1. Business Succession Planning Can your business survive without you?

2. 2 Agenda Small Businesses in the U.S. Planning for When You’re Not Here The Buy-Sell Solution The Value of Life and Disability Insurance How it Works Taking the Next Step

3. 3 Source: U.S. Dept. of Commerce, Bureau of the Census; Advocacy-funded research by Kathryn Kobe, 2007 U.S. As posted on www.sba.gov January 2012.www.sba.gov Small Business Effects on the Economy The estimated 26.8 million small businesses in the United States: Create 75% of new jobs Employ 50% of the country’s private workforce Represent more than 97% of all exporters of goods Represent more than 99% of employers Generate the majority of innovations (patents) that come from United States companies

4. 4 Why Do Small Businesses Fail? Improperly plan for growth Management of financial statements No plan for a succession of ownership

5. 5 Source: LIMRA. “Small Business Owners: 2009” A Closer Look 85% of all U.S. firms are small businesses Only 25% have formal retirement succession plans Only 35% have formal succession plans in the event of death The Value of Life and Disability Insurance Only 40% with plans use life insurance

6. 6 What Will Happen to Your Business? When your retire? If you become disabled? When you pass away?

7. 7 Preserving Your Life’s Work It’s all about… Control Choice Continuity

8. 8 A Written Buy-Sell Agreement Contains: Who will buy/sell? When will the transaction happen? At what price will the business be purchased? Stated terms of the transaction

9. 9 Valuing the Business Appraisal Stated price Formula

10. 10 How Will the Buy-Sell be Funded? Management or family can borrow the funds Your company can save for it You can arrange to buy the business interest under an installment basis You can acquire life and disability insurance coverage

11. 11 Consider Life Insurance Provides the cash needed immediately Prevents drain on business profits Helps to quickly turn a non-liquid asset into a liquid asset The policy’s death benefit can be designed to increase over time to reflect the growth of the business 1 1 Additional underwriting requirements may apply; no guarantee that insured(s) will qualify for increased death benefit protection.

12. 12 Disability Buy-Out Insurance Minimizes impact to the bottom line Can be used to help replace a portion of the disabled owner’s salary or purchase his interest Disabled partner will likely continue to draw salary or K-1 income Can be used to pay overhead and expenses

13. 13 Types of Buy-Sell Agreements Entity Redemption The business itself is the buyer Cross Purchase The owners buy from each other directly Between two or more owners Entity Redemption Between the owner and a key employee or family member in business

14. 14 Which Plan Makes Sense?

15. 15 Stock Redemption / Entity Agreement The income tax-free status of life insurance death benefit proceeds is very valuable. To ensure that the death proceeds of an employer-owned policy can retain this benefit, it is essential to comply with the requirements of Internal Revenue Code Section 101(j). Owner A Owner B Owner C Business Estate of Owner A Business Interest Purchase Price Insurance Company Premium Payments Insurance Proceeds The Business is the owner and beneficiary of a policy on each owner

16. 16 Cross Purchase Agreement Owner AOwner B Estate of Owner A Premium (On life of B) A owns and is the beneficiary of a Policy on B B owns and is the beneficiary of a Policy on A AGREEMENT Life Insurance Policy on Owner B Life Insurance Policy on Owner A Insurance Company Premium (On life of A) Insurance Proceeds (Life of A) Business Interest Redemption Price

17. 17 Unilateral Purchase Agreement Protégé Estate of Owner A AGREEMENT Insurance Company Premium Payments Insurance Proceeds (Life of A) Business Interest Redemption Price Life Insurance Policy on Owner B Life Insurance Policy on Owner A

18. 18 Benefits of a Funded Buy-Sell Assures the business interest will be purchased at fair market value Ties key people to the business Develops management loyalty Helps to unsure competent successor management Provides employees with more job security Helps open the doors to future financing

19. 19 Getting Started Define your goals Evaluate the alternatives with your financial representative, qualified attorney and accountant. Implement the strategy to protect your business

20. 20 Important Note: Pursuant to IRS Circular 230, MetLife is providing you with the following notification: The information contained in this document is not intended to (and cannot) be used by anyone to avoid IRS penalties. This document supports the promotion and marketing of insurance products. You should seek advice based on your particular circumstances from an independent advisor. MetLife, its agents, and representatives may not give legal or tax advice. Any discussion of taxes herein or related to this document is for general information purposes only and does not purport to be complete or cover every situation. Tax law is subject to interpretation and legislative change. Tax results and the appropriateness of any product for any specific taxpayer may vary depending on the facts and circumstances. You should consult with and rely on your own independent legal and tax advisers regarding your particular set of facts and circumstances.

21. 21 CLVL22213 L0512257964[0614] © 2012 METLIFE, INC. PEANUTS © 2012 Peanuts Worldwide Not A Deposit Not FDIC-Insured Not Insured By Any Federal Government Agency Not Guaranteed By Any Bank Or Credit Union May Go Down In Value Important Note: Prospectuses for Equity Advantage Variable Universal Life, and for the investment portfolios offered there under, are available from MetLife. The policy prospectus contains information about the policy's features, risks, charges and expenses. Investors should consider the investment objectives, risks, charges and expenses of the investment company carefully before investing. The investment objectives, risks and policies of the investment options, as well as other information about the investment options, are described in their respective prospectuses. Clients should read the prospectuses and consider this information carefully before investing. Product availability and features may vary by state. MetLife life insurance policies have limitations, exclusions, charges, termination provisions and terms for keeping them in force. There is no guarantee that any of the variable investment options in this product will meet its stated goals or objectives. The cash value is subject to market fluctuations so that, when withdrawn, it may be worth more or less than its original value. Guarantee Advantage Universal Life is issued by MetLife Investors USA Insurance Company on Policy Form Series 5E-34-07 and in New York, only by Metropolitan Life Insurance Company on Policy Form Series 1E-34-07-NY. Legacy Advantage Survivorship Universal Life is issued by MetLife Investors USA Insurance Company on Policy Form Series 5E-32-05 and in New York, only by Metropolitan Life Insurance Company on Policy Form Series 1E-32-05-NY. Equity Advantage Variable Universal Life is issued by MetLife Investors USA Insurance Company on Policy Form Series 5E-46-06 and in New York only by Metropolitan Life Insurance Company on Policy Form Series 1E-46-06- NY-1. MetLife Promise Whole Life is issued by MetLife Investors USA Insurance Company on Policy Form 5E-12-10 and in New York only by Metropolitan Life Insurance Company on Policy Form 1E-12-10-NY. MetLife Promise Whole Life 120 is issued by MetLife Investors USA Insurance Company on Policy Form 5E-12-12 and in New York only by Metropolitan Life Insurance Company on Policy Form 1E-12-10-NY- A. Guaranteed Level Term is issued by MetLife Investors USA Insurance Company on Policy Form Series 5E-21-04 and in New York, only by First MetLife Investors Insurance Company on Policy Form Series 5E-21-04-NY. All are MetLife companies. All guarantees are subject to the claims-paying ability and financial strength of the issuing insurance company. Variable products are distributed by MetLife Investors Distribution Company, 5 Park Plaza, Suite 1900, Irvine, CA 92614. Variable products are offered through MetLife Securities, Inc. and New England Securities Corporation; both at 1095 Avenue of the Americas, New York, NY 10036 (member FINRA/SIPC). May 2012