SESSION TWO WORKBOOK

SESSION TWO WORKBOOK Cook,Inc Decisions and Notes for Modules 1 – 5 Cook, Inc. BSMARTerBusiness Simulation Management and Relationship Training

Introduction It’s been a fantastic year for Cook, Inc., yet there is always room to improve to take the firm to the next level. We wanted to address some pain points identified and felt this was a good time to align our compensation plan and organizational structure to ensure we meet our goals. All details are outlined in the following pages, but we wanted to provide a high level summary of the key changes. In terms of the organizational structure (next page) we are alleviating the pressure on Natalie and functionally organizing ourselves into lines of business. We successfully transitioned the majority of clients from Natalie to lead advisors and created a new associate advisor role which develops a career path for our talented younger advisors. In addition, we have aligned our client service associate team to report to our COO (hired last year), although they will always work with the same lead and junior advisor to ensure a deep understanding of our client’s unique needs. We feel we have developed a strong “bench” and career path for our employees to move along as they progress in their careers. Natalie maintains 10 clients, to keep in touch with their needs. However, given her responsibilities as CEO the client load is much lighter. The partners were feeling strained having to write a check to the bank as we complete the transition to an independent firm. Therefore, for the duration of the buyback period (two more years) we will be distributing profits quarterly to the owners based on their pro-rata shares. This should help alleviate some financial burdens they are feeling. It is clear this distribution plan is only for the next two years, and we will evaluate the plan moving forward and greater business reinvestments after that time. We also have instituted a culture of growth, and have pushed our partners and other firm members to increase their understanding of the brand. While this will take some time, it is no longer just Natalie who is the PR machine of the firm. Investments were made to do PR training with the partners, and also to leverage the resources of Fidelity to ensure our story is consistent, differentiated and repeatable. Many other changes outlined in the following pages, we look forward to watching these decisions and their outcomes as the business continues to be a leader in the industry.

Cook, Inc.’s New Organization Structure

MODULE 1 Organizational Structure and Compensation

Service Team Structure Client (50 clients) Clients (47 clients) Clients (10 legacy) Shared resource brought in as needed Lead Advisor John Bosley Lead Advisor Alex Munday CEO Natalie Cook • CIO – Dylan Sanders Associate Advisor Madison Lee Associate Advisor Jerrod Bustos Maria Haggard Client Service Associate • Ike Horak • Client Service Associate

Service Team Structure We are moving to a team based approach for client service in an effort to take the pressure off of Natalie, improve client experience, provide career paths for employees, and to effectively align resources to meet our mission and vision statement. Natalie has transitioned all but 10 of Cook’s Legacy clients to John and Alex who are now lead advisors. Those clients are also serviced by Jerrod and Ike (see more information below). Madison (currently enrolled in CFP program) will be acting as associate advisor and will be working with John. Jerrod (currently enrolled in CFP program) has been promoted to associate advisor and is supporting Alex. Both will eventually be given smaller less complicated clients to start taking the lead on, and these clients will be the beginnings of their books of business when they transition to lead advisors. Dylan will be pulled into client meetings as a shared resource in her capacity of CIO as needed. Based on the new org structure realignment, we determined that two admins were not necessary. Maria was promoted to a client service associate after a review of her skills to backfill Jerrod’s promotion. Ike remains as the second client service associate. Maria supports John and Madison while Ike supports Alex and Jerrod. Clients are now supported in their comprehensive wealth management plan by a team of specialists, who have the same sets of clients and deep expertise in their complex situations.

Compensation Benchmarking See Appendix A for position compensation information Source: 2013 InvestmentNews/Moss Adams Comp Study

Compensation Benchmarking

MODULE 2 Staff Selection and Performance Management

Performance Evaluation The above form is a generic description, we have developed performance and development plan documents. They are to be completed for a formal review on an annual basis (tied to merit and bonus payouts). Semi-annually they will be completed for a six-month review (not tied to merit increases) to ensure there is an ongoing dialogue. While managers are encouraged to meet with staff at any time, there must be scheduled monthly 1x1 meetings to review items. The development portion of the plan is developed by the employee. It must tie to their job functions, but creates a system where the manager is held responsible for assisting their direct report in achieving those goals.

MODULE 3 The Culture of Your Firm

Organizational Culture

MODULE 4 Incentive Compensation

Partner Compensation

MODULE 5 Partner Compensation

Partner Compensation

Partner Incentive Compensation

Other Initiatives

SESSION TWO WORKBOOK