1. Prosperity Perpetuation® Concepts, Strategy and Management 1215 Superior Ave., Suite 410 Cleveland, Ohio 44114-3289 Tel: (216) 621-4391 Fax: (216) 621-4392 www.calfeefinancial.com pcalfee@calfeefinancial.com Peter H. Calfee, CFP, CPA, CLU, AEP, MBA President Financial expertise for successful people sm

2. Prosperity Perpetuation® Concepts, Strategy and Management MOTIVATION Pursuit of excellence Passion for learning Challenge Proactive Desire to help children Love of people

3. Prosperity Perpetuation® Concepts, Strategy and Management RESPONSIBILITIES CEO of a multi million-dollar operation Balance sheet and “profit and loss” responsibilities Responsible for personnel Government-mandated responsibility for benefits and retirement Focus on source of “raw material” (students) Responsible for delivery of quality goods to market place (matriculation to college or other educational pursuit of choice) Deal with work place violence and associated personnel disputes and employee complaints Required to raise equity and handle financing issues including Bond issuance and debt service

4. Prosperity Perpetuation® Concepts, Strategy and Management Responsible for long-range strategic planning Responsible for school vision & development, maintenance or revitalization of school vision/mission/and motto Responsible for training and guidance of all support personnel Accessible to all shareholders, stakeholders, and interested parties including federal, regional, state and local government employees in the educational arena Available to the student body for whom you exist & why you sought the job in the first place Available to your Board at all times RESPONSIBILITIES

5. Prosperity Perpetuation® Concepts, Strategy and Management FAIR COMPENSATION A “Bridge” between you and the School

6. Prosperity Perpetuation® Concepts, Strategy and Management COMPENSATION Salary Bonus\Other Deferred compensation

7. Prosperity Perpetuation® Concepts, Strategy and Management SALARY Market driven Negotiated Comparability issue Experience School issues Geographic location

8. Prosperity Perpetuation® Concepts, Strategy and Management BONUS - OTHER GUARANTEED OR DISCRETIONARY FOR PURPOSE OF DISCUSSION & INCLUSION Insurance coverage Cars Financial planning Tuition remission Sabbaticals Clubs Other

9. Prosperity Perpetuation® Concepts, Strategy and Management DEFFERED COMPENSATION QUALIFIEDQUALIFIED –403 B –457 Plans –401 K for Non-profits NON-QUALIFIEDNON-QUALIFIED –Ineligible 457 Plans –Other plans designed for unique application

10. Prosperity Perpetuation® Concepts, Strategy and Management POTENTIAL PURPOSE OF NON-QUALIFIED PLANS Retention of employees Performance based or incentive Or both

11. Prosperity Perpetuation® Concepts, Strategy and Management FAIR COMPENSATION Eye of the beholder Depends on working relationship Board views as to compensation Self analysis

12. Prosperity Perpetuation® Concepts, Strategy and Management FAIR COMPENSATION First pillar = Salary Second pillar = Bonus/other Third pillar = Deferred Compensation

13. Prosperity Perpetuation® Concepts, Strategy and Management DEFERRED COMPENSATION Retention driven Performance driven Or –Both

14. Prosperity Perpetuation® Concepts, Strategy and Management ORIGINS OF DEFERRAL For-profit world Change in retirement laws Desire of board to reward Competition for talent Retention based pay Incentive based pay

15. Prosperity Perpetuation® Concepts, Strategy and Management FOR WHOM? Exclusive Discriminatory Can be complicated Tax issues drive design

16. Prosperity Perpetuation® Concepts, Strategy and Management CRITICAL TAX ISSUES Constructive receipt of funds Substantial risk of forfeiture

17. Prosperity Perpetuation® Concepts, Strategy and Management TYPES OF FUNDING Similar to government approved retirement plans Defined “Benefit” Defined “Contribution”

18. Prosperity Perpetuation® Concepts, Strategy and Management METRICS Benchmarks Goals Quantitative Qualitative

19. Prosperity Perpetuation® Concepts, Strategy and Management METRICS Achieve capital goals Increase endowments Maintain operations Improve administration Elevate school reputation Annual fund Expand campus Renovate buildings Maintain culture

20. Prosperity Perpetuation® Concepts, Strategy and Management DEFINE & DESIGN Risks ----- Problems: –Encumber future Boards –Clarify actual cash commitment –School wants to keep Head? –Head wants to commit to school?

21. Prosperity Perpetuation® Concepts, Strategy and Management Other Considerations School Culture Financial Resources Goals and Missions Purpose of Program

22. Prosperity Perpetuation® Concepts, Strategy and Management SUMMARY UNDERSTAND Compensation Program School’s Mission & Vision Inner concepts, desires, goals & beliefs of Head What performance means/metrics Longevity of program

23. Prosperity Perpetuation® Concepts, Strategy and Management UNDERSTAND Financial Accumulation of Funds The Board and its inner workings That all knowledge learned in this process is good – you will know where you “Stand”

24. Prosperity Perpetuation® Concepts, Strategy and Management FINALLY The entire discussion responds to the natural human desire to be treated fairly in a competitive world.