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Exhibit 10.2
EMPLOYMENT AGREEMENT
BETWEEN
CAPTEC NET LEASE REALTY, INC.
AND
PATRICK L. BEACH
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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the _____ day of
___________, 1997, between Captec Net Lease Realty, Inc., a Delaware corporation
(the "Company"), and Patrick L. Beach (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 and Presidents 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.
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2. Term and Positions.
(a) Subject to the provisions for the termination of this
Agreement as provided for herein, the term of this Employment Agreement shall
commence on the date hereof and shall continue through December 31, 2000 (the
"Base Term") and shall automatically be extended for an additional one year
(each a "Renewal Year") at the end of each full calendar year for which this
Employment Agreement remains in effect unless on or before November 30 of each
calendar year, either party gives to the other party written notice of
termination of this Employment Agreement, in which case this Employment
Agreement shall terminate upon the completion of the then applicable employment
period including any previous Renewal Years.
(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 the Board of Directors, (ii) no other individual
shall be elected or appointed as Chief Executive Officer of the Company, (iii)
the highest 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 certificate of
incorporation and bylaws 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 Ann Arbor,
Michigan;
(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
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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;
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, fifteen percent (15%)
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");
(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
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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.
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 One Hundred Fifty Thousand Dollars
($150,000) 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 each 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 grant to the Executive, pursuant to the
Company's Long-Term Incentive Plan, options to acquire 400,000 shares of the
Company's $.01 par value common stock (the "Common Stock") for a period of ten
years from the date of the initial public offering of the Common Stock at a
price equal to the initial public offering price of the Common Stock. The
options shall vest (at which time they shall become exerciseable) prorata on
each of the first three anniversaries of the execution of the Employment
Agreement.
(d) 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.
(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
this Employment 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
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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) 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.
(i) 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.
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 One Million Dollars ($1,000,000) 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) One Million Dollars
($1,000,000) 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
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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. In the event of, and upon the Executive's permanent
disability, all unvested options shall vest immediately and become fully
exerciseable.
(c) Except as otherwise provided in Paragraphs 3(e), 3(h) (in the event
of permanent disability only), 4(a), and 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 Ann Arbor, Michigan, 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
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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 lawful
duties under this Employment Agreement, which failure has not
been 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 time 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 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
Detroit, Michigan. 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
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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 and all unvested options shall
be forfeited. 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 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)), and all option granted to the
Executive shall vest immediately and become fully exerciseable.
6. 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, 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 6 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
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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 6. Payment
thereof shall be made within five (5) calendar days after the date upon which
such subsequent determination is made.
7. 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 Delaware, 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.
(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.
8. 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
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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 Detroit, Michigan, 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.
(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, 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 Delaware.
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(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.
CAPTEC NET LEASE REALTY, INC.
By:
--------------------------
Title: -----------------------
-----------------------------
PATRICK L. BEACH
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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
"FUNDS FROM OPERATIONS PER SHARE" PERCENTAGE OF BASE SALARY Sa
Zero to less than 5% 10%
5% to less than 10% 25%
10% to less than 15% 50%
15% to less than 20% 75%
20% or higher 100%
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EXHIBIT B
[SPLIT-DOLLAR AGREEMENT]
METROPOLITAN LIFE INSURANCE COMPANY
ONE MADISON AVENUE, NEW YORK, NEW YORK 10010
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.
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METROPOLITAN LIFE INSURANCE COMPANY
ONE MADISON AVENUE, NEW YORK, NEW YORK 10010
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.
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The following table demonstrated how dividends may affect policy values.
NON-GUARANTEED
NON-GUARANTEED CURRENT DIV. SCALE (LESS 1% OF
GUARANTEED CURRENT DIV. SCALE 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.
17
METROPOLITAN LIFE INSURANCE COMPANY
ONE MADISON AVENUE, NEW YORK, NEW YORK 10010
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
18
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
NON GUARANTEED
GUARANTEED CASH
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIO-LD
19
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
NON GUARANTEED
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIC-LD
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
INITIAL ANNUAL CONTRACT
PREMIUM (see Page 1)
$28,475.00
DIVIDENDS BUY PAID-UP ADDITIONAL INSURANCE
1996 DIVIDEND SCALE, 1996 PORTFOLIO
NON GUARANTEED
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIC-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
NON GUARANTEED
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
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
NON GUARANTEED
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
ONE MADISON AVENUE,
NEW YORK, NY 10010-3690
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
NON GUARANTEED
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
95121H1 (EXP 1296) MLIC-LD
24
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,
25
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.
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
ONE MADISON AVENUE,
NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIO-LD
26
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
ONE MADISON AVENUE,
NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIC-LD
27
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
ONE MADISON AVENUE,
NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIC-LD
28
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
ONE MADISON AVENUE, NEW YORK, NY 10010-3690
951211HI (EXP 1296) MLIC-LD
29
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