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EX-31.1 - EX-31.1 - METLIFE POLICYHOLDER TRUST | y83540exv31w1.htm |
EX-31.2 - EX-31.2 - METLIFE POLICYHOLDER TRUST | y83540exv31w2.htm |
Table of Contents
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
Form 10-K
(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2009 | ||
OR
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Commission file number
000-30195
MetLife Policyholder
Trust
(Exact name of registrant as
specified in its charter)
Delaware
|
51-6516897 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
Rodney Square North 1100 North Market Street Wilmington, DE (Address of principal executive offices) |
19890 (Zip code) |
(302) 651-1000
(Registrants telephone
number, including area code)
Securities registered pursuant to section 12(b) of the
Act: None
Securities registered pursuant to section 12(g) of the
Act:
Beneficial interests in the MetLife Policyholder Trust
Beneficial interests in the MetLife Policyholder Trust
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or 15(d) of the
Act. Yes o No þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been
subject to such filing requirements for the past
90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes o No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
(§ 229.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K
or any amendment to this
Form 10-K. þ
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act (Check one):
Large accelerated
filer o
|
Accelerated filer o | |
Non-accelerated
filer þ
(Do not check if a smaller reporting company) |
Smaller reporting company o |
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
As of March 22, 2010, 230,505,515 Trust Interests were
outstanding. The Trust Interests are not transferable
except in limited circumstances and have no market value.
DOCUMENTS
INCORPORATED BY REFERENCE:
None.
None.
Table of
Contents
Table of Contents
Note
Regarding Forward-Looking Statements
This Annual Report on
Form 10-K,
including the Managements Discussion and Analysis of
Financial Condition and Results of Operations, may contain or
incorporate by reference information that includes or is based
upon forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
Forward-looking statements give expectations or forecasts of
future events. These statements can be identified by the fact
that they do not relate strictly to historical or current facts.
They use words such as anticipate,
estimate, expect, project,
intend, plan, believe and
other words and terms of similar meaning in connection with a
discussion of future operating or financial performance. In
particular, these include statements relating to future actions,
prospective services or products, future performance or results
of current and anticipated services or products, sales efforts,
expenses, the outcome of contingencies such as legal
proceedings, trends in operations and financial results. See
Managements Discussion and Analysis of Financial
Condition and Results of Operations.
Any or all forward-looking statements may turn out to be wrong.
They can be affected by inaccurate assumptions or by known or
unknown risks and uncertainties. Many such factors will be
important in determining the actual future results of the
MetLife Policyholder Trust (the Trust). These
statements are based on current expectations and the current
economic environment. They involve a number of risks and
uncertainties that are difficult to predict. These statements
are not guarantees of future performance. Actual results could
differ materially from those expressed or implied in the
forward-looking statements. Risks, uncertainties, and other
factors that might cause such differences include the risks,
uncertainties and other factors identified in the Trusts
and MetLife, Inc.s filings with the U.S. Securities
and Exchange Commission (SEC). These factors
include: (i) changes in state unclaimed property laws;
(ii) adverse results or other consequences from litigation,
arbitration or regulatory investigations; (iii) the effects
of business disruption or economic contraction due to terrorism,
other hostilities or natural catastrophes; and (iv) other
risks and uncertainties described from time to time in the
Trusts and MetLife, Inc.s filings with the SEC.
The Trust does not undertake any obligation to publicly correct
or update any forward-looking statement if the Trust later
becomes aware that such statement is not likely to be achieved.
Please consult any further disclosures the Trust or MetLife,
Inc. make on related subjects in reports to the SEC.
Note
Regarding Reliance on Statements in Our Contracts
In reviewing the agreements included as exhibits to this Annual
Report on
Form 10-K,
please remember that they are included to provide you with
information regarding their terms and are not intended to
provide any other factual or disclosure information about the
Trust or the other parties to the agreements. The agreements
contain representations and warranties by each of the parties to
the applicable agreement. These representations and warranties
have been made solely for the benefit of the other parties to
the applicable agreement and:
| should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; | |
| have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; | |
| may apply standards of materiality in a way that is different from what may be viewed as material to investors; and | |
| were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. |
Accordingly, these representations and warranties may not
describe the actual state of affairs as of the date they were
made or at any other time. Additional information about the
Trust may be found elsewhere in this Annual Report on
Form 10-K
and its other public filings, which are available without charge
through the SEC website at www.sec.gov.
2
Table of Contents
Part I
Item 1. | Business. |
The MetLife Policyholder Trust (the Trust) was
established under the Metropolitan Life Insurance Company
(Metropolitan Life) plan of reorganization (the
Plan) and pursuant to the MetLife Policyholder
Trust Agreement, dated as of November 3, 1999, by and
among Metropolitan Life, MetLife, Inc. (the Holding
Company), Wilmington Trust Company (not in its
individual capacity, but solely as trustee for the Trust, the
Trustee) and ChaseMellon Shareholder Services,
L.L.C., as custodian (now known as Mellon Investor Services LLC,
the Custodian), as amended on November 8, 2001
(the Trust Agreement), in connection with the
conversion of Metropolitan Life from a mutual life insurance
company to a stock life insurance company. The Trust is a
single-purpose trust that does not engage in any business or
activity other than voting and holding the Trust Shares (as
defined below) and certain closely related activities, such as
distributing cash dividends. The Trust has no employees. See
Financial Statements and Supplementary Data for
financial information about the Trust.
Under the Plan and the Trust Agreement, each
policyholders membership interest was extinguished and
certain eligible policyholders of Metropolitan Life (the
Trust Eligible Policyholders) received, in
exchange for that interest, a number of interests in the Trust
(Trust Interests) equal to the number of shares
of common stock of the Holding Company, par value $0.01 per
share (the Common Stock), allocated to them in
accordance with the Plan. The assets of the Trust consist
principally of the shares of Common Stock issued to the Trust
(the Trust Shares) for the benefit of the
Trust Eligible Policyholders and permitted transferees
(collectively, the Beneficiaries). The
Trust Shares are held in the name of the Trustee, on behalf
of the Trust, which has legal title over the Trust Shares.
The Beneficiaries do not have legal title to any part of the
assets of the Trust. The Trust Interests represent
undivided fractional interests in the Trust Shares and
other assets of the Trust beneficially owned by a
Trust Beneficiary through the Custodian. On April 7,
2000, the date of demutualization of Metropolitan Life, the
Holding Company distributed to the
Trust 494,466,664 shares of Common Stock for the
benefit of policyholders of Metropolitan Life. Withdrawals by
Beneficiaries of Trust Shares, transactions by
Beneficiaries under the Purchase and Sale Program (as defined
below), and escheatment of unclaimed Trust Shares resulted
in a decrease in the number of Trust Shares from
242,724,190 at December 31, 2008 to 233,157,716 at
December 31, 2009.
A Trust Interest entitles the Beneficiary to certain
rights, including the right to: (i) receive dividends
distributed upon Trust Shares; (ii) have
Trust Shares withdrawn from the Trust to be sold for cash
through a purchase and sale program established by the Holding
Company pursuant to the Plan (the Purchase and Sale
Program); (iii) deposit in the Trust additional
shares of Common Stock purchased through the Purchase and Sale
Program; (iv) withdraw Trust Shares; and
(v) instruct the Trustee to vote the Trust Shares on
certain matters, each as further described in and limited by the
terms of the Trust Agreement. The Trustee has no beneficial
interest in the Trust Shares.
As a general rule, Beneficiaries are prohibited from selling,
assigning, transferring, encumbering or granting any option or
any other interest in their Trust Interests; however,
Trust Interests may be transferred:
(i) from the estate of a deceased Beneficiary to one or
more beneficiaries taking by operation of law or pursuant to
testamentary succession;
(ii) to the spouse or issue of a Beneficiary or to an
entity selected by a Beneficiary, provided that transfers to
such entity are deductible for federal income, gift and estate
tax purposes under §§170, 2055 and 2522 of the
Internal Revenue Code of 1986, as amended, or to a trust
established for the exclusive benefit of one or more of the
following: (x) Beneficiaries, (y) individuals
described in this clause (ii), or (z) entities described in
this clause (ii);
(iii) to a trust established to hold Trust Interests
on behalf of an employee benefit plan;
(iv) if the Beneficiary is not a natural person, by
operation of law to the surviving entity upon the merger or
consolidation of such Beneficiary into another entity, to the
purchaser of substantially all the assets of such Beneficiary or
to the appropriate persons upon the dissolution, termination or
winding up of such Beneficiary;
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(v) by operation of law as a consequence of the bankruptcy
or insolvency of such Beneficiary or the granting of relief to
such Beneficiary under the Federal bankruptcy laws; or
(vi) from a trust holding an insurance policy or annuity
contract on behalf of the insured person under such policy or
contract, to those persons to whom Trust Interests are
required to be so transferred pursuant to the terms of such
trust.
In addition, if the Board of Directors of the Holding Company
determines, based on the advice of legal counsel, that there is,
at any time, a material risk that the assets of the Trust may be
characterized as plan assets under United States
Department of Labor Reg. §2510.3-101, as amended, the Board
may direct the Trustee to distribute to the Custodian, for
distribution to one or more Beneficiaries, a number of
Trust Shares (not to exceed the total number of such
Beneficiaries Trust Interests) as the Board may
determine to be necessary or appropriate to ensure that the
assets of the Trust will not be so characterized as plan
assets.
A transferee of Trust Interests will become subject to the
Trust Agreement. Trust Interests are held in the name
of the Custodian, which keeps a record of the
Trust Interests of the Beneficiaries on a book-entry system
maintained by the Custodian. The Trust Interests are not
represented by certificates or other evidences of ownership.
Beneficiaries may instruct the program agent for the Purchase
and Sale Program to withdraw their allocated shares from the
Trust for sale through the Purchase and Sale Program.
Beneficiaries holding a number of Trust Interests that is
less than 1,000 are also entitled to purchase in the Purchase
and Sale Program additional shares of Common Stock to be
deposited in the Trust and allocated to the Beneficiary, subject
to the limitation that, after such purchase, the Beneficiary
will hold no more than 1,000 Trust Interests, and further,
subject to a minimum of $250 per purchase (or such lesser amount
that would cause the Beneficiary to hold the 1,000 maximum
number of Trust Interests). The number of
Trust Interests allocated to Beneficiaries will be adjusted
for any shares of Common Stock purchased or sold in the Purchase
and Sale Program such that the Trust Interests held by a
Beneficiary will always equal the number of shares of Common
Stock allocated to the Beneficiary.
Beneficiaries may withdraw all, but generally, not less than
all, of their allocated shares of Common Stock at any time by
providing written notice to the Custodian.
The Trust Agreement provides the Trustee with directions as
to the manner in which to vote, assent or consent the
Trust Shares at all times during the term of the Trust. On
all matters brought for a vote before the stockholders of the
Holding Company, with the exception of a Beneficiary Consent
Matter (as defined below), the Trustee will vote or abstain from
voting in accordance with the recommendation given by the Board
of Directors of the Holding Company to its stockholders or, if
no such recommendation is given, as directed by the Board. On
all Beneficiary Consent Matters, the Trustee will vote all of
the Trust Shares in favor of, in opposition to or abstain
from the matter in the same ratio as the Trust Interests of
the Beneficiaries that returned voting instructions to the
Trustee indicated preferences for voting in favor of, in
opposition to or abstaining from such matter. The
Trust Agreement also contains provisions allowing
Beneficiaries to instruct the Custodian to withdraw their
allocated Trust Shares to participate in any tender or
exchange offer for the Common Stock and to make any cash or
share election, or perfect any dissenters rights, in
connection with a merger of the Holding Company.
A Beneficiary Consent Matter is a matter presented
to stockholders of the Holding Company concerning the following:
(i) subject to certain conditions, a contested election of
directors or the removal of a director,
(ii) a merger or consolidation, a sale, lease or exchange
of all or substantially all of the property or assets or a
recapitalization or dissolution of the Holding Company, if it
requires a vote of stockholders under applicable Delaware law,
(iii) any transaction that would result in an exchange or
conversion of Trust Shares for cash, securities or other
property, and
(iv) proposals submitted to stockholders requiring the
Board of Directors to amend the Holding Companys
Stockholder Rights Plan, or redeem rights under that plan, other
than a proposal with respect
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to which the Holding Company has received advice of
nationally-recognized legal counsel to the effect that the
proposal is not a proper subject for stockholder action under
Delaware law.
Proxy solicitation materials, annual reports and information
statements received by the Custodian in connection with any
matter not involving a Beneficiary Consent Matter will be made
available by the Holding Company to Beneficiaries for their
information on a website maintained by the Holding Company or by
mail upon request and at the Holding Companys expense, but
voting instructions to the Trustee will not be solicited and, if
instructions are received, they will not be binding on the
Trustee.
The Trust Agreement provides that regular cash dividends,
if any, collected or received by the Trustee with respect to the
Trust Shares will be distributed by the Custodian
semi-annually to the Beneficiaries within 90 days after
receipt by the Trustee. Distribution of all other cash dividends
will be made by the Custodian to the Beneficiaries on the first
business day following the 30th day after the Trust
receives the dividends. Alternatively, the Trustee may arrange
with the Holding Company for the direct payment by the Holding
Company of such cash dividends to the Beneficiaries.
Historically, the Holding Company has used the latter method.
The Trust Agreement further provides that pending such
distribution, cash dividends (unless distributed directly by the
Holding Company to Beneficiaries) shall be invested by the
Trustee in short-term obligations of or guaranteed by the United
States, or any agency or instrumentality thereof, and in
certificates of deposit of any bank or trust company having a
combined capital and surplus not less than $500,000,000.
Dividends or other distributions in Common Stock will be
allocated to the Beneficiaries in proportion to their
Trust Interests and held by the Trustee as
Trust Shares. Generally, all other distributions by the
Holding Company to its stockholders will be held and distributed
by the Trustee to the Beneficiaries in proportion to their
Trust Interests.
The Trust will terminate on the 90th day after the date on
which the Trustee will have received notice from the Holding
Company that the number of Trust Shares held by the Trust
is equal to 10% or less of the number of issued and outstanding
shares of Common Stock or on the date on which the last
Trust Share will have been withdrawn, distributed or
exchanged. The Trust may be terminated earlier:
(i) on the 90th day after the date on which the
Trustee receives written notice from the Holding Company, given
in the Holding Companys discretion at any time, that the
number of Trust Shares is 25% or less of the number of
issued and outstanding shares of Common Stock,
(ii) on the date on which the Trustee receives written
notice from the Holding Company that the Board of Directors of
the Holding Company has determined, as a result of any amendment
of, or change (including any announced prospective change) in
the laws (or any regulations thereunder) of the United States or
any State, Commonwealth or other political subdivision or
authority thereof or therein, or any official administrative
pronouncement or judicial decision interpreting or applying such
law or regulation, or any changes in the facts or circumstances
relating to the Trust, that maintaining the Trust is or is
reasonably expected to become burdensome to the Holding Company
or the Beneficiaries,
(iii) on the date on which any rights issued under a
stockholder rights plan adopted by the Holding Company and held
by the Trust become separately tradable from the
Trust Shares to which they relate, or
(iv) on the date on which there is an entry of a final
order for termination or dissolution of the Trust or similar
relief by a court of competent jurisdiction.
The Trust Agreement also contains a provision which would
cause termination under certain circumstances in order to comply
with legal rules governing the duration of trusts. As of
March 22, 2010, the Trust Shares constituted 28.1% of
the issued and outstanding shares of Common Stock.
Upon termination of the Trust, the remaining Trust Shares
will be distributed in book entry form to each Beneficiary, or
as otherwise directed by such Beneficiary, together with the
Beneficiarys proportionate share of all unpaid
distributions and dividends and interest earned thereon, if
applicable. The Trust Agreement provides that the Holding
Company may, in its discretion, offer to purchase such shares at
the market price of the Common Stock at the time of the purchase.
The Trust Agreement may be amended from time to time by the
Trustee, the Custodian, the Holding Company and Metropolitan
Life, without the consent of any Beneficiary, (i) to cure
any ambiguity, correct or supplement any
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provision therein that may be inconsistent with any other
provision therein, or to make any other provision with respect
to matters or questions arising under the Trust Agreement,
which will not be inconsistent with the other provisions of the
Trust Agreement, provided that the action does not
adversely affect the Trust Interests of the Beneficiaries,
(ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as will be necessary to
ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times or
to ensure that the Trust will not be required to register as an
investment company under the Investment Company Act of 1940, as
amended, or (iii) to reflect the effect of a merger or
consolidation in which the Holding Company is not the surviving
corporation and the other company into which the Holding Company
is merged or consolidated assumes its obligations under the
Trust Agreement. The Trust Agreement may also be
amended or provisions thereof waived with the consent of
Beneficiaries representing more than one-half of the
Trust Interests, provided that no such amendment or waiver
will, without the consent of each Beneficiary affected thereby,
reduce the Trust Interests or otherwise eliminate or
materially postpone the right of any Beneficiary to receive
dividends or other distributions or to make elections under the
Purchase and Sale Program or to withdraw Trust Shares.
Beneficiaries will not have any preemptive rights with respect
to the Trust Interests. There is no provision for any
sinking fund with respect to the Trust Interests.
The Holding Company pays the Trustee an annual fee of $50,000.
In addition, the Holding Company will reimburse the Trustee for
all reasonable out-of-pocket expenses it incurs in the
performance of its duties under the Trust Agreement.
However, the Holding Company is not required to reimburse the
Trust or Trustee for the expense of mailing to the Custodian any
proxy and other materials received by the Trustee from persons
other than the Holding Company, including mailings with respect
to any Beneficiary Consent Matter. The Holding Company paid to
the Trustee $29,385, $71,539 and $15,938 for out-of-pocket
expenses for the years ended December 31, 2009, 2008 and
2007, respectively.
On December 14, 2009, the Holding Company paid an annual
dividend of $0.74 per share of its Common Stock to stockholders
of record as of November 9, 2009 for a total of
$173 million to the Beneficiaries. On December 15,
2008, the Holding Company paid an annual dividend of $0.74 per
share of its Common Stock to stockholders of record as of
November 10, 2008 for a total of $180 million to the
Beneficiaries.
On March 7, 2010, the Holding Company filed a
Form 8-K
with the SEC announcing that the Holding Company entered into a
Stock Purchase Agreement with ALICO Holdings LLC, a Delaware
limited liability company (the Seller), and American
International Group, Inc., a Delaware corporation
(AIG), pursuant to which the Holding Company agreed
to acquire from the Seller all of the issued and outstanding
capital stock of American Life Insurance Company, a stock life
insurance company domiciled in the State of Delaware, and to
acquire from AIG all of the issued and outstanding capital stock
of Delaware American Life Insurance Company, a stock life
insurance company domiciled in the State of Delaware (the
Transaction). The Transaction, which is expected to
close in late 2010, is subject to certain governmental approvals
and determinations from the relevant authorities. It is
anticipated that after the closing of the Transaction, including
the anticipated financing of the cash portion of the purchase
price, the Trust Shares will constitute less than 25% of
the issued and outstanding shares of Common Stock and, as a
result, the Trust will be eligible to be terminated in the
Holding Companys discretion. The Holding Company has
advised the Trustee that it currently has no intention of
terminating the Trust. Further information relating to the
Transaction is available in the
Form 8-K
of the Holding Company and additional filings of the Holding
Company with the SEC.
The Beneficiaries of the Trust are directed to the Holding
Companys Annual Report to Shareholders and the filings of
the Holding Company under the Securities Exchange Act of 1934
(the Exchange Act) for information regarding the
Holding Company. See Metropolitan Life Insurance Company (1999
SEC No-Act. LEXIS 914) (Avail. Nov. 23, 1999). The Trustee
does not control the operations or activities of the Holding
Company. The Trustee relies on receiving information, reports
and representations from the Holding Company and the Custodian
in the ordinary course of its business. In executing and
submitting this report on behalf of the Trust, the Trustee has
relied upon the accuracy of such reports and representations of
the aforementioned entities.
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Item 1A. | Risk Factors. |
The
Trust has limited resources and is dependent upon the Holding
Company.
The Trust was established under the Plan and pursuant to the
Trust Agreement in connection with the conversion of
Metropolitan Life from a mutual life insurance company into a
stock life insurance company. The Trust is a single-purpose
trust that does not engage in any business or activity other
than voting and holding the Trust Shares and certain
closely related activities, such as distributing cash dividends.
The assets of the Trust consist principally of the
Trust Shares. Beneficiaries of the Trust are directed to
the Holding Companys Risk Factors set forth in
Item 1A of its Annual Report on
Form 10-K
for the year ended December 31, 2009 and the other Exchange
Act filings of the Holding Company for information regarding
certain risks related to the Holding Company that may affect the
value of the Trust Shares.
Beneficiaries
do not have legal title to any part of the Trust assets and have
only certain limited rights.
The Trust has legal title over the Trust Shares. The
Trust Interests represent undivided fractional interests in
the Trust Shares and other assets of the Trust beneficially
owned by a Trust Beneficiary through the Custodian. A
Trust Interest entitles the Beneficiary only to certain
rights, including the right to: (i) receive dividends
distributed upon Trust Shares; (ii) have
Trust Shares withdrawn from the Trust to be sold for cash
through the Purchase and Sale Program; (iii) deposit in the
Trust additional shares of Common Stock purchased through the
Purchase and Sale Program; (iv) withdraw Trust Shares;
and (v) instruct the Trustee to vote the Trust Shares
on certain matters, each as further described in and limited by
the terms of the Trust Agreement. On all matters brought
for a vote before the stockholders of the Holding Company, with
the exception of a Beneficiary Consent Matter, the Trustee will
vote all of the Trust Shares in favor of, in opposition to
or abstain from the matter in the same ratio as the
Trust Interests of the Beneficiaries that returned voting
instructions to the Trustee indicated preferences for voting in
favor of, in opposition to or abstaining from such matter.
Voting instructions to the Trustee on any matter not involving a
Beneficiary Consent Matter will not be solicited and, if
instructions are received, they will not be binding on the
Trustee. It is anticipated that any vote of the stockholders of
the Holding Company in connection with the issuance of shares of
Holding Company common stock upon conversion of the preferred
shares to be issued to the Seller in the proposed Transaction
will not involve a Beneficiary Consent Matter and, therefore,
the Trustee will vote or abstain from voting the
Trust Shares with respect to the Transaction in accordance
with the recommendations given by the Board of Directors of the
Holding Company to its stockholders.
There
is no existing trading market for the Trust Interests and
Beneficiaries may transfer their Trust Interests only in
limited circumstances.
There is no existing trading market for the Trust Interests
and the Trust Interests have no market value. Furthermore,
Trust Interests may generally be transferred only in the
following situations: (i) from the estate of a deceased
Beneficiary to one or more beneficiaries taking by operation of
law or pursuant to testamentary succession; (ii) to the
spouse or issue of a Beneficiary or to an entity selected by a
Beneficiary, provided that transfers to such entity are
deductible for federal income, gift and estate tax purposes
under §§170, 2055 and 2522 of the Internal Revenue
Code of 1986, as amended, or to a trust established for the
exclusive benefit of one or more of the following:
(x) Beneficiaries, (y) individuals described in this
clause (ii), or (z) entities described in this clause (ii);
(iii) to a trust established to hold Trust Interests
on behalf of an employee benefit plan; (iv) if the
Beneficiary is not a natural person, by operation of law to the
surviving entity upon the merger or consolidation of such
Beneficiary into another entity, to the purchaser of
substantially all the assets of such Beneficiary or to the
appropriate persons upon the dissolution, termination or winding
up of such Beneficiary; (v) by operation of law as a
consequence of the bankruptcy or insolvency of such Beneficiary
or the granting of relief to such Beneficiary under the Federal
bankruptcy laws; or (vi) from a trust holding an insurance
policy or annuity contract on behalf of
7
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the insured person under such policy or contract, to those
persons to whom Trust Interests are required to be so
transferred pursuant to the terms of such trust.
A
representative may be appointed for certain Beneficiaries in
legal proceedings.
In any lawsuit or other legal proceeding involving the
Trust Interests, a representative may be appointed to
represent Beneficiaries who do not have the legal capacity to
represent themselves or whose addresses are unknown. The outcome
of the lawsuit or other legal proceeding will be binding on
Beneficiaries for whom the representative was appointed in the
lawsuit or other proceeding.
Item 1B. | Unresolved Staff Comments. |
Not applicable.
Item 2. | Properties. |
The Trust does not, as of the date of this filing, hold in fee,
own, beneficially hold or lease any physical properties.
Item 3. | Legal Proceedings. |
None.
Item 4. | (Removed and Reserved). |
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Part II
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
No public market exists for the Trust Interests.
Item 6. | Selected Financial Data. |
The following table sets forth selected financial information
for the Trust. The financial information for the years ended
December 31, 2009, 2008 and 2007 and at December 31,
2009 and 2008, has been derived from the Trusts audited
financial statements included elsewhere herein. The financial
information for the years ended December 31, 2006 and 2005
and at December 31, 2007, 2006 and 2005 has been derived
from the Trusts audited financial statements not included
herein. The following statements of changes in net assets and
balance sheet data have been prepared in conformity with
accounting principles generally accepted in the United States of
America. The following information should be read in conjunction
with and is qualified entirely by the information contained in
Managements Discussion and Analysis of Financial
Condition and Results of Operations, and the financial
statements appearing elsewhere herein.
For the Years Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Changes in Net Assets Data
|
||||||||||||||||||||
Operations:
|
||||||||||||||||||||
Net investment income
|
$ | 173,466 | $ | 180,305 | $ | 194,176 | $ | 164,414 | $ | 156,880 | ||||||||||
Net realized investment gains
|
90,989 | 394,316 | 516,837 | 432,372 | 335,984 | |||||||||||||||
Change in net unrealized investment gains
|
(84,321 | ) | (7,348,282 | ) | (52,050 | ) | 2,007,740 | 1,939,573 | ||||||||||||
Net increase (decrease) in net assets resulting from
operations
|
180,134 | (6,773,661 | ) | 658,963 | 2,604,526 | 2,432,437 | ||||||||||||||
Distributions to holders of Trust Interests
|
||||||||||||||||||||
From net investment income
|
(173,466 | ) | (180,305 | ) | (194,176 | ) | (164,414 | ) | (156,880 | ) | ||||||||||
From net realized investment gains
|
(90,989 | ) | (394,316 | ) | (516,837 | ) | (432,372 | ) | (335,984 | ) | ||||||||||
Total distributions
|
(264,455 | ) | (574,621 | ) | (711,013 | ) | (596,786 | ) | (492,864 | ) | ||||||||||
Trust Interest transactions
|
||||||||||||||||||||
Cost of Trust Interests issued
|
3,040 | 5,239 | 6,491 | 5,474 | 7,631 | |||||||||||||||
Cost of Trust Interests redeemed
|
(74,055 | ) | (143,413 | ) | (147,310 | ) | (160,930 | ) | (159,422 | ) | ||||||||||
Cost of Trust Interests withdrawn
|
(63,904 | ) | (113,765 | ) | (85,675 | ) | (152,229 | ) | (164,170 | ) | ||||||||||
Net decrease in net assets resulting from Trust Interest
transactions
|
(134,919 | ) | (251,939 | ) | (226,494 | ) | (307,685 | ) | (315,961 | ) | ||||||||||
Total increase (decrease) in net assets
|
(219,240 | ) | (7,600,221 | ) | (278,544 | ) | 1,700,055 | 1,623,612 | ||||||||||||
Net assets
|
||||||||||||||||||||
Beginning of year
|
8,461,365 | 16,061,586 | 16,340,130 | 14,640,075 | 13,016,463 | |||||||||||||||
End of year
|
$ | 8,242,125 | $ | 8,461,365 | $ | 16,061,586 | $ | 16,340,130 | $ | 14,640,075 | ||||||||||
9
Table of Contents
At December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(In thousands, except Trust Interest amounts) | ||||||||||||||||||||
Balance Sheet Data
|
||||||||||||||||||||
Assets:
|
||||||||||||||||||||
Equity securities, at fair value
|
$ | 8,242,125 | $ | 8,461,365 | $ | 16,061,586 | $ | 16,340,130 | $ | 14,640,075 | ||||||||||
Other assets
|
107,073 | 113,766 | 7,129 | 10,067 | 8,504 | |||||||||||||||
Total assets
|
8,349,198 | 8,575,131 | 16,068,715 | 16,350,197 | 14,648,579 | |||||||||||||||
Total liabilities
|
107,073 | 113,766 | 7,129 | 10,067 | 8,504 | |||||||||||||||
Net assets
|
$ | 8,242,125 | $ | 8,461,365 | $ | 16,061,586 | $ | 16,340,130 | $ | 14,640,075 | ||||||||||
Net assets consist of:
|
||||||||||||||||||||
Trust Interests
|
$ | 3,371,975 | $ | 3,506,893 | $ | 3,758,832 | $ | 3,985,326 | $ | 4,293,011 | ||||||||||
Net unrealized investment gains
|
4,870,151 | 4,954,472 | 12,302,754 | 12,354,804 | 10,347,064 | |||||||||||||||
Net assets, for 233,157,716; 242,724,190; 260,655,407;
276,904,422; and 298,777,053 Trust Interests outstanding,
respectively
|
$ | 8,242,125 | $ | 8,461,365 | $ | 16,061,586 | $ | 16,340,130 | $ | 14,640,075 | ||||||||||
Other Data
|
||||||||||||||||||||
Trust Interest rollforward:
|
||||||||||||||||||||
Trust Interests, January 1
|
242,724,190 | 260,655,407 | 276,904,422 | 298,777,053 | 321,314,794 | |||||||||||||||
Trust Interests issued
|
114,850 | 116,363 | 100,817 | 103,485 | 170,425 | |||||||||||||||
Trust Interests redeemed
|
(5,196,811 | ) | (10,064,054 | ) | (10,337,547 | ) | (11,293,360 | ) | (11,187,498 | ) | ||||||||||
Trust Interests withdrawn
|
(4,484,513 | ) | (7,983,526 | ) | (6,012,285 | ) | (10,682,756 | ) | (11,520,668 | ) | ||||||||||
Balance, December 31
|
233,157,716 | 242,724,190 | 260,655,407 | 276,904,422 | 298,777,053 | |||||||||||||||
10
Table of Contents
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations. |
For purposes of this discussion, Trust refers to the
MetLife Policyholder Trust. Following this summary is a
discussion addressing the results of operations and financial
condition of the Trust for the periods indicated. This
discussion should be read in conjunction with Note
Regarding Forward-Looking Statements, Risk
Factors, Selected Financial Data and the
Trusts financial statements included elsewhere herein.
This Managements Discussion and Analysis of Financial
Condition and Results of Operations may contain or incorporate
by reference information that includes or is based upon
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements give expectations or forecasts of future events.
These statements can be identified by the fact that they do not
relate strictly to historical or current facts. They use words
such as anticipate, estimate,
expect, project, intend,
plan, believe and other words and terms
of similar meaning in connection with a discussion of future
operating or financial performance. In particular, these include
statements relating to future actions, expenses, the outcome of
contingencies such as legal proceedings, trends in operations
and financial results. Any or all forward-looking statements may
turn out to be wrong. Actual results could differ materially
from those expressed or implied in the forward-looking
statements. See Note Regarding Forward-Looking
Statements.
Executive
Summary
The Trust was established under the Metropolitan Life Insurance
Company (Metropolitan Life) plan of reorganization
(the Plan) and pursuant to the MetLife Policyholder
Trust Agreement, dated as of November 3, 1999, by and
among Metropolitan Life, MetLife, Inc. (the Holding
Company), Wilmington Trust Company (not in its
individual capacity, but solely as trustee for the Trust, the
Trustee) and ChaseMellon Shareholder Services,
L.L.C., as custodian (now known as Mellon Investor Services LLC,
the Custodian), as amended on November 8, 2001
(the Trust Agreement), in connection with the
conversion of Metropolitan Life from a mutual life insurance
company to a stock life insurance company. The Trust is a
single-purpose trust that does not engage in any business or
activity other than voting and holding the shares of common
stock of MetLife, Inc. issued to the Trust for the benefit of
certain eligible policyholders of Metropolitan Life under the
Plan and the Trust Agreement (the
Trust Shares) and certain closely related
activities, such as distributing cash dividends.
Under the Plan and the Trust Agreement, each
policyholders membership interest was extinguished and
certain eligible policyholders of Metropolitan Life (the
Trust Eligible Policyholders) received, in
exchange for that interest, a number of interests in the Trust
(Trust Interests) equal to the number of shares
of common stock of the Holding Company, par value $0.01 per
share (the Common Stock), allocated to them in
accordance with the Plan. The assets of the Trust consist
principally of the Trust Shares for the benefit of the
Trust Eligible Policyholders and permitted transferees
(collectively, the Beneficiaries).
The number of Trust Interests outstanding at
December 31, 2009 and 2008 was 233,157,716 and 242,724,190,
respectively. The decrease of 9,566,474 in the number of
Trust Interests is primarily attributable to
net Trust Interests redeemed and Trust Interests
withdrawn. Net assets of the Trust consist solely of
Trust Shares and will increase or decrease depending upon,
among other things, the movement of Trust Shares into or
out of the Trust as directed by the Beneficiaries.
Results
of Operations
Discussion
of Results
Year
ended December 31, 2009 compared with the year ended
December 31, 2008
Net assets in the Trust decreased $219 million, or 3%, to
$8,242 million for the year ended December 31, 2009
from $8,461 million for the comparable 2008 period. This
decrease is primarily due to the impact of withdrawals by
Beneficiaries from the Trust, together with (i) a change in
net unrealized investment gains on the Trust Shares, and
(ii) activity under the MetLife, Inc. Purchase and Sale
Program (the Purchase and Sale Program). Net
unrealized investment gains, which represent the difference
between the fair value and the cost basis of the
Trust Shares, decreased $84 million from the prior
year. A net reduction of 9,566,474 Trust Interests resulted
from a decrease of 4,484,513 Trust Interests due to
withdrawals by Beneficiaries from the Trust, and a net decrease
of 5,081,961
11
Table of Contents
Trust Interests in connection with issuances and
redemptions under the Purchase and Sale Program. The
Trust Interests withdrawn primarily reflects the
escheatment of unclaimed cash and shares of Common Stock. As
part of Metropolitan Lifes demutualization and the Holding
Companys initial public offering, the Holding Company
issued shares of its Common Stock to certain eligible
policyholders of Metropolitan Life. Any unclaimed cash and
Common Stock become property of the state of last known
residence, as is the case with other types of unclaimed
property. The schedule by which unclaimed property is escheated
varies by state, but is generally within three to five years of
abandonment. It is anticipated that the number of
Trust Interests will continue to decrease over time as
state dormancy periods expire. Beginning on April 7, 2001,
Beneficiaries were able to withdraw all, but generally, not less
than all, of their allocated shares of Common Stock in the Trust
at any time by providing written notice to the Custodian. Net
redemptions by Beneficiaries through the Purchase and Sale
Program, and withdrawals by Beneficiaries from the Trust
resulted in a $71 million and $64 million decrease in
net assets, respectively, for the year ended December 31,
2009. Net investment income of $173 million, which consists
of dividends received from the Holding Company on its Common
Stock, and net realized investment gains recognized on the sale
of Trust Shares sold in the Purchase and Sale Program of
$91 million, were fully distributed to Beneficiaries.
Year
ended December 31, 2008 compared with the year ended
December 31, 2007
Net assets in the Trust decreased $7,601 million, or 47%,
to $8,461 million for the year ended December 31, 2008
from $16,062 million for the comparable 2007 period. This
decrease is primarily due to a change in net unrealized
investment gains on the Trust Shares, partially offset by
(i) the impact of withdrawals by Beneficiaries from the
Trust, (ii) activity under the Purchase and Sale Program,
and (iii) the impact of tenders by Beneficiaries of
Trust Shares pursuant to the Holding Companys
split-off of its majority-owned subsidiary, Reinsurance Group of
America, Incorporated (RGA), in September 2008. Net
unrealized investment gains, which represent the difference
between the fair value and the cost basis of the
Trust Shares, decreased $7,348 million from the prior
year. A net reduction of 17,931,217 Trust Interests
resulted from a decrease of 7,983,526 Trust Interests due
to withdrawals by Beneficiaries from the Trust, a net decrease
of 9,947,691 Trust Interests in connection with issuances
and redemptions under the Purchase and Sale Program and a net
decrease of 1,781,272 Trust Interests in connection with
tenders by Beneficiaries of Trust Shares pursuant to the
Holding Companys split-off of RGA. The
Trust Interests withdrawn primarily reflects the
escheatment of unclaimed cash and shares of Common Stock. As
part of Metropolitan Lifes demutualization and the Holding
Companys initial public offering, the Holding Company
issued shares of its Common Stock to certain eligible
policyholders of Metropolitan Life. Any unclaimed cash and
Common Stock become property of the state of last known
residence, as is the case with other types of unclaimed
property. The schedule by which unclaimed property is escheated
varies by state, but is generally within three to five years of
abandonment. It is anticipated that the number of
Trust Interests will continue to decrease over time as
state dormancy periods expire. Beginning on April 7, 2001,
Beneficiaries were able to withdraw all, but generally, not less
than all, of their allocated shares of Common Stock in the Trust
at any time by providing written notice to the Custodian. Net
redemptions by Beneficiaries through the Purchase and Sale
Program, withdrawals by Beneficiaries from the Trust and tenders
by Beneficiaries of Trust Shares pursuant to the Holding
Companys split-off of RGA resulted in a $138 million,
$114 million and $25 million decrease in net assets,
respectively, for the year ended December 31, 2008. Net
investment income of $180 million, which consists of
dividends received from the Holding Company on its Common Stock,
and net realized investment gains recognized on the sale of
Trust Shares sold in the Purchase and Sale Program of
$394 million, were fully distributed to Beneficiaries.
Item 7A. | Quantitative and Qualitative Disclosures About Market Risk. |
The Trusts investments in Holding Company securities
expose it to changes in equity prices. The liabilities of the
Trust are equal to the market value of the equity investments.
Therefore, the Trust has negligible market risk and no further
risk management is required.
12
Item 8. | Financial Statements and Supplementary Data. |
Index To
Financial Statements
Page | ||||
F-1 | ||||
Financial Statements at December 31, 2009 and 2008 and for
the years ended December 31, 2009, 2008 and 2007:
|
||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 |
13
Table of Contents
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
MetLife
Policyholder Trust:
We have audited the accompanying statements of assets and
liabilities of the MetLife Policyholder Trust (the
Trust) as of December 31, 2009 and 2008, and
the related statements of operations and changes in net assets
for each of the three years in the period ended
December 31, 2009. These financial statements are the
responsibility of the Trusts management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Trust is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Trusts internal control over
financial reporting. Accordingly, we express no such opinion. An
audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of the MetLife
Policyholder Trust as of December 31, 2009 and 2008, and
the results of its operations and changes in its net assets for
each of the three years in the period ended December 31,
2009, in conformity with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
March 26, 2010
F-1
Table of Contents
MetLife
Policyholder Trust
Statements of Assets and Liabilities
December 31, 2009 and 2008
(In thousands, except Trust Interest and per Trust Interest amounts)
Statements of Assets and Liabilities
December 31, 2009 and 2008
(In thousands, except Trust Interest and per Trust Interest amounts)
2009 | 2008 | |||||||
Assets
|
||||||||
Equity securities, at fair value (cost, $3,371,975 and
$3,506,893, respectively)
|
$ | 8,242,125 | $ | 8,461,365 | ||||
Cash and cash equivalents
|
80 | 40 | ||||||
Receivable for investments sold
|
4,106 | 2,866 | ||||||
Receivable from MetLife, Inc.
|
102,887 | 110,860 | ||||||
Total assets
|
8,349,198 | 8,575,131 | ||||||
Liabilities
|
||||||||
Payable for investments purchased
|
80 | 40 | ||||||
Payable for Trust Interests redeemed
|
4,106 | 2,866 | ||||||
Dividends Payable to Trust Beneficiaries
|
102,887 | 110,860 | ||||||
Total liabilities
|
107,073 | 113,766 | ||||||
Net assets
|
$ | 8,242,125 | $ | 8,461,365 | ||||
Net assets consist of:
|
||||||||
Trust Interests
|
$ | 3,371,975 | $ | 3,506,893 | ||||
Net unrealized investment gains
|
4,870,151 | 4,954,472 | ||||||
Net assets, for 233,157,716 and 242,724,190 Trust
Interests outstanding, respectively
|
$ | 8,242,125 | $ | 8,461,365 | ||||
Net asset value, offering price and redemption price per
Trust Interest (8,242,125/233,157,716) and
(8,461,365/242,724,190) Trust Interests, respectively
|
$ | 35.35 | $ | 34.86 | ||||
See accompanying notes to financial statements.
F-2
Table of Contents
MetLife
Policyholder Trust
Statements of Operations
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
Statements of Operations
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands)
2009 | 2008 | 2007 | ||||||||||
Net investment income
|
$ | 173,466 | $ | 180,305 | $ | 194,176 | ||||||
Net investment gains (losses)
|
||||||||||||
Net realized investment gains
|
90,989 | 394,316 | 516,837 | |||||||||
Change in net unrealized investment (losses) gains
|
(84,321 | ) | (7,348,282 | ) | (52,050 | ) | ||||||
Net gains (losses)
|
6,668 | (6,953,966 | ) | 464,787 | ||||||||
Net increase (decrease) in net assets resulting from
operations
|
$ | 180,134 | $ | (6,773,661 | ) | $ | 658,963 | |||||
See accompanying notes to financial statements.
F-3
Table of Contents
MetLife
Policyholder Trust
Statement of Changes in Net Assets
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands, except Trust Interest amounts)
Statement of Changes in Net Assets
For the Years Ended December 31, 2009, 2008 and 2007
(In thousands, except Trust Interest amounts)
2009 | 2008 | 2007 | ||||||||||
Operations
|
||||||||||||
Net investment income
|
$ | 173,466 | $ | 180,305 | $ | 194,176 | ||||||
Net realized investment gains
|
90,989 | 394,316 | 516,837 | |||||||||
Change in net unrealized investment gains (losses)
|
(84,321 | ) | (7,348,282 | ) | (52,050 | ) | ||||||
Net increase (decrease) in net assets resulting from
operations
|
180,134 | (6,773,661 | ) | 658,963 | ||||||||
Distributions to holders of Trust Interests
|
||||||||||||
From net investment income
|
(173,466 | ) | (180,305 | ) | (194,176 | ) | ||||||
From net realized investment gains
|
(90,989 | ) | (394,316 | ) | (516,837 | ) | ||||||
Total distributions
|
(264,455 | ) | (574,621 | ) | (711,013 | ) | ||||||
Trust Interest transactions
|
||||||||||||
Cost of Trust Interests issued
|
3,040 | 5,239 | 6,491 | |||||||||
Cost of Trust Interests redeemed
|
(74,055 | ) | (143,413 | ) | (147,310 | ) | ||||||
Cost of Trust Interests withdrawn
|
(63,904 | ) | (113,765 | ) | (85,675 | ) | ||||||
Net decrease in net assets resulting from Trust Interest
transactions
|
(134,919 | ) | (251,939 | ) | (226,494 | ) | ||||||
Total decrease in net assets
|
(219,240 | ) | (7,600,221 | ) | (278,544 | ) | ||||||
Net assets
|
||||||||||||
Beginning of year
|
8,461,365 | 16,061,586 | 16,340,130 | |||||||||
End of year
|
$ | 8,242,125 | $ | 8,461,365 | $ | 16,061,586 | ||||||
Other information
|
||||||||||||
Trust Interest rollforward:
|
||||||||||||
Trust Interests, January 1
|
242,724,190 | 260,655,407 | 276,904,422 | |||||||||
Trust Interests issued
|
114,850 | 116,363 | 100,817 | |||||||||
Trust Interests redeemed
|
(5,196,811 | ) | (10,064,054 | ) | (10,337,547 | ) | ||||||
Trust Interests withdrawn
|
(4,484,513 | ) | (7,983,526 | ) | (6,012,285 | ) | ||||||
Balance, December 31
|
233,157,716 | 242,724,190 | 260,655,407 | |||||||||
See accompanying notes to financial statements.
F-4
Table of Contents
MetLife
Policyholder Trust
Notes to
Financial Statements
(In thousands unless otherwise stated)
1. | Significant Accounting Policies |
Description
of Trust
The MetLife Policyholder Trust (the Trust) was
established under the Metropolitan Life Insurance Company
(Metropolitan Life) plan of reorganization (the
Plan) and pursuant to the MetLife Policyholder
Trust Agreement, dated as of November 3, 1999, by and
among Metropolitan Life, MetLife, Inc. (the Holding
Company), Wilmington Trust Company (not in its
individual capacity, but solely as trustee for the Trust, the
Trustee) and ChaseMellon Shareholder Services,
L.L.C., as custodian (now known as Mellon Investor Services LLC,
the Custodian), as amended on November 8, 2001
(the Trust Agreement), in connection with the
conversion of Metropolitan Life from a mutual life insurance
company to a stock life insurance company. The Trust is a
single-purpose trust that does not engage in any business or
activity other than voting and holding the Trust Shares (as
defined below) and certain closely related activities, such as
distributing cash dividends. The Trust has no employees.
Under the Plan and the Trust Agreement, each
policyholders membership interest was extinguished and
certain eligible policyholders of Metropolitan Life (the
Trust Eligible Policyholders) received, in
exchange for that interest, a number of interests in the Trust
(Trust Interests) equal to the number of shares
of common stock of the Holding Company, par value $0.01 per
share (the Common Stock), allocated to them in
accordance with the Plan. The assets of the Trust consist
principally of the shares of Common Stock issued to the Trust
(the Trust Shares) for the benefit of the
Trust Eligible Policyholders and permitted transferees
(collectively, the Beneficiaries). The
Trust Shares are held in the name of the Trustee, on behalf
of the Trust, which has legal title over the Trust Shares.
The Beneficiaries do not have legal title to any part of the
assets of the Trust. The Trust Interests represent
undivided fractional interests in the Trust Shares and
other assets of the Trust beneficially owned by a
Trust Beneficiary through the Custodian. On April 7,
2000, the date of demutualization of Metropolitan Life, the
Holding Company distributed to the
Trust 494,466,664 shares of Common Stock for the
benefit of policyholders of Metropolitan Life. Withdrawals by
Beneficiaries of Trust Shares, transactions by
Beneficiaries under the Purchase and Sale Program (as defined
below), and escheatment of unclaimed Trust Shares resulted
in a decrease in the number of Trust Shares from
242,724,190 at December 31, 2008 to 233,157,716 at
December 31, 2009.
A Trust Interest entitles the Beneficiary to certain
rights, including the right to: (i) receive dividends
distributed upon Trust Shares; (ii) have
Trust Shares withdrawn from the Trust to be sold for cash
through a purchase and sale program established by the Holding
Company pursuant to the Plan (the Purchase and Sale
Program); (iii) deposit in the Trust additional
shares of Common Stock purchased through the Purchase and Sale
Program; (iv) withdraw Trust Shares; and
(v) instruct the Trustee to vote the Trust Shares on
certain matters, each as further described in and limited by the
terms of the Trust Agreement. The Trustee has no beneficial
interest in the Trust Shares.
The Holding Company pays the Trustee an annual fee of $50,000.
The Holding Company also provides the Trustee with minor
management and administrative services, the cost of which is not
considered material and, therefore, is not included in these
financial statements. In addition, the Holding Company
reimburses the Trustee for all reasonable out-of-pocket expenses
it incurs in the performance of its duties under the
Trust Agreement. However, the Holding Company is not
required to reimburse the Trust or Trustee for the expense of
mailing to the Custodian any proxy and other materials received
by the Trustee from persons other than the Holding Company,
including mailings with respect to any Beneficiary Consent
Matter. The Holding Company paid to the Trustee $29,385, $71,539
and $15,938 for out-of-pocket expenses for the years ended
December 31, 2009, 2008 and 2007, respectively.
F-5
Table of Contents
MetLife
Policyholder Trust
Notes to
Financial Statements (Continued)
Equity
Securities
Equity securities are reported at their estimated fair value
based on the quoted prices in active markets that are readily
and regularly obtainable. As such, these securities are
categorized as Level 1 in three-level fair value hierarchy
in accordance with fair value measurement guidance. Unrealized
investment gains and losses on securities are recorded in the
Statements of Operations. Realized gains and losses on sales of
securities are determined on a
first-in
first-out basis. The Trust Agreement provides that regular
cash dividends, if any, collected or received by the Trustee
with respect to the Trust Shares are to be distributed by
the Custodian semi-annually to the Beneficiaries within
90 days after receipt by the Trustee. Distributions of all
other cash dividends are to be made by the Custodian to the
Beneficiaries on the first business day following the
30th day after the Trust receives the dividends.
Alternatively, the Trust Agreement provides that the
Trustee may arrange with the Holding Company for the direct
payment by the Holding Company of such cash dividends to the
Beneficiaries. Historically, the Holding Company has used the
latter method. See -Receivable from MetLife, Inc. and
Liability for Dividends Payable to
Trust Beneficiaries. All security transactions are
recorded on a trade date basis.
Cash
and Cash Equivalents
The Trust considers all highly liquid investments purchased with
an original or remaining maturity of three months or less at the
date of purchase to be cash equivalents.
Receivable
from MetLife, Inc. and Liability for Dividends Payable to Trust
Beneficiaries.
In accordance with the Trust Agreement, the Holding Company
distributes cash dividends directly to the Beneficiaries at the
same time as the payment of dividends to the Holding
Companys stockholders. In the event that dividends are
undeliverable to the Beneficiaries, the Holding Company retains
such dividends until they are claimed by such Beneficiaries or
escheated in accordance with applicable state law. Beginning in
2008, cash dividends that have been declared but are
undeliverable to the Beneficiaries and the cash amounts of
dividend checks that have not been cashed by the Beneficiaries
have been recorded as a receivable from the Holding Company and
a liability of the Trust to such Beneficiaries.
Income
Taxes
As a qualified regulated trust, the Trust is not subject to
income taxes to the extent that it distributes substantially all
of its taxable income in its fiscal year.
2. | Purchase and Sale Program |
Beneficiaries may instruct the program agent for the Purchase
and Sale Program to withdraw their allocated shares from the
Trust for sale through the Purchase and Sale Program.
Trust Interests of 5,196,811, 10,064,054 and 10,337,547 for
the years ended December 31, 2009, 2008 and 2007,
respectively, were redeemed for this purpose. Beneficiaries
allocated less than 1,000 shares of Common Stock under the
Plan are also entitled to purchase in the Purchase and Sale
Program additional shares to bring their Trust Interests up
to 1,000 shares, subject to a minimum of $250 per purchase
(or such lesser amount that would cause the Beneficiary to hold
the 1,000 maximum number of Trust Interests).
Trust Interests of 114,850, 116,363 and 100,817 for the
years ended December 31, 2009, 2008 and 2007, respectively,
were issued for this purpose. The number of Trust Interests
allocated to Beneficiaries will be adjusted for any shares of
Common Stock purchased or sold in the Purchase and Sale Program
such that the Trust Interests held by a Beneficiary will
always equal the number of shares of Common Stock allocated to
the Beneficiary.
Beneficiaries may withdraw all, but generally, not less than
all, of their allocated shares of Common Stock at any time by
providing written notice to the Custodian.
F-6
Table of Contents
MetLife
Policyholder Trust
Notes to
Financial Statements (Continued)
3. | Commitments and Contingencies |
None.
4. | Beneficiary Voting Rights |
The Trust Agreement provides the Trustee with directions as
to the manner in which to vote, assent or consent the
Trust Shares at all times during the term of the Trust. On
all matters brought for a vote before the stockholders of the
Holding Company, with the exception of a Beneficiary Consent
Matter (as defined in the Trust Agreement), the Trustee
will vote or abstain from voting in accordance with the
recommendation given by the Board of Directors of the Holding
Company to its stockholders or, if no such recommendation is
given, as directed by the Board. On all Beneficiary Consent
Matters, the Trustee will vote all of the Trust Shares in
favor of, in opposition to or abstain from the matter in the
same ratio as the Trust Interests of the Beneficiaries that
returned voting instructions to the Trustee indicated
preferences for voting in favor of, in opposition to or
abstaining from such matter. The Trust Agreement also
contains provisions allowing Beneficiaries to instruct the
Custodian to withdraw their allocated Trust Shares to
participate in any tender or exchange offer for the Common Stock
and to make any cash or share election, or perfect any
dissenters rights, in connection with a merger of the
Holding Company.
5. | Subsequent Events |
The Trust evaluated the recognition and disclosure of subsequent
events for its December 31, 2009 financial statements.
F-7
Table of Contents
Item 9. | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
None.
Item 9A(T). | Controls and Procedures. |
The Trustee, with the participation of Joseph B. Feil, Vice
President of Wilmington Trust Company, the Trustee of the
Trust, has evaluated the effectiveness of the design and
operation of the Trusts disclosure controls and procedures
as defined in Exchange Act
Rule 13a-15(e)
or 15d-15(e)
as of the end of the period covered by this report. Based on
that evaluation, Mr. Feil has concluded that these
disclosure controls and procedures are effective.
The Trustee and Mr. Feil, in making these determinations,
have relied to the extent reasonable on information provided by
MetLife, Inc. and Mellon Investor Services LLC. There were no
changes to the Trusts internal control over financial
reporting as defined in Exchange Act
Rule 13a-15(f)
during the quarter ended December 31, 2009 that have
materially affected, or are reasonably likely to materially
affect, the Trusts internal control over financial
reporting.
Managements
Annual Report on Internal Control Over Financial
Reporting
The Trustee is responsible for establishing and maintaining
adequate internal control over financial reporting. In
fulfilling this responsibility, estimates and judgments by the
Trustee are required to assess the expected benefits and related
costs of control procedures. The objectives of internal control
include providing the Trustee with reasonable, but not absolute,
assurance that assets are safeguarded against loss from
unauthorized use or disposition, and that transactions are
executed in accordance with the Trustees authorization and
recorded properly to permit the preparation of financial
statements in conformity with GAAP.
The Trustee has documented and evaluated the effectiveness of
the internal control of the Trust at December 31, 2009
pertaining to financial reporting in accordance with the
criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
In the opinion of the Trustee, the Trust maintained effective
internal control over financial reporting as of
December 31, 2009.
This Annual Report on
Form 10-K
for the year ended December 31, 2009 does not include an
attestation report of Deloitte & Touche LLP, the
Trusts independent registered public accounting firm
(Deloitte), regarding internal control over
financial reporting. Managements report was not subject to
attestation by Deloitte pursuant to temporary rules of the
Securities and Exchange Commission that permit the Trust to
provide only managements report in this Annual Report.
Deloitte has audited the financial statements included in this
Annual Report on
Form 10-K
for the year ended December 31, 2009. The Report of
Independent Registered Public Accounting Firm on their audit of
the financial statements is included at
page F-1.
Item 9B. | Other Information. |
None.
14
Table of Contents
Part III
Item 10. | Directors, Executive Officers and Corporate Governance. |
There are no directors, executive officers or employees of the
Trust. The Trustee of the Trust is Wilmington
Trust Company. The Custodian of the Trust is Mellon
Investor Services LLC, formerly known as ChaseMellon Shareholder
Services, L.L.C.
The Trust has not adopted a code of ethics applicable to its
principal executive officer, principal financial officer,
principal accounting officer or controller, or persons
performing similar functions because the Trust does not have any
such officers.
Item 11. | Executive Compensation. |
Not applicable.
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
There are no directors or executive officers of the Trust. No
person is the beneficial owner of more than five percent of the
Trust Interests.
The Trust has no equity compensation plans.
Item 13. | Certain Relationships and Related Transactions, and Director Independence. |
Not applicable.
Item 14. | Principal Accountant Fees and Services. |
Pursuant to the Trust Agreement, the independent auditor of
the Holding Company serves as the independent auditor of the
Trust, and Deloitte & Touche LLP
(Deloitte), the Holding Companys independent
auditor, has served as the independent auditor of the Trust
since its inception. Deloitte is a registered public accounting
firm with the Public Company Accounting Oversight Board (United
States) (PCAOB) as required by the Sarbanes-Oxley
Act of 2002 (Sarbanes-Oxley) and the Rules of the
PCAOB. Its knowledge of the Trust has enabled it to carry out
its audits of the Trusts financial statements with
effectiveness and efficiency.
Independent
Auditors Fees for 2009 and 2008
2009 | 2008 | |||||||
Audit Fees
|
$ | 49,950 | $ | 49,950 | ||||
Audit-Related Fees
|
$ | | $ | | ||||
Tax Fees
|
$ | | $ | | ||||
All Other Fees
|
$ | | $ | |
Audit fees include fees for services to perform an audit in
accordance with auditing standards of the PCAOB and services
that generally only the Trusts independent auditor can
reasonably provide, such as attest services, consents and
assistance with and review of documents filed with the
Securities and Exchange Commission.
The Trust does not have an audit committee. The Audit Committee
of the Holding Company (the Audit Committee)
approves Deloittes audit and non-audit services in advance
as required under Sarbanes-Oxley and Securities and Exchange
Commission rules. Each year before the annual engagement of the
independent auditor, and under procedures adopted by the Audit
Committee, the Audit Committee reviews a schedule of particular
audit services that the Holding Company expects to be performed
in connection with the audit of the Holding Companys
financial statements for the current fiscal year, including for
the Trust, and an estimated amount of fees for each particular
audit service. The Audit Committee also reviews a schedule of
audit-related, tax and other permitted non-
15
Table of Contents
audit services that the Holding Company may engage the
independent auditor to perform during the twelve month period
following such review, including for the Trust, and an estimated
amount of fees for each of those services.
Based on this information, the Audit Committee pre-approves the
audit services that the Holding Company expects to be performed
by the independent auditor in connection with the audit of the
Holding Companys financial statements (including those of
the Trust) for the current fiscal year, and the audit-related,
tax and other permitted non-audit services that management of
the Holding Company may desire to engage the independent auditor
to perform during the twelve month period following such
pre-approval. In addition, the Audit Committee approves the
terms of the engagement letter to be entered into by the Holding
Company with the independent auditor. All fees shown in the
table above related to services that were approved by the Audit
Committee.
If the audit, audit-related, tax and other permitted non-audit
fees for a particular period exceed the amounts previously
approved, the Audit Committee determines whether or not to
approve the additional fees. The Audit Committee or a designated
member of the Audit Committee to whom authority has been
delegated may, from time to time, pre-approve additional audit
and non-audit services to be performed by the independent
auditor.
16
Table of Contents
Part IV
Item 15. | Exhibits and Financial Statement Schedules. |
The following documents are filed as part of this report:
1. Financial Statements
The financial statements are listed in the Index to Financial
Statements on page 13.
2. Financial Statement Schedules
Not applicable.
3. Exhibits
The exhibits are listed in the Exhibit Index on
page E-1.
17
Table of Contents
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
METLIFE POLICYHOLDER TRUST
By: | Wilmington Trust Company, not in its individual capacity, but solely as trustee for the Trust | |
By: |
/s/ Joseph
B. Feil
|
Name: Joseph B. Feil
Title: | Vice President |
Date: March 26, 2010
18
Table of Contents
Exhibit Index
(Note Regarding Reliance on Statements in Our Contracts:
In reviewing the agreements included as exhibits to this
Annual Report on
Form 10-K,
please remember that they are included to provide you with
information regarding their terms and are not intended to
provide any other factual or disclosure information about the
MetLife Policyholder Trust or the other parties to the
agreements. The agreements contain representations and
warranties by each of the parties to the applicable agreement.
These representations and warranties have been made solely for
the benefit of the other parties to the applicable agreement and
(i) should not in all instances be treated as categorical
statements of fact, but rather as a way of allocating the risk
to one of the parties if those statements prove to be
inaccurate; (ii) have been qualified by disclosures that
were made to the other party in connection with the negotiation
of the applicable agreement, which disclosures are not
necessarily reflected in the agreement; (iii) may apply
standards of materiality in a way that is different from what
may be viewed as material to investors; and (iv) were made
only as of the date of the applicable agreement or such other
date or dates as may be specified in the agreement and are
subject to more recent developments. Accordingly, these
representations and warranties may not describe the actual state
of affairs as of the date they were made or at any other time.
Additional information about the MetLife Policyholder Trust may
be found elsewhere in this Annual Report on
Form 10-K
and its other public filings, which are available without charge
through the SECs website at www.sec.gov.)
Exhibit No.
|
Description
|
|||||
3 | .1 | | MetLife Policyholder Trust Agreement (Incorporated by reference to Exhibit 10.12 to MetLife, Inc.s Registration Statement on Form S-1 (File No. 333-91517) (the S-1 Registration Statement)). | |||
3 | .2 | | Amendment to MetLife Policyholder Trust Agreement (Incorporated by reference to the MetLife Policyholder Trusts Annual Report on Form 10-K for the fiscal year ended December 31, 2007). | |||
4 | .1 | | Amended and Restated Certificate of Incorporation of MetLife, Inc. (Incorporated by reference to Exhibit 3.1 to MetLife, Inc.s Annual Report on Form 10-K for the fiscal year ended December 31, 2006 (the 2006 Annual Report)). | |||
4 | .2 | | Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of MetLife, Inc., filed with the Secretary of State of Delaware on April 7, 2000 (Incorporated by reference to Exhibit 3.2 to the 2006 Annual Report). | |||
4 | .3 | | Certificate of Designations of Floating Rate Non-Cumulative Preferred Stock, Series A, of MetLife, Inc., filed with the Secretary of State of Delaware on June 10, 2005 (Incorporated by reference to Exhibit 99.5 to MetLife, Inc.s Registration Statement on Form 8-A filed on June 10, 2005). | |||
4 | .4 | | Certificate of Designations of 6.50% Non-Cumulative Preferred Stock, Series B, of MetLife, Inc., filed with the Secretary of State of Delaware on June 14, 2005 (Incorporated by reference to Exhibit 99.5 to MetLife, Inc.s Registration Statement on Form 8-A filed on June 15, 2005). | |||
4 | .5 | | MetLife, Inc. Amended and Restated By-laws, effective January 26, 2010 (Incorporated by reference to Exhibit 3.1 to MetLife, Inc.s Current Report on Form 8-K dated January 29, 2010). | |||
4 | .6 | | Form of Certificate of Common Stock, par value $0.01 per share (Incorporated by reference to Exhibit 4.1 to the S-1 Registration Statement). | |||
4 | .7 | | Rights Agreement, dated as of April 4, 2000, between MetLife, Inc. and ChaseMellon Shareholder Services, L.L.C. (predecessor to Mellon Investor Services LLC) (Incorporated by reference to Exhibit 4.48 to the 2006 Annual Report). | |||
4 | .8 | | Amendment to Rights Agreement, dated as of March 7, 2010, between MetLife, Inc. and Mellon Investor Services LLC (formerly known as ChaseMellon Shareholder Services, L.L.C.) (Incorporated by reference to Exhibit 2 to Amendment No. 1 to MetLife, Inc.s Registration Statement on Form 8-A/A filed on March 11, 2010). | |||
4 | .9 | | Form of Right Certificate (Included as Exhibit B of Exhibit 4.7 incorporated by reference to Exhibit 4.48 to the 2006 Annual Report). | |||
31 | .1 | | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
32 | .1 | | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
E-1