As president of Menke & Associates. Inc., I believe there is significant untapped growth potential in most privately held companies.

Whether you want to sell some or all of your stock in the company in the next five years or whether you plan to remain active for the long term, Menke & Associates, Inc. proposes to work with you to develop a program which should help you achieve your growth potential and multiply the total value of your investment in the company.

Our experience with more than 1,500 companies nationwide since 1974 proves to us that only on-site, hands-on owners consistently tap the energy, unlock the ingenuity, and muster the commitment necessary to make a business successful. After all, who cares whether the business succeeds or fails? Only owners really care.

Over 10,000 privately owned businesses like yours have applied this truth - which some call the secret weapon of Capitalism - to develop their most valuable resource: the ownership energy potential of each employee:

• At Springfield Remanufacturing Corp. in Missouri, sales grew by more than 30% per year and the value of the stock increased from $1.00 per share to $18.30 per share during the eight years following implementation of an Employee Stock Ownership Plan and the related employee training program.

• After implementation of an ESOP at Reflexite Corp. in Connecticut, sales doubled and doubled again between 1986 and 1991. The work force tripled, and profits rose almost sixfold.

• At Will-Burt Company in Ohio, employee annual turnover decreased from 35% to 5%, manufacturing efficiency increased from 65% to 95%, and daily absenteeism decreased from 8% to 2.3% as a result of increased employee ownership and training.

• 80% of ESOP companies surveyed saw the Plan as "a good decision that has helped the company." 13% were neutral. Only 4% were negative.

By selling a little stock to an Employee Stock Ownership Plan, the original shareholders of these companies have greatly multiplied the value of the stock they kept.

A University of Michigan study found that companies with significant employee ownership are 1.5 times more profitable than comparable firms with no employee ownership. Generally, 1.5 times more profits means a 50% increase in the value of your stock. And this differential compounds from year to year. Original shareholders thus own a smaller piece of a much bigger pie.

By establishing an ESOP, you can create a tax-deductible, in-house market to give you liquidity for your own stock when and if you choose to sell some shares. Under certain conditions, you can even sell tax free.

Does employee ownership lead to a loss of control? No. Regardless of how much stock the ESOP acquires, you can still control all of the stock. This is because stock owned by the Plan is held in trust. Employees are beneficiaries of the economic value of the trust's investments, but you can retain the voting rights and control.

Properly designed, an Employee Stock Ownership Plan provides a way to tie a portion of each employee's long-term compensation to the risk of the business. An ESOP combines the financial interests of the employees with those of the original shareholders so that teamwork and a long-range investment perspective towards the business are in everyone's self-interest. We think employee ownership is the most efficient incentive program because its success is a direct function of the employee's own efforts.

In order to qualify for an ESOP, your company should be a profitable, taxpaying corporation with at least 15 full-time employees. If you meet these criteria, especially if you already maintain a profit sharing plan or a 401(k) plan, you should definitely consider establishing an ESOP.

Menke & Associates, Inc. is the largest and most active firm in the country in the design and installation of ESOPs. Our staff is available to answer any questions you may have regarding the feasibility of an ESOP in your particular situation. This analysis is provided free of charge.

If you are interested in obtaining more information or a free feasibility analysis, please complete the ESOP Feasibility Questionnaire and return it to us at your earliest convenience.

Very truly yours,

MENKE &ASSOCIATES, INC.

John D. Menke
President