MetLife 2011 Annual Report Download - page 221

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
Additional Information
As previously discussed, most of the assets of the U.S. pension and other postretirement benefit plans are held in group annuity and life insurance
contracts issued by the Subsidiaries. Total revenues from these contracts recognized in the consolidated statements of operations were $47 million,
$46 million and $45 million for the years ended December 31, 2011, 2010 and 2009, respectively, and included policy charges and net investment
income from investments backing the contracts and administrative fees. Total investment income (loss), including realized and unrealized gains (losses),
credited to the account balances was $885 million, $767 million and $725 million for the years ended December 31, 2011, 2010 and 2009,
respectively. The terms of these contracts are consistent in all material respects with those the Subsidiaries offer to unaffiliated parties that are similarly
situated.
Savings and Investment Plans
The Subsidiaries sponsor the U.S. savings and investment plans for substantially all Company employees under which a portion of employee
contributions are matched. The Subsidiaries contributed $95 million, $86 million and $93 million for the years ended December 31, 2011, 2010 and
2009, respectively.
18. Equity
Preferred Stock
There are 200,000,000 authorized shares of preferred stock, of which 6,857,000 shares were designated for issuance of convertible preferred
stock in connection with the financing of the Acquisition in 2010. See “— Convertible Preferred Stock” below.
MetLife, Inc. has outstanding 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.
MetLife, Inc. has outstanding 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.
The Preferred Stock ranks senior to the common stock with respect to dividends and liquidation rights. Dividends on the Preferred Stock are not
cumulative. Holders of the Preferred Stock will be entitled to receive dividend payments only when, as and if declared by MetLife, Inc.’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 three-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 Stock 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, MetLife, Inc. 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 MetLife, Inc.’s common stock — or any other
securities ranking junior to the Preferred Stock — unless the full dividends for the latest completed dividend period on all Preferred Stock, and any parity
stock, have been declared and paid or provided for.
MetLife, Inc. is prohibited from declaring dividends on the Preferred Stock if it fails to meet specified capital adequacy, net income and equity levels.
In addition, under Federal Reserve Board policy, MetLife, Inc. may not be able to pay dividends if it does not earn sufficient operating income.
The Preferred Stock does 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 Stock have
certain voting rights with respect to members of the Board of Directors of MetLife, Inc.
The Preferred Stock is not subject to any mandatory redemption, sinking fund, retirement fund, purchase fund or similar provisions. The Preferred
Stock is redeemable at MetLife, Inc.’s option in whole or in part, at a redemption price of $25 per share of Preferred Stock, plus declared and unpaid
dividends.
In December 2008, MetLife, Inc. entered into an RCC related to the Preferred Stock. As part of such RCC, MetLife, Inc. agreed that it will not repay,
redeem or purchase the Preferred Shares on or before December 31, 2018, unless, subject to certain limitations, it has received proceeds during a
specified period from the sale of specified replacement securities. The RCC is for the benefit of the holders of the related Covered Debt, which was
initially the Senior Notes. As a result of the issuance of the 10.750% JSDs, the 10.750% JSDs became the Covered Debt with respect to, and in
accordance with, the terms of the RCC relating to the Preferred Shares. The RCC will terminate upon the occurrence of certain events, including the
date on which MetLife, Inc. has no series of outstanding eligible debt securities.
MetLife, Inc. 217