Compensation Expense Related to Stock-Based Compensation Equity Awards Stock Options Stock Options are the contingent right of award holders to purchase Shares at a stated price for a limited time. All Stock Options have an exercise price equal to the closing price of a Share reported on the NYSE on the date of grant, and have a maximum term of 10 years. The vast majority of Stock Options granted have become or will become exercisable at a rate of one-third of each award on each of the first three anniversaries of the grant date. Other Stock Options have become or will become exercisable on the third anniversary of the grant date. Vesting is subject to continued service, except for employees who are retirement eligible and in certain other limited circumstances. A summary of the activity related to Stock Options for the year ended December 31, 2012 was as follows: (1) Performance Shares expected to vest and the related compensation expenses may be further adjusted by the performance factor most likely to be achieved, as estimated by management, at the end of the performance period. The following table presents the total unrecognized compensation expense related to stock-based compensation and the expected weighted average period over which these expenses will be recognized at: The components of compensation expense related to stock-based compensation which includes compensation expense related to Phantom Stock-Based Awards, and excludes the insignificant compensation expense related to the 2005 Directors Stock Plan, were as follows: (1) The aggregate intrinsic value was computed using the closing Share price on December 31, 2012 of $32.94 and December 30, 2011 of $31.18, as applicable. The fair value of Stock Options is estimated on the date of grant using a binomial lattice model. Significant assumptions used in the Company’s binomial lattice model, which are further described below, include: expected volatility of the price of Shares; risk-free rate of return; expected dividend yield on Shares; exercise multiple; and the post-vesting termination rate. Expected volatility is based upon an analysis of historical prices of Shares and call options on Shares traded on the open market. The Company uses a weighted-average of the implied volatility for publicly-traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly closing prices of Shares. The Company chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the underlying Shares rather than on daily price movements. 173 MetLife, Inc. Shares Under Option Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (1) (Years) (In millions) Outstanding at January 1, 2012 ............................................... 34,713,526 $40.22 5.35 $— Granted ................................................................. 6,247,050 $37.91 Exercised ................................................................ (3,817,301) $28.44 Expired .................................................................. (1,017,994) $47.35 Forfeited ................................................................. (972,210) $40.23 Outstanding at December 31, 2012 ........................................... 35,153,071 $40.89 5.50 $51 Expected to vest at a future date as of December 31, 2012 ......................... 34,684,396 $40.94 5.41 $51 Exercisable at December 31, 2012 ............................................ 24,530,711 $41.36 4.16 $50 December 31, 2012 Expense Weighted Average Period (In millions) (Years) Stock Options ................................................................................. $56 1.74 Performance Shares ............................................................................ $52 1.65 Restricted Stock Units ........................................................................... $28 1.73 Years Ended December 31, 2012 2011 2010 (In millions) Stock Options ........................................................................................ $ 61 $ 58 $45 Performance Shares (1) ................................................................................. 80 68 29 Restricted Stock Units .................................................................................. 27 18 10 Total compensation expense ............................................................................. $168 $144 $84 Income tax benefit ..................................................................................... $ 59 $ 50 $29 MetLife, Inc. Notes to the Consolidated Financial Statements — (Continued)