Ownership Dynamics of a Typical Privately Owned Company

Ownership Dynamics of a Typical Privately Owned Company Presentation to the FEI NE WI Chapter Mike Vander Zanden April 18, 2018

Agenda Overview of Amerequip Board of Directors Disclosure Requirements Management Compensation Financing Structures Ownership Goals

Overview of Amerequip

Amerequip History 1920 Farm Specialty Manufacturing Company 1924 Arps Corporation 1983 Amerequip Corporation - Privately Owned 1998 Amerequip Corporation ESOP 2011 Amerequip Corporation Privately Owned

$120,000,000 Amerequip Sales By Fiscal Year $107,300,000 $100,000,000 $99,800,000 $86,200,000 $80,000,000 $67,335,000 $70,200,000 $60,000,000 $55,300,000 $49,448,000 $40,000,000 $35,157,000 $34,334,000 $20,000,000 $21,500,000 $24,300,000 $- 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

OEM Partnerships

Refuse Truck Arms

Facilities Overview

Engineering 15,000 Square Feet 20 Team Member Office Prototype Shop 30+ acres testing.

Engineering Center

Production Facilities New Holstein 40k Square Feet Machining Hydraulic Cylinder Assembly 30 team members Kiel 325k Square Feet Robotic Welding Manual Welding E-Coat and Wet Spray Paint Final Assembly Fabrication Administration Quality Manufacturing Engineering Financial Supply Chain Management 300 team member

New Holstein Hydraulic Cylinders & Machining

Kiel Administration, Laser, Fabrication, Welding, Paint, Final Assembly

Board of Directors

Board of Directors Currently 5 board members Majority shareholder chairman, CEO, 3 outside Quarterly board meetings including executive team Compensation is $2000 per meeting with discretionary annual bonus ($0- $10,000) 2 committees Audit and Valuation Board Member Term is not defined

The Amerequip Board Charles Hoke Chairman Currently a member of 6 corporate boards 23 Years at First Star Bank Don Van Houweling Member Currently CEO/Owner Van Wall Group (since 1977) Leading John Deere Dealer, 4 states, 13 stores, 270 employees 9-years in the John Deere Executive Development Program Mike Ferrell Member Former Chairman/CEO Sentry Equipment Corporation Former officer US Navy prior to joining Sentry Equipment Corporation Tom Durkin Member Senior Vice President Asten Johnson Inc. (1987) $300 million global company with 1800 associates in the markets of Paper Machine Clothing, Specialty and Monofilament Graduate of United States Military Academy, West Point, NY and Harvard Business School, Boston, MA

Disclosure Requirements

Disclosure Requirements No outside reporting necessary as private co. Financials are shared with: Owners Executive Team Bank Audit and tax preparation costs ~ $70,000 per year No impact with federal/sec regulations as private company

Management Compensation

Management Compensation Sr. management compensation not impacted by ownership structure Sr. management compensation is salary and annual discretionary bonus A SAR s plan exists for key resources not present at buyout in 2011 No option plans exist

Financing Structure

Financing Structure Companies financing is through bank debt (term & LOC) and investors initial investment As a Sub S taxes are pass through Cash is used to fund growth, expansions, debt, and investors dividend (90%/10%)

Ownership Goals

Ownership Goals Long term goals of shareholders Growth - $24M in 2011 to $100M by 2020 State of the art with core competencies and remain vertically integrated Provide unique solution to OEM s design and contract mfg. Committed to the community Improve financial stability of team members Do things for the right reasons and live our values Value creation is measured by independent annual valuation

Thank You! Excellence is not achieved by chance, excellence is a matter of desire and discipline!

W April WEIDERT GROUP Employee Stock Ownership Plan (ESOP) Basics 2018

What s WEIDERT GROUP? > A B2B Inbound Marketing firm > Leading HubSpot Certified Partner > 23 FTE based in Appleton > 100% ESOP launched 3/31/17 W 32

What s Inbound Marketing? > Lead Attraction & Customer Delight > Centered on online content publishing > Leveraging marketing automation, Google, and social media > Delivering measurable ROI and continuous improvement! W 33

Ready to Get to Know Our ESOP? W 34

Hi. I m the Weidert Group ESOP. I m a qualified retirement plan. (Kind of like a 401(k) but more special.) Wanna know why? W 35

WHAT S SO SPECIAL ABOUT ESOPs? > Only 7,000 companies and 11M employee owners in the U.S. (less than 10% of workforce) > Benefit 100% funded by Weidert Group > Beneficial ownership you get the benefit without the legal responsibilities or risk of direct ownership > You can impact the value of your retirement account through the work you do every day! W Source: The ESOP Association, 2015 annual survey 36

HOW IT WORKS 1. Company sets up ESOP and establishes ESOP trust 2. Company makes annual contributions 3. Contributions invested in Weidert Group Stock 4. You become vested in your account balance over time 5. After you leave, paid vested value of account (subject to plan rules) W 37

REAL BENEFITS Employees in an ESOP company 2.5 times greater retirement accounts 25% higher job growth rate 25% more likely to stay in business W Source: National Center for Employee Ownership, 2013 38

HOW WE GOT HERE: THE ESOP TRANSACTION Previous Owners Sold stock to company (paid with 10-year notes) Sold stock to ESOP trust (paid with 30- year note) ESOP W 39

OVER TIME: ANNUAL CONTRIBUTION PROCESS 1 $ $ 2 ESOP Now owns the stock 3 ESOP Share Share Share Share Share Share 1. Company makes cash contribution to ESOP 2. ESOP makes loan payment to company 3. As loan is repaid, shares of stock go into individual participant accounts W 40

ESOP Retirement Plan is the Owner You You You You You You ESOP Trustee (Professional Fiduciary Services) represents the plan as an owner / legal responsibility Employee Owner you re in the plan / on the job responsibility Company Management stays the same 41

PLAN BASICS W 42

GETTING IN REQUIREMENTS: > Age 21 > 90 days employment ENTER: > 1 st of the next month **Exception: if employed on December 31, 2016, you re in! W 43

CONTRIBUTIONS MADE ANNUALLY (as of Dec 31) > By the company, not you REQUIREMENTS: > To receive a portion of the company s contribution each year 1,000 hours of service during plan year Be employed on Dec 31 Exception: requirements waived if you leave due to retirement (age 62 + 5 yrs participation), death, disability in year of such event W 44

CONTRIBUTIONS: DETERMINING YOUR PORTION Based on your eligible compensation, in proportion to total 1 Your Eligible Comp Total Comp Your Percentage $40,000 / $2M = 2% 2 Total Contribution Your Percentage 2,000 shares x 2% = Your Portion 40 shares Simplified example for illustrative purposes only 45

VESTING EARNING YOUR ACCOUNT OVER TIME: > 20% each year w/ 1,000+ hours of service > 100% after 5 years > Begins on ESOP effective date (or your hire date if later) *Exceptions: 100% vested if leave due to death, disability, or retirement (age 62 + 5 yrs participation) YEAR VESTED % <1 0% 1 20% 2 40% 3 60% 4 80% 5 100% W 46

VALUING COMPANY STOCK Jan1 Valuation process begins Apr1 Valuation complete At least annually (as of Dec 31) Trustee determines fair market value Hires independent financial advisor Takes several months W 47

ANNUAL ADMINISTRATION TIMELINE Jan1 Apr1 May1 Jul1 12/31 PYE Books closed; Valuation process begins Valuation complete Admin process occurs: - Contribution allocated - Vesting & balances updated - Statements produced Distribution period for eligible former employees (see SPD) Simplified example for illustrative purposes only; actual timeline may vary from year to year W 48

WHAT DOES IT ALL MEAN?

2 PLANS 4 1 RETIREMENT ( ESOP + ) 401(k)

WHAT INFLUENCES OUR STOCK VALUE? KEY PROFITABILITY DRIVERS 1 Client retention 2 3 Client profitability / billable hours New client attraction COMPANY PERFORMANCE 4 Reducing expenses 51

THANK YOU. While this communication may be used to promote a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that Weidert Group is not rendering legal, accounting, or tax advice. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. In addition, if anything in this simplified summary conflicts with the ESOP plan documents, the plan documents govern in all cases.

Ownership Dynamics of a Typical Private Equity-owned Company Jay Radtke April 18, 2018

Agenda Overview of Mason Wells Board of Directors Disclosure Requirements Management Compensation Financing Structures Ownership Goals 2018 Mason Wells 54

Overview of Mason Wells 2018 Mason Wells 55

Mason Wells Background Founded in 1982 as a subsidiary of Marshall & Ilsley Corporation (M&I) Became an independent firm in 1998 Closed more than 50 transactions in over 20 years of business Cohesive leadership team with an average tenure of 20 years with Mason Wells Currently seeking investments for $615M fund raised in 2016 Our philosophy: Invest in people (vs. buy companies) 2018 Mason Wells 56

Mason Wells Investment Strategy Lower Middle Market HQ in Midwest Region Company Revenue $25 - $300M Company EBITDA $5 - $30M Transaction Value $25 - $250M Targeted Industries Closely Held / Family-Owned Businesses Assist in strategic planning Focused on growth Internal via capex investment External via tuck-in acquisitions Deep Midwest executive network Value Creation System drives results 2018 Mason Wells 57

Consistent Track Record of Fox Valley Region Investments

Board of Directors 2018 Mason Wells 59

Proven Value in Leadership Board of Directors CEO Management Vision Corporate Mission Ultimate Structure Corporate Culture Financial Goals Strategy Business Philosophy Competitive Positioning Growth Strategy Acquisition Strategy Tactics Planning Philosophy Benchmarking Market Plan Operating Plan Financial Plan Implementation Management Philosophy Organization & Work Design People Selection & Development Rewards & Compensation Information Systems 2018 Mason Wells 60

Board of Directors Typically 5 7 board members CEO, two Mason Wells partners and 2 4 outside board members Mason Wells partner serves as Chairman Board controlled by Mason Wells Compensation for outside board members Fee paid per meeting and opportunity for director stock options Quarterly board meetings Executive Committee Allows for quick decision making Consists of CEO and two MW partners Typically do not have formal audit, compensation, management or other sub-committees 2018 Mason Wells 61

Disclosure Requirements 2018 Mason Wells 62

Disclosure Requirements No outside reporting as long as a private company Share company financials with the following constituents: Senior management team Outside investors and lenders Limited partners Disclosure costs are fairly minimal Annual audit and tax preparation costs are typically < $100,000 per year However, overall fund reporting disclosure required by the SEC is increasing No impact at company level though Impact of Dodd-Frank legislation 2018 Mason Wells 63

Management Compensation 2018 Mason Wells 64

Management Compensation Equity compensation opportunities For certain senior managers (most senior 5 10), there may be an opportunity to invest equity directly into the initial transaction pari passu Opportunity to receive option grants (typically a combination of time and performance vesting) Opportunity for previous owners/managers to re-invest into Newco equity Compensation package will typically be a combination of a base salary, bonus and equity (either purchased or via options) Annual Value Creation bonus pool is provided for 5-10 senior managers Bonus levels of remaining managers is determined by CEO Bonus plans for senior managers are often tied to Equity Value Creation (example on next page) 2018 Mason Wells 65

How is Value Creation Measured and Compensated? ($ in 000's) Management Forecast @ Closing Year 1 Year 2 Year 3 Year 4 Year 5 EBITDA $10,000 $11,000 $12,100 $13,310 $14,641 $16,105 Multiple 6.0 x 6.0 x 6.0 x 6.0 x 6.0 x 6.0 x Enterprise Value $60,000 $66,000 $72,600 $79,860 $87,846 $96,631 Less: Net Debt $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 Equity Value $25,000 $36,000 $47,600 $59,860 $72,846 $86,631 Annual % Change 44.0% 32.2% 25.8% 21.7% 18.9% Y/Y Equity Value Creation N/A $11,000 $11,600 $12,260 $12,986 $13,785 Focus is on creating sustainable equity value by managing the levers of Profitable Growth, Margin Improvement and Capital Management Management is in control and knows targets simple formula Not subject to the stock market 2018 Mason Wells 66

Financing Structure 2018 Mason Wells 67

Typical Transaction Structure Mason Wells is a Control investor: Own >50% Voting Securities Often senior management and co-investors invest in the equity pari passu Balance investments in business (R&D and capex) for growth vs. paying down debt (typically don t pay annual dividends to shareholders) Representative Financial Structure: Senior Debt (Club Deals) Revolver Term/Capex Loans Mezzanine Total Leverage Equity Preferred Stock (8%PIK) Common Stock Total Purchase Multiple Multiple of EBITDA 2.0x 3.5x 0.5x 1.0x 2.5x 4.5x 3.5x 4.0x 6.0x 8.5x 2018 Mason Wells 68

Ownership Goals 2018 Mason Wells 69

Ownership Goals Mason Wells objective is to grow and improve a company over 4 7 years Seek to build market leaders and winning teams Maintain community presence and grow employment Attempt to have most of the major investments done in the first 2 3 years Upgrades for modern equipment and facilities Enable major investments and acquisitions that may not have been possible previously Often management comes to us after 5-6 years saying that we have completed all of the goals and makes sense to consider partnering with someone new Occurs majority of the time If all of the above occurs, then most likely there will be an attractive return to the shareholders Can be a significant wealth creation opportunity for management 2018 Mason Wells 70

Contacts Jay Radtke (414) 727-6405 jradtke@masonwells.com 411 East Wisconsin Avenue Suite 1280 Milwaukee, WI 53202 Tel 414/727-6400 Fax 414/727-6410 www.masonwells.com 2018 Mason Wells 71

Legal Disclaimer The following contains information about Mason Wells business and the presenter s views regarding industry conditions and trends. The information has been aggregated from several Mason Wells funds solely for the purpose of illustrating combined industry experience, as all of the funds have been managed by substantially similar advisory personnel. The views and opinions expressed herein do not constitute a recommendation to make any investment, a prediction of future performance, or a representation of past performance or profitability. Any forward-looking statement contained herein is not and cannot be guaranteed. The results shown and strategies described in the following material should not be considered indicators of past performance of any Mason Wells fund or such fund s manager or of the future performance of any such fund, such fund s manager or of any company owned by such fund. Such information is provided solely to describe transaction types, management style, industry experience, and methods used by such fund s manager. Any charts, graphs, formulas, or other methods of portraying or summarizing results are illustrative only and, while helpful for such purposes, are of limited use for making investment decisions and should be viewed only with relation to other information regarding potential investments, as they are summary in nature. Each Mason Wells fund is managed on a discretionary basis by the fund s manager, with the objective of acquiring interests in companies believed to have significant growth potential. As a matter of convenience, these managers and funds are sometimes collectively referred to herein as "Mason Wells." Similarly, asset numbers for any given fund may include the assets of related side-by-side funds. For more information, please see our website at http://www.masonwells.com. 2018 Mason Wells 72