Carolinas Chapter Annual MeetingESOP Association

Pinehurst, NCAugust 28, 2008

30 years children’s music education leader

1997 – 2001 turnaround New management team OBM/incentive compensation Product expansion

Turnarounds are hard on people Employees do not receive enough

reward Decisions: EBITDA We do not control our destiny

2002 seller financed 100% ESOP 50 Employee Owners 2008 refinance Stock price CAGR 10.3% $750k already paid out to ex-EOs Exceptional transparency: OHD

We can be proud of what we add to our world! Happy children Great music Education Charitable outreach

But how should we feel about what we subtract from our planet?

Carbon emissions? Several million miles of product transport

and employee travel every year Waste?

Packaging Shipment filler Non-recyclables

Byproducts of production processes?

Mindful of stakeholders: consumers communities environment

Footprint: what we take from communities

Balancing decisions EBITDA, share price & community footprint

Becoming a founding B Corporation Shift to digital product forms

Downloads vs. CDs Curriki (open source web) vs. Teacher’s

Guides Packaging overhaul Public transportation subsidy

Corporation: maximize return to shareholders

ESOP: maximize ESOP share price

“Beneficial” Corporation: balanced considerations into Articles of Incorporation

MY LIFE’S THREE STAGES MY COMPANY’S THREE STAGES

Grow & Learn health

Build Relationships people

Seek Significance legacy

Taking Care of Business survival and financial

health Taking Care of People

building wealth for employees

Taking Care of Communities mindful of our net impact

www.bcorporation.net www.worldchanging.com www.netimpact.org www.sustainablelifemedia.com www.ted.com

A profitable company benefitting customers and employee owners? (CHECK!)

Could we redefine our private enterprise? private wealth AND public benefit

Can we be a positive force for lasting change? Leadership in showing others the way Accomplishing the highest NET impact

Carolinas Chapter Annual MeetingESOP Association

Pinehurst, NCAugust 28, 2008