SCHEDULE 14A
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-12
MetLife, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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[MetLife Logo]
Notice
of Annual
Meeting
and
Proxy
Statement
2004
[Snoopy Graphic]
MetLife, Inc.
One Madison Avenue, New York, NY 10010-3690 [MetLife Logo]
March 22, 2004
Dear Shareholder:
You are cordially invited to attend MetLife, Inc.'s annual meeting, which will
be held on Tuesday, April 27, 2004 beginning at 10:30 a.m., local time, in the
Auditorium at One Madison Avenue, New York, New York. To attend the meeting,
please enter the building through the entrance at 320 Park Avenue South, from
which you will be directed to the Auditorium.
At the meeting, shareholders will vote on the election of five Class II
Directors, the approval of the MetLife, Inc. 2005 Stock and Incentive
Compensation Plan, the approval of the MetLife Annual Variable Incentive Plan,
the approval of the MetLife, Inc. 2005 Non-Management Director Stock
Compensation Plan, the ratification of the appointment of Deloitte & Touche LLP
as the Company's independent auditor for 2004, and, if properly presented at the
meeting, a shareholder proposal concerning CEO compensation, and will transact
such other business as may properly come before the meeting.
The vote of every shareholder is important. You can assure that your shares will
be represented and voted at the meeting by signing and returning the enclosed
proxy card, or by voting by telephone or on the Internet. We have included a
postage-paid, pre-addressed envelope, as well as detailed instructions on the
proxy card for shareholders voting by telephone or on the Internet, to make it
convenient for you to vote your shares.
Sincerely yours,
/s/ Robert H. Benmosche
Robert H. Benmosche
Chairman of the Board and
Chief Executive Officer
METLIFE, INC.
ONE MADISON AVENUE
NEW YORK, NY 10010-3690
------------------------
NOTICE OF ANNUAL MEETING
The 2004 Annual Meeting of MetLife, Inc. will be held at One Madison Avenue, New
York, New York on Tuesday, April 27, 2004 at 10:30 a.m., local time. To attend
the meeting, please enter the building through the entrance at 320 Park Avenue
South, from which you will be directed to the Auditorium. At the meeting,
shareholders will act upon the following matters:
1. The election of five Class II Directors;
2. Approval of the MetLife, Inc. 2005 Stock and Incentive Compensation
Plan;
3. Approval of the MetLife Annual Variable Incentive Plan;
4. Approval of the MetLife, Inc. 2005 Non-Management Director Stock
Compensation Plan;
5. The ratification of the appointment of Deloitte & Touche LLP as
MetLife's independent auditor for the year ending December 31, 2004;
6. A shareholder proposal concerning CEO compensation, if properly
presented at the meeting; and
7. Such other business as may properly come before the meeting.
Information about the matters to be acted upon at the meeting is contained in
the accompanying Proxy Statement.
Shareholders of record at the close of business on March 1, 2004 will be
entitled to vote at the meeting.
By Order of the Board of Directors,
/s/ Gwenn L. Carr
Gwenn L. Carr
Vice President and Secretary
New York, New York
March 22, 2004
TABLE OF CONTENTS
Proxy Statement -- 2004 Annual Meeting...................... 1
Information About the 2004 Annual Meeting and Proxy
Voting.................................................... 1
Information About Communications with the Company and the
Board of Directors........................................ 5
Proposal One -- Election of Directors....................... 6
Proposal Two -- Approval of the MetLife, Inc. 2005 Stock and
Incentive Compensation Plan............................... 9
Proposal Three -- Approval of the MetLife Annual Variable
Incentive Plan............................................ 16
Proposal Four -- Approval of the MetLife, Inc. 2005
Non-Management Director Stock Compensation Plan........... 19
Proposal Five -- Ratification of Appointment of the
Independent Auditor....................................... 22
Proposal Six -- Shareholder Proposal Concerning CEO
Compensation.............................................. 23
Corporate Governance........................................ 26
Information About MetLife's Board of Directors......... 26
Audit Committee Report...................................... 34
Compensation Committee Report on Executive Compensation..... 35
Executive Compensation...................................... 40
Summary Compensation Table............................. 40
Long Term Incentive Plan Awards in Last Fiscal Year.... 41
Option Grants in Last Fiscal Year...................... 41
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values......................... 42
Retirement Plan Information............................ 42
Employment-Related Agreements.......................... 44
Equity Compensation Plans Table............................. 46
Performance Graph........................................... 48
Stock Ownership of Directors and Executive Officers......... 49
Section 16(a) Beneficial Ownership Reporting
Compliance............................................ 51
Ownership of MetLife Common Stock........................... 51
MetLife, Inc. 2005 Stock and Incentive Compensation Plan.... A-1
MetLife Annual Variable Incentive Plan...................... B-1
MetLife, Inc. 2005 Non-Management Director Stock
Compensation Plan......................................... C-1
Audit Committee Charter..................................... D-1
Categorical Standards Regarding Director Independence....... E-1
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PROXY STATEMENT -- 2004 ANNUAL MEETING
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This Proxy Statement contains information about the 2004 Annual Meeting of
MetLife, Inc. ("MetLife" or the "Company"), which will be held in the Auditorium
at One Madison Avenue, New York, New York on Tuesday, April 27, 2004 at 10:30
a.m., local time.
This Proxy Statement and the accompanying proxy card, which are furnished in
connection with the solicitation of proxies by MetLife's Board of Directors, are
being mailed and made available electronically to shareholders on or about March
22, 2004.
YOUR VOTE IS IMPORTANT. Whether or not you plan to attend the 2004 Annual
Meeting, please take the time to vote your shares as soon as possible. If you
wish to return your completed proxy card by mail, the Company has included a
postage-paid, pre-addressed envelope for your convenience. Alternatively, you
may vote your shares by using a toll-free telephone number or on the Internet
(see the proxy card for complete instructions).
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INFORMATION ABOUT THE 2004 ANNUAL MEETING AND PROXY VOTING
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WHAT MATTERS ARE TO BE VOTED ON AT THE ANNUAL MEETING?
MetLife intends to present proposals numbered one through five for shareholder
consideration and voting at the Annual Meeting. In addition, shareholders of
MetLife have informed us that they intend to present proposal number six at the
Annual Meeting, in which case that proposal will be voted on if properly
presented at the meeting.
1. The election of five nominees to serve as Class II Directors
2. Approval of the MetLife, Inc. 2005 Stock and Incentive Compensation Plan
3. Approval of the MetLife Annual Variable Incentive Plan
4. Approval of the MetLife, Inc. 2005 Non-Management Director Stock Compensation
Plan
5. The ratification of the appointment of an independent auditor to audit the
Company's financial statements for the year ending December 31, 2004
6. A shareholder proposal concerning CEO compensation
WHAT IS THE BOARD'S RECOMMENDATION?
The Board recommends votes FOR items 1-5 on your Proxy Card and AGAINST item 6.
WILL ANY OTHER MATTERS BE PRESENTED FOR A VOTE AT THE ANNUAL MEETING?
The Board of Directors did not receive any notice prior to the deadline for
submission of additional business that any other matters might be presented for
a vote at the 2004 Annual Meeting. However, if another matter were to be
presented, the proxies would use their own judgment in deciding whether to vote
for or against it.
DO ANY OF THE COMPANY'S EXECUTIVE OFFICERS, DIRECTORS OR DIRECTOR NOMINEES HAVE
ANY DIRECT OR INDIRECT INTEREST IN ANY MATTER TO BE ACTED UPON?
MetLife's executive officers would be eligible to receive grants and awards
under the MetLife, Inc. 2005 Stock Incentive Compensation Plan and the MetLife
Annual Variable Incentive Plan, the approval of each of which is to be voted
upon at the Annual Meeting. The Non-Management Directors would be eligible to
receive grants and awards under the MetLife, Inc. 2005 Non-Management Director
Stock Compensation Plan, the approval of which is also to be voted upon at the
Annual Meeting.
WHO IS ENTITLED TO VOTE?
All MetLife shareholders of record at the close of business on March 1, 2004
(the "record date") are entitled to vote at the 2004 Annual Meeting.
If you are the beneficial owner, but not the record owner, of MetLife common
stock, you will receive instructions about voting from the bank, broker or other
nominee that is the shareholder of record of your shares. Contact your bank,
broker or other nominee directly if you have questions.
HOW DO I VOTE MY SHARES?
- Shareholders of record may vote their shares by mail, by telephone or on the
Internet. Voting by telephone or on the Internet will be available through
11:59 p.m. Eastern time on April 26, 2004.
- Instructions about these ways to vote appear on your proxy card. If you vote
by telephone or on the Internet, please have your proxy card available.
- If you are a shareholder of record or a duly appointed proxy of a shareholder
of record, you may attend the meeting and vote in person. However, if your
shares are held in the name of a bank, broker or other nominee, and you wish
to attend the meeting to vote in person, you will have to contact your bank,
broker or other nominee to obtain its proxy. Bring that document with you to
the meeting.
- Votes submitted by mail, telephone or on the Internet will be voted in the
manner you indicate by the individuals named on the proxy. If you do not
specify how your shares are to be voted, the proxies will vote your shares FOR
the election of the Class II Directors, FOR approval of the MetLife, Inc. 2005
Stock and Incentive Compensation Plan, FOR approval of the MetLife Annual
Variable Incentive Plan, FOR approval of the MetLife, Inc. 2005 Non-Management
Director Stock Compensation Plan, FOR the ratification of the appointment of
Deloitte & Touche LLP as MetLife's independent auditor for 2004, and AGAINST
the shareholder proposal concerning CEO compensation.
WHO CAN ATTEND THE 2004 ANNUAL MEETING?
Only MetLife shareholders of record or their duly appointed proxies are entitled
to attend the meeting. If you are a MetLife shareholder of record and wish to
attend the meeting, please so indicate on the proxy card or as prompted by the
telephone or Internet voting systems and an admission card will be sent to you.
On the date of the meeting, please bring your admission card with you and enter
the building through the entrance at 320 Park Avenue South, from which you will
be directed to the Auditorium.
If a bank, broker or other nominee is the record owner of your shares, you will
need to have proof that you are the beneficial owner to be admitted to the
meeting. A recent statement or letter from your bank or broker confirming your
ownership, or presentation of a valid proxy from a bank, broker or other nominee
that is the record owner of your shares, would be acceptable proof of your
beneficial ownership.
MAY I CHANGE MY VOTE OR REVOKE MY PROXY AFTER IT IS SUBMITTED?
Yes, you may change your vote or revoke your proxy at any time before the Annual
Meeting by:
- returning a later-dated proxy card;
- subsequently voting by telephone or on the Internet;
- attending the Annual Meeting and voting in person; or
- sending your notice of revocation to MetLife, Inc., c/o Mellon Investor
Services, P.O. Box 3530, South Hackensack, NJ 07606-9230 or via the
Internet at http://www.eproxy.com/met.
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Your changed vote or revocation must be received before the polls close for
voting.
HOW WILL METLIFE ASSOCIATES' SHARES HELD IN THE COMPANY'S SAVINGS AND INVESTMENT
PLAN BE VOTED?
Mellon Bank, N.A., as Trustee of the Savings and Investment Plan for Employees
of Metropolitan Life and Participating Affiliates Trust, will vote the MetLife
shares in the Plan in accordance with the voting instructions given by Plan
participants to the Trustee. The Trustee will vote the Plan shares for which it
does not receive voting instructions in the same proportion as the shares for
which it does receive voting instructions.
HOW MANY SHARES CAN VOTE AT THE 2004 ANNUAL MEETING?
There were 756,789,398 shares of MetLife common stock outstanding, as of the
March 1, 2004 record date. Each of those shares is entitled to one vote on each
matter to be voted on at the meeting.
WHAT IS A "QUORUM"?
In order for business to be conducted at the 2004 Annual Meeting, a quorum must
be present. A quorum will be present if shareholders of record of one-third or
more of MetLife shares outstanding on the record date are present in person or
are represented by proxies.
WHAT VOTE IS NECESSARY TO PASS THE ITEMS OF BUSINESS AT THE ANNUAL MEETING?
If a quorum is present at the meeting, a plurality of the shares voting will be
sufficient to elect the Class II Directors. This means that the Director
Nominees who receive the largest number of votes cast are elected as Directors,
up to the maximum number of Directors to be elected at the meeting.
In addition, subject to exceptions set forth in the Company's Certificate of
Incorporation, a majority of the shares voting will be sufficient to approve any
other matter properly before the meeting, including the MetLife, Inc. 2005 Stock
and Incentive Compensation Plan, the MetLife Annual Variable Incentive Plan, the
MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan, ratification
of the appointment of Deloitte & Touche LLP as MetLife's independent auditor,
and a shareholder proposal concerning CEO compensation.
HOW ARE ABSTENTIONS AND BROKER NON-VOTES COUNTED?
Abstentions and broker non-votes will be counted to determine whether a quorum
is present. However, if a shareholder abstains from voting as to a particular
matter, those shares will not be counted as voting for or against that matter.
If brokers or other record holders of shares return a proxy card indicating that
they do not have discretionary authority to vote as to a particular matter
("broker non-votes"), those shares will not be counted as voting for or against
that matter. Accordingly, abstentions and broker non-votes will have no effect
on the outcome of a vote. Under a recent rule change, the New York Stock
Exchange no longer permits its members to exercise discretionary authority to
vote as to any equity compensation plan, or any material revision to the terms
of any existing equity compensation plan.
WHO IS THE INSPECTOR OF ELECTION?
The Board of Directors has appointed Lawrence E. Dennedy, Senior Vice President,
MacKenzie Partners, Inc., to act as Inspector of Election at the 2004 Annual
Meeting. The By-Laws of MetLife provide for confidential voting.
WHAT ARE THE COSTS FOR SOLICITING PROXIES FOR THE 2004 ANNUAL MEETING?
MetLife has retained Mellon Investor Services to assist with the solicitation of
proxies from its shareholders of record for a fee of approximately $11,500 plus
expenses. MetLife also will reimburse
3
banks, brokers or other nominees for their costs of sending MetLife's proxy
materials to beneficial owners. Directors, officers or other MetLife employees
also may solicit proxies from shareholders in person, or by telephone, facsimile
transmission or other electronic means of communication.
WHAT IS THE DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS FOR THE 2005 ANNUAL
MEETING?
Rule 14a-8 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), establishes the eligibility requirements and the procedures that must be
followed for a shareholder's proposal to be included in a public company's proxy
materials. Under the Rule, proposals submitted for inclusion in MetLife's 2005
proxy materials must be received by the Secretary of MetLife at One Madison
Avenue, New York, NY 10010-3690 on or before the close of business on November
23, 2004. Proposals must comply with all of the requirements of Rule 14a-8.
A shareholder who wishes to present a matter for action at MetLife's 2005 Annual
Meeting, but chooses not to do so under Rule 14a-8 under the Exchange Act, must
deliver to the Secretary of MetLife on or before December 28, 2004, a notice
containing the information required by the advance notice and other provisions
of the Company's By-Laws. A copy of the By-Laws may be obtained from the
Secretary of MetLife.
WHERE CAN I FIND THE VOTING RESULTS OF THE 2004 ANNUAL MEETING?
The preliminary voting results will be announced at the meeting. The final
results will be published in the Company's Quarterly Report on Form 10-Q for the
quarter ending June 30, 2004.
MAY I REQUEST ELECTRONIC DELIVERY OF MY PROXY STATEMENT AND ANNUAL REPORT?
This Proxy Statement and MetLife's 2003 Annual Report may be viewed online at
http://ir.metlife.com. If you are a shareholder of record, you may elect to
receive future annual reports and proxy statements electronically by providing
consent to electronic delivery on-line at http://vault.melloninvestor.com/isd.
Should you choose to receive your proxy materials electronically, your choice
will remain in effect until you notify MetLife that you wish to resume mail
delivery of these documents. You may provide your notice to MetLife via the
Internet at http://vault.melloninvestor.com/isd or by writing to MetLife, c/o
Mellon Investor Services, P.O. Box 3530, South Hackensack, NJ 07606-9230. In the
United States, you may provide such notice by calling toll free 1-800-649-3593.
If you hold your MetLife stock through a bank, broker or other holder of record,
refer to the information provided by that entity for instructions on how to
elect this option.
HOW CAN I GET A COPY OF METLIFE'S ANNUAL REPORT ON FORM 10-K?
TO OBTAIN WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2003, ADDRESS YOUR REQUEST TO METLIFE
INVESTOR RELATIONS, METLIFE, INC., ONE MADISON AVENUE, NEW YORK, NEW YORK 10010,
OR, ON THE INTERNET, ADDRESS YOUR REQUEST TO HTTP://IR.METLIFE.COM BY SELECTING
"INFORMATION REQUESTS" OR CALL 1-800-649-3593. THE ANNUAL REPORT ON FORM 10-K
MAY ALSO BE ACCESSED AT HTTP://IR.METLIFE.COM AND AT THE WEBSITE OF THE
SECURITIES AND EXCHANGE COMMISSION AT HTTP://WWW.SEC.GOV.
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INFORMATION ABOUT COMMUNICATIONS WITH THE COMPANY AND THE BOARD OF DIRECTORS
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HOW MAY I COMMUNICATE DIRECTLY WITH THE BOARD OF DIRECTORS?
The Board of Directors provides a process for shareholders to send
communications to the Board of Directors. You may communicate with the Board of
Directors individually or as a group by writing to:
The Board of Directors
MetLife, Inc.
c/o Corporate Secretary
One Madison Avenue
New York, NY 10001-3690
You should identify your communication as being from a MetLife shareholder. The
Corporate Secretary may require reasonable evidence that your communication or
other submission is made by a MetLife shareholder before transmitting your
communication to the Board of Directors.
HOW MAY I COMMUNICATE WITH THE AUDIT COMMITTEE?
The Audit Committee has established procedures for the receipt, retention and
treatment of complaints regarding accounting, internal accounting controls, or
auditing matters. A communication or complaint to the Audit Committee regarding
accounting, internal accounting controls or auditing matters may be submitted
- by sending a written communication addressed as follows:
MetLife, Inc. Audit Committee
c/o Corporate Secretary
One Madison Avenue
New York, New York 10001-3690
- by stating the communication in a call to the MetLife Compliance and Fraud
Hotline (1-800-462-6565) and identifying the communication as intended for the
Audit Committee, or
- by sending the communication in an e-mail message to the Company's Special
Investigation Unit at: siuline@metlife.com.
HOW MAY I COMMUNICATE DIRECTLY WITH THE NON-MANAGEMENT DIRECTORS?
You may communicate with the Non-Management Directors, as a group, by writing
to:
MetLife, Inc. Non-Management Directors
c/o Corporate Secretary
One Madison Avenue
New York, NY 10010-3690
HOW DO I COMMUNICATE DIRECTLY WITH THE COMPANY?
You may communicate with the Company by writing to:
MetLife, Inc.
c/o Corporate Secretary
One Madison Avenue
New York, NY 10010-3690
5
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PROPOSAL ONE -- ELECTION OF DIRECTORS
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At the 2004 Annual Meeting, five Class II Directors will be elected for a term
ending at the 2007 Annual Meeting to hold office until their successors are
elected and qualified.
Each Class II Nominee is currently serving as a Director of MetLife and has
agreed to continue to serve if elected. The Board of Directors has no reason to
believe that any Nominee would be unable to serve as a Director. However, if for
any reason a Nominee should become unable to serve at or before the 2004 Annual
Meeting, the Board could reduce the size of the Board or nominate someone else
for election. If the Board were to nominate someone else to stand for election
at the 2004 Annual Meeting, the proxies could use their discretion to vote for
that other person.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF EACH OF THE
FOLLOWING CLASS II NOMINEES:
CURTIS H. BARNETTE, age 69, has been Of Counsel to the law firm of Skadden,
Arps, Slate, Meagher & Flom LLP since 2000. He is also Chairman Emeritus of
Bethlehem Steel Corporation and was a Director and its Chairman and Chief
Executive Officer from November 1992 through April 2000. Bethlehem Steel
Corporation filed a voluntary petition for reorganization under Chapter 11 of
the United States Bankruptcy Code in 2001 and the proceedings were completed in
2003. He is a graduate member of the Business Council, a Trustee of Lehigh
University, Chair of the Board of Governors of West Virginia University, a
Director of the West Virginia University Foundation, Vice Chair of the Yale Law
School Fund, a Director of the Board of the Ron Brown Award for Corporate
Leadership, a Director of the Pennsylvania Parks and Forests Foundation, and
Chair of the National Museum of Industrial History. Mr. Barnette received a
bachelor's degree from West Virginia University and a law degree from Yale Law
School. He also attended the Advanced Management Program at Harvard Business
School and Manchester University where he was a Fulbright Scholar. Mr. Barnette
served on the President's Trade Advisory Committee from 1989 to 2002 and is a
Director of the National Center for State Courts and the Pennsylvania Society.
He has been a Director of MetLife since August 1999 and a Director of
Metropolitan Life Insurance Company since 1994.
JOHN C. DANFORTH, age 67, has been a Partner in the law firm of Bryan Cave LLP
since 1995. He served in the United States Senate from 1976 to 1995. Senator
Danforth is a Director of The Dow Chemical Company and Cerner Corporation.
Senator Danforth received a bachelor's degree from Princeton University, a law
degree from Yale Law School and a bachelor of divinity degree from Yale Divinity
School. He is ordained to the clergy of the Episcopal Church. Senator Danforth
has been a Director of MetLife and a Director of Metropolitan Life Insurance
Company since 2000.
BURTON A. DOLE, JR., age 66, was a Partner and Chief Executive Officer of
Medsouth Therapies, LLC, a rehabilitative health care company, from 2001 to
2003; he was Chairman of the Board of Nellcor Puritan Bennett, Incorporated, a
medical equipment company, from 1995 until his retirement in 1997. He was
Chairman of the Board, President and Chief Executive Officer of Puritan Bennett,
Incorporated from 1986 to 1995 and the President and Chief Executive Officer of
Puritan Bennett, Incorporated from 1980 to 1986. Mr. Dole served as Chairman of
the Board of Directors of the Kansas City Federal Reserve Bank and Federal
Reserve Agent from 1992 through 1994. He served as Chairman of the Conference of
Chairmen of the Federal Reserve System in 1994. Mr. Dole is a Director of
Anesthesia Patient Safety Foundation. He received both a bachelor's degree in
mechanical engineering and a master's degree in business administration from
Stanford University. Mr. Dole has been a Director of MetLife since August 1999
and a Director of Metropolitan Life Insurance Company since 1996.
HARRY P. KAMEN, age 70, was Chairman of the Board and Chief Executive Officer of
Metropolitan Life Insurance Company from April 1993 until his retirement in July
1998 and, in addition, was its President from December 1995 to November 1997.
Mr. Kamen is a Director of BDC Financial, Inc., The NASD Inc. and Granum Series
Trust Fund. Mr. Kamen received a bachelor's degree from the University
6
of Pennsylvania and a law degree from Harvard Law School and attended the Senior
Executive Program at M.I.T. He is an Overseer of the School of Arts and Sciences
at the University of Pennsylvania and on the Board of Advisors of the Mailman
School of Public Health at Columbia University. He has been a Director of
MetLife since August 1999 and a Director of Metropolitan Life Insurance Company
since 1992.
CHARLES M. LEIGHTON, age 68, was Chairman of the Board and Chief Executive
Officer of the CML Group, Inc., a specialty retail company, from 1969 until his
retirement in March 1998. Mr. Leighton is a Member of the Advisory Board of
FitSense Technology Inc. and Micro Phase Coatings, Inc. and a Trustee of Lahey
Clinic. Mr. Leighton received a bachelor's degree and an honorary law degree
from Bowdoin College and a master's degree in business administration from
Harvard Business School. He has been a Director of MetLife since August 1999 and
a Director of Metropolitan Life Insurance Company since 1996.
THE FOLLOWING CLASS III AND CLASS I DIRECTORS ARE CONTINUING IN OFFICE:
CLASS III DIRECTORS -- TERMS TO EXPIRE IN 2005
CHERYL W. GRISE, age 51, has served as President -- Utility Group for Northeast
Utilities, a public utility holding company, since 2001 and Chief Executive
Officer of its principal operating subsidiaries since September 2002, and Senior
Vice President, Secretary and General Counsel of Northeast Utilities from
1998-2001. She is also a Director of Dana Corporation. She received a bachelor
of arts degree from the University of North Carolina at Chapel Hill, a law
degree from Western State University, and has completed the Yale Executive
Management Program. Ms. Grise has been a Director of Metropolitan Life Insurance
Company and the Company since February 2004.
JAMES R. HOUGHTON, age 67, has been Chairman and Chief Executive Officer of
Corning Incorporated, a global technology company, since April 2002, prior to
which he served as Non-Executive Chairman of the Board of Corning Incorporated
from June 2000. He was Chairman of the Board Emeritus of Corning Incorporated
from 1996 to June 2000. He was Chairman of the Board of Corning Incorporated
from 1983 until his retirement in 1996. Mr. Houghton is a Director of Corning
Incorporated and ExxonMobil Corporation. He received a bachelor's degree from
Harvard College and a master's degree in business administration from Harvard
Business School. Mr. Houghton has been a Director of MetLife since August 1999
and a Director of Metropolitan Life Insurance Company since 1975.
HELENE L. KAPLAN, age 70, has been Of Counsel to the law firm of Skadden, Arps,
Slate, Meagher & Flom LLP since 1990. She is a Director of J.P. Morgan Chase &
Co., The May Department Stores Company and ExxonMobil Corporation. Mrs. Kaplan
is a Member (and former Director) of the Council on Foreign Relations. She is
Chair of Carnegie Corporation of New York, and is a Trustee and Vice-Chair of
The American Museum of Natural History and The J. Paul Getty Trust. She is
Trustee Emerita and Chair Emerita of Barnard College and Trustee Emerita of The
Institute for Advanced Study. Mrs. Kaplan is a Fellow of the American
Philosophical Society and a Member of the American Academy of Arts and Sciences.
Mrs. Kaplan received a bachelor's degree, cum laude, from Barnard College and a
law degree from New York University Law School. She is the recipient of honorary
degrees from Columbia University and Mount Sinai School of Medicine. Mrs. Kaplan
has been a Director of MetLife since August 1999 and a Director of Metropolitan
Life Insurance Company since 1987.
CATHERINE R. KINNEY, age 51, has been Co-Chief Operating Officer and President
of the New York Stock Exchange, Inc. since January 1, 2002, and served as a
Director and Executive Vice Chairman of the Board of Directors of the Exchange
from January 2002 to December 2003, prior to which she served as Group Executive
Vice President of the Exchange for more than five years. Ms. Kinney is a
Director of The Depositary Trust & Clearing Corporation and its subsidiaries.
She is a Member of the Board of Trustees of Iona College (on sabbatical leave),
a Member of the Board of Regents of Georgetown University and a Member of the
Board of Directors of Catholic Charities of the Archdiocese of New York. Ms.
Kinney received a bachelor's degree from Iona College and attended the Advanced
Management Program at Harvard Business School. She has been a Director of
MetLife since December
7
2001 and a Director of Metropolitan Life Insurance Company since February 2002.
Ms. Kinney has announced her planned resignation from the Boards of Directors of
MetLife and Metropolitan Life Insurance Company, effective March 23, 2004.
SYLVIA M. MATHEWS, age 38, has served as Chief Operating Officer and Executive
Director of The Bill and Melinda Gates Foundation since 2001, prior to which she
served as Deputy Director of the Office of Management and Budget in Washington,
D.C. from 1998. Ms. Mathews served as Deputy Chief of Staff to President Bill
Clinton from 1997 to 1998, and was Chief of Staff to Treasury Secretary Robert
Rubin from 1995 to 1997. She has also served as Staff Director for the National
Economic Council from 1993 to 1995. Ms. Mathews was Manager of President
Clinton's economic transition team from 1992 to 1993. Prior to that, she was an
Associate at McKinsey and Company from 1990 to 1992. Ms. Mathews received a
bachelor's degree in government, cum laude, from Harvard University in 1987 and
a bachelor's degree in philosophy, politics and economics from Oxford
University, where she was a Rhodes Scholar. She is a Member of the University of
Washington Medicine Board, the Pacific Council on International Policy, the
Aspen Strategy Group and the CFR Task Force on Transatlantic Relations for the
Council on Foreign Relations. In addition, Ms. Mathews is a Visiting Committee
Member of the John F. Kennedy School of Government at Harvard University and a
Governing Council Member of the Miller Center of Public Affairs at the
University of Virginia. Ms. Mathews has been a Director of MetLife and
Metropolitan Life Insurance Company since January 2004.
STEWART G. NAGLER, age 61, has been Vice Chairman of the Board of MetLife since
September 1999 and served as Chief Financial Officer of MetLife from September
1999 to December 2003. He has been Vice Chairman of the Board of Metropolitan
Life Insurance Company since July 1998 and served as Chief Financial Officer of
that company from April 1993 to December 2003. Mr. Nagler is also Chairman of
the Board and a Director of Reinsurance Group of America, Incorporated, an
affiliate of the Company. He is a Fellow of the Society of Actuaries, a Trustee
of the Boys & Girls Clubs of America, and Chair of the Board of Polytechnic
University of New York. He received a bachelor's degree in mathematics, summa
cum laude, from Polytechnic University. Mr. Nagler has been a Director of
MetLife since August 1999 and a Director of Metropolitan Life Insurance Company
since 1997. Mr. Nagler has announced his planned retirement from the Boards of
Directors of MetLife and Metropolitan Life Insurance Company, effective in 2004.
WILLIAM C. STEERE, JR., age 67, was Chairman of the Board and Chief Executive
Officer of Pfizer Inc., a research-based global pharmaceutical company, from
1992 until his retirement in May 2001. Mr. Steere is a Director of Pfizer Inc.,
Dow Jones & Company, Inc. and Health Management Associates, Inc. Mr. Steere
received a bachelor's degree from Stanford University. He has been a Director of
MetLife since August 1999 and a Director of Metropolitan Life Insurance Company
since 1997.
CLASS I DIRECTORS -- TERMS TO EXPIRE IN 2006
ROBERT H. BENMOSCHE, age 59, has been Chairman of the Board, President and Chief
Executive Officer of MetLife since September 1999. He has been Chairman of the
Board, President and Chief Executive Officer of Metropolitan Life Insurance
Company since July 1998; he was President and Chief Operating Officer from
November 1997 to June 1998, and Executive Vice President from September 1995 to
October 1997. Previously, he was Executive Vice President of PaineWebber Group
Incorporated, a full service securities and commodities firm, from 1989 to 1995.
Mr. Benmosche is a Director of Credit Suisse Group. He is a Member of the Board
of Trustees of Alfred University, The Conference Board, and the Board of
Directors of the New York Philharmonic. He received a bachelor's degree in
mathematics from Alfred University. Mr. Benmosche has been a Director of MetLife
since August 1999 and a Director of Metropolitan Life Insurance Company since
1997.
JOHN M. KEANE, age 61, served in the U.S. Army for thirty years. General Keane
was Vice Chief of Staff of the United States Army, where he served as Chief
Operating Officer for the Army from 1999 until
8
his retirement in October 2003. During his four years in that role, he managed
operations for more than 1.5 million soldiers and civilians in over 120
countries, as well as an annual budget in excess of $100 billion. Prior to
becoming Vice Chief of Staff, General Keane served as the Deputy
Commander-in-Chief of the United States Atlantic Command from 1998 to 1999. He
is a Director of General Dynamics Corporation. General Keane received a
bachelor's degree in accounting from Fordham University and a master's degree in
philosophy from Western Kentucky University. General Keane also has received
honorary doctorate degrees in law and public service from Fordham University and
Eastern Kentucky University, respectively. He is a military contributor and
analyst with ABC News and is a Member of the United States Department of Defense
Policy Board. General Keane has been a Director of MetLife and Metropolitan Life
Insurance Company since October 2003.
JOHN J. PHELAN, JR., age 72, was a Senior Advisor to the Boston Consulting
Group, an international management consulting company, from 1992 through 2002.
Prior to that time, Mr. Phelan was Chairman and Chief Executive Officer of the
New York Stock Exchange, Inc. from 1984 to 1990. Mr. Phelan is a Director of
Merrill Lynch & Co. He received a bachelor's degree from Adelphi University. Mr.
Phelan has been a Director of MetLife since August 1999 and a Director of
Metropolitan Life Insurance Company since 1985. Mr. Phelan will retire from the
Boards of Directors of MetLife and Metropolitan Life Insurance Company effective
on the date of the Company's 2004 Annual Meeting, in accordance with the Boards'
retirement policy.
HUGH B. PRICE, age 62, has been a Senior Advisor to the law firm of Piper
Rudnick LLP since September 2003, prior to which he served as
President and Chief Executive Officer of the National Urban League, Inc. from
1994 to April 2003. Mr. Price is a Director of Sears, Roebuck and Co. and
Verizon Communications, Inc. He received a bachelor's degree from Amherst
College and received a law degree from Yale Law School. Mr. Price has been a
Director of MetLife since August 1999 and a Director of Metropolitan Life
Insurance Company since 1994.
KENTON J. SICCHITANO, age 59, was a Global Managing Partner of
PricewaterhouseCoopers LLP, an assurance, tax and advisory services company,
until his retirement in 2001. Mr. Sicchitano joined Price Waterhouse LLP, a
predecessor firm of PricewaterhouseCoopers LLP, in 1970, and after becoming a
partner in 1979, held various leadership positions within the firm until he
retired in June 2001. He is a Director of PerkinElmer, Inc. and Analog Devices,
Inc. Mr. Sicchitano holds a bachelor's degree from Harvard College and a
master's degree in business administration from Harvard Business School. At
various times from 1986 to 1995 he served as a Director and/or officer of a
number of not-for-profit organizations, including President of the Harvard
Business School Association of Boston, Director of the Harvard Alumni
Association and the Harvard Business School Alumni Association, Director and
Chair of the Finance Committee of New England Deaconess Hospital and a Trustee
of the New England Aquarium. Mr. Sicchitano has been a Director of MetLife and
Metropolitan Life Insurance Company since July 2003.
--------------------------------------------------------------------------------
PROPOSAL TWO -- APPROVAL OF THE METLIFE, INC. 2005 STOCK AND INCENTIVE
COMPENSATION PLAN
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
STOCK AND INCENTIVE PLAN.
Under the Metropolitan Life Insurance Company demutualization (the
"demutualization"), the Company is limited in the number of shares underlying
options and payable in other forms of associate and Director compensation to
approximately 5% of the number of shares of MetLife common stock outstanding
immediately after the effective date of the demutualization. The Company is also
limited by the demutualization in the kind of stock-based awards it may grant to
associates and Directors. These restrictions and limitations expire on April 7,
2005, the fifth anniversary of the effective date of the demutualization.
Accordingly, the Board of Directors of the Company has approved a revised
executive
9
and Director compensation program, as described in Proposals Two, Three, and
Four, subject to shareholder approval.
On February 17, 2004 the Board of Directors of the Company adopted the MetLife,
Inc. 2005 Stock and Incentive Compensation Plan (the "Stock and Incentive
Plan"), effective April 15, 2005 (the "Effective Date"), subject to shareholder
approval. Although this plan is not effective until 2005, it is being presented
at the 2004 Annual Meeting to shareholders for consideration together with the
MetLife Annual Variable Incentive Plan (discussed in Proposal Three) and the
MetLife, Inc. 2005 Non-Management Director Stock Compensation Plan (discussed in
Proposal Four), which like this plan would be effective in 2005, to present a
comprehensive description of these executive and Director compensation programs.
The MetLife Annual Variable Incentive Plan is required to be presented for
shareholder approval at the 2004 Annual Meeting so that awards earned in 2004
under that plan may comply with the deductibility requirements of U.S. Internal
Revenue Code Section 162(m).
The following is a summary of provisions of the Stock and Incentive Plan and is
qualified in its entirety by reference to the complete text of the Stock and
Incentive Plan attached to this Proxy Statement as Appendix A.
The purpose of the Stock and Incentive Plan is to promote the success and
enhance the value of the Company and its Affiliates (as defined in the Stock and
Incentive Plan) by linking the personal interests of those eligible individuals
granted Awards (as defined below) under the Stock and Incentive Plan (the
"Participants") to the interests of the Company's shareholders and to provide
Participants with an incentive for outstanding performance. The Stock and
Incentive Plan will remain in effect until the earlier of its termination in
accordance with its terms, the tenth anniversary of the Effective Date, or the
distribution of all of the shares subject to the Stock and Incentive Plan.
The Compensation Committee of the Board of Directors (or another Committee
designated by the Board) may make awards of nonqualified stock options,
Incentive Stock Options (as defined below), stock appreciation rights,
restricted stock, restricted stock units, performance shares, performance units,
cash-based awards, and stock-based awards (collectively, "Awards"), and
determines all of the terms of Awards. Each Award will be evidenced by a written
agreement with or written statement issued to a Participant (an "Award
Agreement").
SUCCESSOR TO 2000 PLAN
The Stock and Incentive Plan will serve as the successor to the MetLife, Inc.
2000 Stock Incentive Plan (the "Predecessor Plan"). If the Stock and Incentive
Plan is approved, no grants will be made after the Effective Date under the
Predecessor Plan, but each award under the Predecessor Plan will continue to be
governed by the instrument evidencing such award, except as expressly provided
by the Stock and Incentive Plan or by the Compensation Committee. Shares of
Company common stock ("Shares") reserved for issuance under the Predecessor Plan
in excess of the number of Shares as to which awards under the Predecessor Plan
have been awarded, and Shares related to awards under the Predecessor Plan that
have lapsed, expired, terminated, been cancelled, settled in cash, or tendered
to pay an exercise price, or used to satisfy tax withholding, will be available
for issuance under the Stock and Incentive Plan.
SHARE AUTHORIZATION AND LIMITS
The number of Shares reserved for issuance under the Stock and Incentive Plan
will be 68 million Shares, plus any remaining Shares available for grant under
the Predecessor Plan (the "Total Authorization"), subject to adjustment as
provided in the Stock and Incentive Plan. Shares issued in connection with an
Option or Stock Appreciation Right (as defined below) will be counted as one
Share against the Total Authorization. For all other Awards, any Shares issued
will be counted as 1.179 Shares against the Total Authorization.
10
Awards intended to be Performance-Based Compensation to Insiders (as each such
term is defined below) will be subject to the following limits in any one
calendar year to any one Participant ("Award Limits"): two million Shares
subject to Options or Stock Appreciation Rights; one million Shares of
Restricted Stock or Restricted Stock Units; one million Shares awarded as
Performance Shares or for Performance Units, or a value equal to that number of
Shares determined as of the date of vesting or payout, as applicable; $10
million in Cash-Based Awards; and one million Shares in Stock-Based Awards. The
Company does not currently anticipate that any Participant will be granted
Awards in the amount of any of the Award Limits.
Upon the occurrence of certain corporate events, such as a change in
capitalization of the Company, merger, or stock split, the Compensation
Committee may, in its discretion to prevent dilution or enlargement of
Participants' rights, substitute or adjust Share limits and terms of Awards
under the Stock and Incentive Plan.
ELIGIBILITY
All employees of the Company and its Affiliates ("Employees"), and all natural
persons licensed or otherwise authorized under applicable law to represent the
Company or any Affiliate in the sale of insurance or financial products or
services ("Agents"), are eligible for Awards under the Stock and Incentive Plan.
Directors who are not otherwise employed by the Company or any Affiliate are not
eligible to receive Awards under the Stock and Incentive Plan. As of December
31, 2003, there were approximately 47,075 Employees and approximately 148,408
non-Employee Agents.
ADMINISTRATION
The Compensation Committee administers the Stock and Incentive Plan Actions
taken by the Compensation Committee are final, conclusive, and binding. The
Compensation Committee has discretion to interpret the Stock and Incentive Plan,
determine eligibility for Awards, establish the terms of Awards and adopt rules
and regulations for administering the Stock and Incentive Plan. Subject to
applicable restrictions in the Compensation Committee Charter, the Compensation
Committee may delegate any of its administrative duties to any other person or
persons. The Compensation Committee may also delegate any of its duties, except
with respect to Awards intended to be Performance-Based Compensation (as defined
below under the caption "Performance-Based Compensation"), to one or more of its
members or to one or more officers of the Company or its Affiliates, subject to
periodic reports to the Compensation Committee regarding the nature and scope of
the Awards granted under such delegation, and subject to applicable restrictions
in the Committee's Charter.
FAIR MARKET VALUE
For purposes of the Stock and Incentive Plan, the Compensation Committee has the
authority to determine "Fair Market Value" with respect to our stock using any
of several alternative methods commonly used in compensation practices,
including the average trading values of the stock over a period of days. The
Compensation Committee may elect to use different methods of establishing Fair
Market Value at different times, or for different purposes, under the Stock and
Incentive Plan (such as using the average of a single day's high and low trading
prices for establishing the exercise price of an option, but a multi-day average
for valuing stock delivered in lieu of a cash payment).
STOCK OPTIONS
Under the Stock and Incentive Plan, the Compensation Committee may grant options
to purchase Shares ("Options") that are intended to meet the requirements of
Section 422 of the U.S. Internal Revenue Code (the "Code," and such options,
"Incentive Stock Options") and other Options ("Nonqualified Stock Options"). No
Award of Incentive Stock Options may be made more than ten years after the
earlier of the adoption of the Stock and Incentive Plan by the Board or the
Effective Date. No Option may be exercised later than the tenth anniversary date
of its grant, except that the Compensation Committee may grant Options of longer
duration to Participants outside the U.S. The Compensation Committee will
determine, in each Award Agreement, the extent to which a Participant has the
right to exercise each Option following termination of employment or active
relationship as
11
Agent ("Agency") with the Company or Affiliates. The Compensation Committee may
substitute Stock Appreciation Rights (as defined below) for any outstanding
Options, on terms and economic benefit equivalent to such Options.
The exercise price of each Option (the "Option Price") must be based on 100% of
the Fair Market Value of the Shares on the date of grant, set at a premium to
the Fair Market Value of the Shares on the date of grant, or indexed (as
determined by the Compensation Committee) to the Fair Market Value of Shares on
the date of grant. The Compensation Committee may impose such restrictions on
Shares acquired pursuant to exercise of an Option as it determines advisable.
FEDERAL TAX CONSEQUENCES OF OPTIONS
The following is a brief summary of the federal income tax aspects of the
issuance and exercise of Options under the Stock and Incentive Plan, based upon
the federal income tax laws in effect on the date of this Proxy Statement. This
summary is not intended to be exhaustive, and the exact tax consequences to any
Participant will depend upon his or her particular circumstances and other
factors.
Generally, on the grant of an Incentive Stock Option, the Participant will not
recognize income nor will the Company or its subsidiaries be entitled to take a
deduction. A Participant will not have taxable income on the exercise of an
Incentive Stock Option (except that the alternative minimum tax may apply).
Generally, if a Participant sells Shares upon exercise of an Incentive Stock
Option before the end of the applicable Incentive Stock Option holding period,
the Participant must recognize ordinary income equal to the difference between:
(a) the fair market value (as defined in the Code) of the Shares at the
date of exercise of the Incentive Stock Option (or, if less, the amount
realized upon disposition of the Shares), and
(b) the Option Price.
Otherwise, a Participant's disposition of Shares acquired upon the exercise of
an Incentive Stock Option after the Incentive Stock Option holding period is met
generally will result in short term or long term capital gain or loss measured
by the difference between the sale price and the Participant's tax basis in the
Shares. A Participant's tax basis generally is equal to the exercise price plus
any amount previously recognized as ordinary income in connection with the
exercise of the Incentive Stock Option.
Generally, with respect to Nonqualified Stock Options, a Participant will not
recognize income at the time the Option is granted. On exercise of the Option,
the Participant recognizes ordinary income in an amount equal to the difference
between the fair market value of the Shares on the date of exercise and the
Option Price. At disposition, any appreciation (or depreciation) after date of
exercise is treated as either short term or long term capital gain or loss,
depending upon the length of time that the Participant has held the shares.
The Company's subsidiaries that are employers of a Participant generally will be
entitled to a tax deduction equal to the amount recognized as ordinary income by
the Participant in connection with (1) a disqualifying disposition of Shares
received from the exercise of an Incentive Stock Option, or (2) the exercise of
a Nonqualified Stock Option. Such subsidiaries generally will not be entitled to
a tax deduction relating to amounts that represent a capital gain to a
Participant. Additionally, such subsidiaries will not be entitled to a tax
deduction in respect to compensation amounts that are determined to be
"unreasonable" under the tax law. The subsidiaries will also not be entitled to
any tax deduction with respect to an Incentive Stock Option if the participant
disposes of the Shares after holding the Shares for the Incentive Stock Option
holding periods.
STOCK APPRECIATION RIGHTS
Under the Stock and Incentive Plan, the Compensation Committee may grant Awards
in the form of the right to receive the difference in Fair Market Value of a
Share on the date of exercise over the Share price at which such right is
granted (such price, the "Grant Price," and such right, a "Stock
12
Appreciation Right"). The Compensation Committee may require that the exercise
of a Stock Appreciation Right include the forfeiture of the right to purchase a
Share under a related Option, and is itself cancelled or exercised upon the
exercise of the related Option (such Stock Appreciation Right, a "Tandem Stock
Appreciation Right.")
Each Stock Appreciation Right will be evidenced by an Award Agreement that
specifies the Grant Price, the number of Shares on which the Stock Appreciation
Right is based, and other conditions and provisions determined by the
Compensation Committee. No Stock Appreciation Right may be exercised later than
the tenth anniversary date of its grant, except that the Compensation Committee
may grant Stock Appreciation Rights of longer duration to Participants outside
the U.S. The Compensation Committee will determine, in each Award Agreement, the
extent to which a Participant has the right to exercise each Stock Appreciation
Right following termination of employment or Agency with the Company or
Affiliates.
The Grant Price of each Stock Appreciation Right must be based on 100% of the
Fair Market Value of the Shares on the date of grant, set at a premium to the
Fair Market Value of the Shares on the date of grant, or indexed (as determined
by the Compensation Committee) to the Fair Market Value of Shares on the date of
grant. Stock Appreciation Rights (subject to certain limitation applicable to
Tandem Stock Appreciation Rights) may be exercised on terms determined by the
Compensation Committee. The Compensation Committee may impose such restrictions
on Shares acquired pursuant to exercise of a Stock Appreciation Right as it
determines advisable.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
Under the Stock and Incentive Plan, the Compensation Committee may grant Awards
of Shares subject to a period in which such Shares are subject to forfeiture
based on discontinued service, the failure to achieve performance criteria,
and/or the occurrence of other events as determined by the Compensation
Committee (such period, a "Period of Restriction," and such Award, "Restricted
Stock"), and may grant Awards denominated in units subject to a Period of
Restriction ("Restricted Stock Unit"). Restricted Stock Units may be paid in
cash, Shares, or a combination thereof as determined by the Compensation
Committee.
The Compensation Committee may impose such conditions or restrictions on
Restricted Stock or Restricted Stock Units as it deems advisable. The
Compensation Committee may grant Participants holding Restricted Stock the right
to receive dividends and Participants holding Restricted Stock Units the right
to receive the economic equivalent of dividends (in such form and subject to
such restrictions as the Compensation Committee may impose) with regard to such
Shares during the Period of Restriction. No Restricted Stock Unit will confer
any voting rights. The Compensation Committee will determine, in each Award
Agreement, the extent to which a Participant has the right to retain each Share
of Restricted Stock or Restricted Stock Unit following termination of employment
or Agency with the Company or Affiliates.
PERFORMANCE SHARES AND PERFORMANCE UNITS
Under the Stock and Incentive Plan, the Compensation Committee may grant Awards
denominated in Shares ("Performance Shares") or units ("Performance Units"), in
each case the value of which is determined as a function of the extent to which
specified performance criteria have been achieved. Each Performance Share will
have an initial value equal to the Fair Market Value of a Share on the date of
grant. The Compensation Committee may determine that a Performance Share or
Performance Unit is payable in the form of cash, Shares, or a combination
thereof, and may require the Participant to retain Shares paid on account of
either such Award for a specified period of time. The Compensation Committee
will determine, in each Award Agreement, the extent to which a Participant has
the right to retain each Performance Share or Performance Unit following
termination of employment or Agency with the Company or Affiliates.
13
CASH-BASED AWARDS AND STOCK-BASED AWARDS
Under the Stock and Incentive Plan, the Compensation Committee may grant Awards
denominated in Cash ("Cash-Based Awards") and equity-based or equity-related
Awards not otherwise described by the terms of the Stock and Incentive Plan
("Stock-Based Awards"). The Compensation Committee will determine the value, and
any predicate performance criteria, of each Cash-Based Award, and will determine
whether the Cash-Based Award will be payable in cash, Shares (subject to such
restrictions as are determined by the Compensation Committee), or a combination
thereof having a Fair Market Value equal to value of the Cash-Based Award.
Stock-Based Awards may include the grant of Shares or payment of cash in such
amounts and subject to such terms and conditions including, but not limited to
being subject to performance criteria, or in satisfaction of such obligations,
as the Compensation Committee will determine. The Compensation Committee will
determine, in each Award Agreement, the extent to which a Participant has the
right to receive each Cash-Based Award or Stock-Based Award following
termination of employment or Agency with the Company or Affiliates.
PERFORMANCE-BASED COMPENSATION
The vesting, payability, or value of each Award other than an Option or Stock
Appreciation Right to an executive of the Company subject to the reporting
requirements of Section 16 of the Exchange Act (an "Insider") that is intended
to provide remuneration solely on account of the attainment of one or more
pre-established, objective performance criteria under circumstances that satisfy
the requirements of Section 162(m) of the Code (such Section, "Section 162(m),"
and such Award, "Performance-Based Compensation") will be determined by the
attainment of one or more performance goals ("Performance Goals") based on one
or more of the Performance Measures (as defined below) as determined by the
Compensation Committee in conformity with Section 162(m).
No such Award will be payable unless the Compensation Committee certifies in
writing, by resolution or otherwise, that the Performance Goal(s) applicable to
the Award were satisfied. The Compensation Committee may not increase the value
of an Award of Performance-Based Compensation above the maximum value determined
under the performance formula by the attainment of the applicable Performance
Goal(s), but the Compensation Committee may retain the discretion to reduce the
value below such maximum.
Performance Measures include: net earnings or net income (before or after
taxes); earnings per share; net sales growth; net operating profit; operating
earnings; operating earnings per share; return measures (including, but not
limited to, return on assets, capital, equity, or sales); cash flow (including,
but not limited to, operating cash flow, free cash flow, and cash flow return on
capital); earnings before or after taxes, interest, depreciation, and/or
amortization and including/excluding capital gains and losses; gross or
operating margins; productivity ratios; share price (including, but not limited
to, growth measures and total shareholder return); expense targets; margins;
operating efficiency; customer satisfaction; employee and/or Agent satisfaction;
working capital targets; Economic Value Added (a measure of net operating profit
less the opportunity cost of capital); revenue growth; assets under management
growth; and rating agencies' ratings.
The Compensation Committee will have the discretion to alter the Performance
Measures without obtaining shareholder approval of such changes to the extent
that applicable tax or securities laws change to permit such alterations. The
Stock and Incentive Plan does not require that Awards satisfy the requirements
of Section 162(m).
CHANGE OF CONTROL
The following paragraphs describe how Awards would be affected in the event of a
Change of Control (as defined below), except as otherwise provided in the Award
Agreement or other agreement between the Participant and the Company.
14
"Change of Control," as defined in the Stock and Incentive Plan, occurs if:
- a person other than MetLife, its subsidiaries, or its employee benefit
plans acquires securities representing 25% or more of the combined voting
power of MetLife's outstanding securities;
- within any 24-month period the persons who were serving as members of
MetLife's Board (the "Incumbent Directors") cease to constitute a
majority of the members of MetLife's Board (provided that any Directors
elected to the Board by a majority of the Incumbent Directors then still
in office will be treated as Incumbent Directors for this purpose);
- a merger, reorganization, or similar transaction (including a sale of
substantially all assets) occurs, where MetLife's shareholders
immediately prior to such transaction do not control more than a majority
of the voting power in the surviving, resulting, or acquiring entity
immediately after the transaction; or
- any other event occurs which the Board declares to be a Change of
Control.
All outstanding Options and Stock Appreciation Rights will become immediately
exercisable and, if a Participant's employment or Agency is involuntarily
terminated for any reason other than Cause (as defined in the Stock and
Incentive Compensation Plan) within 12 months of the Change of Control the
Participant will have until the earlier of the term of the Option or Stock
Appreciation Right or 12 months following such termination date to exercise the
Options or Stock Appreciation Rights. Any Period of Restriction or other
restrictions on Restricted Stock or Restricted Stock Units will lapse and the
target payout opportunities attainable under all outstanding Awards of
performance-based Restricted Stock, performance-based Restricted Stock Units,
Performance Units, and Performance Shares (including Awards intended to be
Performance-Based Compensation) are deemed fully earned based on attainment of
target performance as of the effective date of the Change of Control.
The vesting of all Awards denominated in Shares or cash will be accelerated and
be paid to Participants in the specified form within 30 days following the
effective date of the Change of Control. All Cash-Based Awards and Stock-Based
Awards will vest immediately and be paid as determined by the Compensation
Committee.
Alternatively to all of the above, the Compensation Committee may unilaterally
determine that all outstanding Awards are cancelled and the value of each Award,
as determined by the Compensation Committee in accordance with the Stock and
Incentive Plan and Award Agreement, will be paid out in cash in an amount based
on the Change of Control Price (no payment, however, will be made on account of
an Incentive Stock Option using a value higher than the Fair Market Value on the
date of the settlement). "Change of Control Price" means the highest price per
share of Shares offered in conjunction with the Change of Control (determined by
the Compensation Committee in good faith if any part of the price is payable
other than in cash) or, if the Change of Control occurs solely due to a change
in the composition of the Board, the highest Fair Market Value of the Shares on
any of the 30 trading days prior to the Change of Control.
No cancellation, acceleration of vesting, lapsing of restrictions, payment of
Award or cash settlement will occur with respect to any Award if the
Compensation Committee reasonably determines in good faith prior to the
occurrence of a Change of Control that such Award will be honored or assumed or
new rights substituted therefor in an Alternative Award (as defined in the Stock
and Incentive Plan) by a successor to the Company.
AMENDMENT AND TERMINATION; MISCELLANEOUS TERMS
The Compensation Committee or Board may, at any time, amend, suspend, or
terminate the Stock and Incentive Plan in whole or in part, provided that
Options and Stock Appreciation Rights will not be repriced, replaced, or
regranted through cancellation or by lowering the exercise price of a previously
granted Option without shareholder approval. To the extent necessary under any
applicable law, regulation, or exchange requirement, no amendment will be
effective unless approved by the shareholders of the Company. No termination,
amendment, or suspension of the Stock and Incentive
15
Plan will adversely affect in any material way any Award previously granted
under the Stock and Incentive Plan without the written consent of the
Participant.
The Stock and Incentive Plan will not limit the right of the Company or any
Affiliate to establish any other compensation or benefit plans or programs.
Except as otherwise stated in any other benefit plan or program, no Award will
be treated as compensation for purposes of calculating a Participant's rights
under any such other plan or program.
Except as otherwise provided by the Compensation Committee, no Award made under
the Stock and Incentive Plan may be sold, transferred, pledged, or assigned
other than by will or the laws of descent and distribution.
The March 1, 2004 closing price of Shares on the New York Stock Exchange was
$35.27.
NEW PLAN BENEFITS
No Awards will be made under the Stock and Incentive Plan until the Effective
Date. At that time, the Compensation Committee will determine the types and
amounts of Awards, and the terms and conditions of Awards, to be granted to
Participants. The types of Awards available under the Stock and Incentive Plan
are significantly different from the grants available under the Predecessor
Plan, which provides only for stock options, and the Long Term Performance
Compensation Plan, which provides for payments after three-year Performance
periods. Thus, the benefits or amounts that will be received or allocated under
the Stock and Incentive Plan, including those in the form of Options, are not
determinable at this time, and it is not possible to state the benefits or
amounts which would have been received or allocated in the last completed fiscal
year if the Stock and Incentive Plan had been in effect.
--------------------------------------------------------------------------------
PROPOSAL THREE -- APPROVAL OF THE METLIFE ANNUAL VARIABLE INCENTIVE PLAN
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
ANNUAL PLAN.
On February 17, 2004 the Board adopted the MetLife Annual Variable Incentive
Plan, as amended and restated (the "Annual Plan"), effective January 1, 2004,
subject to shareholder approval. The following is a summary of provisions of the
Annual Plan and is qualified in its entirety by reference to the complete text
of the Annual Plan attached to this Proxy Statement as Appendix B. Capitalized
terms used in this discussion and not defined in the discussion, have the same
definitions as set forth in "Proposal Two -- Approval of the MetLife, Inc. 2005
Stock and Incentive Compensation Plan."
The purpose of the Annual Plan is to align total annual pay with the Company's
annual financial business results, provide competitive levels of pay for
competitive levels of Company performance, and make a competitive portion of
total compensation variable based on Company, business unit, and individual
performance. The Annual Plan amends and restates the prior Annual Variable
Incentive Plan and remains in effect indefinitely, subject to amendment or
termination by the Compensation Committee or the Board.
ELIGIBILITY AND AWARDS
The Compensation Committee selects those Employees, each of whom is eligible
under the Annual Plan, to whom Awards under the Annual ("Annual Awards") will be
made on or after the Effective Date. The maximum aggregate amount of any Annual
Award to any Employee in any one-year period may not exceed $10 million. All
Annual Awards will be paid in cash unless otherwise determined by the
Compensation Committee. The Compensation Committee may permit or require an
Employee to defer receipt of an Annual Award under such rules as are determined
by the Compensation Committee. No Employee will have any right to an Annual
Award, and the Compensation Committee is not obligated to set terms of Annual
Awards that are uniform among Employees.
16
ADMINISTRATION
The Compensation Committee administers the Annual Plan. Actions taken by the
Compensation Committee are final, conclusive, and binding. The Compensation
Committee has discretion to interpret the Annual Plan, determine eligibility for
Annual Awards, establish the terms of Annual Awards, adopt rules and regulations
for administering the Annual Plan, and amend the Annual Plan. Under the Annual
Plan, the Compensation Committee may delegate any of its administrative duties
to any other person. The Compensation Committee may delegate any of its duties,
except with respect to Awards intended to be Performance-Based Compensation, to
one or more of its members or to one or more officers of the Company or its
Affiliates, subject to periodic reports to the Compensation Committee regarding
the nature and scope of the Awards granted under such delegation.
PERFORMANCE-BASED COMPENSATION
Under the Annual Plan, the vesting, payability, or value of each Annual Award to
an Insider intended to provide remuneration solely on account of the attainment
of one or more pre-established, objective performance criteria under
circumstances that satisfy the requirements of Section 162(m) (such Award,
"Annual Performance-Based Compensation") will be determined by the attainment of
one or more Performance Goals based on the Performance Measures, as determined
by the Compensation Committee in conformity with Section 162(m). No such Annual
Award will be payable unless the Compensation Committee certifies in writing
that the Performance Goal(s) applicable to the Annual Award were satisfied. The
Compensation Committee may not increase the value of an Annual Award of Annual
Performance-Based Compensation above the maximum value determined by the
attainment of the applicable Performance Goal(s), but the Compensation Committee
may retain the discretion to reduce the value below such maximum.
The Compensation Committee will have the discretion to alter the Performance
Measures without obtaining shareholder approval of such changes to the extent
that applicable tax or securities laws change to permit such alterations. The
Annual Plan does not require that Annual Awards satisfy the requirements of
Section 162(m).
AMENDMENT AND TERMINATION; MISCELLANEOUS TERMS
The Compensation Committee or Board may amend, suspend, or terminate the Annual
Plan in whole or in part. No amendment will be affective without shareholder
approval if shareholder approval is required by law, regulation, or stock
exchange rule. No termination, amendment, or suspension of the Annual Plan will
adversely affect in any material way any Annual Award previously granted.
Under the Annual Plan, the Compensation Committee will determine the extent to
which an Employee has the right to receive an Annual Award following the
termination of employment with the Company or an Affiliate.
The Annual Plan will not limit the right of the Company or any Affiliate to
establish any other compensation or benefit plans or programs.
17
NEW PLAN BENEFITS
METLIFE ANNUAL VARIABLE INCENTIVE PLAN
NAME AND POSITION(1) DOLLAR VALUE
-------------------- ----------------------
Robert H. Benmosche,
Chairman of the Board, President, and Chief Executive
Officer................................................... Not determinable(2)
C. Robert Henrikson,
President, U.S. Insurance and Financial Services.......... Not determinable(3)
Stewart G. Nagler,
Vice Chairman of the Board................................ Not determinable(3)
Lisa M. Weber,
Senior Executive Vice President and Chief Administrative
Officer................................................... Not determinable(3)
William J. Toppeta,
President, International.................................. Not determinable(3)
Executive Group............................................. Not determinable(2)(3)
Non-Employee Director Group................................. N/A
Non-Executive Officer Employee Group........................ $213,000,000(4)
---------------
(1) The above table does not include Mr. Clark or Mr. Beller. Each ended his
employment effective December 30, 2003, and, as a result, neither is
eligible to receive an Annual Award for 2004.
(2) The Compensation Committee has determined that Mr. Benmosche is eligible for
an Annual Award for 2004, intended to be performance-based compensation
under Section 162(m) of the Internal Revenue Code, in an amount up to 1% of
net operating earnings or ten million dollars, whichever is less. The
Compensation Committee has discretion to reduce the amount of the actual
Annual Award payable. Because the Company does not currently anticipate that
Mr. Benmosche will be granted an Annual Award in the amount of this limit,
but rather that the Compensation Committee will exercise its discretion to
reduce the Annual Award payable in light of factors it determines are
relevant, the dollar value of the Annual Award is not determinable at this
time.
(3) The Compensation Committee has determined that each officer of the Company
subject to the reporting requirements of Section 16 of the Exchange Act is
eligible for an Annual Award for 2004, intended to be performance-based
compensation under Section 162(m) of the Internal Revenue Code, in an amount
up to 0.5% of net operating earnings or ten million dollars, whichever is
less. The Compensation Committee has discretion to reduce the amount of each
actual Annual Award payable. Because the Company does not currently
anticipate that any executive officer will be granted an Annual Award in the
amount of this limit, but rather that the Compensation Committee will
exercise its discretion to reduce the Annual Awards payable in light of
factors it determines are relevant, the dollar value of the Annual Awards is
not determinable at this time.
(4) The Compensation Committee has determined that, except for Annual Awards to
executive officers, as described in footnotes (2) and (3) above, the maximum
value of all Annual Awards will be based on a percentage of operating
earnings determined with reference to the Company's return on equity. The
number indicated reflects the application of the Compensation Committee's
intended approach for 2004 to the Company's operating earnings and return on
equity for 2003. Individual Annual Awards will be determined by the
Compensation Committee or, pursuant to delegation by the Compensation
Committee, by management of the Company, in each case according to
individual and business performance and other factors the Compensation
Committee or management, respectively, determines are relevant.
18
--------------------------------------------------------------------------------
PROPOSAL FOUR -- APPROVAL OF THE METLIFE, INC. 2005
NON-MANAGEMENT DIRECTOR STOCK COMPENSATION PLAN
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE
NON-MANAGEMENT DIRECTOR STOCK COMPENSATION PLAN.
On February 17, 2004, the Board adopted the MetLife, Inc. 2005 Non-Management
Director Stock Compensation Plan (the "2005 Director Stock Plan"), effective on
the Effective Date, subject to shareholder approval. The following is a summary
of provisions of the 2005 Director Stock Plan and is qualified in its entirety
by reference to the complete text of the 2005 Director Stock Plan attached to
this Proxy Statement as Appendix C. Capitalized terms used in this discussion
and not defined in the discussion, have the same definitions as set forth in
"Proposal Two -- Approval of the MetLife, Inc. 2005 Stock and Incentive
Compensation Plan."
The purpose of the 2005 Director Stock Plan is to promote the long term
interests of the Company and its shareholders by strengthening the Company's
ability to attract, motivate, and retain well qualified individuals as Eligible
Directors (as hereinafter defined) upon whose judgment, initiative, and efforts
the financial success and growth of the business of the Company largely depend,
and to provide an additional incentive for such individuals through stock
ownership and other rights that promote and recognize the financial success and
growth of the Company and create value for shareholders. The 2005 Director Stock
Plan will remain in effect until the earlier of its termination in accordance
with its terms, the tenth anniversary of the Effective Date, or the distribution
of all of the shares subject to the 2005 Director Stock Plan.
The Governance Committee of the Board of Directors (or another Committee
designated by the Board) may make Director Awards of nonqualified stock options,
stock appreciation rights, restricted stock, restricted stock units, and
stock-based Director Awards (collectively, "Director Awards"), and determines
all of the terms of Director Awards. Each Director Award will be evidenced by a
written agreement with or written statement issued to the Director who received
the Award (such Director, a "Director Participant," and such document, an
"Director Award Agreement").
SHARE AUTHORIZATION AND LIMITS
The number of Shares reserved for issuance under the 2005 Director Stock Plan
will be two million Shares (the "Total Director Share Authorization"), subject
to adjustment as provided in the 2005 Director Stock Plan. No more than 25,000
Shares will be granted in any form of Director Awards to any individual Director
Participant in any calendar year.
Upon the occurrence of certain corporate events, such as a change in
capitalization of the Company, merger, or stock split, the Governance Committee
in its discretion may, to prevent dilution or enlargement of Director
Participants' rights, substitute or adjust Share limits and terms of Awards
under the 2005 Director Stock Plan.
ELIGIBILITY
Under the 2005 Director Stock Plan, all members of the Board of Directors who
are not Employees ("Eligible Directors") are eligible for Director Awards. As of
March 1, 2004, there were 15 Eligible Directors.
19
ADMINISTRATION
The Governance Committee administers the 2005 Director Stock Plan. Actions taken
by the Governance Committee are final, conclusive, and binding. The Governance
Committee has discretion to interpret the 2005 Director Stock Plan, establish
the terms of Director Awards, adopt rules and regulations for administering the
2005 Director Stock Plan. The Governance Committee may delegate any of its
administrative duties to others.
FAIR MARKET VALUE
For purposes of the 2005 Director Stock Plan, the Governance Committee has the
authority to determine "Fair Market Value" with respect to MetLife's common
stock using any of several alternative methods commonly used in compensation
practices, including the average trading values of the stock over a period of
days. The Governance Committee may elect to use different methods of
establishing Fair Market Value at different times, or for different purposes,
under the 2005 Director Stock Plan (such as using the average of a single day's
high and low trading prices for establishing the exercise price of an option,
but a multi-day average for valuing stock delivered in lieu of a cash payment).
STOCK OPTIONS
Under the 2005 Director Stock Plan, the Governance Committee may grant
Nonqualified Stock Options. Each Option Director Award Agreement will specify
the Option Price, the number of Shares subject to the Nonqualified Stock Option,
and other conditions and provisions determined by the Governance Committee. No
Option may be exercised later than the tenth anniversary date of its grant. The
Governance Committee will determine, in each Director Award Agreement, the
extent to which a Director Participant has the right to exercise each Option
following termination of directorship with the Company. The Governance Committee
may substitute Stock Appreciation Rights for any outstanding Nonqualified Stock
Option, on terms and economic benefit equivalent to such Nonqualified Stock
Options.
The Option Price of each Nonqualified Stock Option must be based on 100% of the
Fair Market Value of the Shares on the date of grant, set at a premium to the
Fair Market Value of the Shares on the date of grant, or indexed (as determined
by the Governance Committee) to the Fair Market Value of Shares on the date of
grant. The Governance Committee may impose such restrictions on Shares acquired
pursuant to exercise of a Nonqualified Stock Option as it determines advisable.
FEDERAL TAX CONSEQUENCES OF OPTIONS
The following is a brief summary of the Federal income tax aspects of the
issuance and exercise of Options under the 2005 Director Stock Plan, based upon
the federal income tax laws in effect on the date of this Proxy Statement. This
summary is not intended to be exhaustive, and the exact tax consequences to any
Director Participant will depend upon his or her particular circumstances and
other factors.
Generally, a Director Participant will not recognize income at the time the
Nonqualified Stock Option is granted. On exercise of the Nonqualified Stock
Option, the Director Participant recognizes ordinary income in an amount equal
to the difference between the fair market value (as defined by the Code) of the
Shares on the date of exercise and the Option Price. At disposition, any
appreciation (or depreciation) after date of exercise is treated either as short
term or long term capital gain or loss, depending upon the length of time that
the Director Participant has held the shares. The Company will generally be
entitled to a federal income tax deduction equal to the ordinary income
recognized by the Director Participant on exercise of the Nonqualified Stock
Option.
20
STOCK APPRECIATION RIGHTS
Under the 2005 Director Stock Plan, the Governance Committee may grant Director
Awards in the form of Stock Appreciation Rights. Stock Appreciation Rights may
be Tandem Stock Appreciation Rights.
Each Stock Appreciation Right will be evidenced by an Director Award Agreement
that specifies the Grant Price, the number of Shares on which the Stock
Appreciation Right is based, and other conditions and provisions determined by
the Governance Committee. No Stock Appreciation Right may be exercised later
than the tenth anniversary date of its grant. The Governance Committee will
determine, in each Director Award Agreement, the extent to which a Director
Participant has the right to exercise each Stock Appreciation Right following
termination of directorship with the Company.
The Grant Price of each Stock Appreciation Right must be based on 100% of the
Fair Market Value of the Shares on the date of grant, set at a premium to the
Fair Market Value of the Shares on the date of grant, or indexed (as determined
by the Governance Committee) to the Fair Market Value of Shares on the date of
grant. Stock Appreciation Rights (subject to certain limitations applicable to
Tandem Stock Appreciation Rights) may be exercised on terms determined by the
Governance Committee. The Governance Committee may impose such restrictions on
Shares acquired pursuant to exercise of a Stock Appreciation Right as it
determines advisable.
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
Under the 2005 Director Stock Plan, the Governance Committee may grant Director
Awards of Restricted Stock and Restricted Stock Units. Restricted Stock Units
may be paid in cash, Shares, or a combination thereof as determined by the
Governance Committee. The Governance Committee may impose such conditions or
restrictions on Restricted Stock or Restricted Stock Units as it deems
advisable.
The Governance Committee may grant Director Participants holding Restricted
Stock the right to receive dividends (in such form and subject to such
restrictions as the Governance Committee may impose) with regard to such Shares
during the Period of Restriction. No Restricted Stock Unit will confer any
voting rights. The Governance Committee will determine, in each Director Award
Agreement, the extent to which a Director Participant has the right to retain
each Share of Restricted Stock or Restricted Stock Unit following termination of
directorship with the Company.
STOCK-BASED DIRECTOR AWARDS
Under the 2005 Director Stock Plan, the Governance Committee may grant Director
Awards in the form of Stock-Based Awards. Stock-Based Awards may include the
grant of Shares or payment of cash in such amounts and subject to such terms and
conditions or in satisfaction of any obligation of the Company or an Affiliate
to an Eligible Director, as the Governance Committee determines. The Governance
Committee will determine, in each Director Award Agreement, the extent to which
a Director Participant has the right to receive each Stock-Based Director Award
following termination of directorship with the Company.
AMENDMENT AND TERMINATION; NO REPRICING WITHOUT SHAREHOLDER APPROVAL
The Governance Committee or Board may, at any time, amend, suspend, or terminate
the 2005 Director Stock Plan in whole or in part, provided that Options will not
be repriced, replaced, or regranted through cancellation or by lowering the
exercise price of a previously granted Option without shareholder approval. To
the extent necessary under any applicable law, regulation, or exchange
requirement, no amendment will be effective unless approved by the shareholders
of the Company. No termination, amendment, or suspension of the 2005 Director
Stock Plan will adversely affect in any material way any Director Award
previously granted under the 2005 Director Stock Plan without the written
consent of the Director Participant.
21
Except as otherwise provided by the Governance Committee, no award made under
the 2005 Director Stock Plan may be sold, transferred, pledged, or assigned
other than by will or the laws of descent and distribution.
The March 1, 2004 closing price of Shares on the New York Stock Exchange was
$35.27.
NEW PLAN BENEFITS
No Director Awards will be made under the 2005 Director Stock Plan until the
Effective Date. At that time, the Governance Committee will determine the types
and amounts of Director Awards, and the terms and conditions of Director Awards,
to be granted to Director Participants. The types of Director Awards available
under the 2005 Director Stock Plan are significantly different from the grants
available under the 2000 Directors Stock Plan (as hereafter defined), which
provides only for stock options and Share awards. Thus, the benefits or amounts
that will be received or allocated under the 2005 Director Stock Plan, including
those in the form of Nonqualified Options, are not determinable at this time,
and it is not possible to state the benefits or amounts which would have been
received or allocated in the last completed fiscal year if the 2005 Director
Stock Plan had been in effect.
--------------------------------------------------------------------------------
PROPOSAL FIVE -- RATIFICATION OF APPOINTMENT OF THE INDEPENDENT AUDITOR
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE TO RATIFY THE APPOINTMENT OF
DELOITTE & TOUCHE LLP AS METLIFE'S INDEPENDENT AUDITOR FOR THE YEAR ENDING
DECEMBER 31, 2004.
Deloitte & Touche LLP ("Deloitte") has served as independent auditor of MetLife
and Metropolitan Life Insurance Company and most of its subsidiaries for many
years. Its long term knowledge of the MetLife group of companies has enabled it
to carry out its audits of MetLife's financial statements with effectiveness and
efficiency. The Audit Committee assures the regular rotation of the audit
engagement team partners to the extent that such rotation is required by law.
Deloitte is a registered company with the Public Company Accounting Oversight
Board ("PCAOB") as required by the Sarbanes-Oxley Act of 2002 and the Rules of
the PCAOB.
INDEPENDENT AUDITOR'S FEES FOR 2003 AND 2002
2003 2002
------------- -------------
Audit Fees(1)............................................... $26.8 million $17.8 million
Audit Related Fees(2)....................................... $ 7.4 million $ 7.7 million
Tax Fees(3)................................................. $ 1.3 million $ 1.6 million
All Other Fees(4)........................................... $ 0.8 million $ 2.4 million
---------------
(1) Fees for services to perform an audit or review in accordance with
generally accepted auditing standards and services that generally only
the Company's independent auditor can reasonably provide, such as
comfort letters, statutory audits, attest services, consents and
assistance with and review of documents filed with the Securities and
Exchange Commission. Includes fees billed to Reinsurance Group of
America, Incorporated, a majority-owned public company subsidiary of
MetLife, Inc. Such fees in fiscal years 2002 and 2003 were approved by
the Audit Committee of MetLife, Inc.
(2) Fees for assurance and related services that are traditionally
performed by the Company's independent auditor, such as, audit and
related services for employee benefit plan audits, due diligence
related to mergers and acquisitions, accounting assistance and audits
in connection with proposed or consummated acquisitions, internal
control reviews, attest services not required by statute or regulation,
and consultation concerning financial accounting and reporting
standards.
(3) Fees for tax compliance, consultation and planning services. Tax
compliance generally involves preparation of original and amended tax
returns, claims for refunds and tax payment planning services. Tax
consultation and tax planning encompass a diverse range of services,
including
22
assistance in connection with tax audits and filing appeals, tax advice
related to mergers and acquisitions, employee benefit plans and
requests for rulings or technical advice from taxing authorities.
(4) Fees for other types of permitted services not covered by the first
three categories, such as, assistance with the Closed Block Actuarial
Model, business project management support and training.
All of the fees for 2003 set out on the foregoing table have been pre-approved
by the Audit Committee in accordance with the Audit Committee's pre-approval
procedures.
The Audit Committee has adopted pre-approval procedures as required under the
Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange
Commission. Pursuant to these procedures, at the final scheduled meeting of the
Audit Committee in each fiscal year, the Company's General Auditor provides to
the Audit Committee a schedule setting forth the particular audit services that
the General Auditor expects to be performed by the Company's independent auditor
in connection with the audit of the Company's financial statements for the next
fiscal year, together with a proposed maximum amount of fees for each particular
audit service, and a schedule setting forth the permitted audit-related, tax and
other permitted non-audit services that management desires or may desire to
engage the auditor to perform during the next fiscal year, together with a
proposed maximum amount of fees for each such particular service. These
schedules are accompanied by a supporting schedule which gives the same
information with respect to the then-current fiscal year. At the final scheduled
meeting for the fiscal year, the Audit Committee pre-approves the specific audit
services, maximum amounts of fees that may be paid in connection with such
services, and the terms of an engagement letter to be entered into by the
Company with the independent auditor, and approves audit-related, tax and other
permitted non-audit services that management may desire to engage the
independent auditor to perform during the next fiscal year and the maximum
amount of fees for each such service, in each case as the Audit Committee, in
its sole judgment, believes does not impair the independence of the independent
auditor.
The engagement of the auditor to perform any services not specifically
pre-approved by the Audit Committee at the last meeting of its fiscal year, or
to perform services that have been approved where the fees will exceed the
maximum dollar amount approved at such meeting for the service, must be
pre-approved by the Audit Committee or a member of the Audit Committee to whom
authority to pre-approve audit and non-audit services has been delegated by the
Audit Committee.
The General Auditor presents to the Audit Committee at each of its meetings a
schedule indicating which services have been approved by delegated authority.
Based on the recommendation of the Audit Committee, the Board of Directors
appointed Deloitte as MetLife's independent auditor for the year ending December
31, 2004. The appointment is subject to ratification by MetLife shareholders at
the 2004 Annual Meeting.
Representatives of Deloitte will attend the 2004 Annual Meeting. They will have
an opportunity to make a statement if they desire to do so, and they will be
available to respond to appropriate questions.
--------------------------------------------------------------------------------
PROPOSAL SIX -- SHAREHOLDER PROPOSAL CONCERNING CEO COMPENSATION
--------------------------------------------------------------------------------
The Catholic Equity Fund (a component of The Catholic Funds, Inc.), 1100 West
Wells Street, Milwaukee, WI 53233 and Christus Health, 2600 North Loop West,
Houston, TX 77092 have notified the Company that they intend to propose the
following resolution at the Annual Meeting. The stock ownership of each of the
proponents will be furnished by the Company's Corporate Secretary to any person
promptly upon receiving an oral or written request therefor.
"CEO PAY LIMIT
"WHEREAS;
"U.S. CEO compensation is often excessive(1) and often tempts CEOs to undertake
self-serving ventures(2) and often degrades long-term stock performance(3). The
ratio of average CEO pay to average-worker pay has skyrocketed from about 40 in
1980 to at least several hundred currently(4).
23
"MetLife appears to be part of this national problem. A study shows the
Company's 2002 CEO compensation to be 722 times the pay of an average U.S.
worker(5).
"We believe that the system for compensating CEOs would markedly improve if
companies would take three steps. First, restore a reasonable relationship to
average-worker pay. Second, include company stock or options in the CEO's
compensation only if the company provides that same type of compensation to all
fulltime workers on a basis that would avoid increasing the pay gap. Third, link
CEO compensation to meeting specific performance requirements that would mainly
reflect the contributions of the CEO rather than of the work force or the
economy in general.
"In our opinion, a huge CEO-to-worker pay gap not only degrades worker and
therefore company performance but also violates the dignity and worth of every
human being that is the foundation of Catholic social teaching and common moral
principles.
"RESOLVED: The shareholders urge the Board of Directors:
"- to limit the Compensation paid to the CEO in any fiscal year to no more
than 100 times the average Compensation paid to the company's
Non-Managerial Workers in the prior fiscal year, unless the shareholders
have approved paying the CEO a greater amount;
"- In any proposal for shareholder approval, to provide that the CEO can
receive more than the 100-times amount only if the company achieves one or
more goals that would mainly reflect the CEO's contributions; and
"- In that proposal, to provide for grants to the CEO of stock options or
other equity only if the company provides equity compensation to all
fulltime employees such that they would participate proportionately in
stock performance.
" "Compensation" means salary, bonus, the grant-date present value of stock
options, the grant-date present value of restricted stock, payments under
long-term incentive plans, and "other annual" and "all other compensation" as
those categories are defined for proxy statement purposes.
" "Non-Managerial Workers" means those employees of the company worldwide whose
work would put them into the categories of Blue-Collar Occupations or Service
Occupations or the Sales and Administrative Support components of White-Collar
Occupations as used by the Bureau of Labor Statistics in its National
Compensation Surveys.
"Notes:
"1. Conference Board, 9/17/02 (quoting Greenspan: "infectious greed"),
Business Week 4/22/02 ("simply out of hand").
"2. Edward M. Welch, "Justice In Executive Compensation", America 5/19/03.
"3. Graef Crystal, Bloomberg 8/13/03 ("high pay destroys high performance").
"4. Economist.com, Executive Pay, 10/9/03.
"5. AFL/CIO Executive Paywatch, www.aflcio.org."
24
STATEMENT OF THE BOARD OF DIRECTORS IN OPPOSITION
TO THE SHAREHOLDER PROPOSAL
The Board of Directors believes that the proposal is contrary to the interests
of the Company and its shareholders and, accordingly, is recommending that the
shareholders vote AGAINST the proposal for the following reasons:
The Company has a strong pay for performance philosophy that reflects Company
and individual performance and provides a total compensation program for the CEO
and other executives that is competitive within the insurance industry and the
broader financial services industry. The Company benchmarks its executive
compensation programs against a select group of insurance and financial services
companies and generally positions the Company's executive compensation
opportunities within a range of the median to the third quartile of such
companies.
In accordance with the Corporate Governance Standards of the New York Stock
Exchange (the "NYSE Standards"), the Compensation Committee is responsible for
approving the CEO's goals and assessing the CEO's achievement of such goals. The
Compensation Committee makes recommendations to the Independent Directors (as
such Directors are designated in accordance with the NYSE Standards), who then
determine the CEO's compensation in a manner they believe to be in the best
interest of the Company and its shareholders. In performing its
responsibilities, the Compensation Committee has retained a nationally
recognized independent compensation consulting firm to provide advice to the
Committee about competitive compensation practices and trends in the market. The
Compensation Committee's Report on Executive Compensation, beginning on page 35
of this Proxy Statement, sets forth the factors that were taken into
consideration in determining the CEO's total compensation for 2003.
The Compensation Committee and the Independent Directors devote significant time
and effort to assessing the performance of the CEO, taking into consideration
the need to:
- reinforce the Company's pay for performance culture by making a significant
portion of the CEO's compensation variable and based on company, business
unit and his individual performance;
- align the financial interests of the CEO and the Company's shareholders and
provide incentives for continued high performance, by awarding a significant
portion of the CEO's compensation in stock-based incentives;
- provide competitive total compensation opportunities that will attract,
retain and motivate high-performing executives; and
- align the compensation plans to the Company's business strategies and
objectives.
For all of the foregoing reasons, the Board of Directors believes that the
compensation of the CEO should continue to be determined in the discretion of
the Independent Directors and the shareholder proposal is therefore not in the
best interests of the Company or its shareholders. Therefore, your Board of
Directors recommends that shareholders vote AGAINST this proposal.
25
--------------------------------------------------------------------------------
CORPORATE GOVERNANCE
--------------------------------------------------------------------------------
INFORMATION ABOUT METLIFE'S BOARD OF DIRECTORS.
RESPONSIBILITIES, INDEPENDENCE AND COMPOSITION OF THE BOARD OF DIRECTORS. The
Board of Directors consists of individuals on whose judgment, initiative and
efforts the financial success and growth of the business of the Company largely
depend. As a Board, these individuals review MetLife's business policies and
strategies and advise and counsel the Chief Executive Officer and the other
executive officers who manage the Company's business. The Board currently
consists of 17 Directors, 15 of whom are Independent Directors (as defined
below). A "Non-Management Director" is a Director who is not an officer of the
Company or of any entity in a consolidated group with the Company. An
"Independent Director" is a Non-Management Director who the Board of Directors
has affirmatively determined has no material relationships with the Company and
otherwise satisfies the requirements of the New York Stock Exchange Inc.'s
Corporate Governance Standards (the "NYSE Standards"). An Independent Director
for Audit Committee purposes must also meet additional requirements under Rule
10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act").
The Board has affirmatively determined that all the Non-Management Directors are
Independent Directors who do not have any material relationships with the
Company or any of its consolidated subsidiaries. The Board determined that,
except for Mr. Danforth, the Non-Management Directors satisfy the criteria set
forth in categorical standards established by the Board to assist it in making
determinations regarding independence, which are set forth in the Categorical
Standards Regarding Director Independence, included as Appendix E to this Proxy
Statement and included in the Corporate Governance Guidelines of the Company,
which are posted on the Company's website at
http://www.metlife.com/corporategovernance. The Company will provide such
information in print to any shareholder who requests it. Although Mr. Danforth
does not fall squarely within the categorical standards because he is a partner
at Bryan Cave LLP ("Bryan Cave"), which provides legal services to the Company
and such subsidiaries, the Board determined that he does not have a material
relationship with the Company or any of such subsidiaries. In reaching its
determination, the Board concluded the aggregate payments by the Company and
such subsidiaries to Bryan Cave during the last fiscal year for legal services
were de minimis (less than 0.5% of Bryan Cave's gross revenues for its last
fiscal year); that Mr. Danforth receives fixed amounts of annual compensation
from Bryan Cave, the amount of which is not influenced by any payment received
by Bryan Cave from the Company or such subsidiaries; and that Mr. Danforth
provides no legal services to the Company or any such subsidiaries.
The Company's Board of Directors is divided into three classes. One class is
elected each year to hold office for a term of three years. Of the 17 current
Directors, five are Class I Directors with terms expiring at the 2006 Annual
Meeting, five are Class II Directors with terms expiring at the 2004 Annual
Meeting, and seven are Class III Directors with terms expiring at the 2005
Annual Meeting. John J. Phelan, Jr., a Class I Director, will retire from the
Board effective on April 27, 2004, the date of the 2004 Annual Meeting, in
accordance with the Board's retirement policy. Mr. Nagler, a Class III Director,
will retire from the Board in 2004, in accordance with his previously announced
retirement from the Company. Ms. Kinney, a Class III Director, announced her
resignation from the Board effective March 23, 2004.
NON-MANAGEMENT DIRECTOR EXECUTIVE SESSIONS. The Non-Management Directors of the
Company, have met in regularly scheduled executive sessions without the presence
of the Company's management. The position of Presiding Director of the
Non-Management Directors' executive sessions rotates among the Chairs of the
various Board Committees that consist entirely of Independent Directors,
according to a schedule approved by the Non-Management Directors.
DIRECTOR NOMINATION PROCESS. Potential candidates for Board positions are
identified by the Board of Directors and the Governance Committee through a
variety of means, including the use of search firms
26
and recommendations of Board members and executive officers and of shareholders
received as provided below. Potential candidates for nomination as Director
nominees must provide written information about their qualifications and
participate in interviews conducted by individual Board members, including the
Chairs of the Audit and Governance Committees. Candidates are evaluated using
the criteria adopted by the Board to determine their qualifications based on the
information supplied by the candidates and information obtained from other
sources.
The Governance Committee will consider shareholder recommendations of candidates
for election as Director. Shareholders must satisfy the notification,
timeliness, consent and information requirements set forth in the Company's
By-Laws applicable to nominations that are brought before an annual meeting by a
shareholder. The Committee makes no distinctions in evaluating Nominees for
positions on the Board based on whether or not a Nominee is recommended by a
shareholder, provided that the procedures with respect to nominations referred
to above are followed.
To be timely, a shareholder recommendation must be submitted to the Corporate
Secretary at MetLife, Inc., One Madison Avenue, New York, NY 10001-3690 not
later than 120 calendar days prior to the first anniversary of the previous
year's annual meeting. Recommendations for nomination of a Director candidate to
be made regarding the elections at the Annual Meeting in 2005 must be received
by the Corporate Secretary no later than December 28, 2004. The recommendation
must set forth all the information relating to the person recommended that is
required to be disclosed in solicitations of proxies for election of Director
pursuant to Regulation 14A under the Exchange Act, and must include the
recommended Nominee's written consent to being named in the Proxy Statement as a
Nominee and to serving as Director if elected. In addition, the recommendation
must include (A) a description of all arrangements or understandings between the
nominating shareholder and the person being recommended and any other persons
(naming them) pursuant to which the nominations are to be made by the
shareholder; (B) a representation that the recommending shareholder is a
beneficial owner entitled to vote at the Annual Meeting; (C) if the recommending
shareholder intends to solicit proxies, a statement to that effect; and (D) the
name and address of the recommending shareholder and the candidate being
recommended.
Under criteria recommended by the Governance Committee and approved by the
Board, the Governance Committee believes that the following specific, minimum
qualifications must be met by any Governance Committee-recommended candidate for
election to the Board of Directors:
- Financial Literacy. Such person should be "financially literate" as such
qualification is interpreted by the Company's Board of Directors in its
business judgment.
- Leadership Experience. Such person should possess significant leadership
experience, such as experience in business, finance/accounting, law,
education or government, and should possess qualities reflecting a proven
record of accomplishment and ability to work with others.
- Commitment to the Company's Values. Such person shall be committed to
promoting the financial success of the Company and preserving and
enhancing the Company's reputation as a leader in American business and
shall be in agreement with the values of the Company as embodied in its
Codes of Conduct.
- Absence of Conflicting Commitments. Such person should not have
commitments that would conflict with the time commitments of a Director
of the Company.
- Reputation and Integrity. Such person shall be of high repute and
recognized integrity and not have been convicted in a criminal proceeding
or be named a subject of a pending criminal proceeding (excluding traffic
violations and other minor offenses). Such person shall not have been
found in a civil proceeding to have violated any federal or state
securities or commodities law, and shall not be subject to any court or
regulatory order or decree limiting his or her business activity,
including in connection with the purchase or sale of any security or
commodity.
- Other Factors. Such person shall have other characteristics considered
appropriate for membership on the Board of Directors, including an
understanding of marketing and finance,
27
sound business judgment, significant experience and accomplishments and
educational background.
In recommending candidates for election as Directors, the Governance Committee
will take into consideration the need for the Board to have a majority of
Directors that meet the independence requirements of the Corporate Governance
Standards of the New York Stock Exchange and such other criteria as shall be
established from time to time by the Board of Directors.
BOARD COMMITTEES. MetLife's Board of Directors has designated six Committees.
These Committees perform essential functions on behalf of the Board. The
Committee Chairs review and approve agendas for all meetings of their respective
Committees. The responsibilities of each of the Committees are summarized below.
Only Independent Directors may be members of the Audit, Compensation and
Governance Committees. Currently, Mr. Benmosche is the only management Director
who is a member of the Executive Committee and Mr. Nagler is the only management
Director who is a member of the Public Responsibility Committee. All other
members of those two Committees are Independent Directors.
The following table lists the Directors who currently serve on the Committees
and the number of meetings held for each such Committee during 2003.
MEMBERSHIP ON BOARD COMMITTEES
(S = Chair -- = Member)
---------------------------------------------------------------------------------------------------------------
PUBLIC SALES
NAME AUDIT COMPENSATION GOVERNANCE RESPONSIBILITY PRACTICES EXECUTIVE
---------------------------------------------------------------------------------------------------------------
R.H. Benmosche S
---------------------------------------------------------------------------------------------------------------
C. H. Barnette --
---------------------------------------------------------------------------------------------------------------
J. C. Danforth -- --
---------------------------------------------------------------------------------------------------------------
B. A. Dole, Jr. -- --
---------------------------------------------------------------------------------------------------------------
C.W. Grise -- -- --
---------------------------------------------------------------------------------------------------------------
J. R. Houghton S -- -- --
---------------------------------------------------------------------------------------------------------------
H. P. Kamen -- --
---------------------------------------------------------------------------------------------------------------
H. L. Kaplan S -- --
---------------------------------------------------------------------------------------------------------------
J. M. Keane -- -- --
---------------------------------------------------------------------------------------------------------------
C. R. Kinney* -- -- --
---------------------------------------------------------------------------------------------------------------
C. M. Leighton -- S --
---------------------------------------------------------------------------------------------------------------
S. M. Mathews -- --
---------------------------------------------------------------------------------------------------------------
S. G. Nagler* --
---------------------------------------------------------------------------------------------------------------
J. J. Phelan, Jr.* -- -- --
---------------------------------------------------------------------------------------------------------------
H. B. Price -- S --
---------------------------------------------------------------------------------------------------------------
K. J. Sicchitano -- -- --
---------------------------------------------------------------------------------------------------------------
W. C. Steere, Jr. -- S -- --
---------------------------------------------------------------------------------------------------------------
NUMBER OF MEETINGS HELD IN
2003: 10 6 7 2 2 2
---------------------------------------------------------------------------------------------------------------
---------------
* Ms. Kinney has announced her resignation from the Board effective March 23,
2004; Mr. Nagler will be retiring from the Board in 2004; and Mr. Phelan will
be retiring from the Board on April 27, 2004, the date of the 2004 Annual
Meeting.
COMMITTEE CHARTERS. Each Committee of the Board of Directors has a Charter,
which defines the Committee's purposes and responsibilities. Charters for the
Audit, Compensation and Governance
28
Committees are posted on the Company's website at
http://www.metlife.com/corporategovernance and the Audit Committee Charter is
attached as Appendix D to this Proxy Statement.
THE AUDIT COMMITTEE
RESPONSIBILITIES: The Audit Committee is a separately designated standing
Committee of the Board of Directors consisting solely of Independent Directors.
The Audit Committee is directly responsible for the appointment, compensation,
retention and oversight of the work of the Company's independent auditor. The
Audit Committee oversees the Company's accounting and financial reporting
processes, the adequacy of the Company's internal control over financial
reporting and of its disclosure controls and procedures, and the integrity of
its financial statements, pre-approves all audit and non-audit services to be
provided by the independent auditor, reviews reports concerning significant
legal and regulatory matters, discusses the Company's guidelines and policies
with respect to the process by which the Company undertakes risk management and
risk assessment, and reviews the performance of the Company's internal audit
function. The Audit Committee also discusses the Company's filings on Forms 10-K
and 10-Q and the financial information in those filings and prepares the Audit
Committee report for inclusion in the annual proxy statement. The Audit
Committee works closely with management as well as the Company's independent
auditor and internal General Auditor. The Audit Committee has the authority to
obtain advice and assistance from, and receive appropriate funding from the
Company for, the retention of outside counsel and other advisors as the Audit
Committee deems necessary to carry out its duties.
A more detailed description of the role and responsibilities of the Audit
Committee is set forth in a written charter adopted by the Board of Directors.
In January 2004, the Audit Committee recommended, and the Board of Directors
approved, amendments to the Audit Committee Charter. A copy of the Audit
Committee Charter, as amended January 21, 2004, is set forth in Appendix D to
this Proxy Statement and is also available on the Company's website at
http://www.metlife.com/corporategovernance.
AUDIT COMMITTEE REPORT: The Audit Committee Report is presented on page 34 of
this Proxy Statement.
FINANCIAL LITERACY AND AUDIT COMMITTEE FINANCIAL EXPERT: The Board of Directors
has determined that the members of the Audit Committee are financially literate,
as such qualification is interpreted by the Board of Directors. The Board of
Directors has also determined that a majority of the members of the Audit
Committee would qualify as "audit committee financial experts," as such term is
defined by the Securities and Exchange Commission, including James R. Houghton,
the Chair of the Committee. Mr. Houghton is an Independent Director under the
NYSE Standards and meets the special requirements for purposes of membership on
the Audit Committee required under Rule 10A-3 under the Exchange Act.
COMMUNICATIONS WITH THE AUDIT COMMITTEE: The Audit Committee has established
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal accounting controls, or auditing matters. Please see "How
may I communicate with the Audit Committee?" on page 5 of this Proxy Statement.
THE COMPENSATION COMMITTEE
RESPONSIBILITIES: The Compensation Committee is a standing Committee of the
Board, which assists the Board in fulfilling its responsibility to oversee the
compensation and benefits of the Company's executive officers and other
employees of the MetLife enterprise and produces an annual report on executive
compensation for inclusion in the Company's proxy statement. The Committee
approves the corporate goals and objectives relevant to the Chief Executive
Officer's total compensation, evaluates the Chief Executive Officer's
performance in light of such goals and objectives, and endorses, for approval by
the Independent Directors, the Chief Executive Officer's total compensation
level based on such evaluation. The Compensation Committee approves and
recommends ratification by the Board of
29
Directors of the other executive officers' total compensation, including their
base salaries and annual and long term incentives, including equity-based
incentives. The Compensation Committee has sole authority to retain and approve
the terms of the retention of any compensation consultants and other
compensation experts in condition with the evaluation of Chief Executive Officer
or senior executive officer compensation.
A more detailed description of the role and responsibilities of the Compensation
Committee is set forth in a written charter adopted by the Board of Directors.
The Compensation Committee Charter is available on the Company's website at
http://www.metlife.com/corporategovernance.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION: No member of the
Compensation Committee is or at any time during 2003 has been an officer or
employee of MetLife or any of its subsidiaries. During 2003, no executive
officer of MetLife served as a director or member of the compensation committee
(or other committee serving an equivalent function) of any other entity, one of
whose executive officers is or has been a Director of MetLife or a member of
MetLife's Compensation Committee.
COMPENSATION COMMITTEE'S REPORT: The Compensation Committee Report on Executive
Compensation is presented beginning on page 35 of this Proxy Statement.
THE GOVERNANCE COMMITTEE
RESPONSIBILITIES: The Governance Committee is a standing Committee of the Board
which assists the Board by identifying individuals qualified to become members
of the Board, consistent with the criteria established by the Board, developing
and recommending corporate governance guidelines to the Board, overseeing
MetLife's financial policies and strategies, capital structure and dividend
policies, and overseeing MetLife's internal risk management function. The
Governance Committee recommends policies and procedures regarding shareholder
nomination of Director candidates and regarding communication with
Non-Management Directors. Other duties and responsibilities of the Governance
Committee include recommending the appointment of Directors to serve as the
Chairs and members of the Committees of the Board, overseeing the evaluation of
the Board and reviewing the compensation and benefits of the Board of Directors
and recommending modifications thereof as may be appropriate.
The Governance Committee consists of Independent Directors who meet the
independence requirements
for members of a committee responsible for nominating directors that are set
forth in the NYSE Standards.
A more detailed description of the role and responsibilities of the Governance
Committee is set forth in a written charter adopted by the Board of Directors.
The Governance Committee Charter is available on the Company's website at
http://www.metlife.com/corporategovernance.
NOMINATION OF DIRECTORS: The Governance Committee will consider nominees for
election as a Director recommended by shareholders in accordance with the
procedures described above under "Director Nomination Process" beginning on page
26.
THE PUBLIC RESPONSIBILITY COMMITTEE
RESPONSIBILITIES: The Public Responsibility Committee oversees the Company's
charitable contributions, public benefit programs and other corporate
responsibility matters. In this regard, the Committee reviews the Company's
goals and strategies for its contributions in support of health, education,
civic affairs, culture and similar purposes, and its social investment program
in which loans and other investments are made to support affordable housing,
community, business and economic development and health care services for low
and moderate income communities. The Committee also reviews the Company's goals
and strategies concerning legislative and regulatory initiatives that impact the
interests of the Company, and annually reviews and recommends the charitable
contribution budget to the Board of Directors for its approval.
30
THE SALES PRACTICES COMPLIANCE COMMITTEE
RESPONSIBILITIES: The Sales Practices Compliance Committee oversees compliance
matters concerning the sale or marketing of insurance products to individuals by
MetLife's subsidiaries. The Committee reviews policies and procedures with
respect to sales practices compliance matters and audit plans and budgets for
sales office audits prepared by the Corporate Ethics and Compliance Department
related to sales practices compliance matters. The Committee also receives and
reviews reports concerning activities related to sales practices compliance
matters, including reports of any significant investigations by governmental
authorities.
THE EXECUTIVE COMMITTEE
RESPONSIBILITIES: The Executive Committee may exercise the powers and authority
of the Board of Directors during intervals between meetings of the Board of
Directors.
BOARD AND COMMITTEE MEETINGS IN 2003. In 2003, there were 13 regular and
special meetings of the Board of Directors and 29 Committee meetings. Except for
Ms. Kinney, all Directors attended 75% or more of all meetings of the Board of
Directors and the Committees on which they served during 2003.
DIRECTORS' RETAINER AND ATTENDANCE FEES. Non-Management Directors of the
Company receive an aggregate annual retainer fee of $150,000 for serving on the
Company's Board of Directors and on the Board of Directors of Metropolitan Life
Insurance Company, a wholly-owned subsidiary of the Company. A Non-Management
Director who serves for only a portion of the year would be paid a prorated
retainer fee to reflect the period of such service.
Beginning with the 2004 Annual Meeting, Non-Management Directors' annual
retainer fees will be paid, as follows: (i) $75,000 of value will be paid in
shares of the Company's common stock; and (ii) $75,000 will be paid in cash.
Prior to the change in the fee payment structure for Non-Management Directors,
they received $50,000 of value in shares of the Company's common stock; $25,000
of value in options to purchase shares of the Company's common stock; and
$75,000 in cash.
A Non-Management Director who serves as the Chair of a Board Committee is paid
an annual fee of $10,000 for such service. The Committee Chair's fee is paid in
cash. A Non-Management Director who serves for only a portion of the year would
be paid a prorated retainer fee to reflect the period of such service.
The Company pays a $10,000 annual fee to each Non-Management Director who serves
as the Chair of the Metropolitan Life Insurance Company Investment or Executive
Committee for such service. The Committee Chair is paid in cash. A
Non-Management Director who serves for only a portion of the year would be paid
a prorated retainer fee to reflect the period of such service.
The retainer fees for Board service and for serving as a Committee Chair are
paid in advance at the time of the Annual Meeting.
Non-Management Directors also are paid a $1,000 fee for each Board and Committee
meeting attended. Attendance fees are paid following the meetings.
Non-Management Directors are also reimbursed for expenses they incur to attend
the Company's Board and Committee meetings.
THE METLIFE, INC. 2000 DIRECTORS STOCK PLAN. The MetLife, Inc. 2000 Directors
Stock Plan (the "2000 Directors Stock Plan") authorizes the Governance Committee
to determine that the Company will pay up to 50% of the Company's Non-Management
Directors' retainer and attendance fees in stock grants and will pay all or part
of the remainder of such fees in stock options. The plan provides that the
exercise price of any stock option granted to the Company's Non-Management
Directors may be not less than the fair market value of a share of the Company's
common stock on the date the stock option is granted. Any stock awards made
before April 7, 2005, the fifth anniversary of the effective date of
Metropolitan Life Insurance Company's demutualization, replace all or any
portion of the Non-Management Directors' fees otherwise payable in cash.
31
The Non-Management Directors may elect to receive stock in lieu of all or a
portion of the retainer and attendance fees that otherwise would be payable in
cash. The plan provides that up to 500,000 shares of the Company's common stock
may be issued for stock grants. Only fees payable for service as a
Non-Management Director of the Company are payable in stock awards.
Stock options granted under the plan are exercisable at any time.
The Board of Directors may terminate, modify or amend the plan at any time,
subject, in certain instances, to shareholder approval, and, if prior to April
7, 2005, the fifth anniversary of the effective date of the demutualization, the
approval of the New York Superintendent of Insurance.
For a discussion of the proposed 2005 Director Stock Plan, see: "Proposal
Four -- Approval of the MetLife, Inc. 2005 Non-Management Director Stock
Compensation Plan" beginning at page 19 of this Proxy Statement.
METLIFE FEE DEFERRALS. A Non-Management Director may defer the receipt of all
or part of his or her retainer and attendance fees, and may elect to defer the
receipt of any shares issuable under the terms of the 2000 Directors Stock Plan
in lieu of retainer and attendance fees and any dividends payable on the shares
until after he or she ceases to serve as a Director.
DIRECTORS' BENEFIT PROGRAMS. Non-Management Directors who joined the Board
after January 1, 2003 receive $200,000 of group life insurance. Non-Management
Directors who joined the Board prior to January 1, 2003 are eligible to continue
to receive $200,000 of life insurance coverage under policies then in existence,
for which MetLife would pay the Directors a cash amount sufficient to cover the
cost of premiums (ranging up to approximately $20,000). MetLife provides each
Non-Management Director with business travel accident insurance coverage while
traveling on MetLife business. Non-Management Directors are eligible to
participate in MetLife's Long Term Care Insurance Program on a fully
contributory basis.
DIRECTORS' RETIREMENT POLICY. The retirement policy adopted by the Board of
Directors provides that no Director shall stand for election as a member of
MetLife's Board after he or she reaches the age of 72, and that a Director may
continue to serve until the annual shareholders meeting coincident with or
immediately following his or her 72nd birthday. In addition, no Director who is
also an officer of MetLife shall serve as a Director when he or she retires as
an officer of MetLife or Metropolitan Life Insurance Company unless the Board
waives this requirement. The policy also provides that each Director shall offer
to resign from the Board whenever there is a change or discontinuance of his or
her principal occupation or a significant change in his or her business or
professional responsibilities.
CHARITABLE GIFT PROGRAM. Non-Management Directors elected as Directors of
Metropolitan Life Insurance Company prior to October 1, 1999 participate in a
charitable gift program under which each may recommend one or more charitable or
educational institutions to receive, in the aggregate, a $1 million contribution
from Metropolitan Life Insurance Company in the name of that Director upon the
Director's death. For 2003, the Company paid $223,294 in premiums for insurance
policies under the program.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. Helene L. Kaplan and Curtis H.
Barnette, Directors of MetLife, are both Of Counsel to Skadden, Arps, Slate,
Meagher & Flom LLP ("Skadden"). Skadden performs legal services for MetLife and
its affiliates, and MetLife provides insurance-related products and services to
Skadden. John C. Danforth, a Director of MetLife, is a partner of Bryan Cave
LLP, which performs legal services for MetLife and its affiliates. Hugh B.
Price, a Director of MetLife, is a Senior Advisor to Piper Rudnick LLP, which
performs legal services for MetLife and its affiliates. Catherine R. Kinney, a
Director of MetLife, is an executive officer and was, until December 2003, a
Director of the New York Stock Exchange, Inc. on which securities of MetLife and
certain of its affiliates are listed. The Board of Directors has affirmatively
determined that none of the Non-Management Directors, including these Directors,
has a material relationship with the Company for purposes of the Corporate
32
Governance Standards of the New York Stock Exchange. See "Corporate Governance"
beginning on page 26.
FINANCIAL MANAGEMENT CODE OF PROFESSIONAL CONDUCT. The Company has adopted the
MetLife Financial Management Code of Professional Conduct (the "Financial
Management Code"), a "code of ethics" as defined under the rules of the
Securities and Exchange Commission, that applies to the Company's Chief
Executive Officer, Chief Financial Officer, Chief Accounting Officer, Corporate
Controller and all professionals in finance and finance-related departments. The
Financial Management Code is available on the Company's website at
http://www.metlife.com/corporategovernance. The Company intends to satisfy its
disclosure obligations under Item 10 of Form 8-K by posting information about
amendments to, or waivers from a provision of the Financial Management Code that
apply to the Company's Chief Executive Officer, Chief Financial Officer, Chief
Accounting Officer, and Corporate Controller on the Company's website at the
address given above.
33
--------------------------------------------------------------------------------
AUDIT COMMITTEE REPORT
--------------------------------------------------------------------------------
This report is submitted by the Audit Committee of the MetLife Board of
Directors (the "Committee"). The Committee, on behalf of the Board, is
responsible for overseeing management's conduct of MetLife's financial reporting
and internal control processes. A copy of the Audit Committee's Charter, as
amended in January 2004, is set forth on Appendix D of this Proxy Statement, and
also is available on the Company's website at
http://www.metlife.com/corporategovernance.
Management has the responsibility for the preparation of MetLife's consolidated
financial statements and the reporting process. The firm of Deloitte & Touche
LLP ("Deloitte"), as MetLife's independent auditor, is responsible for auditing
MetLife's consolidated financial statements in accordance with generally
accepted auditing standards. The Committee reviewed and discussed MetLife's
audited consolidated financial statements for the year ended December 31, 2003
(the "2003 consolidated financial statements") with management and with
Deloitte.
Deloitte has discussed with the Committee those matters described in the
Statement on Auditing Standards No. 61. Deloitte has also provided to the
Committee and discussed the written disclosures and the letter required by
Independence Standards Board Standard No. 1 regarding Deloitte's independence.
The Committee recommended to the Board that MetLife's 2003 audited consolidated
financial statements be included in MetLife's Annual Report on Form 10-K for the
fiscal year ended December 31, 2003 for filing with the Securities and Exchange
Commission, in reliance upon the reviews and discussions with management and
Deloitte described above, and the Board of Directors' receipt of an opinion from
Deloitte dated March 5, 2004 stating that MetLife's 2003 consolidated financial
statements present fairly, in all material respects, the consolidated financial
position of MetLife and its consolidated subsidiaries at December 31, 2003 and
2002 and the consolidated results of their operations and their consolidated
cash flows for each of the three years in the period ended December 31, 2003 in
conformity with accounting principles generally accepted in the United States of
America.
Respectfully,
James R. Houghton, Chair
Burton A. Dole, Jr.
John M. Keane
John J. Phelan, Jr.
Hugh B. Price
Kenton J. Sicchitano
William C. Steere, Jr.
34
--------------------------------------------------------------------------------
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
This report on executive compensation is submitted by the Compensation Committee
(the
"Committee") of MetLife's Board of Directors. The Committee, has oversight of
MetLife's executive total compensation program, including benefits, and receives
regular reports concerning the program. The Committee evaluates the performance
of the Chief Executive Officer and endorses, for approval by the Independent
Directors, the total compensation of the Chief Executive Officer based on such
evaluation. The Committee also reviews and recommends to the Board of Directors
total compensation for executive officers named in the "Summary Compensation
Table" on page 40 (the "Named Executive Officers").
COMPENSATION PHILOSOPHY AND OBJECTIVES
MetLife's total compensation philosophy, as endorsed by the Compensation
Committee, is designed to:
- Provide competitive total compensation opportunities that will attract, retain
and motivate high-performing executives;
- Align the compensation plans to the Company's business strategies;
- Reinforce the Company's pay for performance culture by making a significant
portion of compensation variable and based on company, business unit and
individual performance; and
- Align the financial interests of the Company's executives and its shareholders
through stock-based incentives and by building executive ownership in the
Company.
MetLife has a strong pay for performance philosophy, and to that end the total
compensation program provides opportunities that are competitive within the
insurance industry and the broader financial services industry. The Committee
relies on an independent compensation consultant and national surveys for advice
and information on competitive compensation practices and trends in the
marketplace. The Committee has selected a group of insurance and financial
services companies against which MetLife's executive compensation programs are
benchmarked and generally positions its executive compensation opportunities
within a range of the median to the third quartile of insurance and financial
services companies. Some of these companies, but not all, are included in the
S&P Indices which are reflected on the "Performance Graph," on page 48.
It is the Committee's policy that all incentive compensation paid to MetLife's
executives be deductible for federal income tax purposes.
COMPENSATION COMPONENTS AND PRACTICES
Because of specific regulatory constraints related to the demutualization of
Metropolitan Life Insurance Company, a wholly-owned subsidiary of MetLife, the
Company was unable to use stock-based incentives prior to April 2001. Executives
were not permitted to own stock until April 7, 2002, the second anniversary of
the demutualization. Through April 7, 2005, the maximum number of shares the
Committee may use in the various components of the Company's executive
compensation and benefits programs is 5% of the shares outstanding immediately
after the effective date of the plan of demutualization, subject to reduction
for stock options granted to members of the Company's Board of Directors (see
"The MetLife, Inc. 2000 Directors Stock Plan" on page 31) and for shares granted
as compensation to employees or insurance agents under certain other
compensation and benefit plans.
Total compensation consists of base salary and annual and long term incentive
awards. A substantial portion of each executive's total compensation is variable
and will continue to be at risk based on Company, business unit and individual
performance. As an executive's responsibilities become more significant, a
larger portion of total compensation will be at-risk or variable based on
performance. The compensation philosophy places less emphasis on base salary
than on incentives and aims to reward executives through the payment of annual
and long term incentive awards that are performance-driven.
35
Beginning in April 2001, the Committee was able to grant stock options and to
approve long term incentive payments in stock to the Company's executives. Each
of these compensation components replaced long term incentive awards previously
paid entirely in cash.
BASE SALARY
Each year the Committee reviews the base salaries of the Named Executive
Officers and, when warranted, makes recommendations regarding base salary
changes to the Independent Directors regarding the Chief Executive Officer, and
to the Board of Directors regarding the other Named Executive Officers, in the
context of total compensation relative to their respective responsibilities and
the competitive market. Likewise, other executive officers are paid base
salaries that are intended to reflect their levels of responsibilities and
competitive market conditions within a total compensation context.
ANNUAL INCENTIVE PROGRAM
The objectives of the Annual Variable Incentive Plan (the "AVIP") are to:
- provide competitive opportunities commensurate with Company performance;
- align total annual incentive pay with the Company's annual business results;
and
- make a significant portion of total compensation variable based upon Company,
business unit and individual performance.
Prior to the beginning of each calendar year, the Committee approves the formula
of performance measures and goals of the AVIP that are based on the Company's
business plan. Goals, such as operating earnings and return on equity, are used
as a basis for determining the maximum value of all awards that will be
available for distribution. The actual value of all awards approved by the
Committee is allocated among the various business units based on each unit's
performance compared with the objectives set for it at the beginning of the
performance period and overall Company results.
In all AVIP award determinations, including those for Named Executive Officers,
individual performance, compared with established objectives and relative
contributions among the AVIP participants, is a key factor in the determination
of the individual's actual incentive award. Paying for performance has produced
significant AVIP award differentiation based on an individual's performance and
relative contribution. The Committee recommends individual incentive awards for
executive officers, including the Named Executive Officers other than the Chief
Executive Officer, to the Board of Directors for approval, and endorses for the
approval of the Independent Directors the incentive award for the Chief
Executive Officer. Each of the Named Executive Officers participates in AVIP.
The Board has approved the Annual Plan effective January 1, 2004, subject to
shareholder approval. The Committee intends that, beginning with awards
attributable to 2004 performance, the maximum annual awards that may be paid to
officers of the Company subject to the reporting requirements of Section 16 of
the Exchange Act will be determined in a manner designed to meet the
requirements for performance-based compensation under Section 162(m) of the
Internal Revenue Code. See Proposal Three, beginning on page 16 of this Proxy
Statement.
LONG TERM INCENTIVE PROGRAM
In 2001, a new long term incentive program replaced the one which was payable
entirely in cash. Since that time, the long term incentive program has been
comprised of two components: the Long Term Performance Compensation Plan (the
"Long Term Plan") and the MetLife, Inc. 2000 Stock Incentive Plan (the "2000
Stock Plan"). Long term incentive awards assist the Company in focusing efforts
of the executives on increasing total shareholder value and attaining other
performance goals over a number of years, which are integral to the Company's
continued success.
The objectives of the long term incentive program are:
- align executives' and shareholders' interests;
- foster and promote the long term financial success of the Company;
36
- encourage executives to take a long term strategic perspective and reward
performance accordingly; and
- attract and retain key executives with long term business perspective.
Long term incentive awards for executives, including those of the Named
Executive Officers other than the Chief Executive Officer, are recommended by
the Committee to the Board of Directors, and long term incentive awards for the
Chief Executive Officer are endorsed by the Committee for the approval of the
Independent Directors in the context of total compensation.
The Board has approved the Stock and Incentive Plan effective April 15, 2005,
subject to shareholder approval, to provide the framework for a continued long
term incentive program. See Proposal Two, beginning on page 9 of this Proxy
Statement.
LONG TERM PERFORMANCE COMPENSATION PLAN
The current Long Term Plan covers a three-year performance period (the
"Performance period"). The Committee approves the incentive opportunity targets
for each Long Term Plan participant, including the Named Executive Officers, for
each Performance period. The Committee may approve a higher or lower incentive
opportunity for a particular individual based on his or her potential impact on
the Company's long term business results.
At the time it approves incentive opportunities, the Committee also determines
the financial and strategic business goals against which corporate performance
will be measured. The primary factor the Committee considers is total
shareholder return on the Company's stock during the Performance period. At the
end of the Performance period, the Committee also considers the extent to which
the other corporate performance goals have been met and determines the amount
which may be awarded to participants with respect to performance for such
period.
The Committee and the Board of Directors may choose to exercise discretion under
the Long Term Plan to approve a final award reflecting between 90% and 110% of
the product of each individual's incentive opportunity multiplied by the total
shareholder return on the Company's common stock during the Performance period.
Except for an award to the Chief Executive Officer, whose award is endorsed by
the Compensation Committee and approved by the Independent Directors, no award
will become payable, including those of the Named Executive Officers, unless it
is approved by the Board of Directors. Awards may be paid, in whole or in part,
in shares of the Company's common stock at the discretion of the Board of
Directors. Each of the Named Executive Officers participates in the Long Term
Plan.
METLIFE, INC. 2000 STOCK INCENTIVE PLAN
The Committee administers the 2000 Stock Plan and determines the participants to
whom options to purchase shares of Company common stock are granted, the timing
of such grants, and terms and conditions of each option. No option exercise
price may be less than the fair market value of a share of the Company's common
stock on the date the option is granted.
In 2003, management employees of the Company and certain subsidiaries, including
each of the Named Executive Officers, were granted "Management" stock options,
in amounts determined on an individual basis by the Committee to reflect the
responsibilities and performance of the participants and to motivate superior
performance. For additional information about stock options, see the chart
entitled "Option Grants in Last Fiscal Year" on page 41.
BUILDING EQUITY OWNERSHIP
Executives, including the Named Executive Officers, were not able to own stock
until April 7, 2002, the second anniversary of the demutualization. The Company
has established a strong stock ownership
37
philosophy. Executives, including the Named Executive Officers, are expected to
own shares of MetLife common stock according to the following guidelines:
TITLE EQUITY OWNERSHIP SCALE
----- ----------------------
Chief Executive Officer..................................... Seven times base salary
Vice Chairman/Division President............................ Four times base salary
Senior Executive Vice President............................. Three times base salary
Executive/Senior Vice President............................. Two times base salary
Vice President.............................................. One times base salary
Shares acquired by exercise of stock options, through Long Term Plan share
awards, in the Savings and Investment Plan for Employees of Metropolitan Life
and Participating Affiliates (the "Savings and Investment Plan"), or on the open
market or held by immediate family members or in trust, and shares tracked in
the MetLife Deferred Compensation Plan for Officers or Metropolitan Life
Auxiliary Savings and Investment Plan (the "Auxiliary Savings and Investment
Plan"), count toward satisfaction of these requirements. There is no compulsory
time frame for accumulating the minimum ownership requirement. Active officers
(and other associates of equivalent grades) are expected to retain stock
acquired through the exercise of stock options or from Long Term Plan Awards
until the officer meets the stock ownership requirements.
CEO COMPENSATION
Mr. Benmosche's total compensation for 2003, which is detailed in the "Summary
Compensation Table" on page 40, includes a base salary of $1,100,000, an annual
incentive award under AVIP of $3,400,000 for 2003, and an estimated Long Term
Plan Award of $2,888,162 for the April 1, 2001 to March 31, 2004 Performance
period (see footnote 4 to the "Summary Compensation Table" on page 40). Mr.
Benmosche's base salary of $1,100,000 has been at that level since March 2002.
In 2003, Mr. Benmosche also received stock options totaling 450,000 shares and
an Long Term Plan award opportunity of $4,500,000 for the April 1, 2003 to March
31, 2006 Performance period.
In determining Mr. Benmosche's compensation for 2003, the Committee weighed his
accomplishments against his goals for the year while also taking into
consideration the effectiveness of his leadership and its impact on the MetLife
enterprise. As a result of Mr. Benmosche's strategic leadership, the Company's
2003 financial and operating results exceeded the goals for both its
international and U.S. operations, as did growth of the MetLife Bank; the
Company maintained its financial strength ratings; the strength of the MetLife
brand was leveraged in support of broader product offerings; and through Mr.
Benmosche's leadership, the Company continued to expand its role as a leader in
the financial services industry by advancing national and local legislative and
regulatory changes, all of which actions and initiatives were Mr. Benmosche's
objectives for 2003. At the same time, the Company maintained its standards of
ethical conduct across its lines of business and its reputation for integrity.
38
OTHER COMPENSATION AND BENEFIT PROGRAMS
The Named Executive Officers also participate in a broad-based employee benefits
program that includes a pension program, a savings and investment program, group
health and disability coverage, group life insurance, and other benefit plans.
Each of the Named Executive Officers has the opportunity under the MetLife
Deferred Compensation Plan for Officers to defer receipt of a portion of his or
her cash compensation and stock awards until a later date. Further details on
the retirement program are provided on pages 42 through 44. The Named Executive
Officers are also parties to other employment-related agreements as described
under the heading "Employment-Related Agreements" beginning on page 44 of this
Proxy Statement.
Respectfully,
William C. Steere, Jr., Chair
James R. Houghton
Cheryl W. Grise
Catherine R. Kinney
Kenton J. Sicchitano
Charles M. Leighton
39
--------------------------------------------------------------------------------
EXECUTIVE COMPENSATION
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------
LONG TERM
COMPENSATION
--------------------------
AWARDS PAYOUTS
ANNUAL COMPENSATION ------------- ----------
------------------------------------------------ SECURITIES
OTHER ANNUAL UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#)(3) PAYOUTS($) COMPENSATION($)
--------------------------- ---- --------- -------- --------------- ------------- ---------- ---------------
Robert H. Benmosche, 2003 $1,100,000 $3,400,000(1) $ 78,320(2) 450,000 $2,888,162(4) $185,185(5)
Chairman of the Board 2002 1,080,769 3,500,000 66,253 525,000 3,336,300 421,771
and Chief Executive 2001 1,000,000 3,300,000 114,936 322,600 4,238,000 463,731
Officer................
C. Robert Henrikson, 2003 600,000 1,075,000(1) -- 115,000 962,721(4) 68,646(5)
President, 2002 585,577 1,100,000 -- 140,000 1,430,000 117,217
U.S. Insurance and 2001 525,000 825,000 -- 80,800 1,800,000 129,605
Financial Services.....
Stewart G. Nagler, Vice 2003 670,000 800,000(1) 66,917(2) 115,000 1,083,061(4) 61,521(5)
Chairman of the Board.. 2002 662,308 850,000 -- 155,000 1,672,700 139,819
2001 630,000 1,000,000 57,635 89,750 2,142,000 139,412
Lisa M. Weber, Senior 2003 450,000 875,000(1) -- 80,000 541,530(4) 54,831(5)
Executive Vice 2002 435,577 900,000 -- 110,000 800,000 105,389
President and Chief 2001 358,635 900,000 -- 44,975 820,000 88,089
Administrative Officer..
William J. Toppeta, 2003 500,000 750,000(1) -- 80,000 842,381(4) 48,538(5)
President, 2002 495,193 700,000 -- 110,000 1,256,700 85,379
International........
2001 475,001 600,000 -- 71,850 1,547,000 103,802
Gary A. Beller, former 2003 460,000 900,000(1) -- 80,000 902,551(4) 54,896(5)
Senior Executive Vice 2002 460,000 900,000 -- 110,000 1,106,300 121,071
President(6)........... 2001 460,000 850,000 -- 67,375 1,275,000 139,385
Gerald Clark, former Vice 2003 670,000 675,000(1) -- 115,000 1,083,061(4) 63,410(5)
Chairman of the 2002 662,308 900,000 52,068(2) 155,000 1,644,922 132,030
Board(6)............... 2001 630,000 1,075,000 61,382 89,750 2,114,274 154,715
----------------------------------------------------------------------------------------------------------
---------------
(1) Includes incentive awards pursuant to the AVIP based on 2003 performance,
which were paid in the first quarter of 2004.
(2) Includes amounts representing the approximate incremental cost to MetLife
for personal use of the corporate aircraft as follows: during 2003: $78,000
for Mr. Benmosche and $42,000 for Mr. Nagler; during 2002: $66,040 for Mr.
Benmosche; and $39,260 for Mr. Clark; and during 2001: $112,400 for Mr.
Benmosche; $50,600 for Mr. Nagler and $46,200 for Mr. Clark. Also includes
$17,279 in cost to the Company in 2003 for financial planning services
provided to Mr. Nagler.
(3) Specific information regarding stock option grants is provided in the table
entitled "Option Grants in Last Fiscal Year" set forth on page 41.
(4) These amounts do not reflect actual payouts for the Long Term Plan
Performance period April 1, 2001 to March 31, 2004. On March 5, 2004, the
Board of Directors determined to calculate each executive's payout based on
the executive's opportunity multiplied by Total Shareholder Return during
the Performance period. The amounts in this table reflect what the Named
Executive Officer's payout would have been had the Performance period ended,
and Total Shareholder Return had been calculated, as of March 5, 2004.
Payment of the awards to the Named Executive Officers will be made after
March 31, 2004 and will be payable in the form of 75% in MetLife common
stock and 25% in cash. The actual payment amounts will be reported, as
applicable, in the 2005 Proxy Statement.
(5) Includes: (i) contributions to the Savings and Investment Plan of $8,000 for
each of the Named Executive Officers; (ii) employer contributions to, or,
with respect to, the Auxiliary Savings Investment Plan as follows:
40
Mr. Benmosche: $177,185; Mr. Henrikson: $60,646; Mr. Nagler: $53,521; Ms.
Weber: $46,831; Mr. Toppeta: $40,538; Mr. Beller: $46,896; and Mr. Clark:
$55,410.
(6) The last day of employment of Messrs. Clark and Beller with an affiliate of
the Company was December 30, 2003.
LONG TERM INCENTIVE PLAN AWARDS IN LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS
UNDER NON-STOCK PRICE-BASED PLANS
PERFORMANCE OR OTHER PERIOD ---------------------------------
NAME UNTIL MATURATION OR PAYOUT ESTIMATED TARGET PAYMENT(1)
---- ------------------------------ ---------------------------------
Robert H. Benmosche............. April 1, 2003 - March 31, 2006 $4,500,000
C. Robert Henrikson............. April 1, 2003 - March 31, 2006 950,000
Stewart G. Nagler............... April 1, 2003 - March 31, 2006 950,000
Lisa M. Weber................... April 1, 2003 - March 31, 2006 750,000
William J. Toppeta.............. April 1, 2003 - March 31, 2006 750,000
Gary A. Beller.................. April 1, 2003 - March 31, 2006 750,000
Gerald Clark.................... April 1, 2003 - March 31, 2006 950,000
---------------
(1) The Long Term Plan provides for awards to eligible employees at the end of
the three-year Performance period. At the beginning of each Performance
period, individual incentive opportunities are set for each participant. In
addition, performance measures and goals are established for the MetLife
enterprise. The performance of the enterprise, measured against these
measures and goals, affects the amount of the award payable in respect of
the stated individual opportunity.
For the Performance period ending in 2006, the Board of Directors determined
to exercise its discretion to approve the base amount of each individual's
award by adjusting the incentive opportunity set for that individual upward
or downward to reflect the total shareholder return on the Company's common
stock during the Performance period (the "Base Award"). In addition, the
Board of Directors may further adjust any Base Award under the Long Term
Plan. For the Performance period ending in 2006, the Board has determined to
exercise its discretion so that the final award for each participant will
not be less than 90% of the Base Award or greater than 110% of the Base
Award. The target amounts included in the table reflect 100% of the
applicable incentive award opportunity for each individual since it is not
possible to predict what the total shareholder return will be at the end of
the Performance period and its impact on any such final award payout.
The Long Term Plan does not specify a maximum dollar amount of any award.
Awards under the Long Term Plan may be paid, on the approval of the Board,
in whole or in part, in shares of the Company's common stock valued at the
fair market value of the stock on the payment date.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-------------------------------------------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED EXERCISE OR FOR OPTION TERM(3)
OPTIONS TO EMPLOYEES BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SH)(2) DATES 5%($) 10%($)
---- ------------- ---------------- ----------- ---------- ----------- ------------
Robert H. Benmosche..... 450,000 8.03% $26.00 2/17/13 $7,358,067 $18,646,787
C. Robert Henrikson..... 115,000 2.05 26.00 2/17/13 1,880,395 4,765,290
Stewart G. Nagler....... 115,000 2.05 26.00 2/17/13 1,880,395 4,765,290
Lisa M. Weber........... 80,000 1.43 26.00 2/17/13 1,308,101 3,314,984
William J. Toppeta...... 80,000 1.43 26.00 2/17/13 1,308,101 3,314,984
Gary A. Beller.......... 80,000 1.43 26.00 2/17/13 1,308,101 3,314,984
Gerald Clark............ 115,000 2.05 26.00 2/17/13 1,880,395 4,765,290
---------------
(1) These options will normally become exercisable at the rate of 33 1/3% per
year on each of the first three anniversaries of their date of grant
beginning on February 18, 2004.
41
(2) The exercise price of the options granted is equal to the fair market value
of a share of MetLife common stock on the date of grant.
(3) These amounts, based on assumed appreciation rates of 5% and 10% as
prescribed by the Securities and Exchange Commission rules, are not intended
to forecast possible future appreciation, if any, of the Company's stock
price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS
FISCAL YEAR-END(#) AT FISCAL YEAR-END($)
SHARES ACQUIRED VALUE ---------------------------- ----------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ----------- ----------- ------------- ----------- -------------
Robert H. Benmosche....... 0 $0 389,934 907,666 $1,380,554 $5,014,018
C. Robert Henrikson....... 0 0 100,401 235,399 354,825 1,292,601
Stewart G. Nagler......... 0 0 111,367 248,383 393,618 1,336,902
Lisa M. Weber............. 0 0 66,517 168,458 232,776 913,331
William J. Toppeta........ 0 0 84,435 177,415 299,431 946,651
Gary A. Beller............ 0 0 81,451 175,924 288,331 941,104
Gerald Clark.............. 0 0 111,367 248,383 393,618 1,336,902
RETIREMENT PLAN INFORMATION
The Metropolitan Life Retirement Plan for United States Employees ("Retirement
Plan"), as supplemented by the MetLife Auxiliary Pension Plan (the "Auxiliary
Pension Plan"), provides for two different defined benefit formulas. Benefits
under one formula are determined primarily based on final average compensation
and years of service (the "Traditional Formula"). Benefits under the other
formula are determined by length of service, total eligible compensation, and
specified interest rates (the "Personal Retirement Account Formula"). Eligible
associates who began employment before January 1, 2002 were generally given the
opportunity to elect, effective January 1, 2003, to continue accruing retirement
benefits under the Traditional Formula or to begin accruing retirement benefits
under the Personal Retirement Account Formula. Those associates involuntarily
terminated with eligibility for severance benefits in 2003 were given the
opportunity to change this election. Eligible associates hired on or after
January 1, 2002 accrue retirement benefits under the Personal Retirement Account
Formula.
The Auxiliary Pension Plan is generally designed to provide benefits which
eligible employees would have received under the Retirement Plan but for limits
applicable under the Retirement Plan. Benefits payable under the Retirement Plan
and the Auxiliary Pension Plan are not subject to reduction for social security
benefits or other offset amounts, but are integrated with social security
benefits so as to result in a generally consistent level of benefits in relation
to eligible compensation. Participants may choose joint and survivor annuity,
life annuity with term certain, contingent annuity, or first-to-die annuity
payout of their benefits under either formula. Participants may choose a lump
sum payout of their benefits under the Personal Retirement Account Formula.
Participants at the level generally equivalent to Senior Vice-President or
higher may also select, subject to the approval of the Compensation Committee or
its designee, the timing and frequency of auxiliary benefit payments under the
Traditional Formula.
The retirement benefits of Messrs. Benmosche, Henrikson, Nagler, Toppeta,
Beller, and Clark are determined under the Traditional Formula. Ms. Weber's
retirement benefits are determined by the Traditional Formula with regard to
service prior to January 1, 2003, and (reflecting her choice) the Personal
Retirement Account Formula with regard to service thereafter.
42
TRADITIONAL FORMULA
The following table shows the estimated Traditional Formula retirement benefits
payable at normal retirement age (generally 65) to a person retiring with the
indicated final average pay and years of credited service on a 30% joint and
survivor basis, if married, and on a life annuity basis with a 5-year guarantee,
if single.
ESTIMATED ANNUAL BENEFITS AT RETIREMENT
WITH INDICATED YEARS OF CREDITED SERVICE
FINAL
AVERAGE PAY 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
----------- -------- -------- ---------- ---------- ---------- ---------- ---------- ----------
$500,000... $ 41,200 $ 82,400 $ 123,500 $ 164,700 $ 205,900 $ 247,100 $ 288,300 $ 300,800
750,000... 62,400 124,900 187,300 249,700 312,200 374,600 437,000 455,800
1,000,000.. 83,700 167,400 251,000 334,700 418,400 502,100 585,800 610,800
1,250,000.. 104,900 209,900 314,800 419,700 524,700 629,600 734,500 765,800
1,500,000.. 126,200 252,400 378,500 504,700 630,900 757,100 883,300 920,800
1,750,000.. 147,400 294,900 442,300 589,700 737,200 884,600 1,032,000 1,075,800
2,000,000.. 168,700 337,400 506,000 674,700 843,400 1,012,100 1,180,800 1,230,800
2,250,000.. 189,900 379,900 569,800 759,700 949,700 1,139,600 1,329,500 1,385,800
2,500,000.. 211,200 422,400 633,500 844,700 1,055,900 1,267,100 1,478,300 1,540,800
2,750,000.. 232,400 464,900 697,300 929,700 1,162,200 1,394,600 1,627,000 1,695,800
3,000,000.. 253,700 507,400 761,000 1,014,700 1,268,400 1,522,100 1,775,800 1,850,800
3,250,000.. 274,900 549,900 824,800 1,099,700 1,374,700 1,649,600 1,924,500 2,005,800
3,500,000.. 296,200 592,400 888,500 1,184,700 1,480,900 1,777,100 2,073,300 2,160,800
3,750,000.. 317,400 634,900 952,300 1,269,700 1,587,200 1,904,600 2,222,000 2,315,800
4,000,000.. 338,700 677,400 1,016,000 1,354,700 1,693,400 2,032,100 2,370,800 2,470,800
4,250,000.. 359,900 719,900 1,079,800 1,439,700 1,799,700 2,159,600 2,519,500 2,625,800
4,500,000.. 381,200 762,400 1,143,500 1,524,700 1,905,900 2,287,100 2,668,300 2,780,800
4,750,000.. 402,400 804,900 1,207,300 1,609,700 2,012,200 2,414,600 2,817,000 2,935,800
5,000,000.. 423,700 847,400 1,271,000 1,694,700 2,118,400 2,542,100 2,965,800 3,090,800
The annual Traditional Formula retirement benefit is generally equal to the sum
of (a)(i) a percentage of an executive's "final average compensation" up to his
or her "covered compensation" (i.e., the average of the Social Security Wage
Bases during the 35 calendar years ending with the earlier of the calendar year
in which the Participant retires from active service or the calendar year in
which the Participant attains his or her Social Security Retirement Age), plus
(ii) a percentage of the executive's "final average compensation" in excess of
his or her "covered compensation," and the sum thereof times (iii) years of
"credited service" not exceeding 35 years, and (b) a percentage of "final
average compensation" multiplied by years of "credited service" in excess of 35
years.
For participants at the level generally equivalent to Senior Vice-President or
higher, "final average compensation" for purposes of the Traditional Formula is
the sum of the annualized "annual basic compensation" (which includes base
salary) for the 60 highest consecutive months of service in the 120 months of
service prior to retirement or separation from service, plus the average of the
highest five payments of "annual variable incentive compensation" (which
includes payments under the AVIP) in the last 120 months of service prior to
retirement or separation from service. For other participants, "final average
compensation" is defined for purposes of the Traditional Formula as the
annualized average of the individual's combined annual basic compensation and
annual variable incentive compensation for the 60 highest consecutive months of
service in the 120 months of service prior to retirement or separation from
service. Such compensation is generally the same as the compensation reflected
in the "salary" and "bonus" columns of the "Summary Compensation Table" on page
40.
At December 31, 2003 (assuming retirement as of such date), the estimated "final
average compensation" for purposes of the Traditional Formula is $4,319,507 for
Mr. Benmosche, $1,507,083
43
for Mr. Henrikson, $1,721,868 for Mr. Nagler, $1,147,417 for Mr. Toppeta,
$1,355,667 for Mr. Beller, and $1,634,668 for Mr. Clark. The estimated years of
credited service for purposes of the Traditional Formula as of such date is 8
years for Mr. Benmosche, 31 years for Mr. Henrikson, 41 years for Mr. Nagler, 30
years for Mr. Toppeta, 9 years for Mr. Beller, and 37 years for Mr. Clark.
Pursuant to an agreement in connection with his retirement, Mr. Clark's
retirement benefits are determined by adding two years to his age and two years
to his "credited service" to those otherwise applicable under the Traditional
Formula, rather than by the terms of the plans.
PERSONAL RETIREMENT ACCOUNT FORMULA
Personal Retirement Account Formula retirement benefits are determined by
crediting each eligible associate at the end of each month in which the
associate is employed by certain Company affiliates an amount equal to 5% of
eligible pay up to the annual social security wage base, and 10% of eligible pay
over the annual social security wage base, plus interest on the accrued balance
at a rate determined annually based on the 30-year bond rate promulgated by the
Internal Revenue Service (for 2003, the annual interest rate was 4.96%).
At December 31, 2003, Ms. Weber's estimated annual benefit at normal retirement
age, determined by the total retirement benefits under the Traditional Formula
and the Personal Retirement Account Formula, was $120,200, based on a life
annuity with a five year term certain.
EMPLOYMENT-RELATED AGREEMENTS
EMPLOYMENT CONTINUATION AGREEMENTS. The Company has entered into employment
continuation agreements with the Named Executive Officers and certain other of
its key executives. These agreements provide that, in the event of a "change of
control," as defined in the agreements, the executive's employment would
continue, subject to the terms of the agreement, for a period of three years.
During this period, the executive's compensation, benefits and certain other
terms and conditions of employment are subject to certain minimum standards
which, if not met, allow the executive to terminate employment for "good
reason," as defined in the agreements. Should the executive terminate employment
for "good reason" or be terminated without "cause," as defined in the
agreements, the agreements provide for the payment of termination benefits which
include: three year continuation of benefits; additional service credit for
pension benefits for the lesser of three years or through the executive's
sixty-fifth birthday; and a lump-sum severance payment equal to three times the
sum of the executive's (a) base salary, (b) average annual bonus award over the
preceding three years, and (c) if a change of control had occurred prior to
January 1, 2004, average long term incentive award over the preceding three
years, less the value of any equity compensation awards. The agreements also
provide that the Named Executive Officer would be made whole for any excise
taxes due as a result of payments exceeding the change of control excise tax
threshold.
Additionally, Messrs. Benmosche and Nagler may voluntarily terminate employment
during the thirty-day period beginning six months after a change of control and
receive the termination benefits discussed in the prior paragraph. Mr. Clark's
agreement had an identical term.
TRANSITION ASSISTANCE PLAN. The Named Executive Officers are eligible to
participate in the MetLife Plan for Transition Assistance for Officers which
provides for outplacement services and formula-based severance payments, and
other benefits, including: vesting of pension and savings and investment program
account balances; certain additions to age and service credit for pension and
benefits purposes; limited continuation of medical benefits or, under certain
conditions, eligibility for retirement medical benefits; and limited
continuation of life insurance benefits. Certain provisions of the plan that go
into effect in the event of a change of control of the Company do not apply to
the Named Executive Officers because of their employment continuation
agreements.
2000 STOCK PLAN AND STOCK OPTION AGREEMENTS. The Named Executive Officers have
been awarded stock options under the 2000 Stock Plan and have executed
agreements concerning such options. All such agreements provide that if the
executive is: (i) terminated from employment in a sale,
44
divestiture, or similar transaction involving a business unit or segment
designated by the Compensation Committee, the options will continue to become
exercisable as originally scheduled and remain exercisable until the earlier of
the expiration of the term of the option or three years after the date the
executive is terminated; or (ii) terminated from employment for "cause," as
defined in the 2000 Stock Plan, the options will be forfeited.
All such agreements also provide that in the event of a "change of control," as
defined in the 2000 Stock Plan, all options covered by the agreements will
become fully exercisable. However, the Compensation Committee has the discretion
to cancel the options and, in lieu thereof, make a cash payment to the executive
equal to the excess of the "change of control" price over the option exercise
price. No such acceleration of exercisability, cash settlement or other payment
will occur if, prior to the change of control, the Compensation Committee
reasonably determines in good faith that the options will be honored, assumed,
or substituted for new rights immediately after the change of control.
The agreements regarding grants on and after February 8, 2002, provide that if
the executive: (i) dies while employed, all options will become exercisable
immediately and remain exercisable until the expiration of the term of the
option; (ii) retires, the options will continue to become exercisable and remain
exercisable until the expiration of the term of the option; or (iii) qualifies
for long term disability, the options will continue to become exercisable and
remain exercisable until the expiration of the term of the option and no
subsequent termination of employment, other than for "cause," will affect the
options. Such agreements regarding earlier grants provide that if the executive:
(i) dies while employed, all options will become exercisable immediately and
remain exercisable until the earlier of the expiration of the term of the option
or three years after the date of the executive's death; (ii) retires, the
options will continue to become exercisable as originally scheduled and remain
exercisable until the earlier of the expiration of the term of the option or
three years after the date the executive retired; or (iii) becomes eligible for
long term disability, the options will continue to become exercisable as
originally scheduled and remain exercisable until the earlier of the expiration
of the term of the option or three years after the date the executive qualifies
for long term disability and no subsequent termination of employment, other than
for "cause," will affect the options.
All such agreements provide that, should the executive's employment terminate
for a reason not otherwise described above, any then-currently exercisable
options may be exercised until the earlier of the expiration of the term of the
option or thirty days from the date of termination.
LONG TERM PLAN. The Long Term Plan, in which each Named Executive Officer
participates, provides that, upon a "change of control," as defined in the plan,
outstanding opportunities for three-year Performance periods that began in 2000
and earlier were to have been paid in cash using an average corporate
performance factor for the prior three years, prorated for the portion of the
three year Performance period that occurred prior to the change of control. For
outstanding opportunities that began in 2001 and later, the plan provides that
upon a change of control such opportunities are to be paid in cash reflecting
the total shareholder return through the date of the change of control, but also
provides that no such payment will be made if the Compensation Committee
reasonably determines in good faith that new rights will be substituted for the
opportunities immediately after the change of control.
AUXILIARY SAVINGS AND INVESTMENT PLAN. The Auxiliary Savings and Investment
Plan, in which each of the Named Executive Officers participates, provides that,
upon a "change of control" as defined in the plan, accrued auxiliary and
qualified benefits vest if the participant remains employed through the
applicable vesting period that prevailed prior to the change of control, or if
the participant is involuntarily terminated without cause or voluntarily
terminates employment for good reason (each as defined in the plan) within two
years after the change of control. In addition, the plan provides that
participants will be given the opportunity to elect in advance to have their
benefits paid in cash in the event that their employment terminates under the
conditions described in the preceding sentence within two years after a change
of control.
45
AUXILIARY PENSION PLAN. The Auxiliary Pension Plan, in which each of the Named
Executive Officers participates, provides that, upon a "change of control" as
defined in the plan, accrued auxiliary and qualified benefits vest if the
participant remains employed through the applicable vesting period that
prevailed prior to the change of control, or if the participant is involuntarily
terminated without cause or voluntarily terminates employment for good reason
(each as defined in the plan) within two years after the change of control.
OFFICERS DEFERRED COMPENSATION PLAN. The MetLife Deferred Compensation Plan for
Officers, in which each Named Executive Officer participates, provides that
participants will be given the opportunity to elect in advance to have their
benefits paid in cash in the event that their employment terminates within two
years after a change of control.
EQUITY COMPENSATION PLANS TABLE
The following table provides information, as of December 31, 2003, regarding the
securities authorized for issuance under the Company's equity compensation
plans.
NUMBER OF
NUMBER OF SECURITIES REMAINING
SECURITIES TO BE AVAILABLE FOR FUTURE
ISSUED UPON WEIGHTED-AVERAGE ISSUANCE UNDER
EXERCISE OF EXERCISE PRICE OF EQUITY COMPENSATION
OUTSTANDING OUTSTANDING, PLANS (EXCLUDING
OPTIONS, WARRANTS OPTIONS, WARRANTS SECURITIES REFLECTED
AND RIGHTS AND RIGHTS IN THE FIRST COLUMN)
----------------- ----------------- --------------------
PLAN CATEGORY
Equity compensation plans approved by
security holders (1)............... 20,295,028 $29.05 17,179,812(2)(3)(4)
Equity compensation plans not
approved by security holders....... None -- None
---------- ------ ----------
Total...................... 20,295,028 $29.05 17,179,812
========== ====== ==========
---------------
(1) The 2000 Stock Plan and the 2000 Directors Stock Plan were each approved by
Metropolitan Life Insurance Company, the sole shareholder of the Company at
the time of approval. The policyholders of Metropolitan Life Insurance
Company entitled to vote on its plan of reorganization (the "plan of
reorganization") approved that plan of reorganization, which included both
the 2000 Stock Plan and the 2000 Directors Stock Plan. The policyholders
entitled to so vote received a summary description of each plan, including
the applicable limits on the number of shares available for issuance under
each plan.
(2) Under the plan of reorganization, the Company is authorized to issue a
maximum of 38,323,333 shares of common stock under certain compensation
plans. Of the 38,323,333 shares:
- 37,823,333 shares, representing five percent of the total number of
shares of Company common stock outstanding immediately after the
effective date of the plan of reorganization, may be utilized (i) for
issuances pursuant to options granted under the 2000 Stock Plan and the
2000 Directors Stock Plan, (ii) for issuances under the Long Term Plan,
(iii) for investment tracking valuation under the Metropolitan Life
Auxiliary Savings and Investment Plan (a non-qualified savings and
investment plan under which distributions are made in cash) and (iv) for
investment tracking valuation and issuance under the MetLife Deferred
Compensation Plan for Officers (a non-qualified deferred compensation
plan). As of December 31, 2003, a total of 795,802 shares had been
utilized with respect to the plans described in (ii), (iii) and (iv)
above; and
- 500,000 shares are available for issuance as share awards under the 2000
Directors Stock Plan. As of December 31, 2003, a total of 52,691 shares
had been utilized with respect to share awards under this plan.
46
Under the plan of reorganization, (i) the total number of shares of Company
common stock available for issuance under each of the above authorizations will
be appropriately adjusted in the event of a common stock, dividend or split,
recapitalization, merger, spin-off or similar change and (ii) shares subject to
options that are canceled, terminated or otherwise settled without the issuance
of Company common stock are again available for issuance under the plans.
(3) Under the 2000 Stock Plan, options covering no more than 60% of the total
shares available for issuance under the plan could have been awarded prior
to April 8, 2002 and options covering no more than 80% of the total shares
available under the plan could have been awarded prior to April 8, 2003.
(4) Under the 2000 Directors Stock Plan, the number of shares issuable pursuant
to options may not exceed 378,233.
47
--------------------------------------------------------------------------------
PERFORMANCE GRAPH
--------------------------------------------------------------------------------
The following graph compares the cumulative shareholder return on MetLife common
stock with the cumulative total return on the Standard & Poor's 500 Stock Index,
the Standard & Poor's 500 Insurance Index, and the Standard & Poor's Financial
Index. The graph assumes that $100 was invested on April 5, 2000 (the date on
which public trading in MetLife common stock commenced) in MetLife common stock
and each of the indices described, and that all dividends were reinvested.
-------------------------------------------------------------------------------------------------------------------------------
APRIL 5, 2000 DECEMBER DECEMBER 31, 2001 DECEMBER 31, 2002 DECEMBER 31, 2003
31, 2000
-------------------------------------------------------------------------------------------------------------------------------
MetLife, Inc. $100 $228 $207 $178 $224
-------------------------------------------------------------------------------------------------------------------------------
S&P 500(R) $100 $ 90 $ 79 $ 61 $ 79
-------------------------------------------------------------------------------------------------------------------------------
S&P 500 Insurance Index $100 $140 $122 $ 97 $117
-------------------------------------------------------------------------------------------------------------------------------
S&P Financial Index $100 $123 $112 $ 95 $125
-------------------------------------------------------------------------------------------------------------------------------
48
--------------------------------------------------------------------------------
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
--------------------------------------------------------------------------------
The following table sets forth, at March 1, 2004, the number of shares of common
stock of the Company or its affiliates beneficially owned by: (i) each Director;
(ii) each of the Named Executive Officers; and (iii) all Directors and Executive
Officers as a group.
----------------------------------------------------------------------------------------------------------------
SHARES
BENEFICIALLY
SHARES OF DEFERRED OWNED AS A
COMMON STOCK SHARES AND PERCENTAGE OF
BENEFICIALLY SHARE COMMON STOCK
NAME AND ADDRESS(1) OWNED(2)(3) EQUIVALENTS(4) TOTAL OUTSTANDING
----------------------------------------------------------------------------------------------------------------
Robert H. Benmosche................ 853,442 64,604 918,046 *
----------------------------------------------------------------------------------------------------------------
Curtis H. Barnette................. 11,179 -- 11,179 *
----------------------------------------------------------------------------------------------------------------
John C. Danforth................... 6,836 4,382 11,218 *
----------------------------------------------------------------------------------------------------------------
Burton A. Dole, Jr................. 6,851 4,382 11,233 *
----------------------------------------------------------------------------------------------------------------
Cheryl W. Grise.................... 1,297 -- 1,297 *
----------------------------------------------------------------------------------------------------------------
James R. Houghton.................. 11,179 -- 11,179 *
----------------------------------------------------------------------------------------------------------------
Harry P. Kamen..................... 11,347 4,382 15,729 *
----------------------------------------------------------------------------------------------------------------
Helene L. Kaplan................... 9,571 2,645 12,216 *
----------------------------------------------------------------------------------------------------------------
John M. Keane...................... 2,017 -- 2,017 *
----------------------------------------------------------------------------------------------------------------
Catherine R. Kinney................ 7,660 1,736 9,396 *
----------------------------------------------------------------------------------------------------------------
Charles M. Leighton................ 6,915 4,382 11,297 *
----------------------------------------------------------------------------------------------------------------
Sylvia M. Mathews.................. 553 369 922 *
----------------------------------------------------------------------------------------------------------------
Stewart G. Nagler(5)............... 231,837 42,573 274,410 *
----------------------------------------------------------------------------------------------------------------
John J. Phelan, Jr................. 8,939 3,245 12,184 *
----------------------------------------------------------------------------------------------------------------
Hugh B. Price...................... 6,846 4,382 11,228 *
----------------------------------------------------------------------------------------------------------------
Kenton J. Sicchitano............... 2,560 -- 2,560 *
----------------------------------------------------------------------------------------------------------------
William C. Steere, Jr.............. 7,846 24,941 32,787 *
----------------------------------------------------------------------------------------------------------------
C. Robert Henrikson................ 222,977 27,690 250,667 *
----------------------------------------------------------------------------------------------------------------
Lisa M. Weber...................... 146,741 15,491 162,232 *
----------------------------------------------------------------------------------------------------------------
William J. Toppeta................. 172,195 24,334 196,529 *
----------------------------------------------------------------------------------------------------------------
Gary A. Beller..................... 187,942 -- 187,942 *
----------------------------------------------------------------------------------------------------------------
Gerald Clark....................... 241,621 31,852 273,473 *
----------------------------------------------------------------------------------------------------------------
Board of Directors of MetLife, but
not in each Director's individual
capacity(6)........................ 351,051,700(7) -- 351,051,700(7) 46.39%
----------------------------------------------------------------------------------------------------------------
All Directors and Executive
Officers as a group(8)............. 2,587,734(9) 320,556(9) 2,908,290 *
----------------------------------------------------------------------------------------------------------------
* Number of shares represents less than one percent of the number of shares of
common stock outstanding.
(1) The address of each Director and Named Executive Officer is: c/o MetLife,
Inc., One Madison Avenue, New York, New York 10010-3690.
49
(2) Each Director and Named Executive Officer has sole voting and investment
power over the shares beneficially owned as set out in this column opposite
his or her name, except for: (i) shares held in the MetLife Policyholder
Trust (described in note (6) below); (ii) shares that the Named Executive
Officers have the right to acquire under the Stock Plan (set out in note (3)
below); and (iii) shares that the Directors have a right to receive under
the 2000 Directors Stock Plan and Executive Officers have a right to receive
under the MetLife Deferred Compensation Plan for Officers (set out in note
(4), below). Additionally, Mr. Henrikson has shared investment and voting
power over 479 shares included in this column and has no investment or
voting power over 20 of shares included in this column.
(3) Includes shares that are subject to options which were granted under the
2000 Directors Stock Plan or the Stock Plan and are exercisable within 60
days of March 1, 2004: 6,836 shares for Messrs. Barnette, Danforth, Dole,
Houghton, Kamen, Leighton, Phelan, Price, Steere, and Ms. Kaplan,
respectively; 178 shares for Ms. Grise; 1,210 shares for General Keane;
5,631 shares for Ms. Kinney; 553 shares for Ms. Mathews; 1,536 shares for
Mr. Sicchitano; 822,600 shares for Mr. Benmosche; 231,418 shares for Mr.
Nagler; 167,376 shares for Mr. Beller; 231,418 shares for Mr. Clark; 212,468
shares for Mr. Henrikson; 171,851 shares for Mr. Toppeta; and 144,976 shares
for Ms. Weber.
(4) Includes (i) deferred shares under the 2000 Directors Stock Plan and share
equivalents under the MetLife Deferred Compensation Plan for Outside
Directors: 4,382 deferred shares for each of Messrs. Danforth, Dole, Kamen,
Leighton, and Price; 2,645 deferred shares for Ms. Kaplan; 1,736 deferred
shares for Ms. Kinney; 369 deferred shares for Ms. Mathews; 3,245 deferred
shares for Mr. Phelan; and 5,277 deferred shares and 19,664 share
equivalents for Mr. Steere; (ii) deferred shares under the MetLife Deferred
Compensation Plan for Officers: 64,604 for Mr. Benmosche; 32,390 for Mr.
Nagler; 31,852 for Mr. Clark; 27,690 for Mr. Henrikson; 24,334 for Mr.
Toppeta; and 15,491 for Ms. Weber; and (iii) 10,183 share equivalents for
Mr. Nagler held under the Metropolitan Life Auxiliary Savings and Investment
Plan. Deferred shares and share equivalents are not deemed to be
beneficially owned unless the owner has a right to receive shares within 60
days, and the deferred shares and shares equivalents listed in this column
are not reflected in the column captioned "Shares of Common Stock
Beneficially Owned."
(5) Mr. Nagler, a Director and Executive Officer of the Company, is also the
Chairman and a Director of Reinsurance Group of America, Incorporated
("RGA"), an affiliate of the Company, and beneficially owns 1,000 shares of
RGA common stock (the "RGA Shares"). He exercises sole voting and investment
power over the RGA Shares.
(6) The Board of Directors of MetLife, but not any Director in his or her
individual capacity, is deemed to beneficially own the shares of common
stock held by the MetLife Policyholder Trust because the Board will direct
the voting of those shares on certain matters submitted to a vote of
shareholders. The amount shown includes shares beneficially owned through
the MetLife Policyholder Trust by a Director in the Director's individual
capacity.
(7) This number reflects the ownership of the Beneficiaries of the MetLife
Policyholder Trust, as reported on Amendment No. 16 to Schedule 13D referred
to under the heading "Ownership of MetLife Common Stock" on page 51.
(8) Does not include shares of MetLife common stock held by the MetLife
Policyholder Trust beneficially owned by the Board of Directors, but not in
each Director's individual capacity.
(9) Includes: (i) 2,471,321 shares that are subject to options that are
exercisable within 60 days of March 1, 2004, by all Directors and Executive
Officers of the Company as a group; and (ii) 320,556 deferred shares and
share equivalents held by all Directors and Executive Officers of the
Company as a group.
50
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Exchange Act, requires the Company's Directors, executive
officers and holders of more than 10% of the Company's common stock to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of common stock and other equity securities of the
Company. Such persons are required by SEC regulations to furnish the Company
with copies of all Section 16(a) forms filed by such person with respect to the
Company. The Company believes that during fiscal 2003, except for Ms. Kaplan who
filed one late report concerning a purchase of MetLife Common Stock, all filings
required to be made by reporting persons were timely made in accordance with the
requirements of the Exchange Act.
--------------------------------------------------------------------------------
OWNERSHIP OF METLIFE COMMON STOCK
--------------------------------------------------------------------------------
The following information was reported to the Securities and Exchange Commission
by persons who beneficially owned more than 5% of MetLife common stock as of the
dates of their reports.
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
BENEFICIAL OWNER OWNERSHIP CLASS
------------------- ----------- ----------
Beneficiaries of the MetLife Policyholder
Trust(1)..................................... 351,051,700 46.39%
c/o Wilmington Trust Company, as Trustee
1100 North Market Street
Wilmington, DE 19890
AXA Financial, Inc. ........................... 41,728,137(2) 5.51%
1290 Avenue of the Americas
New York, New York 10104
(1) In connection with the demutualization of Metropolitan Life Insurance
Company, certain of its eligible policyholders were allocated a number of
interests in the MetLife Policyholder Trust equal to the number of shares of
MetLife common stock allocated to such policyholders. The shares
beneficially owned by such policyholders, the beneficiaries of the Trust,
are held in the name of Wilmington Trust Company, as Trustee. The Trust
Agreement provides the Trustee with directions as to the manner in which to
vote, assent or consent shares in the Trust at all times during the term of
the Trust. The beneficiaries of the Trust have sole investment power over
the shares. As reported on Amendment No. 16 to Schedule 13D, dated March 1,
2004, the MetLife Board of Directors, as a group, had shared voting power
with respect to the 351,051,700 shares.
(2) Based on a Schedule 13G filed with the Securities and Exchange Commission on
February 10, 2004 by AXA Financial, Inc. ("AXA Financial"), a holding
company, filing on behalf of itself, AXA Assurances I.A.R.D. Mutuelle, AXA
Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle, and AXA. AXA
Financial reported beneficial ownership of 38,475,842 shares, constituting
5.1% of the class of shares, with sole dispositive power for all such
shares, shared voting power for 7,140,521 of such shares, and sole voting
power for 19,652,193 of such shares. The other reporting persons each
indicated beneficial ownership of 41,728,137 shares, over which they each
claimed sole voting power for 22,238,227 of such shares, shared voting power
for 7,140,521 of such shares, sole dispositive power for 38,635,953 of such
shares and shared dispositive power for 3,092,184 of such shares. The
reporting persons indicated that a majority of the shares reported are held
by unaffiliated third-party client accounts managed by Alliance Capital
Management L.P., as investment adviser. Alliance Capital Management L.P. is
a majority-owned subsidiary of AXA Financial.
51
APPENDIX A
--------------------------------------------------------------------------------
METLIFE, INC. 2005 STOCK AND INCENTIVE COMPENSATION PLAN
--------------------------------------------------------------------------------
ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. MetLife, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), establishes an incentive
compensation plan to be known as the MetLife, Inc. 2005 Stock and Incentive
Compensation Plan (hereinafter referred to as the "Plan"), as set forth in this
document.
The Plan permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
Performance Shares, Performance Units, Cash-Based Awards, and Stock-Based
Awards.
The Plan shall become effective, if approved by the Board and shareholders, on
April 15, 2005 (the "Effective Date") and shall remain in effect as provided in
Section 1.3 hereof.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the success and
enhance the value of the Company and Affiliates by linking the personal
interests of the Participants to those of the Company's shareholders, and by
providing Participants with an incentive for outstanding performance.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its operation
largely is dependent.
1.3 DURATION OF THE PLAN. The Plan shall commence as of the Effective Date, as
described in Section 1.1 herein, and shall remain in effect, subject to the
right of the Committee or the Board to amend or terminate the Plan at any time
pursuant to Article 16 herein, until the earlier of (i) the tenth anniversary of
the Effective Date, or (ii) all Shares subject to the Plan have been purchased
or acquired according to the Plan's provisions.
1.4 SUCCESSOR PLAN. This Plan shall serve as the successor to the MetLife,
Inc. 2000 Stock Incentive Plan (the "Predecessor Plan"), and no further grants
shall be made under the Predecessor Plan from and after the Effective Date of
this Plan. All outstanding awards under the Predecessor Plan immediately prior
to the Effective Date of this Plan are hereby incorporated into this Plan and
shall accordingly be treated as Awards under this Plan. However, each such award
shall continue to be governed solely by the terms and conditions of the
instrument evidencing such grant or issuance, and, except as otherwise expressly
provided herein or by the Committee, no provision of this Plan shall affect or
otherwise modify the rights or obligations of holders of such incorporated
awards.
Any Shares of common stock reserved for issuance under the Predecessor Plan in
excess of the number of Shares as to which awards have been awarded thereunder
shall be transferred into this Plan upon the Effective Date and shall become
available for grant under this Plan. Any Shares related to awards granted or
issued under the Predecessor Plan that after the Effective Date may lapse,
expire, terminate, or are cancelled, are settled in cash in lieu of common
stock, are tendered (either by actual delivery or attestation) to pay the option
price, or are used to satisfy any tax withholding requirements shall be deemed
available for issuance or reissuance under Section 4.1 of this Plan.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meaning set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized.
2.1 "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act, with reference to the
Company, and shall also include any corporation, partnership, joint venture,
limited liability company, or other entity in which the Company
A-1
owns, directly or indirectly, at least fifty percent (50%) of the total combined
Voting Power of such corporation or of the capital interest or profits interest
of such partnership or other entity.
2.2 "AGENCY" means the active relationship between an Agent and an insurance
company for which the Agent is licensed.
2.3 "AGENT" means a natural person licensed or otherwise authorized under
applicable law to represent the Company or an Affiliate in the sale of insurance
or other financial products or services.
2.4 "AWARD" means, individually or collectively, a grant under this Plan of
NQSOs, ISOs, SARs, Restricted Stock, Restricted Stock Units, Performance Shares,
Performance Units, Cash-Based Awards, or Stock-Based Awards, in each case
subject to the terms of this Plan.
2.5 "AWARD AGREEMENT" means either (i) a written agreement entered into by the
Company or an Affiliate and a Participant setting forth the terms and provisions
applicable to Awards granted under this Plan; or (ii) a written statement issued
by the Company or an Affiliate to a Participant describing the terms and
provisions of such Award.
2.6 "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.7 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.8 "CASH-BASED AWARD" means an Award granted under Article 10 herein, the
value of which is denominated in cash as determined by the Committee and which
is not any other form of Award described in this Plan.
2.9 "CAUSE" means (i) the willful failure by the Participant to perform
substantially the Participant's duties as an Employee or Agent (other than due
to physical or mental illness) after reasonable notice to the Participant of
such failure, (ii) the Participant's engaging in serious misconduct that is
injurious to the Company or any Affiliate in any way, including, but not limited
to, by way of damage to their respective reputations or standings in their
respective industries, (iii) the Participant's having been convicted of, or
having entered a plea of nolo contendere to, a crime that constitutes a felony
or (iv) the breach by the Participant of any written covenant or agreement with
the Company or any Affiliate not to disclose or misuse any information
pertaining to, or misuse any property of, the Company or any Affiliate or not to
compete or interfere with the Company or any Affiliate.
2.10 "CHANGE OF CONTROL" shall occur if any of the following events occur:
(i) Any Person acquires Beneficial Ownership, directly or indirectly, of
securities of the Company representing twenty-five percent (25%) or more of
the combined Voting Power of the Company's securities;
(ii) Within any twenty-four (24) month period, the individuals who were
Directors of the Company at the beginning of such period (the "Incumbent
Directors") shall cease to constitute at least a majority of the Board of
Directors or the Board of Directors of any successor to the Company;
provided, however, that any Director elected or nominated for election to
the Board by a majority of the Incumbent Directors then still in office
shall be deemed to be an Incumbent Director for purposes of this Section
2.10(ii);
(iii) The shareholders of the Company approve a merger, consolidation,
share exchange, division, sale or other disposition of all or substantially
all of the assets of the Company which is consummated (a "Corporate
Event"), and immediately following the consummation of which the
shareholders of the Company immediately prior to such Corporate Event do
not hold, directly or indirectly, a majority of the Voting Power of (i) in
the case of a merger or consolidation, the surviving or resulting
corporation, (ii) in the case of a share exchange, the acquiring
corporation, or (iii) in the case of a division or a sale or other
disposition of assets, each surviving, resulting or acquiring corporation
which, immediately following the relevant Corporate Event, holds more than
A-2
twenty-five percent (25%) of the consolidated assets of the Company
immediately prior to such Corporate Event; or
(iv) Any other event occurs which the Board declares to be a Change of
Control.
2.11 "CHANGE OF CONTROL PRICE" means the highest price per share of Shares
offered in conjunction with any transaction resulting in a Change of Control (as
determined in good faith by the Committee if any part of the offered price is
payable other than in cash) or, in the case of a Change of Control occurring
solely by reason of a change in the composition of the Board, the highest Fair
Market Value of the common stock on any of the thirty (30) trading days
immediately preceding the date on which a Change of Control occurs.
2.12 "CODE" means the U.S. Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.
2.13 "COMMITTEE" means the Compensation Committee of the Board of Directors, or
any other duly authorized committee of the Board appointed by the Board to
administer the Plan.
2.14 "COMPANY" means MetLife, Inc., a Delaware corporation, and any successor
thereto as provided in Article 18 herein.
2.15 "CONSTRUCTIVELY TERMINATED" means, unless otherwise specified by the
Committee in the Award Agreement, a voluntary termination of employment by an
Employee or of a relationship as an Agent by an Agent within ten (10) business
days after any of the following actions by the Company, Affiliate, or person
acting on behalf of either:
(i) Requiring the Employee or Agent to be based as his/her regular or
customary place of employment or Agency at any office or location more than
fifty (50) miles from the location at which the Employee performed his/her
duties immediately prior to the Change of Control, or in a state other than
the one in which the Employee or Agent performed his/her duties immediately
prior to the Change of Control, in each case except for travel reasonably
required in the performance of the individual's responsibilities;
(ii) In the case of an Employee, reducing the Employee's base salary below
the rate in effect at the time of a Change of Control;
(iii) In the case of an Employee, failing to pay the Employee's base
salary, other wages, or employment-related benefits as required by law; or
(iv) In the case of an Agent, failing to pay the Agent's compensation or
benefits as required by law.
2.16 "DIRECTOR" means any individual who is a member of the Board of Directors
of the Company.
2.17 "EMPLOYEE" means any employee of the Company or an Affiliate. Directors
who are not otherwise employed by the Company or an Affiliate shall not be
considered Employees under this Plan. For greater clarity, and without limiting
the generality of the foregoing, individuals described in the first sentence of
this definition who are foreign nationals or are employed outside of the United
States, or both, are Employees and may be granted Awards on the terms and
conditions set forth in the Plan, or on such other terms and conditions as may,
in the judgment of the Committee, be necessary or desirable to further the
purposes of the Plan.
2.18 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
2.19 "FAIR MARKET VALUE" or "FMV" means a price that is based on the opening,
closing, actual, high, low, or average selling prices of a Share on the New York
Stock Exchange ("NYSE") or other established stock exchange (or exchanges) on
the applicable date, the preceding trading day, the next succeeding trading day,
or an average of trading days, as determined by the Committee in its discretion.
Such definition(s) of FMV shall be specified in each Award Agreement and may
differ depending on whether FMV is in reference to the grant, exercise, vesting,
settlement, or payout of an
A-3
Award. If, however, the accounting standards used to account for equity awards
granted to Participants are substantially modified subsequent to the Effective
Date of the Plan, the Committee shall have the ability to determine an Award's
FMV based on the relevant facts and circumstances. If Shares are not traded on
an established stock exchange, FMV shall be determined by the Committee based on
objective criteria.
2.20 "FISCAL YEAR" means the year commencing on January 1 and ending December
31 or other time period as approved by the Board.
2.21 "FREESTANDING SAR" means an SAR that is not a Tandem SAR, as described in
Article 7 herein.
2.22 "GRANT PRICE" means the price against which the amount payable is
determined upon exercise of an SAR.
2.23 "INCENTIVE STOCK OPTION" or "ISO" means an Option to purchase Shares
granted under Article 6 herein and that is designated as an Incentive Stock
Option and is intended to meet the requirements of Section 422 of the Code, or
any successor provision.
2.24 "INSIDER" shall mean an individual who is, on the relevant date, subject
to the reporting requirements of Section 16 of the Exchange Act, as determined
by the Board.
2.25 "NONQUALIFIED STOCK OPTION" or "NQSO" means an Option to purchase Shares,
granted under Article 6 herein, which is not intended to be an Incentive Stock
Option or that otherwise does not meet such requirements.
2.26 "OPTION" means the conditional right to purchase Shares at a stated Option
Price for a specified period of time in the form of an Incentive Stock Option or
a Nonqualified Stock Option subject to the terms of this Plan.
2.27 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee.
2.28 "PARTICIPANT" means an Employee or an Agent who has been selected to
receive an Award, or who has an outstanding Award granted under the Plan.
2.29 "PERFORMANCE-BASED COMPENSATION" means compensation under an Award that is
granted in order to provide remuneration solely on account of the attainment of
one or more Performance Goals under circumstances that satisfy the requirements
of Section 162(m) of the Code.
2.30 "PERFORMANCE GOAL" means a performance criterion selected by the Committee
for a given Award for purposes of Article 11 based on one or more of the
Performance Measures.
2.31 "PERFORMANCE MEASURES" means measures as described in Article 11, the
attainment of one or more of which shall, as determined by the Committee,
determine the vesting, payability, or value of an Award to an Insider that are
designated to qualify as Performance-Based Compensation.
2.32 "PERFORMANCE PERIOD" means the period of time during which the assigned
performance criteria must be met in order to determine the degree of payout
and/or vesting with respect to an Award.
2.33 "PERFORMANCE SHARE" means an Award granted under Article 9 herein and
subject to the terms of this Plan, denominated in Shares, the value of which at
the time it is payable is determined as a function of the extent to which
corresponding performance criteria have been achieved.
2.34 "PERFORMANCE UNIT" means an Award granted under Article 9 herein and
subject to the terms of this Plan, denominated in units, the value of which at
the time it is payable is determined as a function of the extent to which
corresponding performance criteria have been achieved.
2.35 "PERIOD OF RESTRICTION" means the period when an Award of Restricted Stock
or Restricted Stock Unit is subject to forfeiture based on the passage of time,
the achievement of performance criteria, and/or upon the occurrence of other
events as determined by the Committee, in its discretion.
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2.36 "PERSON" shall have the meaning ascribed to such term in Section 3(a)(9)
of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) thereof; provided, however, that "Person"
shall not include (i) the Company or any Affiliate, (ii) the MetLife
Policyholder Trust (or any person(s) who would otherwise be described herein
solely by reason of having the power to control the voting of the shares held by
that trust), or (iii) any employee benefit plan (including an employee stock
ownership plan) sponsored by the Company or any Affiliate.
2.37 "RESTRICTED STOCK" means an Award of Shares subject to a Period of
Restriction, granted under Article 8 herein and subject to the terms of this
Plan.
2.38 "RESTRICTED STOCK UNIT" means an Award denominated in units subject to a
Period of Restriction, granted under Article 8 herein and subject to the terms
of this Plan.
2.39 "SHARES" means the shares of common stock of the Company, $.01 par value
per Share.
2.40 "STOCK APPRECIATION RIGHT" or "SAR" means the conditional right to receive
the difference between the FMV of a Share on the date of exercise over the Grant
Price, pursuant to the terms of Article 7 herein and subject to the terms of
this Plan.
2.41 "STOCK-BASED AWARD" means an equity-based or equity-related Award granted
under Article 10 herein and subject to the terms of this Plan, and not otherwise
described by the terms of this Plan.
2.42 "TANDEM SAR" means an SAR that the Committee specifies is granted in
connection with a related Option pursuant to Article 7 herein and subject to the
terms of this Plan, the exercise of which shall require forfeiture of the right
to purchase a Share under the related Option (and when a Share is purchased
under the Option, the Tandem SAR shall similarly be cancelled) or an SAR that is
granted in tandem with an Option but the exercise of such Option does not cancel
the SAR, but rather results in the exercise of the related SAR. Regardless of
whether an Option is granted coincident with an SAR, an SAR is not a Tandem SAR
unless so specified by the Committee at time of grant.
2.43 "VOTING POWER" shall mean such number of Voting Securities as shall enable
the holders thereof to cast all the votes which could be cast in an annual
election of directors of a company.
2.44 "VOTING SECURITIES" shall mean all securities entitling the holders
thereof to vote in an annual election of directors of a company.
ARTICLE 3. ADMINISTRATION
3.1 GENERAL. The Committee shall be responsible for administering the Plan.
The Committee may employ attorneys, consultants, accountants, agents, and other
individuals, any of whom may be an Employee or Agent, and the Committee, the
Company, and its officers and Directors shall be entitled to rely upon the
advice, opinions, or valuations of any such persons. All actions taken and all
interpretations and determinations made by the Committee shall be final,
conclusive, and binding upon the Participants, the Company, and all other
interested parties.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of the Plan and any
Award Agreement or other agreement ancillary to or in connection with the Plan,
to determine eligibility for Awards, and to adopt such rules, regulations, and
guidelines for administering the Plan as the Committee may deem necessary or
proper. Such authority shall include, but not be limited to, selecting Award
recipients, establishing all Award terms and conditions and, subject to Article
16, adopting modifications and amendments, or subplans to the Plan or any Award
Agreement, including, without limitation, any that are necessary or appropriate
to comply with the laws or compensation practices of the countries and other
jurisdictions in which the Company and Affiliates operate.
3.3 DELEGATION. The Committee may delegate to one or more of its members or to
one or more officers of the Company or its Affiliates, any of its duties or
powers as it may deem advisable; provided, however, that the Committee may not
delegate any of its non-administrative powers with respect to
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Awards intended to be Performance-Based Compensation; and provided further, that
the member(s) or officer(s) shall report periodically to the Committee regarding
the nature and scope of the Awards granted pursuant to the authority delegated
pursuant to this Section 3.3. Subject to the terms of the previous sentence, the
Committee may delegate to any individual(s) such administrative duties or powers
as it may deem advisable
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR AWARDS. Subject to adjustment as provided
in Section 4.2 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be sixty-eight million (68,000,000) plus any
remaining Shares available for grant under the Predecessor Plan as set forth in
Section 1.4 (such total number of Shares, including such adjustment and
remaining Shares, the "Total Share Authorization"). Any Shares issued in
connection with an Option or SAR shall be counted against the limit as one (1)
Share for every one (1) Share issued; for Awards other than Options and SARs,
any Shares issued shall be counted against this limit as one and one-hundred
seventy-nine thousandths (1.179) Shares for every one (1) Share issued. The
maximum aggregate number of Shares that may be granted in the form of
Nonqualified Stock Options shall be equal to the Total Authorization. The
maximum aggregate number of Shares that may be granted in the form of Incentive
Stock Options shall be sixty-eight million (68,000,000).
For greater clarity, any Awards that are not settled in Shares shall not reduce
any of these reserves. Any Shares related to Awards (or after the Effective
Date, awards granted under the Predecessor Plan) which (i) terminate by
expiration, forfeiture, cancellation, or otherwise without the issuance of such
Shares, (ii) are settled in cash either in lieu of Shares or otherwise, or (iii)
are exchanged with the Committee's permission for Awards not involving Shares,
shall be available again for grant under the Plan. Moreover, if the Option Price
of any Option granted under the Plan or the tax withholding requirements with
respect to any Award granted under the Plan are satisfied by tendering Shares to
the Company (by either actual delivery or by attestation), or if an SAR is
exercised, only the number of Shares issued, net of the Shares tendered, if any,
will be deemed delivered for purposes of determining the maximum number of
Shares available for issuance under the Plan. The maximum number of Shares
available for issuance under the Plan shall not be reduced to reflect any
dividends or dividend equivalents that are reinvested into additional Shares or
credited as additional Restricted Stock, Restricted Stock Units, Performance
Shares, or Stock-Based Awards. The Shares available for issuance under the Plan
may be authorized and unissued Shares or treasury Shares.
Unless and until the Committee determines that an Award to an Insider shall not
be designed to qualify as Performance-Based Compensation, the following limits
("Award Limits") shall apply to grants of Awards to Insiders under the Plan:
(a) OPTIONS AND SARS: The maximum aggregate number of Shares that may be
granted in the form of Options or Stock Appreciation Rights, pursuant to
any Award granted in any one Fiscal Year to any one Participant, shall be
two million (2,000,000).
(b) RESTRICTED STOCK/RESTRICTED STOCK UNITS: The maximum aggregate grant
with respect to Awards of Restricted Stock/Restricted Stock Units granted
in any one Fiscal Year to any one Participant shall be one million
(1,000,000).
(c) PERFORMANCE SHARES/PERFORMANCE UNITS: The maximum aggregate Award of
Performance Shares or Performance Units that a Participant may receive in
any one Fiscal Year shall be one million (1,000,000) Shares, or equal to
the value of one million (1,000,000) Shares determined as of the date of
vesting or payout, as applicable.
(d) CASH-BASED AWARDS: The maximum aggregate amount awarded or credited
with respect to Cash-Based Awards to any one Participant in any one Fiscal
Year may not exceed ten million dollars ($10,000,000) determined as of the
date of vesting or payout, as applicable.
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(e) STOCK AWARDS: The maximum aggregate grant with respect to Awards of
Stock-Based Awards in any one Fiscal Year to any one Participant shall be
one million (1,000,000).
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any corporate event or
transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, extraordinary
dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of the Company, combination of securities,
exchange of securities, dividend in kind, or other like change in capital
structure or distribution (other than normal cash dividends) to shareholders of
the Company, or any similar corporate event or transaction, the Committee, in
its sole discretion, in order to prevent dilution or enlargement of
Participants' rights under the Plan, shall substitute or adjust, as applicable,
the number and kind of Shares that may be issued under the Plan, the number and
kind of Shares subject to outstanding Awards, the Option Price or Grant Price
applicable to outstanding Awards, the Award Limits, the limit on issuing Awards
other than Options granted with an Option Price equal to at least the FMV of a
Share on the date of grant or Stock Appreciation Rights with a Grant Price equal
to at least the FMV of a Share on the date of grant, and any other value
determinations applicable to outstanding Awards or to this Plan.
The Committee, in its sole discretion, may also make appropriate adjustments in
the terms of any Awards under the Plan to reflect, or related to, such changes
or distributions and may modify any other terms of outstanding Awards, including
modifications of performance criteria and changes in the length of Performance
Periods. The determination of the Committee as to the foregoing adjustments, if
any, shall be conclusive and binding on Participants under the Plan.
Subject to the provisions of Article 15 and any applicable law or regulatory
requirement, without affecting the number of Shares reserved or available
hereunder, the Committee may authorize the issuance, assumption, substitution,
or conversion of Awards under this Plan in connection with any such corporate
event or transaction upon such terms and conditions as it may deem appropriate.
Additionally, the Committee may amend the Plan, or adopt supplements to the
Plan, in such manner as it deems appropriate to provide for such issuance,
assumption, substitution, or conversion as provided in the previous sentence.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Individuals eligible to participate in the Plan include all
Employees and Agents.
5.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee
may from time to time, select from all eligible Employees and Agents, those to
whom Awards shall be granted and shall determine in its discretion, the nature,
terms, and amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, Options
may be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee in its
discretion. Notwithstanding the foregoing, no ISOs may be granted more than ten
(10) years after the earlier of (a) adoption of the Plan by the Board, and (b)
the Effective Date.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, the conditions upon which an
Option shall become vested and exercisable, and any such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or a NQSO.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this Plan
shall be determined by the Committee and shall be specified in the Award
Agreement. The Option Price may include an Option Price based on one hundred
percent (100%) of the FMV of the Shares on the date of grant, an
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Option Price that is set at a premium to the FMV of the Shares on the date of
grant, or an Option Price that is indexed to the FMV of the Shares on the date
of grant, with the index determined by the Committee in its discretion.
6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant. Notwithstanding the foregoing, for Options granted to
Participants outside the United States, the Committee has the authority to grant
Options that have a term greater than ten (10) years.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and on the occurrence of such events, and be subject
to such restrictions and conditions, as the Committee shall in each instance
approve, which need not be the same for each grant or for each Participant.
6.6 PAYMENT. Options granted under this Article 6 shall be exercised by the
delivery of a notice of exercise to the Company or an agent designated by the
Company in a form specified or accepted by the Committee, or by complying with
any alternative procedures which may be authorized by the Committee, setting
forth the number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by tendering (either by actual
delivery or attestation) previously acquired Shares having an aggregate FMV at
the time of exercise equal to the total Option Price; (c) by a combination of
(a) and (b); or (d) any other method approved or accepted by the Committee in
its sole discretion subject to such rules and regulations as the Committee may
establish.
Subject to Section 6.7 and any governing rules or regulations, as soon as
practicable after receipt of a notification of exercise and full payment, the
Committee shall cause to be delivered to the Participant Share certificates or
evidence of book entry Shares in an appropriate amount based upon the number of
Shares purchased under the Option(s). Unless otherwise determined or accepted by
the Committee, all payments in cash shall be paid in United States dollars.
6.7 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted pursuant to this Plan as it may deem advisable, including, without
limitation, requiring the Participant to hold the Shares acquired pursuant to
exercise for a specified period of time, or restrictions under applicable laws
or under the requirements of any stock exchange or market upon which such Shares
are listed and/or traded.
6.8 TERMINATION OF EMPLOYMENT OR AGENCY. Each Participant's Award Agreement
shall set forth the extent to which the Participant shall have the right to
exercise the Option following termination of the Participant's employment or
Agency with the Company or Affiliates. Such provisions shall be determined in
the sole discretion of the Committee, shall be included in the Award Agreement
entered into with each Participant, need not be uniform among all Options issued
pursuant to this Article 6, and may reflect distinctions based on the reasons
for termination.
6.9 NONTRANSFERABILITY OF OPTIONS.
(a) INCENTIVE STOCK OPTIONS. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, all
ISOs granted to a Participant under this Article 6 shall be exercisable
during his or her lifetime only by such Participant.
(b) NONQUALIFIED STOCK OPTIONS. Except as otherwise provided in a
Participant's Award Agreement at the time of grant, or thereafter by the
Committee, NQSO granted under this Article 6 may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by
will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement at the time of grant
or thereafter by the Committee, all NQSOs
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granted to a Participant under this Article 6 shall be exercisable during
the Participant's lifetime only by such Participant.
6.10 NOTIFICATION OF DISQUALIFYING DISPOSITION. The Participant will notify
the Company upon the disposition of Shares issued pursuant to the exercise of an
ISO or Shares received as a dividend on ISO stock. The Company will use such
information to determine whether a disqualifying disposition as described in
Section 421(b) of the Code has occurred.
6.11 SUBSTITUTING SARS. Regardless of the terms of the Award Agreement, the
Committee, at any time when the Company is not subject accounting for
equity-based compensation granted to its Employees under APB Opinion 25 (or a
successor standard), shall have the right to substitute SARs for outstanding
Options granted to any Participant, provided that (i) the substituted SARs call
for settlement by the issuance of Shares or by the issuance of Shares or cash as
determined by the Committee in its discretion, and (ii) the terms of the
substituted SARs and economic benefit of such substituted SARs (including the
difference between the Grant Price and Fair Market Value of the Shares
associated with the SARs compared to the difference between the Option Price and
Fair Market Value of the Shares underlying the Options) are equivalent to the
terms and economic benefit of the Options being replaced, as determined by the
Committee. The Committee may, based on a determination that this Section 6.11
creates adverse accounting consequences for the Company or otherwise, nullify
this Section 6.11.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, SARs may
be granted to Participants at any time and from time to time and upon such terms
as shall be determined by the Committee in its discretion. The Committee may
grant Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.
The SAR Grant Price for each grant of a Freestanding SAR shall be determined by
the Committee and shall be specified in the Award Agreement. The SAR Grant Price
may include a Grant Price based on one hundred percent (100%) of the FMV of the
Shares on the date of grant, a Grant Price that is set at a premium to the FMV
of the Shares on the date of grant, or is indexed to the FMV of the Shares on
the date of grant, with the index determined by the Committee, in its
discretion. The Grant Price of Tandem SARs shall be equal to the Option Price of
the related Option.
7.2 SAR AGREEMENT. Each SAR Award shall be evidenced by an Award Agreement
that shall specify the Grant Price, the term of the SAR, and any such other
provisions as the Committee shall determine.
7.3 TERM OF SAR. The term of an SAR granted under the Plan shall be determined
by the Committee, in its sole discretion, and except as determined otherwise by
the Committee and specified in the SAR Award Agreement, no SAR shall be
exercisable later than the tenth (10th) anniversary date of its grant.
Notwithstanding the foregoing, for SARs granted to Participants outside the
United States, the Committee has the authority to grant SARs that have a term
greater than ten (10) years.
7.4 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes.
7.5. EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with respect
to a Tandem SAR granted in connection with an ISO: (a) the Tandem SAR will
expire no later than the expiration of the underlying ISO; (b) the value of the
payout with respect to the Tandem SAR may be for no more than one hundred
percent (100%) of the difference between the Option Price of the underlying ISO
and the FMV of the Shares subject to the underlying ISO at the time the Tandem
SAR is exercised; and (c) the
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Tandem SAR may be exercised only when the FMV of the Shares subject to the ISO
exceeds the Option Price of the ISO.
7.6 PAYMENT OF SAR AMOUNT. Upon the exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the FMV of a Share on the date of exercise over
the Grant Price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, Shares of equivalent value (based on the FMV on the date of exercise of
the SAR, as defined in the Award Agreement or otherwise defined by the Committee
thereafter), in some combination thereof, or in any other form approved by the
Committee at its sole discretion. The Committee's determination regarding the
form of SAR payout shall be set forth or reserved for later determination in the
Award Agreement pertaining to the grant of the SAR.
7.7 TERMINATION OF EMPLOYMENT OR AGENCY. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's employment or Agency with the Company
or Affiliates. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with
Participants, need not be uniform among all SARs issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination.
7.8 NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement at the time of grant or thereafter by the
Committee, an SAR granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement at the time of grant or thereafter by the
Committee, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.
7.9 OTHER RESTRICTIONS. Without limiting the generality of any other provision
of this Plan, the Committee may impose such other conditions and/or restrictions
on any Shares received upon exercise of an SAR granted pursuant to the Plan as
it may deem advisable. This includes, but is not limited to, requiring the
Participant to hold the Shares received upon exercise of an SAR for a specified
period of time.
ARTICLE 8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1 GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS. Subject to the terms
and provisions of the Plan, the Committee, at any time and from time to time,
may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts and upon such terms as the Committee shall
determine.
8.2 RESTRICTED STOCK OR RESTRICTED STOCK UNIT AGREEMENT. Each Restricted Stock
and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement that
shall specify the Period(s) of Restriction, the number of Shares of Restricted
Stock or the number of Restricted Stock Units granted, and any such other
provisions as the Committee shall determine.
8.3 NONTRANSFERABILITY OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. Except
as otherwise provided in this Plan or the Award Agreement, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction specified in the Award Agreement
(and in the case of Restricted Stock Units until the date of delivery or other
payment), or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Award Agreement at the
time of grant or thereafter by the Committee. All rights with respect to the
Restricted Stock and/or Restricted Stock Units granted to a Participant under
the Plan shall be available during his
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or her lifetime only to such Participant, except as otherwise provided in the
Award Agreement at the time of grant or thereafter by the Committee.
8.4 OTHER RESTRICTIONS. The Committee shall impose, in the Award Agreement at
the time of grant or anytime thereafter, such other conditions and/or
restrictions on any Shares of Restricted Stock or Restricted Stock Units granted
pursuant to this Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, restrictions based upon the
achievement of specific performance criteria, time-based restrictions on vesting
following the attainment of the performance criteria, time-based restrictions,
restrictions under applicable laws or under the requirements of any stock
exchange or market upon which such Shares are listed or traded, or holding
requirements or sale restrictions placed on the Shares by the Company upon
vesting of such Restricted Stock or Restricted Stock Units.
To the extent deemed appropriate by the Committee subject to Section 19.6, the
Company may retain the certificates representing Shares of Restricted Stock, or
Shares delivered in consideration of Restricted Stock Units, in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have
been satisfied or lapse, and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion shall determine.
8.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear a legend such as the
following:
The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the MetLife,
Inc. 2005 Stock and Incentive Compensation Plan, and in the associated
Award Agreement. A copy of the Plan and such Award Agreement may be
obtained from MetLife, Inc.
8.6 VOTING RIGHTS. To the extent required by law, Participants holding Shares
of Restricted Stock granted hereunder shall be granted the right to exercise
full voting rights with respect to those Shares during the Period of
Restriction. A Participant shall have no voting rights with respect to any
Restricted Stock Units granted hereunder.
8.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock or Restricted Stock Units
granted hereunder may, if the Committee so determines, be credited with
dividends paid with respect to the underlying Shares or dividend equivalents
while they are so held in a manner determined by the Committee in its sole
discretion. The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The Committee, in its
sole discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, Shares, Restricted Stock, or Restricted Stock
Units.
8.8 TERMINATION OF EMPLOYMENT AND AGENCY. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain Restricted
Stock and/or Restricted Stock Units following termination of the Participant's
employment or Agency with the Company or Affiliates. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Shares of Restricted Stock or Restricted Stock Units issued pursuant to the
Plan, and may reflect distinctions based on the reasons for termination.
8.9 PAYMENT IN CONSIDERATION OF RESTRICTED STOCK UNITS. When and if Restricted
Stock Units become payable, a Participant having received the grant of such
units shall be entitled to receive payment from the Company in cash, Shares of
equivalent value (based on the FMV, as defined in the Award Agreement at the
time of grant or thereafter by the Committee), in some combination thereof, or
in any
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other form determined by the Committee at its sole discretion. The Committee's
determination regarding the form of payout shall be set forth or reserved for
later determination in the Award Agreement pertaining to the grant of the
Restricted Stock Unit.
ARTICLE 9. PERFORMANCE SHARES AND PERFORMANCE UNITS
9.1 GRANT OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Subject to the terms
and provisions of the Plan, the Committee, at any time and from time to time,
may grant Performance Shares and/or Performance Units to Participants in such
amounts and upon such terms as the Committee shall determine.
9.2 VALUE OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Each Performance Share
shall have an initial value equal to the FMV of a Share on the date of grant.
Each Performance Unit shall have an initial value that is established by the
Committee at the time of grant which may be less than, equal to, or greater than
the FMV of a Share. The Committee shall set performance criteria for a
Performance Period in its discretion which, depending on the extent to which
they are met, will determine, in the manner determined by the Committee and
documented in the Award Agreement the value and/or number of each Performance
Share or Performance Unit that will be paid to the Participant.
9.3 EARNING OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Subject to the terms
of this Plan, after the applicable Performance Period has ended, the holder of
Performance Shares/Performance Units shall be entitled to receive payout on the
value and number of Performance Shares/Performance Units determined as a
function of the extent to which the corresponding performance criteria have been
achieved. Notwithstanding the foregoing, the Company has the ability to require
the Participant to hold the Shares received pursuant to such Award for a
specified period of time.
9.4 FORM AND TIMING OF PAYMENT OF PERFORMANCE SHARES AND PERFORMANCE
UNITS. Payment of earned Performance Shares/Performance Units shall be as
determined by the Committee and as evidenced in the Award Agreement. Subject to
the terms of the Plan, the Committee, in its sole discretion, may pay earned
Performance Shares/Performance Units in the form of cash or in Shares (or in a
combination thereof) equal to the value of the earned Performance
Shares/Performance Units at the close of the applicable Performance Period. Any
Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The determination of the Committee with respect to the form of payout
of such Awards shall be set forth in the Award Agreement pertaining to the grant
of the Award or reserved for later determination.
9.5 DIVIDENDS AND OTHER DISTRIBUTIONS. The Committee will decide if
Participants holding Performance Shares will receive dividend equivalents with
respect to dividends declared with respect to the Shares. Such dividends may be
subject to the accrual, forfeiture, or payout restrictions as determined by the
Committee in its sole discretion.
9.6 TERMINATION OF EMPLOYMENT OR AGENCY. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to retain Performance
Shares/Performance Units following termination of the Participant's employment
or Agency with the Company or an Affiliate. Such provisions shall be determined
in the sole discretion of the Committee, shall be included in the Award
Agreement entered into with each Participant, need not be uniform among all
Awards of Performance Shares/Performance Units issued pursuant to the Plan, and
may reflect distinctions based on the reasons for termination.
9.7 NONTRANSFERABILITY OF PERFORMANCE SHARES AND PERFORMANCE UNITS. Except as
otherwise provided in a Participant's Award Agreement at the time of grant or
thereafter by the Committee, Performance Shares/Performance Units may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement or otherwise by the
Committee at any time, a Participant's rights under the Plan shall inure during
his or her lifetime only to such Participant.
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ARTICLE 10. CASH-BASED AWARDS AND STOCK-BASED AWARDS
10.1 GRANT OF CASH-BASED AWARDS. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time and time, may grant Cash-Based
Awards to Participants in such amounts and upon such terms as the Committee may
determine.
10.2 VALUE OF CASH-BASED AWARDS. Each Cash-Based Award shall have a value as
may be determined by the Committee. For each Cash-Based Award, the Committee may
establish performance criteria in its discretion. If the Committee exercises its
discretion to establish such performance criteria, the number and/or value of
Cash-Based Awards that will be paid out to the Participant will be determined,
in the manner determined by the Committee, the extent to which the performance
criteria are met.
10.3 PAYMENT IN CONSIDERATION OF CASH-BASED AWARDS. Subject to the terms of
this Plan, the holder of a Cash-Based Award shall be entitled to receive payout
on the value of Cash-Based Award determined as a function of the extent to which
the corresponding performance criteria, if any, have been achieved.
10.4 FORM AND TIMING OF PAYMENT OF CASH-BASED AWARDS. Payment of earned
Cash-Based Awards shall be as determined by the Committee and evidenced in the
Award Agreement. Subject to the terms of the Plan, the Committee, in its sole
discretion, may pay earned Cash-Based Awards in the form of cash or in Shares
(or in a combination thereof) that have an aggregate FMV equal to the value of
the earned Cash-Based Awards (the applicable date regarding which aggregate FMV
shall be determined by the Committee). Such Shares may be granted subject to any
restrictions deemed appropriate by the Committee. The determination of the
Committee with respect to the form of payout of such Awards shall be set forth
in the Award Agreement pertaining to the grant of the Award.
10.5 STOCK-BASED AWARDS. The Committee may grant other types of equity-based
or equity-related Awards not otherwise described by the terms of this Plan
(including the grant or offer for sale of unrestricted Shares) in such amounts
and subject to such terms and conditions including, but not limited to being
subject to performance criteria, or in satisfaction of such obligations, as the
Committee shall determine. Such Awards may entail the transfer of actual Shares
to Participants, or payment in cash or otherwise of amounts based on the value
of Shares and may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other than the
United States.
10.6 TERMINATION OF EMPLOYMENT OR AGENCY. Each Award Agreement shall set forth
the extent to which the Participant shall have the right to receive Cash-Based
Awards and Stock-Based Awards following termination of the Participant's
employment or Agency with the Company or Affiliates. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
applicable Award Agreement, need not be uniform among all Awards of Cash-Based
Awards and Stock-Based Awards issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
10.7 NONTRANSFERABILITY OF CASH-BASED AWARDS AND STOCK-BASED AWARDS. Except as
otherwise provided in a Participant's Award Agreement at the time of grant or
thereafter by the Committee, Cash-Based Awards and Stock-Based Awards may not be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement at the time of grant or
thereafter by the Committee, a Participant's rights under the Plan shall be
exercisable during the Participant's lifetime only by the Participant.
ARTICLE 11. PERFORMANCE MEASURES
Notwithstanding any other terms of this Plan, the vesting, payability, or value
(as determined by the Committee) of each Award other than an Option or SAR that,
at the time of grant, the Committee intends to be Performance-Based Compensation
to an Insider shall be determined by the attainment of one or more Performance
Goals as determined by the Committee in conformity with Code
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Section 162(m). The Committee shall specify in writing, by resolution or
otherwise, the Participants eligible to receive such an Award (which may be
expressed in terms of a class of individuals) and the Performance Goal(s)
applicable to such Awards within ninety (90) days after the commencement of the
period to which the Performance Goal(s) relate(s) or such earlier time as
required to comply with Code Section 162(m). No such Award shall be payable
unless the Committee certifies in writing, by resolution or otherwise, that the
Performance Goal(s) applicable to the Award were satisfied. In no case may the
Committee increase the value of an Award of Performance-Based Compensation above
the maximum value determined under the performance formula by the attainment of
the applicable Performance Goal(s), but the Committee may retain the discretion
to reduce the value below such maximum.
Unless and until the Committee proposes for shareholder vote and the
shareholders approve a change in the general Performance Measures set forth in
this Article 11, the Performance Goal(s) upon which the payment or vesting of an
Award to an Insider that is intended to qualify as Performance-Based
Compensation shall be limited to the following Performance Measures:
(a) Net earnings or net income (before or after taxes);
(b) Earnings per share;
(c) Net sales growth;
(d) Net operating profit;
(e) Operating earnings;
(f) Operating earnings per share;
(g) Return measures (including, but not limited to, return on assets,
capital, equity, or sales);
(h) Cash flow (including, but not limited to, operating cash flow, free
cash flow, and cash flow return on capital);
(i) Earnings before or after taxes, interest, depreciation, and/or
amortization and including/ excluding capital gains and losses;
(j) Gross or operating margins;
(k) Productivity ratios;
(l) Share price (including, but not limited to, growth measures and total
shareholder return);
(m) Expense targets;
(n) Margins;
(o) Operating efficiency;
(p) Customer satisfaction;
(q) Employee and/or Agent satisfaction;
(r) Working capital targets; and
(s) Economic Value Added;
(t) Revenue growth;
(u) Assets under management growth; and
(v) Rating Agencies' ratings.
Any Performance Measure(s) may be used to measure the performance of the Company
as a whole or any business unit of the Company or any combination thereof, as
the Committee may deem appropriate, or any of the above Performance Measures as
compared to the performance of a group of
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comparator companies, or published or special index that the Committee, in its
sole discretion, deems appropriate. In the Award Agreement, the Committee also
has the authority to provide for accelerated vesting of any Award based on the
achievement of Performance Goal(s).
The Committee may provide in any Award Agreement that any evaluation of
attainment of a Performance Goal may include or exclude any of the following
events that occurs during the relevant period: (a) asset write-downs; (b)
litigation or claim judgments or settlements; (c) the effect of changes in tax
laws, accounting principles, or other laws or provisions affecting reported
results; (d) any reorganization and restructuring programs; (e) extraordinary
nonrecurring items as described in Accounting Principles Board Opinion No. 30
and/or in management's discussion and analysis of financial condition and
results of operations appearing in the Company's annual report to shareholders
for the applicable year; (f) acquisitions or divestitures; and (g) foreign
exchange gains and losses. To the extent such inclusions or exclusions affect
Awards to Insiders, they shall be prescribed in a form that meets the
requirements of Code Section 162(m) for deductibility.
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing Performance Measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards to Insiders that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m).
ARTICLE 12. BENEFICIARY DESIGNATION
A Participant's "beneficiary" is the person or persons entitled to receive
payments or other benefits or exercise rights that are available under the Plan
in the event of the Participant's death. A Participant may designate a
beneficiary or change a previous beneficiary designation at such times
prescribed by the Committee by using forms and following procedures approved or
accepted by the Committee for that purpose. If no beneficiary designated by the
Participant is eligible to receive payments or other benefits or exercise rights
that are available under the Plan at the Participant's death the beneficiary
shall be the Participant's estate.
Notwithstanding the provisions above, the Committee may in its discretion, after
notifying the affected Participants, modify the foregoing requirements,
institute additional requirements for beneficiary designations, or suspend the
existing beneficiary designations of living Participants or the process of
determining beneficiaries under this Article 12, or both, in favor of another
method of determining beneficiaries.
ARTICLE 13. DEFERRALS AND SHARE SETTLEMENTS
Notwithstanding any other provision under the Plan, the Committee may permit or
require a Participant to defer such Participant's receipt of any Award, or
payment in consideration of any Award, under the terms of this Plan or another
Plan. To the extent such deferral is permitted by the Committee under the terms
of this Plan rather than another Plan, the Committee shall establish rules and
procedures for such deferrals as it sees fit.
ARTICLE 14. RIGHTS OF EMPLOYEES AND AGENTS
14.1 EMPLOYMENT. Nothing in the Plan or an Award Agreement shall interfere
with or limit in any way the right of the Company or an Affiliate to terminate
any Participant's employment, Agency or other service relationship at any time,
nor confer upon any Participant any right to continue in the capacity in which
he or she is employed or otherwise serves the Company or an Affiliate.
Neither an Award nor any benefits arising under this Plan shall constitute part
of an employment or Agency contract with the Company or an Affiliate and,
accordingly, subject to the terms of this Plan, this Plan may be terminated or
modified at any time in the sole and exclusive discretion of the
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Committee without giving rise to liability on the part of the Company or an
Affiliate for severance payments or otherwise except as provided in this Plan.
For purposes of the Plan, unless otherwise provided by the Committee, transfer
of employment or Agency of a Participant between the Company and an Affiliate or
among Affiliates, shall not be deemed a termination of employment or Agency. The
Committee may stipulate in a Participant's Award Agreement or otherwise the
conditions under which a transfer of employment or Agency to an entity that is
spun-off from the Company or an Affiliate or a vendor to the Company or an
Affiliate, if any, shall not be deemed a termination of employment or Agency for
purposes of an Award.
14.2 PARTICIPATION. No Employee or Agent shall have the right to be selected
to receive an Award. No Employee or Agent, having been selected to receive an
Award, shall have the right to be selected to receive a future Award or (if
selected to receive such a future Award) the right to receive such a future
Award on terms and conditions identical or in proportion in any way to any prior
Award.
14.3 RIGHTS AS A SHAREHOLDER. A Participant shall have none of the rights of a
shareholder with respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.
ARTICLE 15. CHANGE OF CONTROL
15.1 ACCELERATED VESTING AND PAYMENT. Subject to the provisions of Section
15.2 or as otherwise provided in the Award Agreement, in the event of a Change
of Control, unless otherwise specifically prohibited under law or by the rules
and regulations of a national security exchange:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable; additionally, if a Participant's employment or
Agency is involuntarily terminated for any reason except Cause within
twelve (12) months of such Change in Control, the Participant shall have
until the earlier of (i) twelve (12) months following such termination date
, or (ii) the term of the Option or SAR, to exercise such Options or SARs;
(b) Any Period of Restriction and other restrictions imposed on Restricted
Stock or Restricted Stock Units shall lapse, and Restricted Stock Units
shall be immediately payable;
(c) The target payout opportunities attainable under all outstanding
Awards of performance-based Restricted Stock, performance-based Restricted
Stock Units, Performance Units, and Performance Shares (including but not
limited to Awards intended to be Performance-Based Compensation) shall be
deemed to have been fully earned based on targeted performance being
attained as of the effective date of the Change of Control:
(i) The vesting of all Awards denominated in Shares shall be
accelerated as of the effective date of the Change of Control, and shall
be paid out to Participants within thirty (30) days following the
effective date of the Change of Control; and
(ii) Awards denominated in cash shall be paid to Participants in cash
within thirty (30) days following the effective date of the Change of
Control;
(d) Upon a Change of Control, unless otherwise specifically provided in a
written agreement entered into between the Participant and the Company or
an Affiliate, the Committee shall immediately vest and pay out all
Cash-Based Awards and Other Stock-Based Awards as determined by the
Committee; and
(e) The Committee shall have the ability to unilaterally determine that
all outstanding Awards are cancelled upon a Change in Control, and the
value of such Awards, as determined by the Committee in accordance with the
terms of the Plan and the Award Agreement, be paid out in cash in an amount
based on the Change of Control Price within a reasonable time subsequent to
the Change in Control; provided, however, that no such payment shall be
made on account of an ISO using a value higher than the FMV on the date of
settlement.
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15.2 ALTERNATIVE AWARDS. Notwithstanding Section 15.1, no cancellation,
acceleration of vesting, lapsing of restrictions, payment of Award, cash
settlement or other payment shall occur with respect to any Award if the
Committee reasonably determines in good faith prior to the occurrence of a
Change of Control that such Award shall be honored or assumed, or new rights
substituted therefor (such honored, assumed or substituted Award hereinafter
called an "Alternative Award") by any successor as described in Article 18;
provided that any such Alternative Award must:
(a) Be based on stock which is traded on an established U.S. securities
market, or that the Committee reasonably believes will be so traded within
sixty (60) days after the Change of Control;
(b) Provide such Participant with rights and entitlements substantially
equivalent to or better than the rights, terms and conditions applicable
under such Award, including, but not limited to, an identical or better
exercise or vesting schedule and identical or better timing and methods of
payment;
(c) Have substantially equivalent economic value to such Award (determined
at the time of the Change of Control); and
(d) Have terms and conditions which provide that in the event that the
Participant's employment or Agency is involuntarily terminated or
Constructively Terminated, any conditions on a Participant's rights under,
or any restrictions on transfer or exercisability applicable to, each such
Alternative Award shall be waived or shall lapse, as the case may be.
ARTICLE 16. AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION
16.1 AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION. The Committee or
Board may, at any time and from time to time, alter, amend, modify, suspend, or
terminate the Plan in whole or in part; provided however, that:
(a) Without the prior approval of the Company's shareholders, Options and
SARs issued under the Plan will not be repriced, replaced, or regranted
through cancellation or by lowering the exercise price of a previously
granted Option.
(b) To the extent necessary under any applicable law, regulation or
exchange requirement, no amendment shall be effective unless approved by
the shareholders of the Company in accordance with applicable law,
regulation, or exchange requirement.
16.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under the Plan. To the extent such adjustment affects
Awards to Insiders intended to be Performance-Based Compensation, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.
16.3 AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment, suspension, or modification of
the Plan shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.
ARTICLE 17. WITHHOLDING
The Company or any Affiliate shall have the power and the right to deduct or
withhold, or require a Participant to remit to the Company or any Affiliate, an
amount sufficient to satisfy federal, state, and
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local taxes, domestic or foreign (including the Participant's FICA obligation),
required by law or regulation to be withheld with respect to any taxable event
arising or as a result of this Plan. The Committee may provide for Participants
to satisfy withholding requirements by having the Company withhold Shares or the
Participant making such other arrangements, in either case on such conditions as
the Committee specifies.
ARTICLE 18. SUCCESSORS
Any obligations of the Company or an Affiliate under the Plan with respect to
Awards granted hereunder, shall be binding on any successor to the Company or
Affiliate, respectively, whether the existence of such successor is the result
of a direct or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business and/or assets of the Company or Affiliate, as
applicable.
ARTICLE 19. GENERAL PROVISIONS
19.1 FORFEITURE EVENTS. Without limiting in any way the generality of the
Committee's power to specify any terms and conditions of an Award consistent
with law, and for greater clarity, the Committee may specify in an Award
Agreement that the Participant's rights, payments, and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture, or recoupment
upon the occurrence of certain specified events, in addition to any otherwise
applicable vesting or performance conditions of an Award. Such events shall
include, but shall not be limited to, failure to accept the terms of the Award
Agreement, termination of employment or Agency under certain or all
circumstances, violation of material Company and Affiliate policies, breach of
noncompetition, confidentiality, nonsolicitation, noninterference, corporate
property protection, or other agreement that may apply to the Participant, or
other conduct by the Participant that is detrimental to the business or
reputation of the Company and Affiliates.
19.2 LEGEND. The certificates for Shares may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.
19.3 DELIVERY OF TITLE. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable.
19.4 INVESTMENT REPRESENTATIONS. The Committee may require each Participant
receiving Shares pursuant to an Award under this Plan to represent and warrant
in writing that the Participant is acquiring the Shares for investment and
without any present intention to sell or distribute such Shares.
19.5 EMPLOYEES AND AGENTS BASED OUTSIDE OF THE UNITED STATES. Without limiting
in any way the generality of the Committee's powers under this Plan, including
but not limited to the power to specify any terms and conditions of an Award
consistent with law, in order to comply with the laws in other countries in
which the Company or an Affiliate operates or has Employees or Agents, the
Committee, in its sole discretion, shall have the power and authority,
notwithstanding any provision of the Plan to the contrary, to:
(a) Determine which Affiliates shall be covered by the Plan;
(b) Determine which Employees and Agents outside the United States are
eligible to participate in the Plan;
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(c) Modify the terms and conditions of any Award granted to Employees or
Agents outside the United States to comply with applicable foreign laws;
(d) Establish subplans and modify exercise procedures and other terms and
procedures, to the extent such actions may be necessary or advisable. Any
subplans and modifications to Plan terms and procedures established under
this Section 19.5 by the Committee shall be attached to this Plan document
as appendices; and
(e) Take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local government
regulatory exemptions or approvals.
Notwithstanding the above, the Committee may not take any actions hereunder and
no Awards shall be granted that would violate the Exchange Act, the Code, any
securities law, or governing statute or any other applicable law.
19.6 UNCERTIFICATED SHARES. To the extent that the Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may be effected on a noncertificated basis to the extent not prohibited by
applicable law or the rules of any stock exchange.
19.7 UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company or an Affiliate may make to
aid it in meeting its obligations under the Plan. Nothing contained in the Plan,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company or
an Affiliate and any Participant, beneficiary, legal representative, or any
other person. Awards shall be general, unsecured obligations of the Company,
except that if an Affiliate executes an Award Agreement instead of the Company
the Award shall be a general, unsecured obligation of the Affiliate and not any
obligation of the Company. To the extent that any individual acquires a right to
receive payments from the Company or an Affiliate, such right shall be no
greater than the right of an unsecured general creditor of the Company or
Affiliate, as applicable. All payments to be made hereunder shall be paid from
the general funds of the Company or Affiliate, as applicable, and no special or
separate fund shall be established and no segregation of assets shall be made to
assure payment of such amounts except as expressly set forth in the Plan. The
Plan is not intended to be subject to ERISA.
19.8 NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award Agreement. In such an instance, unless the
Committee determines otherwise, fractional Shares and any rights thereto shall
be forfeited or otherwise eliminated.
19.9 OTHER COMPENSATION AND BENEFIT PLANS. Nothing in this Plan shall be
construed to limit the right of the Company or an Affiliate to establish other
compensation or benefit plans, programs, policies, or arrangements. Except as
may be otherwise specifically stated in any other benefit plan, policy, program,
or arrangement, no Award shall be treated as compensation for purposes of
calculating a Participant's rights under any such other plan, policy, program,
or arrangement.
19.10 NO CONSTRAINT ON CORPORATE ACTION. Nothing in this Plan shall be
construed (i) to limit, impair or otherwise affect the Company's or an
Affiliate's right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets, or (ii) to limit the right or power of the Company or an
Affiliate to take any action which such entity deems to be necessary or
appropriate.
ARTICLE 20. LEGAL CONSTRUCTION
20.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
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20.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
20.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required. The Company or an Affiliate shall receive the
consideration required by law for the issuance of Awards under the Plan.
The inability of the Company or an Affiliate to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
or the Affiliate's counsel to be necessary to the lawful issuance and sale of
any Shares hereunder, shall relieve the Company or Affiliate of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
20.4 GOVERNING LAW. The Plan and each Award Agreement shall be governed by the
laws of the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.
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APPENDIX B
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METLIFE ANNUAL VARIABLE INCENTIVE PLAN
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ARTICLE 1. PURPOSE, EFFECTIVENESS, AND DURATION
1.1 PURPOSE OF THE PLAN. The purpose of the MetLife Annual Variable Incentive
Plan (the "Plan") is to align total annual pay with the Company's annual
financial business results, provide competitive levels of pay for competitive
levels of Company performance, and make a competitive portion of total
compensation variable based on Company, business unit, and individual
performance.
1.2 EFFECTIVE DATE. The Plan shall become effective on the Effective Date and
shall amend, restate, and supersede the prior Annual Variable Incentive Plan if
approved by the Board and shareholders of the Company. In the absence of
shareholder approval, the Plan and any Awards granted pursuant to the Plan prior
to the date of such approval shall be null and void.
1.3 DURATION OF THE PLAN. The Plan shall remain in effect indefinitely,
subject to the right of the Committee or the Board to amend or terminate the
Plan at any time pursuant to Article 9 herein.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meaning set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized.
2.1 "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act, with reference to the
Company, and shall also include any corporation, partnership, joint venture,
limited liability company, or other entity in which the Company owns, directly
or indirectly, at least fifty percent (50%) of the total combined Voting Power
of such corporation or of the capital interest or profits interest of such
partnership or other entity.
2.2 "AWARD" means an annual incentive compensation award payable under this
Plan and subject to its terms.
2.3 "BENEFICIARY" means the person or persons entitled to receive payments or
other benefits or exercise rights that are available under the Plan, if any, in
the event of the Participant's death.
2.4 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.5 "CODE" means the U.S. Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.
2.6 "COMMITTEE" means the Compensation Committee of the Board, or such other
committee as may be appointed by the Board for the purpose of administering the
Plan.
2.7 "COMPANY" means MetLife, Inc., a Delaware corporation, or any successor
thereto.
2.8 "DIRECTOR" means any individual who is a member of the Board of Directors.
2.9 "EFFECTIVE DATE" means January 1, 2004.
2.10 "EMPLOYEE" means any employee of the Company or an Affiliate. Directors
who are not otherwise employed by the Company or an Affiliate shall not be
considered Employees under this Plan. For greater clarity, and without limiting
the generality of the foregoing, individuals described in the first sentence of
this definition who are foreign nationals or are employed outside of the United
States, or both, are Employees to whom Awards may be granted on the terms and
conditions set forth in the Plan, or (in the case of any individuals who are not
Insiders) on such other terms and conditions as may, in the judgment of the
Committee, be necessary or desirable to further the purposes of the Plan.
2.11 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
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2.12 "INSIDER" means an individual who is, on the relevant date, subject to the
reporting requirements of Section 16 of the Securities Exchange Act of 1934, as
amended from time to time, or any successor act thereto.
2.13 "PARTICIPANT" means an Employee of the Company or an Affiliate who has
been selected to receive an Award under the terms of the Plan.
2.14 "PERFORMANCE-BASED COMPENSATION" means compensation to an Insider pursuant
to an Award that is granted in order to provide remuneration solely on account
of the attainment of one or more preestablished, objective Performance Measures
under circumstances that satisfy the requirements of Code Section 162(m).
2.15 "PERFORMANCE GOAL" means a performance criterion selected by the Committee
for a given Award for purposes of Article 11 based on one or more of the
Performance Measures.
2.16 "PERFORMANCE MEASURES" means measures as described in Article 5, the
attainment of one or more of which shall, as determined by the Committee,
determine whether Awards shall be payable as Performance-Based Compensation.
2.17 "PLAN" means the MetLife Annual Variable Incentive Plan.
2.18 "VOTING POWER" shall mean such number of Voting Securities as shall enable
the holders thereof to cast a specified percentage of the votes which could be
cast in an annual election of directors of a company.
2.19 "VOTING SECURITIES" shall mean all securities entitling the holders
thereof to vote in an annual election of directors of a company
ARTICLE 3. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee is eligible to participate in the Plan.
3.2 PARTICIPATION. Subject to the provisions of the Plan, the Committee may
from time to time select from all eligible Employees those to whom Awards shall
be granted.
ARTICLE 4. AWARD TERMS
4.1 GRANT OF AWARDS. The Committee shall grant all Awards on and after the
Effective Date and determine in its discretion the amount, nature, and any and
all terms and conditions permissible by law of each Award. Subject to the
requirements of Code Section 162(m) with regard to Awards intended to be
Performance-Based Compensation, the Committee may grant Awards (a) in advance of
and contingent upon the attainment of any performance criteria or other
contingencies applicable to the Award; (b) following the attainment of any
performance criteria or other contingencies the Committee previously made
prospectively applicable to an anticipated or possible Award; or (c) that are
and were not contingent upon the attainment of any performance criteria or other
contingencies.
4.2 MAXIMUM LIMIT REGARDING AWARDS. The maximum aggregate amount awarded or
credited with respect to an Award to any one Participant in any one-year period
may not exceed ten million dollars ($10,000,000.00) determined as of the date
the Award is payable.
4.3 FORM OF PAYMENT. All Awards granted under this Plan shall, if payable, be
payable in cash unless otherwise determined by the Committee.
4.4 DEFERRAL OF AWARD. Notwithstanding any other provision of the Plan, the
Committee may permit or require a Participant to defer such Participant's
receipt of any Award under the terms of this Plan or another plan. To the extent
such deferral is permitted by the Committee under the terms of this Plan rather
than another plan, the Committee shall establish rules and procedures for such
deferrals as it sees fit.
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ARTICLE 5. PERFORMANCE-BASED COMPENSATION
Notwithstanding any other terms of this Plan, the vesting, payability, or value
(as determined under the performance formula set by the Committee) of each Award
that the Committee intends, at time of grant, to be Performance-Based
Compensation to an Insider shall be determined by the attainment of one or more
Performance Goals as determined by the Committee in conformity with Code Section
162(m). The Committee shall specify in writing, by resolution or otherwise, the
Participants eligible to receive such an Award (which may be expressed in terms
of a class of individuals) and the Performance Goal(s) applicable to such Awards
within ninety (90) days after the commencement of the period to which the
Performance Goal(s) relate(s) or such earlier time as required to comply with
Code Section 162(m). No such Award shall be payable unless the Committee
certifies in writing, by resolution or otherwise, that the Performance Goal(s)
applicable to the Award were satisfied. In no case may the Committee increase
the value of an Award of Performance-Based Compensation above the maximum value
determined under the performance formula by the attainment of the applicable
Performance Goal(s), but the Committee may retain discretion to reduce the value
below such maximum.
Unless and until the Committee proposes for shareholder vote and the
shareholders approve a change in the general Performance Measures set forth in
this Article 5, the Performance Goal(s) upon which the payment of an Award to an
Insider that is intended to qualify as Performance-Based Compensation shall be
limited to the following Performance Measures:
(a) Net earnings or net income (before or after taxes);
(b) Earnings per share;
(c) Net sales growth;
(d) Net operating profit;
(e) Operating earnings;
(f) Operating earnings per share
(g) Return measures (including, but not limited to, return on assets,
capital, equity, or sales);
(h) Cash flow (including, but not limited to, operating cash flow, free
cash flow, and cash flow return on capital);
(i) Earnings before or after taxes, interest, depreciation, and/or
amortization and including/ excluding capital gains and losses;
(j) Gross or operating margins;
(k) Productivity ratios;
(l) Share price (including, but not limited to, growth measures and total
shareholder return);
(m) Expense targets;
(n) Margins;
(o) Operating efficiency;
(p) Customer satisfaction;
(q) Employee and/or Agent satisfaction;
(r) Working capital targets;
(s) Economic Value Added
(t) Revenue growth;
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(u) Assets under management growth; and
(v) Rating Agencies' ratings.
Any Performance Measure may be used to measure the performance of the Company as
a whole, any Affiliate, any business unit of the Company or any Affiliate, or
any combination thereof, as the Committee may deem appropriate, or any of the
above Performance Measures as compared to the performance of a group of
comparator companies, or published or special index that the Committee, in its
sole discretion, deems appropriate. The Committee also has the authority to
provide for accelerated vesting or payability of any Award based on the
achievement of Performance Goal(s)s.
The Committee may provide that any evaluation of attainment of a Performance
Goal may include or exclude any of the following events that occurs during the
relevant period: (a) asset write-downs; (b) litigation or claim judgments or
settlements; (c) the effect of changes in tax laws, accounting principles, or
other laws or provisions affecting reported results; (d) any reorganization and
restructuring programs; (e) extraordinary nonrecurring items as described in
Accounting Principles Board Opinion No. 30 and/or in management's discussion and
analysis of financial condition and results of operations appearing in the
Company's annual report to shareholders for the applicable year; (f)
acquisitions or divestitures; and (g) foreign exchange gains and losses. To the
extent such inclusions or exclusions affect Awards to Insider, they shall be
prescribed in a form that meets the requirements of Code Section 162(m) for
deductibility.
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing Performance Measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards to Insiders that shall not qualify as Performance-Based
Compensation, the Committee may make such grants without satisfying the
requirements of Code Section 162(m).
ARTICLE 6. TERMINATION OF EMPLOYMENT
The Committee shall determine the extent to which the Participant shall have the
right to receive an Award following termination of the Participant's employment
with the Company or an Affiliate. Such terms need not be uniform among all
Participants and Awards, and may reflect distinctions based on the reasons for
termination or any other bases permissible by law.
ARTICLE 7. BENEFICIARY DESIGNATION
A Participant may designate a Beneficiary or change a previous Beneficiary by
using forms and following procedures approved or accepted by the Company or an
Affiliate for that purpose. If, at the Participant's death, no Beneficiary
designated by the Participant is eligible to receive payments or other benefits
or exercise rights that are available under the Plan, the Beneficiary shall be
the Participant's surviving spouse or, should the Participant have no surviving
spouse, the Participant's estate. The Committee may, in its discretion, modify
the foregoing, institute additional requirements for beneficiary designations,
or suspend the existing beneficiary designations of living Participants or the
process of determining beneficiaries under this Article 7, or both, in favor of
another method of determining beneficiaries.
ARTICLE 8. ADMINISTRATION
8.1 GENERAL. The Committee shall be responsible for administering the Plan.
The Committee may employ attorneys, consultants, accountants, and other
individuals, any of whom may be an Employee, and the Committee, the Company, and
its officers and directors shall be entitled to rely upon the advice, opinions,
or valuations of any such persons. All actions taken and all interpretations and
determinations made by the Committee shall be final, conclusive, and binding
upon the Participants, the Company, Affiliates, and all other interested
parties.
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8.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of the Plan or other
agreement or document ancillary to or in connection with the Plan, to determine
eligibility for Awards, to determine the terms and conditions of Awards, and to
adopt such rules, regulations, and guidelines for administering the Plan or
exercising any of its rights or responsibilities as the Committee may deem
necessary or proper. Such authority shall include, but not be limited to,
selecting Award recipients, establishing all Award terms and conditions and,
subject to Article 9, adopting modifications and amendments.
8.3 DELEGATION. The Committee may delegate to one or more of its members or to
one or more officers of the Company or its Affiliates, any of its duties or
powers as it may deem advisable; provided, however, that the Committee may not
delegate any of its non-administrative powers with respect to Awards intended to
be Performance-Based Compensation, and provided further, that the member(s) or
officer(s) shall report periodically to the Committee regarding the nature and
scope of the Awards granted pursuant to the authority delegated pursuant to this
Section 3.3. Subject to the terms of the previous sentence, the Committee may
delegate to any person(s) such administrative duties or powers as it may deem
advisable.
ARTICLE 9. AMENDMENT AND TERMINATION OF THE PLAN
9.1 AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION. The Committee or
Board may, at any time and from time to time, alter, amend, modify, suspend, or
terminate the Plan in whole or in part. No amendment of the Plan shall be
effective without shareholder approval if shareholder approval is required by
law, regulation, or stock exchange rule.
9.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR NONRECURRING
EVENTS. The Committee may make adjustments in the terms and conditions of, and
the criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Company or the financial statements of the Company or of
changes in applicable laws, regulations, or accounting principles, whenever the
Committee determines that such adjustments are appropriate in order to prevent
unintended dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. The determination of the Committee
as to the foregoing adjustments, if any, shall be conclusive and binding on
Participants under the Plan. Adjustment to Awards constituting Performance-Based
Compensation shall be made only if such Awards subsequent to such adjustments
meet the requirements of Code Section 162(m) for deductibility.
9.3 AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the Plan
to the contrary with the exception of Section 1.2, no termination, amendment,
suspension, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan without the written consent of
the Participant holding such Award.
ARTICLE 10. GENERAL PROVISIONS
10.1 INTERPRETATION. The Plan is designed and intended to comply, to the
extent applicable to Performance-Based Compensation, with Code Section 162(m),
and all provisions hereof shall be construed in a manner to so comply.
10.2 NONTRANSFERABILITY. Except as otherwise provided by the Committee, Awards
may not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and distribution.
Except as otherwise provided by the Committee, a Participant's rights under the
Plan, if any, shall be exercisable during the Participant's lifetime only by the
Participant.
10.3 PARTICIPANT RIGHTS. No Participant shall have any right to an Award under
the Plan. The Committee is not obligated to set terms of Awards that are uniform
among Participants or Awards.
10.4 NO RIGHT TO CONTINUED EMPLOYMENT. Neither eligibility to participate nor
participation in the Plan shall confer upon a Participant any right to
continuation of employment by the Company or any
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Affiliate, nor shall the Plan interfere in any way with the Company's or any
Affiliate's or any employee's right to terminate a Participant's employment at
any time.
10.5 WITHHOLDING TAXES. The Company and each Affiliate shall have the power
and the right to deduct or withhold, or require a Participant to remit to the
Company or Affiliate, an amount sufficient to satisfy federal, state, and local
taxes, domestic or foreign (including the Participant's FICA obligation),
required by law or regulation to be withheld with respect to any taxable event
arising or as a result of this Plan.
10.6 REQUIREMENTS OF LAW. Awards shall be subject to all applicable laws,
rules, and regulations. The inability of the Company or an Affiliate to obtain
authority from any regulatory body having jurisdiction which authority is deemed
by the Company's or the Affiliate's counsel to be necessary to the lawful
payment hereunder shall relieve the Company or Affiliate of any liability for
the failure to make a payment as to which such requisite authority shall not
have been obtained.
10.7 UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company or any Affiliate may make
to aid it in meeting its obligations under the Plan. Nothing contained in the
Plan, and no action taken pursuant to its provisions, shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Company or any Affiliate and any Participant, beneficiary, legal representative,
or any other person. Awards shall be general, unsecured obligations of the
Company or Affiliate employing the Participant at the time payment pursuant to
an Award is due. Should neither the Company nor an Affiliate employ the
Participant at the time payment pursuant to an Award is due, the Award shall be
the general, unsecured obligation of the last of the Company or Affiliate to
employ the Participant (as such employment is specified in the Human Resources
records of the Company and Affiliates) prior to the time payment is due. To the
extent that any person acquires a right to receive payments from the Company or
any Affiliate, such right shall be no greater than the right of an unsecured
general creditor of the Company or Affiliate, as applicable. All payments made
under the Plan shall be paid from the general funds of the Company or Affiliate,
as applicable, and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts except as
expressly set forth in the Plan. The Plan is not intended to be subject to
ERISA. Notwithstanding any of the other terms of this Plan, no Affiliate shall
be liable for an Award unless the Affiliate has approved or ratified the Plan or
the Award.
10.8 OTHER COMPENSATION AND BENEFIT PLANS. Nothing in this Plan shall be
construed to limit the right of the Company or any Affiliate to establish other
compensation or benefit plans, programs, policies, or arrangements. Except as
may be otherwise specifically stated in any other benefit plan, policy, program,
or arrangement, no Award shall be treated as compensation for purposes of
calculating a Participant's rights under any such other plan, policy, program,
or arrangement.
10.9 NO CONSTRAINT ON CORPORATE ACTION. Nothing in this Plan shall be
construed (i) to limit, impair or otherwise affect the Company's or any
Affiliate's right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets or (ii) to limit the right or power of the Company or an
Affiliate to take any action which such entity deems to be necessary or
appropriate.
10.10 GOVERNING LAW. The Plan shall be governed by the laws of the State of
Delaware, excluding any conflicts or choice of law rule or principle that might
otherwise refer construction or interpretation of the Plan to the substantive
law of another jurisdiction.
10.11 SUCCESSORS. Any obligations of the Company or an Affiliate under the
Plan with respect to Awards granted hereunder, shall be binding on any successor
to the Company or Affiliate, respectively, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation,
or otherwise, of all or substantially all of the business and/or assets of the
Company or Affiliate, as applicable.
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APPENDIX C
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METLIFE, INC. 2005 NON-MANAGEMENT DIRECTOR STOCK COMPENSATION PLAN
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ARTICLE 1. ESTABLISHMENT, PURPOSE, AND DURATION
1.1 ESTABLISHMENT OF THE PLAN. MetLife, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), establishes an incentive
compensation plan to be known as the MetLife, Inc. 2005 Non-Management Director
Stock Compensation Plan (hereinafter referred to as the "Plan"), as set forth in
this document.
The Plan permits the grant of Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, and Stock-Based Awards.
1.2 PURPOSE OF THE PLAN. The purpose of the Plan is to promote the long-term
interests of the Company and its shareholders by strengthening the Company's
ability to attract, motivate, and retain well qualified individuals as
Non-Management Directors of the Company upon whose judgment, initiative, and
efforts the financial success and growth of the business of the Company largely
depend, and to provide an additional incentive for such individuals through
stock ownership and other rights that promote and recognize the financial
success and growth of the Company and create value for shareholders.
1.3 DURATION OF THE PLAN. The Plan shall commence as of the Effective Date and
shall remain in effect until the earlier of (i) the tenth anniversary of the
Effective Date, or (ii) all Shares subject to the Plan have been purchased or
acquired according to the Plan's provisions, in each case subject to the right
of the Committee or the Board to amend or terminate the Plan at any time
pursuant to Article 13 herein.
ARTICLE 2. DEFINITIONS
Whenever used in the Plan, the following terms shall have the meaning set forth
below, and when the meaning is intended, the initial letter of the word shall be
capitalized.
2.1 "AFFILIATE" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations of the Exchange Act, with reference to the
Company, and shall also include any corporation, partnership, joint venture,
limited liability company, or other entity in which the Company owns, directly
or indirectly, at least fifty percent (50%) of the total combined Voting Power
of such corporation or of the capital interest or profits interest of such
partnership or other entity.
2.2 "AWARD" means, individually or collectively, a grant of Options, Restricted
Stock, Restricted Stock Units, or Stock-Based Awards, in each case under and
subject to the terms of this Plan.
2.3 "AWARD AGREEMENT" means either (i) a written agreement entered into by the
Company and a Participant setting forth the terms and provisions applicable to
Awards granted under this Plan; or (ii) a written statement issued by the
Company to a Participant describing the terms and provisions of such Award.
2.4 "BENEFICIAL OWNER" OR "BENEFICIAL OWNERSHIP" shall have the meaning
ascribed to such term in rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
2.5 "BOARD" OR "BOARD OF DIRECTORS" means the Board of Directors of the
Company.
2.6 "CODE" means the U.S. Internal Revenue Code of 1986, as amended from time
to time, or any successor thereto.
2.7 "COMMITTEE" means the Governance Committee of the Board of Directors, or
any other duly authorized committee of the Board appointed by the Board to
administer the Plan.
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2.8 "COMPANY" means MetLife, Inc., a Delaware corporation, and any successor
thereto as provided in Article 14 herein.
2.9 "DIRECTOR" means any individual who is a member of the Board of Directors
of the Company.
2.10 "EFFECTIVE DATE" means April 15, 2005.
2.11 "EMPLOYEE" means any employee of the Company or an Affiliate.
2.12 "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor act thereto.
2.13 "FAIR MARKET VALUE" or "FMV" means a price that is based on the opening,
closing, actual, high, low, or average selling prices of a Share on the New York
Stock Exchange ("NYSE") or other established stock exchange (or exchanges) on
the applicable date, the preceding trading day, the next succeeding trading day,
or an average of trading days, as determined by the Committee in its discretion.
Such definition(s) of FMV shall be specified in each Award Agreement and may
differ depending on whether FMV is in reference to the grant, exercise, vesting,
settlement, or payout of an Award. If, however, the accounting standards used to
account for equity awards granted to Participants are substantially modified
subsequent to the Effective Date of the Plan, the Committee shall have the
ability to determine an Award's FMV based on the relevant facts and
circumstances. If Shares are not traded on an established stock exchange, FMV
shall be determined by the Committee based on objective criteria.
2.14 "FREESTANDING SAR" means an SAR that is not a Tandem SAR, as described in
Article 7 herein.
2.15 "GRANT PRICE" means the price against which the amount payable is
determined upon exercise of an SAR.
2.16 "NON-MANAGEMENT DIRECTOR" means a Director who is not an Employee.
2.17 "OPTION" means the conditional right to purchase Shares at a stated Option
Price for a specified period of time, subject to the terms of this Plan. Each
Option shall be a Nonqualified Stock Option, in that no Option shall be an
Incentive Stock Option intended to meet the requirements of Section 422 of the
Code.
2.18 "OPTION PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option, as determined by the Committee.
2.19 "PARTICIPANT" means an Non-Management Director who has received an Award,
or who has an outstanding Award granted under the Plan.
2.20 "PERIOD OF RESTRICTION" means the period when an Award of Restricted Stock
or Restricted Stock Unit is subject to forfeiture based on the passage of time,
the achievement of performance goals, and/or upon the occurrence of other events
as determined by the Committee, in its discretion.
2.21 "RESTRICTED STOCK" means an Award of Shares subject to a Period of
Restriction, granted under Article 8 herein and subject to the terms of this
Plan.
2.22 "RESTRICTED STOCK UNIT" means an Award denominated in units subject to a
Period of Restriction, granted under Article 8 herein and subject to the terms
of this Plan.
2.23 "SHARES" means the shares of common stock of the Company, $.01 par value
per Share.
2.24 "STOCK APPRECIATION RIGHT" or "SAR" means the conditional right to receive
the difference between the FMV of a Share on the date of exercise over the Grant
Price, pursuant to the terms of Article 7 herein and subject to the terms of
this Plan.
2.25 "STOCK-BASED AWARD" means an equity-based or equity-related Award granted
under Article 9 herein and subject to the terms of this Plan, and not otherwise
described by the terms of this Plan.
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2.26 "TANDEM SAR" means an SAR that the Committee specifies is granted in
connection with a related Option pursuant to Article 7 herein and subject to the
terms of this Plan, the exercise of which shall require forfeiture of the right
to purchase a Share under the related Option (and when a Share is purchased
under the Option, the Tandem SAR shall similarly be cancelled) or an SAR that is
granted in tandem with an Option but the exercise of such Option does not cancel
the SAR, but rather results in the exercise of the related SAR. Regardless of
whether an Option is granted coincident with an SAR, an SAR is not a Tandem SAR
unless so specified by the Committee at time of grant.
2.27 "VOTING POWER" shall mean such number of Voting Securities as shall enable
the holders thereof to cast all the votes which could be cast in an annual
election of directors of a company.
2.28 "VOTING SECURITIES" shall mean all securities entitling the holders
thereof to vote in an annual election of directors of a company.
ARTICLE 3. ADMINISTRATION
3.1 GENERAL. The Committee shall be responsible for administering the Plan.
All actions taken and all interpretations and determinations made by the
Committee shall be final, conclusive, and binding upon the Participants, the
Company, and all other interested parties.
3.2 AUTHORITY OF THE COMMITTEE. The Committee shall have full and exclusive
discretionary power to interpret the terms and the intent of the Plan and any
Award Agreement or other agreement ancillary to or in connection with the Plan,
and to adopt such rules, regulations, and guidelines for administering the Plan
as the Committee may deem necessary or proper. Such authority shall include, but
not be limited to, establishing all Award terms and conditions and, subject to
Article 13 and Section 6.3, adopting modifications and amendments to the Plan or
any Award Agreement.
3.3 DELEGATION. The Committee may delegate to one or more of its members or to
one or more officers of the Company or its Affiliates, or to any other
individual(s) such administrative duties or powers as it may deem advisable, and
the Committee or any individual to whom it has delegated duties or powers as
aforesaid may employ one or more individuals to render advice with respect to
any responsibility the Committee or such individual may have under the Plan.
ARTICLE 4. SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS
4.1 NUMBER OF SHARES AVAILABLE FOR AWARDS. Subject to adjustment as provided
in Section 4.2 herein, the number of Shares hereby reserved for issuance to
Participants under the Plan shall be two million (2,000,000). The maximum
aggregate number of Shares that may be granted in any one calendar year to any
one Participant under the Plan shall be twenty-five thousand (25,000).
Any Shares related to Awards which (i) terminate by expiration, forfeiture,
cancellation, or otherwise without the issuance of such Shares, (ii) are settled
in cash either in lieu of Shares or otherwise, or (iii) are exchanged with the
Committee's permission for Awards not involving Shares, shall be available again
for grant under the Plan. Moreover, if the Option Price of any Option granted
under the Plan or the tax withholding requirements with respect to any Award
granted under the Plan are satisfied by tendering Shares to the Company (by
either actual delivery or by attestation), or if an SAR is exercised, only the
number of Shares issued, net of the Shares tendered, if any, will be deemed
delivered for purposes of determining the maximum number of Shares available for
issuance under the Plan. The maximum number of Shares available for issuance
under the Plan shall not be reduced to reflect any dividends or dividend
equivalents that are reinvested into additional Shares or credited as additional
Restricted Stock, Restricted Stock Units, or Stock-Based Awards. The Shares
available for issuance under the Plan may be authorized and unissued Shares or
treasury Shares.
4.2 ADJUSTMENTS IN AUTHORIZED SHARES. In the event of any corporate event or
transaction (including, but not limited to, a change in the Shares of the
Company or the capitalization of the Company) such as a merger, consolidation,
reorganization, recapitalization, separation, stock dividend, extraordinary
dividend, stock split, reverse stock split, split up, spin-off, or other
distribution of stock or property of
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the Company, combination of securities, exchange of securities, dividend in
kind, or other like change in capital structure or distribution (other than
normal cash dividends) to shareholders of the Company, or any similar corporate
event or transaction, the Committee, in its sole discretion, in order to prevent
dilution or enlargement of Participants' rights under the Plan, shall substitute
or adjust, as applicable, the number and kind of Shares that may be issued under
the Plan, the number and kind of Shares subject to outstanding Awards, the
Option Price or Grant Price applicable to outstanding Awards, the annual
Participant Share Award limit, and any other value determinations applicable to
outstanding Awards or to this Plan.
The Committee, in its sole discretion, may also make appropriate adjustments in
the terms of any Awards under the Plan to reflect, or related to, such changes
or distributions and may modify any other terms of outstanding Awards. The
determination of the Committee as to the foregoing adjustments, if any, shall be
conclusive and binding on Participants under the Plan.
Subject to the provisions of Article 13, Section 6.3, and any applicable law or
regulatory requirement, without affecting the number of Shares reserved or
available hereunder, the Committee may authorize the issuance, assumption,
substitution, or conversion of Awards under this Plan in connection with any
such corporate event or transaction upon such terms and conditions as it may
deem appropriate.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 ELIGIBILITY. Individuals eligible to participate in the Plan include all
Non-Management Directors.
5.2 PARTICIPATION. Subject to the provisions of the Plan, the Committee from
time to time may make Awards and determine in its discretion, the nature, terms,
and amount of each Award.
ARTICLE 6. STOCK OPTIONS
6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, Options
may be granted to Participants in such number, and upon such terms, and at any
time and from time to time as shall be determined by the Committee in its
discretion.
6.2 AWARD AGREEMENT. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, the conditions upon which an
Option shall become vested and exercisable, and any such other provisions as the
Committee shall determine.
6.3 OPTION PRICE. The Option Price for each grant of an Option under this Plan
shall be determined by the Committee and shall be specified in the Award
Agreement. The Option Price may include an Option Price based on one hundred
percent (100%) of the FMV of the Shares on the date of grant, an Option Price
that is set at a premium to the FMV of the Shares on the date of grant, or an
Option Price that is indexed to the FMV of the Shares on the date of grant, with
the index determined by the Committee in its discretion. Without the prior
approval of the Company's shareholders, Options issued under the Plan will not
be repriced, replaced, or regranted through cancellation, or by lowering the
exercise price of a previously granted Option.
6.4 DURATION OF OPTIONS. Each Option granted to a Participant shall expire at
such time as the Committee shall determine at the time of grant; provided,
however, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant.
6.5 EXERCISE OF OPTIONS. Options granted under this Article 6 shall be
exercisable at such times and on the occurrence of such events, and be subject
to such restrictions and conditions, as the Committee shall in each instance
approve, which need not be the same for each grant or for each Participant.
6.6 RESTRICTIONS ON SHARE TRANSFERABILITY. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted pursuant to this Plan as it may deem advisable, including, without
limitation, requiring the Participant to hold the Shares acquired pursuant
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to exercise for a specified period of time, or restrictions under applicable
laws or under the requirements of any stock exchange or market upon which such
Shares are listed and/or traded.
6.7 TERMINATION OF DIRECTORSHIP. Each Participant's Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
Option following termination of the Participant's service as a Director. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.
6.8 NONTRANSFERABILITY OF OPTIONS. Except as otherwise provided in a
Participant's Award Agreement at the time of grant, or thereafter by the
Committee, Options granted under this Article 6 may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will or
by the laws of descent and distribution. Further, except as otherwise provided
in a Participant's Award Agreement at the time of grant or thereafter by the
Committee, all Options granted to a Participant under this Article 6 shall be
exercisable during the Participant's lifetime only by such Participant.
6.9 SUBSTITUTING SARS. Regardless of the terms of the Award Agreement, the
Committee, at any time when the Company is subject to fair value accounting for
equity-based compensation, shall have the right to substitute SARs for
outstanding Options granted to any Participant, provided the substituted SARs
call for settlement by the issuance of Shares, and the terms of the substituted
SARs and economic benefit of such substituted SARs are equivalent to the terms
and economic benefit of the Options being replaced, as determined by the
Committee.
6.10 PAYMENT FOR OPTIONS. Options granted under this Article 6 shall be
exercised by the delivery of a notice of exercise to the Company or an agent
designated by the Company in a form specified or accepted by the Committee, or
by complying with any alternative procedures which may be authorized by the
Committee, setting forth the number of Shares with respect to which the Option
is to be exercised, accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the Company in
full either: (a) in cash or its equivalent; (b) by tendering (either by actual
delivery or attestation) previously acquired Shares having an aggregate FMV at
the time of exercise equal to the total Option Price; (c) by a combination of
(a) and (b); or (d) any other method approved or accepted by the Committee in
its sole discretion subject to such rules and regulations as the Committee may
establish.
Subject to Section 6.7 and any governing rules or regulations, as soon as
practicable after receipt of a notification of exercise and full payment, the
Committee shall cause to be delivered to the Participant Share certificates or
evidence of book entry Shares in an appropriate amount based upon the number of
Shares purchased under the Option(s). Unless otherwise determined or accepted by
the Committee, all payments in cash shall be paid in United States dollars.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARS. Subject to the terms and conditions of the Plan, SARs may
be granted to Participants at any time and from time to time and upon such terms
as shall be determined by the Committee in its discretion. The Committee may
grant Freestanding SARs, Tandem SARs, or any combination of these forms of SARs.
The SAR Grant Price for each grant of a Freestanding SAR shall be determined by
the Committee and shall be specified in the Award Agreement. The SAR Grant Price
may include (but not be limited to) a Grant Price based on one hundred percent
(100%) of the FMV of the Shares on the date of grant, a Grant Price that is set
at a premium to the FMV of the Shares on the date of grant, or is indexed to the
FMV of the Shares on the date of grant, with the index determined by the
Committee, in its discretion. The Grant Price of Tandem SARs shall be equal to
the Option Price of the related Option.
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7.2 SAR AGREEMENT. Each SAR Award shall be evidenced by an Award Agreement
that shall specify the Grant Price, the term of the SAR, and any such other
provisions as the Committee shall determine.
7.3 TERM OF SAR. The term of an SAR granted under the Plan shall be determined
by the Committee, in its sole discretion, and except as determined otherwise by
the Committee and specified in the SAR Award Agreement, no SAR shall be
exercisable later than the tenth (10th) anniversary date of its grant.
7.4 EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised upon
whatever terms and conditions the Committee, in its sole discretion, imposes.
7.5. EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or part of
the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
7.6 PAYMENT OF SAR AMOUNT. Upon the exercise of an SAR, a Participant shall be
entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the FMV of a Share on the date of exercise over
the Grant Price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be in
cash, Shares of equivalent value (based on the FMV on the date of exercise of
the SAR, as defined in the Award Agreement or otherwise defined by the Committee
thereafter), in some combination thereof, or in any other form approved by the
Committee at its sole discretion. The Committee's determination regarding the
form of SAR payout shall be set forth or reserved for later determination in the
Award Agreement pertaining to the grant of the SAR.
7.7 TERMINATION OF DIRECTORSHIP. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's service as a Director. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with Participants, need not be
uniform among all SARs issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination.
7.8 NONTRANSFERABILITY OF SARS. Except as otherwise provided in a
Participant's Award Agreement at the time of grant or thereafter by the
Committee, an SAR granted under the Plan may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement at the time of grant or thereafter by the
Committee, all SARs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant.
7.9 OTHER RESTRICTIONS. Without limiting the generality of any other provision
of this Plan, the Committee may impose such other conditions and/or restrictions
on any Shares received upon exercise of an SAR granted pursuant to the Plan as
it may deem advisable. This includes, but is not limited to, requiring the
Participant to hold the Shares received upon exercise of an SAR for a specified
period of time.
ARTICLE 8. RESTRICTED STOCK AND RESTRICTED STOCK UNITS
8.1 GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS. Subject to the terms
and provisions of the Plan, the Committee, at any time and from time to time,
may grant Shares of Restricted Stock and/or Restricted Stock Units to
Participants in such amounts and upon such terms as the Committee shall
determine.
8.2 RESTRICTED STOCK OR RESTRICTED STOCK UNIT AGREEMENT. Each Restricted Stock
and/or Restricted Stock Unit grant shall be evidenced by an Award Agreement that
shall specify the Period(s) of Restriction, the number of Shares of Restricted
Stock or the number of Restricted Stock Units granted, and any such other
provisions as the Committee shall determine.
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8.3 NONTRANSFERABILITY OF RESTRICTED STOCK AND RESTRICTED STOCK UNITS. Except
as otherwise provided in this Plan or the Award Agreement, the Shares of
Restricted Stock and/or Restricted Stock Units granted herein may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction specified in the Award Agreement
(and in the case of Restricted Stock Units until the date of delivery or other
payment), or upon earlier satisfaction of any other conditions, as specified by
the Committee in its sole discretion and set forth in the Award Agreement at the
time of grant or thereafter by the Committee. All rights with respect to the
Restricted Stock and/or Restricted Stock Units granted to a Participant under
the Plan shall be available during his or her lifetime only to such Participant,
except as otherwise provided in the Award Agreement at the time of grant or
thereafter by the Committee.
8.4 OTHER RESTRICTIONS. The Committee shall impose, in the Award Agreement at
the time of grant or anytime thereafter, such other conditions and/or
restrictions on any Shares of Restricted Stock or Restricted Stock Units granted
pursuant to this Plan as it may deem advisable including, without limitation, a
requirement that Participants pay a stipulated purchase price for each Share of
Restricted Stock or each Restricted Stock Unit, time-based restrictions on
vesting following the attainment of the performance goals, time-based
restrictions, restrictions under applicable laws or under the requirements of
any stock exchange or market upon which such Shares are listed or traded, or
holding requirements or sale restrictions placed on the Shares by the Company
upon vesting of such Restricted Stock or Restricted Stock Units.
To the extent deemed appropriate by the Committee subject to Section 15.4, the
Company may retain the certificates representing Shares of Restricted Stock, or
Shares delivered in consideration of Restricted Stock Units, in the Company's
possession until such time as all conditions and/or restrictions applicable to
such Shares have been satisfied or lapse.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock Award shall become freely transferable by the
Participant after all conditions and restrictions applicable to such Shares have
been satisfied or lapse, and Restricted Stock Units shall be paid in cash,
Shares, or a combination of cash and Shares as the Committee, in its sole
discretion shall determine.
8.5 CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 8.4 herein, each certificate representing Shares of
Restricted Stock granted pursuant to the Plan may bear a legend such as the
following:
The sale or other transfer of the Shares of stock represented by this
certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the MetLife,
Inc. 2005 Non-Management Director Stock Compensation Plan, and in the
associated Award Agreement. A copy of the Plan and such Award Agreement may
be obtained from MetLife, Inc.
8.6 VOTING RIGHTS. To the extent required by law, Participants holding Shares
of Restricted Stock granted hereunder shall be granted the right to exercise
full voting rights with respect to those Shares during the Period of
Restriction. A Participant shall have no voting rights with respect to any
Restricted Stock Units granted hereunder.
8.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding Shares of Restricted Stock or Restricted Stock Units
granted hereunder may, if the Committee so determines, be credited with
dividends paid with respect to the underlying Shares or dividend equivalents
while they are so held in a manner determined by the Committee in its sole
discretion. The Committee may apply any restrictions to the dividends or
dividend equivalents that the Committee deems appropriate. The Committee, in its
sole discretion, may determine the form of payment of dividends or dividend
equivalents, including cash, Shares, Restricted Stock, or Restricted Stock
Units.
8.8 TERMINATION OF DIRECTORSHIP. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to retain Restricted Stock
and/or Restricted Stock Units following termination of the Participant's service
as a Director. Such provisions shall be determined in the sole
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discretion of the Committee, shall be included in the Award Agreement entered
into with each Participant, need not be uniform among all Shares of Restricted
Stock or Restricted Stock Units issued pursuant to the Plan, and may reflect
distinctions based on the reasons for termination.
8.9 PAYMENT IN CONSIDERATION OF RESTRICTED STOCK UNITS. When and if Restricted
Stock Units become payable, a Participant having received the grant of such
units shall be entitled to receive payment from the Company in cash, Shares of
equivalent value (based on the FMV, as defined in the Award Agreement at the
time of grant or thereafter by the Committee), in some combination thereof, or
in any other form determined by the Committee at its sole discretion. The
Committee's determination regarding the form of payout shall be set forth or
reserved for later determination in the Award Agreement pertaining to the grant
of the Restricted Stock Unit.
ARTICLE 9. STOCK-BASED AWARDS
9.1 STOCK-BASED AWARDS. The Committee may grant other types of equity-based or
equity-related Awards not otherwise described by the terms of this Plan
(including the grant or offer for sale of unrestricted Shares) in such amounts
and subject to such terms and conditions, or in satisfaction of any obligation
of the Company or an Affiliate to a Non-Management Director, as the Committee
shall determine. Such Awards may entail the transfer of actual Shares to
Participants, or payment in cash or otherwise of amounts based on the value of
Shares and may include, without limitation, Awards designed to comply with or
take advantage of the applicable local laws of jurisdictions other than the
United States.
9.2 TERMINATION OF DIRECTORSHIP. Each Award Agreement shall set forth the
extent to which the Participant shall have the right to receive Stock-Based
Awards following termination of the Participant's service as a Director. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the applicable Award Agreement, need not be uniform among all Awards
of Stock-Based Awards issued pursuant to the Plan, and may reflect distinctions
based on the reasons for termination.
9.3 NONTRANSFERABILITY OF STOCK-BASED AWARDS. Except as otherwise provided in
a Participant's Award Agreement at the time of grant or thereafter by the
Committee, Stock-Based Awards may not be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement at the time of grant or thereafter by the
Committee, a Participant's rights under the Plan shall be exercisable during the
Participant's lifetime only by the Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
A Participant's "beneficiary" is the person or persons entitled to receive
payments or other benefits or exercise rights that are available under the Plan
in the event of the Participant's death. A Participant may designate a
beneficiary or change a previous beneficiary designation at such times
prescribed by the Committee by using forms and following procedures approved or
accepted by the Committee for that purpose. If no beneficiary designated by the
Participant is eligible to receive payments or other benefits or exercise rights
that are available under the Plan at the Participant's death the beneficiary
shall be the Participant's estate.
Notwithstanding the provisions above, the Committee may in its discretion, after
notifying the affected Participants, modify the foregoing requirements,
institute additional requirements for beneficiary designations, or suspend the
existing beneficiary designations of living Participants or the process of
determining beneficiaries under this Article 10, or both, in favor of another
method of determining beneficiaries.
ARTICLE 11. DEFERRALS AND SHARE SETTLEMENTS
Notwithstanding any other provision under the Plan, the Committee may permit or
require a Participant to defer such Participant's receipt of any Award, or
payment in consideration of any Award, under the
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terms of this Plan or another Plan. To the extent such deferral is permitted by
the Committee under the terms of this Plan rather than another Plan, the
Committee shall establish rules and procedures for such deferrals as it sees
fit.
ARTICLE 12. RIGHTS OF NON-MANAGEMENT DIRECTORS
12.1 DIRECTORSHIP. Nothing in the Plan or an Award Agreement shall be
construed to confer a right to be elected or to continue to serve as a Director.
No Participant shall have any claim or right to be granted an Award, and the
grant of an Award shall not be construed to create any obligation on the part of
the Board to nominate any of its members for re-election by the Company's
shareholders. Nothing in the Plan or an Award Agreement shall interfere with or
limit in any way the right of the Board to otherwise remove the Participant from
the Board at any time, nor confer upon any Participant a right to remain a
member of the Board for any period of time, or at any particular rate of
compensation.
12.2 PARTICIPATION. No Non-Management Director, having received an Award,
shall have the right to receive a future Award or (if receiving such a future
Award) the right to receive such a future Award on terms and conditions
identical or in proportion in any way to any prior Award.
12.3 RIGHTS AS A SHAREHOLDER. A Participant shall have none of the rights of a
shareholder with respect to Shares covered by any Award until the Participant
becomes the record holder of such Shares.
ARTICLE 13. AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION
13.1 AMENDMENT, MODIFICATION, SUSPENSION, AND TERMINATION. The Committee or
Board may, at any time and from time to time, alter, amend, modify, suspend, or
terminate the Plan in whole or in part; provided however, that to the extent
necessary under any applicable law, regulation or exchange requirement, no
amendment shall be effective unless approved by the shareholders of the Company
in accordance with applicable law, regulation, or exchange requirement.
13.2 ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 4.2 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent unintended dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan. The determination of the
Committee as to the foregoing adjustments, if any, shall be conclusive and
binding on Participants under the Plan.
13.3 AWARDS PREVIOUSLY GRANTED. Notwithstanding any other provision of the
Plan to the contrary, no termination, amendment, suspension, or modification of
the Plan shall adversely affect in any material way any Award previously granted
under the Plan, without the written consent of the Participant holding such
Award.
ARTICLE 14. SUCCESSORS
Any obligations of the Company under the Plan with respect to Awards granted
hereunder, shall be binding on any successor to the Company, respectively,
whether the existence of such successor is the result of a direct or indirect
purchase, merger, consolidation, or otherwise, of all or substantially all of
the business and/or assets of the Company, as applicable.
ARTICLE 15. GENERAL PROVISIONS
15.1 FORFEITURE EVENTS. Without limiting in any way the generality of the
Committee's power to specify any terms and conditions of an Award consistent
with law, and for greater clarity, the Committee may specify in an Award
Agreement that the Participant's rights, payments, and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture, or recoupment
upon the
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occurrence of certain specified events, in addition to any otherwise applicable
vesting or performance conditions of an Award.
15.2 LEGEND. The certificates for Shares may include any legend that the
Committee deems appropriate to reflect any restrictions on transfer of such
Shares.
15.3 DELIVERY OF TITLE. The Company shall have no obligation to issue or
deliver evidence of title for Shares issued under the Plan prior to:
(a) Obtaining any approvals from governmental agencies that the Company
determines are necessary or advisable; and
(b) Completion of any registration or other qualification of the Shares
under any applicable national or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable.
15.4 UNCERTIFICATED SHARES. To the extent that the Plan provides for issuance
of certificates to reflect the transfer of Shares, the transfer of such Shares
may be effected on a noncertificated basis to the extent not prohibited by
applicable law or the rules of any stock exchange.
15.5 UNFUNDED PLAN. Participants shall have no right, title, or interest
whatsoever in or to any investments that the Company or an Affiliate may make to
aid it in meeting its obligations under the Plan. Nothing contained in the Plan,
and no action taken pursuant to its provisions, shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the Company or
an Affiliate and any Participant, beneficiary, legal representative, or any
other person. Awards shall be general, unsecured obligations of the Company. To
the extent that any individual acquires a right to receive payments from the
Company, such right shall be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall be paid from
the general funds of the Company, and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of such
amounts except as expressly set forth in the Plan. The Plan is not intended to
be subject to ERISA.
15.6 NO FRACTIONAL SHARES. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Award Agreement but shall, instead, be payable in
cash.
15.7 NO CONSTRAINT ON CORPORATE ACTION. Nothing in this Plan shall be
construed (i) to limit, impair or otherwise affect the Company's or an
Affiliate's right or power to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, or to merge or
consolidate, or dissolve, liquidate, sell, or transfer all or any part of its
business or assets, or (ii) to limit the right or power of the Company or an
Affiliate to take any action which such entity deems to be necessary or
appropriate.
ARTICLE 16. LEGAL CONSTRUCTION
16.1 GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine, the plural shall
include the singular, and the singular shall include the plural.
16.2 SEVERABILITY. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
16.3 REQUIREMENTS OF LAW. The granting of Awards and the issuance of Shares
under the Plan shall be subject to all applicable laws, rules, and regulations,
and to such approvals by any governmental agencies or national securities
exchanges as may be required. The Company shall receive the consideration
required by law for the issuance of Awards under the Plan.
The inability of the Company or an Affiliate to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful
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issuance and sale of any Shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such Shares as to which
such requisite authority shall not have been obtained.
16.4 GOVERNING LAW. The Plan and each Award Agreement shall be governed by the
laws of the State of Delaware, excluding any conflicts or choice of law rule or
principle that might otherwise refer construction or interpretation of the Plan
to the substantive law of another jurisdiction.
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APPENDIX D
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AUDIT COMMITTEE CHARTER
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ROLE OF THE AUDIT COMMITTEE
The Audit Committee is appointed by the Board of Directors to perform the
functions the Committee is required by law or regulation to perform and to
assist the Board in fulfilling its responsibility to oversee:
- the Company's accounting and financial reporting processes and the audits
of the Company's financial statements;
- the adequacy of the Company's internal control over financial reporting;
- the integrity of its financial statements;
- the qualifications and independence of the Company's independent auditor;
- the appointment, retention and performance of the Company's independent
auditor and the performance of the internal audit function; and
- the Company's compliance with legal and regulatory requirements.
QUALIFICATIONS AND APPOINTMENT OF AUDIT COMMITTEE MEMBERS
On the recommendation of the Governance Committee, the Board of Directors
appoints the Chair and the members of Audit Committee, having determined their
qualifications. Audit Committee members shall serve at the pleasure of the Board
of Directors and for such term or terms as the Board may determine.
COMMITTEE MEMBERSHIP
The Audit Committee shall consist of no fewer than three members. The members of
the Audit Committee shall meet the director and audit committee member
independence requirements of the Corporate Governance Standards of the New York
Stock Exchange, and Rule 10A-3 under the Securities Exchange Act of 1934.
Audit Committee members may not simultaneously serve on the audit committees of
more than two other public companies.
Each member of the Audit Committee should be financially literate, as such
qualification is interpreted by the Board of Directors in its business judgment;
provided, however, that if any member of the Audit Committee is not financially
literate when appointed to the Committee, then he or she must become financially
literate within a reasonable time after appointment.
At least one member of the Audit Committee:
- shall be determined by the Board of Directors to have accounting or
related financial management expertise, as the Board of Directors
interprets such qualification in its business judgment; and
- shall be determined by the Board of Directors to be an "audit committee
financial expert," as such term is defined by the Commission in Item
401(h) of Regulation S-K.
AUDIT COMMITTEE AUTHORITY AND RESPONSIBILITIES
In carrying out its responsibilities, the Audit Committee shall:
- be solely and directly responsible for appointing (subject to shareholder
ratification where appropriate), terminating, approving the compensation
and terms of engagement of, and
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overseeing the work of any registered public accounting firm that is
engaged as the Company's independent auditor to prepare or issue an audit
report, including the scope, plans and results of the audit and the
Company's financial statements, and the Company shall provide appropriate
funding, as determined by the Committee, for payment of compensation to
the Company's independent auditor for rendering or issuing such audit
report;
- pre-approve all audit and, subject to Section 10A(i) of the Exchange Act
and rules promulgated thereunder, permitted non-audit services (including
the fees and terms thereof) provided by the independent auditor to the
Company and its subsidiaries. The Audit Committee may delegate authority
to pre-approve audit and permitted non-audit services to any one or more
Committee members and such member or members to whom such authority is
delegated, upon any exercise of such authority, shall submit or cause to
be submitted to the Committee at its next scheduled meeting a report on
activities pursuant to such delegation;
- be responsible for resolving any disagreements between management and the
Company's independent auditor concerning financial reporting;
- have authority to engage independent counsel and other advisers, as it
determines necessary to carry out its duties, and the Company shall
provide appropriate funding, as determined by the Committee, for payment
of compensation to the Company's independent auditor for rendering or
issuing an audit report and to any advisers engaged by the Committee, and
for payment of administrative expenses of the Committee that are
necessary or appropriate in carrying out its duties; and
- review and approve procedures for the receipt, retention, and treatment
of complaints received by the Company regarding accounting, internal
accounting controls, or auditing matters and for the confidential,
anonymous submission by employees of concerns regarding questionable
accounting or auditing matters.
With respect to the Company's internal control over financial reporting, the
Audit Committee shall:
- review and discuss with management, the internal auditor and the
independent auditor management's reports evaluating the adequacy and
effectiveness of the Company's internal control over financial reporting,
including any significant deficiencies or material weaknesses in the
design or operation of internal control over financial reporting that
could adversely affect the Company's ability to record, process,
summarize and report financial information;
- review and discuss with management, the internal auditor and the
independent auditor, the independent auditor's reports concerning the
adequacy of the Company's internal control over financial reporting; and
- review and discuss with management, the internal auditor and the
independent auditor management's reports concerning the prevention and
detection of fraud against the Company, including reports of any fraud,
whether or not material, that involves management or other employees who
have a significant role in the Company's internal control over financial
reporting.
With respect to the Company's financial statements and disclosures of financial
information, the Audit Committee shall:
- discuss with the independent auditor, and with the internal auditor, in
each case out of the presence of management if deemed appropriate, (a)
the audit process, any problems or difficulties encountered in the course
of the performance of the audit, including any restrictions on the
independent auditor's activities or access to requested information
imposed by management and any significant disagreements with management;
and (b) the Company's internal control over financial reporting, and the
budget, staffing and quality of the Company's internal audit function,
including any "management" or "internal control" letter issued or
proposed to be issued by such auditor to the Company, and management's
response thereto;
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- discuss with management, the internal auditor and the independent auditor
the quality and the acceptability of the Company's accounting policies
and any significant changes to the Company's auditing and accounting
principles and practices suggested by the independent auditor, internal
audit personnel or management;
- discuss with the independent auditor all alternative accounting
treatments of financial information within accounting principles
generally accepted in the United States of America that have been
discussed with management;
- review and discuss with management, the internal auditor and the
independent auditor:
-- significant issues regarding accounting and auditing principles and
practices and financial statement presentations, including critical
accounting policies and estimates, any significant changes in the
Company's selection or application of accounting principles and any
significant issues that may have been raised by management, the
internal auditor or the independent auditor as to the adequacy of the
Company's internal control over financial reporting and any special
audit steps adopted in light of material control deficiencies;
-- analyses prepared by management, the internal auditor and/or the
independent auditor setting forth significant financial reporting
issues and judgments made in connection with the preparation of the
financial statements; and
-- the effect of regulatory and accounting initiatives on the financial
statements;
- review any material financial or other arrangements of the Company that
do not appear on the Company's financial statements, any reports by
management, the internal auditor or the independent auditor regarding any
such arrangements of the Company that do not appear on the Company's
financial statements, and any transactions or courses of dealing with
third parties that are significant in size or involve terms or other
aspects that differ from those that would likely be negotiated with
independent parties, and that are relevant to an understanding of the
Company's financial statements;
- review management's reports evaluating the effectiveness of the Company's
disclosure controls and procedures in assuring that material information
required to be disclosed in the Company's periodic reports filed with the
Commission is reported to management, appropriately processed and
summarized by management and reflected in such reports filed with the
Commission within the specified time periods;
- discuss with management, the internal auditor and the independent auditor
the Company's quarterly reports on Form 10-Q and the interim financial
information contained therein, including the Company's disclosures under
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," or authorize the Chair of the Committee to discuss the
foregoing with management, the internal auditor and the independent
auditor and make a report thereon to the full Committee, prior to the
filing of such quarterly reports with the Commission;
- discuss with management the Company's practices regarding earnings press
releases as well as the provision of financial information and earnings
guidance by management to analysts and rating agencies;
- discuss with management, the internal auditor and the independent auditor
the audited financial statements to be included in the Company's annual
reports on Form 10-K, including the Company's disclosures under
"Management's Discussion and Analysis of Financial Condition and Results
of Operations," prior to the filing of such reports with the Commission
and discuss with the independent auditor the matters required to be
discussed by Statement of Auditing Standards No. 61; and
- based on its discussions with management, the internal auditor and the
independent auditor and upon the receipt of an opinion of the Company's
independent auditor on the Company's
D-3
financial statements, in form and content satisfactory to the Committee,
determine whether to recommend to the Board of Directors that the
Company's audited financial statements be included in the Company's
Annual Reports on Form 10-K for filing with the Commission.
The Audit Committee also shall:
- periodically discuss the Company's guidelines and policies with respect
to the process by which the Company undertakes risk assessment and risk
management;
- review with management, the internal auditor and the independent auditor
any correspondence with regulators or governmental agencies and any
employee complaints or published reports that are brought to its
attention that raise material issues regarding the Company's financial
statements or accounting policies;
- receive reports from the Company's General Counsel concerning significant
legal and regulatory matters;
- review the Company's policies on ethical business conduct and review
reports concerning the monitoring of compliance with such policies;
- review reports concerning executive officers' expenses and perquisites
and their personal use of private aircraft, and review reports concerning
such officers' compliance with the Company's policies and procedures with
respect to such expenses and perquisites and personal use of private
aircraft;
- meet at least six times a year or more frequently as circumstances may
require;
- meet regularly in executive session separately with management and with
the Company's internal and external auditors;
- exercise such other powers and perform such other duties and
responsibilities as are incidental to the purposes, duties and
responsibilities specified herein and as may from time to time be
delegated to the Committee by the Board of Directors; and
- make regular reports to the Board of Directors about the Committee's
activities.
AUDIT COMMITTEE'S RELATIONSHIP WITH THE COMPANY'S INDEPENDENT AUDITOR
The Company's independent auditor shall make reports directly to the Audit
Committee and be accountable to the Audit Committee.
The Company's independent auditor shall periodically and at least annually
submit to the Committee a formal written statement delineating all relationships
between the independent auditor and the Company. Based on such statements, the
Audit Committee shall discuss with the independent auditor any disclosed
relationships or services that might impact the independent auditor's
objectivity and independence. The Committee also shall consider whether the
independent auditor's provision of non-audit services to the Company is
compatible with the maintenance of the auditor's independence.
At least annually, the independent auditor shall provide a report to the Audit
Committee describing the firm's internal quality-control procedures, any
material issues raised by the most recent internal quality-control review, or
peer review, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the firm, and any steps taken to deal
with any such issues.
The Audit Committee shall review the foregoing report and the independent
auditor's work and evaluate the independent auditor's qualifications,
performance and independence, including a review and evaluation of the lead
partner on the independent auditor's engagement with the Company, and present
its conclusions to the Board of Directors and, if so determined by the
Committee, recommend that the Board of Directors take additional action to
satisfy itself of the qualifications, performance and
D-4
independence of the independent auditor. The Audit Committee shall assure the
regular rotation of the audit engagement team partners to the extent that such
rotation is required by law.
The Audit Committee shall set clear policies for the Company's employment of
employees or former employees of the Company's independent auditor.
AUDIT COMMITTEE'S RELATIONSHIP WITH THE COMPANY'S INTERNAL AUDITOR
The Company's internal auditor shall make reports directly to the Audit
Committee and be accountable to the Audit Committee.
The Audit Committee shall review the budget, staffing and quality of the
Company's internal audit function and the appointment and termination of senior
internal audit personnel.
The Audit Committee shall review all significant reports to management prepared
by internal audit personnel.
LIMITATION ON AUDIT COMMITTEE'S ROLE
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements and disclosures are
complete and accurate and are in accordance with generally accepted accounting
principles and applicable rules and regulations. These are the responsibilities
of management and the independent auditor. Accordingly, in carrying out its
oversight responsibilities, the Audit Committee does not provide any expert or
special assurance as to the Company's financial statements; nor does it provide
any professional certification as to the independent auditor's work.
AUDIT COMMITTEE REPORT TO SHAREHOLDERS
Annually, the Committee shall cause to be included in the Company's proxy
statement the report of the Committee to the Company's shareholders as required
by Commission regulations.
ANNUAL EVALUATION OF THE COMMITTEE'S PERFORMANCE
Annually, the Committee shall conduct an evaluation of its performance.
D-5
APPENDIX E
--------------------------------------------------------------------------------
CATEGORICAL STANDARDS REGARDING DIRECTOR INDEPENDENCE
--------------------------------------------------------------------------------
(Excerpt from Corporate Governance Guidelines)
A majority of the Board of Directors shall be independent within the meaning of
the Corporate Governance Standards of the New York Stock Exchange.
The Board of Directors has developed the following categorical standards for
determining the materiality of relationships that the Directors may have with
the Company. A Director shall not be deemed to have a material relationship with
the Company that impairs the Director's independence as a result of any of the
following relationships:
- the Director is an officer or other person holding a salaried position of
an entity (other than a principal, equity partner or member of such
entity) that provides professional services to the Company and the amount
of all payments from the Company to such entity during the most recently
completed fiscal year was less than two percent of such entity's
consolidated gross revenues;
- the Director is the beneficial owner of less than five percent of the
outstanding equity interests of an entity that does business with the
Company;
- the Director is an executive officer of a civic, charitable or cultural
institution that received less than the greater of $1 million or two
percent of its consolidated gross revenues, as such term is construed by
the New York Stock Exchange for purposes of Section 303A.02(b)(v) of the
Corporate Governance Standards, from the Company and the MetLife
Foundation for each of the last three fiscal years;
- the Director is an officer of an entity that is indebted to the Company,
or to which the Company is indebted, and the total amount of either the
Company's or the business entity's indebtedness is less than three
percent of the total consolidated assets of such entity as of the end of
the previous fiscal year; and
- the Director obtained products or services from the Company on terms
generally available to customers of the Company for such products or
services.
The Board retains the sole right to interpret and apply the foregoing standards
in determining the materiality of any relationship.
The Board shall undertake an annual review of the independence of all
non-management Directors. To enable the Board to evaluate each non-management
Director, in advance of the meeting at which the review occurs, each
non-management Director shall provide the Board with full information regarding
the Director's business and other relationships with the Company, its affiliates
and senior management.
Directors must inform the Board whenever there are any material changes in their
circumstances or relationships that could affect their independence, including
all business relationships between a Director and the Company, its affiliates,
or members of senior management, whether or not such business relationships
would be deemed not to be material under any of the categorical standards set
forth above. Following the receipt of such information, the Board shall
reevaluate the Director's independence.
E-1
[Recycled Logo. Printed on recycled paper with enviornmentally friendly inks in
the USA. PEANUTS (copyright symbol) United Feature Syndicate, Inc.
www.snoopy.com]
(METLIFE LOGO)
METLIFE, INC. PROXY CARD
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF METLIFE, INC.
FOR THE
2004 ANNUAL MEETING, APRIL 27, 2004
THE SHAREHOLDER(S) WHOSE SIGNATURE(S) APPEAR(S) ON THE REVERSE SIDE OF THIS
PROXY CARD HEREBY APPOINT(S) JAMES L. LIPSCOMB, GWENN L. CARR, AND JAMES D.
GAUGHAN, OR ANY OF THEM, EACH WITH FULL POWER OF SUBSTITUTION, AS PROXIES TO
VOTE ALL SHARES OF METLIFE, INC. COMMON STOCK THAT THE SHAREHOLDER(S) WOULD BE
ENTITLED TO VOTE ON ALL MATTERS THAT MAY PROPERLY COME BEFORE THE 2004 ANNUAL
MEETING AND AT ANY ADJOURNMENTS OR POSTPONEMENTS. THE PROXIES ARE AUTHORIZED TO
VOTE IN ACCORDANCE WITH THE SPECIFICATIONS INDICATED BY THE SHAREHOLDER(S) ON
THE REVERSE OF THIS PROXY CARD. IF THIS PROXY CARD IS SIGNED AND RETURNED BY THE
SHAREHOLDER(S), AND NO SPECIFICATIONS ARE INDICATED, THE PROXIES ARE AUTHORIZED
TO VOTE AS RECOMMENDED BY THE BOARD OF DIRECTORS OF METLIFE, INC. IF THIS PROXY
CARD IS SIGNED AND RETURNED, THE PROXIES APPOINTED THEREBY WILL BE AUTHORIZED TO
VOTE IN THEIR DISCRETION ON ANY OTHER MATTERS THAT MAY BE PRESENTED FOR A VOTE
AT THE 2004 ANNUAL MEETING AND AT ANY ADJOURNMENTS OR POSTPONEMENTS.
(CONTINUED, AND TO BE DATED AND SIGNED ON THE REVERSE SIDE.)
ADDRESS CHANGE/COMMENTS (Mark the corresponding box on the reverse side)
________________________________________________________________________________
- FOLD AND DETACH HERE -
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3, 4, AND 5, AND
"AGAINST" PROPOSAL 6.
Please mark
your votes as /X/
indicated in
this example
1. Election of Class II Directors
The Class II nominees for
election as Directors are: FOR WITHHOLD
(01) Curtis H. Barnette
(02) John C. Danforth / / / /
(03) Burton A. Dole, Jr.
(04) Harry P. Kamen
(05) Charles M. Leighton
Instruction: To withhold authority to vote for any individual nominee(s), write
the name(s) or number(s) as listed above in the space provided below.
Exceptions: ______________________________
___________________________________________
2. Approval of the MetLife, FOR AGAINST ABSTAIN
Inc. 2005 Stock and
Incentive Compensation / / / / / /
Plan
3. Approval of the MetLife FOR AGAINST ABSTAIN
Annual Variable
Incentive Plan / / / / / /
4. Approval of the MetLife, FOR AGAINST ABSTAIN
Inc. 2005 Non-
Management Director / / / / / /
Stock Compensation Plan
5. Ratification of FOR AGAINST ABSTAIN
appointment of Deloitte
& Touche LLP as / / / / / /
Independent Auditor
for 2004
6. Shareholder proposal FOR AGAINST ABSTAIN
concerning CEO
compensation / / / / / /
Electronic Delivery:
You may consent to access MetLife, Inc.'s Annual Reports to Shareholders, Proxy
Statements, prospectuses, and other shareholder communications on-line at:
https://vault.melloninvestor.com/isd.
If you plan to attend the meeting, please mark this box. / /
If you wish to include any comments, please mark this box
and use reverse side. / /
To change your address, please mark this box and indicate
your new address on the reverse side of this card. / /
Signature of Shareholder(s)_____________________________________________________
Signature of Shareholder(s)_____________________________________________________
Dated:____________________
(When signing as attorney, executor, administrator, trustee, or in another
representative capacity, include signature and title.)
________________________________________________________________________________
- FOLD AND DETACH HERE BEFORE MAILING CARD -
VOTE BY INTERNET OR TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
Internet and telephone voting is available
through 11:59 p.m. Eastern Time on April 26, 2004
YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE NAMED
PROXIES TO VOTE YOUR SHARES IN THE SAME MANNER AS IF
YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.
INTERNET
HTTP://WWW.EPROXY.COM/MET
Use the Internet to vote.
Have your proxy card in
hand when you access the
web site.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone
telephone to vote. Have
your proxy card in hand
when you call.
OR
MAIL
Mark, sign and date your
proxy card and return it in
the enclosed postage-paid
envelope.
IF YOU VOTE BY INTERNET OR BY TELEPHONE, YOU DO NOT NEED TO MAIL BACK
YOUR PROXY CARD.
(METLIFE LOGO)
METLIFE, INC. VOTING INSTRUCTION FORM
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF METLIFE, INC.
FOR THE 2004 ANNUAL MEETING, APRIL 27, 2004
DIRECTIONS TO MELLON BANK, N.A., TRUSTEE OF THE SAVINGS AND INVESTMENT PLAN FOR
EMPLOYEES OF METLIFE AND PARTICIPATING AFFILIATES COMPANY STOCK FUND.
AS A PLAN PARTICIPANT, YOU HAVE THE RIGHT TO DIRECT THE PLAN TRUSTEE HOW TO VOTE
THE SHARES OF METLIFE, INC. COMMON STOCK THAT ARE ALLOCATED TO YOUR PLAN ACCOUNT
AND SHOWN ON THE REVERSE OF THIS VOTING INSTRUCTION FORM. THE PLAN TRUSTEE WILL
HOLD YOUR INSTRUCTIONS IN COMPLETE CONFIDENCE EXCEPT AS MAY BE NECESSARY TO MEET
LEGAL REQUIREMENTS.
YOU MAY INSTRUCT THE PLAN TRUSTEE HOW TO VOTE BY TELEPHONE, INTERNET OR BY
SIGNING AND RETURNING THIS VOTING INSTRUCTION FORM. A POSTAGE-PAID ENVELOPE IS
ENCLOSED.
THE PLAN TRUSTEE WILL VOTE YOUR PLAN SHARES IN ACCORDANCE WITH THE
SPECIFICATIONS INDICATED BY YOU ON THE REVERSE OF THIS VOTING INSTRUCTION FORM.
THE PLAN TRUSTEE MUST RECEIVE YOUR VOTING INSTRUCTIONS BY APRIL 23, 2004 AT 6:00
P.M. EASTERN TIME. IF THE PLAN TRUSTEE DOES NOT RECEIVE YOUR INSTRUCTIONS BY
THAT TIME, THE PLAN TRUSTEE WILL VOTE YOUR PLAN SHARES IN THE SAME PROPORTION AS
THE PLAN SHARES FOR WHICH IT HAS RECEIVED INSTRUCTIONS. IF YOU SIGN AND RETURN
THIS VOTING INSTRUCTION FORM AND NO SPECIFICATIONS ARE INDICATED, YOUR PLAN
SHARES WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS OF METLIFE, INC.
ON ANY MATTERS THAT MAY BE PRESENTED FOR A VOTE AT THE 2004 ANNUAL MEETING AND
ANY ADJOURNMENTS OR POSTPONEMENTS OTHER THAN THOSE DESCRIBED ON THE REVERSE OF
THIS VOTING INSTRUCTION FORM, YOUR PLAN SHARES WILL BE VOTED IN THE DISCRETION
OF THE PROXIES APPOINTED BY THE SHAREHOLDERS.
YOU WILL RECEIVE A SEPARATE SET OF PROXY SOLICITATION MATERIALS FOR ANY SHARES
OF COMMON STOCK YOU OWN OTHER THAN YOUR PLAN SHARES. YOUR NON-PLAN SHARES MUST
BE VOTED SEPARATELY FROM YOUR PLAN SHARES.
(CONTINUED, AND TO BE DATED AND SIGNED ON THE REVERSE SIDE.)
________________________________________________________________________________
- FOLD AND DETACH HERE -
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1, 2, 3, 4, AND 5, AND
"AGAINST" PROPOSAL 6.
Please mark
your votes as /X/
indicated in
this example
1. Election of Class II Directors
The Class II nominees for
election as Directors are: FOR WITHHOLD
(01) Curtis H. Barnette
(02) John C. Danforth / / / /
(03) Burton A. Dole, Jr.
(04) Harry P. Kamen
(05) Charles M. Leighton
Instruction: To withhold authority to vote for any individual nominee(s), write
the name(s) or number(s) as listed above in the space provided below.
Exceptions: ______________________________
___________________________________________
2. Approval of the MetLife, FOR AGAINST ABSTAIN
Inc. 2005 Stock and
Incentive Compensation / / / / / /
Plan
3. Approval of the MetLife FOR AGAINST ABSTAIN
Annual Variable
Incentive Plan / / / / / /
4. Approval of the MetLife, FOR AGAINST ABSTAIN
Inc. 2005 Non-
Management Director / / / / / /
Stock Compensation Plan
5. Ratification of FOR AGAINST ABSTAIN
appointment of Deloitte
& Touche LLP as / / / / / /
Independent Auditor
for 2004
6. Shareholder proposal FOR AGAINST ABSTAIN
concerning CEO
compensation / / / / / /
Signature of Shareholder(s)_____________________________________________________
Signature of Shareholder(s)_____________________________________________________
Dated:____________________
(When signing as attorney, executor, administrator, trustee, or in another
representative capacity, include signature and title.)
________________________________________________________________________________
- FOLD AND DETACH HERE BEFORE MAILING CARD -
VOTE BY INTERNET OR TELEPHONE
24 HOURS A DAY, 7 DAYS A WEEK
Internet and telephone voting is available
through 6:00 p.m. Eastern Time on April 23, 2004
YOUR INTERNET OR TELEPHONE VOTE AUTHORIZES THE PLAN
TRUSTEES TO VOTE YOUR SHARES IN THE SAME MANNER AS IF
YOU MARKED, SIGNED AND RETURNED YOUR VOTING INSTRUCTION FORM.
INTERNET
HTTP://WWW.EPROXY.COM/MET
Use the Internet to vote.
Have your voting instruction
form in hand when you access
the web site.
OR
TELEPHONE
1-800-435-6710
Use any touch-tone
telephone to vote. Have
your voting instruction
form in hand when you call.
OR
MAIL
Mark, sign and date your
voting instruction form
and return it in the
enclosed postage-paid
envelope.
IF YOU VOTE BY INTERNET OR BY TELEPHONE, YOU DO NOT NEED TO MAIL BACK
YOUR VOTING INSTRUCTION FORM.