COMMERCIAL BANKING

ESOP Advisory Group Capabilities E M PLOY EE STOCK OWN ERSHIP PL AN S MA K I N G INFOR ME D DECISI ONS FOR YOUR BU S I N E SS, E MPLOY E E S AND S HAREH OLDERS

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Our Qualifications and Experience

J.P. Morgan maintains over 1,200 banking relationships with ESOP companies, including over 600 lending relationships, more than any other US bank. Our experience and national focus position us as the provider of choice for companies seeking to maximize the benefits of an ESOP. Depth of Knowledge

Technical Leadership

• Deep expertise in analyzing and structuring complex ESOP financings developed over years of involvement in ESOP transactions

• Involved in complex structuring issues

• Leadership in ESOP organizations

• Mature ESOP issues, including repurchase obligation

• Strong relationships with leading ESOP professionals

• Experience with IRS and Department of Labor compliance issues

»» New and second stage ESOP transactions »» M&A and corporate finance transactions

National Footprint Collaboration with bankers, underwriters and investment professionals across J.P. Morgan’s national platform, including: • Commercial Banking • Investment Banking • Wealth Management/Private Banking • Chase Capital and Chase Placements

Activity • From 2007 to 2015, reviewed an average of 197 ESOPs annually and extended an average of $356 million annually in new financing to ESOP companies—with 261 reviewed and $493 million new financing extended in 2015 alone • In 2013, reviewed 254 ESOP opportunities and closed 83 transactions • In 2014, reviewed 229 ESOP opportunities and closed 88 transactions • In 2015, reviewed 261 ESOP opportunities, closed 97 transactions

J.P. Morgan Is the Industry Leader in ESOP Financing Activity

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ESOP Advisory Group Capabilities

ESOP Advisory Group’s unparalleled expertise in ESOP transactions nationally positions J.P. Morgan as an industry leader. J.P. Morgan provides clients with market intelligence, current industry knowledge and best practices, bringing value to our clients throughout the life of the ESOP. • Advise shareholders and companies about ESOP alternatives • Assist clients in navigating complex ESOP structuring issues • Consult and finance new and second stage ESOP transactions • Provide advice regarding M&A and corporate finance transactions involving ESOP-owned companies • Provide advice on mature ESOP issues, including repurchase obligation and regulatory and compliance matters

Mature ESOP

Financing

ESOP Education

ESOP Advisory Group

Transaction Structuring

Transaction Planning

Providing optimal solutions to meet your ESOP financing needs

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Representative J.P. Morgan ESOP Transactions The ESOP Advisory Group helps make J.P. Morgan more than just a financing source for ESOP transactions. Our collective experience and depth of knowledge allow us to understand ESOP-related issues on a detailed level and to highlight issues in a true advisory capacity. Below are examples of the added value of working with the J.P. Morgan ESOP Advisory Group. Transactions Financed Minority ESOP Purchase

Second Stage 100% S ESOP

New C ESOP 1042 Election

ESOP Company Acquisition

Repurchase Obligation

Regulatory Compliance

ESOP Termination

Aerospace $68 million

Craft Brewer

Pharmaceuticals $35 million

Engineering $36.6 million

Lumber $37 million

Metals $53 million

Industrial Mfg. $15 million

Value of the ESOP Advisory Group Completed preliminary feasibility analysis and closed this minority ESOP purchase addressing multifaceted ESOP structuring issues Executed on a complex ESOP structure with warrants, management equity and seller paper Successfully executed on a convertible preferred C ESOP to facilitate preferential capital gains treatment for the seller Addressed the ESOP-related issues in a major acquisition by an ESOP-owned engineering firm of a non-ESOP competitor Assisted Agent with restructuring of the ESOP’s off-balance sheet repurchase obligation for a company facing financial issues Identified IRS compliance issues with IRC Sec. 409(p) and prevented a major tax violation

Facilitated a successful transaction to terminate an existing ESOP

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The ESOP Advisory Group possesses decades of technical knowledge and leadership, as well as dedicated involvement in the ESOP community, positioning J.P. Morgan as a national leader for financing transactions to ESOP-owned companies. ESOP Advisory Group – Representative Transactions J.P. Morgan’s dedicated ESOP specialists help structure financing for privately held companies who are executing new and second stage sale transactions to ESOPs, as well as complex mature ESOP-related transactions. Drawing on our members’ more than 100 years of collective experience, we can help you structure financing that fits with your long-term ESOP strategy, while also serving as a trusted advisor on ESOP-related issues.

Harpoon Brewery

Cycle Gear

Columbia Pipe & Supply Co.

Kinney Drugs

$70,000,000

$30,000,000

$25,000,000

Syndicated ABL – Revolving Line

Syndication with $17,000,000 Hold Senior Term Loan and Revolving Line of Credit  Joint Lead Arranger/Joint Bookrunner/Syndication Agent

ABL – Revolving Line of Credit Sole Lender

Senior Revolver Minority Sale to the ESOP

CADMUS

New Belgium Brewing

Shorr Packaging Second Stage

Second Stage ESOP Transaction

ESOP Financing Converting to

Converting to 100% ESOP

100% ESOP Ownership

Sole Lender

Participant

Sole Lender

$18,000,000 Senior Debt Financing

of Credit

Senior Debt Financing

Capital Line of Credit

Thorntons $200,000,000 Syndication with $31,000,000 hold Senior Line of Credit, 25% ESOP formation

Participant

Sole Lender

Participant

Ownership

Senior Bank Loan and Working

Clif

Holden Industries

Protingent

Berger Group Holdings, Inc.

$42,500,000

$85,000,000

$3,900,000

$95,000,000

Long Term Revolving

Syndication with

Line of Credit

$30,000,000 Hold Line of Credit and Term Loan Agent/Lead Arranger

Participant

Senior Term Facility Sole Lender

Syndication with $40,000,000 Hold Senior Line of Credit Lead

ESOP Advisory Group team The ESOP Advisory Group is comprised of experienced and knowledgeable professionals recognized in the ESOP community. The group, led by Regina Carls, is dedicated to helping bankers and their privately held clients evaluate the benefits of selling stock to an ESOP, allowing clients to make the choice to best meet their needs and objectives. With more than 100 collective years of experience in banking, finance and ESOPs, the members of the ESOP Advisory Group collaborate to bring their transaction structuring, design and financing expertise to help clients and prospects achieve their desired outcomes.

Regina Carls Managing Director

Eric Zaiman Executive Director

(630) 221-2116 [email protected]

(212) 270-5402 [email protected]

Paul Trost Executive Director (312) 732-7448 [email protected]

Leah Turnbull Vice President (312) 732-6832 [email protected]

Peter Delong Vice President (312) 732-1525 [email protected]

Chris Nakamura Associate (212) 270-0874 [email protected]

Thomas Clarke Associate (312) 732-1275 [email protected]

For more information, please contact your J.P. Morgan representative or visit jpmorgan.com/cb/esop © 2016 JPMorgan Chase & Co. All rights reserved. Chase, JPMorgan and JPMorgan Chase are marketing names for certain businesses of JPMorgan Chase & Co. and its subsidiaries worldwide (collectively, “JPMC”) and if and as used herein may include as applicable employees or officers of any or all of such entities irrespective of the marketing name used. Products and services may be provided by commercial bank affiliates, securities affiliates or other JPMC affiliates or entities. In particular, securities brokerage services other than those which can be provided by commercial bank affiliates under applicable law will be provided by registered broker/dealer affiliates such as J.P. Morgan Securities LLC, J.P. Morgan Institutional Investments Inc. or by such other affiliates as may be appropriate to provide such services under applicable law. Such securities are not deposits or other obligations of any such commercial bank, are not guaranteed by any such commercial bank and are not insured by the Federal Deposit Insurance Corporation. Not all products and services are available in all geographic areas. Eligibility for particular products and services is subject to final determination by JPMC and or its affiliates/subsidiaries. IRS Circular 230 Disclosure: JPMC does not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with JPMC of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties. 191615 We are committed to making a difference by using paper with post-consumer fiber. 191615