1. Business Continuation Using Life Insurance to Help Ensure the Continuation of Your Business INDIVIDUAL LIFE INSURANCE NOT INSURED BY FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE FDIC BANK INSURANCE PRODUCTS: “The Hartford” is The Hartford Financial Services Group, Inc. and its subsidiaries. This information is written in connection with the promotion or marketing of the matters addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice.

2. The Forced Sale Sale may not return fair market value of equipment and inventory Outstanding accounts receivable difficult to collect Reputation, customer base, and location could be lost Family control will likely be lost

3. The Strategy: Business Continuation Plan Help provide cash to buy-out a deceased owner’s share Help ensure knowledgeable and informed ownership Help ensure profits benefit active owners Help create ready market and fair price for your share of business Help reduce economic pressure on heirs to liquidate other assets Help minimize risks of disputes with IRS

4. Successful Steps to Business Continuation Planning Determine the value of your business Decide on a source of funding Select a plan type Get your plan in place

5. Business Valuation Helps Eliminate Potential Conflicts Values Per Share Taxpayer ValueIRS ValueCourt DecisionElapsed Time $2,400 $10,638 $253 $6,530 $16,650 $1,033 $4,750 $16,111 $900 7 yrs., 6 mos. 10 yrs., 4 mos. 6 yrs., 2 mos. Estate of Anna Ewing PHTCMP 50296 (11/28/1`950) Estate of Henry Huntington 94 F2d 1019 (CA9 1938) Estate of David Levenson 282 F2d 581 (CA3 1960)

6. Funding the Buy-Out Borrowing Investment side fund, or sinking fund Installment payments Life insurance Note: Life insurance policies contain fees and expenses, including cost of insurance, administrative fees and premium loads, surrender charges and other charges or fees that may be incurred under the policy.

7. Types of Arrangements Entity buyout, or stock redemption arrangement Cross-purchase arrangement Buy-Sell Agreement

8. How an Entity Buyout Arrangement Works Insurance Company CorporationOwner Estate Death Benefit Premium Cash Share of Business

9. The Effect of IRC Section 101(j) Under Section 101(j) of the Internal Revenue Code, the death benefit of an employer owned life insurance policy may not be completely federal income tax-free if certain notice and consent rules and other requirements are not fulfilled. In addition, death proceeds may be included in your estate for estate tax purposes. You should consult your tax advisor.

10. Generally income tax-free death benefit* Death benefit may not be included in estate of insured Potential step-up in basis in stock for surviving owners Redemption of stock by business entity may not be income tax-free event Premium payments are not a tax-deductible business expense Tax Considerations for Entity Buyout Arrangement * Although the death benefit is not subject to regular corporate income taxes, the corporate alternative minimum tax could apply.

11. One policy for every business owner Business owns policies and pays premium Premium is not tax-deductible Financial Considerations for Entity Buyout Arrangement

12. How a Cross-Purchase Arrangement Works Insurance Company Owner A (Estate)Owner B (Survivor) Premium Cash Share of Business Premium Death Benefit

13. Generally death benefit received income tax-free Death benefit not included in estate of insured Surviving company owners can receive a step-up cost basis on stock purchased Premium payments are not deductible Tax Considerations for Cross-Purchase Arrangement

14. Each owner purchases policy on lives of other owners Owners use personal funds to purchase the policies or funds from business entity Premium payments would not be deductible to the business or employee A taxable bonus paid to the employee (who may use the proceeds to pay the policy premium) is deductible to the business, provided such compensation is reasonable Financial Considerations for Cross-Purchase Arrangement

15. Consult with your attorney or professional advisor. Ask your financial professional to help determine the most effective way to fund your plan. Getting Your Plan in Place

16. This information is written in connection with the promotion or marketing of the matters addressed in this material. The information cannot be used or relied upon for the purpose of avoiding IRS penalties. These materials are not intended to provide tax, accounting or legal advice. As with all matters of a tax or legal nature, you should consult your own tax or legal counsel for advice. "The Hartford" is The Hartford Financial Services Group, Inc. and its subsidiaries, including the life insurance issuing companies of Hartford Life Insurance Company (New York) and Hartford Life and Annuity Insurance Company (outside New York), Simsbury, CT. The mailing address for both issuers is P.O. Box 2999, Hartford, CT 06104-2999. www.hartfordinvestor.com LIF 10079 PPT-02-243-5-09