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EXHIBIT 10.5
EMPLOYMENT AGREEMENT
BETWEEN
XXXXXX LODGING COMPANY
AND
XXXXXX X. XXXXXX
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the ___ day of
___________, 1996, between Xxxxxx Lodging Company, an Ohio corporation (the
"Company"), and Xxxxxx X. Xxxxxx (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive as
its President and Chief Executive Officer and the Executive hereby accepts such
employment, on the terms and subject to the conditions hereinafter set forth.
(b) During the term of this Employment Agreement
and any renewal hereof (all references herein to the term of this Employment
Agreement shall include references to the period of renewal hereof, if any), the
Executive shall be and shall have the titles of President and Chief Executive
Officer and shall devote such business time and efforts to his employment as the
Executive deems appropriate and perform diligently such duties as are
customarily performed by Chief Executive Officers of publicly-held real estate
investment trusts, together with such other duties as may be reasonably
requested from time to time by the Board of Directors of the Company (the
"Board"), which duties shall be consistent with his positions as set forth above
and as provided in Paragraph 2.
2. TERM AND POSITIONS.
(a) Subject to the provisions for renewal and termination
hereinafter provided, the term of this Employment Agreement shall begin on the
date hereof and shall continue for calendar year 1997 and for the succeeding two
calendar years. As of January 1, 1998, and the first day of each succeeding
calendar year thereafter, such term automatically shall be extended for one (1)
additional calendar year, beginning with the calendar year commencing January 1,
2000, and thereafter, unless: (i) this Employment Agreement is terminated as
provided in Paragraph 5(a)(i) or 5(a)(ii) or (ii) either the Company or the
Executive shall give at least one calendar year's written notice of termination
of this Employment Agreement to the other at least 30 days before January 1,
1998, or the beginning of any such succeeding calendar year (for example, unless
such written notice of termination is given on or prior to December 2, 1997, the
term of this Employment Agreement automatically will be extended, effective
January 1, 1998, until December 31, 2000).
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(b) The Executive shall be entitled to serve as
the President and Chief Executive Officer of the Company. Without limiting the
general scope of the Executive's position: (i) the Executive shall not be
required to report to any single individual and shall report only to the Board
as an entire body, (ii) no other individual shall be elected or appointed as
Chief Executive Officer of the Company, (iii) the highest levels of other
executive officers of the Company shall report to no individual other than the
Executive, and (iv) no individual or group of individuals (including a committee
established or other designee appointed by the Board) shall have any authority
over or equal to the authority of the Executive in his role as Chief Executive
Officer, and neither the Company, the Board, nor any member of the Board shall
take any action which will or could have the effect of, or appear to have the
effect of, giving such authority to any such individual or group. The Executive
shall be entitled to the full protection of applicable indemnification
provisions of the articles of incorporation and code of regulations of the
Company, as the same may be amended from time to time, for his service as a
director, officer and employee of the Company.
(c) If:
(i) the Company materially changes the
Executive's duties and responsibilities as set forth in
Paragraph 1(b) or 2(b) without his consent (including, without
limitation, by violating any of the provisions of clause (i),
(ii), (iii) or (iv) of Paragraph 2 (b));
(ii) the Executive's place of employment or the
principal executive offices of the Company are moved to a
location more than fifty (50) miles from the geographical
center of Cleveland, Ohio;
(iii) there occurs a material breach by the
Company of any of its obligations under this Employment
Agreement (other than those specified in this Section 2(c))
that has not been cured in all material respects within ten
(10) days after the Executive gives notice thereof to the
Company;
(iv) there occurs a "change in control" (as
hereinafter defined) of the Company; or
(v) the Board or any nominating committee
thereof or committee performing a Board nomination function
fails to nominate the Executive for election to the Board in
connection with any shareholders' meeting to be held or action
to be taken for the election of directors;
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then the Executive shall have the right to terminate his employment with the
Company, but such termination shall not be considered a voluntary resignation or
termination of such employment or of this Employment Agreement by the Executive
but rather a discharge of the Executive by the Company without "cause" (as
defined in Paragraph 5(a)(ii)).
(d) The Executive shall be considered not to have
consented to any written proposal calling for a material change in his duties
and responsibilities unless he shall give written notice of his consent thereto
to the Board within fifteen (15) days after receipt of such written proposal. If
the Executive shall not have given such consent, the Company shall have the
opportunity to withdraw such proposed material change by written notice to the
Executive given within ten (10) days after the end of said fifteen (15) day
period.
(e) The term "change in control" means the first
to occur of the following events:
(i) any person or group of commonly
controlled persons owns or controls, directly or indirectly,
fifty percent (50%) or more of the voting control or value of
the equity interests in the Company following consummation of
the initial public offering of the Company's Common Shares,
without par value (the "IPO"); or
(ii) any person or group of commonly controlled
persons who own less than five percent (5%) of the voting
control or value of the equity interests in the Company during
the first 30 days following the consummation of the IPO
acquire ownership or control, directly or indirectly, of more
than twenty percent (20%) of the voting control or value of
the equity interests in the Company;
(iii) the shareholders of the Company approve an
agreement to merge or consolidate with another corporation or
other entity resulting (whether separately or in connection
with a series of transactions) in a change in ownership of
twenty percent (20%) or more of the voting control or value of
the equity interests in the Company, or an agreement to sell
or otherwise dispose of all or substantially all of the
Company's assets (including, without limitation, a plan of
liquidation or dissolution), or otherwise approve of a
fundamental alteration in the nature of the Company's
business.
Notwithstanding the foregoing provisions of this Paragraph
2, the ownership of equity interests in the Company by the Executive, Xxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx and their
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respective affiliates shall not be considered to result in a "change in control"
of the Company.
3. COMPENSATION.
During the term of this Employment Agreement the Company shall pay or
provide, as the case may be, to the Executive the compensation and other
benefits and rights set forth in this Paragraph 3.
(a) The Company shall pay to the Executive a base salary payable in
accordance with the Company's usual pay practices (and in any event no less
frequently than monthly) at the rate of Two Hundred Fifty Thousand Dollars
($250,000) per annum, to be increased (but not decreased) from time to time
(based upon the performance of the Company and the Executive) in a manner
consistent with the compensation of Chief Executive Officers of publicly-held
real estate investment trusts.
(b) The Company shall pay to the Executive bonus compensation for each
calendar year of the Company, not later than sixty (60) days following the end
of that year or the termination of his employment, as the case may be, prorated
on a per diem basis for partial calendar years, and determined and calculated in
a manner set forth on Exhibit A attached hereto.
(c) The Company shall provide to the Executive and his family all the
medical, dental, and all other group insurance benefits which the Company
provides generally to employees of the Company during active employment. In the
event of disability or death of the Executive, these benefits shall be continued
by the Company for life for the Executive and his spouse.
(d) The Company shall provide to the Executive a suitable new,
air-conditioned, full-sized automobile, or other automobile of equal or lesser
value of the Executive's choice, for the exclusive use of the Executive,
together with automobile theft, casualty, and liability insurance, and payment
or reimbursement of the Executive for use of a cellular telephone and all
charges related thereto (including usage) and all maintenance, repair and
gasoline or, in lieu of the foregoing automobile, an automobile allowance as
exists from time to time under Company policy, the dollar amount of which shall
be substantially commensurate with the cost for such automobile, together with
telephone charges, insurance costs, maintenance, repairs and gasoline for the
Executive's personal vehicle used in lieu thereof.
(e) The Executive shall participate in all retirement and other benefit
plans of the Company generally available from time to time to employees of the
Company and for which the Executive qualifies under their terms (and nothing in
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this Agreement shall or shall be considered to in any way affect the Executive's
rights and benefits thereunder except as expressly provided herein).
(f) The Executive shall be entitled to such periods of vacation and sick
leave allowance each year as are determined by the Executive in his reasonable
and good faith discretion, which in any event shall be not less than as provided
generally under the Company's vacation and sick leave policy for executive
officers.
(g) The Executive shall be entitled to participate in any option or other
employee benefit compensation plan that is generally available to senior
executive officers, as distinguished from general management, of the Company.
The Executive's participation in and benefits under any such plan shall be on
the terms and subject to the conditions specified in the governing document of
that plan.
(h) The Company shall, on the Executive's behalf, bear the cost of
initiation and regular membership fees and dues, incurred during the term of
this Employment Agreement, for one country club, one golf club and one downtown
business club, and shall reimburse the Executive the amount of any charges
actually and reasonably incurred at such clubs in the conduct of the Company's
business.
(i) Beginning on the day after the cessation of the Executive's employment
with the Company, except in the case of termination of the Executive's
employment for cause under Paragraph 5, and continuing until the Executive's
death or the date, if ever, on which the Executive begins full-time employment
with another employer, the Company shall provide to the Executive, at no cost to
the Executive, office space at a location (other than the executive offices of
the Company) suitable to the Executive's status as the former Chief Executive
Officer of the Company, a full-time secretary and other customary office support
functions.
(j) The Company shall reimburse the Executive or provide him with an
expense allowance during the term of this Employment Agreement for travel,
entertainment and other expenses reasonably and necessarily incurred by the
Executive in connection with the Company's business. The Executive shall furnish
such documentation with respect to reimbursements to be made hereunder as the
Company shall reasonably request.
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4. PAYMENT IN THE EVENT OF DEATH OR PERMANENT DISABILITY.
(a) The Company shall arrange for certain life insurance benefits to be
available to the Executive and his family as provided in this paragraph pursuant
to a Split-Dollar Agreement between the Company and the Executive (or his
assigns), in substantially the form of Exhibit B attached hereto and
incorporated herein by this reference. The life insurance benefit to be provided
by the Company to the Executive and his family under the Split-Dollar Agreement
shall be provided under two policies. One policy shall be a joint and survivor
policy in the amount of Two Million Five Hundred Thousand Dollars ($2,500,000)
insuring the life of the Executive and his spouse. The other policy shall insure
the Executive's life and shall be in an amount equal to the greater of (i) Two
Million Five Hundred Thousand Dollars ($2,500,000) or (ii) five (5) times the
Executive's annual cash compensation paid or payable by the Company (including
the base salary provided under Paragraph 3(a) of this Agreement and the bonus
provided under Paragraph 3(b) of this Agreement). Each year, the amount of the
life insurance benefit shall be reviewed and revised in accordance with the
prior years' cash compensation paid and accrued for the benefit of the
Executive, as soon as the amount of the prior year's earned cash compensation,
including all cash bonuses, can be calculated.
(b) In the event of the Executive's "permanent disability" (as hereinafter
defined) during the term of this Employment Agreement, for a period of fifteen
(15) years the Company shall pay to the Executive an annual amount equal to .80
times the Executive's then effective per annum rate of salary, as determined
under Paragraph 3(a), plus a pro rata portion of the bonus applicable to the
fiscal year in which such permanent disability occurs, as such bonus is
determined under Paragraph 3(b). After such fifteen (15) year period and for
each year thereafter until the Executive attains age sixty-five (65), the
Company shall pay to the Executive a disability benefit in an amount equal to
the greater of (i) sixty-five percent (65%) of the Executive's base compensation
during the year in which the disability occurred, or (ii) fifty percent (50%) of
the Executive's average annual total cash compensation for the three (3) years
immediately before the year in which the disability occurred. The Company, to
the extent possible, shall insure such disability benefits through an insurance
company. Such coverage shall contain a benefit for total, as well as partial and
residual, disabilities. The Company shall review and revise the amount of
coverage not less than annually in accordance with the prior year's total cash
compensation as soon as the amount of cash compensation, including all cash
bonuses, can be calculated.
(c) Except as otherwise provided in Paragraphs 3(e), 3(i) (in the event of
permanent disability only), 4(a), and
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4(b), in the event of the Executive's death or permanent disability, the
Executive's employment hereunder shall terminate and the Executive shall be
entitled to no further compensation or other benefits under this Employment
Agreement, except as to that portion of any unpaid salary and other benefits
accrued and earned by him hereunder up to and including the date of such death
or permanent disability, as the case may be.
(d) For purposes of this Employment Agreement, the Executive's "permanent
disability" shall be deemed to have occurred after one hundred twenty (120) days
in the aggregate during any consecutive twelve (12) month period, or after
ninety (90) consecutive days, during which one hundred twenty (120) or ninety
(90) days, as the case may be, the Executive, by reason of his physical or
mental disability or illness, shall have been unable to discharge his duties
under this Employment Agreement. The date of permanent disability shall be such
one hundred twentieth (120th) or ninetieth (90th) day, as the case may be. In
the event either the Company or the Executive, after receipt of notice of the
Executive's permanent disability from the other, dispute that the Executive's
permanent disability shall have occurred, the Executive shall promptly submit to
a physical examination by the chief of medicine of any major accredited hospital
in the Cleveland, Ohio, area and, unless such physician shall issue his written
statement to the effect that in his opinion, based on his diagnosis, the
Executive is capable of resuming his employment and devoting his full time and
energy to discharging his duties within thirty (30) days after the date of such
statement, such permanent disability shall be deemed to have occurred.
5. TERMINATION.
(a) The employment of the Executive under this Employment Agreement, and
the terms hereof, may be terminated by the Company:
(i) on the death or permanent disability (as defined in
Section 4(d)) of the Executive,
(ii) for cause at any time by action of the Board. For
purposes hereof, the term "cause" shall mean:
(A) The Executive's fraud, commission of a felony or of
an act or series of acts which result in material injury to
the business reputation of the Company, commission of an act
or series of repeated acts of dishonesty which are
materially inimical to the best interests of the Company, or
the Executive's willful and repeated failure to perform his
duties under this Employment Agreement, which failure has
not been
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cured within fifteen (15) days after the Company gives
notice thereof to the Executive; or
(B) The Executive's material breach of any material
provision of this Employment Agreement, which breach has not
been cured in all substantial respects within ten (10) days
after the Company gives notice thereof to the Executive; or
(iii) other than for cause at any by action of the Board,
subject to the operation of Paragraph 5(c).
The exercise by the Company of its rights of termination under
this Paragraph 5 shall be the Company's sole remedy in the event of
the occurrence of an event as a result of which such right to
terminate arises. Upon any termination of this Employment Agreement,
the Executive shall be deemed to have resigned from all offices and
any directorship held by the Executive in the Company.
(b) In the event of a termination claimed by the Company to be for "cause"
pursuant to Paragraph 5(a)(ii), the Executive shall have the right to have the
justification for said termination determined by arbitration in Cleveland, Ohio.
In order to exercise such right, the Executive shall serve on the Company within
thirty (30) days after termination a written request for arbitration. The
Company immediately shall request the appointment of an arbitrator by the
American Arbitration Association and thereafter the question of "cause" shall be
determined under the rules of the American Arbitration Association, and the
decision of the arbitrator shall be final and binding on both parties. The
parties shall use all reasonable efforts to facilitate and expedite the
arbitration and shall act to cause the arbitration to be completed as promptly
as possible. During the pendency of the arbitration, the Executive shall
continue to receive all compensation and benefits to which he is entitled
hereunder, and if at any time during the pendency of such arbitration the
Company fails to pay and provide all compensation and benefits to the Executive
in a timely manner, the Company shall be deemed to have automatically waived
whatever rights it then may have had to terminate the Executive's employment for
cause. If the arbitrator determines that the Executive's termination was
effected for "cause," the Executive shall reimburse the Company for all
compensation and benefits received by him during the pendency of the arbitration
to which he is not entitled in accordance with the first sentence of Paragraph
5(c). Expenses of the arbitration shall be borne equally by the parties.
(c) In the event of termination for any of the reasons set forth in
subparagraph (a)(i) or (a)(ii) of this Paragraph 5, except as otherwise provided
in Paragraphs 3(e), 3(i) (in the case of permanent disability only), 4(a), and
4(b), the Executive shall be entitled to no further compensation or other
benefits under this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him hereunder up to and
including the effective date of such termination. If the Company terminates the
Executive's employment other than pursuant to subparagraph 5(a)(i) or 5(a)(ii)
or the Executive terminates his employment pursuant to subparagraph
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2(c), all of the compensation and benefits payable to the Executive pursuant to
this Employment Agreement shall be paid to the Executive for the remainder of
the term of this Employment Agreement (as that term is defined in subparagraph
2(a)).
6. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges the Company's reliance and expectation of
the Executive's continued commitment to performance of his duties and
responsibilities during the term of this Employment Agreement. In light of such
reliance and expectation on the part of the Company, during the term of this
Employment Agreement and for a period of two (2) years thereafter (and, as to
clause (ii) of this subparagraph (a), at any time during and after the term of
this Employment Agreement), the Executive shall not, directly or indirectly, do
or suffer either of the following:
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(i) Own, manage, control or participate in the ownership,
management, or control of, or be employed or engaged by or otherwise
affiliated or associated as a consultant, independent contractor or
otherwise with, any other corporation, partnership, proprietorship,
limited liability company, firm, association or other business entity
engaged in the business of, or otherwise engage in the business of,
acquiring, owning or developing hotel properties, except that the
Executive may (A) own not more than one percent (1%) of any class of
publicly traded securities of any entity, and own interests in the
Company and in Xxxxxx Hotel Properties, L.P. (the "Partnership"),
subject only to any restriction imposed by any agreement or instrument
other than this Agreement, (B) have such an interest in, or
participation, employment, engagement, affiliation, association or
relationship with, any entity that manages hotel properties, so long
as that entity is not engaged in the business of acquiring, owning or
developing hotel properties, and (C) retain, dispose of or otherwise
deal with interests in hotel properties that he acquires by
inheritance, so long as the Executive's activities in connection
therewith do not result in his acquisition, ownership or development
of hotel properties in addition to those properties; or
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(ii) Disclose, divulge, discuss, copy or otherwise use or suffer
to be used in any manner, in competition with, or contrary to the
interests of, the Company, any confidential information relating to
the Company's operations, properties or otherwise to its particular
business or other trade secrets of the Company, it being acknowledged
by the Executive that all such information regarding the business of
the Company compiled or obtained by, or furnished to, the Executive
while the Executive shall have been employed by or associated with the
Company is confidential information and the Company's exclusive
property; provided, however, that the foregoing restrictions shall not
apply to the extent that such information: (A) is clearly obtainable
in the public domain, (B) becomes obtainable in the public domain,
except by reason of the breach by the Executive of the terms hereof,
(C) was not acquired by the Executive in connection with his
employment or affiliation with the Company, (D) was not acquired by
the Executive from the Company or its representatives, or (E) is
required to be disclosed by rule of law or by order of a court or
governmental body or agency.
(b) The Executive agrees and understands that the remedy at law for
any breach by him of this Paragraph 6 will be inadequate and that the damages
flowing from such breach are not readily susceptible to being measured in
monetary terms. Accordingly, it is acknowledged that, upon adequate proof of the
Executive's violation of any legally enforceable provision of this Paragraph 6,
the Company shall be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach. Nothing in this
Paragraph 6 shall be deemed to limit the Company's remedies at law or in equity
for any breach by the Executive of any of the provisions of this Paragraph 6
which may be pursued or availed of by the Company.
(c) The Executive has carefully considered the nature and extent of
the restrictions upon him and the rights and remedies conferred upon the Company
under this Paragraph 6, and hereby acknowledges and agrees that the same are
reasonable in time and territory, are designed to eliminate competition which
otherwise would be unfair to the Company, do not stifle the inherent skill and
experience of the Executive, would not operate as a bar to the Executive's sole
means of support, are fully required to protect the legitimate interests of the
Company and do not confer a benefit upon the Company disproportionate to the
detriment to the Executive.
7. TAX ADJUSTMENT PAYMENTS. If all or any portion of the amounts payable to
the Executive under this Employment Agreement (together with all other payments
of cash or property,
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whether pursuant to this Employment Agreement or otherwise, including, without
limitation, the issuance of common stock of the Company, or the granting,
exercise or termination of options therefor) constitutes "excess parachute
payments" within the meaning of Section 280G of the Code that are subject to the
excise tax imposed by Section 4999 of the Code (or any similar tax or
assessment), the amounts payable hereunder shall be increased to the extent
necessary to place the Executive in the same after-tax position as he would have
been in had no such tax assessment been imposed on any such payment paid or
payable to the Executive under this Employment Agreement or any other payment
that the Executive may receive in connection therewith. The determination of the
amount of any such tax or assessment and the incremental payment required hereby
in connection therewith shall be made by the accounting firm employed by the
Executive within thirty (30) calendar days after such payment and said
incremental payment shall be made within five (5) calendar days after
determination has been made. If, after the date upon which the payment required
by this Paragraph 7 has been made, it is determined (pursuant to final
regulations or published rulings of the Internal Revenue Service, final judgment
of a court of competent jurisdiction, Internal Revenue Service audit assessment,
or otherwise) that the amount of excise or other similar taxes or assessments
payable by the Executive is greater than the amount initially so determined,
then the Company shall pay the Executive an amount equal to the sum of: (i) such
additional excise or other taxes, PLUS (ii) any interest, fines and penalties
resulting from such underpayment, PLUS (iii) an amount necessary to reimburse
the Executive for any income, excise or other tax assessment payable by the
Executive with respect to the amounts specified in (i) and (ii) above, and the
reimbursement provided by this clause (iii), in the manner described above in
this Paragraph 7. Payment thereof shall be made within five (5) calendar days
after the date upon which such subsequent determination is made.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio, and has all requisite
corporate power and authority to enter into, execute and deliver this Employment
Agreement, fulfill its obligations hereunder and consummate the transactions
contemplated hereby.
(b) The execution and delivery of, performance of obligations under, and
consummation of the transactions contemplated by, this Employment Agreement have
been duly authorized and approved by all requisite corporate action by or in
respect of the Company, and this Employment Agreement constitutes the legally
valid and binding obligation of the Company, enforceable by the Executive in
accordance with its terms.
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(c) No provision of the Company's governing documents or any agreement to
which it is a party or by which it is bound or of any material law or regulation
of the kind usually applicable and binding upon the Company prohibits or limits
its ability to enter into, execute and deliver this Employment Agreement,
fulfill its respective obligations hereunder and consummate the transactions
contemplated hereby.
9. MISCELLANEOUS.
(a) The Executive represents and warrants that he is not a party to any
agreement, contract or understanding, whether employment or otherwise, which
would restrict or prohibit him from undertaking or performing employment in
accordance with the terms and conditions of this Employment Agreement.
(b) The provisions of this Employment Agreement are severable and if any
one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions and any partially
unenforceable provision, to the extent enforceable in any jurisdiction,
nevertheless shall be binding and enforceable.
(c) The rights and obligations of the Company under this Employment
Agreement shall inure to the benefit of, and shall be binding on, the Company
and its successors and assigns, and the rights and obligations (other than
obligations to perform services) of the Executive under this Employment
Agreement shall inure to the benefit of, and shall be binding upon, the
Executive and his heirs, personal representatives and assigns.
(d) Any controversy or claim arising out of or relating to this Employment
Agreement, or the breach thereof, shall be settled by arbitration in accordance
with the Rules of the American Arbitration Association then pertaining in the
City of Cleveland, Ohio, and judgment upon the award rendered by the arbitrator
or arbitrators may be entered in any court having jurisdiction thereof. The
arbitrator or arbitrators shall be deemed to possess the powers to issue
mandatory orders and restraining orders in connection with such arbitration;
provided, however, that nothing in this Paragraph 9(d) shall be construed so as
to deny the Company the right and power to seek and obtain injunctive relief in
a court of equity for any breach or threatened breach by the Executive of any of
his covenants contained in Paragraph 6 hereof.
(e) Any notice to be given under this Employment Agreement shall be
personally delivered in writing or shall have been deemed duly given when
received after it is posted in the United States mail, postage prepaid,
registered or certified, return receipt requested, and if mailed to the Company,
shall be addressed to its principal place of business, attention: General
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Counsel, and if mailed to the Executive, shall be addressed to him at his home
address last known on the records of the Company, or at such other address or
addresses as either the Company or the Executive may hereafter designate in
writing to the other.
(f) The failure of either party to enforce any provision or provisions of
this Employment Agreement shall not in any way be construed as a waiver of any
such provision or provisions as to any future violations thereof, or prevent
that party thereafter from enforcing each and every other provision of this
Employment Agreement. The rights granted the parties herein are cumulative and
the waiver of any single remedy shall not constitute a waiver of such party's
right to assert all other legal remedies available to it under the
circumstances.
(g) This Employment Agreement supersedes all prior agreements and
understandings between the parties and may not be modified or terminated orally.
No modification, termination or attempted waiver shall be valid unless in
writing and signed by the party against whom the same is sought to be enforced.
(h) This Employment Agreement shall be governed by and construed according
to the laws of the State of Ohio.
(i) Where necessary or appropriate to the meaning hereof, the singular and
plural shall be deemed to include each other, and the masculine, feminine and
neuter shall be deemed to include each other.
XXXXXX LODGING COMPANY
By:___________________________
Title:________________________
And By:_______________________
Title:________________________
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XXXXXX X. XXXXXX
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Exhibit A
BONUS CALCULATION
The amount of the bonus to be paid by the Company to the Executive
under Paragraph 3(b) of the Employment Agreement shall be based on the increase
in the "funds from operations per share" of the Company from year to year. The
bonus for calendar 1996 under this Agreement shall be based on the increase from
the Company's pro forma 1995 "funds from operations per share" to the Company's
1996 "funds from operations per share." Each year thereafter, the "funds from
operations per share" for the current year shall be compared to the "funds from
operations per share" for the immediately preceding year. The amount of the
"funds from operations per share" shall be appropriately adjusted in connection
with share dividends, share splits and other changes in the Company's
capitalization and shall be determined each year by the Company's Compensation
Committee in conjunction with such accountants or other experts as may be
appropriate. The amount of the bonus each year shall be calculated as follows:
Growth from Prior Year's Amount of Bonus as a
"Funds From Operations per share" Percentage of Base Salary
------------------------ -------------------------
Zero to less than 5% 10%
5% to less than 10% 25%
10% to less than 15% 45%
15% to less than 20% 65%
20% or higher 90%
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EXHIBIT B
[SPLIT-DOLLAR AGREEMENT]
METROPOLITAN LIFE INSURANCE COMPANY
XXX XXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
LIFE INSURANCE SALES ILLUSTRATION
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
For Client:
Client:
Proposed Policy: Survivorship Whole Life (Form # 2J-90(96))
Base Policy provides Guaranteed Level Death Benefit payable only at second
death.
Base Policy provides Guaranteed Level Premiums payable for 55 years.
1st Insured's Risk Classification: MALE PREFERRED NONSMOKER age 47
2nd Insured's Risk Classification: FEMALE PREFERRED NONSMOKER age 45
For issue in the state of OH.
Divided Option: Dividends buy Paid-Up Additional Insurance.
Initial Contract Premiums
Benefits Included Annual Semi-annual Check-o-matic Years to Pay
----------------- ------ ----------- ------------- ------------
2,500 Base Policy (Guaranteed) $ 28,475.00 $ 15,341.25 $ 2,557.50 55
--------- --------- --------
Total Initial Contract Premium $ 28,475.00 $ 15,341.25 $ 2,557.50
This policy insures two individuals with the death benefit payable only at the
second death, except for any First- to-Die Rider. The primary purpose of this
policy is to provide for estate liquidity.
If you apply for this life insurance policy, MetLife will determine your
eligibility for coverage and premiums based on your actual risk classifications
and issue ages. You should compare the specifications shown above to those on
page 3 of any policy you may receive. If different, your MetLife representative
will explain any differences and provide you with a revised illustration.
What is Guaranteed
The Contract Premium (Base Policy premium and all riders, except First-to-Die
Rider if any) shown in the illustration is guaranteed and can not be increased
by MetLife. MetLife also guarantees that the Death Benefit and the Cash Value
will never be less than the amount shown under the "Guaranteed" column headings
as long as the policyowner pays the required Contract Premiums, when due, and
does not borrow or surrender any Guaranteed Cash Value. THE GUARANTEED CASH
VALUE AND THE GUARANTEED DEATH BENEFIT DO NOT REFLECT REDUCTIONS THAT WOULD
RESULT FROM ANY POLICY LOANS FROM ANY POLICY LOANS OR SURRENDERS.
17
METROPOLITAN LIFE INSURANCE COMPANY
XXX XXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
LIFE INSURANCE SALES ILLUSTRATION
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
What is Non-Guaranteed
Amounts shown under the "Non-Guaranteed" columns reflect dividends. Dividends --
WHICH CAN NOT BE GUARANTEED, PREDICTED, OR EVEN ESTIMATED -- may be used to
increase your Death Benefit and/or Cash Value, used to reduce your Premium
Outlay, taken in cash, or applied under certain combinations of these uses. This
illustration is based on the 1996 dividend scale.
Since dividends will vary as changes occur MetLife's investment earnings
(interest), claims experience, and expenses, your actual Non-Guaranteed Cash
Value, Death Benefit, and Premium Outlay may differ (more or less) from what is
shown in the illustration.
In addition, the actual dividend option you choose and the extent to which you
borrow or surrender your policy's cash value will also cause your Non-Guaranteed
Cash Value and Death Benefit, as well as your Premium Outlay to be more or less
than what is shown in the illustration.
The purpose in showing the "Non-Guaranteed" columns is to assist you in
understanding how the policy works, NOT how it will perform.
ACCELERATED PAYMENT ARRANGEMENT -- Dividends can also be used to reduce the
number of years premium payments must be made in cash as shown in the Premium
Outlay column.
Additions Rider Cash Value if any.
Since dividends are NON-GUARANTEED, the actual number of years you will have to
pay the Contract Premium which continues to be required for 55 years, in cash,
may differ from what is shown in this illustration. If dividends are reduced,
some additional out-of-pocket cash outlays may be required by you even after
cash outlays have been discontinued under the Accelerated Payment Arrangement.
18
The following table demonstrated how dividends may affect policy values.
GUARANTEED NON-GUARANTEED NON-GUARANTEED
CURRENT DIV. SCALE CURRENT DIV. SCALE (LESS 1% OF
THE INTEREST COMPONENT)
POLICY CONTRACT DEATH CASH PREMIUM DEATH CASH PREMIUM DEATH CASH
YEAR PREMIUM BENEFIT VALUE OUTLAY BENEFIT VALUE OUTLAY BENEFIT VALUE
5 28475 25000000 8000 28475 2653674 108340 28475 2630333 104036
10 28475 25000000 247500 28475 2931903 351579 28475 2848424 331463
20 28475 25000000 707500 0 2631836 759613 8851 2553315 728574
age 65 28475 25000000 602500 0 2644931 654683 11500 2550686 620750
age 65 28475 25000000 707500 0 2631836 759613 8851 2553315 728574
For the table above as well as the Standard Ledger section shown on the
following pages, Contract Premiums and Premium Outlay are assumed to be paid on
the first day of each policy year, and Cash Values and Death Benefits are shown,
do not show the impact of any loans or cash surrenders. The Non-Guaranteed Death
Benefit and Cash Value columns, which are based on the Premium Outlay shown,
reflect any illustrated loans or cash surrenders. Other Non-Guaranteed columns
shown in this illustration that reflect dividend balances only show the impact
of any illustrated cash surrenders.
19
METROPOLITAN LIFE INSURANCE COMPANY
XXX XXXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000
LIFE INSURANCE SALES ILLUSTRATION
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
Proposed Insureds: and
Acknowledges
This illustration provides a summary of certain guaranteed and non-guaranteed
values and certain other provisions relating to the policy described in this
illustration. The policy must be read carefully to see exactly what benefits are
provided and what conditions apply. All rights and obligations will be governed
by the terms and conditions set forth in the policy itself if and when issued.
You have the absolute right to return the policy for any reason to MetLife or to
the sales representative from whom you purchased this policy within 10 days
after you receive it (or a longer period if stated in your policy) and receive a
refund of any premiums paid.
We have received all 14 pages of the illustration and understand that if any of
the pages are missing this illustration is not valid. We understand that any
non-guaranteed elements illustrated are subject to change. This means that the
Premium Outlay, non-guaranteed cash values, and non-guaranteed death benefits
may be more or less than those shown in the illustration. No representations
have been made to us to the contrary. We also understand that under no
circumstances (except for policy loans or surrenders) will the values and
benefits ever be less than those shown as guaranteed for as long as the required
contract premiums are paid.
------------------------------------------------- Date: ------------
Signature of Applicant (policyowner)
------------------------------------------------- Date: ------------
Signature of Applicant (policyowner)
------------------------------------------------- Date: ------------
Signature of 1st Insured (if other than policyowner)
------------------------------------------------- Date: ------------
Signature of 2nd Insured (if other than policyowner)
I certify that this illustration has been presented to the applicants in its
entirety and that I have explained that any non-guaranteed elements illustrated
are subject to change. I have made no representations that are inconsistent with
the illustration.
-------------------------------------------------- Date: ------------
Signature of Representative
20
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH BENEFIT': $2,500,000.00
TARGET AMOUNT OF INSURANCE: $2,500,000.00
TARGET AMOUNT OF INSURANCE: $ 28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE 1996 DIVIDEND SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
1 28475 0 2500000 28475 0 0 0 0 0 0 0 25000000
2 28475 2500 2500000 28475 0 0 0 5000 4999 7499 31973 2531903
3 28475 25000 2500000 28475 0 0 0 5850 11248 36248 68061 2568061
4 28475 52500 2500000 28475 0 0 0 6775 18917 71417 108339 2608339
5 28475 8000 2500000 28475 0 0 0 7925 28340 108340 153674 2653674
6 28475 112500 2500000 28475 0 0 0 9250 39827 152327 204546 2704508
7 28475 142500 2500000 28475 0 0 0 9975 52936 195436 257584 2757584
8 28475 177500 2500000 28475 0 0 0 10800 67886 245386 313115 2813115
9 28475 212500 2500000 28475 0 0 0 11675 84858 297358 371162 2871162
10 28475 247500 2500000 28475 0 0 0 12625 104079 351579 431903 2931903
The Contract Premium is required in each policy year. Any Premium
Outlay shown to be less than the Contract Premium relies on dividends and/or
certain other policy values to make up the difference. Dividends which are based
on the 1996 dividend scale cannot be guaranteed and are likely to be changed by
MetLife over time. As a result, your policy's Premium Outlay, non-guaranteed
values and benefits are likely to be more or less favorable than those
illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIB premium or repay any loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIO-LD
21
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH
BENEFIT': $ 2,500,000.00
TARGET AMOUNT OF INSURANCE $ 2,500,000.00
INITIAL ANNUAL CONTRACT
PREMIUM (see Page 1) $28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE 1996 DIVIDEND
SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
# 11 28475 287500 2500000 0 28475 0 0 13675 95143 382643 374757 2874757
# 12 28475 327500 2500000 0 28475 0 0 14800 86614 414114 324000 2824000
# 13 28475 367500 2500000 0 28475 0 0 15950 78564 446064 279242 2779242
# 14 28475 412500 2500000 0 28475 0 0 17325 71250 483750 240760 2740750
# 15 28475 457500 2500000 0 28475 0 0 18700 64744 522244 208101 2708101
# 16 28475 112500 2500000 0 28475 0 0 20200 59228 561728 181194 2681194
# 17 28475 142500 2500000 0 28475 0 0 21900 54983 607483 160208 2660208
# 18 28475 177500 2500000 0 28475 0 0 13675 52183 654683 144931 2644131
# 19 28475 212500 2500000 0 28475 0 0 25650 51141 703641 135497 2635497
# 20 28475 247500 2500000 0 28475 0 0 27750 52113 759613 131836 2631136
The Contract Premium is required in each policy year. Any Premium
Outlay shown to be less than the Contract Premium relies on dividends and/or
certain other policy values to make up the difference. Dividends which are based
on the 1996 dividend scale cannot be guaranteed and are likely to be changed by
MetLife over time. As a result, your policy's Premium Outlay, non-guaranteed
values and benefits are likely to be more or less favorable than those
illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIB premium or repay any Loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
# The Premium Outlay for these years illustrates the use of dividends
which are not guaranteed an/or other policy values. As dividends vary, the
Premium Outlay may be more or less than the amount shown. Please refer to page
13 for an explanation of the Accelerated Payment Arrangement
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
22
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH
BENEFIT': $ 2,500,000.00
TARGET AMOUNT OF INSURANCE $ 2,500,000.00
INITIAL ANNUAL CONTRACT
PREMIUM (see Page 1) $28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE
1996 DIVIDEND SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
# 21 28475 760000 2500000 0 28475 0 0 30025 55426 815426 134009 2634009
# 22 28475 817500 2500000 0 28475 0 0 32675 61629 879129 142541 2642541
# 23 28475 872500 2500000 0 28475 0 0 35475 71084 943584 157423 2657483
# 24 28475 932500 2500000 0 28475 0 0 38350 84105 1016605 178515 2678505
# 25 28475 990000 2500000 -282063 28475 282062 22565 41400 101127 786499 205917 2401289
# 26 28475 1050000 2500000 0 28475 0 24370 44675 122660 843662 239872 2410814
# 27 28475 1112500 2500000 0 28475 0 26320 48225 149310 906492 280764 2425446
# 28 28475 1172500 2500000 0 28475 0 28425 52050 181696 970453 328982 2445289
# 29 28475 1232500 2500000 0 28475 0 30699 56075 220436 1038494 384873 2470431
# 30 28475 1292500 2500000 0 28475 0 33155 60300 266156 1111059 448801 2501204
The Contract Premium is required in each policy year. Any Premium
Outlay shown to be less than the Contract Premium relies on dividends and/or
certain other policy values to make up the difference. Dividends which are based
on the 1996 dividend scale cannot be guaranteed and are likely to be changed by
MetLife over time. As a result, your policy's Premium Outlay, non-guaranteed
values and benefits are likely to be more or less favorable than those
illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIB premium or repay any Loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
# The Premium Outlay for these years illustrates the use of dividends
which are not guaranteed an/or other policy values. As dividends vary, the
Premium Outlay may be more or less than the amount shown. Please refer to page
13 for an explanation of the Accelerated Payment Arrangement
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
23
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH
BENEFIT': $ 2,500,000.00
TARGET AMOUNT OF INSURANCE $ 2,500,000.00
INITIAL ANNUAL CONTRACT
PREMIUM (see Page 1) $28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE
1996 DIVIDEND SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
# 31 28475 1352500 2500000 0 28475 0 35808 64450 319267 1188362 520735 1537360
# 32 28475 1412500 2500000 0 28475 0 38672 68600 380280 1270703 600844 2578767
# 33 28475 1470000 2500000 0 28475 0 41766 72525 449499 1355656 688972 2625129
# 34 28475 1527500 2500000 0 28475 0 45107 76300 527297 1445847 785136 2676186
# 35 28475 1582500 2500000 0 28475 0 48716 80050 614152 1538986 889586 2731920
# 36 28475 1637500 2500000 0 28475 0 52613 83700 710565 1637786 1002674 2792395
# 37 28475 1690000 2500000 0 28475 0 56822 87350 817017 1739916 1124811 2857110
# 38 28475 1740000 2500000 0 28475 0 61368 91050 934064 1845595 1256629 2928160
# 39 28475 1787500 2500000 0 28475 0 66278 94625 1062095 1954848 1398469 3003722
# 40 28475 1832500 2500000 0 28475 0 71580 97900 1201354 2067527 1550475 3084143
The Contract Premium is required in each policy year. Any Premium
Outlay shown to be less than the Contract Premium relies on dividends and/or
certain other policy values to make up the difference. Dividends which are based
on the 1996 dividend scale cannot be guaranteed and are likely to be changed by
MetLife over time. As a result, your policy's Premium Outlay, non-guaranteed
values and benefits are likely to be more or less favorable than those
illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIB premium or repay any Loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
# The Premium Outlay for these years illustrates the use of dividends
which are not guaranteed an/or other policy values. As dividends vary, the
Premium Outlay may be more or less than the amount shown. Please refer to page
13 for an explanation of the Accelerated Payment Arrangement
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
24
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH
BENEFIT': $ 2,500,000.00
TARGET AMOUNT OF INSURANCE $ 2,500,000.00
INITIAL ANNUAL CONTRACT
PREMIUM (see Page 1) $28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE
1996 DIVIDEND SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
# 41 28475 1877500 2500000 0 28475 0 77306 100825 1351969 2185836 1712589 3168955
# 42 28475 1917500 2500000 0 28475 0 83491 103375 1514046 2304422 1884666 3257542
# 43 28475 1957500 2500000 0 28475 0 90170 105500 1687705 2427911 2066418 3349124
# 44 28475 1995000 2500000 0 28475 0 97384 106850 1872537 2552859 2256830 3442152
# 45 28475 2035000 2500000 0 28475 0 105174 107875 2068978 2681426 2455673 3535821
# 46 28475 2072500 2500000 0 28475 0 113588 108875 2278072 2817132 2663229 3629789
# 47 28475 2110000 2500000 0 28475 0 122675 109350 2499974 2953859 2878397 3722268
# 48 28475 2152500 2500000 0 28475 0 132489 111650 2740186 3104082 3105907 3817503
# 49 28475 2195000 2500000 0 28475 0 143088 113375 2999167 3262475 3344253 3912831
# 50 28475 2240000 2500000 0 28475 0 154535 115100 3278076 3431849 3594343 4008115
The Contract Premium is required in each policy year. Any Premium
Outlay shown to be less than the Contract Premium relies on dividends and/or
certain other policy values to make up the difference. Dividends which are based
on the 1996 dividend scale cannot be guaranteed and are likely to be changed by
MetLife over time. As a result, your policy's Premium Outlay, non-guaranteed
values and benefits are likely to be more or less favorable than those
illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIB premium or repay any Loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
# The Premium Outlay for these years illustrates the use of dividends
which are not guaranteed an/or other policy values. As dividends vary, the
Premium Outlay may be more or less than the amount shown. Please refer to page
13 for an explanation of the Accelerated Payment Arrangement
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
25
SURVIVORSHIP WHOLE LIFE (METLIFE ESTATE SAVER)
STANDARD LEDGER
PREPARED FOR: AND
PRESENTED BY: Agent
MALE PREFERRED NONSMOKER 47
FEMALE PREFERRED NONSMOKER 45
ISSUE STATE: OH
FACE AMOUNT OF INSURANCE - 'GUARANTEED DEATH BENEFIT':
$2,500,000.00
TARGET AMOUNT OF INSURANCE $2,500.000.00
INITIAL ANNUAL CONTRACT PREMIUM (see Page 1):
$28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE 1996 DIVIDEND SCALE, 1996 PORTFOLIO
GUARANTEED NON GUARANTEED
CASH
ANNUAL VALUE OF
POL CONTRACT CASH DEATH PREMIUM AMOUNT ANNUAL LOAN ANNUAL ADDITIONAL CASH ADDITIONAL DEATH
YEAR PREMIUM VALUE BENEFIT OUTLAY SURR. LOAN INTEREST DIVIDEND INSURANCE VALUE INSURANCE BENEFIT
B-O-Y E-O-Y B-O-Y B-O-Y B-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y E-O-Y
# 51 28475 2287500 2500000 0 28475 0 166898 118300 3579203 3613578 3858106 4104910
# 52 28475 2332500 2500000 0 28475 0 180250 118750 3901122 3800247 4135086 420170
# 53 28475 2380000 2500000 0 28475 0 194760 119275 4248592 4000547 4430001 4301966
# 54 28475 2420000 2500000 0 28475 0 210244 119700 4613789 4195500 4744744 4406455
# 55 28475 2500000 2500000 0 28475 0 227063 120150 4936993 4371641 4936993 4371641
The Contract Premium is required in each policy year. Any
Premium Outlay shown to be Less than the Contract Premium relies on dividends
and/or certain other policy values to make up the difference. Dividends which
are based on the 1996 dividend scale cannot be guaranteed and are likely to be
changed by MetLife over time. As a result, your policy's Premium Outlay,
non-guaranteed values and benefits are likely to be more or less favorable than
those illustrated. But your Premium Outlay will not exceed the required Contract
Premium (unless you increase the SIE premium or repay any loan) and your values
and benefits will not be less than the amounts shown under the columns
designated as guaranteed (except for any surrenders and loans). This
illustration is not valid unless accompanied by the Supplemental Footnotes
beginning on page 10.
# The Premium Outlay for three years illustrates the use of
dividends which are not guaranteed and/or other policy values. As dividends
vary, the Premium Outlay may be more or less than the amount shown. Please refer
to page 13 for an explanation of the Accelerated Payment Arrangement.
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
95121H1 (exp 1296) MLIC-LD
26
The Explanatory Notes
STANDARD LEDGER
PREMIUM OUTLAY -- Shows the results if the January 1996 dividend scale continues
without change. Dividends are not guaranteed and may increase or decrease in the
future. If the future dividends decrease, it is possible that dividends and any
Paid-Up Additions Rider Cash Value will not be sufficient in some future years
to fund the full Contract Premium, and some additional out-of-pocket cash outlay
will be required. The amount of any additional cash outlay will depend on the
level of coverage to remain in force. This column also reflects any cash
surrenders and/or loans.
GUARANTEED CASH VALUE - The total as of the end of the policy year of the
Guaranteed Cash Value of the base policy, plus the Guaranteed Cash Value of the
Supplemental Insurance Benefit, if any (calculated using guaranteed maximum term
rates and no dividends), plus the Paid-Up Additions Rider Guaranteed Cash Value,
if any. All value assume no dividends are paid, no loans or cash surrenders are
made, and all Contract Premiums have been paid, when due, through that year.
GUARANTEED DEATH BENEFIT - The total of the Face Amount of insurance under the
base policy, any guaranteed coverage under Supplemental Insurance Benefit
coverage (calculated using guaranteed maximum term rates and no dividends), any
Four Year Term Insurance Rider coverage, and any Guaranteed Paid-Up Additions
Rider Death Benefit. It does not include the Death Benefit of any First-to-Die
Rider.
NON-GUARANTEED CASH VALUE- The total as of the end of the year of the Guaranteed
Cash Value of the base policy, plus the Non-Guaranteed Paid-Up Additions Rider
Cash Value, if any, plus the Cash Value of Paid- Up Insurance purchased by
dividends and under the Supplemental Insurance Benefit, if any, plus accumulated
dividends, if any, plus the end of year dividend, if any, minus any outstanding
loans and loan interest due. This column reflects any cash surrenders shown.
NON-GUARANTEED ADDITIONAL INSURANCE - Includes the Death Benefit of Paid-Up
Additional Insurance purchase by dividends and under the Supplemental Insurance
Benefit, if any. It does not include any values under the Paid-Up Additions
Rider.
NON-GUARANTEED DEATH BENEFIT - Includes the Face Amount of insurance under the
base policy, the Death Benefit of Paid-Up Additional Insurance purchased by
dividends, if any, plus the accumulated dividends, if any, the Death Benefit of
the Paid-Up Additions Rider, if any, the Death Benefit of the Supplemental
Insurance Benefit, if any, the Death Benefit of the Four Year Term Rider
Insurance, if any, minus any outstanding loan and loan interest due. It does not
include the Death Benefit of the First-to-Die Rider, if any. This column
reflects any cash surrenders shown.
AMOUNT SURRENDERED - Includes any amounts surrendered from any dividend balances
and/or Paid-Up Rider values.
DIVIDEND INFORMATION - DividenDs, which are based on the January 1996 scale,
cannot be guaranteed, and are likely to be changed by MetLife over time. As a
result, your policy's Premium Outlay and non- guaranteed values and benefits are
likely to be more or less favorable than those illustrated. However, your
Premium Outlay will not exceed the required Contract Premium (unless you
increase the SIB premium or repay any loan), and your values and benefits will
not be less than the amounts shown in the guaranteed values columns (except for
any surrenders and loans).
TAX NOTE - The inclusion of the Paid-UP Additions Rider, the Four Year Term
Rider, or the First-to-Die Rider may cause this policy to be considered a
modified endowment contract (MEC) for federal income tax purposes. If so,
amounts you receive, including loans proceeds, will be subject to federal income
tax to the extent of any gain in your policy. Taxable amounts are also generally
subject to a 10 percent additional tax unless you are at least age 59 1/2 when
such amounts are received. Please consult your tax or legal advisor for possible
tax implications.
27
ISSUE OF INSURANCE - Any application for insurance will be subject to MetLife's
underwriting rules.
LOAN INTEREST- This illustration is based on an adjustable loan interest rate of
8.00%. Actual rates may differ and are subject to change on each policy
anniversary.
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIO-LD
28
INTEREST ADJUSTED INDEXES - These indexes provide a means for evaluating the
comparative cost of the policy under stated assumptions. They can be useful in
comparing similar plans of insurance, a lower index being better than a higher
one. These indexes reflect the time value of money.
Indexes are approximate because they involve assumptions, including the rate of
interest used, the dividends being paid in cash and the continuation of current
dividend scales. Indexes apply to the basic policy only. They exclude the
Supplemental Insurance Benefit, if any, as well as any optional riders such as
disability waiver.
Interest adjusted indexes based on a 5.00% interest rate for the basic policy:
END OF END OF
10 YRS 20 YRS
LIFE INSURANCE NET PAYMENT COST INDEX 8.53 6.82
LIFE INSURANCE SURRENDER COST INDEX 1.03 1.34
EQUIVALENT LEVEL ANNUAL DIVIDEND 286 4.57
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
29
After premiums for your policy have been paid for a number of years, the
Accelerated Payment arrangement allows you to choose to pay future premiums, as
they fall due, through the use of accumulated dividends, and Paid-Up Additions
Rider cash value, if any. When you wish to start this procedure, ask your
Metropolitan Life Sales Representative to confirm that the dividends credited to
your policy and the Paid-Up Additions Rider cash value, if any, together with
future dividends based on the scale then in effect, are sufficient to accomplish
this objective. If values are sufficient, the procedure will make future premium
payments annually (no out-of-pocket cash outlay from you). Your Sales
Representative will assist you in making this change, if necessary, and in
putting this procedure in effect.
The number of years illustrated that out-of-pocket premium payments are required
under the Accelerated Payment arrangement is based upon the dividend scale in
effect at the time the policy is issued. Dividends, however, are not guaranteed.
Changes in dividend scales may increase or decrease the number of years for
which out-of-pocket premiums need to be paid. Also, if future dividend scales
decrease after this Accelerate Payment procedure is started, it is possible that
values may not be sufficient in some future years to pay the then full current
premium, again requiring out-of-pocket payment of the insufficient amount.
The Accelerated Payment arrangement increases your flexibility. When dividends
are sufficient, you may stop your out-of-pocket outlay or continue to pay your
premiums as you normally do. Even if you have chosen to pay premiums by the
Accelerated Payment arrangement, you may return to paying your premiums directly
at any time.
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
30
BENEFITS THAT MAY BE AVAILABLE
------------------------------
The following are descriptions of benefits provided under the contract or by
riders that may be included with your policy, only at issue. These benefits, are
subject to certain limitations and exclusions which are not described below,
and, may not be available with all policies and in all states. For full details,
ask to see a specimen contract and/or rider.
DISABILITY WAIVER OF PREMIUMS BENEFIT
-------------------------------------
This benefit will be available, at the policyowner's option, an either or both
of the insureds. Provides that, if a covered insured becomes totally disabled,
as described in the rider, before age 60 and such disability lasts for at least
six months, the full premium for the base policy and the Four Year Term
Insurance Rider and the First-to- Die Rider will be waived while total
disability continues. Premiums for any Paid-Up Additions Rider benefit or for
the Supplemental Insurance Benefit will not be paid by this benefit. If the
totally disabled insured dies, the premium payments will resume. There is also a
limited waiver benefit for total disability occurring between ages 60 and 65.
PAID-UP ADDITIONAL INSURANCE BENEFIT
------------------------------------
Provides for the purchase of additional paid-up insurance payable at the death
of the second insured to die and which generates additional cash values. This
rider also provides the potential for greater premium flexibility and for
advancing the year when cash premium payments are no longer required under the
Accelerated Payment arrangement.
FOUR YEAR TERM RIDER (ESTATE PROTECTION RIDER)
----------------------------------------------
Application where the policy is to be transferred to a trust, or other third
party owner, shortly after issue. This rider is intended to offset the
possibility that the proceeds of the policy could be includible in the taxable
estate of the second insured to die if such a transfer were to occur within
years of death.
FIRST-TO-DIE RIDER
------------------
This rider provides level tern insurance on both insured lives with the death
benefit payable at the death of the first insured to die. The term of the
coverage can be either 10, 15, or 20 years, subject to issue age limitations.
SUPPLEMENTAL INSURANCE BENEFIT (SIB)
------------------------------------
This benefit allows the policyholder to buy a combination of term insurance and
paid-up additional insurance to supplement the fact amount of insurance. If this
benefit is to be used, it must be elected at the time of issue.
POLICY SPLIT OPTION
-------------------
This option allows the policyholder to convert the Survivorship Whole Life base
policy and any Supplemental Insurance Benefit, any Paid-Up Additions Rider, and
any accumulated dividends into two separate single life policies, one on the
life of each of the insureds. This option is only available when the two
insureds are married to each other at the time the policy was issued and may
only be exercised in certain situations and is not available in all states.
METROPOLITAN LIFE INSURANCE COMPANY
Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000
951211HI (exp 1296) MLIC-LD
31
POLICY FACT SHEET
INSURED #1 INSURED #2
NAME........................................
SEX......................................... MALE FEMALE
AGE LAST BIRTHDAY........................... 47
RATING CLASS................................ PREFERRED (47) PREFERRED (45)
SMOKING STATUS.............................. NONSMOKER NONSMOKER
SPECIAL RATING CLASS........................ NONE (0) NONE (0)
NONE (0) NONE (0)
ISSUE STATE................................. OH
COVERAGES:
GUARANTEED BASIC FACT AMOUNT..................................................... $2,500,000
NON GUARANTEED SUPPLEMENTAL INSURANCE BENEFIT.................................... $ 0
FOUR YEAR TERM RIDER............................................................. $ 0
FIRST-TO-DIE RIDER............................................................... $ 0
DISABILITY WAIVER................................................................INSURED 1... NO
DISABILITY WAIVER................................................................INSURED 2... NO
NON GUARANTEED PAID-UP ADDITIONS RIDER........................................... NO
INITIAL PREMIUMS:
BASIC POLICY PREMIUM....................................................... $ 28,475.00 15,341.25 2,557.50
DISABILITY WAIVER INSURED 1............................................. $ 0.00 0.00 0.00
DISABILITY WAIVER INSURED 2............................................. $ 0.00 0.00 0.00
NON GUARANTEED SUPPL INS BEN (0)........................................... $ 0.00 0.00 0.00
ADDITIONAL DUMP-IN (SIB)................................................ $ 0.00
PLANNED SIB BILLABLE PREMIUM............................................... $ 0.00 0.00 0.00
FOUR YEAR TERM RIDER....................................................... $ 0.00 0.00 0.00
FIRST-TO-DIE RIDER......................................................... $ 0.00 0.00 0.00
NON GUARANTEED PAID-UP RIDER............................................... $ 0.00
ADDITIONAL DUMP-IN (PUAR)............................................... $ 0.00
7 PAY GUIDELINE PREMIUM........................................................ $ 58,750.00
UNDERWRITING AMOUNT FOR PUAR................................................... $ 0.00
PRF NSM PREMIUM FOR PUAR....................................................... $ 28,400.00
NON GUARANTEED INITIAL PUAR DEATH BENEFIT...................................... $ 0.00
NON GUARANTEED DEATH BENEFIT................................................... $ 2,500,000.00
INITIAL AMOUNT OF SIB PAID-UP ADDITIONS $ 0
INITIAL AMOUNT OF SIB ONE-YEAR TERM INS $ 0
ACCOUNT REPRESENTATIVE:
THIS FORM MUST BE ATTACHED TO APPLICATION
