ESOP ORIENTATION

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STOCK BONUS PLAN ORIENTATION
Menke Associates, Inc.
WELCOME
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WHAT IS A STOCK BONUS PLAN?

• Qualified Retirement Plan
• Assets are invested primarily (at least 51) in
  Company Stock
• The assets are held in trust for the benefit of
  employee/stockholders and their beneficiaries

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What is a Stock Bonus Plan? (Contd)

• Employee Retirement Income Security Act(ERISA)
• The trust is a tax exempt repository

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WHY DID ROSE INTERNATIONAL, INC. FORM A
STOCK BONUS PLAN?
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A COMPANY HAS NO OBLIGATION TO GIVE STOCK TO
EMPLOYEES BUT THE BOARD OF DIRECTORS HAS
DECIDED THIS STEP IS CRITICAL TO ROSE
INTERNATIONALS LONG TERM SUCCESS.
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THE CENTRAL CONCEPT WITH THE STOCK BONUS
PLAN YOU CAN ACQUIRE STOCK IN ROSE INTERNATIONAL,
INC. WITHOUT INVESTING YOUR MONEY.
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YOUR INVESTMENTS WILL BE

• LOYALTY
• COMMITMENT
• DEDICATION
• SMART WORK

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PYRAMID OF WEALTH
SBP
401(K) PLANS/OTHER
SOCIAL SECURITY
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HOW DOES THE SBP WORK?
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THE ESOP TRANSACTION
ROSE INTERNATIONAL
TRUST
EMPLOYEES
STOCK
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THE FIVE STEPS

• ELIGIBILITY PARTICIPATION
• CONTRIBUTIONS
• ALLOCATIONS

• VESTING
• DISTRIBUTIONS

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PLAN YEAR

• EFFECTIVE DATE JANUARY 1, 2000
• ANNIVERSARY DATE DECEMBER 31

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• ELIGIBILITY
• ELIGIBILITY IS DETERMINED AT EACH ENTRY DATE
  (JANUARY 1 JULY 1 OF EACH YEAR).
• All employees not already in the plan who have
  at least 12 consecutive months of service and who
  have logged 1000 hours in the preceding 12 months
  from the entry date, become eligible.

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CONTRIBUTIONS EACH YEAR ROSE INTERNATIONAL, INC.
MAY MAKE A CONTRIBUTION IN CASH OR STOCK INTO THE
TRUST.
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THE CONTRIBUTIONS COME FROM PROFITS.

• AT THE DISCRETION OF THE BOARD OF DIRECTORS
• UP TO 15 OF COVERED COMPENSATION

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ALLOCATIONSEACH PLAN YEAR THAT CONTRIBUTION IS
ALLOCATED TO YOUR INDIVIDUAL ACCOUNT, ON THE LAST
DAY, IN PROPORTION TO YOUR COMPENSATION TO ALL
ELIGIBLE COMPENSATION, AND BASED ON YOUR YEARS OF
SERVICE. ALL ELIGIBLE EMPLOYEES MUST WORK AT
LEAST 1,000 HOURS IN EACH PLAN YEAR TO RECEIVE AN
ALLOCATION.
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VESTINGYOUR RIGHT TO THAT ALLOCATION INCREASES
ANNUALLY - BASED ON YEARS OF SERVICE UNDER THE
VESTING SCHEDULE. ROSE HAS MADE A UNIQUE
DECISION TO REWARD LONG-TERM EMPLOYMENT AND
ENSURED YOUR VESTING IS GRANDFATHERED BACK TO
INCLUDE ALL YEARS OF SERVICE, NOT JUST THOSE
COINCIDING WITH THE PLAN EXISTENCE.
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VESTING SCHEDULE
ROSE INTERNATIONAL, INC.
YEARS/SERVICE
VESTED
lt2 YEARS 0 2 YEARS
20 3 YEARS
40 4 YEARS
60 5 YEARS
80 6 YEARS
100
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FULL VESTING

• RETIREMENT
• DISABILITY
• DEATH

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VESTING/FORFEITURE

• YOU EARN RIGHTS TO ALLOCATED STOCK

• YOU GIVE UP RIGHTS TO ALLOCATED STOCK

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DISTRIBUTION

• RETIREMENT, DEATH OR DISABILITYDISTRIBUTED IN
  SUBSTANTIALLY EQUAL ANNUAL INSTALLMENTS OVER FIVE
  YEARS.
• TERMINATIONBEGINNING IN THE SIXTH YEAR, THE SAME
  AS ABOVE.
• DE MINIMUS OF 5,000.

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YOU MUST CONVERT YOUR STOCK DISTRIBUTION TO
CASH.
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RETIREMENT
65
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A TAXING MATTER
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ANY DISTRIBUTION PRIOR TO AGE 591/2,UNLESS YOU
ARE DISABLED, NOT ROLLED OVER INTO ANOTHER
QUALIFIED PLAN (IRAs OK) IS SUBJECT TO A 10
PENALTY IN ADDITION TO BEING TAXED AT ORDINARY
RATES!!!
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WHAT IS YOUR STOCK WORTH?

• ANNUAL VALUATION BY AN INDEPENDENT APPRAISER
• FAIR MARKET VALUE
• ANNUAL STATEMENT

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THE APPRAISER CONSIDERS

• The nature and history of the business.
• The general economic outlook and the condition
  and outlook of the specific industry.
• The financial condition of the business.
  
  
• The earnings capacity of the business.
• The dividend paying capacity of the business.
• The nature and value of all assets.
• Sales of the stock and the size of the block
  sold.
• The stock market price of comparable companies.

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Growing Earnings Revenue Way
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Growing Earnings Expenses Way
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HOW YOUR ACCOUNTS GROW

• EMPLOYER CONTRIBUTIONS
• FORFEITURES
• STOCK APPRECIATION
• DISTRIBUTIONS
• INTEREST ON INVESTMENTS

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REMEMBER

• ASSETS OF THE TRUST ARE FOR YOUR EXCLUSIVE
  BENEFIT, AND ARE SEPARATE FROM THE ASSETS OF
  ROSE INTERNATIONAL, INC.
• PLAN PARTICIPANTS ARE NOT LIABLE FOR COMPANY
  DEBTS.

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PLAN COMMITTEE

• GULAB BHATIA
• HIMANSHU BHATIA

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TRUSTEES

• GULAB BHATIA
• HIMANSHU BHATIA

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CONGRATULATIONS ! YOU ARE NOW ON YOUR WAY TO
BECOMING.... INVESTORS IN ROSE INTERNATIONAL,
INC.
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NOBODY EVER WASHES A RENTAL CAR
JOHN D. MENKE
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THE ESOP IS A LONG TERM PLAN

• IN WHICH THE VALUE OF YOUR STOCK WILL INCREASE OR
  DECREASE DEPENDING ON THE PROFITABILITY AND
  GROWTH OF ROSE INTERNATIONAL, INC.

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Status as of 6-15-01

• Valuation has been completed
• Rose Contribution has been determined
• Eligibility has been determined.
• Allocation formula (unit based, giving 1 unit for
  each year of service, and each 1000 in income)
  has been applied.
• Account Statements and Valuation Highlights will
  be mailed next couple of weeks.