MetLife 2003 Annual Report Download - page 85

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
14. Equity
Preferred Stock
On September 29, 1999, the Holding Company adopted a stockholder rights plan (the ‘‘rights plan’’) under which each outstanding share of
common stock issued between April 4, 2000 and the distribution date (as defined in the rights plan) will be coupled with a stockholder right. Each right
will entitle the holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock. Each one one-hundredth of a share of
Series A Junior Participating Preferred Stock will have economic and voting terms equivalent to one share of common stock. Until it is exercised, the right
itself will not entitle the holder thereof to any rights as a stockholder, including the right to receive dividends or to vote at stockholder meetings.
Stockholder rights are not exercisable until the distribution date, and will expire at the close of business on April 4, 2010, unless earlier redeemed or
exchanged by the Holding Company. The rights plan is designed to protect stockholders in the event of unsolicited offers to acquire the Holding
Company and other coercive takeover tactics.
Common Stock
On February 19, 2002, the Holding Company’s Board of Directors authorized a $1 billion common stock repurchase program. This program began
after the completion of the March 28, 2001 and June 27, 2000 repurchase programs, each of which authorized the repurchase of $1 billion of common
stock. Under these authorizations, the Holding Company may purchase common stock from the MetLife Policyholder Trust, in the open market and in
privately negotiated transactions.
On August 7, 2001, the Company purchased 10 million shares of its common stock as part of the sale of 25 million shares of MetLife common
stock by Santusa Holdings, S.L., an affiliate of Banco Santander Central Hispano, S.A. The sale by Santusa Holdings, S.L. was made pursuant to a shelf
registration statement, effective June 29, 2001.
The Company acquired 2,997,200, 15,244,492 and 45,242,966 shares of common stock for $97 million, $471 million and $1,322 million during
the years ended December 31, 2003, 2002 and 2001, respectively. During the year ended December 31, 2003, 59,904,925 shares of common stock
were issued from treasury stock for $1,667 million, of which 59,771,221 shares were issued in connection with the settlement of the purchase contracts
(see Note 8) with cash proceeds of approximately $1,006 million. During the years ended December 31, 2002 and 2001, 16,379 and 67,578 shares of
common stock were issued from treasury stock for $438 thousand and $1 million, respectively. At December 31, 2003, the Company had approximately
$709 million remaining on its existing share repurchase authorization.
Dividend Restrictions
Under the New York Insurance Law, Metropolitan Life is permitted without prior insurance regulatory clearance to pay a stockholder dividend to the
Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to
policyholders as of the immediately preceding calendar year, and (ii) its statutory net gain from operations for the immediately preceding calendar year
(excluding realized capital gains). Metropolitan Life will be permitted to pay a cash dividend to the Holding Company in excess of the lesser of such two
amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent does not
disapprove the distribution. Under the New York Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of
a stock life insurance company would support the payment of such dividends to its stockholders. The Department has established informal guidelines for
such determinations. The guidelines, among other things, focus on the insurer’s overall financial condition and profitability under statutory accounting
practices. For the year ended December 31, 2003, Metropolitan Life paid to MetLife, Inc. $698 million in dividends for which prior insurance regulatory
clearance was not required and $750 million in special dividends, as approved by the Superintendent. For the year ended December 31, 2002,
Metropolitan Life paid to MetLife, Inc. $535 million in dividends for which prior insurance regulatory clearance was not required and $369 million in special
dividends, as approved by the Superintendent. For the year ended December 31, 2001, Metropolitan Life paid to MetLife, Inc. $721 million in dividends
for which prior insurance regulatory clearance was not required and $3,033 million in special dividends, as approved by the Superintendent. At
December 31, 2003, the maximum amount of the dividend which may be paid to the Holding Company from Metropolitan Life in 2004, without prior
regulatory approval is $798 million. Metropolitan Life could pay the Holding Company a dividend of $798 million without prior approval of the
Superintendent.
Under the Delaware Insurance Law, MIAC is permitted without prior insurance regulatory clearance to pay a stockholder dividend to the Holding
Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the greater of (i) 10% of its surplus to
policyholders as of the immediately preceding calendar year, and (ii) its statutory net gain from operations for the immediately preceding calendar year
(excluding realized capital gains). MIAC will be permitted to pay a cash dividend to the Holding Company in excess of the greater of such two amounts
only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent does not
disapprove the distribution. Under the Delaware Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of
a stock life insurance company would support the payment of such dividends to its stockholders. The Department has established informal guidelines for
such determinations. The guidelines, among other things, focus on the insurer’s overall financial condition and profitability under statutory accounting
practices. MIAC paid to MetLife, Inc. $104 million in dividends for which prior insurance regulatory clearance was not required and $94 million in special
dividends, as approved by the Superintendent for the year ended December 31, 2003. For the years ended December 31, 2002 and 2001,
respectively, MIAC paid to MetLife, Inc. $25 million and $31 million in dividends for which prior insurance regulatory clearance was not required. As of
December 31, 2003, the maximum amount of the dividend which may be paid to the Holding Company from MIAC in 2004, without prior regulatory
approval, is $185 million.
Under the Rhode Island Insurance Law, Metropolitan Property and Casualty Insurance Company is permitted without prior insurance regulatory
clearance to pay a stockholder dividend to the Holding Company as long as the aggregate amount of all such dividends in any calendar year does not
exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year, and (ii) next preceding three year earnings
reduced by capital gains and dividends paid to stockholders. Metropolitan Property and Casualty Insurance Company will be permitted to pay a
stockholder dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend
and the amount thereof with the Superintendent and the Superintendent does not disapprove the distribution. For the year ended December 31, 2003,
Metropolitan Property and Casualty Insurance Company paid to MetLife, Inc. $75 million in dividends for which prior insurance regulatory clearance was
MetLife, Inc.
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