Eligibility: – 18 to 21 Years of Age – Worked 1,000 hours/year Optional Contributions: – Deferral Matching – Profit Sharing Elective Deferrals: – 100% of Compensation – Up to $15,500/year – $5,000 “Catch-Up” if 50+ P ROS & C ONS PROS: Easy to Set-Up & Administer No Mandatory Contributions Permitted Disparity Designs Optional Vesting Schedules Optional ROTH Contributions Optional Loan Feature CONS: Annual Tax Filings Annual Administration Fees Annual Discrimination Tests - 1 -

3. What is a Safe Harbor 401k? B ASICS Plan Adoption Agreement Flexible Eligibility: – 18 to 21 Years of Age – Worked 1,000 hours/year Mandatory Contributions: – 3% of Annual Compensation - OR - – 3.5% to 4% Match on Deferrals Elective Deferrals: – 100% of Compensation – Up to $15,500/year – $5,000 “Catch-Up” if 50+ P ROS & C ONS PROS: Easy to Set-Up & Administer No Discrimination Testing Optional Profit Sharing Optional Vesting Schedules* Optional ROTH Contributions Optional Loan Feature CONS: Annual Tax Filings Annual Administration Fees Mandatory ER Contributions - 2 -

4. How Can They Be Structured? N ON -E LECTIVE S AFE H ARBOR Mandatory Contributions: – Flat 3% of Compensation – Regardless of Participation Owner/HCE Deferrals: – 100% of Compensation – Up to $15,500/year – $5,000 “Catch-Up” if 50+ Can Wait To Notify: – Determined Annually – 30 Days Before Year-End S AFE H ARBOR M ATCH Matching Contributions: – 100% up to 3% Comp – 50% on next 2% Comp Owner/HCE Deferrals: – 100% of Compensation – Up to $15,500/year – $5,000 “Catch-Up” if 50+ Must Pre-Notify: – Determined Annually – 30 Days Before Plan Year - 3 -

5. What’s The Difference? SH NEC S UMMARY : % C ONTRIB Owners$ 9,00046% HCEs 3,15016% NHCEs 7,50038% TOTAL$19,650 (Immediately Vested) SH M ATCH S UMMARY : % C ONTRIB Owners $12,00053% HCEs 4,20019% NHCEs 6,40028% TOTAL $22,600 (Immediately Vested) - 4 - N ON -E LECTIVE S AFE H ARBOR S AFE H ARBOR M ATCH E MPLOYEES :A VG D EFRRAL A NNUAL C OMP 2 Owners Max$300,000 1 Highly Compensated Employees (HCEs) 10% 105,000 4 Non-HCEs (Participate) 5% 160,000 3 Non-HCEs (Don’t Participate) 0% 90,000 TOTAL PAYROLL$655,000

6. What If Excluded Owners/HCEs? SH NEC S UMMARY : Owners -$ - 0 - HCEs - - 0 - NHCEs 3% 7,500 TOTAL1.1%$ 7,500 (Immediately Vested) SH M ATCH S UMMARY : Owners -$ - 0 - HCEs - - 0 - NHCEs2.6% 6,400 TOTAL1.0%$ 6,400 (Immediately Vested) - 5 - N ON -E LECTIVE S AFE H ARBOR S AFE H ARBOR M ATCH E MPLOYEES :A VG D EFRRAL A NNUAL C OMP 2 Owners Max$300,000 1 Highly Compensated Employees (HCEs) 10% 105,000 4 Non-HCEs (Participate) 5% 160,000 3 Non-HCEs (Don’t Participate) 0% 90,000 TOTAL PAYROLL$655,000

7. SIMPLE v. SH401k SIMPLE No Administrative Fees No Annual Tax Filings No Discrimination Testing Must Include ALL Employees Max Personal Deferrals: – 100% Compensation – Up to $10,500 – $2,500 “Catch-Up” if 50+ Mandatory Contributions: – 2% of Annual Compensation - OR - – 3% Match on Deferrals 100% Immediately Vested S AFE H ARBOR 401( K ) Low Administrative Fees Easy Annual Tax Filings No Discrimination Testing May Exclude Employees Max Personal Deferrals: – 100% Compensation – Up to $15,500 – $5,000 “Catch-Up” if 50+ Mandatory Contributions: – 3% of Annual Compensation - OR – – 4% Match on Deferrals 100% Immediately Vested - 6 -

8. How Do They Compare? - 7 - SH M ATCH S UMMARY : Owners 3%$ 9,000 HCEs 3% 3,150 NHCEs1.9% 4,800 TOTAL2.6%$16,950 (Immediately Vested) SH M ATCH S UMMARY : Owners -$ - 0 - HCEs - - 0 - NHCEs2.6% 6,400 TOTAL1.0%$ 6,400 (Immediately Vested) SIMPLE M ATCH S AFE H ARBOR M ATCH 401( K ) E MPLOYEES :A VG D EFRRAL A NNUAL C OMP 2 Owners Max$300,000 1 Highly Compensated Employees (HCEs) 10% 105,000 4 Non-HCEs (Participate) 5% 160,000 3 Non-HCEs (Don’t Participate) 0% 90,000 TOTAL PAYROLL$655,000

9. Who Gets The Benefit? SIMPLE M ATCH S AFE H ARBOR M ATCH 401( K ) EmployeeDeferralMatchTotalDeferralMatchTotal Owner #1$10,5004,500$15,000$15,500- 0 -$15,500 Owner #2$10,5004,500$15,000$15,500- 0 -$15,500 HCE$10,5003,150$13,150$10,500- 0 -$10,500 Non-HCE #1$ 2,5001,500$ 4,000$ 2,5002,000$ 4,500 Non-HCE #2$ 2,5001,500$ 4,000$ 2,5002,000$ 4,500 Non-HCE #3$ 1,500 900$ 2,400$ 1,5001,200$ 3,700 Non-HCE #4$ 1,500 900$ 2,400$ 1,500 1,200$ 3,700 Non-HCE #5$ 0- 0 -$ 0 - 0 -$ 0 Non-HCE #6$ 0- 0 -$ 0 - 0 -$ 0 Non-HCE #7$ 0- 0 -$ 0 - 0 -$ 0 ER COST$16,950$6,400 - 8 -

10. Isn’t There A Vesting Version? A UTOMATIC E NROLLMENT S AFE H ARBOR 401( K ) Enroll Every Employee: – Minimum 3% Deferral – Employee May Opt Out Automatic Increases: – Scheduled Annual Increases – Scale up to 6% over 3 yrs Mandatory Contributions: – 100% of first 1% Deferral – 50% of next 5% Deferral Available Vesting Schedules: – Immediate – 50% per Year – 2-Year Cliff B ENEFITS Creates Retention Plan Forfeit Contributions: – Pay Annual Plan Expenses – Offset Future Contributions – Distribute to “Vested” EEs - 9 -

11. How Does It Work? Enroll Every Employee: – 3% Deferral – 1% Escalator/Year Offer Employees Opt-Out Start Making Contributions A UTO E NROLL SH M ATCH S UMMARY : Owners -$ - 0 - HCEs - - 0 - NHCEs1.9% 4,800 TOTAL0.7% $ 4,800 (Vested Over 2 Years!) - 10 - E MPLOYEES :A VG D EFRRAL A NNUAL C OMP 2 Owners Max$300,000 1 Highly Compensated Employees (HCEs) 10% 105,000 4 Non-HCEs (Stay In) 5% 160,000 3 Non-HCEs (Opt Out) 0% 90,000 TOTAL PAYROLL$655,000

12. SIMPLE v. AE401k SIMPLE No Administrative Fees No Annual Tax Filings No Discrimination Testing Must Include ALL Employees Max Personal Deferrals: – 100% Compensation – Up to $10,500 – $2,500 “Catch-Up” if 50+ Mandatory Contributions: – 2% of Annual Compensation - OR - – 3% Match on Deferrals 100% Immediately Vested A UTO E NROLL 401( K ) Low Administrative Fees Easy Annual Tax Filings No Discrimination Testing May Exclude Employees Max Personal Deferrals: – 100% Compensation – Up to $15,500 – $5,000 “Catch-Up” if 50+ Mandatory Contributions: – 3% of Annual Compensation - OR - – 3.5% Match on Deferrals Up to 2 yr Vesting Schedule - 11 -

13. How Do They Compare? - 12 - SH M ATCH S UMMARY : Owners 3%$ 9,000 HCEs 3% 3,150 NHCEs1.9% 4,800 TOTAL2.6%$16,950 (Immediately Vested) SH M ATCH S UMMARY : Owners -$ - 0 - HCEs - - 0 - NHCEs1.9% 4,800 TOTAL0.7% $ 4,800 (Vested Over 2 Years!) SIMPLE M ATCH A UTO E NROLL SH M ATCH 401( K ) E MPLOYEES :A VG D EFRRAL A NNUAL C OMP 2 Owners Max$300,000 1 Highly Compensated Employees (HCEs) 10% 105,000 4 Non-HCEs (Participate/Stay In) 5% 160,000 3 Non-HCEs (Don’t Participate/Opt Out) 0% 90,000 TOTAL PAYROLL$655,000

14. Who Gets The Benefit? SIMPLE M ATCH P LAN A UTO E NROLL SH M ATCH 401( K ) EmployeeDeferralMatchTotalDeferralMatchTotal Owner #1$10,5004,500$15,000$15,500- 0 -$15,500 Owner #2$10,5004,500$15,000$15,500- 0 -$15,500 HCE$10,5003,150$13,150$10,500- 0 -$10,500 Non-HCE #1$ 2,5001,500$ 4,000$ 2,5001,500$ 4,000 Non-HCE #2$ 2,5001,500$ 4,000$ 2,5001,500$ 4,000 Non-HCE #3$ 1,500 900$ 2,400$ 1,500 900$ 2,400 Non-HCE #4$ 1,500 900$ 2,400$ 1,500 900$ 2,400 Non-HCE #5$ 0- 0 -$ 0 - 0 -$ 0 Non-HCE #6$ 0- 0 -$ 0 - 0 -$ 0 Non-HCE #7$ 0- 0 -$ 0 - 0 -$ 0 ER COST$16,950$4,800 - 13 -

15. How Do I Decide? O BJECTIVE /D ECISION Do Owners Want to Defer: – $10,500/year – $15,500/year Does Employer Want: – Give Employees Money – Offer Savings Incentives Does Employer Want: – Unconditional Benefit – Retention Benefit P LAN T YPE SIMPLE 401(k) NEC SH 401(k) or SIMPLE Match SH 401(k) or SIMPLE SH 401(k) or SIMPLE AutoEnroll SH Match 401(k) - 14 -

16. Dates To Remember Notify Re: SH Match December 1 st (Previous Year) Convert SIMPLE to SH401k January 1 st (Current Year) Determine SH NEC November 31 st (Current Year) Establish New SH401kOctober 1 st (Current Year) - 15 -

17. Questions & Answers