Presenter Name Presenter Title AIG Life Insurance Date

Presenter Name Presenter Title AIG Life Insurance Date (Presenter photo at left) Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

There’s no need for exit planning. My key people would never leave There’s no need to share my plan Retirement is a long way away I put my money back into the business I already have a retirement plan I know the real value of my business Paying too much in taxes is inevitable Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 2

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

There’s no need for exit planning § Just prior to departure – Value the Business – Find a buyer or choose a successor – Draw up agreement – Execute the Agreement – Transition into retirement Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 4

There’s no need for exit planning § Implications of being right or wrong – Business Valuation – Transactional Structure – Company Successor – The Unanticipated Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 5

There’s no need for exit planning § What can be done? – Begin Succession Planning in advance – Consider current value with desired value (needs) – Contemplate unanticipated events Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 6

THERE’S NO NEED FOR EXIT PLANNING There’s no need for exit planning Ask yourself… § Am I already working on a current succession plan? § Have I begun the development of leadership and business skills of your successor? § Is there enough time to maximize the company’s value and consider the unanticipated? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 7

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

There’s no need to share my plan § My plan is private – May become public – I don’t want to change it – It is my business – Everybody will do the right thing – They can figure out what I meant Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 9

THERE’S NO NEED TO SHARE MY PLAN There’s no need to share my plan § Implications of being right or wrong – If plans are not properly documented – litigated? – The owner is not a planning expert – The assumed valuation may not be accurate – Not everyone will necessarily do the right thing Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 10

There’s no need to share my plan § What can be done? – Share your plan with anyone it may touch – Document your plan – Ensure that all the key parties are on the same page Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 11

There’s no need to share my plan Ask yourself… § Have you shared your exit plans with your key people in your business? § Has any potential dissention in views been addressed? § Do the terms of the agreement meet the needs of your survivors? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 12

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

I put my money back in the business § Implications of being right or wrong – No Replacement income – Procrastinate – No control over what happens Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 14

I put my money back in the business § What can be done? – Anticipate market disruption – Implement wealth building outside of business – Multiple streams of income Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 15

I put my money back in the business Ask yourself… § Has your industry ever changed? § Have you built wealth outside of your business? § Have you consider the consequence of a dramatic change in the value of your business prior to your departure? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 16

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

I know the real value of my business § Implications of being right or wrong – If you are right, the Buy/Sell is valid – If you are wrong, the Buy/Sell is not valid Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 18

I know the real value of my business § What can be done? – Get regular appraisals by a professional – Use a Formula Valuation* vs Fixed Value – Plan and secure proper funding in advance *Validate Formula Valuation +/- with Certified Valuation Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 19

I know the real value of my business § Do you know the real value of your business? § Have you validated the number? § How does the valuation relate to your goals? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 20

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

My key people would never leave § Implications of being right or wrong – Continued disability – Loss of key employees – Money doesn’t always buy security and/or loyalty Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 22

My key people would never leave § What can be done? – Develop a Key Person strategy – Create a mutually beneficial, long term promise – Complete successor planning Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 23

MY KEY PEOPLE WOULD NEVER LEAVE My key people would never leave § Have you considered plans that will evoke loyalty from your key people? § Do your benefits reward your people as they wish to be rewarded? § Have you considered how the successor will be accepted by the surviving team? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 24

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

Retirement is a long way away § Implications of being right or wrong – Not enough time to accumulate – Procrastination results in not enough income – Relying on higher valuation and being disappointed Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 26

Retirement is a long way away § What can be done? – Set goals & timing – Create a succession plan – Develop buy/sell for retirement – Conduct long range planning Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 27

Retirement is a long way away § Have you set goals & timing? § Is your exit plan in writing? § Have you considered retirement discrimination? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 28

I already have a retirement plan § Implications of being right or wrong – May be insufficient to provide your lifestyle – You may find out at the worst time – No “Reset” button to go back – If business is main source, consider the unexpected Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 30

I ALREADY HAVE A RETIREMENT PLAN I already have a retirement plan Planning Discrimination What Percentage of Earned Compensation Will a 401(k) and Social Security Benefits Provide? Compensation $100, 000 $150, 000 $200, 000 $250, 000 401(k) Annual Contribution (10% of Compensation)1 $5, 000 10, 000 15, 000 18, 500 401(k) Annual Benefits at age 672 14, 688 29, 388 44, 088 54, 384 21, 048 31, 140 35, 868 36, 168 35, 736 60, 528 79, 956 90, 554 45% 36% Social Security Benefits Beginning at age 673 Total Retirement Income Beginning at age 67 % of Comp. Replaced by Social Security and 401(k) § $50, 000 72% 60% 53% 1 The maximum contribution for 2018 is $18, 500. Does not reflect the use of the catch-up provision. 2 Assumes: (1) Male age 45 (4/01/1973); (2) contributions for 22 years; (3) growth rate=6%; and (4) payout based on single life annuity, age 67. 3 Social Security benefits are based on the Quick Benefit Calculator at www. ssa. gov. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 31

I already have a retirement plan § What can be done? – Supplement your retirement income – Consider Death and Disability benefits for unexpected – Do the math – know how much it will take – Do something different for a better result Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 32

I already have a retirement plan Ask yourself… § Do you have pre-retirement benefits? § Is your retirement funding self-completing? § Are you protected against ups and downs in the market? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 33

There’s nothing I can do about taxes § Implications of being right or wrong – If you are right, pay more, keep less – If you are wrong, pay less, keep more Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 35

THERE’S NOTHING I CAN DO ABOUT TAXES There’s nothing I can do about taxes § What can be done? – Pay only what you owe, when you owe it – Consider tax advantaged solutions – Contemplate trusts and tax free gifts – Take advantage of alternative retirement plans Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 36

THERE’S NOTHING I CAN DO ABOUT TAXES There’s nothing I can do about taxes Ask yourself… § Have you utilized business tax strategies since the 2017 tax changes? § Are you using tax favored vehicles? § Do you have a supplemental retirement plan? Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 37

Summary There’s no need for exit planning. My key people would never leave There’s no need to share my plan Retirement is a long way away I put my money back into the business I already have a retirement plan I know the real value of my business There’s nothing I can do about taxes Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 38

Call to Action § Set up a meeting with your financial professional – You may want to begin with a meeting with your financial professional. S/he can coordinate your efforts with tax and legal advisers as well. – Consider each of the 8 blunders and determine the priority of each and how you may be able to improve your situation and potential outcomes. Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York. 39

§ Policies issued by American General Life Insurance Company and The United States Life Insurance Company in the City of New York.

For more information and resources for Quality of Life Insurance visit Qualityoflifeinsurance. com. Policies issued by American General Life Insurance Company (AGL). Issuing company AGL is responsible for financial obligations of insurance products and is a member of American International Group, Inc. (AIG). Guarantees are backed by the claims-paying ability of the issuing insurance company. AGL does not solicit business in the state of New York. Products may not be available in all states and product features may vary by state. Please refer to your policy. Policy Form Numbers: 15646, ICC 15 -15646; Rider Form Numbers: 15600, ICC 15 - 15600, CA WMDR 82001 -5 Rev 0914, 13601, ICC 13 -13601, ICC 14 -14002, 82012, 82410, 88390, ICC 15 -15990, ICC 15 -15602, ICC 15 -15603, ICC 15 -15604, ICC 15 -15271, ICC 15 -15272, ICC 15 -15274, 15996, ICC 15 -15997, and 07620. This information is provided by American General Life Insurance Company (ALG) and The United States Life Insurance Company in the City of New York (US Life), members of American International Group, Inc. (AIG). The information contained in this document is general in nature and intended for educational purposes only and is not a comprehensive analysis of the topic presented. The information may be subject to change and should be verified for accuracy and reliability (e. g. , federal income tax statutes, rulings, etc. that may have changed since publication) and may be subject to differing legal interpretations. While the publisher has been diligent in attempting to provide accurate information, the accuracy of the information cannot be guaranteed. No representation or warranty, express or implied, is made by ALG, US Life and its affiliates as to the completeness of the information in this document. AGL and US Life shall not be liable for any loss or damage caused by the use of, or reliance on, the tax, accounting, legal, investment or financial items contained in this material. Any tax statements in this material are not intended to suggest the avoidance of U. S. federal, state or local tax penalties. The Company, its financial professionals and other representatives are not authorized to give legal, tax or accounting advice. For advice concerning your situation, consult your professional attorney, tax advisor or accountant. AGLC 111930 © 2018. All rights reserved.