Form 8-K METLIFE INC For: Feb 27
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): February 27, 2019
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction
200 Park Avenue, New York, New York
(Address of Principal Executive Offices)
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Michel A. Khalaf is MetLife, Inc.'s President, U.S. Business and EMEA, and (as MetLife, Inc. has previously announced) will become its President and Chief Executive Officer ("CEO") as of May 1, 2019. MetLife, Inc. affiliates (collectively, the “Company”) and Michel A. Khalaf entered into an amendment to Mr. Khalaf's Letter of Understanding of June 15, 2017 (the "Amendment") on February 27, 2019, and a waiver and release (the “Release”) on March 4, 2019. MetLife, Inc.’s Board of Directors previously approved the terms of each.
As MetLife, Inc. previously disclosed, in 2017, the Company transferred Mr. Khalaf to the United States from the United Arab Emirates, which has a lower tax structure than that of the U.S. In order to encourage Mr. Khalaf to take the role of President of both the U.S. Business and EMEA, the Company developed a transition plan for tax-related support using escalating rates for hypothetical tax withholding. Under the plan, the Company withheld for taxes from Mr. Khalaf’s pay and conveyed to taxing authorities on Mr. Khalaf’s behalf any tax amounts due, including amounts covered by the Company in excess of the withholding. The transition plan was to end on January 1, 2020 with Mr. Khalaf assuming full responsibility for U.S. taxes. The Company also made Mr. Khalaf whole for taxes on imputed income for some, but not all, relocation-related services it provided him, consistent with its established employee relocation policy, and provided tax return preparation assistance.
In the 2019 Amendment, Mr. Khalaf has agreed to terminate the transition plan and stop tax-related support a year earlier than planned. The Company's Board of Directors and Mr. Khalaf based the agreement on the understanding that, as a CEO who resides in the U.S., Mr. Khalaf will be responsible for all of his taxes, consistent with similarly-situated executives. Accordingly, the Amendment specifies that the transition plan’s tax-related support ended effective December 31, 2018, four months before Mr. Khalaf becomes CEO.
The Company will make Mr. Khalaf whole for taxes on the final relocation of his family’s home furnishings to the U.S. in 2019, consistent with the Company's current policy. The Company will also continue to provide tax return preparation assistance for a limited period of time.
In connection with Mr. Khalaf’s appointment as MetLife, Inc. CEO, the Company will transfer his employment from a MetLife company based in the United Arab Emirates (“UAE”) to one based in the United States. The Company’s U.S.-based benefit plans would subtract from Mr. Khalaf’s pension benefit any "end of service gratuity" payment to which he would be entitled in the UAE. Under the Release, Mr. Khalaf will retain his full Company pension benefits, rather than receive an “end of service gratuity,” in exchange for a waiver and release of claims.
The foregoing descriptions are not complete and are qualified by reference to the Amendment and the Release, which are filed as Exhibits 10.1 and 10.2 hereto.
On March 5, 2019, MetLife, Inc. issued a news release confirming its previously announced declaration of a first quarter 2019 dividend of $0.25 per share on MetLife, Inc.’s floating rate non-cumulative preferred stock, Series A. A copy of the news release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
/s/ Jeannette N. Pina
Jeannette N. Pina
Vice President and Secretary
Date: March 5, 2019
AMENDMENT 1 TO
LETTER OF UNDERSTANDING DATED JUNE 13, 2017
UNITED ARAB EMIRATES - UNITED STATES
February 26, 2019
You have agreed to become the President and Chief Executive Officer of MetLife, Inc. effective May 1, 2019 (the “Appointment Date”). This letter serves as an amendment to your Letter of Understanding of June 13, 2017 (“LOU”).
Termination of Assignment and Transfer of Employment
You are currently on an assignment from the Company’s branch in the United Arab Emirates (“MetLife UAE”) to MetLife in New York with a scheduled duration from July 1, 2017 through December 31, 2019. Effective on the day prior to the Appointment Date, your assignment from MetLife UAE to New York, and your employment with MetLife UAE, will end. Effective on the Appointment Date, your employment with MetLife Group, Inc. (“MetLife Group”) on an at-will basis will begin. As of the Appointment Date, you will no longer be employed by any MetLife, Inc. affiliate other than MetLife Group. You will not be entitled to any further compensation or benefits from MetLife UAE, except as required by law.
Tax Equalization, as described in the LOU, will apply only to compensation and benefits paid on or prior to December 31, 2018, and only to the extent the LOU otherwise provides for Tax Equalization for such items. With the sole exception provided below under Relocation-Related Support, you are responsible for all applicable actual income and employment taxes with respect to all compensation and benefits paid on or after January 1, 2019 in any jurisdiction, including those you visit on business. This includes:
base salary you earn during 2019 or later;
your 2018 AVIP award paid in 2019 and any later AVIP awards; and
any payouts for stock-based long-term incentives in 2019 or later, such as your 2016-2018 or later Performance Shares or Performance Units, your Restricted Stock Unit or Restricted Unit tranches vesting in 2019 or later, and any proceeds from your exercise of Stock Options or Unit Options.
Applicable actual income taxes include any of your U.S. federal, state, and local income taxes, any of your employment taxes such as FICA and Medicare taxes, and any other income or employment taxes to which you may be subject as a result of business travel or otherwise.
Other Compensation and Benefits
You will no longer accrue benefits under the MetLife Deferred Compensation Plan for Globally Mobile Employees and the Alico Overseas Pension Plan as of the Appointment Date, per the terms of those plans. However, beginning as of the Appointment Date, you will accrue benefits under the MetLife Retirement Plan and the MetLife Auxiliary Pension Plan, subject to the terms of such plans, and will be eligible to defer a portion of your compensation and receive matching employer contributions under the MetLife 401(k) Plan, the MetLife Leadership Plan and the MetLife Auxiliary Match Plan, subject to the terms of such plans.
Your medical and dental coverage under the MetLife Expatriate Benefit Plan will also cease as of the Appointment Date. As of the Appointment Date, you will be eligible to participate in the standard medical, dental and other welfare plans sponsored by MetLife Group, subject to the terms of such plans.
Each item described in the “Assignment Compensation and Ongoing Assignment Support,” “Pre-Assignment,” “Relocation,” and “End of Assignment” sections of the LOU will stop as of the Appointment Date, except as described below. For example, you will not receive the final transition allowance payment specified in the LOU that was to be paid in July of 2019.
This amendment will not affect any LOU provisions for tax gross-up of your Assignment Compensation and Ongoing Assignment Support items incurred in 2018 or earlier.
We recognize that as result of your transfer to MetLife Group, you will have to resolve certain end-of-assignment matters. To this end, MetLife Group will provide you with the following items initially described in the LOU, as modified here:
Immigration support to help you maintain your authorization to work in the United States for the duration of your employment with MetLife Group, and/or support for a Green Card application.
Professional tax services by MetLife Group’s chosen tax provider for assistance in preparing your personal income tax returns for periods that contain any date through December 31, 2019, to ensure complete and consistent treatment and disclosure of final relocation matters and past Tax Equalization payments. MetLife Group may elect to have its chosen tax advisor prepare one or more of your tax returns in subsequent years if MetLife Group, in its sole discretion, deems it necessary or advisable to do so.
A final shipment of your household goods, as specified in the LOU, so long as the shipment takes place on or before December 31, 2019. Notwithstanding that MetLife Group provides this benefit to you after December 31, 2018, MetLife Group will make you whole for any taxes on this benefit, consistent with its current policy.
In the event you purchase a home in the U.S. by December 31, 2019, MetLife Group will provide you with home purchase support comprised of assistance with your selection of a mortgage through its chosen relocation vendor. MetLife will reimburse you for reasonable closing costs on your home purchase up to U.S. $120,000.
Except as modified by this amendment, the terms of the LOU will continue in effect. The LOU, as amended by this amendment, any generally-applicable policies or practices of MetLife Group or any of its affiliates that are implicated by the LOU, and the Waiver and Release of Claims also being offered to you, represent the entire agreement between you and MetLife Group and all of its affiliates, including MetLife UAE, solely regarding your assignment and its termination. Any word used in this amendment shall have the meaning defined in the LOU, if any.
This amendment to the LOU is specifically conditioned upon your counter-signature to this letter, and your execution of the Waiver and Release of Claims also being offered to you, prior to the Appointment Date. Further, please be advised that any amounts MetLife Group or any of its affiliates pay to you or anyone else, and any taxes MetLife Group or any of its affiliates pay on your behalf pursuant to Tax Equalization or otherwise will not create any credit or otherwise affect the calculation of benefits provided under any pension, retirement, retirement savings, any deferred compensation, bonus, equity, incentive, severance, displacement, supplemental unemployment, health, life, or disability plan, or any other compensation or benefit plan, policy, program, or arrangement provided by any MetLife entity. If you agree to the terms and conditions stated above, please sign this letter in duplicate, retain a copy for your reference, and return one to us in confirmation of your agreement and acceptance of its terms.
MetLife Group, Inc.
By: MetLife, Inc., sole shareholder
By: /s/ Susan M. Podlogar
MetLife, Inc. title: CHRO
Accepted and Agreed:
/s/ Michel Khalaf
CONFIRMATION OF END OF EMPLOYMENT AND WAIVER AND RELEASE OF CLAIMS
This Agreement is between:
American Life Insurance Company (“MetLife UAE”) and
Michel Khalaf, an employee of the MetLife UAE ("You").
(each referred to as a "Party" and together the "Parties").
As part of the formalities of ending your employment with MetLife UAE and beginning your employment with MetLife Group, Inc., the Parties agree as follows:
Full and final settlement
You understand and agree that the payments referred to in this Agreement are offered with no admission of liability on the part of MetLife UAE and its affiliates (the “Company”) and in full and final settlement of all and any claims, costs, expenses or rights of action of any kind (whether contractual, statutory or otherwise) that you have or may have against the Company. By signing this Agreement, you hereby confirm that all matters between you and the Company have been fully and finally resolved. MetLife UAE advises you to consult with an attorney before executing this Agreement.
Employment termination and settlement conditions
You confirm and agree that:
Your employment with MetLife UAE shall end on April 30, 2019 ("End Date"). You shall commence employment with MetLife Group, Inc. on May 1, 2019.
You will receive your normal salary and MetLife UAE benefits, subject to their terms, through the End Date. To the extent applicable, you agree that your statutory notice period of three months shall be reduced pursuant to Article 59(3) of the Dubai International Financial Centre ("DIFC") Employment Law no 4 of 2005 as amended ("DIFC Employment Law") with the effect that your employment with MetLife UAE shall end on the End Date.
Your participation in all MetLife UAE benefits plans will cease as of the End Date, subject to the terms of such plans, and you will be eligible to participate in the standard medical, dental and other welfare plans sponsored by MetLife Group, Inc. subject to the terms of such plans. Your UAE paid time off (“PTO”) will be applied to MetLife Group, Inc. PTO.
Regardless of any other terms of this Agreement, any of your rights under each of the following shall continue in force: (i) your Letter of Understanding of June 13, 2017 as amended by Amendment 1; (ii) your MetLife stock-based long-term incentive awards; (iii) the Alico Overseas Pension Plan; (iv) the MetLife Deferred Compensation Plan for Globally Mobile Employees; any (v) any option you have to convert your group life insurance policy to an individual life insurance policy. Your rights under any Company product you have purchased independent from your employment will not be affected by any terms of this Agreement.
The payments set out in this Agreement represent all and any payments which may be due to you up to and including the End Date, and in accordance with all applicable legislation including the DIFC Employment Law.
There are no outstanding monies by way of compensation or salary, expenses or other sums whatsoever due to you from the Company either in respect of your employment by the Company, its termination, or in respect of any matters associated therewith.
You have no claims or rights of action whatsoever against the Company or its or their directors, officers, employees, or agents arising out of your employment, its termination or otherwise and you have not presented or brought and will not present or bring any complaint, proceedings, actions or claim in the DIFC, or United Arab Emirates ("UAE") or worldwide.
You hereby irrevocably waive any rights you may have in respect of any claims or rights of action whatsoever and the Company shall be immediately deemed fully and irrevocably released in connection thereto. You confirm that the amounts provided for in this Agreement constitute valid consideration in respect of the claims waived.
You confirm that you have chosen to receive benefits pursuant to (a) the Alico Overseas Pension Plan; and (b) the MetLife Deferred Compensation Plan for Globally Mobile Employees instead of an end of service gratuity payment as permitted pursuant to Article 62(5) of the DIFC Employment Law.
You will fully co-operate with the Company as directed in order to cancel your UAE residence visa and work permit.
You fully understand the terms of this Agreement and that the Company has given you reasonable opportunity to raise any questions or concerns that you may have.
In the event of any delay in cancelling your residence visa and work permit, you acknowledge and agree that you will not be entitled to any additional payments over and above the payments detailed in this Agreement (which are calculated up to the End Date).
This Agreement may be executed in any number of counterparts, each of which, when executed shall constitute a duplicate original, but all the counterparts shall together constitute the one Agreement.
3.2 The parties have entered into this Agreement on the date the last Party signed it below.
Governing law and jurisdiction
This Agreement shall be construed and governed by the laws of the DIFC and any laws of the UAE having effect in DIFC.
Any dispute arising out of or in connection with this Agreement shall be settled by the exclusive jurisdiction of courts in the State of New York, U.S.A.
Please review this Agreement and sign below to indicate your acceptance within 21 calendar days of receiving it. MetLife UAE may extend this period of time to you in writing.
/s/ Michel Khalaf
/s/ Edward Spehar
American Life Insurance Company Title:
Chairman, Chief Executive Officer and Treasurer
March 4, 2019
METLIFE CONFIRMS FIRST QUARTER 2019
SERIES A PREFERRED STOCK DIVIDEND
NEW YORK, March 5, 2019- MetLife, Inc. (NYSE: MET) today announced that it has confirmed its previously announced declaration of the first quarter 2019 dividend of $0.25 per share on the company’s floating rate non-cumulative preferred stock, Series A (NYSE: METPrA).
The New York Stock Exchange has not yet set an ex-dividend date for the Series A preferred stock. Following this confirmatory announcement, the New York Stock Exchange will set an ex-dividend date for the Series A preferred stock. The dividend will be payable March 15, 2019, to shareholders of record as of Feb. 28, 2019.
MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates (“MetLife”), is one of the world’s leading financial services companies, providing insurance, annuities, employee benefits and asset management to help its individual and institutional customers navigate their changing world. Founded in 1868, MetLife has operations in more than 40 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.
This news release may contain or refer to forward-looking statements. Forward-looking statements give expectations or forecasts of the future using terms such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “will,” and other terms tied to future periods. Results could differ materially from those expressed or implied in the forward-looking statements. Forward-looking statements are based on assumptions and expectations. They involve risks and uncertainties, including the “Risk Factors” MetLife, Inc. describes in its U.S. Securities and Exchange Commission filings. The company has no obligation to correct or update any forward-looking statement. Parts of this news release may include additional information on forward-looking statements.