Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Illustration of Policy Values Funding the Plan
TBD Interest Rate 7.09%
(1)
Initial Premium 2,000,000
(2) Net Policy Loan Proceeds
Initial Policy Death Benefit 48,335,555
(3) Year End Accum Value*
(4) Year End Surrender Value*
(5) Death Benefit
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0 0 0
0 0 0 0 0 0 0 0 0 0
1,659,996 3,439,866 5,344,961 7,385,139 9,573,607 11,924,982 14,454,008 15,153,487 15,907,727 16,723,570
0 1,697,852 3,638,232 5,714,179 7,939,382 10,327,492 13,176,016 14,194,993 15,268,731 16,404,072
48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
0 0 0 0 0 0 0 0 0 0
0 0 14,000,000 0 0 0 0 1,000,000 1,000,000 1,000,000
17,947,350 19,262,349 20,503,739 21,826,398 23,236,562 24,740,877 26,346,806 28,050,163 29,858,789 31,782,282
17,947,350 19,262,349 5,803,739 6,391,398 7,029,812 7,723,790 8,478,864 8,238,824 8,006,883 7,787,781
48,335,555 48,335,555 33,635,555 32,900,555 32,128,805 31,318,468 30,467,613 28,524,216 26,483,649 24,341,054
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
33,829,927 36,015,401 38,354,655 40,867,818 43,579,472 46,520,933 49,719,655 53,127,809 56,758,406 60,622,842
7,585,701 7,408,963 7,267,895 7,176,721 7,153,819 7,223,998 7,407,874 7,650,438 7,957,167 8,331,540
22,091,329 19,729,117 17,248,796 14,644,458 11,909,903 9,550,045 9,893,856 10,306,829 10,795,087 11,362,682
14,000,000
27,000,000
Policy Premium
30 Year Summary *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Cum. Payments 14,000,000 Cum. Net Policy Loan Proceeds 27,000,000 Surrender Value 8,331,540 Death Benefit 11,362,682
Page 1 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Illustration of Policy Values Funding the Plan
TBD Interest Rate 7.09%
(1)
Initial Premium 2,000,000
(2) Net Policy Loan Proceeds
Initial Policy Death Benefit 48,335,555
(3) Year End Accum Value*
(4) Year End Surrender Value*
(5) Death Benefit
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
64,733,859 69,104,852 73,748,329 78,674,943 83,898,417 89,425,866 95,263,065 101,415,029 107,882,626 114,818,904
8,777,993 9,301,193 9,904,486 10,588,908 11,358,081 12,208,513 13,134,844 14,130,397 15,183,762 16,435,098
12,014,686 12,756,435 13,591,902 14,522,655 15,553,001 16,679,806 17,897,997 19,201,148 20,577,893 21,027,854
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
122,299,608 130,422,604 139,312,298 149,115,292 159,626,623 170,899,500 182,991,240 195,963,595
17,946,611 19,801,957 22,110,619 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
21,615,599 22,410,409 23,503,742 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
14,000,000
45,000,000
Policy Premium
48 Year Summary *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Cum. Payments Cum. Net Policy Loan Proceeds Surrender Value Death Benefit
Page 2 of 15
14,000,000 45,000,000 40,579,339 40,579,339
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Summary Employer's Tax Bracket 34.00%
Executive's Tax Bracket 39.60%
TBD Interest Rate 7.09%
Initial Policy Death Benefit 48,335,555
Assumed Long-Term AFR for All Years Illustrated 1.90%
Employer (1)
(2)
Net Payment*
Promissory Note Interest Rate 1.90%
Executive
Cumulative Net Payments
(3) Portion of Col. (2) Due as a Loan Receivable
(4)
(5)
Cumulative Charge to Earnings (2) - (3)
(6) (7) Net Policy Loan Proceeds Executive's Available for Share of Net Retirement Accum Payment* Income Value**
(8)
(9)
Executive's Share of Surrender Value**
Executive's Share of Death Benefit
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
1,974,920 1,949,840 1,924,760 1,899,680 1,874,600 1,849,520 1,824,440 -175,560 -175,560 -175,560
1,974,920 3,924,760 5,849,520 7,749,200 9,623,800 11,473,320 13,297,760 13,122,200 12,946,640 12,771,080
2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 14,000,000 14,000,000 14,000,000
-25,080 -75,240 -150,480 -250,800 -376,200 -526,680 -702,240 -877,800 -1,053,360 -1,228,920
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
0 0 0 0 0 0 0 0 0 0
-340,004 -560,134 -655,039 -614,861 -426,393 -75,018 454,008 1,153,487 1,907,727 2,723,570
-2,000,000 -2,302,148 -2,361,768 -2,285,821 -2,060,618 -1,672,508 -823,984 194,993 1,268,731 2,404,072
46,335,555 44,335,555 42,335,555 40,335,555 38,335,555 36,335,555 34,335,555 34,335,555 34,335,555 34,335,555
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
-175,560 -175,560 -14,000,000 0 0 0 0 0 0 0
12,595,520 12,419,960 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
14,000,000 14,000,000 0 0 0 0 0 0 0 0
-1,404,480 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
266,000 266,000 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 1,000,000 1,000,000 1,000,000
3,947,350 5,262,349 20,503,739 21,826,398 23,236,562 24,740,877 26,346,806 28,050,163 29,858,789 31,782,282
3,947,350 5,262,349 5,803,739 6,391,398 7,029,812 7,723,790 8,478,864 8,238,824 8,006,883 7,787,781
34,335,555 34,335,555 33,635,555 32,900,555 32,128,805 31,318,468 30,467,613 28,524,216 26,483,649 24,341,054
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
33,829,927 36,015,401 38,354,655 40,867,818 43,579,472 46,520,933 49,719,655 53,127,809 56,758,406 60,622,842
7,585,701 7,408,963 7,267,895 7,176,721 7,153,819 7,223,998 7,407,874 7,650,438 7,957,167 8,331,540
22,091,329 19,729,117 17,248,796 14,644,458 11,909,903 9,550,045 9,893,856 10,306,829 10,795,087 11,362,682
2,394,000
13,000,000
-1,580,040
Executive's 30 Year Summary Living Values †Death Benefit TBD: Less Loan Repayment Due Employer: Equals Executive's Net Value: Plus Cumulative After Tax Cash Flow: Equals Executive's Total Net Value:
*See appropriate Net Payment Analysis for details. **This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
8,331,540 0 8,331,540 13,000,000 21,331,540
11,362,682 0 11,362,682 13,000,000 24,362,682
†Surrender value less employer's loans plus cum. net policy loans.
Page 3 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Summary Employer's Tax Bracket 34.00%
Executive's Tax Bracket 39.60%
TBD Interest Rate 7.09%
Initial Policy Death Benefit 48,335,555
Assumed Long-Term AFR for All Years Illustrated 1.90%
Employer (1)
(2)
Net Payment*
Promissory Note Interest Rate 1.90%
Executive
Cumulative Net Payments
(3) Portion of Col. (2) Due as a Loan Receivable
(4)
(5)
Cumulative Charge to Earnings (2) - (3)
(6) (7) Net Policy Loan Proceeds Executive's Available for Share of Net Retirement Accum Payment* Income Value**
(8)
(9)
Executive's Share of Surrender Value**
Executive's Share of Death Benefit
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
64,733,859 69,104,852 73,748,329 78,674,943 83,898,417 89,425,866 95,263,065 101,415,029 107,882,626 114,818,904
8,777,993 9,301,193 9,904,486 10,588,908 11,358,081 12,208,513 13,134,844 14,130,397 15,183,762 16,435,098
12,014,686 12,756,435 13,591,902 14,522,655 15,553,001 16,679,806 17,897,997 19,201,148 20,577,893 21,027,854
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
122,299,608 130,422,604 139,312,298 149,115,292 159,626,623 170,899,500 182,991,240 195,963,595
17,946,611 19,801,957 22,110,619 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
21,615,599 22,410,409 23,503,742 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
2,394,000
31,000,000
-1,580,040
Executive's 48 Year Summary Living Values †Death Benefit TBD: Less Loan Repayment Due Employer: Equals Executive's Net Value: Plus Cumulative After Tax Cash Flow: Equals Executive's Total Net Value:
*See appropriate Net Payment Analysis for details. **This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
40,579,339 0 40,579,339 31,000,000 71,579,339
40,579,339 0 40,579,339 31,000,000 71,579,339
†Surrender value less employer's loans plus cum. net policy loans.
Page 4 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Employer's Net Payment Analysis
Employer's Tax Bracket 34.00%
(1)
(2)
Beginning of Year Loan to Executive
Assumed Long-Term AFR for All Years Illustrated 1.90%*
(3)
(4)
Loan Repayment from Executive
Cumulative Loan to Executive
Loan Interest Received from Executive
Promissory Note Interest Rate 1.90%
(5) After Tax Loan Interest Received from Executive
(6)
(7)
(8)
Employer's Employer's Net Annual Payment Charge to (1) - (2) - (5) Earnings
Employer's Cumulative Charge to Earnings
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0 0 0
0 0 0 0 0 0 0 0 0 0
2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 14,000,000 14,000,000 14,000,000
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
25,080 50,160 75,240 100,320 125,400 150,480 175,560 175,560 175,560 175,560
1,974,920 1,949,840 1,924,760 1,899,680 1,874,600 1,849,520 1,824,440 -175,560 -175,560 -175,560
-25,080 -50,160 -75,240 -100,320 -125,400 -150,480 -175,560 -175,560 -175,560 -175,560
-25,080 -75,240 -150,480 -250,800 -376,200 -526,680 -702,240 -877,800 -1,053,360 -1,228,920
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
0 0 0 0 0 0 0 0 0 0
0 0 14,000,000 0 0 0 0 0 0 0
14,000,000 14,000,000 0 0 0 0 0 0 0 0
266,000 266,000 0 0 0 0 0 0 0 0
175,560 175,560 0 0 0 0 0 0 0 0
-175,560 -175,560 -14,000,000 0 0 0 0 0 0 0
-175,560 -175,560 0 0 0 0 0 0 0 0
-1,404,480 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
14,000,000
14,000,000
2,394,000
1,580,040
-1,580,040
-1,580,040
The promissory note between the employer and the executive is presumed to be secured by a collateral assignment of the policy. *See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 5 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Employer's Net Payment Analysis
Employer's Tax Bracket 34.00%
(1)
(2)
Beginning of Year Loan to Executive
Assumed Long-Term AFR for All Years Illustrated 1.90%*
(3)
(4)
Loan Repayment from Executive
Cumulative Loan to Executive
Loan Interest Received from Executive
Promissory Note Interest Rate 1.90%
(5) After Tax Loan Interest Received from Executive
(6)
(7)
(8)
Employer's Employer's Net Annual Payment Charge to (1) - (2) - (5) Earnings
Employer's Cumulative Charge to Earnings
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
-1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040 -1,580,040
14,000,000
14,000,000
2,394,000
1,580,040
-1,580,040
-1,580,040
The promissory note between the employer and the executive is presumed to be secured by a collateral assignment of the policy. *See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 6 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's Net Payment Analysis
Executive's Tax Bracket 39.60%
(1)
(2)
Policy Premium Due by Executive
Beginning of Year Loan from Employer
Assumed Long-Term AFR for All Years Illustrated 1.90%*
Promissory Note Interest Rate 1.90%
(3) Net Policy Loan Proceeds Available for Loan Repayment
(4)
(5)
(6)
(7)
Loan Repayment
Cumulative Loan Due Employer
Loan Interest Paid to Employer
Executive's Net Payment**
(8) Net Policy Loan Proceeds Available for Retirement Income
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0 0 0
2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 14,000,000 14,000,000 14,000,000
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
0 0 0 0 0 0 0 0 0 0
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 14,000,000 0 0 0 0 0 0 0
0 0 14,000,000 0 0 0 0 0 0 0
14,000,000 14,000,000 0 0 0 0 0 0 0 0
266,000 266,000 0 0 0 0 0 0 0 0
266,000 266,000 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 1,000,000 1,000,000 1,000,000
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
14,000,000
14,000,000
14,000,000
14,000,000
2,394,000
2,394,000
13,000,000
The promissory note between the employer and the executive is presumed to be secured by a collateral assignment of the policy.
*See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration.
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
**Column (7) = Columns (1) - (2) - (3) + (4) + (6)
Date: 08/22/2016
Page 7 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's Net Payment Analysis
Executive's Tax Bracket 39.60%
(1)
(2)
Policy Premium Due by Executive
Beginning of Year Loan from Employer
Assumed Long-Term AFR for All Years Illustrated 1.90%*
Promissory Note Interest Rate 1.90%
(3) Net Policy Loan Proceeds Available for Loan Repayment
(4)
(5)
(6)
(7)
Loan Repayment
Cumulative Loan Due Employer
Loan Interest Paid to Employer
Executive's Net Payment**
(8) Net Policy Loan Proceeds Available for Retirement Income
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
14,000,000
14,000,000
14,000,000
14,000,000
2,394,000
2,394,000
31,000,000
The promissory note between the employer and the executive is presumed to be secured by a collateral assignment of the policy.
*See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration.
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
**Column (7) = Columns (1) - (2) - (3) + (4) + (6)
Date: 08/22/2016
Page 8 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Promissory Note Analysis
Assumed Long-Term AFR for All Years Illustrated 1.90%**
Promissory Note Interest Rate 1.90%
Loan Collateral (1)
(2) (3) (4) Annual Annual Loan Loan Interest Loan Interest Repayments Paid from Paid from from Non-Policy Policy Non-Policy Values Values Values
Beginning of Year Loan to Executive
(5) Loan Repayments from Policy Values
(6)
(7)
(8)
(9)
Year End Cumulative Loan to Executive
Year End Policy Accum Value*
Year End Policy Surrender Value*
Year End Policy Death Benefit*
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 0 0 0
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 14,000,000 14,000,000 14,000,000
1,659,996 3,439,866 5,344,961 7,385,139 9,573,607 11,924,982 14,454,008 15,153,487 15,907,727 16,723,570
0 1,697,852 3,638,232 5,714,179 7,939,382 10,327,492 13,176,016 14,194,993 15,268,731 16,404,072
48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555 48,335,555
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
0 0 0 0 0 0 0 0 0 0
266,000 266,000 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 14,000,000 0 0 0 0 0 0 0
14,000,000 14,000,000 0 0 0 0 0 0 0 0
17,947,350 19,262,349 20,503,739 21,826,398 23,236,562 24,740,877 26,346,806 28,050,163 29,858,789 31,782,282
17,947,350 19,262,349 5,803,739 6,391,398 7,029,812 7,723,790 8,478,864 8,238,824 8,006,883 7,787,781
48,335,555 48,335,555 33,635,555 32,900,555 32,128,805 31,318,468 30,467,613 28,524,216 26,483,649 24,341,054
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
33,829,927 36,015,401 38,354,655 40,867,818 43,579,472 46,520,933 49,719,655 53,127,809 56,758,406 60,622,842
7,585,701 7,408,963 7,267,895 7,176,721 7,153,819 7,223,998 7,407,874 7,650,438 7,957,167 8,331,540
22,091,329 19,729,117 17,248,796 14,644,458 11,909,903 9,550,045 9,893,856 10,306,829 10,795,087 11,362,682
14,000,000
2,394,000
0
0
14,000,000
**See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration. *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 9 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Promissory Note Analysis
Assumed Long-Term AFR for All Years Illustrated 1.90%**
Promissory Note Interest Rate 1.90%
Loan Collateral (1)
(2) (3) (4) Annual Annual Loan Loan Interest Loan Interest Repayments Paid from Paid from from Non-Policy Policy Non-Policy Values Values Values
Beginning of Year Loan to Executive
(5) Loan Repayments from Policy Values
(6)
(7)
(8)
(9)
Year End Cumulative Loan to Executive
Year End Policy Accum Value*
Year End Policy Surrender Value*
Year End Policy Death Benefit*
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0 0
64,733,859 69,104,852 73,748,329 78,674,943 83,898,417 89,425,866 95,263,065 101,415,029 107,882,626 114,818,904
8,777,993 9,301,193 9,904,486 10,588,908 11,358,081 12,208,513 13,134,844 14,130,397 15,183,762 16,435,098
12,014,686 12,756,435 13,591,902 14,522,655 15,553,001 16,679,806 17,897,997 19,201,148 20,577,893 21,027,854
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
122,299,608 130,422,604 139,312,298 149,115,292 159,626,623 170,899,500 182,991,240 195,963,595
17,946,611 19,801,957 22,110,619 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
21,615,599 22,410,409 23,503,742 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
14,000,000
2,394,000
0
0
14,000,000
**See the accompanying supplemental report entitled "Loan-Based Split Dollar (Preface)" for remarks regarding loan interest rates used in this illustration. *This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 10 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Employer's 48 Year Analysis
$15,000,000
$10,000,000
$5,000,000
$0
$0
$-1,580,040 $-1,580,040 $-5,000,000 10
20
30
40
Years At Year 48 Employer's Cumulative Net Payments
$-1,580,040
Cumulative Charge to Earnings
$-1,580,040
Loans Due Employer from Executive
Date: 08/22/2016
Page 11 of 15
$0
50
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's 48 Year Analysis
$60,000,000
$45,000,000 $40,579,339 $40,579,339
$31,000,000
$30,000,000
$15,000,000
$2,394,000
$0
10
20
30
40
50
Years At Year 48 Executive's Cumulative Net Payments Executive's Cumulative Net Loan Proceeds 1
1
$31,000,000
Executive's Surrender Value Less Cum. Loan Due Employer
$40,579,339
Executive's Death Benefit Less Cum. Loan Due Employer
$40,579,339
For retirement income.
Date: 08/22/2016
$2,394,000
Page 12 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's Personal Report
Executive's Tax Bracket 39.60%
TBD Interest Rate 7.09%
Valued Coach Costs (1)
Valued Coach Values (3)
(4)
(5)
Executive's Net Payment*
(2) Net Policy Loan Proceeds Available for Retirement Income
Executive's Share of Accum Value**
Executive's Share of Surrender Value**
Executive's Share of Death Benefit
Year
Male Age
1 2 3 4 5 6 7 8 9 10
52 53 54 55 56 57 58 59 60 61
38,000 76,000 114,000 152,000 190,000 228,000 266,000 266,000 266,000 266,000
0 0 0 0 0 0 0 0 0 0
-340,004 -560,134 -655,039 -614,861 -426,393 -75,018 454,008 1,153,487 1,907,727 2,723,570
-2,000,000 -2,302,148 -2,361,768 -2,285,821 -2,060,618 -1,672,508 -823,984 194,993 1,268,731 2,404,072
46,335,555 44,335,555 42,335,555 40,335,555 38,335,555 36,335,555 34,335,555 34,335,555 34,335,555 34,335,555
11 12 13 14 15 16 17 18 19 20
62 63 64 65 66 67 68 69 70 71
266,000 266,000 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 1,000,000 1,000,000 1,000,000
3,947,350 5,262,349 20,503,739 21,826,398 23,236,562 24,740,877 26,346,806 28,050,163 29,858,789 31,782,282
3,947,350 5,262,349 5,803,739 6,391,398 7,029,812 7,723,790 8,478,864 8,238,824 8,006,883 7,787,781
34,335,555 34,335,555 33,635,555 32,900,555 32,128,805 31,318,468 30,467,613 28,524,216 26,483,649 24,341,054
21 22 23 24 25 26 27 28 29 30
72 73 74 75 76 77 78 79 80 81
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
33,829,927 36,015,401 38,354,655 40,867,818 43,579,472 46,520,933 49,719,655 53,127,809 56,758,406 60,622,842
7,585,701 7,408,963 7,267,895 7,176,721 7,153,819 7,223,998 7,407,874 7,650,438 7,957,167 8,331,540
22,091,329 19,729,117 17,248,796 14,644,458 11,909,903 9,550,045 9,893,856 10,306,829 10,795,087 11,362,682
2,394,000
13,000,000
*Assuming all parties follow the procedure outlined on the Executive's Net Payment Analysis page.
Note: Any negative values represent the unsecured portion of the premium loans.
**This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 13 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's Personal Report
Executive's Tax Bracket 39.60%
Valued Coach Costs (1)
TBD Interest Rate 7.09%
Valued Coach Values (3)
(4)
(5)
Executive's Net Payment*
(2) Net Policy Loan Proceeds Available for Retirement Income
Executive's Share of Accum Value**
Executive's Share of Surrender Value**
Executive's Share of Death Benefit
Year
Male Age
31 32 33 34 35 36 37 38 39 40
82 83 84 85 86 87 88 89 90 91
0 0 0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
64,733,859 69,104,852 73,748,329 78,674,943 83,898,417 89,425,866 95,263,065 101,415,029 107,882,626 114,818,904
8,777,993 9,301,193 9,904,486 10,588,908 11,358,081 12,208,513 13,134,844 14,130,397 15,183,762 16,435,098
12,014,686 12,756,435 13,591,902 14,522,655 15,553,001 16,679,806 17,897,997 19,201,148 20,577,893 21,027,854
41 42 43 44 45 46 47 48
92 93 94 95 96 97 98 99
0 0 0 0 0 0 0 0
1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000
122,299,608 130,422,604 139,312,298 149,115,292 159,626,623 170,899,500 182,991,240 195,963,595
17,946,611 19,801,957 22,110,619 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
21,615,599 22,410,409 23,503,742 25,003,528 28,259,272 31,913,781 36,006,235 40,579,339
2,394,000
31,000,000
*Assuming all parties follow the procedure outlined on the Executive's Net Payment Analysis page.
Note: Any negative values represent the unsecured portion of the premium loans.
**This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Loan arrangement presumed terminated in year 13; however, the employer's loans must be repaid no later than the date specified in the plan documentation.
Page 14 of 15
Loan-Based Split Dollar Funded With TBD Presented By: Daniel P. Wachs
Insured: Valued Coach University of Michigan
Executive's Matching Values at Age 99 (Year 48)
Male Age 52
Executive's Tax Bracket 39.60%
TBD Interest Rate 7.09%
Gross Interest Rate Required on a Hypothetical Taxable Investment to Match the Executive's Share of TBD Policy Values over 48 Years (Executive's Net Payments Used as the Hypothetical Investment) Hypothetical Taxable Alternative To match Surrender Value of: $40,579,339 To match Death Benefit of: $40,579,339
22.01% 22.01%
To Match Surrender Value
To Match Death Benefit
$40,579,339
$40,579,339
22.01% Required
22.01% Required
Income Tax Considerations 1. Hypothetical Taxable Investment: Interest is taxed as earned. 2. TBD: a. Death Benefit including available cash value component is income tax free. b. Loans are income tax free as long as the policy is kept in force. c. Withdrawals and other non-loan policy cash flow up to cost basis (not in violation of IRC Section 7702) are income tax free as a return of premium. d. Cash values shown assume most favorable combination of b and/or c.
*This illustration assumes the nonguaranteed values shown continue in all years. This is not likely, and actual results may be more or less favorable. This illustration is not valid unless accompanied by a proposal from TBD.
Date: 08/22/2016
Page 15 of 15