2. Today’s Presenter: Mitch Vandiver Controlling Your Future through Succession Planning Passing the Torch without Getting Burned

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5. 5 Family to Family: Laird Norton Tyee Family Business Survey 2007, Retrieved December 2011 from http://familybusinesssurvey.com/2007. © 2012, Strategies, Inc. All rights reserved

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15. Essential Elements of the Founder’s Plan: Founder’s role – Today & Future Business afterlife… Transfer of power Financial independence from the business Eliminate need to sell company to pay estate taxes 15 © 2012, Strategies, Inc. All rights reserved

16. Essential Questions to Ask: Do I want to pass my company to my children? Why? How do I want to be remembered? What does my spouse want for the future? What dreams have I not yet fulfilled? What hopes do I have for my children? Company? Do I have my own personal 5-10 year plan? 16 © 2012, Strategies, Inc. All rights reserved

17. Won’t let go Lets go to return Retires and advises Retires and disappears 17 The Hero’s Farewell, Jeffrey Sonnenfeld, Oxford University Press, 1988 © 2012, Strategies, Inc. All rights reserved

18. Disruptive Based on Need Relationship Focused Qualitative Not by Choice Permanent Based on Merit Results Focused Quantitative By Choice Temporary 18 © 2012, Strategies, Inc. All rights reserved

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26. The Business Transition Understand the business lifecycle Develop effective and efficient operations Craft a strategic vision Make clear financial assumptions 26 © 2012, Strategies, Inc. All rights reserved

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28. The Management Transition Recognize that the current management model will and must change Provide a mechanism for those who will not be active in the business a way to cash out Become serious about developing the next generation of leaders and managers Make the Decision Document the Plan 28 © 2012, Strategies, Inc. All rights reserved

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30. The Ownership Transition Once you have made decisions required to complete the Management Transition, you know who will run the business in the next generation Now you are in a good position to answer the principal question of the Ownership Transition 30 Key Point – Ensure retention of Control coupled with distribution of ownership © 2012, Strategies, Inc. All rights reserved

31. The 5 Most Critical Elements… Challenge assumptions Understand the differences between “fair” and “equal” Document and communicate your decisions Strengthen the ownership team Provide for an orderly exit for those not participating in the management of the business 31 © 2012, Strategies, Inc. All rights reserved

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33. Structuring the Transition Expand your perspective and have a broad view Ensure retention of Control coupled with distribution of ownership An effective Governance and Tax Plan should round out and support the balance between business prosperity, family harmony and personal well-being 33 © 2012, Strategies, Inc. All rights reserved

34. Best Practices Meritocracy brings lasting Liquidity & Legacy Socialism causes Illiquidity and Liquidation Protect the Golden Goose that Lays the Golden Egg Current generation must launch and support the process Communicate, Communicate, Communicate and respect individual strengths and choices The best business families plan one to two generations in advance Don’t fall in love with your plan – develop a Plan B… 34 © 2012, Strategies, Inc. All rights reserved

35. A great succession is a process and one that hardly anyone notices. It is a non-event, an evolutionary process arising from careful planning and the artful management of expectations over a period of years. It is not a legal and financial transaction alone, nor just an insurance funded plan – rather it is a process which the various disciplines within this room should work through in concert to address the six required plans. 35 © 2012, Strategies, Inc. All rights reserved

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37. 37 © 2012, Strategies, Inc. All rights reserved Thank you for attending! More Questions? Contact us at 410-363-6669 or mitch@strategiescorp.netmitch@strategiescorp.net

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