1. Executive Compensation Going all in on Good People & Doubling Down on Top Talent By Jim Vollmer

2. Executive Compensation Executive Bonus Golden Handcuffs Split-Dollar Plans Golden Parachutes What ‘s Executive Bonus

3. Worth Protecting Administrator, CFO, COO, CNO / DON, Pharmacist or any other key Employee

4. Claims Expertise WHY USE LIFE INSURANCE FOR EXECUTIVE COMPENSATION More Flexible & Efficient than just increasing Salary Tax Free Death Benefit Immediate Value Permanent & Flexible Grows Tax Free Cash Build Up Retention Tool Key Man Insurance

5. Life Insurance is Property 50% It can be owned by two parties much like a real estate joint venture. An Undivided Interest in Life Insurance consists of a percentage share in each right & benefit.

6. POLICY OWNERSHIP & CONTROL EmployerEmployeeShared

7. Key Components Executive Compensation using Life Insurance Death Benefit Cash Values Premium Joint Ownership Plan Agreement Funding Period Tax on Bonus Bonus to Exec

8. J OwnershipUndivided Interest Premium $40,000 per year Term 15 Years ExecutiveAge 45 Vesting 25% Year 5 50 % Year 10 100% Year 15 ASSUMPTIONS Illustration # 1

9. Executive Compensation Illustration #1 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 1 Age 46 $40,000100%$38,400$876,472$0 Yr 5 Age 50 $40,00075%$146,400$702,190$0$50,000

10. Executive Compensation Illustration #1 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 1 Age 46 0%$0 Yr 5 Age 50 25%$0$50,000$15,000$48,800$234,068

11. Executive Compensation Illustration #1 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 9 Age 54 $30,00075%$278,438$844,576$10,000$0 Yr 10 Age 55 $30,00050%$213,020$589,312$10,000$103,084

12. Executive Compensation Illustration #1 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 9 Age 54 25%$10,000$0$3,000$92,812$281,526 Yr 10 Age 55 50%$10,000$103,084$33,925$213,020$589,312

13. Executive Compensation Illustration #1 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 14 Age 59 $20,00050%$327,986$704,278$20,000$0 Yr 15 Age 60 $20,0000%$0 $20,000$347,810

14. Executive Compensation Illustration #1 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 14 Age 59 50%$20,000$0$6,000$92,812$281,526 Yr 15 Age 60 100%$20,000$347,805$110,342$718,616$1,471,200

15. Ability to Make Things Easy AgeHeight Weight Gender Para Medical Information UNDERWRITING VARIABLES Tobacco Usage

16. J OwnershipUndivided Interest Premium $30,000 per year Term 28 Years ExecutiveAge 37 Steeped Vesting 12% Year 1 64 % Year 15 100% Year 27 ASSUMPTIONS Illustration # 2

17. Executive Compensation Illustration #2 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 1 Age 37 $30,000100%$28,687$876,472$0 Yr 5 Age 41 $23,01472%$111,779$731,098$6,986$6,679

18. Executive Compensation Illustration #2 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 1 Age 37 0%$0 Yr 5 Age 41 28%$6,986$6,679$4,100$42,932$257,058

19. Executive Compensation Illustration #2 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 10 Age 46 $16,97853%$184,588$593,412$13,022$12,098 Yr 20 Age 56 $ 7,21121%$192,493$427,798$22,789$25,244

20. Executive Compensation Illustration #2 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 10 Age 46 47%$13,022$12,098$7,536$163,807$526,607 Yr 20 Age 56 79%$22,789$25,244$14,410$717,697$1,595,010

21. Executive Compensation Illustration #2 Employer Perspective Year & Age Premium Paid by Company Share % Company’s Portion of Surrender Value Company’s Net Death Benefit Salary Expense for Premium Share Salary Expense for Buyout Yr 26 Age 63 $1,4922$36,262$66,253$28,508$35,564 Yr 27 Age 64 $ 7390%$0 $29,261$37,085

22. Executive Compensation Illustration #2 Executive Perspective Year & Age Share % Salary Bonus for Premium % Salary Bonus for Buyout Income Tax on Salary Bonus (30%) Executive’s Portion of Surrender Value Executive’s Net Death Benefit Yr 26 Age 63 98%$28,508$35,564$19,222$1,436,467$2,624,570 Yr 27 Age 64 100%$29,261$37,085$19,904$1,566,971$2,789,680

23. The Plan Agreement Establishes the Undivided Interests Accompanies Life Application Becomes part of the Policy File Addresses Administration Legal Instruments Accounting Annual Review Administrative Costs Annual Fee of $150 per year One time fee of $175

24. Claims Expertise IMPLEMENTATION Application & Plan Agreement Para Meds Final Rating Pay First Premium Policy Delivered Annual Reviews

25. What happens at the end of the term? What are the options for the Executive? Suppose the Executive finds a dream job they can’t resist? What if the Hospital falls out of love with their star executive? Exit Strategies 1.Let it self-complete 2.Mid-course Exit 3.Early Exit

26. Executive Compensation Going all in on Good People & Doubling Down on Top Talent By Jim Vollmer April 7, 2011 Questions