EFTA02707619.pdf

Summary of Coverage Individual Life Insurance Coverage-on Leon Black- • Split-Dollar Entity: AIF IV Management, Inc. • Policy owner: Norman Brownstein, Trustee under the Leon D. Black Insurance Trust N1 dated September 13, 1999. • These policies' register dates are September 1999. —Wettish Siffli-rtisthit 4410)s et Normal Annual Account Value fastrander Value ' AtkanCt" Carrier Policy Number Cbverage Premium 12-31-12 12-ii -12 112-31-12 Prudential VI 016 844 $30,000,000 $502,335 $4,504,232.62 $4.504,232.62 $6,108,212 AXA Equitable 49 232 126 $15.000,000 $264,894 $2,053,540.91 $2,019,619.09 $3,172,980 Security Life ofDenver 610014742 £,000 000 96.380 $584.170.30 5_576.482.80 $1.180,138 Total — Individual Life Insurance Coverage 00.000,000 5863.609 $7,141,943.83 $7,100,334.51 . S10,461,338 ', Second-to-Die, Wealth Transfer Life Insurance Coverage on Leon & Debra Blaek • Split-Dollar Entity: AIF IV Management. Inc. • Policy owner: Norman Brownstein, Trustee under the Leon D. Black Insurance Trust #2 dated September 13, 1999. • These policies, other than the Prudential policy, have a register date of April 28. 1999 in order to save Debra's insurance age. (Prudential utilizes "current age" vs. "closest age", therefore backdating was not necessary and the regis er date for the Prudential policy is 9/13/99.) Net Cash Split-Dollar Amount or Normal Annual Account Value Surrender Value Advance Carrier Policy Number average? Premium 12-31-12 12-31-12 1241-12 Prudential VO 001 958 $20,000,000 $179,595 S2,727,667.92 $2,727,667.92 S 2.304.955 New York Life 75 500 858 $20,000,000 S196.080 S3,081,046.27 $3,073,203.07 S 2,514,929 Pacific Life VP 6089 7390 $ 5.010.000 $ 33.218 $457,928.92 $457,928.92 S 424,480 John Hancock 20 039 301 $30.000,000 $359,022 $5,040,643.54 $5,040.643.54 S 4,622,974 AXA Equitable 49 232 123 664 9 4 2.638.569.80 2 627 947 Total Second-to-Dle Life Insurance Coverage $100,010,000 $973,161 $13,972,252.99 513,938,013.21 ft2,495,28S LOC9020-Ld-Vid3 This information has been takenfrom sources which we believe to be reliable. bra there is no guarantee as to its accuracy. It is not a replacementfor any account statement or transaction confirmation issued by the provider. Please compare this document to your custodial statementfor accuracy as applicable. Please refer to the prospectus and most recent annual report for further information. Transcription errors do not affect actual policy values. qvh t oneCinnat.b.1:00.1 s4.V.Ja.ben•e• I Ai EFTA02707619  EFTA02707620 rpm ryant Group INCORPORATED Roger E. Cammon President & Co-Chief Executive Officer 701 Market Stint. Sul* 1200 SL Louis. Missend ssum (5141 211.8068 (314) 231-4850 fax December 7, 2012 PERSONAL & CONFIDENTIAL Ms. Eileen Alexanderson Black Family Partners 9 West 57th Street, 14th Floor New York, NY 10019 via email Leon Black Trust-Owned Life Insurance Coverage 2012 Reportable Income & Annual Gift Dear Eileen: Annually, Leon must report or contribute the economic benefit of his Split-Dollar life insurance plans as income for income tax purposes. This same amount represents the annual value of the gift for gift tax purposes. The following page outlines the reportable income and annual gift on a policy by policy basis. If you have any questions concerning this information, please do not hesitate to contact me. Respectful I y, Rogev'E. Cammon Enclosure cc: Mr. Thomas Turrin Gay are AXA WWI pat* Menne enough AXA knees. at 6 cis DatiCAMMILmiledincos4Vepnal2REC On The maned Individual offers securion and lavestrons arhavy recoreuhrough AXA Adorns. LLC (NY. NY 2133144600k member f INRA. WC, see offers annoy and inesnom pothole through AXA Network. LLC Aed Os soncluria Bryan Group. Inc is no' owned Or named by AXA Ashmore n AXA Network. Wynne Offen through IA makings Securities, Inc. A Repined Broker/Dealer. Memoir FINRNSIPC Bryant Group. Inc re ondependeny owned and operant Ian CsairCAMOINteprierbklannOr ina< and EFTA_R1_02 06302  EFTA02707621 INDIVIDUAL LIFE INSURANCE COVERAGE ON LEON BLACK ) Split-Dollar Entity: A 1E, IV Management, Inc. ) Policy owner: Norman Brownstein, Trustee under the Leon D. Slack Insurance Trust #1 dated September 13, '999. ) These policies' register dates are September 1999. • POLICY AMOUNT OF ANNUAL REGISTER REPORTABLE CARRIER NUMBER COVERAGE PREMIUM DATE INCOME & GIFT AMOUNT Prudential VI 016 844 $30,000,000 ,4XA uitable 49 232 126 $15,000 000 $264 894 9/13/99 $25,191 Security Lye of 610014742 $5.000.000 $96380 9/20/99 $8,360 Denver Total - Individual Life $50,000,000 $863,609 $84,964 Insurance Coverag e SECOND-TO-DIE, WEALTH TRANSFER LIFE INSURANCE COVERAGE ON LEON & DEBRA BLACK Split-Dollar Entity: All, IV Management, Inc. ) Policy owner: Norman Brownstein, Trustee under the Leon D. Black Insurance Trust #2 dated September 13, 1999. ) These policies, other than the Prudential policy, have a register date of April 28, 1999 in order to save Debra's insurance age. (Prudential utilizes "current age" vs. "closest age", therefore backdating was not necessary.) - - POLICY AMOUNT OF ANNUAL REGISTER REPORTABLE CARRIER NUMBER COVERAGE PREMIUM DATE INCOME & GIFT AMOUNT Prudential VO RH 958 $20,000,000 $179,595 9/13/99 $3,430 New York Life 75 500 858 $20,000,000 $196,080 4/28/99 $4,456 Pacific Life VP 6089 7390 $5,000,000 $33,218 4/28/99 $860 John Hancock 20 039 301 $30,000,000 $359,022 4/28/99 $5,445 ,4XA Equitable 49 232 123 $25 000,40 $205.244 4/28/99 $1977 Total Second-to-Die Life S100,000,000 $973,161 $19,168 Insurance Coverage EFTA_R1_02106303  EFTA02707622 Leon Black Trust-Owned, Split-Dollar Life Insurance Coverages Annual Review Meeting November 30, 2011 I. Review Current Projection of Split-Dollar Life Insurance Plans - Summary Page (III-I from October 2011 Review) attached. II. Explore using another, existing irrevocable trust or other entity to purchase the policies and terminate the Split- Dollar arrangement. - Attached Comparison: Continue Current Split-Dollar Plan Versus Another Trust Purchases the Policies and Split-Dollar Plan Terminated. • Second-to-Die policies composite comparison. • Individual policies on Leon composite comparison. III. Issues to Consider in the above referenced transaction. 11 %kn., Don lferanAA itrutOL.ct l000ltc • Ilcc 11.3.3.11,,,c ,doc Bryant Group ,NconpoRAT,D EFTA_R1_02106304  SPLIT-DOLLAR PLANS - 2011 In Force Update LEON and DEBRA BLACK ORIGINAL PROJECTIONS 2010 PROJECTIONS 2011 PROJECTIONS 98 10.00% ityPolleilical Gross Rate 09 9.00% Hypothelervil Gross Rate o 9.00% Hypothetical Gross Rate (0 6.00% Hypothetical Gross Role of Return 8 Current Charges of Return & Current Charges 04 Return 8 Current Charges of Return 8 Current Charges SECOND-TO-DIE SPLIT-DOLLAR PLANS NOOR3899.819 AM Poles Wien ClAntaltrobleyatialGately Progign Concur, Proem, Company PTOOKIJO ifraArl DA» Ant.> largo Prorate ComPalY Premium ~ay Paint Nam" POyMOrt Puhvuurn Amax femme AolCy ~eV Conrvcis Premon Ven Reopen ,ku vows Amery CorOP. ram)* CO.Por NY yarn RØ Vru YANA A~Avy IMP MarormIrvi Majestic Venable Erode Orents pie Protection 98 Potty 820 039 301 30.000.000 359.022 12 2051 21 2020 Ottrveror ponep POPSY h•Y• •14 loo- 19 2018 ion 22 2021 . Thal«. parnoni. OM, b øst Rom 120191 Qom (20201 AXA Equilrolo Surviterstep 25.000000 20L5.246 16 2015 cem Ace P.m A. no?••••••ip Policy II 49 232 123 29 2028 26 2025 33 2032 OttOO OK. • Thrtrro pm,µrn KIO UCY0 120111 C10271 (2024/ 13031) New Yost UN's Survivorship VUL Policy I 75 500 854 20.000,000 196,080 17 2016 32 2031 Crowing Wreaks. Y. 28 2027 40 2039 Oi4is"o• oe. • ThrPOO tOtOMPIO MO '0 Oafs <3015) lØ loon) 80361 Pwrfentlars Senievorthet Preferred 20.000.000 179.595 19 2018 O•••••••• 36 2035 OSIN Mug, goo Doug. hp Policy å VO 001 958 •••) 32 2031 43 At Death t0.• tog- • I viehe pun um{ ~I »OM. 1201N (2034) MOM Pacific Ute's 541.1Estet. 5,010,000 33.218 18 2017 Dolts • Ng onto ••• Ae• PrOSOKVf PolicyI VP 6089 7390 Iir 29 2028 27 2026 35 2034 ~Aye es niescan roman Ado been (20271 (2M51 R0331 TOTALS: 100.010,000 973.161 INDIVIDUAL SPLIT-DOLLAR PLANS (Leon Black) %oho". Canaan? Premiere Preen Anna, CO~N COgYany Progium Cargo., FiltIlOcalte Parson, came Paleart PvFenx Ammon POKY Iteralc Came, Porn," Ytes Can. (Whew Amerman Carl. Roprverf Fe Veen VOW Yaps RØ UN. Yhar. Amatory tae Prudential's WI tiara Ap Ingo hfg pokey I V1016 844 30,000,000 502 335 25 2024 35 M Dtfilh wt. CO 33 Al Du L 38 Ai Drool ' Lir e I wethe pgenet.w cog wt 0033i (20331 (20311 I2036; AXA Erfuluble9 Incentive Lde broth A. 15.000,000 264.8111 24 2023 33 Al DO.Ilh ~Ai Ap Policy9 49 732 121 16 1.• 29 Awes L it AG' 31 Al Demo ' pl lugh, {amigos peg lo Ogg (2021) 00311 not) (20291 INGlootCullty UIaY firsInne 5.01)0.000 teal Aq• Policy S 610014742 98.380 25 Al Nate 29 Poky I apt. Isel M 31 Potty UMW' "1"y‘yAr 29 Poky Lepte• ""(17•Ali Two'. ~lb ~I 802131 (2077) an 120271 TOTALS: L 50.000.000 Mai GRANO TOTAL 150,010.0003 1133, MMI SO£90 L Z0- 1.WV.I.33 worn, mange Ile etroasecy is 38 years (Age rot tor,unWelMøere9abyWLepnYApN,rAsq\•opwSpMaØPbn,Ntipn.aWnØtneygbpa teaMkAkaavuYpwanpmeeeepllrw.Wpenummyrnsn:..syteraeuHW TS ~cane mum mourn is pea Sar 39 pa nee mama»ihe mcy io iscrea Age 98 Inro man. Iht KPKPPOP "W ad LIK" MP" , .~$ 1. lo SPADOW Piån deli" ugh alb ~wog In* meal prawn pet. nay be ecnorveaci • Pm poky wags io polg, you 32 Mots Aori 791roam 11p2o 10•0140 anymphAni IBM PPONIPII POkaled WOOS poet" Pays; rifle» ~Wily borong ho pow, hut, pa ~rya 00~1,» L.C.1% sywrnoylflperiny (Ago MI LMpran),ØTa PIWYOty•OnOt. ither charges io the SWOON«Phis Peron nay lari powdered • The ~Mery frock" year 39PAM Age tiN bum wen ihe weeded "umpteen an! prong he «Mane met hugooh CorgAllh, Wen he Puhl olug~ olio. (1~ lh SpliGobar Plan errson maybe conirees0 • The ',Maud smog oft~b pad 1.31yen IMnpaYYn11ØybLwM1agV 1 1a warm:nee contra» ~Leone roe 51 •KKOPIt DIM SCJI ,Dolai Peale ~sr. such is rwe»no ~Jr, rarbe, " no. tr, ..yerro • 75•rotce tro••• ~Kt 315 KParaP•99 Mk , " ~Ob. sPeen°4 PO~P. rofoi nfro•• a'ne" innrv' thronvicg roro plaro ~owe. Oro dlr.?» 101he SpADOS Plan clouoo ru. -onto*, c •mimnrororninim - EFTA02707623  EFTA02707624 8.00% Gross Rate of Return Assuming 800% Nyootheital Gross Rate 9 Return 8 Curren Policy Chows SECOND-TO-DIE SPLIT-DOLLAR PLAN MR. & MRS. LEON BLACK S100,010,000 COMBINED Second-To-Die Death Benefit Coverage - 5 SVUL Policies Based Upon a 1973.161 Normal Annual Premium Payment ANOTHER TRUST PURCIASWSIFIIIBLIollir " CONTINUE CURRENT SPLIT-DOLLAR PLAN TERMINATES THE SPLIT-DOLLAR PLAN A ON EXECUTIVE CORPORATION EXF Cu I- I VF Trim Death BeneM Arena] Gift. Trust Osalh Bonen: Annual GM+ Ns her AMY] Premium • Governor Annual Premium . Meaning Trusi Corner Incoming Trust Recovery Recovery Ye. A96 Ace Death Proceeds (hoar Proceeds 1999 al 44 968.500 99.889.018 4.661 968,500 99.889.018 9681 2000 49 45 967.740 99.699.252 5.421 967.740 99,699,252 5.421 2001 50 46 966.850 90,443.309 6.311 966.850 99.443,309 6.311 2002 51 47 965.777 99,179697 7.384 965,777 99,179,897 7.384 2003 52 48 964,535 99.617.969 8,626 964,535 99.617.969 8,626 2005 63 49 963.035 99.668.704 10,126 963.035 99.668.704 10.128 2005 54 50 963.035 100.780.647 10.126 963.035 100.780.647 10,126 2006 55 51 959,427 101,714.915 13,734 959.427 101,714,915 13,734 2007 56 52 957.201 100.927,298 15.960 957.201 100.927.298 15.960 2008 57 53 955,429 96,531,757 17,732 955.420 98.531,757 17.732 2009 58 54 953.867 99.570.544 19294 953.867 99.570,544 19.204 2010 59 55 955.300 101,213.274 17.861 955.300 101.213.274 17,861 2011 60 56 954,468 101.415.687 18.693 954.468 101,415,887 18,693 2012 61 57 963,784 101,867.381 19.377 (11,677.665) 100.010.000 614.139 2 2013 62 58 953.073 102.369,722 20.068 100.010.000 614.139 2014 63 59 952.297 102.930.414 20.864 100,010,000 614,139 2015 64 60 951,602 103.556.668 21.559 100.010.000 570.587 2016 66 61 950.488 104.267.144 22.873 100.010.000 289.313 2017 66 62 949.482 105.045.370 23.879 100.010.000 207,695 2018 67 63 948,267 105.891919 24.894 100.016= 80,500 2019 68 64 946.983 106.825.414 26.178 100.010.030 2020 89 65 945.170 107,828,121 27.991 106016000 2021 70 66 (7,198,970) 108.286,697 20.561 100,010.= 2022 71 67 592.632 108.781.288 21,507 103.010.000 2023 72 ea 590.820 106.743,502 23.319 100,010,000 2024 73 69 589,661 108.187,069 24.478 100.010.630 2025 74 70 587.976 107.632.300 26.163 100.010,000 2026 75 71 586.630 107.078,888 27.509 100.010.000 2027 76 72 584.266 106.527,841 29,873 100.010,000 2028 77 73 581,303 106,979.755 32,636 • 100.010.000 2029 78 74 577.348 105,435,624 36.791 100,016000 2030 79 75 573.363 104,895.480 40.776 100610600 2031 80 76 566,545 104.362,152 47.594 100.010.000 2032 81 77 (6.173,393) 104,019,842 33,365 100,010.000 2033 82 78 370.368 103,682,692 38,525 100.010.000 2034 83 79 (774.052) 103,345,751 38.735 100.010.000 2035 84 80 330,903 103614.848 44.772 100.010,000 2036 86 01 324,539 102,690,309 51,136 100.010.000 2037 86 82 317.024 102,373.285 58.651 100,010.000 2038 87 83 305,471 102.067,814 70,204 101.063,258 2039 88 84 (7.406646) 101.935.862 47,643 102,614.407 2040 69 85 129.587 101.806,275 50.008 104,254.279 2041 90 86 121.122 101,685,153 58,473 105,984,401 2042 91 87 - 101.685.153 68.458 107,805,796 2043 92 88 • 101,685,153 79.866 109,717,955 2044 90 89 (7.219.807) (101,685,153) (109,717,955) 2045 94 90 IVPV of Corporals Cash Row • 6.00%4 9,408,100 9.554,801 Leon's GM Amount Leon's GM Amount 20126 Therea/19 1,178,643 RAUB Premium Payments: 2,990,492 Total Gin Amount 1,334,473 Total GM Amount 3,146,422 EXOCUTMIs Internet Rate of R011.1171' 17.43% Executive's imams, Rate ot Itreluns 12.26% Company recovers 511,677.665 of Ole S12.495.235 Spit.Dotat Advance. 2 In Vie even' One trusl has sutrtimi cash 10 meal the weal= payments. addtionat gifts may NOT be needed. 2eIs Os 806 PUN Content . • :os 3 EFTA_R1_02 06306  EFTA02707625 8.00% Gross Rate of Return Assuring 9.00'2 Hypothetical Gross Rate of Return & C.rintro Poky C:! INDIVIDUAL SPLIT-DOLLAR PLAN MR. LEON BLACK $50,000,000 COMBINED Individual Death Benefit Coverage - 3 VUL Policies Based Upon a $663,609 Normal Annual Premium Payment ANOTHER TRUST PURCHASES THE POLICIES & CONTINUE CURRENT SPLIT-DOLLAR PLAN TERMINATES THE SPLIT-DOLLAR PLAN CORPORATION EXECUTIVE CORPORATION EXECO1WE' Trust Death 8enek Annual GM • Trust Death Berets Annual Gilt • Annual Premium + Coverage Annual Premium + Coverage Incoming Trust Incoming Trust Recovery Recovery Year Age Death Proceeds Death Proceeds 1999 48 821,004 50,014,178 42,605 821,004 50,014.178 42,605 2000 49 819,621 48,961,588 43,988 819,621 48,961.588 43.988 2001 50 818242 48,466,260 45.367 818.242 48,466.260 45.367 2032 51 816.807 48.529,954 46.802 816,807 48,529.954 46,802 2003 52 814.613 48.342.621 48,996 814,613 48.342.621 48,996 2034 53 811.444 48.318,209 52.165 811,444 48,318.209 52,165 2005 54 811.444 48,283,943 52.165 811,444 48.283,943 52,165 2006 55 801.954 48.696,486 61.655 801,954 48.696.486 61.655 2007 56 797,040 47.238.285 66.5643 797.040 47.238.285 66,569 2038 57 790.702 46.399.128 72.907 790,702 46,399.128 72,907 2009 58 783.973 47,129.584 79.636 783,973 47,129.584 79.636 2010 59 789,957 46.932.191 73.652 789,957 46.932.191 73.652 2011 60 783.131 46,897,480 80,478 783.131 46.897.480 80.478 2012 61 777.169 40872.328 86,440 (6,718,901) 1 52.175.103 871.885 2013 62 770,687 46,851,150 92.922 52.405.417 871,885 2014 83 762,118 46$51,734 101,491 52.638.439 871.885 2015 64 752,689 46,869,569 110,720 52.873.112 871.855 2016 65 742.214 46.936.950 121.395 53,147.660 871,885 2017 66 730,594 47,019,778 133.015 53.424.398 871,885 2018 67 717,818 47.118,029 145,791 53,713.743 871,885 2019 68 704.233 47.221057 159.376 54,033,057 871,885 2020 69 689.262 47.296,829 174,347 54,356.256 871,885 2021 70 672,848 47,328,701 190,763 54.681.8913 871,885 2022 71 648,065 47,306.100 215.524 55.007.819 795,142 2023 72 621,140 47210,548 242.469 55.007.819 369,550 2024 73 590,917 47.043,260 272,692 55,007,819 104,656 2025 74 556.699 46.849,180 306,910 55,007,819 104,656 2026 76 518,663 46,679,170 344.946 55,007.819 104,656 2027 78 489.574 46.189.596 374,035 55,007.819 104,656 2028 77 393,344 42,540,144 373,885 55.007.819 104,656 2029 78 362,999 42.177.146 404.230 55.007.819 104,656 2030 79 229.364 41.947,781 438.479 55.007.819 104.656 2031 80 204,926 41.742,855 476,152 55,007,819 104,656 2032 81 177,132 41.565,723 517,941 55.007.819 104,656 2033 82 145,114 41.420.609 563,498 55.007.819 104,656 2034 83 106,752 41,311,857 613.095 55,007,819 104,656 2035 84 68.658 41.243,199 692,588 55,007.819 104,656 2038 85 24,862 41.218.337 843,782 55,007.819 104,656 2037 86 (20.460.853) (41,218,337 (55,007.819 2038 87 2039 88 NPV of Co:parer* Cash Flow 0 6.00%: 9,101,879 4,426,363 Leon's Gift Amount Leon's GM Amount 01 2012 & The ta/ler 7,996,488 Future Premium Payments: 11,244,063 2 Total Gilt Amount. 8,763,473 Total Gil Amount: 12,011,048 Esecutryal Mama) Rate of Return. 10.38% ExeanNies !Memel Rate of Return 7.73% I Company narawer$ 56.718,901 of the 310.459.932 SW -Dollar Advance. 2 in the event the trust has sulfdlenl cash to meet the premium payments. additional gills may NOT be needed. 4 kic/vessl Sidra Pun Gnaw sin o Ilt.• ?Oil Ss EFTA_R1_02106307  EFTA02707626 Review of $150 mil Life Insurance purchased through Bryant Group Rationale for the $50mi1 life insurance policy on Leon: Proceeds would be available at time of death to pay off some of indebtedness related to your art collection Rationale for the second-to-die policy on Debra and Leon: Proceeds would be available at time of death to pay estate taxes These policies are owned in irrevocable life insurance trusts (the Leon D Black Insurance Trusts #1 and #2). The policies purchased were set up in a split-dollar structure to minimize gift tax. The split-dollar entity, AIF IV Management Inc (now part of BFP), advances the annual premiums (in lieu of compensation to Leon). Fortunately, these variable universal life policies were purchased from top carriers who have fared relatively well in the recent financial crisis. Investments in various mutual funds were elected at the time of the purchase of the policies by John Hannan. The goal in a structure like this is to have the policy assets invested in a way that they will appreciate enough to have sufficient equity to allow for a cash withdrawal to both repay premiums previously advanced by the split dollar entity(at which point the split $ arrangement is terminated) and cover premiums going forward. The death benefit, when ultimately paid to the Trust, is income tax-free and estate tax free. In 2009, you paid gift tax on a reportable income and gift of $90,639 compared with the full amount of $1.8 mil of premiums paid annually which would otherwise have been considered gifts to the trusts. These policies were initiated in September 1999. You have paid in $19.5 mil in premiums