Harlon Group –– Professionals focusing entirely on performance, compensation management and executive benefits.

OUR COMMITMENT TO OUR CLIENTS

As a consultancy dedicated to performance and compensation management, the Harlon Group supports clients’ needs for aligning performance with compensation.

Alignment of performance and compensation is key to success – especially for companies, both public and private using shareholder equity as the underlying security for compensation planning. Alignment of performance is key also to not-for-profit organizations seeking improvements to support stake holder expectations.

The Harlon Group is committed to our clients in the following areas:

Education – It is our responsibility to ensure our clients are aware of and understand current trends in compensation planning, including the use of appropriate performance metrics and vehicles for delivering pay, as well as the impacts of compensation programs on corporate accounting and reporting and corporate and individual taxation.

Research – Our affiliation and activities with professional associations, such as The Corporate Counsel, the National Association of Stock Plan Professionals, the National Association of Corporate Directors, and other trusted partners, ensures our clients access to extensive research on a plethora of compensation matters.

Professional Tools – The Harlon Group partners with nationally recognized firms for tax, accounting, actuarial advice and placement of insurance products. Our commercial salary survey library is comparable to other, larger, professional service firms. The market salary survey data base used in Harlon Group projects supports testimony of expert witnesses as well as public company reporting under the scrutiny of Institutional Shareholder Services and other watchdog groups.

Professional Relationship – Our approach is to be open, available and committed to timely responses to our clients’ needs. Our nature is to be provocative, inquisitive and, most critically, professionally responsive in working with client representatives, which include members of the board of directors, senior management team members and functional experts.

Specific Expertise – By virtue of our background and experience, Harlon Group principals are very adept in helping companies, both for profit and not-for-profit, identify and align performance criteria with compensation levels and mix while delivering compensation in efficient ways.

·  Health Care Industry – The Harlon Group has especial understanding and expertise in helping executives and board of directors of provider organizations connect strategy, performance metrics and varying levels and types of compensation as well as maintain compliance with IRS rulings regarding levels of compensation.

·  Executive Benefits – The Harlon Group positions executive benefits including deferred compensation and supplemental executive retirement plans to meet the needs of all organizations, executives and board members. Working with trusted partners, the Harlon Group helps clients find efficient ways to fund executive benefits.

OUR DISTINCTIVE ATTRIBUTES

We believe the following characteristics distinguish us from most of the other professional service firms that consult on performance, compensation management matters and executive benefits.

Regional Focus – We are a firm with a strong work ethic with Midwest roots that reflect a commitment to helping companies succeed. Unlike other performance and compensation management firms that are typically located in New York, Chicago and/or Los Angeles, our Denver office provides convenient access to our client base. In contrast to other consulting firms, we do not consider a mega or large cap corporation to be more of a fit with our approach than a mid or small cap public or private company and not-for-profit organizations.

Breadth of Experience and Human Capital Expertise – We focus on the most critical element of talent management – aligning performance with compensation and executive benefits. Our broad experience and our extensive affiliation with other human capital management experts allow us to consult on a variety of talent matters. We realize our clients have needs that link to and go beyond our deep expertise in performance, compensation management and executive benefits. In light of that, the Harlon Group has compiled an affiliate list of extremely competent professionals in executive coaching, succession planning, organizational effectiveness and business strategy.

Understanding and Expertise in Compensation Compliance Challenges – Our expertise in dealing with IRS matters of compensation including compliance with Section 4958 guidelines for not-for-profit organizations (see attached brief outline) and our understanding of compensation tax matters allows us broad confidence in dealing with compliance challenges. Our expertise in understanding and applying equity based currencies for use in compensation planning in private and publicly held companies is key to our success as a regional compensation consulting firm.

Understanding the Importance of Performance Measurement - What gets measured gets improved – the focus of Peter Drucker for a good deal of his career was on developing leaders that are responsible and accountable to meeting strategic goals of their company. The key indicator of success for the Harlon Group is supporting an organization’s needs to set, track and reward performance relative to attracting, motivating and retaining top talent.

Designed Efficiencies – the principals of our firm have observed the high cost of overhead at consulting firms that purport to provide a broad array of services – because of this, we design our “touch points” in each project to minimize expenses and maximize times where our expertise provides the most value, even in global engagements. Our principals have worked with large publicly held firms and mid-sized privately held firms with each assignment meticulously coordinated with clients outside legal counsel and accounting firm.

Our Philosophy – we are wed to the principles that drive common sense and conservatively driven planning. We do not subscribe to “near perfect” tax schemes in developing compensation planning techniques and we do not agree with placing Plan participants at risk regarding tax liabilities nor, at risk regarding their abilities to perform at high levels for their respective organizations.

Bill Heck – Managing Principal

As project leader for significant Harlon Group projects, Bill heads up teams of infinitely qualified professionals. His background and experience as both practitioner and consultant allow him the luxury of attracting and organizing talented team members to work with Harlon Group clients.

Bill specializes in developing and designing performance and compensation plans for broad-based staff, sales teams, board of directors and executive leadership teams. He works with publicly and closely held companies including financial services, food wholesalers/retailers, manufacturing, energy and telecommunication companies, health care systems and real estate companies in aligning performance with compensation for increased productivity.

As a senior consultant with both Arthur Andersen and the Hay Group he helped organizations retain top talent while improving business processes. Bill has served as Chief People Officer of two major national health care systems as well as developing consulting practices for BKD, CPA, one of the ten largest public accounting firms in the U.S.

Bill’s experience helping clients includes Hallmark, Milwaukee Journal Sentinel, Van Gilder Insurance Corporation, Saia Motor Freight Line, Inc., Jevic Transportation, Inc., Yellow Roadway Transportation, United Western Bancorp, Lockton Companies, HCA Health Midwest, Johnson Outdoors Inc., Colorado Capital Bank, H&R Block Financial Advisory Services, Children’s Medical Center of Dallas, Colliers International, Aquila, Inc., Denbury Resources, Inc. and Sprint.

Bill's graduate degree from the University of Colorado is in business and human resource administration. He is an independent director on the board of a private manufacturing firm that develops innovative fire retardant products for the aircraft industry and the lead director of an independent investment advisory firm. He is a principal with Board of Directors Development Group and serves on the advisory board of the Denver chapter of the National Association for Corporate Directors and on the board of the Association for Corporate Growth Denver. Bill is a founding member of the Rocky Mountain Human Resource Planning Society and has served on the board of the Kansas City chapter of the National Association of Stock Plan Professionals.

Bill shares a common bond with other human capital professionals around the globe who seek to elevate the value of human, intellectual and brand capital to the reporting level of financial capital.

This search allows Bill access to professionals who are similarly intent on proving that a portion of market value creation can be attributed to these three key elements of deployable capital.

Reasonableness of Compensation and Taxpayers Bill of Rights II

In 1996, Congress passed the Taxpayers Bill of Rights II (TBOR), which authorizes the IRS to apply intermediate sanctions to any excess benefit transaction. Intermediate sanctions under TBOR include taxes and penalties on individuals receiving the excess benefits, as well as taxes and penalties on anyone who knowingly approves any excess benefit transaction. An excess benefit transaction arises when a tax-exempt organization provides an economic benefit to a “disqualified person” if the value of the benefit provided exceeds the value of the consideration the tax-exempt organization receives in return. Types of transactions that could be considered excess benefit transactions include:

· Unreasonable Compensation: Compensating individuals in amounts that exceed the value of services received.

· Revenue-Based Compensation: Paying compensation to individuals based in whole or in part on revenues of the tax-exempt entity in a manner that results in private inurement.

· Bargain Sales: Paying more for assets than they are worth, or selling them for less than they are worth.

· Unreported Compensation: Any compensation not reported on the recipient’s W-2 statement and on the employer’s form 990 is inherently suspect as an excess benefit transaction.

A “disqualified person” is any person who:

· Is (or was in the preceding five years) in a position to exercise substantial influence over the affairs of the organization.

· A family member of a person in a position to exercise substantial influence over the affairs of the organization.

· An entity, at least 35% of which is owned by a person in a position to exercise substantial influence, or a family member of such a person.

“Disqualified persons” are likely to include directors, trustees, and top management employees. Key physicians may also be disqualified persons, even without any management status.

A board of directors may create a “rebuttable presumption of reasonableness” by following the following three guidelines.

1.  The transaction must be considered by independent directors of the board only.

2.  Board approval of compensation arrangements must be based on appropriate comparability data.

3.  The board must adequately document the bases for compensation levels.

4.  Decisions must be documented concurrently.

Example of Recent Clients – 2007/2008:

United Western Bank Denver Colorado

International Catastrophe Insurance Managers, LLC Boulder Colorado

TCF Bank Colorado Denver Colorado / Minneapolis Minnesota

Craig Hospital Denver Colorado

The Colorado Health Foundation Denver Colorado

H&R Block Financial Services Kansas City Missouri

Republic Financial Corporation Denver Colorado

Commerce Bank Shares Kansas City Missouri

Lutheran Medical Center Community Foundation Denver Colorado

Koch Industries Wichita Kansas

Broh Companies Denver Colorado

Yellow Roadway Corporation Kansas City Missouri

Smart Care Family Medical Centers Denver Colorado

Paul Mueller Company Springfield Missouri

Good Times Restaurant Denver Colorado

Colorado Capital Bank Denver Colorado

West Marine, Inc Watsonville, California

Xanterra Resorts and Recreation, Inc. Denver Colorado

Anderson Ranch Arts Center Snowmass Colorado

Green Manning and Bunch Denver Colorado

Van Gilder Insurance Corporation Denver Colorado

Decisioneering Incorporated Denver Colorado

Land Title Guarantee Company Denver Colorado

National Western Stock Show Denver, Colorado

AeroGrow International, Inc. Denver, Colorado

Bill Heck

+1.303.996.5695