Exit Planning

The Eight Exit Options

1.Transfer Ownership to Family Members

2.Sell to Other Shareholders

3.Sell to Management (“MBO” or “LBO”)

4.Sell to an Employee Stock Ownership Plan (“ESOP”)

5.Sell to a Third Party

6.Refinance or Recapitalize the Business

7.Go Public

8.Liquidate the Business

Different Values for the
Same Company

Exit

Channel

Exit

Option

Valuation

Authority

Value

Standard

Resulting Value

Family

Gifting/GRAT

IRS

Fair Market Value

with discounts

$6,500,000

Owners

Buy-Sell

Agreement

Owners

Negotiated value or

Fair Market Value

$9,000,000

Third-

Party

Buyer

Controlled

Auction

Buyer,

Seller and

their

advisors

Investment Value or

Market Value

$10,250,000