MetLife 2010 Annual Report Download - page 224

The following table presents the weighted average assumptions, with the exception of risk-free rate, which is expressed as a range, used
to determine the fair value of Stock Options issued:
2010 2009 2008
Years Ended December 31,
Dividendyield....................................... 2.11% 3.15% 1.21%
Risk-freerateofreturn ................................. 0.35%-5.88% 0.73%-6.67% 1.91%-7.21%
Expected volatility . . . . . . . . . . . . . ....................... 34.41% 44.39% 24.85%
Exercisemultiple..................................... 1.75 1.76 1.73
Post-vestingterminationrate ............................. 3.64% 3.70% 3.05%
Contractualterm(years) ................................ 10 10 10
Expectedlife(years)................................... 7 6 6
Weighted average exercise price of stock options granted . . . . . . . . . . $35.06 $23.61 $59.48
Weighted average fair value of stock options granted . . . . . . . . . . . . . . $11.29 $8.37 $17.51
The following table presents a summary of Stock Option exercise activity:
2010 2009 2008
Years Ended
December 31,
(In millions)
Totalintrinsicvalueofstockoptionsexercised................................... $22 $ 1 $36
Cashreceivedfromexerciseofstockoptions ................................... $52 $ 8 $45
Taxbenefitrealizedfromstockoptionsexercised................................. $ 8 $ — $13
Performance Shares
Performance Shares are units that, if they vest, are multiplied by a performance factor to produce a number of final Performance Shares
which are payable in shares of MetLife, Inc. common stock. Performance Shares are accounted for as equity awards, but are not credited with
dividend-equivalents for actual dividends paid on MetLife, Inc. common stock during the performance period. Accordingly, the estimated fair
value of Performance Shares is based upon the closing price of MetLife, Inc. common stock on the date of grant, reduced by the present
value of estimated dividends to be paid on that stock during the performance period.
Performance Share awards normally vest in their entirety at the end of the three-year performance period. Vesting is subject to continued
service, except for employees who are retirement eligible and in certain other limited circumstances. Vested Performance Shares are
multiplied by a performance factor of 0.0 to 2.0 based largely on MetLife, Inc.’s performance in change in annual net operating earnings and
total shareholder return over the applicable three-year performance period compared to the performance of its competitors. A performance
factor of 0.94 was applied for the January 1, 2007 — December 31, 2009 performance period.
The following table presents a summary of Performance Share activity for the year ended December 31, 2010:
Performance
Shares
Weighted Average
Grant Date
Fair Value
Outstanding at January 1, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,493,435 $38.43
Granted(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,528,065 $32.24
Forfeited.................................................... (58,176) $30.06
Payable(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (807,750) $60.83
Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,155,574 $31.91
Performance Shares expected to vest at December 31, 2010 . . . . . . . . . . . . . . . . . . 3,972,769 $33.40
(1) The total fair value on the date of the grant was $49 million.
(2) Includes both shares paid and shares deferred for later payment.
Performance Share amounts above represent aggregate initial target awards and do not reflect potential increases or decreases resulting
from the performance factor determined after the end of the respective performance periods. At December 31, 2010, the three year
performance period for the 2008 Performance Share grants was completed, but the performance factor has not yet been calculated. Included
in the immediately preceding table are 824,825 outstanding Performance Shares to which the performance factor will be applied.
Restricted Stock Units
Restricted Stock Units are units that, if they vest, are payable in shares of MetLife, Inc. common stock. Restricted Stock Units are
accounted for as equity awards, but are not credited with dividend-equivalents for actual dividends paid on MetLife, Inc. common stock
during the performance period. Accordingly, the estimated fair value of Restricted Stock Units is based upon the closing price of MetLife, Inc.
common stock on the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance
period.
The vast majority of Restricted Stock Units normally vest in their entirety on the third anniversary of their grant date. Other Restricted Stock
Units normally vest in their entirety on the fifth anniversary of their grant date. Vesting is subject to continued service, except for employees
who are retirement eligible and in certain other limited circumstances.
F-135MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)