1. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Strategies for Business Owners For Producer or Broker/Dealer Use Only. Not For Public Distribution. MetLife L1111217738[exp1212]

2. For Producer or Broker/Dealer Use Only. Not For Public Distribution. A Preview The Business Owner Marketplace The Business Strategy Approach Family Business Dynamics Valuation Exit Planning Looking Forward Please note: This document is designed to provide introductory information on the subject matter. MetLife does not provide tax and legal advice. Clients should consult their attorney and /or tax advisor before making financial investment or planning decisions.

3. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Question: Why are We Discussing Business Owners? Answer: they represent must of the wealth Answer: They represent many of the successful people in need of our services

4. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Business Strategies are Larger than Exit Planning Consider all the business owner’s needs –Exit –Retirement, –Executive Benefit –Estate

5. For Producer or Broker/Dealer Use Only. Not For Public Distribution. What’s their Priority? Do I have an Exit Plan? How does my business support my Retirement Plan? How do I align my company with my Estate plan? How can I most effectively use my business to provide executive benefits to recruit, retain, and reward talent. Bottom Line: What’s Keeping Them Up at Night?

6. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Competing Values RELATIONSHIPS LOYALTY STABILITY GOALS COMPETENCE GROWTH

7. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Conflicting Values RELATIONSHIPS LOYALTY STABILITY GOALS COMPETENCE GROWTH

8. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Estate Equalization Multiple Children: Some in business, some not Is equal…. equitable? What is the role of life insurance?

9. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Spouse vs. Third Party Does the Surviving Spouse Possess the Ability and/or Desire to Run the Business? Will a Sale to a Third Party Maximize the Value Obtained From the Business? Is There a Ready, Willing, and Able Buyer?

10. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Leadership Transition in Family Business Cold Turkey –“Dying with Boots on” –May cause chaos Delay, Delay –Successors may get frustrated and leave Gradual Progression –Identifying successors early on –Slowly handing over the reigns

11. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Business Valuation Issues How does the IRS define “Fair Market Value”? Revenue Ruling 59-60 and its progeny Chapter 14-Special Valuation Rules

12. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Business Valuation Issues TYPES Book Value Discounted Future Earnings Capitalization of Earnings OTHER VALUE SOURCES Assets –Tangible and intangible –Employees Brand/Goodwill It is important to confer with your attorney as well as a qualified appraiser regarding the valuation methodology appropriate for a particular business. All appraisals should be conducted by a qualified appraiser.

13. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Business Owner Exit Planning

14. For Producer or Broker/Dealer Use Only. Not For Public Distribution. An Exit Strategy is a Lifetime Plan Focuses Upon “Who” “When”, “How” and “How Much” Developed By Your Team Of Tax, Legal And Financial Advisors Should Be Reviewed Periodically Exit Strategy Fundamentals

15. For Producer or Broker/Dealer Use Only. Not For Public Distribution. The Client Profile “Affluent” business owners Owners who may need a business continuation agreement updated/created. Is it funded? Owners who have the following unanswered questions 1. When can I exit my business? 2. How much can I sell it for? 3. Who can I transfer my business to? 4. What is the best way to sale the business? 5. How can I minimize taxes?

16. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Options Shut down the business Sell to outsiders Sell to insiders

17. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Exit Roadmap Business Death Disability Departure Divorce Shut Down Sell To Outsiders Sell To Insiders

18. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Shut Down Business Death Disability Departure Divorce Shut Down Sell To Outsiders Sell To Insiders Business Ceases Common for Sole Prop Asset Sale

19. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale to Outsiders Business Death Disability Departure Divorce Shut Down Sell To Outsiders Sell To Insiders Asset sale Stock sale Stock swap Cash or stock lump sum Installments Earn out Non-compete Consulting arrangement Key employee retention

20. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale to Outsiders Could be large company or a competitor –Sale of assets –Sale of stock Purchase price paid in cash or stock –Lump-sum or installments –May include earnout provisions Usually non-compete clause May be consulting arrangement

21. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Issues for Outsider Sale Type of sale is issue from income tax standpoint –Asset better for buyer –Stock better for seller Retention of key employees is crucial –Stay bonus –SERP

22. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale to Insiders Business Death Disability Departure Divorce Shut Down Sell To Outsiders Sell To Insiders Employees Family Keep business in family Sell business to employees

23. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale to Employees Lifetime sale to key employees One way buy/sell ESOP Stock bonus & stock redemption Self-funding buyout Risk of default Identifying potential employee purchasers

24. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale to Employees One Way Buy/Sell - –Identified key employees purchase business from owner –Cash & installments –Concerns about receiving payments Stock Bonus & Redemption –Owner bonuses stock to key employees –Company redeems owner shares

25. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Keep in Family Two Options: –Sale –Gift Sale can be at retirement, disability, or death Need to identify successors Family equality becomes an issue

26. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Transfer to Family Gift Sell Installment sale Lump sum Family Buy/sell IDIT sale SCIN/Private Annuity Lifetime gifts Bequests GRAT Family attribution Chapter 14 rules Fair market value Transfer taxes Estate liquidity Valuation Retained interests

27. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Sale Will company stay in business and be able to make installments to owner? Possible income tax issues with family redemption Gift tax issues if sale is not for fair market value Family buy/sell Gift/sale strategies (IDIT, SCIN)

28. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Gifting the Business Annual gifts –$13,000 per person per year (in 2011-2012) Lifetime gift exemption –$1,000,000 Leveraged gifts –IDIT, GRAT, SCIN Valuation discounts * –Lack of control –Lack of marketability * Use of discounts, though legitimate where appropriate, is often the subject of IRS scrutiny. It is important to confer with your independent tax and legal advisors regarding the use of this technique.

29. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Setting the Tone Why is now the Ideal Time to Discuss Business Strategies?

30. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Preview…Looking Forward Exit Strategies Workshop Nonqualified Benefits ESOP’s Buy-Sell Strategies-Tactics and Issues Life Insurance in Qualified Plans Business Valuation COLI Products

31. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Important Information The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (“Act”) impacts the federal gift, estate and generation skipping transfer tax (together referred to as “transfer tax”) through 2012. Among other changes, the Act temporarily establishes maximum exemption amounts of $5,000,000 per person for transfer tax purposes, establishes a maximum transfer tax rate of 35% and provides for portability of the estate tax exemption between spouses. These changes, however, are only in effect through December 31, 2012. Unless Congress enacts new legislation, on January 1, 2013 the transfer tax laws will revert back to the laws (e.g. exemption amounts of $1,000,000 and generally 55% maximum tax rates) that were in effect in 2001. At this time, it is not clear what steps, if any, Congress will take to revise the transfer tax laws for years beyond 2012. Future changes in transfer tax exemption amounts and transfer tax rates may impact the appropriateness of any transfer tax planning strategy or product sale. Clients need to understand that tax law is always subject to interpretation and legislative change. MetLife and its affiliates do not provide tax advice and therefore clients must speak with their qualified legal and tax counsel regarding their current estate plan and what planning options are available and appropriate.

32. For Producer or Broker/Dealer Use Only. Not For Public Distribution. Important Information 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 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 tax 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 advisors regarding your particular set of facts and circumstances. Prospectuses for Equity Advantage Variable Universal Life, and for the investment portfolios offered thereunder, are available from MetLife. The policy prospectus contains information about the policies features, risks, charges and expenses. 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. Guarantees are based on the claims paying ability and financial strength of the issuing insurance company. Please contact your financial professional for complete details. Life insurance products are issued by MetLife Investors USA Insurance Company, Metropolitan Life Insurance Company Life insurance products are issued by MetLife Investors USA Insurance Company, Irvine, CA, 92614. Metropolitan Life Insurance Company, New York, NY, 10166 and in New York only by First MetLife Investors Insurance Company, New York, NY, 10166. 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, Irvine, CA. All are MetLife companies. November 2011 L1111217738[exp1212] Peanuts © United Features Syndicate, Inc