1. Foldcraft Co.: Transformational Journey Steve Sheppard Chair and CEO, Foldcraft Co. (Retired) CEO, Winds of Peace Foundation (Current)

2. Introduction Incorporated 1948 100% Employee-Owned S Corp 350 Members 350 Members 4 Wholly-Owned Subsidiaries 4 Wholly-Owned Subsidiaries 2006: $50MM Consolidated Sales Companies, Products, Services TransformationalValues-Based

3. Foldcraft Business Objectives Grow Equity By 12% Per Year Diversify Our Business Manifest Employee Ownership Improve Competitively and Globally Simple….But How? Simple….But How?

4. I. Welcome to the Reality of Employee Ownership

5. What if…? We could substantially increase the involvement and satisfaction of our employees, and in the process afford better benefits, twice the retirement income of comparable companies and higher wages? We could increase productivity at our company by an average of 5.3% annually? There is a “magic pill” that could boost our investment rate of return by 2.7% every year? There is an initiative that can increase sales, employment and sales/employee by 2.4%? We could increase the likelihood of the longevity of our firm by 15.2%? There could be a strategy that would better assure our firm would continue operating independently? We could eliminate corporate income taxes?

6. What if…? What if…? We were working for the benefit of ourselves and our co-workers, not some absentee owners? We had the opportunity to create real wealth through owning equity? We could buy into owning a company without investing any of our own money? We woke up one day and realized that we really will become old and retire some day? We had the opportunity to create twice as many retirement bucks as the average worker?

7. What’s Different in an ESOP? Expectations Opportunity for Wealth-Building Covenant With Each Other Corporate Culture Introspection Wider Focus on Employees Engaging, Teaching, Communicating, Understanding the ESOP

8. Ownership “Magic” Ownership “Magic” Opportunity for Culture Shift Holistic Development ParticipationOwnership

9. Stewardship Stewardship Membership in an organization means that we have chosen and accepted this playing field. This choice and acceptance becomes our contract. Our desires for compensation, self-expression, participation…whatever we want from a place…are viable only so long as we can commit to the mission, results, constraints, principles, difficulties of the larger institution. If we cannot support these requirements and boundaries, then we should leave. Stewardship offers more choice and control in exchange for a promise….

10. What I Promise to You: *Open Book Management *Member Involvement *Stewardship *Servant Leadership *Listening *Vision *100 Best Companies *Change *Opportunity

11. What You Promise to Me: *Partnership *Commitment *Participation *Attitude (Courtesy, Respect) *Body, Head, Heart *Change *Self-Management *Peer Pressure *Desire to Be All That You Can Be

12. ESOP Noteworthy Outstanding Employee-Owner in America, 1993 Outstanding Employee-Owner in Minnesota, 1993, 1994,1996 Outstanding Employee-Owned Company in Minnesota, 1996, 1998 Outstanding Employee-Owned Company in America, 1998

13. Foldcraft Statistics 47/200 Participants Own 6-Figure Accounts The Average of Those 6-Figure Accounts Is More Than $160,000 30/47 Accounts Are Owned By Non- Managers 19 Accounts Are Owned By Factory Participants, 11 By Office Average of ALL 200 Accounts Is More Than $75,000

14. CORPORATE WELLNESS: I NTELLECTUAL S OCIAL E MOTIONAL S PIRITUAL O CCUPATIONAL P HYSICAL

15. II. Open Book Management: Chapter and Verse Chocolate Chip Cookies The Great Game of Business The School Desk Company The ESOP Huddle Weekly Closes Individual Profit/Loss Statements White Boards, Hour-by-Hour Charts

16. III. Foldcraft’s Lean Journey Pella Visit 5/98 Industry Week publishes “Kaizen Blitz” 9/97 Participate in Pella Event 6/98 1st Foldcraft Shopfloor Event 8/98

17. Unleashing Ownership Potential Kaizen Teams Inside and Outside, All Members Intense, Focused, Accountable (25%-50%- 40%) Educate, Facilitate, Elucidate, Celebrate Cara’s Story

18. Foldcraft’s Lean Journey 1st Foldcraft Kaizen Event Results: Proved to ourselves that it could be done 50% Floorspace Reduction 66% WIP Reduction 25% Productivity Increase The Vent!

19. Foldcraft’s Lean Journey 4/02 Tool & Die Becomes Process Build Foldcraft Acquires Baker Furniture 4/02 Kaizen Comes To Baker 5/02

20. Results Achieved ‘98-Present: Process Lead-Time66% Floorspace42,000 sq. ft. Productivity240% Claims48% On-Time Ship 95.2%99.3% Significant product expansion Insourcing previously purchased items

21. Foldcraft’s Lean Journey Kaizen Continues Every Day, Every Hour! Monthly Events Point Kaizens HOT Lab Work Public Events Hour-by-Hour Charts White Boards Etc.

22. Does It Make A Difference? Competition (Falcon) Customers (YUM!) Acquisitions (Millwork) Share Appreciation Distributions

23. Cross Boundaries Transformational Educational Travel Third-World Realities Broadening Member Thinking Educating Re: Diversities Global/Cultural Sensitivities

24. Foldcraft Foundation Funded by Foldcraft 10% Pre-Tax Profit Separate Member Board Established 1997 Global Focus

25. IV. The Global Context IV. The Global Context Winds of Peace Foundation Martha Valle Valle Honduras ESOP Organizational Workshops

26. Q & A Q & A

27. Why It’s Important Wellness IS ESOP The Have’s and the Have-Not’s Equity Ownership Life Is Short