A Plan for Your Business

Investment Products • Are Not a Deposit of Any Bank • Are Not FDIC Insured • Are Not Insured by Any Federal Government Agency • Are Not Guaranteed by Any Bank or Savings Association • May Go Down in Value

Non-Qualified Deferred Compensation

KEEPING PACE

Products which may be used in the deferred compensation plans described in this brochure are issued by AXA Equitable Life Insurance Company (AXA Equitable) and distributed by AXA Advisors, LLC. All guarantees are provided by AXA Equitable and based on its claims-paying ability. AXA Equitable is a subsidiary of AXA Financial. AXA Financial (AXA) is part of the global AXA Group and one of the world’s leading financial protection and wealth management organizations. With over $1 trillion in assets under management (as of 12/31/04), AXA Group has an operating presence in the world’s major markets — Europe, North America and selected countries in Asia Pacific. Backed by a reputation for integrity, reliability and professionalism, AXA Group has helped over 40 million customers around the world build their financial futures.

I T ’ S I M P O R TA N T T O TA K E C A R E O F H I G H LY VA L U E D E M P L O Y E E S In today’s competitive marketplace, the ability to recruit, retain and reward employees is critical to the success of any business. It is especially important to take care of those people who help make the difference between success and failure.

There’s No Substitute for a Well-Designed Executive Non-Qualified Retirement Plan The competition for talented senior executives is fierce. A company may think it has a generous executive benefits program in place. However, it may not be accomplishing the most important goals: to retain and reward the most valued employees by providing them with a benefit plan that will help them secure a comfortable retirement.

One of the Best Investments You Can Make It isn’t enough to simply have a “one size fits all” benefit plan package. Given the limits imposed by the Internal Revenue Code on contributions to traditional qualified retirement plans, highly compensated executives may find it difficult to achieve their retirement goals. A non-qualified plan may be the answer. Nonqualified plans can add the flexibility that key executives need to meet these goals. As a result, non-qualified plans can be some of the fastest-growing retirement plans in the United States today.

Key executives need a benefit plan that goes beyond traditional raises or bonuses.

K E Y E X E C U T I V E S FA C E A R E T I R E M E N T P L A N N I N G D I L E M M A Historically, the majority of an executive’s pre-retirement income was replaced by social security and qualified plan benefits. Today, however, highly compensated employees may face a serious shortfall upon retirement.

For over two-and-a-half decades, the government has imposed limitations and restrictions on pension benefits and deferral opportunities (including 401(k) plans) of highly compensated executives. In 1974, the Employee Retirement and Income Security Act (ERISA) created new pension laws. Since then, additional legislation has generally increased taxes, with some exceptions like EGTRRA, leaving highly compensated executives with retirement income at an even more reduced percentage of their final pay.

The March of Pension Legislation

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1974

ERISA — Formed new pension laws.

1978

Revenue Act — Introduced 401(k) plans.

1982

TEFRA — Reduced qualified plan limits to $90,000 in annual payments and $30,000 in annual contributions.

1984

DEFRA — Imposed additional 10% tax on business owners for early distributions. Postponed COLA adjustments.

1986

TRA — Reduced 401(k) deferral limits. Imposed limitation on deductibility of interest on loans in excess of $50,000 from life insurance policies. Imposed highly compensated limitations.

1987

OBRA — Introduced full funding limitations which reduced deductible contributions to defined-benefit plans.

1993

OBRA — Cut back maximum compensation considered for plans from $235,840 to $150,000 (indexed for inflation).

1994

GATT — Imposed rounding-down rules for payments and contribution limits.

2002

EGTRRA — Increased the maximum 401(k) salary deferral percentage from 25% of compensation to 100% of compensation, but this amount cannot exceed $11,000 in 2002, and increases by $1,000 each year to a maximum of $15,000 in 2006. Also implemented, an age 50+ “catch-up” additional deferral of $1,000 in 2002, which increases by $1,000 each year to a maximum of $5,000 in 2006. After 2006, both the contribution amount and the “catch-up” amount are indexed annually for inflation in minimum increments of $500.

Consider the Following Hypothetical Example... Three hypothetical employees will be age 65 at retirement in 12 years with the same company-sponsored benefit package. All employees are age 53 when they begin employment in 2005. The Manager starts with annual compensation of $50,000, the Executive starts with annual compensation of $250,000, and the Senior Executive starts with annual compensation of $450,000. All annual compensation increases at 6% for 12 years.

* This does not assume that the maximum contributions have been used. If maximum contributions had been used, these amounts would be significantly less.

1 Pension benefit calculated at 25% of final pay and subject to the maximum compensation limit of $210,000 in 2005 and cost-of-living adjustments at 6% with the maximum compensation limit increasing in $5,000 increments according to IRC Section 401(a)(17). Pension benefits would be reduced if a joint and survivor benefit option is elected at retirement. 2 Social security benefits calculated for the year of retirement using the 10-year averaging method for projecting future social security benefits. 3 401(k) income assumes annual deferred amount of $14,000 for 12 years, and does not reflect any increases to the maximum deferral amount under IRC Section 402(g)(1) due to EGTRRA (including the special “catch-up” rule for age 50 and older), hypothetical 6% growth rate, and annual income amount calculated over life expectancy beginning at age 65.

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401( k ) P L A N S H A V E L I M I TAT I O N S F O R K E Y E M P L O Y E E S A company’s 401(k) plan may be an adequate retirement savings plan for the majority of your employees, but this may not be the case for your highly compensated executives. The following hypothetical example shows how key employees could be receiving substantially less of a deferral opportunity (as a percentage of income) plus company matching contributions.

In this example, both employees work for the same company, with annual earnings of $40,000 and $200,000, respectively.

Supervisor

Key Executive

$40,000

$200,000

401(k) Deferral Amount Subject to the Lesser of $14,000 or 100%4

35.0%

7.0% 4

Company Match of 50¢ on the Dollar up to a Maximum of 3%

3.0%

3.0%

Deferral Opportunity

38.0%

10.0%

—-

28.0%

Annual Compensation

Key Executives Lost Deferral Opportunity

4 2005 maximum deferral amount under IRC Sec. 402(g)(1) is $14,000.

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ADVANTAGES OF NON-QUALIFIED DEFERRED COMPENSATION PLANS Recruit, Retain and Reward Non-qualified plan benefits can make the company more attractive to prospective and current executives. Supplemental plans can also be used to reward individuals for performance.

Selectivity and Control The company may choose the participants, plan design and the amount of corporate and/or executive contributions. In short, the company can maintain complete control.

Exemption from IRS Approval and Minimal ERISA Requirements Since non-qualified retirement plans are generally unfunded and structured exclusively for key executives, they do not have to comply with most ERISA requirements or Internal Revenue Code rules that regulate qualified plans. They must, however, comply with the Deferred Compensation Rules under Section 409A of the Internal Revenue Code.

No Contribution Limits or Non-Discrimination Requirements Contributions to non-qualified plans generally are not subject to statutory limits; as a result, preferential treatment to top executives may be permitted.

Lower Set-Up and Administration Costs Generally, most plans are easy to set up and manage. No annual reporting is required and bookkeeping can be quite simple. Vesting can be nonexistent, or by any schedule the company desires.

Income Tax Deferral Generally, contributions, company matches and earnings are not taxed until the proceeds are actually distributed.

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D I F F E R E N T S T R AT E G I E S T O M E E T S P E C I F I C N E E D S There are several strategies designed to help companies retain and reward key employees.

Supplemental Executive Retirement Plan (SERP) Mirrors or supplements a qualified retirement plan. • Employee contributions are usually not required. • No federal taxes are paid on the benefits until they are received.

Deferral Plan Pre-tax salary deferrals and employer matching contributions “mirror” 401(k) deferrals and contributions lost under IRC contribution limits and non-discrimination rules. • Reduces employee’s current taxes. • Contributions and all earnings grow tax deferred. • Can replace lost qualified employer contributions via a match.

PLAN DESIGN OPTIONS Qualified Retirement Plan (traditional) Supplemental Executive Retirement Plan (SERP) Deferral Plan/401(k) Mirror Plan Executive Bonus Plan Cost-Sharing Plan

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Executive Bonus Plan Bonuses enable select executives to own cash value life insurance. • Tax-deferred cash value accumulation. • Death benefit is generally received income tax free to personally named beneficiary. • Executive controls the policy.

Cost-Sharing Plan (Split Dollar Life Insurance Plan) The company and executive share the cost and benefits of life insurance. • Executive can get permanent life insurance coverage and cash value accumulation. • Taxable income to the executive may be less than the premium paid.

Freedom to Select Participants/ Insureds

Employer’s Deductible Contribution/ Payment

Plan/Policy Assets Are Protected from Employer’s Creditors

Contributions/ Premiums Tax Deferred

Government Reporting Is Required

IRS Approval Necessary

Employer Controls Funding

NO

YES

YES

YES

YES

YES

Limited

YES

NO

NO

YES

Virtually None

NO

YES

YES

NO

NO

YES

Virtually None

NO

YES

YES

YES

YES

NO

None

NO

YES

YES

NO

YES 5

NO

Virtually None

NO

YES

5 Depending on the type of plan in place.

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SECURING AND FUNDING SERPS AND DEFERRAL PLANS Securing Rabbi Trusts allow specific assets to be segregated by the company to pay plan benefits to the participants. The trust assets, treated as company assets, remain on the company’s balance sheet and are subject to the claims of creditors. Thus, if the company becomes insolvent or bankrupt, the employees under the nonqualified retirement plan will be unsecured general creditors of the company. Additionally, any income that the trust generates is considered taxable income to the company.

Funding Companies may adopt various informal funding techniques to pay for nonqualified plan liabilities and still maintain the unfunded status.

Corporate Owned Life Insurance (COLI) is the most common 6 funding method. When a company funds its non-qualified plan with COLI, it buys permanent life insurance policies on the lives of the executives and names itself as the beneficiary. Upon the participant’s death, the company receives the death benefit, generally income tax free. 7 The company cannot deduct the premiums as a business expense. However, it can list the cash value of the policy as an asset on the balance sheet, and at the same time provide current retirement benefits. The non-qualified retirement benefits are tax deductible by the company when paid to the employees. Additionally, the tax-deferred growth of the cash value helps offset plan liabilities and may produce a positive earnings impact. With life insurance as an informal funding vehicle, it may be possible to recover all the costs of establishing and maintaining a non-qualified plan.

6 Clark/Bardes Consulting Survey (2001), 65% of Non-Qualified Deferral Compensation plans were funded by COLI. 7 May be subject to alternative minimum tax.

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BROAD RANGE OF CLIENT SERVICES Setting up and administering a SERP or deferral plan requires a knowledgeable group of trained professionals and state-of-the-art technology. AXA Financial has access to Third-Party Administrators, including Executive Benefits Group, Inc., who employ some of the most valued and respected professionals in the executive benefits industry.

SCOPE OF CLIENT SERVICES Benefit Plan and Policy Administration Services8

Executive Compensation Planning11

As-Sold Illustrations, Plan Participant Statements/Internet/VRU, Benefit and Plan Accounting Reports & Policy Finance Services

Deferrals, SERPS, BOLI, Split Dollar & Bonus Plans

Trust Services9

Cost Analysis11

Rabbi & ILIT Trusts

Analysis of Funding Alternatives

Policy Administration Services10 Dedicated Team for Underwriting and Policy Issue

Funding Design11 Specific Expertise in COLI Product Design to Address Benefit Liabilities

IT’S A WINNING DECISION Now may be the time to consider an executive benefits program or enhance an existing one. Remember, with the right benefits program in place, a company can worry less about retaining and rewarding key executives and concentrate more on the strategies that make the business successful.

8 Executive Benefits Group, Inc. of PA (TPA, not affiliated with AXA Financial) and other TPAs. 9 Through Frontier Trust Company, an affiliated company of AXA Advisors, LLC. 10 Through the National Operations Center of AXA Equitable Life Insurance Company, located in Charlotte, NC. 11 Through the AXA Advisors Support Group — Atlanta.

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Securities [and investment advisory services] offered through AXA Advisors, LLC, NY, NY 10104, member NASD, SIPC. Annuity and insurance products offered through AXA Network, LLC and its subsidiaries, including AXA Network Insurance Agency, LLC, in CA, and AXA Network Insurance Agency of Utah, in UT. All guarantees are based on the claims-paying ability of AXA Equitable. AXA Advisors does not provide tax or legal advice. The information provided is based on our general understanding of the subject matter discussed and is for informational purposes only. Please consult your tax and/or legal advisors regarding your particular circumstances. © 2005 AXA Advisors, LLC. All rights reserved. 1290 Avenue of Americas, New York, NY 10104, (212) 554-1234

GE-31717 (5/05)

Cat. #130073 (5/05)