SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN TABLE OF CONTENTS

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2 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN TABLE OF CONTENTS ANNUAL COMPLIANCE SUMMARY ACTION ITEMS CHECKLIST COMPOSITION OF NET ASSETS AND CASH FLOW SUMMARY PLAN SPECIFICATIONS EMPLOYEE CENSUS 1 2 A N N U A L ACCOUNT BALANCE STATEMENT ADJUSTMENTS TO ACCOUNT BALANCE STATEMENT 3 V A L U A T I O N DISCRIMINATION TESTS Limit on Deductible Contributions IRC 416 Top-Heavy Test IRC 401(k) Average Deferral Percentage Test IRC 410(b) Minimum Coverage Test IRC 401(a)(4) General Test Glossary of Discrimination Tests 2014 IRS Annual Plan Limits ANNUAL INFORMATION FILING Form 5500-SF Summary Annual Report 4 5

3 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 ANNUAL COMPLIANCE SUMMARY FINANCIAL INFORMATION SUMMARY COMMENTS Pre-Tax 401(k) Contributions $52, $0.00 accrued as of 12/31/2014. Source Total Deductible Employer Contributions $124, Safe Harbor $18, Profit Sharing $52, (Less Forfeitures) ($0.00) Total Deductible $124, PYE $124, Forfeitures This Year $1, Used to pay Fees Total Considered Plan Compensation $670, Employer contributions = 14.84% of considered compensation. Please note that in accordance with IRS regulations, severance pay is excluded for all Plan purpose. DISCRIMINATION TESTING RESULTS COMMENTS Limit on Deductible Contributions PASS Employer contributions were less than 25% of considered compensation. IRC 416 Top-Heavy Test TOP HEAVY Key employee balances are greater than 60% of total considered plan assets. This year s allocations satisfy Top Heavy Plan requirements. The Plan is TH for 2014 as balances for Key Employees as of 12/31/2013 exceed 60% of Plan Assets. The Plan will be subject to minimum allocations in 2014 if either Key Employee makes any salary deferral contributions in Your typical Profit Sharing Contribution would satisfy the minimum.

4 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 ANNUAL COMPLIANCE SUMMARY Plan uses Safe Harbor QNEC to meet testing requirements. IRC 401(k) Average Deferral Percentage Testing IRC 402(g) Deferral Limitation Test IRC 410(b) Minimum Coverage Test IRC 401(a)(4) General Test IRC 415 Annual Additions Limitations PASS PASS/FAIL PASS PASS NO VIOLATIONS HCE s for next year are: Second In Command Top Dog Please refer to the Action Items Checklist for corrective measures to be taken. Deferrals are limited to the lesser of 100% of compensation or $17,500. Participants who are age 50 or older may defer an additional $5,500. Passes using either the Ratio Percentage or Average Benefits testing techniques. Employer classification based contributions satisfied benefits based testing. No participant s total contribution allocations exceeded $51,000 or 100% of compensation (excluding catch-up contributions). PLAN DOCUMENTATION STATUS COMMENTS Plan Amendments this year and Summary of Material Modifications (SMM) Qualification Status Class Allocation Resolution N/A COMPLIANT REQUIRED No changes this year. Determination Letter # A dated 09/03/2013 issued for EGTRRA restatement. As of today, your Plan is not missing any amendments Resolution has been executed on 05/14/2014

5 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 ANNUAL COMPLIANCE SUMMARY Any fees paid with Trust assets must be reasonable and necessary. Benchmarking of your plan arrangement against industry standards by an independent third party is strongly recommended to ensure unbiased and accurate results. Certification of Reasonableness UNKNOWN Failure to have evidence of your benchmarking may result in a Prohibited Transaction reportable on the Form Be sure to maintain any documentation of your decision process for the design and selection of your new service providers. This may serve as proof that you have determined your current arrangement to be reasonable. ANNUAL INFORMATION FILING STATUS COMMENTS Form 5500-SF Participant Salary Deferral and Loan Payment Withholdings Deposited to Trust On Time - Within Mandated Guidelines FILING PENDING COMPLIANT Electronic filing with EBSA is mandatory. Please refer to the Action Items Checklist for filing instructions. All deposits made within DOL safe harbor timeline. Be sure to deposit payroll withholdings as soon as it is administratively feasible to segregate them from company assets. Generally, follow the same deposit timeline as the company has to follow for submitting federal tax withheld from payroll payments. Plans with less than 100 participants may use a safe harbor standard of depositing these monies within 7 business days from the payroll date, if necessary.

6 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 ANNUAL COMPLIANCE SUMMARY ERISA Fidelity Bond Coverage $100, You are required to maintain fidelity bond coverage equal to no less than 10% of plan assets as of the beginning of the Plan Year; up to a maximum coverage threshold of $500,000 Coverage is sufficient for the current plan year.

7 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN PARTICIPATION RESULTS Percentage of Eligible Employees Participating 2014 ANNUAL COMPLIANCE SUMMARY CURRENT YEAR PRIOR YEAR COMMENTS 100% 100% No Change Average Age - All Eligible Employees Increased Average Plan Compensation All Eligible Employees Highly Compensated Employee Deferral Rate Non Highly Compensated Employee Deferral Rate Percentage of Catch-Up Eligible Employees Making Catch-Up $134,000 $129,000 Increased 6.73% 6.42% Increased 9.10% 8.9% Increased 100% 100% No Change

8 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 PLAN YEAR END ACTION ITEMS CHECKLIST Checklist Item Due Date Action Required Accrued Employer Contributions Form 5500-SF Summary Annual Report (SAR) Client Satisfaction Survey Distributions Payable 03/15/2015 OR IF EXTENDED 09/15/2015 ASAP NO LATER THAN 07/25/2015 ASAP NO LATER THAN 09/30/2015 ASAP ASAP Be sure to deposit your 12/31/2014 accrued contributions to the plan by the deadline for filing your business tax return, including extensions. Profit Sharing accrual: $52,800 Safe Harbor accrual: $18,450 Please review the Form 5500-SF or Form 5500 and related schedules (if any), sign and return page 1 to our attention. PWI will file the Form electronically upon receipt of the signature page and will provide you a confirmation of the filing. Distribute the SAR to all participants by the due date. Please let us know how we are doing and how we can improve our services to you and your staff. Return the completed survey to PWI in the preaddressed envelope provided. Your Plan requires that terminated Participants with balances less than $1,000 be paid out of the Plan as soon as possible. Those with balances between $5,000 and $1,000 must also be paid out via their own distribution election or an automatic rollover following a 30 day notice period. Please refer to the Vested Balance Statement for a listing of terminated participants eligible for distribution. Pension Works will begin processing these distributions on your behalf.

9 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 PLAN YEAR END ACTION ITEMS CHECKLIST Checklist Item Due Date Action Required Please notify our office if any of these participants have been rehired and are therefore not eligible for a distribution at this time. Fiduciary - Certification of Reasonableness New Participants Employees become participants in the plan on January 1 st or July 1 st after they have completed one year of service during which they worked 1,000 hours and attained age 21 ASAP 06/01/2014 & 12/01/2014 If you haven t benchmarked your plan s service providers and their related fees and would like assistance with this, we can help. Give us a call to get this started. Provide the following disclosures 30 days prior to their official plan entry date. Summary Plan Description (SPD) Summary Material Modifications (SMM) Enrollment/Beneficiary Designation Form Investment Platform Enrollment kit Qualified Default Investment Alternative (QDIA)Notice 404(a)(5) Participant Fee Disclosure Notice Annual 401(k) Safe Harbor Notice Required Annual Participant Notices 11/30/2014 Please be sure you collect completed enrollment forms from all participants whether they elect to actively participate or not. The following notices will be provided to you by Pension Works in advance of the due date and need to be provided to all participants: Qualified Default Investment Arrangement (QDIA)Notice 401(k) Safe Harbor Notice 404(a)(5) Participant Fee Disclosure

10 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN 2014 PLAN YEAR END ACTION ITEMS CHECKLIST Checklist Item Due Date Action Required Military Leave REMINDER Under the terms of USERRA and the HEART Act, Plan Sponsors are required to provide allocations of any Employer Contribution that Participants would have received had they not been called to military duty. You are required to provide these make-up allocations as soon as possible following the date the participants return to employment after completing their Qualified Military Service, or should they be killed or disabled in the line of duty. Please contact Pension Works, Inc. immediately if you have an employee return to employment after any Qualified Military Service or should you be notified of their death or disability so that we may advise you of any necessary actions. Note that adjustments will be made for any allocations that were made based on Differential Wage Payments so be sure to keep track of this type of compensation should it apply.

11 SAMPLE COMPANY, INC. 401(k) PROFIT SHARING PLAN COMPOSITION OF NET ASSETS AND CASH FLOW SUMMARY 01/01/2014 THROUGH 12/31/ /01/ /31/ INVESTMENTS: Investment Platform $98, $228, Forfeiture Account $0.00 $1, Loans $0.00 $ Subtotal $98, $230, RECEIVABLES: Profit Sharing Contribution $50, $52, Pre-Tax 401(k) Contribution $49, $52, Roth 401(k) Contribution $0.00 $0.00 Safe Harbor QNEC Contribution $17, $18, Subtotal $116, $123, TOTAL GROSS ASSETS: $215, $353, LESS PAYABLES: $0.00 $ NET ASSETS: $215, $353, ================ CASH FLOW SUMMARY INCOME: Profit Sharing Contribution $52, Pre-Tax 401(k) Contribution $52, Roth 401(k) Contribution $0.00 Safe Harbor QNEC Contribution $18, Rollover Contribution $1, Forfeitures Used to Reduce $0.00 Interest/Dividends $0.00 Loan Interest $0.00 Loan Write Off $ Subtotal $124, EXPENSES: Participant Distributions $0.00 Corrective Distributions $0.00 Fees $ Subtotal $0.00 OTHER CHANGES: Net Gain/(Loss) $13, Adjustments $ Subtotal $13, NET ASSETS AT 12/31/2013: $353, ================

12 Plan Specifications Sample Company, Inc. 401(k) Profit Sharing Plan March 10, 2014 For the plan year 1/1/2014 through 12/31/2014 Employer: Type of Entity Sample Plan, Inc. C-Corporation EIN: TIN: Plan #: 001 Dates: Effective: 01/01/2001 Valuation: 12/31/2014 Year-end: Period beginning: 01/01/2014 and ending: 12/31/ /31/2014 Eligibility: All employees except non-resident aliens, members of an excluded class, union. Participation PROFIT SHARING EMPLOYEE 401(K) Entry Date PROFIT SHARING EMPLOYEE 401(K) Allocation and Vesting: Minimum Age Months of Service Hours Required Employed on N/A N/A First day of 1st or 7th month of plan year on or next following eligibility satisfaction First day of 1st or 7th month of plan year on or next following eligibility satisfaction Contribution Allocation Vesting Active Terminated Deceased Disabled Retired Hours Required Share Hours Required Share Hours Required Share Hours Required Share Hours Required Hours Required PROFIT SHARING 1000 Yes 0 Yes 0 Yes 0 Yes EMPLOYEE 401(K) 0 Yes 0 Yes 0 Yes 0 Yes 0 N/A Retirement: Normal Early First of month coincident with or next following attainment of age 65. Not provided Contribution Frequency: PROFIT SHARING EMPLOYEE 401(K) Contribution: 401(k) ADP Safe Harbor Nonelective Plan Year Each Payroll Period 3.00% of each participant's compensation EMPLOYEE 401(K) At participant's discretion. ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

13 Plan Specifications March 10, 2014 Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 Contribution: (cont) PROFIT SHARING Allocation is based on compensation by class Percent of Class Comp Min Amt Max Amt 1 0% $25,150 $25, % $25,150 $25, % $0 N/A 4 2% $0 N/A 5 2% $0 N/A ****** TOP HEAVY MINIMUM ALLOCATION OF 3.00% OF COMPENSATION APPLIES ****** Limitation Maximums 415 Percent of compensation - 100% Dollar amount - $52, (a) Deductible employer contribution - 25% of total compensation 401(a)(17) Compensation - $260, (g) Deferral for calendar year - $17, (v) Catch-up - $5,500 Vesting: Compensation from entry date in first year of participation for Non-Elective, Elective, 401(k) Safe Harbor, 415 Compensation for Allocation, 401(a)(4) Discrimination Testing and 401(k) Discrimination Testing PROFIT SHARING 0% In the first year, then 20% per year Pre-Retirement Death Benefit: Account Balance Discrimination Test Assumptions: Vesting service includes all years of service All other contribution source accounts are 100% vested at all times. Deceased and disabled participants are immediately 100% vested in all sources. HCE Determination Otherwise Excludable Based on all employees Otherwise Excludable HCEs are included with the Not Otherwise Excludable employees 410(b)/401(a)(4) Testing: Pre-Retirement Post-Retirement 8.5% Interest I83F Individual Annuity (female) at 8.5% interest Permissively Aggregated plans - tested separately Compensation used - Annual Compensation ADP/ACP Testing 401(k) Test NHCE Average Deferral % NHCE Average Contribution % Shifting 401(k) Safe Harbor Plan - Both ADP and ACP are Deemed to Pass Based on current year Based on current year ADP shifted to ACP test ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

14 Plan Specifications Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Projection Assumptions: Normal Form Pre-Retirement Lump Sum 6% Interest ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

15 Employee Census Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 01/01/2014 through 12/31/2014 March 10, 2014 Key SVC Ages Dates Percent Owner PS FS Gender PA AA RA Birth Hire Part Retire Compensation Hours Worked HCE OEX 3 Administrative Asst 1 Cls M /01/64 01/01/86 01/01/04 01/01/29 $40, , Administrative Asst 2 Cls F /01/79 01/01/05 01/01/04 01/01/44 $60, , Administrative Asst 3 Cls M /01/84 01/01/07 01/01/04 01/01/49 $25, , Second In Command Cls- 2 Y 1 Top Dog Cls- 1 Y F /01/50 01/01/86 01/01/04 01/01/15 $245, , Y 29 5 M /01/54 01/01/86 01/01/04 01/01/19 $300, , Y Participants at Beginning of Plan Year New Participants on First Day of Year 5 0 New Participants During Year 0 Retired or Separated Without Any Future Benefits 0 Participants at End of Year 5 Census Count Total Compensation 5 $670, Key: AA=Attained Age FS=Future Service HCE=Highly Compensated Employee OEX=Otherwise Excludable PA=Participation Age PS=Past Service RA=Retirement Age ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

16 Account Balance Statement Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Beginning Balance Gain (Loss) Contribution Forfeitures Allocated Adjustments Vested Amount Ending Balance Percent Amount 3 Administrative Asst 1 PROFIT SHARING 401(k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $31, $1, $ $0.00 $0.00 $34, $34, $0.00 $0.00 $1, $0.00 $0.00 $1, $1, $0.00 $0.00 $2, $0.00 -$28.00 $1, $1, Employee Total: $31, $1, $4, $0.00 -$28.00 $37, $37, Administrative Asst 2 PROFIT SHARING 401(k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $17, $1, $1, $0.00 $0.00 $19, $19, $0.00 $0.00 $1, $0.00 $0.00 $1, $1, $0.00 $0.00 $ $0.00 -$28.00 $ $ Employee Total: $17, $1, $3, $0.00 -$28.00 $22, $22, Administrative Asst 3 PROFIT SHARING 401(k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $8, $ $ $0.00 $0.00 $9, $9, $0.00 $0.00 $ $0.00 $0.00 $ $ $0.00 $0.00 $5, $0.00 -$28.00 $5, $5, Employee Total: $8, $ $6, $0.00 -$28.00 $15, $15, Second In Command PROFIT SHARING 401(k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $56, $3, $25, $0.00 $0.00 $84, $84, $0.00 $0.00 $7, $0.00 $0.00 $7, $7, $0.00 $0.00 $22, $0.00 -$28.00 $21, $21, Employee Total: $56, $3, $54, $0.00 -$28.00 $113, $113, Top Dog PROFIT SHARING 401(k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $114, $6, $25, $0.00 $0.00 $146, $146, $0.00 $0.00 $7, $0.00 $0.00 $7, $7, $0.00 $0.00 $22, $0.00 -$28.00 $21, $21, Employee Total: $114, $6, $54, $0.00 -$28.00 $176, $176, ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

17 Account Balance Statement Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Beginning Balance Gain (Loss) Contribution Forfeitures Allocated Adjustments Vested Amount Ending Balance Percent Amount Totals for each account: PROFIT SHARING $228, $13, $52, $0.00 $0.00 $295, $295, (k) ADP Safe Harbor Nonelective EMPLOYEE 401(K) $0.00 $0.00 $18, $0.00 $0.00 $18, $18, $0.00 $0.00 $52, $0.00 -$ $51, $51, Grand Total: $228, $13, $123, $0.00 -$ $365, $365, ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

18 Adjustments to Account Balance Statement Sample Company, Inc. 401(k) Profit Sharing Plan March 10, 2014 For the plan year 01/01/2014 through 12/31/2014 Transfers Expenses Adjustments Withdrawals Vested Payments Total Adjustments 3 Administrative Asst 1 EMPLOYEE 401(K) 4 Administrative Asst 2 EMPLOYEE 401(K) 5 Administrative Asst 3 EMPLOYEE 401(K) 2 Second In Command EMPLOYEE 401(K) 1 Top Dog EMPLOYEE 401(K) Totals for each account: EMPLOYEE 401(K) Grand Total: ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

19 Limit on Deductible Contributions Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Eligible Compensation $670, (a)(17) Limit ($260,000.00) Adjustment $40, Total Participating Payroll $630, PROFIT SHARING Contribution $52, (k) ADP Safe Harbor Nonelective Contribution $18, Total Employer Contribution Allocated $71, Contribution as Percent of Participating Payroll 25% of Payroll 11.31% $157, Contribution Passes Deductibility Test ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

20 Top Heavy Test Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 01/01/2014 through 12/31/2014 March 10, 2014 The Plan is Top Heavy for the Next Plan Year Employee Classification Employees Considered Account Balance Receivable Excluded Balance Prior Distributions Adjusted Balance Percent of Total Key Employees 2 289, , % Non-Key Employees 3 75, , % Totals: 5 $365, $0.00 $0.00 $0.00 $365, % ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

21 401(k) Discrimination Test March 10, 2014 Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 PASSED 401(k) Discrimination Test 401K Participants Average Deferral Percentage Non-Highly Compensated % Highly Compensated % 401(k) Deferral (ADP) Test All Participants Maximum average percentage 11.38% Actual average percentage 6.94% Pass Type(s) of Contribution(s) included in this test: EMPLOYEE 401(K) NHCEs percentages based on current year data Highly Compensated Testing Compensation Contribution Deferral Percent Highly Compensated 2 Second In Command Y 1 Top Dog Y Highly Compensated Total Non-Highly Compensated Total deferral 22, Less catch-up 4, , , Total deferral 22, Less catch-up 4, , , Total deferral 44, Less catch-up 9, , , ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

22 401(k) Discrimination Test March 10, 2014 Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 Highly Compensated Testing Compensation Contribution Deferral Percent 3 Administrative Asst 1 4 Administrative Asst 2 5 Administrative Asst 3 40, , , , , Non-Highly Compensated Total 125, , Grand Total: Total deferral 52, Less catch-up from limits 9, $630, $43, % ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

23 410(b) Minimum Coverage Test Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 01/01/2014 through 12/31/2014 March 10, 2014 Passed 410(b) Minimum Coverage Test I. Ratio Percentage Test - Passed A. Benefiting B. Not Benefiting C. Total Passed Satisfied Plan Eligibility Number of Participants NHCE's HCE's Total D. Percentage (A/C) % % E. Ratio Percentage (NHCE's/HCE's) d (must be 70% or more) Ratio percentage exception codes: a=only HCE's, b=no HCE's benefiting, d=all NHCE's benefiting II. Average Benefit Test - Passed A. Nondiscriminatory Classification Test 1. NHCE's Concentration Percentage 2. Safe Harbor Percentage 3. Unsafe Harbor Percentage 4. Ratio Percentage Passed d Passes if ratio percentage is 1) greater than or equal to Safe Harbor percentage or 2) greater than or equal to Unsafe Harbor percentage subject to facts and circumstances All Together Contribution Basis Equivalent Benefit Basis B. Average Benefit Percentage Test 1. Average Benefit Percentage of NHCE's 2. Average Benefit Percentage of HCE's 3. Average Benefit Percentage (B1/B2) (must be 70% or more) w/o PD Annual Annual Accrued-to-Date with PD w/o PD with PD w/o PD with PD % Pass % Pass % Pass % Pass % Pass % Pass ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

24 410(b) Minimum Coverage Test Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 01/01/2014 through 12/31/2014 March 10, 2014 Passed 410(b) Minimum Coverage Test 401(k) I. Ratio Percentage Test - Passed A. Benefiting B. Not Benefiting C. Total Passed Satisfied Plan Eligibility Number of Participants NHCE's HCE's Total D. Percentage (A/C) % % E. Ratio Percentage (NHCE's/HCE's) d (must be 70% or more) Ratio percentage exception codes: a=only HCE's, b=no HCE's benefiting, d=all NHCE's benefiting II. Average Benefit Test - Passed A. Nondiscriminatory Classification Test 1. NHCE's Concentration Percentage 2. Safe Harbor Percentage 3. Unsafe Harbor Percentage 4. Ratio Percentage Passed d Passes if ratio percentage is 1) greater than or equal to Safe Harbor percentage or 2) greater than or equal to Unsafe Harbor percentage subject to facts and circumstances All Together Contribution Basis Equivalent Benefit Basis B. Average Benefit Percentage Test 1. Average Benefit Percentage of NHCE's 2. Average Benefit Percentage of HCE's 3. Average Benefit Percentage (B1/B2) (must be 70% or more) w/o PD Annual Annual Accrued-to-Date with PD w/o PD with PD w/o PD with PD % Pass % Pass % Pass % Pass % Pass % Pass ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

25 410(b) For 401(a)(4) Top Heavy Safe Harbor Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 01/01/2014 through 12/31/2014 March 10, 2014 No participants received additional contribution for top heavy minimum or the plan does not use a 401(a)(4) safe harbor formula (e.g. proportional to salary or integrated). ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

26 401(a)(4) General Test Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Minimum Allocation Gateway -- A. Highest HCE Allocation Rate B. Lowest NHCE Allocation Rate C. Lowest NHCE Rate (415(c) Comp) Passed % - Highest HCE Allocation Rate Is No More Than 3 Times the Lowest NHCE Rate 5.00 % 5.00 % Times 1/3 = 4.42 % IRS Sec (a)(4)-8(b) regulations allow 401(a)(4) cross testing (i.e. contributions can be tested as equivalent benefits) if: (1) A. is no more than 3 times B (2) (3) (4) C. is 5% or greater The plan has Broadly Available Allocation Rates (i.e. for the group of employees at each allocation rate or higher, the group passes 410(b) without regard to the average benefit test of 1.410(b) -5 (i.e. generally it passes either the ratio percentage or the nondiscriminatory classification test)), or The plan has Age-Based Allocation with either a gradual age or service schedule (i.e. smoothly increasing allocation rates that an NHCE can grow into with increasing age or service) or is based on a Uniform Target Benefit Allocation ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

27 401(a)(4) General Test Minimum Allocation Gateway Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 HCE DC Alloc Rate DB Rate DB Average Rate Aggregate Rate 415(c) DC Rate 415(c) Aggregate Rate 415(c) Compensation 3 Administrative Asst , Administrative Asst , Administrative Asst , Second In Command Y , Top Dog Y , ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

28 401(a)(4) General Test Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 March 10, 2014 Testing 5% range PASSED 401(a)(4) Discrimination Test The plan as a whole must pass the 401(a)(4) Minimum Allocation Gateway in order to pass the general test. A Rate Group passes if the Ratio Percent is 70% or more, or if the plan passes the average benefit percentage test and the Rate Group's Ratio Percent is greater than or equal to the mid-point between the Safe and Unsafe Harbor Percentages. Minimum Allocation Gateway Average Benefit Percentage Test NHCE's Concentration Percent Safe Harbor Percent Mid-Point Unsafe Harbor Percent Passed Passed 60.00% 50.00% 45.00% 40.00% Passed Rate Group -- Method: Equivalent Accrual (Annual) without Permitted Disparity Rate Non-Highly Compensated Employees Number Greater or Equal Total Percent in this Group Highly Compensated Employees Number Greater or Equal Total Percent in this Group Ratio Percent Pass/Fail Pass Pass Note: Grouping of allocation rates - Rates within the greater of 5% or.05 of a percent from a mid point rate are assumed to be equal to that mid point rate. ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

29 Passed 401(a)(4) General Test - Rate Grouping Sample Company, Inc. 401(k) Profit Sharing Plan For the plan year 1/1/2014 through 12/31/2014 Testing 5% range Method: Equivalent Accrual (Annual) without Permitted Disparity March 10, 2014 Highly Compensated Employees Rate Rate Group 1 >=1.85 Rate Group 2 >= Second In Command Class * Y 1 Top Dog Class Y Y Number of HCE's in Group Total Number of HCE's Percent of HCE's % % Non-Highly Compensated Employees 3 Administrative Asst 1 Class * Y 4 Administrative Asst 2 Class Y Y 5 Administrative Asst 3 Class Y Y Number of NHCE's in Group Total Number of NHCE's Percent of NHCE's % % Ratio Percent of NHCE's/HCE's % % PASS PASS Grouping of Allocation/Accrual rates - Rates within the greater of 5% or.05 of a percent from a mid point rate are assumed to be equal to that mid point rate. ***** SAMPLE REPORTS FOR ILLUSTRATION PURPOSES ONLY *****

30 GLOSSARY OF DISCRIMINATION TESTS A Highly Compensated Employee is any employee who: Highly Compensated Employees (HCE) IRC 414(q)(1)(B) was greater than a 5% owner in the current or prior year; was an employed spouse, direct ascendant or descendant of a greater than 5% owner in the current or prior year; or had compensation in excess of $115,000 (indexed annually) in the lookback year (and if elected in the plan document, was in the top 20% of employees for the look-back year when ranked by compensation *). *The Top 20% election is typically used in smaller plans with many otherwise Highly Compensated Individuals. For Plan Years beginning after December 31, 2001, an Employee or former Employee (including any deceased Employee) who, at any time during the Plan Year that includes the Determination Date (generally, the last day of the prior plan year) is either: Key Employees IRC 416(i)(1) An officer of the Employer having an Annual Compensation greater than $165,000 (as adjusted by Code section 416(i)); A 5-Percent Owner; or Any person who owns directly or indirectly more than one percent (1 %) of the outstanding stock of the Employer or stock possessing more than one percent (1 %) of the total combined voting power of all stock of the Employer or, in the case of an unincorporated Employer, the capital or profits interest in the Employer and has Annual Compensation from the Employer of more than one hundred fifty thousand dollars ($150,000). Limit on Deductible Contributions IRC 404(a)(3) IRS limits the annual amount of aggregate tax deductible employer contributions that can be made to a tax qualified retirement plan. That amount is equal to 25% of aggregate eligible compensation. The definition of compensation provided in the plan document will impact this limit and great care should be taken to ensure that it is accurately determined for all employees covered by the plan. The plan compensation should be reconciled to all employee s individual compensation amounts that flow together on the Form W-3 or Payroll Summary (or 941 reports that you make quarterly to IRS) to ensure all employees are accurately considered. If a plan contribution exceeding the 25% limit is inadvertently made to a plan, corrective measures must be taken to identify the excess, and then either hold it in suspense for subsequent deduction or return it to the employer if it can be construed to have occurred by mistake. Penalties of up to 10% of the excess contribution may apply.

31 GLOSSARY OF DISCRIMINATION TESTS A Top Heavy plan is defined by IRS as one in which more than 60% of plan assets are allocated to the accounts of Key Employees (defined above). Top Heavy Test IRC 416(c)(2) When the plan becomes Top Heavy, a minimum contribution is required be made on behalf of Non-Key Employees equal to the highest allocation rate made for the year to a Key Employee, but not to exceed 3% of compensation. Exception is provided for a Top Heavy 401(k) Plan whose plan document provides for a Safe Harbor contribution. When the 3% Non-Elective Safe Harbor provision is used, the plan will automatically satisfy the Top Heavy requirement. When a Safe Harbor Matching provision is used, the Top Heavy Minimum contribution will also be satisfied as long as no other Employer contributions are allocated to the Plan for that Plan Year. All Employer contributions are considered towards satisfaction of the Top Heavy Minimum contribution requirements in a Top Heavy Plan. Average Deferral Percentage Test (ADP) IRC 401(k) & Average Contribution Percentage Test (ACP) IRC 401(m) If a retirement plan provides for Employee Salary Deferrals on either a pre-tax or Roth after-tax basis, the Average Deferral Percentage Test (ADP) and the Actual Contribution Percentage (ACP) tests may be required and are the exclusive means of demonstrating that the plan satisfies the non-discrimination requirements of IRC 401(k) and 401(m). These tests are performed on the basis of contribution rates for the current or prior plan year to determine if the Highly Compensated Employee group (HCE) has deferred above the maximum allowable amount when compared to the group of Non-Highly Compensated Employees (NHCE). While pre-tax Salary Deferrals are generally tested alone under the ADP test, Roth after-tax, along with Matching contributions are generally tested together under the ACP test. IRS provides many techniques for performing and\or satisfying these tests. Component testing, contribution sharing, Failsafe or Qualified Non-Elective Contributions, Re-characterization, etc. are all possible techniques to be considered when trying to correct a failing test. The rules can be complex. If corrective action is necessary, some or all of the HCE contribution amounts may require distribution. Because both tests operate on the basis of individual contribution\compensation by participant percentages, accurate contribution amounts by participant along with accurate employee compensation and accurate determination of the Highly Compensated Employee group are all critical to properly performing these tests.

32 GLOSSARY OF DISCRIMINATION TESTS Minimum Coverage Test IRC 410(b) A retirement plan is not tax qualified unless it benefits a minimum number of employees for each source of contribution being provided. The minimum number required depends on the size of the employer, the employee demographics and sometimes the level of benefits provided under the plan. Employees excluded by plan age and service requirements do not need to be tested, BUT those left out due to employment classifications or other plan related reasons need to be tested to demonstrate adequate coverage. There are two minimum coverage tests under IRC 410(b). One of the two tests must be passed annually or the plan risks disqualification. The ratio percentage test is the simpler of the two and requires that the ratio of the Non-Highly Compensated Employees benefitting over the ratio of Highly Compensated Employees is at least 70%. The average benefits percentage test is generally used when the ratio test is failed. The IRS provides up to six different complex techniques by which to pass this test. Generally, the average benefit test is comprised of two parts (nondiscriminatory classification test and average benefits percentage test), both of which must pass for the plan to pass the average benefits test. Each contribution source MUST pass one of the two tests. Contributions or benefits under a qualified retirement plan must not favor Highly Compensated Employees (HCE s) except as permitted by statute or regulation. In addition, a qualified plan must make all benefits, rights and features under the plan available on a nondiscriminatory basis. Failure to demonstrate nondiscrimination will cause a plan to lose its tax qualification. General Test IRC 401(a)(4) In demonstrating a plan to be nondiscriminatory, either contributions or the benefits produced by contributions can be measured. A plan is required to test each year on a plan year basis. A number of design based safe harbors exist that when used are deemed nondiscriminatory and need not be tested. Albeit, such safe harbors are limited and designed to produce uniform allocations that often don t meet a Plan Sponsors objectives or needs. Plans that allocate contributions under a non designed based safe harbor technique such as a classification based allocation system must pass The General Test in order to be deemed nondiscriminatory. The General Test is comprised of two components and the plan must pass each component: Minimum Allocation Gateway all benefitting Non-Highly Compensated Employees (NHCE s) allocations are at a rate of at least 1/3 of that received by the HCEs (up to 5% of compensation). Rate Group Testing each HCE s benefit rate is tested separately to ensure that the minimum number of NHCE s have the same or greater rate.

33 GLOSSARY OF DISCRIMINATION TESTS General Test IRC 401(a)(4) continued Up to six different methods can be used to develop the benefit testing rate. Five of the six methods calculate the benefit produced at normal retirement age that is actuarially equivalent to each participant s contribution allocation, sometimes combined with their account balance, expressed as a percentage of their compensation (a rate). The actuarial factors to be used in the rate calculations are only those permitted by statute. The number of NHCE s needed in any rate group is generally dependent on which method the plan used to pass the Minimum Coverage Test (either the ratio percentage test or the Average Benefits Test). Additionally other options are permitted for working through failing tests such as component testing and rounding of rate factors. General Testing is complex. A defined contribution plan must limit the annual additions (contributions and forfeitures) that are allocated to a participant s account each year. When a plan violates the limit, the excess must be returned. Each year this test should be run to ensure that none of the participants have received more than allowed. Annual Additions Limits (Contributions & Forfeitures) IRC 415 For 2012, the annual dollar limit is $50,000. Several additions are not included when calculating the annual limit. Catch-up contributions (amounts contributed by participants age 50 and older); Rollover and transfer amounts; Loan repayment amounts; Restoration of Losses pursuant to a Department of Labor order. For Employer contributions the Annual Additions Limit is measured separately by the Employer and includes all plans of the Employer. For example an individual may work for two unrelated Employers and receive the maximum annual addition limit in Employer contributions under both Employers plans. If your Plan s Definition of Compensation excludes certain items of taxable income, such as overtime, commissions or bonuses, this test is required to prove that, in operation, the definition of Plan Compensation is non-discriminatory (meets the requirements of IRS Section 414(s)). Compensation Test IRC 414(s) The test compares the ratios of Plan Compensation to Total Compensation for HCE s and NHCE s. The NHCE s ratio must be greater than or equal to the ratio for HCE s. Otherwise the definition of Plan Compensation is discriminatory. Only those benefiting are included. While three methods can be used to perform the test - Individual, Combination and Aggregate, only the Individual method is accepted by the IRS without further explanation. Additionally, under the Individual and Combination methods an election can be made to include or exclude participants with zero compensation, sometimes making the difference to pass this test.

34 IRS ANNUAL PLAN LIMITS 2014 CALENDAR YEAR Maximum Considered Compensation $260,000 Maximum Annual Addition (Defined Contribution) $52,000 Maximum Annual Benefit (Defined Benefit) $210,000 Maximum Salary Reduction Contribution $17,500 Maximum Catch Up Contribution $5,500 Highly Compensated Employee Earnings Threshold $115,000 Key Person Compensation Threshold $170,000 Social Security Taxable Wage Base $117,000 ESOP Extended Payment Account Balance Threshold $1,050,000

35 Form 5500-SF Department of the Treasury Internal Revenue Service Department of Labor Employee Benefits Security Administration Pension Benefit Guaranty Corporation Part I Short Form Annual Return/Report of Small Employee Benefit Plan This form is required to be filed under sections 104 and 4065 of the Employee Retirement Income Security Act of 1974 (ERISA), and section 6057(b) and 6058(a) of the Internal Revenue Code (the Code). Annual Report Identification Information Complete all entries in accordance with the instructions to the Form 5500-SF. OMB Nos This Form is Open to Public Inspection For calendar plan year 2013 or fiscal plan year beginning 01/01/2014 and ending 12/31/2014 A B C This return/report is for: This return/report is: Check box if filing under: X a single-employer plan the first return/report an amended return/report Form 5558 a multiple-employer plan (not multiemployer) the final return/report a short plan year return/report (less than 12 months) automatic extension a one-participant plan DFVC program special extension (enter description) Part II Basic Plan Information --- enter all requested information 1a Name of plan 1b Three-digit plan number Sample Company, Inc. 401(k) Profit Sharing Plan (PN) 001 1c Effective date of plan 01/01/2004 2a Plan sponsor's name and address; include room or suite number (employer, if for a single-employer plan) 2b Sample Company, Inc. (EIN) c US 2 Main St. Smallville VT (802) d a Plan administrator's name and address X Same as Plan Sponsor Name Same as Plan Sponsor Address 3b Administrator's EIN Employer Identification Number Sponsor's telephone number Business code (see instructions) 3c Administrator's telephone number 4 If the name and/or EIN of the plan sponsor has changed since the last return/report filed for this plan, enter the 4b a 5a b c 6a b name, EIN, and the plan number from the last return/report. Sponsor's name Total number of participants at the beginning of the plan year Total number of participants at the end of the plan year Number of participants with account balances as of the end of the plan year (defined benefit plans do not complete this item) 5c 5 Were all of the plan's assets during the plan year invested in eligible assets? (See instructions.) X Yes No Are you claiming a waiver of the annual examination and report of an independent qualified public accountant (IQPA) under 29 CFR ? (See instructions on waiver eligibility and conditions.) X Yes No If you answered "No" to either line 6a or line 6b, the plan cannot use Form 5500-SF and must instead use Form c If the plan is a defined benefit plan, is it covered under the PBGC insurance program (see ERISA section 4021)? Yes No Not determined Caution: A penalty for the late or incomplete filing of this return/report will be assessed unless reasonable cause is established. Under penalties of perjury and other penalties set forth in the instructions, I declare that I have examined this return/report, including, if applicable, a Schedule SB or Schedule MB completed and signed by an enrolled actuary, as well as the electronic version of this return/report, and to the best of my knowledge and belief, it is true, correct, and complete. SIGN HERE Signature of plan administrator Date Top Dog, President Enter name of individual signing as plan administrator SIGN HERE Signature of employer/plan sponsor Date Top Dog, President Enter name of individual signing as employer or plan sponsor Preparer's name (including firm name, if applicable) and address; include room or suite number (optional) Preparer's telephone number (optional) 4c 5a 5b EIN PN 5 5 For Paperwork Reduction Act Notice and OMB Control Numbers, see the instructions for Form 5500-SF. Form 5500-SF (2013) v

36 Part III 7 a b c 8 a b c d Form 5500-SF 2013 Page 2 Financial Information Plan Assets and Liabilities Total plan assets Total plan liabilities Net plan assets (subtract line 7b from line 7a) 7a 7b 7c Income, Expenses, and Transfers for this Plan Year Contributions received or receivable from: (1) Employers 8a(1) (2) Participants 8a(2) (3) Others (including rollovers) 8a(3) Other income (loss) 8b Total income (add lines 8a(1), 8a(2), 8a(3), and 8b) 8c Benefits paid (including direct rollovers and insurance premiums to provide benefits) e f g h Other expenses Total expenses (add lines 8d, 8e, 8f, and 8g) i j Transfers to (from) the plan (see instructions) Part IV Plan Characteristics 9a 2A 2E 2F 2G 2J 2T 3D b Certain deemed and/or corrective distributions (see instructions) Administrative service providers (salaries, fees, commissions) Net income (loss) (subtract line 8h from line 8c) 8d 8e 8f 8g 8h 8i 8j (a) Beginning of Year (b) End of Year 215, ,740 (a) Amount (b) Total If the plan provides pension benefits, enter the applicable pension feature codes from the List of Plan Characteristic Codes in the instructions: If the plan provides welfare benefits, enter the applicable welfare feature codes from the List of Plan Characteristic Codes in the instructions: Part V 10 a b c d e f g h i Part VI 11 11a 12 a b Compliance Questions During the plan year: Was there a failure to transmit to the plan any participant contributions within the time period described in 29 CFR ? (See instructions and DOL's Voluntary Fiduciary Correction Program) Were there any nonexempt transactions with any party-in-interest? (Do not include transactions reported on line 10a.) Was the plan covered by a fidelity bond? Did the plan have a loss, whether or not reimbursed by the plan's fidelity bond, that was caused by fraud or dishonesty? Were any fees or commissions paid to any brokers, agents, or other persons by an insurance carrier, insurance service, or other organization that provides some or all of the benefits under the plan? (See instructions.) Has the plan failed to provide any benefit when due under the plan? Did the plan have any participant loans? (If "Yes," enter amount as of year end.) If this is an individual account plan, was there a blackout period? (See instructions and 29 CFR ) If 10h was answered "Yes," check the box if you either provided the required notice or one of the exceptions to providing the notice applied under 29 CFR Pension Funding Compliance 10a 10b 10c 10d 10e 10f 10g 10h 10i Yes No Amount Is this a defined benefit plan subject to minimum funding requirements? (If "Yes," see instructions and complete Schedule SB (Form 5500) and line 11a below) Yes X No Enter the unpaid minimum required contribution for current year from Schedule SB (Form 5500) line 39 11a Is this a defined contribution plan subject to the minimum funding requirements of section 412 of the Code or section 302 of ERISA? Yes X No (If "Yes," complete line 12a or lines 12b, 12c, 12d, and 12e below, as applicable.) If a waiver of the minimum funding standard for a prior year is being amortized in this plan year, see instructions, and enter the date of the letter ruling granting the waiver Month Day Year If you completed line 12a, complete lines 3, 9, and 10 of Schedule MB (Form 5500), and skip to line 13. Enter the minimum required contribution for this plan year 215, ,740 71,250 52,100 1,590 13,728 X 12b 138, ,668 X X 100,000 X X X X X

37 Form 5500-SF 2013 Page 3- c d e Part VII 13a b c Enter the amount contributed by the employer to the plan for this plan year Subtract the amount in line 12c from the amount in line 12b. Enter the result (enter a minus sign to the left of a negative amount) Will the minimum funding amount reported on line 12d be met by the funding deadline? Yes No N/A Plan Terminations and Transfers of Assets Has a resolution to terminate the plan been adopted in any plan year? Yes X No If "Yes," enter the amount of any plan assets that reverted to the employer this year 13a Were all the plan assets distributed to participants or beneficiaries, transferred to another plan, or brought under the control of the PBGC? Yes X No If during this plan year, any assets or liabilities were transferred from this plan to another plan(s), identify the plan(s) to which assets or liabilities were transferred. (See instructions.) 13c(1) Name of plan(s): 13c(2) EIN(s) 13c(3) PN(s) 12c 12d Part VIII Trust Information (optional) 14a Name of trust 14b Trust's EIN Sample Company, Inc. 401(k) Profit

38 SUMMARY ANNUAL REPORT for Sample Company, Inc. 401(k) Profit Sharing Plan This is a summary of the annual report for Sample Company, Inc. 401(k) Profit Sharing Plan, /001 for 01/01/2014 through 12/31/2014. The annual report has been filed with the Employee Benefits Security Administration, formerly known as the Pension and Welfare Benefits Administration, as required under the Employee Retirement Income Security Act of 1974 (ERISA). Basic Financial Statement Plan expenses were $0. These expenses included $0 in administrative expenses, $0 in benefits paid to participants and beneficiaries, and $0 in other expenses. A total of 5 persons were participants in or beneficiaries of the plan at the end of the plan year, although not all of these persons had yet earned the right to receive benefits. The value of plan assets, after subtracting liabilities of the plan was $353,740 as of 12/31/2014 compared to $215,072 as of 01/01/2014. During the plan year the plan experienced an increase in its net assets of $138,668. This increase includes unrealized appreciation or depreciation in the value of plan assets; that is, the difference between the value of the plan's assets at the end of the year and the value of the assets at the beginning of the year or the cost of assets acquired during the year. The plan had total income of $138,668, including employer contributions of $71,250, employee contributions of $53,690 and earnings from investments of $13,728. Your Rights to Additional Information You have the right to receive a copy of the full annual report, or any part thereof, on request. To obtain a copy of the full annual report, or any part thereof, write or call the office of Sample Company, Inc., who is Plan Administrator at 2 Main St., Smallville, VT, The charge to cover copying cost will be $4.00 for the full annual report, or $0.25 per page for any part thereof. You also have the right to receive from the plan administrator, on request and at no charge, a statement of the assets and liabilities of the plan and accompanying notes, if any, or a statement of income and expenses of the plan and accompanying notes, if any, or both. If you request a copy of the full annual report from the plan administrator, these two statements and accompanying notes, if any, will be included as part of that report. The charge to cover copying costs given above does not include a charge for copying of these portions of the report because these portions are furnished without charge. You also have the legally protected right to examine the annual report at the main office of the plan at 2 Main St., Smallville, VT, and at the US Department of Labor in Washington DC, or obtain a copy from the US Department of Labor upon payment of copying costs. Requests to the Department should be addressed to: Public Disclosure Room, Room N-1513, Employee Benefits Security Administration, US Department of Labor, 200 Constitution Avenue, NW, Washington DC