MetLife 2006 Annual Report Download - page 150

gain from operations for the immediately preceding calendar year. MICC will be permitted to pay a cash dividend in excess of the greater of
such two amounts only if it files notice of its declaration of such a dividend and the amount thereof with the Connecticut Commissioner of
Insurance (“Commissioner”) and the Commissioner does not disapprove the payment within 30 days after notice. In addition, any dividend
that exceeds earned surplus (unassigned funds, reduced by 25% of unrealized appreciation in value or revaluation of assets or unrealized
profits on investments) as of the last filed annual statutory statement requires insurance regulatory approval. Under Connecticut State
Insurance Law, the Commissioner has broad discretion in determining whether the financial condition of a stock life insurance company
would support the payment of such dividends to its shareholders. The Connecticut State Insurance Law requires prior approval for any
dividends for a period of two years following a change in control. As a result of the acquisition of MICC by the Holding Company on July 1,
2005, under Connecticut State Insurance Law, all dividend payments by MICC through June 30, 2007 require prior approval of the
Commissioner.
Under Rhode Island State Insurance Law, MPC 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 twelve-month period does not exceed the lesser of:
(i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year; or (ii) net income, not including realized
capital gains, for the immediately preceding calendar year. MPC 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 Rhode
Island Commissioner of Insurance (the “Rhode Island Commissioner”) and the Rhode Island Commissioner does not disapprove the
distribution within 30 days of its filing. Under Rhode Island State Insurance Code, the Rhode Island Commissioner has broad discretion in
determining whether the financial condition of a stock property and casualty insurance company would support the payment of such
dividends to its shareholders.
Under Delaware State Insurance Law, Metropolitan Tower Life Insurance Company (“MTL”) is permitted, without prior insurance
regulatory clearance, to pay a stockholder dividend to the Holding Company as long as the amount of the dividend when aggregated with
all other dividends in the preceding 12 months does not exceed the greater of: (i) 10% of its surplus to policyholders as of the end of the
immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding
realized capital gains). MTL 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 the declaration of such a dividend and the amount thereof with the Delaware Commissioner of Insurance (the
“Delaware Commissioner”) and the Delaware Commissioner does not disapprove the distribution within 30 days of its filing. In addition, any
dividend that exceeds earned surplus (defined as unassigned funds) as of the last filed annual statutory statement requires insurance
regulatory approval. Under Delaware State Insurance Law, the Delaware Commissioner has broad discretion in determining whether the
financial condition of a stock life insurance company would support the payment of such dividends to its shareholders.
Stock-BasedCompensationPlans
Overview
As described more fully in Note 1, effective January 1, 2006, the Company adopted SFAS 123(r) using the modified prospective
transition method. The adoption of SFAS 123(r) did not have a significant impact on the Company’s consolidated financial position or
consolidated results of operations.
Description of Plans
The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the “Stock Incentive Plan”), authorized the granting of awards in the form of
options to buy shares of Holding Company common stock (“Stock Options”) that either qualify as incentive Stock Options under
Section 422A of the Internal Revenue Code or are non-qualified. The MetLife, Inc. 2000 Directors Stock Plan, as amended (the “Directors
Stock Plan”), authorized the granting of awards in the form of Performance Share awards, non-qualified Stock Options, or a combination of
the foregoing to outside Directors of the Holding Company. Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan, as
amended (the “2005 Stock Plan”), awards granted may be in the form of Stock Options, Stock Appreciation Rights, Restricted Stock or
Restricted Stock Units, Performance Shares or Performance Share Units, Cash-Based Awards, and Stock-Based Awards (each as defined
in the 2005 Stock Plan). Under the MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan (the “2005 Directors Stock
Plan”), awards granted may be in the form of non-qualified Stock Options, Stock Appreciation Rights, Restricted Stock or Restricted Stock
Units, or Stock-Based Awards (each as defined in the 2005 Directors Stock Plan). The Stock Incentive Plan, Directors Stock Plan, 2005
Stock Plan, the 2005 Directors Stock Plan and the LTPCP, as described below, are hereinafter collectively referred to as the “Incentive
Plans.”
The aggregate number of shares reserved for issuance under the 2005 Stock Plan and the LTPCP is 68,000,000, plus those shares
available but not utilized under the Stock Incentive Plan and those shares utilized under the Stock Incentive Plan that are recovered due to
forfeiture of Stock Options. Additional shares carried forward from the Stock Incentive Plan and available for issuance under the 2005
Stock Plan were 12,423,881 as of December 31, 2006. There were no shares carried forward from the Directors Stock Plan. Each share
issued under the 2005 Stock Plan in connection with a Stock Option or Stock Appreciation Right reduces the number of shares remaining
for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than Stock Options
or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. The number of shares
reserved for issuance under the 2005 Directors Stock Plan are 2,000,000. As of December 31, 2006, the aggregate number of shares
remaining available for issuance pursuant to the 2005 Stock Plan and the 2005 Directors Stock Plan were 66,712,241 and 1,941,734,
respectively.
Stock Option exercises and other stock-based awards to employees settled in shares are satisfied through the issuance of shares held
in treasury by the Company. Under the current authorized share repurchase program, as described above, sufficient treasury shares exist
to satisfy foreseeable obligations under the Incentive Plans.
F-67MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)