MetLife 2007 Annual Report Download - page 161

Gross benefit payments for the next ten years, which reflect expected future service where appropriate, and gross subsidies to be
received under the Prescription Drug Act are expected to be as follows:
Pension
Benefits Gross Prescription Drug Subsidies Net
Other Postretirement Benefits
(In millions)
2008. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 360 $116 $ (14) $102
2009. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 373 $120 $ (15) $105
2010. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 383 $124 $ (16) $109
2011. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 397 $129 $ (16) $113
2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 413 $132 $ (17) $115
2013-2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,288 $713 $(100) $613
Savings and Investment Plans
The Subsidiaries sponsor savings and investment plans for substantially all employees under which a portion of employee contributions
are matched. The Subsidiaries contributed $79 million, $82 million and $78 million for the years ended December 31, 2007, 2006 and
2005, respectively.
18. Equity
Preferred Stock
Issuances
In September 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.
In connection with financing the acquisition of Travelers on July 1, 2005, which is described in Note 2, the Holding Company issued
preferred shares as follows:
In June 2005, the Holding Company issued 24 million shares of Floating Rate Non-Cumulative Preferred Stock, Series A (the
“Series A preferred shares”) with a $0.01 par value per share, and a liquidation preference of $25 per share, for aggregate proceeds of
$600 million.
In June 2005, the Holding Company issued 60 million shares of 6.50% Non-Cumulative Preferred Stock, Series B (the “Series B
preferred shares”), with a $0.01 par value per share, and a liquidation preference of $25 per share, for aggregate proceeds of
$1.5 billion.
The Series A and Series B preferred shares (the “Preferred Shares”) rank senior to the common stock with respect to dividends and
liquidation rights. Dividends on the Preferred Shares are not cumulative. Holders of the Preferred Shares will be entitled to receive dividend
payments only when, as and if declared by the Holding Company’s Board of Directors or a duly authorized committee of the board. If
dividends are declared on the Series A preferred shares, they will be payable quarterly, in arrears, at an annual rate of the greater of:
(i) 1.00% above 3-month LIBOR on the related LIBOR determination date; or (ii) 4.00%. Any dividends declared on the Series B preferred
shares will be payable quarterly, in arrears, at an annual fixed rate of 6.50%. Accordingly, in the event that dividends are not declared on the
Preferred Shares for payment on any dividend payment date, then those dividends will cease to accrue and be payable. If a dividend is not
declared before the dividend payment date, the Holding Company has no obligation to pay dividends accrued for that dividend period
whether or not dividends are declared and paid in future periods. No dividends may, however, be paid or declared on the Holding
Company’s common stock — or any other securities ranking junior to the Preferred Shares — unless the full dividends for the latest
completed dividend period on all Preferred Shares, and any parity stock, have been declared and paid or provided for.
The Holding Company is prohibited from declaring dividends on the Preferred Shares if it fails to meet specified capital adequacy, net
income and shareholders’ equity levels. In addition, under Federal Reserve Board policy, the Holding Company may not be able to pay
dividends if it does not earn sufficient operating income.
The Preferred Shares do not have voting rights except in certain circumstances where the dividends have not been paid for an
equivalent of six or more dividend payment periods whether or not those periods are consecutive. Under such circumstances, the holders
of the Preferred Shares have certain voting rights with respect to members of the Board of Directors of the Holding Company.
The Preferred Shares are not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar provisions.
The Preferred Shares are redeemable, but not prior to September 15, 2010. On and after that date, subject to regulatory approval, the
Preferred Shares will be redeemable at the Holding Company’s option in whole or in part, at a redemption price of $25 per Preferred Share,
plus declared and unpaid dividends.
In connection with the offering of the Preferred Shares, the Holding Company incurred $56.8 million of issuance costs which have been
recorded as a reduction of additional paid-in capital.
F-65MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)