MetLife 2013 Annual Report Download - page 190

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
16. Equity (continued)
The following table presents a summary of Performance Share and Restricted Stock Unit activity:
Performance Shares Restricted Stock Units
Shares
Weighted Average
Grant Date
Fair Value Units
Weighted Average
Grant Date
Fair Value
Outstanding at January 1, 2013 ........................................... 4,822,028 $36.93 2,080,148 $36.55
Granted ............................................................. 1,749,212 $50.86 2,182,213 $32.34
Forfeited ............................................................. (151,075) $40.87 (395,365) $33.97
Payable (1) ........................................................... (1,346,025) $32.24 (538,480) $33.17
Outstanding at December 31, 2013 ....................................... 5,074,140 $42.86 3,328,516 $33.35
Expected to vest at a future date as of December 31, 2013 ..................... 5,067,337 $38.60 2,995,664 $33.34
(1) 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, 2013, the three year performance period for
the 2011 Performance Share grants was completed, but the performance factor had not yet been calculated. Included in the immediately preceding
table are 1,545,020 outstanding Performance Shares to which the 2011 – 2013 performance factor will be applied. The factor will be determined in
the second quarter of 2014.
Liability Awards (Phantom Stock-Based Awards)
Certain MetLife international subsidiaries have a liability for Phantom Stock-Based Awards in the form of Unit Options, Restricted Units, and/or
Performance Units. These Share-based cash settled awards are recorded as liabilities until payout is made. Unlike Share-settled awards, which have a
fixed grant-date fair value, the fair value of unsettled or unvested liability awards is remeasured at the end of each reporting period based on the
change in fair value of one Share. The liability and corresponding expense are adjusted accordingly until the award is settled.
Unit Options
Each Unit Option is the contingent right of the holder to receive a cash payment equal to the closing price of a Share on the surrender date, less
the closing price on the grant date, if the difference is greater than zero. The vast majority of Unit Options have become or will become eligible for
surrender at a rate of one-third of each award on each of the first three anniversaries of the grant date. Other Unit Options have become or will
become eligible for surrender on the third anniversary of the grant date. Vesting is subject to continued service, except for employees who are
retirement eligible and in certain other limited circumstances.
Restricted Units
Restricted Units are units that, if they vest, are payable in cash equal to the closing price of a Share on the last day of the restriction period. The
vast majority of Restricted Units normally vest in their entirety on the third anniversary of their grant date. Vesting is subject to continued service,
except for employees who are retirement eligible and in certain other limited circumstances.
Performance Units
Performance Units are units that, if they vest, are multiplied by a performance factor to produce a number of final Performance Units which are
payable in cash equal to the closing price of a Share on a date following the last day of the three-year performance period. The performance factor for
the Performance Units for any given period is determined on the identical basis as the performance factor for Performance Shares for the same
performance period. Performance Units are accounted for as liability awards, but are not credited with dividend-equivalents for actual dividends paid
on Shares during the performance period. Accordingly, the estimated fair value of Performance Units is based upon the closing price of a Share on
the date of grant, reduced by the present value of estimated dividends to be paid on that stock during the performance period.
See “— Performance Shares” for a discussion of the Performance Shares vesting period and award calculation, which is also used for
Performance Units.
The following table presents a summary of Liability Awards activity:
Unit
Options Restricted Units Performance Units
Outstanding at January 1, 2013 ........................................................... 1,370,317 740,436 305,164
Granted .............................................................................. 48,301 445,740 297,834
Exercised ............................................................................ (127,386) — —
Forfeited ............................................................................. (69,606) (127,329) (15,761)
Paid ................................................................................. — (79,325) (55,349)
Outstanding at December 31, 2013 ........................................................ 1,221,626 979,522 531,888
Expected to vest at a future date as of December 31, 2013 ..................................... 1,137,832 881,570 478,699
Statutory Equity and Income
Each of MetLife, Inc.’s U.S. insurance company’s state of domicile imposes risk-based capital (“RBC”) requirements that were developed by the
National Association of Insurance Commissioners (“NAIC”). American Life does not write business in Delaware or any other domestic state and, as such,
182 MetLife, Inc.