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Missouri | 6321 | 43-1627032 | ||
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Chesterfield, Missouri 63017
(636) 736-7439
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
R. Randall Wang James R. Levey Bryan Cave LLP One Metropolitan Square 211 North Broadway, Suite 3600 St. Louis, Missouri 63102 (314) 259-2000 | James L. Lipscomb Executive Vice President and General Counsel MetLife, Inc. 200 Park Avenue New York, New York 10166 (212) 578-2211 | Adam O. Emmerich David K. Lam Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, New York 10019 (212) 403-1000 |
Large accelerated filer x | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||||
Title of Each Class of | Amount to be | Offering | Aggregate | Registration | ||||||||||||
Securities to be Registered | Registered | Price Per Unit | Offering Price(2) | Fee(3)(4) | ||||||||||||
Class B common stock, par value $0.01 per share(5) | 29,243,539 | (1) | N/A | $1,418,311,641.50 | $55,739.65 | |||||||||||
(1) | Represents the maximum number of shares of class B common stock, par value $0.01 per share (the “RGA class B common stock”), of RGA, offered in exchange for shares of common stock, par value $0.01 per share (“MetLife common stock”), of MetLife, Inc., a Delaware corporation (“MetLife”), as described in the Prospectus filed as part of this Registration Statement. | |
(2) | Estimated solely for the purpose of calculating the registration fee pursuant to Rules 457(f)(1) and 457(f)(3) and Rule 457(c) of the Securities Act of 1933, as amended (the “Securities Act”), based on $48.50, the average of the high and low sales prices of RGA common stock (the “RGA common stock”), as reported by the New York Stock Exchange (“NYSE”) on August 5, 2008. Because there is no trading market for RGA class B common stock, the RGA common stock is believed to be the most appropriate measure of the value of the securities to be exchanged in the exchange offer for the purposes of calculating the filing fee. | |
(3) | Computed in accordance with Rule 457(f) under the Securities Act. | |
(4) | The total amount registered under this registration statement is 29,243,539 shares of RGA class B common stock, or $1,418,311,641.50 proposed maximum aggregate offering price, computed in accordance with Rule 457(f) under the Securities Act. $1,642,808,312 of Class B common stock was previously registered onForm S-4 (RegistrationNo. 333-151390) initially filed by RGA on June 3, 2008, and all $1,642,808,312 of such shares are carried forward hereby. The amount of filing fee associated with the securities that remain unsold and that was previously paid with such other registration statement is $68,759.84. The previously paid fees have been applied to the filing fees otherwise associated with this registration statement, leaving a balance of $13,020.19. | |
(5) | Each share of RGA class B common stock issued also represents one Series B preferred stock purchase right. Series B preferred stock purchase rights currently cannot trade separately from the underlying RGA class B common stock and, therefore, do not carry a separate price or necessitate an additional registration fee. |
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The information contained in this document is subject to completion or amendment. A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document is not an offer to sell these securities and it is not soliciting an offer to buy these securities, nor will there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. |
[Goldman, Sachs & Co. Logo] | [Merrill Lynch & Co. Logo] |
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MetLife, Inc. 1 MetLife Plaza, Long Island City, NY 11101 Attn: Investor Relations (212) 578-2211 metir@metlife.com www.metlife.com | Reinsurance Group of America, Incorporated 1370 Timberlake Manor Parkway Chesterfield, MO 63017 Attn: Corporate Secretary (636) 736-7000 www.rgare.com |
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EX-5.1: FORM OF OPINION OF WILLIAM L. HUTTON, ESQ. | ||||||||
EX-8.1: FORM OF OPINION OF WACHTELL, LIPTON, ROSEN & KATZ | ||||||||
EX-23.1: CONSENT OF DELOITTE & TOUCHE LLP | ||||||||
EX-23.2: CONSENT OF DELOITTE & TOUCHE LLP |
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Q: | What is happening in this transaction? | |
A: | MetLife and RGA entered into a recapitalization and distribution agreement, pursuant to which MetLife will dispose of most of its equity interest in RGA to MetLife’s security holders. The transaction consists of: | |
• a recapitalization of RGA common stock into two classes of common stock — RGA class A common stock and RGA class B common stock (which is referred to as the “recapitalization”); and | ||
• an exchange offer pursuant to which MetLife will acquire MetLife common stock in exchange for RGA class B common stock (which is referred to as the “exchange offer” or, when completed, the “split-off”). | ||
In addition, to the extent that MetLife holds any RGA class B common stock following the split-off, MetLife will dispose of such RGA class B common stock in: | ||
• one or more public or private debt exchanges, pursuant to which MetLife will acquire MetLife debt securities in exchange for RGA class B common stock (each of which is referred to as a “debt exchange”); and/or | ||
• one or more subsequent split-offs, pursuant to which MetLife will acquire MetLife common stock in exchange for RGA class B common stock (each of which is referred to as a “subsequent split-off”). | ||
The complete divestiture of MetLife’s RGA class B common stock whether accomplished by the exchange offer and any debt exchangesand/or any subsequent split-offs is referred to in this document as the “divestiture.” Following completion of the divestiture, MetLife and its subsidiaries will hold no RGA class B common stock and 3,000,000 shares of RGA class A common stock. MetLife has agreed to complete the divestiture on or before the first anniversary of the completion of the exchange offer. | ||
Recapitalization. MetLife and its subsidiaries currently hold approximately 52% of the outstanding RGA common stock. In the recapitalization, each outstanding share of RGA common stock will be reclassified as one share of RGA class A common stock. Immediately thereafter, MetLife and its subsidiaries will exchange each share of their RGA class A common stock (other than 3,000,000 shares of RGA class A common stock, which constitute approximately 5% of the outstanding RGA common stock) with RGA for one share of RGA class B common stock. | ||
The 3,000,000 shares of RGA class A common stock that MetLife and its subsidiaries will not exchange with RGA for shares of RGA class B common stock in the recapitalization are the reclassified shares in respect of RGA common stock acquired by MetLife and its subsidiaries in the fourth quarter of 2003, and are referred to as the “recently acquired stock.” | ||
Exchange Offer. This document relates to the exchange offer, and is being sent to MetLife stockholders to enable them to make their investment decision as to whether to tender some or all of their shares of MetLife common stock in exchange for RGA class B common stock. | ||
In the exchange offer, MetLife is making an offer to MetLife stockholders to acquire their shares of MetLife common stock in exchange for all of the 29,243,539 shares of RGA class B common stock that MetLife and its subsidiaries will hold after the recapitalization. For each $1.00 of MetLife common stock accepted in the exchange offer, tendering MetLife stockholders will receive approximately $[ • ] of RGA class B common stock, subject to a limit of [ • ] shares of RGA class B common stock per share of MetLife common stock. A description of the terms and conditions of the exchange offer is set forth under “The Exchange Offer.” | ||
Debt Exchange / Subsequent Split-Offs. To the extent that MetLife or its subsidiaries hold any RGA class B common stock after the split-off, MetLife will dispose of such RGA class B common stock in one or more debt exchangesand/or one or more subsequent split-offs, thus completing the divestiture on or prior to the first |
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anniversary of the completion of the exchange offer. In the event that MetLife disposes of such RGA class B common stock in a subsequent split-off, such subsequent split-off may be on different economic terms from the exchange offer, which terms may be more or less favorable than the terms of the exchange offer. | ||
MetLife currently expects that, if it continues to hold any RGA class B common stock after the completion of the exchange offer, it will divest such shares in a private debt exchange pursuant to an arrangement with one or more investment banks (which are referred to as the “participating banks”). MetLife currently expects that the participating banks will purchase an amount of MetLife debt securities (either in the market, through one or more tender offers commenced prior to or after the closing of the exchange offerand/or in private transactions) so that, when such MetLife debt securities are exchanged with MetLife in any debt exchanges, the participating banks will receive any remaining shares of RGA class B common stock then held by MetLife and its subsidiaries, thereby completing the divestiture. The participating banks may sell the RGA class B common stock that they receive in any debt exchanges in the market or to a third party, including pursuant to a registered public offering. In connection with this potential sale, MetLife currently expects that the participating banks will enter into a registration rights agreement with RGA, which agreement will provide the participating banks with rights to request RGA to file a registration statement to register the sale of RGA class B common stock to the public. | ||
The shares of RGA class B common stock distributed by MetLife pursuant to the exchange offer, any debt exchanges and any subsequent split-offs will constitute 100% of the RGA class B common stock that MetLife and its subsidiaries will receive in the recapitalization. | ||
Q: | Why has MetLife decided to engage in the divestiture? | |
A: | MetLife believes that the divestiture will provide numerous corporate benefits to itself and its stockholders, as well as to RGA and its shareholders, the most important of which are listed below. | |
• Facilitate MetLife and RGA’s Respective Expansion and Growth. MetLife and RGA have significantly different competitive strengths and operating strategies, and, with RGA generating only a small portion of MetLife’s consolidated operating earnings, each company believes that the divestiture will strengthen its ability to focus its managerial and financial resources on developing and growing its core businesses. | ||
• Reduce MetLife’s Exposure to Global Reinsurance Business. The divestiture will enable MetLife to significantly reduce its current exposure to the reinsurance business, a segment of the global insurance industry that produces more volatile earnings and whose growth lags behinds MetLife’s core business segments. | ||
Q: | Why is the RGA board of directors recommending the divestiture? | |
A: | The RGA board of directors believes that the divestiture will provide numerous corporate benefits to itself and the RGA shareholders, the most important of which are listed below. | |
• Eliminate Stock Overhang. The divestiture is expected to eliminate the overhang on the market for RGA common stock that results from having a large corporate shareholder, thereby increasing the liquidity and public float of RGA’s common stock and consequently, following the divestiture, RGA expects its common stock to trade more efficiently than it does today. Moreover, RGA expects that, following the divestiture, its common stock will be more widely followed by the equity research community than is the case presently. Accordingly, RGA expects these factors to provide it with greater flexibility to use its equity as currency for acquiring complementary operations and raising cash for its business operations on a more efficient basis and to enhance the attractiveness of its equity-based compensation plans, thereby increasing RGA’s ability to attract and retain quality employees. | ||
• Allow RGA to Make Independent Decisions. As MetLife and RGA’s businesses evolve over time, and their business strategies diverge, the divestiture will allow RGA to pursue its future business initiatives free from the constraints of having a controlling corporate shareholder whose policies may conflict with the best interests of RGA’s businesses. Absent the divestiture, it is possible that, under certain |
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circumstances, such constraints could restrict RGA’s ability to make investments or pursue strategies that RGA management believes are in the best long-term interests of RGA. | ||
• Eliminate Customer Conflicts. At present, a number of key customers of RGA are direct competitors of MetLife. Some key customers of RGA have expressed concern, and are expected to continue to express concern, about the indirect benefit that MetLife derives from the business it conducts with RGA. RGA expects that the divestiture will eliminate these customer conflicts, and that the elimination of these conflicts will benefit RGA’s business going forward. | ||
• Change in Control Premium. The divestiture may permit RGA shareholders to share in any premium associated with a change in control of RGA, if such an event should occur. The requirements relating to the qualification of the divestiture for tax-free treatment, however, may restrict RGA’s ability to engage in certain change in control transactions. | ||
Q: | Why did MetLife choose the exchange offer to divest its shares of RGA? | |
A: | The divestiture is believed to be a tax-efficient way to achieve the goals outlined in response to the two questions immediately above. The exchange offer is expected to be a tax-free transaction to both MetLife and its stockholders for U.S. federal income tax purposes (except with respect to any cash received instead of fractional shares of RGA class B common stock). | |
In addition, the exchange offer will enable MetLife stockholders to adjust their investment between MetLife and RGA on a voluntary basis. | ||
Q: | Why is RGA engaging in a recapitalization concurrently with the exchange offer? | |
A: | For the divestiture to be tax-free to MetLife and its stockholders, current U.S. federal income tax law generally requires, among other things, that MetLife distribute to its security holders stock of RGA having the right to elect at least 80% of the members of the RGA board of directors. Accordingly, RGA will engage in the recapitalization such that, after the recapitalization, RGA’s outstanding equity capital structure will consist of RGA class A common stock and RGA class B common stock. The RGA class A common stock will be identical in all respects to RGA’s current common stock, and will also be identical in all respects to the RGA class B common stock (including with respect to dividends and voting on matters other than director-related matters), and will vote together as a single class, except with respect to certain limited matters required by Missouri law described below and, except that, in each case: | |
• holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA; | ||
• holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA; | ||
• there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | ||
• holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of the outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock (see “The Transactions — RGA Special Meeting and Proposals”). | ||
If, for example, the RGA board of directors were to consist of five directors, four would be designated for election by the holders of the RGA class B common stock and one would be designated for election by the holders of the RGA class A common stock. Following the recapitalization and prior to the completion of the exchange offer, MetLife and its subsidiaries will hold all of the outstanding shares of RGA class B common stock and thus MetLife can distribute to its security holders RGA stock having the right to elect 80% of the members of the RGA board of directors. | ||
Upon the recapitalization, holders of RGA class A common stock and RGA class B common stock will be entitled to receive the same per share consideration in any reorganization or in any merger, share exchange, consolidation or combination of RGA with any other company (except for such differences as may be permitted with respect to their existing rights to elect directors). |
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Q: | How will the relationship between RGA and MetLife change after the exchange offer is completed? | |
A: | After the exchange offer is completed, because MetLife and its subsidiaries will no longer own a controlling interest in RGA, the RGA board of directors and management will be free to pursue initiatives that they believe are in RGA’s best interest, without requiring these initiatives to be consistent with MetLife’s view of the best interests of RGA or MetLife. In addition, all three of the RGA directors who are also officers of MetLife will resign from the RGA board of directors. See “The Transactions — MetLife’s Reasons for the Divestiture.” | |
Q: | Will the divestiture have a financial impact on RGA? | |
A: | RGA does not expect the divestiture to have any material impact on the financial condition or results of operations of RGA. | |
Q: | Who may participate in the exchange offer? | |
A: | Any U.S. holder of MetLife common stock may participate in the exchange offer, including directors and officers of MetLife, RGA and their respective subsidiaries, and including participants in the Savings and Investment Plan for Employees of Metropolitan Life and Participating Affiliates, the New England Life Insurance Company Agents’ Deferred Compensation Plan and Trust, the New England Life Insurance Company Agents’ Retirement Plan and Trust and the New England Life Insurance Company 401(k) Savings Plan and Trust (these plans are collectively referred to in this document as the “MetLife employee benefit plans”). MetLife has been informed that instructions to tender or withdraw by participants in the MetLife employee benefit plans must be made at least three business days prior to the last day of the exchange offer period. If the limit on the number of shares that can be received for each share of MetLife common stock is in effect at the expiration of the originally contemplated exchange offer period, participants in the MetLife employee benefit plans will not be able to tender their shares during the extension period and will only be able to withdraw their shares until 5:00 p.m., New York City time, on the first trading day of the two business day extension period. Participants in MetLife employee benefit plans will receive further special instructions from BNY Mellon Shareowner Services regarding the procedures for tendering the shares of MetLife common stock that they hold through the MetLife employee benefit plans. However, participants in MetLife employee benefit plans will not be eligible to tender in the exchange offer any of the shares allocated to the nonvested portion of their employer contributions accounts in any of these plans as of the deadline for directing the trustee of these plans to tender shares held in their MetLife employee benefit plan accounts. Furthermore, participants who hold interests in a MetLife employee benefit plan will be permitted to tender only the whole number of shares of MetLife common stock credited to their accounts (fractional shares will be disregarded for this purpose) and participants whose interests amount to less than one share of MetLife common stock will not be able to participate in the exchange offer. See “The Exchange Offer — Procedures for Tendering.” | |
Although MetLife has mailed this document to its stockholders to the extent required by U.S. law, including stockholders located outside the United States, this document is not an offer to sell or exchange, and it is not a solicitation of an offer to buy, any shares of MetLife common stock, RGA class A common stock or RGA class B common stock in any jurisdiction in which such offer, sale or exchange is not permitted. | ||
Countries outside the United States generally have their own legal requirements that govern securities offerings made to persons resident in those countries and often impose stringent requirements about the form and content of offers made to the general public. RGA and MetLife have not taken any action under thosenon-U.S. regulations to facilitate a public offer to exchange the RGA class B common stock outside the United States. Therefore, the ability of anynon-U.S. person to tender MetLife common stock in the exchange offer will depend on whether there is an exemption available under the laws of such person’s home country that would permit the person to participate in the exchange offer without the need for MetLife or RGA to take any action to facilitate a public offering in that country or otherwise. For example, some countries exempt transactions from the rules governing public offerings if they involve persons who meet certain eligibility requirements relating to their status as sophisticated or professional investors. |
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All tendering holders must make certain representations in the letter of transmittal, including (in the case ofnon-U.S. holders) as to the availability of an exemption under their home country laws that would allow them to participate in the exchange offer without the need for MetLife or RGA to take any action to facilitate a public offering in that country or otherwise. MetLife and RGA will rely on those representations and, unless the exchange offer is terminated, MetLife plans only to accept shares tendered by persons who properly complete the letter of transmittal and provide any other required documentation on a timely basis and as otherwise described herein. | ||
Non-U.S. stockholders should consult their advisors in considering whether they may participate in the exchange offer in accordance with the laws of their home countries and, if they do participate, whether there are any restrictions or limitations on transactions in the RGA class B common stock that may apply in their home countries. MetLife, RGA and theco-dealer managers cannot provide any assurance about whether such limitations may exist. See “The Exchange Offer — Legal and Other Limitations; Certain Matters Relating toNon-U.S. Jurisdictions” for additional information about limitations on the exchange offer outside the United States. | ||
Q: | Can I participate in the exchange offer if I hold MetLife shares through the MetLife Policyholder Trust? | |
A: | Yes. If you hold trust interests in the MetLife Policyholder Trust, the trust custodian will mail you a request for instructions as to whether to tender your proportionate share of the MetLife common stock held by the MetLife Policyholder Trust. If you elect to instruct the trust custodian to tender your proportionate share of MetLife common stock, your trust interests will be reduced to reflect such tender. As a trust beneficiary, you may, by delivering written notice to the trust custodian, revoke any instructions you may have previously given in connection with the exchange offer to the extent that the trust custodian may withdraw previously tendered shares of MetLife common stock under the terms of the exchange offer. The trust custodian has informed MetLife that instructions to tender or withdraw must be delivered to the trust custodian in a written form specified by the custodian and will not be effective unless the trust custodian receives them at least three business days prior to the last day of the exchange offer period. If the limit on the number of shares that can be received for each share of MetLife common stock is in effect at the expiration of the originally contemplated exchange offer period, you will not be able to withdraw your shares because the exchange offer period will only be extended by two trading days and trust beneficiaries must deliver instructions to the trust custodian at least three business days prior to the last day of the exchange offer period. Upon completion of the exchange offer, the transfer agent will promptly deliver any shares of RGA class B common stock received on your behalf pursuant to the exchange offer, including any cash received in lieu of fractional shares, together with a written statement indicating the number of trust interests you retain following completion of the exchange offer, in each case in accordance with the terms of the trust agreement for the MetLife Policyholder Trust. | |
Q: | How many shares of RGA class B common stock will tendering MetLife stockholders receive for shares of MetLife common stock accepted in the exchange offer? | |
A: | The exchange offer is designed to permit tendering MetLife stockholders to exchange their shares of MetLife common stock for shares of RGA class B common stock at a [ • ]% discount to the per-share value of RGA class B common stock, calculated as set forth in this document. Stated another way, for each $1.00 of MetLife common stock accepted in the exchange offer, tendering MetLife stockholders will receive approximately $[ • ] of RGA class B common stock, based on the calculated per-share values determined by reference to the average of the daily volume-weighted average price (which is referred to as the “VWAP”) of MetLife common stock and RGA common stock on the NYSE on the last three trading days of the exchange offer. As previously disclosed, in the exchange offer, MetLife will offer RGA class B common stock at a discount of not greater than 18% nor less than 8% to the per-share value of RGA class B common stock, subject to the limit. The actual discount and limit will be included in this exchange offer prospectus prior to it being declared effective by the SEC. |
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Please note, however, that: | ||
• the number of shares of RGA class B common stock that tendering MetLife stockholders can receive is subject to a limit of [ • ] shares of RGA class B common stock for each share of MetLife common stock accepted in the exchange offer.If the limit is in effect, tendering MetLife stockholders will receive less than $[ • ]of RGA class B common stock for each $1.00 of MetLife common stock, depending on the calculated per-share values of MetLife common stock and RGA class B common stock at the expiration date of the exchange offer, and they could receive much less; | ||
• the exchange offer does not provide for a minimum exchange ratio; and | ||
• because the exchange offer is subject to proration, the number of shares of MetLife common stock that MetLife accepts in the exchange offer may be less than the number of shares that are tendered. Proration will be applied in accordance with the procedures described under “The Exchange Offer — Proration.” References in this document to “proration” are to such procedures. | ||
MetLife will announce whether the limit on the number of shares that can be received for each share of MetLife common stock tendered is in effect at the expiration of the originally contemplated exchange offer period, throughwww.dfking.com/metlifeand by press release, no later than 4:30 p.m. on the expiration date of the exchange offer. If the limit is in effect at that time, then the exchange ratio will be fixed at the limit and the exchange offer will be extended until 12:00 midnight, New York City time, at the end of the second following trading day to permit stockholders to tender or withdraw their shares of MetLife common stock during those days. | ||
Q: | Why is there a limit on the number of shares of RGA class B common stock tendering MetLife stockholders can receive for each share of MetLife common stock that they tender? | |
A: | Tendering MetLife stockholders cannot receive more than [ • ] shares of RGA class B common stock for each share of MetLife common stock accepted in the exchange offer.If the limit is in effect, tendering MetLife stockholders will receive less than $[ • ]of RGA class B common stock for each $1.00 of MetLife common stock that they tender, and they could receive much less. | |
This limit was calculated based on a [ • ]% discount for RGA class B common stock based on the closing prices of MetLife common stock and RGA common stock on [ • ] (the day before the date of this document). MetLife set this limit to ensure that any unusual or unexpected drop in the trading price of RGA common stock, relative to the trading price of MetLife common stock, would not result in an unduly high number of shares of RGA class B common stock being exchanged per share of MetLife common stock accepted in the exchange offer. | ||
Q: | What will happen if the limit is in effect? | |
A: | MetLife will announce whether the limit on the number of shares that can be received for each share of MetLife common stock tendered is in effect at the expiration of the originally contemplated exchange offer period, throughwww.dfking.com/metlifeand by press release, no later than 4:30 p.m. on the original expiration date of the exchange offer. If the limit is in effect at that time, then the exchange ratio will be fixed at the limit and the exchange offer will be automatically extended until 12:00 midnight, New York City time, at the end of the second following trading day to permit stockholders to tender or withdraw their shares of MetLife common stock during those days. Any changes in the prices of the shares of MetLife common stock or RGA common stock on those additional days of the exchange offer will not, however, affect the exchange ratio. In other words, the number of shares of RGA class B common stock that tendering MetLife stockholders will receive will not change as a result of changes in the prices of RGA common stock or MetLife common stock on those additional days that would otherwise have affected the ratio had those movements occurred during the originally contemplated exchange offer period. See “The Exchange Offer — Extension; Termination; Amendment.” |
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Q: | How are the calculated per-share values of MetLife common stock and RGA class B common stock determined for purposes of calculating the number of shares of RGA class B common stock to be received in the exchange offer? | |
A: | The calculated per-share value of a share of MetLife common stock for purposes of the exchange offer will equal the average of the daily VWAP of MetLife common stock on each of the last three trading days of the originally contemplated exchange offer period. | |
The calculated per-share value of a share of RGA class B common stock for purposes of the exchange offer will equal the average of the daily VWAP of RGA common stock on each of the last three trading days of the originally contemplated exchange offer period. Because there is no trading market for the RGA class B common stock, the RGA common stock is believed to be the most appropriate measure of the value of the RGA class B common stock. | ||
The last three trading days of the originally contemplated exchange offer period are [ • ], 2008, [ • ], 2008 and [ • ], 2008. Although those dates could change if the exchange offer is extended, those dates will not change for purposes of calculating the per-share values if that extension occurs solely as a result of the automatic extension of the exchange offer triggered by the limit. If the limit is in effect, the exchange ratio will be fixed and the calculated per-share values of the two stocks based on the VWAP will no longer affect the exchange ratio. See “The Exchange Offer — Extension; Termination; Amendment.” | ||
Q: | What is the “VWAP?” | |
A: | The VWAP for MetLife common stock or RGA common stock, as the case may be, will be the volume-weighted average price per share of that stock on the NYSE during the period beginning at 9:30 a.m., New York City time (or such other time as is the official open of trading on the NYSE), and ending at 4:00 p.m., New York City time (or such other time as is the official close of trading on the NYSE), as reported by Bloomberg L.P., except that, on the last trading day of the originally contemplated exchange offer period, such data will only take into account any adjustments made to reported trades included by 4:10 p.m., New York City time, on that day. | |
Q: | Where can I find the VWAPs of MetLife common stock and RGA common stock during the exchange offer period? | |
A: | A web page atwww.dfking.com/metlifewill provide the daily VWAP of both MetLife common stock and RGA common stock, together with indicative exchange ratios, for each day during the exchange offer. During the last three trading days of the originally contemplated exchange offer period, when the values of MetLife common stock and RGA common stock are calculated for the purposes of the exchange offer, the web page will show the indicative exchange ratios based on indicative calculated per-share values which will equal: | |
• on any day that is not the last day, the actual VWAPs during the elapsed portion of that day; and | ||
• on the last day, the VWAPs of the next-to-last day averaged with the actual daily volume-weighted average prices during the elapsed portion of that last day. During this period, the indicative exchange ratios and calculated per-share values will be updated every 30 minutes (on approximately the hour andhalf-hour mark of the normal trading day). This information will reflect a20-minute reporting delay. | ||
Q: | How and when will the final exchange ratio be made available? | |
A: | Subject to the possible automatic extension of the originally contemplated exchange offer period described below, the final exchange ratio showing the number of shares of RGA class B common stock that tendering MetLife stockholders will receive for each share of MetLife common stock accepted in the exchange offer will be available atwww.dfking.com/metlife and by press release no later than 4:30 p.m., New York City time, on the expiration date of the exchange offer and separately announced by press release. In addition, as described below, indicative exchange ratios will be available throughout the exchange offer period. | |
MetLife stockholders may also contact the information agent to obtain these indicative exchange ratios and the final exchange ratio at the information agent’s toll-free number provided on the back cover of this document. | ||
MetLife will announce whether the limit on the number of shares that can be received for each |
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share of MetLife common stock tendered is in effect at the expiration of the contemplated exchange offer period, throughwww.dfking.com/metlifeand by press release, no later than 4:30 p.m. on the expiration date. If the limit is in effect at that time, then the exchange ratio will be fixed at the limit and the exchange offer period will be extended until 12:00 midnight, New York City time, at the end of the second following trading day to permit stockholders to tender or withdraw their shares of MetLife common stock during those days. | ||
Q: | Will indicative exchange ratios be provided during the exchange offer period? | |
A: | Yes. Indicative exchange ratios will be available atwww.dfking.com/metlife by 4:30 p.m., New York City time, on each day during the exchange offer period, calculated as though that day were the expiration date of the exchange offer. For example, by 4:30 p.m., New York City time, on [ • ], MetLife will show an indicative exchange ratio based on the average of the VWAP of MetLife common stock and RGA common stock on [ • ], [ • ] and [ • ]. The indicative exchange ratio will also reflect whether the limit on the exchange ratio, described above, would have been in effect. MetLife stockholders may also contact the information agent at its toll-free number to obtain these indicative exchange ratios. | |
In addition, for purposes of illustration, MetLife has provided a table that indicates the number of shares of RGA class B common stock that tendering MetLife stockholders would receive per share of MetLife common stock, calculated on the basis described above and taking into account the maximum limit, assuming a range of averages of the VWAP of MetLife common stock and RGA common stock on the last three trading days of the exchange offer period. See “The Exchange Offer — Terms of the Exchange Offer.” | ||
Q: | What if the MetLife common stock or the RGA common stock does not trade on the next-to-last or the last day of the exchange offer period? | |
A: | If a market disruption event occurs with respect to the MetLife common stock or the RGA common stock on any of the three days during which the calculated per-share value of each share of MetLife common stock and RGA class B common stock was originally expected to be determined, the exchange offer period will be automatically extended and the calculated per-share value of MetLife common stock and RGA class B common stock will be determined on the immediately succeeding trading day or days, as the case may be, on which no market disruption event occurs with respect to both the MetLife common stock and the RGA common stock. For specific information as to what would constitute a market disruption event, see “The Exchange Offer — Extension; Termination; Amendment.” | |
Q: | Are there circumstances under which tendering MetLife stockholders would receive fewer shares of RGA class B common stock than they would have received if the exchange ratio were determined using the closing prices of the two stocks on the expiration date of the exchange offer? | |
A: | Yes. For example, if the trading price of MetLife common stock were to increase during the last three days of the exchange offer, the calculated per-share value of MetLife common stock would likely be lower than the closing price of MetLife common stock on the expiration date of the exchange offer. As a result, tendering MetLife stockholders may receive less RGA class B common stock for each $1.00 of MetLife common stock than they would have if that per-share value were calculated on the basis of the closing price of MetLife common stock on the expiration date of the exchange offer. Similarly, if the trading price of RGA common stock were to decrease during the last three days of the exchange offer period, the calculated per-share value of RGA class B common stock would likely be higher than the closing price of RGA common stock on the expiration date of the exchange offer. This could also result in tendering MetLife stockholders receiving fewer shares of RGA class B common stock for each $1.00 of MetLife common stock than they would otherwise receive if that per-share value were calculated on the basis of the closing price of RGA common stock on the expiration date. | |
In addition, if the limit on the number of shares that can be received for each share of MetLife common stock tendered is in effect at the expiration of the contemplated exchange offer period and the exchange offer is automatically extended until 12:00 midnight, New York City |
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time, at the end of the second following trading day, then the number of shares that tendering MetLife stockholders will receive in exchange for each share of MetLife common stock tendered will be fixed at the limit and will not relate to the closing prices on the expiration date of the exchange offer. | ||
The value of RGA class B common stock that tendering MetLife stockholders receive may not remain above the value of MetLife common stock that they exchange following the expiration date of the exchange offer. | ||
Q: | Will tendering MetLife stockholders receive any fractional shares of RGA class B common stock in the exchange offer? | |
A: | No. Fractional shares of RGA class B common stock will not be issued in the exchange offer. Instead, tendering MetLife stockholders will receive cash for the fractional shares that they otherwise would have received. The exchange agent, acting as agent for the MetLife stockholders otherwise entitled to receive fractional shares of RGA class B common stock, will aggregate all fractional shares and cause them to be sold in the open market for the accounts of these stockholders. | |
Q: | What is the aggregate number of shares of RGA class B common stock being offered in the exchange offer? What happens if the exchange offer is oversubscribed and MetLife is unable to fulfill all tenders of MetLife common stock at the exchange ratio? | |
A: | The aggregate number of shares of RGA class B common stock being offered in the exchange offer is 29,243,539. Therefore, if a number of shares of MetLife common stock tendered in the exchange offer would otherwise result in more than 29,243,539 shares of RGA class B common stock being distributed pursuant to the exchange offer, then each tendering MetLife stockholder will be subject to proration to ensure that no more than 29,243,539 shares of RGA class B common stock are distributed in the exchange offer. | |
Proration for each tendering MetLife stockholder will be based on the number of shares of MetLife common stock tendered by that stockholder in the exchange offer, and not on that stockholder’s aggregate ownership of MetLife common stock. Any shares of MetLife common stock not accepted for exchange as a result of proration will be returned to tendering MetLife stockholders. MetLife will announce its preliminary determination of the extent to which tenders will be prorated by press release by 9:00 a.m., New York City time, on the business day following the expiration of the exchange offer. This document refers to this determination as the “preliminary proration factor.” MetLife will announce its final determination of the extent to which tenders will be prorated by press release promptly after this determination is made. This determination is referred to in this document as the “final proration factor.” | ||
MetLife stockholders who directly or beneficially own fewer than 100 shares of MetLife common stock and wish to tender all their shares of MetLife common stock may, subject to certain restrictions, request that their shares not be subject to proration, by checking the box entitled “Odd-Lot Preference” on the letter of transmittal. See “The Exchange Offer — Proration.” | ||
Q: | Can tendering MetLife stockholders change their mind after they tender their MetLife common stock? | |
A: | Yes. Tendering MetLife stockholders may withdraw their tendered shares at any time before the exchange offer expires. See “The Exchange Offer — Withdrawal Rights.” If tendering MetLife stockholders change their mind again, they can re-tender their MetLife common stock by following the tender procedures prior to the expiration of the exchange offer. | |
Q. | Will tendering MetLife stockholders be able to withdraw the shares of MetLife common stock after the final exchange ratio has been determined? | |
A: | Yes. The final exchange ratio used to determine the number of shares of RGA class B common stock that tendering MetLife stockholders will receive for each share of MetLife common stock accepted in the exchange offer will be announced by 4:30 p.m., New York City time, on the originally contemplated expiration date of the exchange offer, which is currently anticipated to be [ • ], 2008. The expiration date may be extended or the exchange offer may be terminated. Tendering MetLife stockholders have a right to withdraw shares of MetLife common stock they have tendered at any time before 12:00 midnight, New York City time, at the end |
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of the expiration date. See “The Exchange Offer — Withdrawal Rights.” In order to withdraw their shares, tendering MetLife stockholders (or, in lieu thereof, if they hold their shares through a broker, dealer, commercial bank, trust company or similar institution, that institution on their behalf) must provide a written notice of withdrawal or facsimile transmission notice of withdrawal to the exchange agent. The information that must be included in that notice is specified under “The Exchange Offer — Withdrawal Rights.” If tendering MetLife stockholders hold their shares through a broker, dealer, commercial bank, trust company or similar institution, they should consult that institution on the procedures they must comply with and the time by which such procedures must be completed in order for that institution to provide a written notice of withdrawal or facsimile notice of withdrawal to the exchange agent on their behalf before 12:00 midnight, New York City time, at the end of the expiration date. If tendering MetLife stockholders hold their shares through such an institution, that institution must deliver the notice of withdrawal with respect to any shares they wish to withdraw. In such a case, as a beneficial owner and not a registered stockholder, any such stockholder will not be able to provide a notice of withdrawal for such shares directly to the exchange agent. | ||
In addition, if the limit on the number of shares of RGA class B common stock that can be received for each share of MetLife common stock tendered is in effect at the expiration of the originally contemplated exchange offer period, then the exchange ratio will be fixed at the limit and the exchange offer will be extended until 12:00 midnight, New York City time, at the end of the second following trading day to permit stockholders to tender or withdraw their shares of MetLife common stock during those days, either directly or by acting through a broker, dealer, commercial bank, trust company or similar institution on their behalf. | ||
Q: | Are there any conditions to MetLife’s obligation to complete the exchange offer? | |
A: | Yes. MetLife is not required to complete the exchange offer unless the conditions described under “The Exchange Offer — Conditions for Completing the Exchange Offer” are satisfied or waived prior to the expiration of the exchange offer. For example, MetLife will not be required to accept tendered MetLife shares for payment unless, among other things: | |
• a sufficient number of shares of MetLife common stock are tendered and not withdrawn so that, when multiplied by the exchange ratio, MetLife can exchange at least 26,319,186 shares (90% of the 29,243,539 shares) of RGA class B common stock that it owns; | ||
• the recapitalization has been completed; and | ||
• there has been no change in, revocation of, or amendment to the private letter ruling issued by the Internal Revenue Service (which is referred to as the “IRS”) and applicable law such that MetLife or RGA remain reasonably satisfied that, among other items, neither MetLife nor any of its subsidiaries will incur any tax (other than anyde minimistax) or other tax-related liability as a result of the recapitalization, the exchange offer and any other divestiture transactions. | ||
Q: | Are there any conditions to RGA’s obligation to complete the recapitalization? | |
A: | Yes. RGA’s obligation to complete the recapitalization will be subject to satisfaction or waiver by RGA of the conditions described under “The Recapitalization and Distribution Agreement.” For example, RGA will not be required to complete the recapitalization unless, among other things: | |
• holders of both (1) a majority of the outstanding shares of RGA common stock and (2) a majority of the outstanding shares of RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy entitled to vote will have approved the recapitalization proposal; | ||
• holders of a majority of the outstanding shares of RGA common stock will have approved the governance proposals; | ||
• holders of a majority of the outstanding shares of RGA common stock present in person or by proxy and entitled to vote will have ratified the Section 382 shareholder rights plan; and | ||
• all of the conditions to the completion of the exchange offer (other than the condition that the recapitalization will have occurred) will have been satisfied or waived. |
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Q: | What happens if more than the minimum amount of shares of MetLife common stock is tendered, but not enough to allow MetLife to exchange all of the shares of RGA class B common stock? | |
A: | In this case, MetLife will dispose of the remainder of the RGA class B common stock either in one or more debt exchangesand/or one or more subsequent split-offs. MetLife currently expects that, if it holds any shares of RGA class B common stock after the split-off, then it will dispose of such shares pursuant to a private debt exchange with participating banks holding MetLife debt securities. | |
Q: | When does the exchange offer expire? | |
A: | The exchange offer, and the withdrawal rights of tendering MetLife stockholders, will expire at 12:00 midnight, New York City time, at the end of [ • ], 2008, unless the exchange offer is extended or terminated. In addition, if the limit on the number of shares that can be received for each share of MetLife common stock tendered is in effect at the expiration of the contemplated exchange offer period, then the exchange ratio will be fixed at the limit and the exchange offer will be extended until 12:00 midnight, New York City time, at the end of the second following trading day. MetLife may terminate the exchange offer in the circumstances described in “The Exchange Offer — Extension; Termination; Amendment.” | |
Q: | Can the exchange offer be extended, and under what circumstances? | |
A: | Yes. MetLife may extend the exchange offer for an aggregate of 10 business days. In addition, MetLife may extend the exchange offer (1) for one or more periods of not more than 10 business days per extension if the conditions to MetLife’s obligation to complete the exchange offer have not been satisfied or waived by the expiration date, (2) for any period as required by any rule, regulation, interpretation or position of the SEC or its staff applicable to the exchange offer, (3) if the limit on the number of shares of RGA class B common stock that can be received for each share of MetLife common stock tendered is reached, or (4) if a market disruption event occurs on any of the three days during which the value of each share of MetLife common stock and RGA class B common stock was originally expected to be determined. See “The Exchange Offer — Extension; Termination; Amendment.” | |
If the exchange offer is extended, MetLife will publicly announce by press release the extension no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. | ||
Q: | Will MetLife or its subsidiaries own any RGA stock other than the RGA class B common stock? | |
A: | Yes. In the recapitalization, 3,000,000 shares of RGA common stock held by a subsidiary of MetLife will be reclassified as 3,000,000 shares of RGA class A common stock (which are referred to as the “recently acquired stock”). MetLife has agreed that, until the earlier of termination of the recapitalization and distribution agreement or the 60th day following the earlier of the first date following the split-off on which MetLife no longer holds any RGA class B common stock or the first anniversary of the split-off (which is referred to as the“lock-up period”), it will not sell, transfer or otherwise dispose of the recently acquired stock without the prior written consent of RGA. MetLife has further agreed that, following the expiration of thelock-up period, it will sell, exchange or otherwise dispose of the recently acquired stock within 60 months of the completion of the split-off. | |
Q: | How do MetLife stockholders decide whether to participate in the exchange offer? | |
A: | Whether MetLife stockholders should participate in the exchange offer depends on many factors. MetLife stockholders should examine carefully their specific financial position, plans and needs before they decide whether to participate. MetLife encourages MetLife stockholders to consider, among other things: | |
• their view of the relative values of their shares of MetLife common stock and the shares of RGA class B common stock they will receive in the exchange offer; and | ||
• their individual investment strategy with regard to these stocks. | ||
In addition, MetLife stockholders should consider all of the factors described in the section entitled “Risk Factors.” | ||
None of MetLife, RGA, or any of their respective directors or officers, or theco-dealer |
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managers make any recommendation as to whether MetLife stockholders should tender their shares of MetLife common stock. MetLife stockholders must make their own decision after carefully reading this document and consulting with their advisors based on their own financial position and requirements. MetLife stockholders are encouraged to read this document carefully. | ||
Q: | How do MetLife stockholders participate in the exchange offer? | |
A: | The procedures MetLife stockholders must follow to participate in the exchange offer will depend on whether they hold their shares of MetLife common stock in certificated form, through a bank or broker, through the MetLife Policyholder Trustand/or through MetLife employee benefit plans. For specific instructions about how to participate, see the section entitled “The Exchange Offer — Procedures for Tendering.” | |
Q: | Can MetLife stockholders tender some, but not all, of their shares of MetLife common stock in the exchange offer? | |
A: | Yes. MetLife stockholders may tender all, some or none of their shares of MetLife common stock. | |
Q: | What do MetLife stockholders do if they want to retain all of their MetLife common stock? | |
A: | If MetLife stockholders want to retain all of their MetLife common stock, they do not need to take any action. | |
Q: | Will the RGA class B common stock be listed on a securities exchange following the split-off? | |
A: | Yes. RGA class B common has been approved for listing on the NYSE, subject to official notice of issuance, and will be listed on the NYSE under the symbol “RGA.B” following the split-off. | |
Q: | Why is the value of RGA common stock being used to measure the value of RGA class B common stock? | |
A: | Although there is no trading market for the RGA class B common stock, MetLife believes the current RGA common stock is an appropriate, readily ascertainable proxy for the value of the RGA class B common stock due to the substantial identity in the attributes of the two classes of RGA stock. As a result of the recapitalization, all issued and outstanding shares of RGA common stock will be recapitalized as RGA class A common stock (and certain shares of RGA class A common stock held by MetLife and its subsidiaries will be exchanged for an equivalent number of shares of RGA class B common stock). The RGA class A common stock will be identical in all respects to RGA’s current common stock, and will also generally be identical in all respects to the RGA class B common stock, with the following main exceptions: (1) the holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA, (2) holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA, and (3) only the RGA class B common stock is subject to the significant holder voting limitation, and there will be certain limited differences required by Missouri law. | |
Q: | Will trading prices for the RGA class A common stock and the RGA class B common stock be different? | |
A: | There is currently no trading market for the RGA class B common stock, and neither MetLife nor RGA can assure MetLife stockholders that one will develop. RGA common stock is listed on the NYSE under the symbol “RGA”, and the RGA class B common stock has been approved for listing on the NYSE, subject to official notice of issuance. Neither MetLife nor RGA can predict whether there will be any disparity in the trading prices for the two classes of RGA stock once both are listed on the NYSE. It is possible that RGA class B common stock may trade at a premium or discount to the RGA class A common stock. | |
If, immediately after the split-off, the RGA class B common stock were to trade at a discount to the RGA class A common stock, that would result in tendering MetLife stockholders effectively receiving less than $[ • ] of RGA class B common stock for each $1.00 of MetLife common stock tendered and accepted in the exchange offer. | ||
Q: | Will the RGA class B common stock be converted into RGA class A common stock following the completion of the divestiture? | |
A: | No. RGA currently expects that, following the completion of the divestiture, and in connection with the next regularly scheduled annual |
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shareholders’ meeting of RGA (anticipated to be held on May 27, 2009), or a special meeting called for such purpose, the RGA board of directors will consider a proposal to convert the RGA class B common stock into RGA class A common stock on a one-for-one basis (which is referred to as the “conversion”), and to submit such a proposal to the RGA shareholders. However, there is no binding commitment by the RGA board of directors to, and there can be no assurance that the RGA board of directors will, consider the issue or resolve to present such a proposal to the RGA shareholders and, if submitted, that the RGA shareholders would approve such a conversion. The RGA amended and restated articles of incorporation will provide that the RGA class B common stock will convert into RGA class A common stock, on a one-for-one basis, if and when: | ||
• the RGA board of directors determines to propose such conversion to the RGA shareholders; | ||
• the RGA board of directors adopts a resolution submitting the proposal to convert the shares of RGA class B common stock to its shareholders; and | ||
• the holders of a majority of RGA class A common stock and the holders of a majority of RGA class B common stock, represented in person or by proxy at the shareholders’ meeting each approve the proposal. | ||
Q: | Do the shares of RGA class A common stock and RGA class B common stock have different voting rights? | |
A: | Yes. RGA class A common stock and RGA class B common stock will vote together as a single class, except with respect to certain limited matters required by Missouri law described in the answer to the following question, and except that: | |
• holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA; | ||
• holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA; | ||
• there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | ||
• holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of the outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock. See “Description of RGA Capital Stock — Common Stock.” | ||
For example, assuming the RGA board of directors were to consist of five directors, four would be designated for election by the RGA class B holders and one would be designated for election by the RGA class A holders. | ||
Q: | Other than the voting rights for the RGA board of directors, is there any difference between a share of RGA class A common stock and a share of RGA class B common stock? | |
A: | Generally no. The rights of the holders of RGA class A common stock and RGA class B common stock will be substantially the same in all other respects. More specifically, the voting rights of RGA class A common stock and RGA class B common stock will be the same in all matters submitted to the RGA shareholders except (1) the election of RGA’s directors, (2) a reduction in the voting power by holders of more than 15% of the RGA class B common stock if such holders do not also hold an equal or greater proportion of RGA class A common stock, (3) separate voting by class on any proposal to convert RGA class B common stock into RGA class A common stock, and (4) certain other limited matters required by Missouri law. | |
Missouri law requires a separate class voting right if an amendment to the RGA articles of incorporation would alter the aggregate number of authorized shares or par value of either such class or alter the powers, preferences or special rights of either such class so as to affect these rights adversely. These class voting rights provide each class with an additional measure of protection in the case of a limited number of actions that could have an adverse effect on the holders of shares of such class. For example, if the RGA board of directors were to propose an amendment to the RGA articles of incorporation that would adversely affect the rights and privileges of RGA class A common stock or RGA class B common stock, the holders of shares of that class would be entitled to a separate class vote on such proposal, in addition to any vote |
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that may be required under the RGA articles of incorporation. | ||
Q: | Why is RGA amending its organizational documents? | |
A: | RGA is amending its organizational documents in order, among other things, to effect the recapitalization. Subject to the approval of the RGA shareholders, RGA will amend the RGA articles of incorporation to provide, among other things, that: | |
• the holders of RGA class A common stock have, as a class, the right to elect no more than 20% of the directors of RGA; | ||
• the holders of RGA class B common stock have, as a class, the right to elect at least 80% of the directors of RGA; | ||
• the voting power with respect to directors of a holder of more than 15% of the outstanding RGA class B common stock will be restricted to 15% of the outstanding RGA class B common stock (provided that, if such holder also has in excess of 15% of the outstanding RGA class A common stock, the holder of RGA class B common stock may exercise the voting power of the RGA class B common stock in excess of 15% to the extent that such holder has an equivalent percentage of outstanding RGA class A common stock); and | ||
• RGA shareholders are subject to stock ownership limitations, which would generally limit RGA shareholders from owning 5% or more (by value) of RGA stock for a period of 36 months and one day from the completion of the recapitalization (it being understood that such limitation, among other things, (1) would not apply to MetLife or its subsidiaries, (2) would not apply to any participating banks that may participate in any debt exchanges and (3) would not prohibit a person from acquiring or owning 5% or more (by value) of RGA stock as a result of the divestiture). Any person permitted to acquire or own 5% or more (by value) of RGA stock pursuant to the three exceptions described in the immediately preceding sentence will not be permitted to acquire any additional RGA stock at any time during the 36 month and one day restriction period, unless and until such person owns less than 5% (by value) of RGA stock, at which point such person may acquire RGA stock only to the extent that, after such acquisition, such person owns less than 5% (by value) of RGA stock. | ||
These amendments are referred to in this document as the “RGA governance proposals.” | ||
In addition, RGA has adopted a Section 382 shareholder rights plan, which will be amended prior to or in connection with the divestiture that will be designed to limit holders of 5% or more (by value) of RGA stock, generally on the same terms and subject to the same exceptions, as set forth in the paragraph above (any such rights plan, the “Section 382 shareholder rights plan”). RGA is submitting this Section 382 shareholder rights plan to its shareholders for ratification. See “Description of RGA Capital Stock — Description of Section 382 Shareholder Rights Plan.” | ||
Q: | Will the differences in voting rights between the RGA class A common stock and the RGA class B common stock affect the exchange ratio? | |
A: | No. | |
Q: | Will tendering MetLife stockholders be taxed on the shares of RGA class B common stock that they receive in the split-off? | |
A: | MetLife and RGA each has received a ruling from the IRS (which is referred to as the “IRS ruling”) to the effect that the split-off (together with any debt exchanges and any subsequent split-offs) will be tax-free to MetLife and MetLife stockholders for U.S. federal income tax purposes, except with respect to any cash received in lieu of fractional shares of RGA class B common stock. In addition, it is a condition to the completion of the exchange offer that MetLife receives a tax opinion from Wachtell, Lipton, Rosen & Katz (which is referred to as the “tax opinion”), in form and in substance reasonably satisfactory to MetLife, regarding the satisfaction of certain requirements for tax-free treatment under Section 355 of the Internal Revenue Code on which the IRS will not and did not rule. The ruling and the tax opinion do not address any state, local or foreign tax consequences of the divestiture. MetLife stockholders should consult their tax advisors as to the particular tax consequences to them of the split-off. See “The Exchange Offer — U.S. Federal Income Tax Consequences of the Exchange Offer.” |
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Q: | Are there any appraisal rights for holders of MetLife common stock or RGA common stock? | |
A: | No. There are no appraisal rights available to MetLife stockholders or RGA shareholders in connection with the recapitalization or the exchange offer. | |
Q: | What is the accounting treatment of the exchange offer? | |
A: | The shares of MetLife common stock acquired by MetLife in the exchange offer will be recorded as an acquisition of treasury stock at a cost equal to the market value of the shares of MetLife common stock tendered and accepted in the exchange offer at its expiration. Any difference between the net book value of MetLife’s investment in the RGA class B common stock and the market value of the shares of MetLife common stock acquired at that date will be recognized by MetLife as a gain or loss from discontinued operations net of any direct and incremental expenses of this exchange offer on the disposal of its RGA class B common stock. | |
Q: | What will MetLife do with the shares of MetLife common stock that it acquires? | |
A: | The shares of MetLife common stock acquired by MetLife in the exchange offer will be held as treasury stock. | |
Q: | What will RGA do with the shares of RGA class A common stock that it receives from MetLife in the recapitalization? | |
A: | The shares of RGA class A common stock acquired by RGA from MetLife and its subsidiaries in the recapitalization in exchange for the RGA class B common stock will be retired. | |
Q: | What is the impact of the exchange offer on MetLife’s share count? | |
A: | Any acquisition of MetLife common stock by MetLife or its subsidiaries in the exchange offer will reduce the number of shares of MetLife common stock outstanding, although the actual number of shares of MetLife common stock outstanding on a given date reflects a variety of factors such as option exercises. | |
Q: | Where is more information about MetLife and RGA available? | |
A: | Information about MetLife and RGA is available from various sources described in the section entitled “Where You Can Find More Information.” | |
Q: | Whom should MetLife stockholders call if they have questions about the exchange offer or want copies of additional documents? | |
A: | MetLife stockholders may call the information agent, D.F. King & Co., Inc. at(212) 269-5550 (banks and brokers only) or(800) 825-0898 (toll free), to ask any questions about the exchange offer or to request additional documents, including copies of this document. |
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• | references to RGA include Reinsurance Group of America, Incorporated and its consolidated subsidiaries; and | |
• | references to MetLife include MetLife, Inc. and its consolidated subsidiaries. |
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• | Ownership. MetLife is currently RGA’s majority shareholder, beneficially owning approximately 52% of RGA’s outstanding common stock as of June 30, 2008. | |
• | Directors. Three of RGA’s eight directors, including RGA’s current chairman, are officers of MetLife. These three directors will resign in connection with the completion of the exchange offer. | |
• | Reinsurance Business. RGA has direct policies and reinsurance agreements with MetLife and some of its affiliates. Under these agreements, RGA has net premiums of approximately $250.9 million in 2007, $227.8 million in 2006, and $226.7 million in 2005. The net premiums reflect the net business assumed from and ceded to such affiliates of MetLife. The pre-tax income (loss) on this business, excluding investment income allocated to support the business, was approximately $16.0 million in 2007, $10.9 million in 2006, and ($11.3) million in 2005. |
• | a recapitalization of RGA common stock into two classes of common stock — RGA class A common stock and RGA class B common stock; and | |
• | an exchange offer pursuant to which MetLife offers to acquire MetLife common stock from its stockholders in exchange for all of the RGA class B common stock. |
• | one or more public or private debt exchanges, pursuant to which MetLife will acquire MetLife debt securities in exchange for RGA class B common stock; and/or |
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• | one or more subsequent split-offs pursuant to which MetLife will acquire MetLife common stock from its stockholders in exchange for RGA class B common stock. |
• | holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA; | |
• | holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA; | |
• | there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | |
• | holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock. |
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• | a sufficient number of shares of MetLife common stock are tendered and not withdrawn so that MetLife can exchange at least 26,319,186 shares (90% of the 29,243,539 shares) of RGA class B common stock that MetLife owns; | |
• | the recapitalization has been completed; and | |
• | there has been no change in, revocation of, or amendment to the IRS ruling or applicable law, such that MetLife and RGA are no longer satisfied that, among other items, neither MetLife nor any of its subsidiaries will incur any tax (other than anyde minimistax) or other tax related liability as a result of the recapitalization, the exchange offer and any debt exchanges or any subsequent split-offs. |
• | holders of both (1) a majority of outstanding RGA common stock and (2) a majority of the outstanding RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy and entitled to vote at the special meeting will have approved the recapitalization proposal; and | |
• | all of the conditions to the completion of the exchange offer (other than the condition that the recapitalization will have occurred) will have been satisfied or waived. In other words, because the recapitalization will occur immediately prior to the exchange offer, there will not be a circumstance in which RGA shares are recapitalized other than where the RGA class B common stock then held by MetLife is exchanged with MetLife stockholders. |
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• | If MetLife stockholders hold certificates for shares of MetLife common stock, they must deliver to the exchange agent at the address listed on the back cover of this document a properly completed and duly executed letter of transmittal (or a manually executed facsimile of that document), along with any required signature guarantees and any other required documents, and the certificates representing the shares of MetLife common stock tendered. | |
• | If MetLife stockholders wish to tender their shares of MetLife common stock but the shares are not immediately available, or time will not permit the shares or other required documentation to reach the exchange agent prior to the expiration date, or the procedure for book entry transfer cannot be completed on a timely basis, such stockholders must follow the procedures for guaranteed delivery under the section entitled “The Exchange Offer — Procedures for Tendering — Guaranteed Delivery Procedures.” | |
• | If MetLife stockholders hold MetLife common stock through a broker, they should follow the instructions sent to them separately by their broker. Such stockholders should not use the letter of transmittal to direct the tender of their shares of MetLife common stock. Their broker must notify The Depository Trust Company (“DTC”) and cause it to transfer the shares into the exchange agent’s account in accordance with DTC’s procedures. The broker must also ensure that the exchange agent receives an agent’s message from DTC confirming the book-entry transfer of the shares of MetLife common stock. A tender by book-entry transfer will be completed upon receipt by the exchange agent of an agent’s message, book-entry confirmation from DTC and any other required documents. | |
• | If a trust beneficiary holds trust interests in the MetLife Policyholder Trust, the trust custodian will mail them a request for instructions as to whether to tender their proportionate share of the MetLife common stock held by the MetLife Policyholder Trust. If such holder elects to instruct the trust custodian to tender their proportionate share of MetLife common stock, their trust interests will be reduced to reflect such tender. A trust beneficiary may, by delivering written notice to the trust custodian, revoke any instructions they may have previously given in connection with the exchange offer to the extent that the trust custodian may withdraw previously tendered MetLife common stock under the terms of the exchange offer. The trust custodian has informed MetLife that instructions to tender or withdraw must be delivered to the trust custodian in a written form specified by the custodian and will not be effective unless the trust custodian receives them at least three business days prior to the last day of the exchange offer period. If the limit on the number of shares that can be received for each share of MetLife common stock is in effect at the expiration of the originally contemplated |
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exchange offer period, trust beneficiaries will not be able to withdraw their shares because the exchange offer period will only be extended by two trading days and trust beneficiaries must deliver instructions to the trust custodian at least three business days prior to the last day of the exchange offer period. Upon completion of the exchange offer, the transfer agent will promptly deliver any shares of RGA class B common stock received on behalf of any trust beneficiary pursuant to the exchange offer, including any cash received in lieu of fractional shares, together with a written statement indicating the number of trust interests any such trust beneficiary retains following completion of the exchange offer, in each case in accordance with the terms of the trust agreement for the MetLife Policyholder Trust. |
• | Participants in the MetLife employee benefit plans should follow the special instructions that are being sent to them by BNY Mellon Shareowner Services. Such participants should not use the letter of transmittal to direct the tender of MetLife common stock held in these plans. Such participants may direct the plan trustee to tender all, some or none of the MetLife common stock in their employee benefit plan account(s), subject to the limitations set forth below and in any instructions provided by BNY Mellon Shareowner Services. MetLife has been informed that instructions to tender or withdraw by participants in the MetLife employee benefit plans must be made at least three business days prior to the last day of the exchange offer period. If the limit on the number of shares that can be received for each share of MetLife common stock is in effect at the expiration of the originally contemplated exchange offer period, participants in the MetLife employee benefit plans will not be able to tender their shares during the extension period and will only be able to withdraw their shares until 5:00 p.m., New York City time, on the first trading day of the two business day extension period. However, participants in MetLife employee benefit plans will not be eligible to tender in the exchange offer any of the shares of MetLife common stock allocated to the nonvested portion of their employer contributions accounts in any of these plans as of the deadline for directing the trustee of these plans to tender shares held in their MetLife employee benefit plan accounts. Furthermore, participants who hold interests in a MetLife employee benefit plan will be permitted to tender only the whole number of shares of MetLife common stock credited to their accounts (fractional shares will be disregarded for this purpose) and participants whose interests amount to less than one share of MetLife common stock will not be able to participate in the exchange offer. |
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• | the exchange ratio will fluctuate until the end of the exchange offer, and will be subject to a limit, which may cause tendering MetLife stockholders to receive no discount or a lower discount than they expected; | |
• | if the exchange offer, any debt exchanges, or any subsequent split-offs are determined to be taxable, MetLife and tendering MetLife stockholders could be subject to a material amount of taxes; | |
• | the divestiture may be taxable to MetLife if there is an acquisition of 50% or more of the outstanding common stock of MetLife or RGA and may result in indemnification obligations from RGA to MetLife; | |
• | the transactions could limit RGA’s ability to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA or limit RGA’s and its subsidiaries’ ability to fully utilize their NOLs and other tax attributes; | |
• | the proposed acquisition restrictions and RGA’s Section 382 shareholder rights plan, which are intended to help preserve RGA’s and its subsidiaries’ NOLs and other tax attributes, may not be effective or may have unintended negative effects; |
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• | the right of the holders of RGA class A common stock to elect up to 20% of RGA’s directors will be subject to RGA’s existing shareholder nomination procedures, and such directors will act as fiduciaries for all of the RGA shareholders, which factors may diminish the value and effectiveness of the RGA class A voting rights; | |
• | the holders of the RGA class B common stock will control the election of at least 80% of RGA’s directors, which may render RGA more vulnerable to unsolicited takeover bids, including bids that unfairly discriminate between classes of RGA shareholders; | |
• | there is no public market for RGA class B common stock and an active trading market may not develop, which may adversely affect the market price; | |
• | the divestiture will result in a substantial amount of RGA class B common stock entering the market, which may adversely affect the market price of the RGA class A common stock and the RGA class B common stock, and the prior performance of RGA common stock may not be indicative of the performance of the RGA common stock after the split-off; | |
• | RGA’s stock price may fluctuate significantly following the split-off or any additional divestiture transactions, and tendering MetLife stockholders could lose all or part of their investment as a result; | |
• | the voting rights of the RGA class B common stock may change in the future; | |
• | RGA’s anti-takeover provisions may delay or prevent a change in control of RGA, which could adversely affect the price of each class of RGA common stock; | |
• | applicable insurance laws may make it difficult to effect a change of control of RGA; and | |
• | after the recapitalization and divestiture, RGA will no longer benefit from MetLife’s stature and industry recognition. |
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MetLife | RGA | |||||||||||||||||||||||
For the Quarterly Period Ended: | High | Low | Dividends | High | Low | Dividends | ||||||||||||||||||
2006 | ||||||||||||||||||||||||
March 31, 2006 | $ | 52.07 | $ | 48.14 | $ | 49.15 | $ | 45.55 | $ | 0.09 | ||||||||||||||
June 30, 2006 | 53.48 | 48.00 | 49.15 | 46.61 | 0.09 | |||||||||||||||||||
September 30, 2006 | 57.80 | 49.33 | 53.04 | 48.07 | 0.09 | |||||||||||||||||||
December 31, 2006 | 60.00 | 56.08 | $ | 0.59 | 58.65 | 51.95 | 0.09 | |||||||||||||||||
2007 | ||||||||||||||||||||||||
March 31, 2007 | $ | 66.25 | $ | 58.74 | $ | 59.84 | $ | 53.47 | $ | 0.09 | ||||||||||||||
June 30, 2007 | 69.35 | 62.35 | 64.79 | 57.42 | 0.09 | |||||||||||||||||||
September 30, 2007 | 70.27 | 58.48 | 61.49 | 48.81 | 0.09 | |||||||||||||||||||
December 31, 2007 | 71.23 | 59.73 | $ | 0.74 | 59.37 | 49.94 | 0.09 | |||||||||||||||||
2008 | ||||||||||||||||||||||||
March 31, 2008 | $ | 62.53 | $ | 52.46 | $ | 59.31 | $ | 47.45 | $ | 0.09 | ||||||||||||||
June 30, 2008 | 63.60 | 52.61 | 57.81 | 43.19 | 0.09 | |||||||||||||||||||
September 30, 2008 (through August 5, 2008) | 54.50 | 47.73 | 51.16 | 40.95 | 0.09 |
MetLife Common Stock | ||||||||||||
High | Low | Close | ||||||||||
May 30, 2008 | $ | 60.69 | $ | 59.61 | $ | 60.03 | ||||||
[ • ], 2008 | $ | [•] | $ | [•] | $ | [•] |
RGA Common Stock | ||||||||||||
High | Low | Close | ||||||||||
May 30, 2008 | $ | 51.62 | $ | 50.78 | $ | 51.42 | ||||||
[ • ], 2008 | $ | [•] | $ | [•] | $ | [•] |
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Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
MetLife historical per share data | ||||||||||||||||||||||||||||
Income from continuing operations available to common shareholders per common share: | ||||||||||||||||||||||||||||
Basic | 2.14 | 2.82 | $ | 5.57 | $ | 3.86 | $ | 4.02 | $ | 3.43 | $ | 2.37 | ||||||||||||||||
Diluted | 2.10 | 2.76 | 5.44 | 3.81 | 3.99 | 3.41 | 2.34 | |||||||||||||||||||||
Net income available to common shareholders per common share: | ||||||||||||||||||||||||||||
Basic | 2.14 | 2.82 | $ | 5.62 | $ | 8.09 | $ | 6.21 | $ | 3.67 | $ | 2.97 | ||||||||||||||||
Diluted | 2.10 | 2.76 | 5.48 | 7.99 | 6.16 | 3.65 | 2.94 | |||||||||||||||||||||
Cash dividends declared per common share | N/A | N/A | $ | 0.74 | $ | 0.59 | $ | 0.52 | $ | 0.46 | $ | 0.23 |
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
RGA historical per share data | ||||||||||||||||||||||||||||
Income from continuing operations: | ||||||||||||||||||||||||||||
Basic | $ | 2.37 | $ | 2.53 | $ | 4.98 | $ | 4.79 | $ | 3.77 | $ | 3.94 | $ | 3.47 | ||||||||||||||
Diluted | 2.30 | 2.43 | 4.80 | 4.65 | 3.70 | 3.90 | 3.46 | |||||||||||||||||||||
Net income: | ||||||||||||||||||||||||||||
Basic | $ | 2.29 | $ | 2.49 | $ | 4.75 | $ | 4.71 | $ | 3.58 | $ | 3.56 | $ | 3.37 | ||||||||||||||
Diluted | 2.22 | 2.39 | 4.57 | 4.57 | 3.52 | 3.52 | 3.36 | |||||||||||||||||||||
Cash dividends declared per common share | $ | 0.18 | $ | 0.18 | $ | 0.36 | $ | 0.36 | $ | 0.36 | $ | 0.27 | $ | 0.24 |
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Six Months | ||||||||||||||||||||||||||||
Ended June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Statement of Income Data(1) | ||||||||||||||||||||||||||||
Revenues(2)(3): | ||||||||||||||||||||||||||||
Premiums | $ | 15,294 | $ | 13,668 | $ | 27,895 | $ | 26,412 | $ | 24,860 | $ | 22,200 | $ | 20,575 | ||||||||||||||
Universal life and investment-type product policy fees | 2,838 | 2,587 | 5,311 | 4,780 | 3,828 | 2,867 | 2,495 | |||||||||||||||||||||
Net investment income | 9,091 | 9,355 | 19,010 | 17,086 | 14,760 | 12,268 | 11,381 | |||||||||||||||||||||
Other revenues | 766 | 795 | 1,533 | 1,362 | 1,271 | 1,198 | 1,199 | |||||||||||||||||||||
Net investment gains (losses) | (1,248 | ) | (277 | ) | (738 | ) | (1,382 | ) | (86 | ) | 175 | (551 | ) | |||||||||||||||
Total revenues | 26,741 | 26,128 | 53,011 | 48,258 | 44,633 | 38,708 | 35,099 | |||||||||||||||||||||
Expenses(2)(3): | ||||||||||||||||||||||||||||
Policyholder benefits and claims | 15,458 | 13,628 | 27,828 | 26,431 | 25,506 | 22,662 | 20,811 | |||||||||||||||||||||
Interest credited to policyholder account balances | 2,576 | 2,841 | 5,741 | 5,171 | 3,887 | 2,997 | 3,035 | |||||||||||||||||||||
Policyholder dividends | 876 | 856 | 1,726 | 1,701 | 1,679 | 1,666 | 1,731 | |||||||||||||||||||||
Other expenses | 5,639 | 5,730 | 11,673 | 10,783 | 9,264 | 7,813 | 7,168 | |||||||||||||||||||||
Total expenses | 24,549 | 23,055 | 46,968 | 44,086 | 40,336 | 35,138 | 32,745 | |||||||||||||||||||||
Income from continuing operations before provision for income tax | 2,192 | 3,073 | 6,043 | 4,172 | 4,297 | 3,570 | 2,354 | |||||||||||||||||||||
Provision for income tax(2) | 598 | 892 | 1,760 | 1,099 | 1,223 | 993 | 583 | |||||||||||||||||||||
Income from continuing operations | 1,594 | 2,181 | 4,283 | 3,073 | 3,074 | 2,577 | 1,771 | |||||||||||||||||||||
Income (loss) from discontinued operations, net of income tax(2) | — | (1 | ) | 34 | 3,220 | 1,640 | 267 | 472 | ||||||||||||||||||||
Income before cumulative effect of a change in accounting, net of income tax | 1,594 | 2,180 | 4,317 | 6,293 | 4,714 | 2,844 | 2,243 | |||||||||||||||||||||
Cumulative effect of a change in accounting, net of income tax(3) | — | — | — | — | — | (86 | ) | (26 | ) | |||||||||||||||||||
Net income | 1,594 | 2,180 | 4,317 | 6,293 | 4,714 | 2,758 | 2,217 | |||||||||||||||||||||
Preferred stock dividends | 64 | 68 | 137 | 134 | 63 | — | — | |||||||||||||||||||||
Charge for conversion of company-obligated mandatorily | ||||||||||||||||||||||||||||
redeemable securities of a subsidiary trust | — | — | — | — | — | — | 21 | |||||||||||||||||||||
Net income available to common shareholders | $ | 1,530 | $ | 2,112 | $ | 4,180 | $ | 6,159 | $ | 4,651 | $ | 2,758 | $ | 2,196 | ||||||||||||||
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As of June 30, | As of December 31, | |||||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Balance Sheet Data(1) | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||
General account assets | $ | 406,086 | $ | 398,403 | $ | 383,350 | $ | 353,776 | $ | 270,039 | $ | 251,085 | ||||||||||||
Separate account assets | 149,701 | 160,159 | 144,365 | 127,869 | 86,769 | 75,756 | ||||||||||||||||||
Total assets(2) | $ | 555,787 | $ | 558,562 | $ | 527,715 | $ | 481,645 | $ | 356,808 | $ | 326,841 | ||||||||||||
Liabilities: | ||||||||||||||||||||||||
Life and health policyholder liabilities(4) | $ | 286,822 | $ | 278,246 | $ | 267,146 | $ | 257,258 | $ | 193,612 | $ | 177,947 | ||||||||||||
Property and casualty policyholder liabilities(4) | 3,316 | 3,324 | 3,453 | 3,490 | 3,180 | 2,943 | ||||||||||||||||||
Short-term debt | 623 | 667 | 1,449 | 1,414 | 1,445 | 3,642 | ||||||||||||||||||
Long-term debt | 9,694 | 9,628 | 9,129 | 9,489 | 7,412 | 5,703 | ||||||||||||||||||
Collateral financing arrangements | 5,847 | 5,732 | 850 | — | — | — | ||||||||||||||||||
Junior subordinated debt securities | 5,224 | 4,474 | 3,780 | 2,533 | — | — | ||||||||||||||||||
Payables for collateral under securities loaned and other transactions | 45,979 | 44,136 | 45,846 | 34,515 | 28,678 | 27,083 | ||||||||||||||||||
Other | 16,040 | 17,017 | 17,899 | 15,976 | 12,888 | 12,618 | ||||||||||||||||||
Separate account liabilities | 149,701 | 160,159 | 144,365 | 127,869 | 86,769 | 75,756 | ||||||||||||||||||
Total liabilities(2) | 523,246 | 523,383 | 493,917 | 452,544 | 333,984 | 305,692 | ||||||||||||||||||
Stockholders’ Equity: | ||||||||||||||||||||||||
Preferred stock, at par value | 1 | 1 | 1 | 1 | — | — | ||||||||||||||||||
Common stock, at par value | 8 | 8 | 8 | 8 | 8 | 8 | ||||||||||||||||||
Additional paid-in capital | 17,647 | 17,098 | 17,454 | 17,274 | 15,037 | 14,991 | ||||||||||||||||||
Retained earnings(5) | 21,441 | 19,884 | 16,574 | 10,865 | 6,608 | 4,193 | ||||||||||||||||||
Treasury stock, at cost | (4,047 | ) | (2,890 | ) | (1,357 | ) | (959 | ) | (1,785 | ) | (835 | ) | ||||||||||||
Accumulated other comprehensive income (loss)(6) | (2,509 | ) | 1,078 | 1,118 | 1,912 | 2,956 | 2,792 | |||||||||||||||||
Total stockholders’ equity | 32,541 | 35,179 | 33,798 | 29,101 | 22,824 | 21,149 | ||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 555,787 | $ | 558,562 | $ | 527,715 | $ | 481,645 | $ | 356,808 | $ | 326,841 | ||||||||||||
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||||
Other Data (1) | ||||||||||||||||||||||||||||
Net income available to common shareholders | $ | 1,530 | $ | 2,112 | $ | 4,180 | $ | 6,159 | $ | 4,651 | $ | 2,758 | $ | 2,196 | ||||||||||||||
Return on common equity(7) | N/A | N/A | 13.0 | % | 21.9 | % | 18.5 | % | 12.5 | % | 11.4 | % | ||||||||||||||||
Return on common equity, excluding accumulated other comprehensive income (loss) | N/A | N/A | 13.2 | % | 22.6 | % | 20.4 | % | 14.4 | % | 13.0 | % | ||||||||||||||||
Earnings Per Share Data (1) | ||||||||||||||||||||||||||||
Income from Continuing Operations Available to Common Shareholders Per Common Share | ||||||||||||||||||||||||||||
Basic | $ | 2.14 | $ | 2.82 | $ | 5.57 | $ | 3.86 | $ | 4.02 | $ | 3.43 | $ | 2.37 | ||||||||||||||
Diluted | $ | 2.10 | $ | 2.76 | $ | 5.44 | $ | 3.81 | $ | 3.99 | $ | 3.41 | $ | 2.34 | ||||||||||||||
Income from Discontinued Operations Per Common Share | ||||||||||||||||||||||||||||
Basic | $ | — | $ | — | $ | 0.05 | $ | 4.23 | $ | 2.19 | $ | 0.35 | $ | 0.64 | ||||||||||||||
Diluted | $ | — | $ | — | $ | 0.04 | $ | 4.18 | $ | 2.17 | $ | 0.35 | $ | 0.63 | ||||||||||||||
Cumulative Effect of a Change in Accounting Per Common Share (3) | ||||||||||||||||||||||||||||
Basic | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (0.11 | ) | $ | (0.04 | ) | ||||||||||||
Diluted | $ | — | $ | — | $ | — | $ | — | $ | — | $ | (0.11 | ) | $ | (0.03 | ) |
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Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||||
Net Income Available to Common Shareholders Per Common Share | ||||||||||||||||||||||||||||
Basic | $ | 2.14 | $ | 2.82 | $ | 5.62 | $ | 8.09 | $ | 6.21 | $ | 3.67 | $ | 2.97 | ||||||||||||||
Diluted | $ | 2.10 | $ | 2.76 | $ | 5.48 | $ | 7.99 | $ | 6.16 | $ | 3.65 | $ | 2.94 | ||||||||||||||
Dividends Declared Per Common Share | N/A | N/A | $ | 0.74 | $ | 0.59 | $ | 0.52 | $ | 0.46 | $ | 0.23 |
(1) | On July 1, 2005, MetLife acquired The Travelers Insurance Company, excluding certain assets, most significantly, Primerica, from Citigroup Inc. (“Citigroup”), and substantially all of Citigroup’s international insurance businesses (collectively, “Travelers”). The 2005 selected financial data includes total revenues and total expenses of $966 million and $577 million, respectively, from the date of the acquisition. | |
(2) | Discontinued operations: |
Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Investment income | $ | 3 | $ | 10 | $ | 20 | $ | 241 | $ | 403 | $ | 657 | $ | 727 | ||||||||||||||
Investment expense | (2 | ) | (4 | ) | (8 | ) | (151 | ) | (245 | ) | (392 | ) | (424 | ) | ||||||||||||||
Net investment gains (losses) | — | 5 | 13 | 4,795 | 2,125 | 146 | 420 | |||||||||||||||||||||
Total revenues | 1 | 11 | 25 | 4,885 | 2,283 | 411 | 723 | |||||||||||||||||||||
Interest expense | — | — | — | — | — | 13 | 4 | |||||||||||||||||||||
Provision for income tax | — | 4 | 10 | 1,725 | 812 | 141 | 263 | |||||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | $ | 1 | $ | 7 | $ | 15 | $ | 3,160 | $ | 1,471 | $ | 257 | $ | 456 | ||||||||||||||
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Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions) | ||||||||||||||||||||||||||||
Revenues | $ | — | $ | 52 | $ | 71 | $ | 100 | $ | 74 | $ | 333 | $ | 235 | ||||||||||||||
Expenses | — | 47 | 58 | 89 | 89 | 310 | 206 | |||||||||||||||||||||
Income before provision for income tax | — | 5 | 13 | 11 | (15 | ) | 23 | 29 | ||||||||||||||||||||
Provision for income tax | — | 1 | 4 | 3 | (2 | ) | 13 | 13 | ||||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | — | 4 | 9 | 8 | (13 | ) | 10 | 16 | ||||||||||||||||||||
Net investment gain (loss), net of income tax | (1 | ) | (12 | ) | 10 | 52 | 182 | — | — | |||||||||||||||||||
Income (loss) from discontinued operations, net of income tax | $ | (1 | ) | $ | (8 | ) | $ | 19 | $ | 60 | $ | 169 | $ | 10 | $ | 16 | ||||||||||||
December 31, | ||||||||||||||||
2006 | 2005 | 2004 | 2003 | |||||||||||||
(In millions) | ||||||||||||||||
Total assets | $ | 1,563 | $ | 1,621 | $ | 410 | $ | 210 | ||||||||
Life and health policyholder liabilities(4) | $ | 1,595 | $ | 1,622 | $ | 24 | $ | 17 | ||||||||
Short-term debt | — | — | 19 | — | ||||||||||||
Other | — | — | 225 | 73 | ||||||||||||
Total liabilities | $ | 1,595 | $ | 1,622 | $ | 268 | $ | 90 | ||||||||
(3) | The cumulative effect of a change in accounting, net of income tax, of $86 million for the year ended December 31, 2004, resulted from the adoption ofSOP 03-1,Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts.The cumulative effect of a change in accounting, net of income tax, of $26 million for the year ended December 31, 2003, resulted from the adoption of SFAS No. 133 Implementation Issue No. B36,Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments. | |
(4) | Policyholder liabilities include future policy benefits, other policyholder funds and bank deposits. The life and health policyholder liabilities also include policyholder account balances, policyholder dividends payable and the policyholder dividend obligation. | |
(5) | The cumulative effect of changes in accounting, net of income tax, of $329 million, which decreased retained earnings at January 1, 2007, resulted from $292 million related to the adoption ofSOP 05-1,Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts,and $37 million related to the adoption of Financial Accounting Standards Board Interpretation No. 48,Accounting for Uncertainty in Income Taxes — An Interpretation of FASB Statement No. 109. | |
(6) | The cumulative effect of a change in accounting, net of income tax, of $744 million resulted from the adoption of SFAS No. 158,Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,and decreased accumulated other comprehensive income at December 31, 2006. | |
(7) | Return on common equity is defined as net income available to common shareholders divided by average common stockholders’ equity. |
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Six Months Ended | ||||||||||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||||||||||
2008 | 2007 | 2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||||||||
(In millions, except per share data) | ||||||||||||||||||||||||||||
Total revenues | $ | 3,003 | $ | 2,843 | $ | 5,718 | $ | 5,194 | $ | 4,585 | $ | 4,039 | $ | 3,205 | ||||||||||||||
Net income from continuing operations | 147 | 156 | 308 | 293 | 236 | 245 | 178 | |||||||||||||||||||||
Loss from discontinued accident and health operations, net of income taxes | (5 | ) | (2 | ) | (14 | ) | (5 | ) | (12 | ) | (23 | ) | (6 | ) | ||||||||||||||
Cumulative effect of change in accounting principle, net of income taxes | — | — | — | — | — | — | 1 | |||||||||||||||||||||
Net income | 142 | 154 | 294 | 288 | 224 | 222 | 173 | |||||||||||||||||||||
Basic earnings per common share: | ||||||||||||||||||||||||||||
Net income from continuing operations before cumulative effect of change in accounting principle and discontinued operations | 2.37 | 2.53 | 4.98 | 4.79 | 3.77 | 3.94 | 3.47 | |||||||||||||||||||||
Net income | 2.29 | 2.49 | 4.75 | 4.71 | 3.58 | 3.56 | 3.37 | |||||||||||||||||||||
Diluted earnings per common share: | ||||||||||||||||||||||||||||
Net income from continuing operations before cumulative effect of change in accounting principle and discontinued operations | 2.30 | 2.43 | 4.80 | 4.65 | 3.70 | 3.90 | 3.46 | |||||||||||||||||||||
Net income | 2.22 | 2.39 | 4.57 | 4.57 | 3.52 | 3.52 | 3.36 | |||||||||||||||||||||
Cash dividends declared per common share | 0.18 | 0.18 | 0.36 | 0.36 | 0.36 | 0.27 | 0.24 | |||||||||||||||||||||
Total assets | 22,410 | 20,334 | 21,598 | 19,037 | 16,194 | 14,048 | 12,113 | |||||||||||||||||||||
Long-term debt, including capital leases | 926 | 909 | 896 | 676 | 674 | 350 | 398 | |||||||||||||||||||||
Total stockholders’ equity | 3,061 | 2,895 | 3,190 | 2,815 | 2,527 | 2,279 | 1,948 |
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• | If MetLife stockholders exchange all of their shares of MetLife common stock and the exchange offer is fully subscribed, they will no longer have an interest in MetLife, but instead will directly own an interest in RGA. As a result, their investment will be subject exclusively to risks associated with RGA and not risks associated with MetLife. | |
• | If MetLife stockholders exchange some, but not all, of their shares of MetLife common stock, regardless of whether the exchange offer is fully subscribed, the number of shares of MetLife common stock they own will decrease (unless they acquire MetLife common stock other than through the exchange offer), while the number of shares of RGA common stock they own will increase. As a result, their investment will be subject to risks associated with both MetLife and RGA. | |
• | If MetLife stockholders do not exchange any of their shares of MetLife common stock and the exchange offer is fully subscribed, their interest in MetLife will increase on a percentage basis, while their indirect ownership in RGA will decrease (and pursuant to any debt exchanges, any subsequent split-offs and the eventual disposition by MetLife of the recently acquired stock, their indirect ownership in RGA will eventually be eliminated). As a result, their investment will be subject almost exclusively to risks associated with MetLife and not to risks associated with RGA because shares of MetLife common stock will no longer include a substantial investment in the RGA business. |
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• | the size of the discount in the exchange offer; | |
• | actual or anticipated fluctuations in RGA’s operating results; | |
• | changes in expectations as to RGA’s future financial performance or changes in financial estimates of securities analysts; | |
• | success of RGA’s operating and growth strategies; | |
• | investor anticipation of strategic and technological threats, whether or not warranted by actual events; | |
• | operating and stock price performance of other comparable companies; and | |
• | realization of any of the risks described in these risk factors or those set forth in the RGA Annual Report onForm 10-K for the year ended December 31, 2007. |
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• | such person has provided certain required information to the Missouri Department of Insurance, and | |
• | such acquisition is approved by the Missouri Director of Insurance after a public hearing. |
• | such person has provided information, material and evidence to the Canadian Superintendent of Financial Institutions as required by him, and | |
• | such acquisition is approved by the Canadian Minister of Finance. |
• | a person, or group of persons acting in concert, beneficially owns or controls an entity that beneficially owns securities, such as RGA common stock, representing more than 50% of the votes entitled to be cast for the election of directors and such votes are sufficient to elect a majority of the directors of the insurance company, or | |
• | a person has any direct or indirect influence that would result in control in fact of an insurance company. |
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• | adverse changes in mortality, morbidity, lapsation or claims experience; | |
• | changes in RGA’s financial strength and credit ratings or those of MetLife or its subsidiaries, and the effect of such changes on RGA’s future results of operations and financial condition; | |
• | inadequate risk analysis and underwriting; | |
• | general economic conditions or a prolonged economic downturn affecting the demand for insurance and reinsurance in RGA’s current and planned markets; | |
• | the availability and cost of collateral necessary for regulatory reserves and capital; | |
• | market or economic conditions that adversely affect RGA’s ability to make timely sales of investment securities; | |
• | risks inherent in RGA’s risk management and investment strategy, including changes in investment portfolio yields due to interest rate or credit quality changes; | |
• | fluctuations in U.S. or foreign currency exchange rates, interest rates, or securities and real estate markets; | |
• | adverse litigation or arbitration results; | |
• | the adequacy of reserves, resources and accurate information relating to settlements, awards and terminated and discontinued lines of business; | |
• | the stability of and actions by governments and economies in the markets in which RGA operates; | |
• | competitive factors and competitors’ responses to RGA’s initiatives; |
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• | the success of RGA’s clients; | |
• | successful execution of RGA’s entry into new markets; | |
• | successful development and introduction of new products and distribution opportunities; | |
• | RGA’s ability to successfully integrate and operate reinsurance businesses that RGA acquires; | |
��� | regulatory action that may be taken by state Departments of Insurance with respect to RGA, MetLife, or any of their subsidiaries; | |
• | RGA’s dependence on third parties, including those insurance companies and reinsurers to which RGA cedes some reinsurance, third-party investment managers and others; | |
• | the threat of natural disasters, catastrophes, terrorist attacks, epidemics or pandemics anywhere in the world where RGA or its clients do business; | |
• | changes in laws, regulations, and accounting standards applicable to RGA, its subsidiaries, or its business; | |
• | the effect of RGA’s status as an insurance holding company and regulatory restrictions on its ability to pay principal of and interest on its debt obligations; and | |
• | other risks and uncertainties described in this document, including under the caption “Risk Factors” and in RGA’s other filings with the SEC. |
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• | a recapitalization of RGA common stock into two classes of common stock — RGA class A common stock and RGA class B common stock; and | |
• | an exchange offer pursuant to which MetLife offers to acquire MetLife common stock from MetLife stockholders in exchange for RGA class B common stock. |
• | one or more debt exchanges, pursuant to which MetLife will acquire MetLife debt securities in exchange for RGA class B common stock; and/or | |
• | one or more subsequent split-offs pursuant to which MetLife will acquire MetLife common stock in exchange for RGA class B common stock. |
• | holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA; |
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• | holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA; | |
• | there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | |
• | holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of the outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock (see “Description of RGA Capital Stock — Common Stock”). |
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• | the stock price performance of precedent transactions involving a similar recapitalization that was immediately followed by a pro rata distribution of recapitalized shares to all stockholders of the majority shareholder; | |
• | liquidity analyses and past trading disparities of precedent dual-class structures; | |
• | a comparison of the proposed structure with a prior voting/non-voting dual class structure of RGA with respect to voting characteristic, public float and business purpose; and | |
• | a possible timetable for the transaction. |
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• | how it compared with precedent split-off transactions and dual class recapitalization precedents; | |
• | the potential economic benefits of the transaction to MetLife; | |
• | the potential benefits of the transaction to RGA and preliminary issues for consideration, including rating agency considerations, historic dual class trading performance, public market valuation considerations, including with respect to RGA’s share price and liquidity analysis; and | |
• | a possible alternative transaction structure that would involve the combination of a relatively small business of MetLife with RGA and the split-off of the combined entity, which would result in a single class of stock, rather than a dual class structure. |
• | that the transaction would eliminate the stock overhang on RGA common stock and would increase the liquidity of the RGA stock; | |
• | that the transaction could lead RGA to be more widely followed by the equity research community because of a broader shareholder base; | |
• | that the transaction might allow RGA to pursue its future business initiatives free from the constraint of having a controlling corporate shareholder; | |
• | that the dual class structure resulting from the transaction could pose trading risks for public shareholders, and that RGA might not be able to convert the dual class structure into a single class following the transaction as a result of tax requirements; and | |
• | that the RGA public shareholders may not be receiving sufficient benefit for agreeing to reduce their voting power over the selection of the RGA board of directors. |
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• | potential revisions to the recapitalization/split-off transaction, including developments relating to the possibility of converting the dual class structure into a single class structure following the transaction, the inclusion of a charter provision providing for equal consideration for both classes in a merger or recapitalization of RGA stock, and corporate governance protections for holders of RGA class A common stock following the transaction; | |
• | other transaction considerations, including the absence of precedent recapitalization/split-off transactions, Morgan Stanley’s potential ability to deliver a fairness opinion, the possibility of seeking additional economic value in the transaction given the tax benefit of the transaction to MetLife, potential effects on the public RGA shareholders from any discount offered by MetLife in the split-off, and historic stock price disparities in dual class trading; | |
• | a review and analysis of precedent recapitalization transactions; and | |
• | a preliminary timetable, including receipt of a favorable IRS private letter ruling with respect to the transaction and the expected levels of participation in the split-off by MetLife’s stockholders. |
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• | the RGA special committee’s opposition to a possible spin-off of RGA common stock to MetLife stockholders because of the potential significant increase in shareholder servicing costs that would result from having such a large shareholder base; | |
• | MetLife’s discussion of a possible subsequent debt exchange as a means for MetLife to, among other things, adjust its debt-equity ratio after the split-off; | |
• | the RGA special committee’s inability to obtain additional economic value from MetLife in the recapitalization/split-off transaction on behalf of RGA shareholders due to MetLife’s unwillingness to provide such additional economic value, including as a result of IRS and related tax limitations; | |
• | possible limits on the use of net operating losses and other tax attributes of RGA and its subsidiaries that could result from an ownership change under Section 382 of the Internal Revenue Code; | |
• | the possible adoption of an amendment to the RGA articles of incorporation to restrict transfers of RGA stock, as well as a shareholder rights plan, each designed to protect RGA from experiencing an ownership change under Section 382 of the Internal Revenue Code by deterring shareholders of RGA from acquiring 5% or more (by value) of the total outstanding RGA stock; | |
• | the nature and stringency of capital and operating restrictions proposed by MetLife for tax and other purposes; | |
• | the scope of indemnification for tax matters; | |
• | the ability of MetLife to delay commencement of the split-off in certain circumstances, including in the event of certain changes in market conditions or otherwise in its discretion; | |
• | the treatment of unsolicited acquisition proposals for RGA after the execution of any agreement providing for the recapitalization/split-off transaction; |
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• | the ability of MetLife to terminate the agreement due to receipt of a superior proposal under certain circumstances; | |
• | the payment by MetLife of certain of RGA’s expenses related to the transactions; and | |
• | the unwillingness of MetLife to allow RGA to participate in the pricing of the exchange offer. |
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• | the divestiture is expected to eliminate the overhang on the market for RGA common stock that results from having a large corporate shareholder, thereby increasing the liquidity and public float of RGA common stock and, consequently, following the divestiture, RGA expects its common stock to trade more efficiently than it does today. Moreover, RGA expects that, following the divestiture, its common stock will be more widely followed by the equity research community than is the case presently. Accordingly, RGA expects these factors to provide it with greater flexibility to use its equity as currency for acquiring complementary operations and to raise cash for its business operations on a more efficient basis and to enhance the attractiveness of RGA’s equity-based compensation plans, thereby increasing RGA’s ability to attract and retain quality employees; | |
• | as MetLife and RGA’s businesses evolve over time, and their business strategies diverge, the divestiture will allow RGA to pursue its future business initiatives free from the constraints of having a controlling corporate shareholder whose policies may conflict with the best interests of RGA’s businesses. Absent the divestiture, it is possible that under certain circumstances, such constraints could restrict RGA’s ability to make investments or pursue strategies that RGA management believes are in the best long-term interests of RGA; | |
• | the divestiture is expected to eliminate customer conflicts. At present, a number of key customers of RGA are direct competitors of MetLife. Some key customers of RGA have expressed concern, and are expected to continue to express concern, about the indirect benefit that MetLife derives from the business they conduct with RGA. RGA expects that the divestiture will eliminate these customer conflicts, and that this will benefit RGA’s business going forward; and | |
• | the divestiture may permit RGA shareholders to share in any premium associated with a change in control of RGA, if such an event should occur. The requirements relating to the qualification of the divestiture for tax-free treatment, however, may restrict RGA’s ability to issue stock or engage in certain business combinations. See “Risk Factors — Risks Relating to the Exchange Offer and the Divestiture — The tax-free distribution by MetLife could result in potentially significant limitations on the ability of RGA to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA.” |
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• | that the divestiture is structured so as to result in no income tax liability to RGA’s existing shareholders (including MetLife and its other subsidiaries); | |
• | in the case of the RGA special committee, the financial analyses reviewed with it by its financial advisor; | |
• | in the case of the RGA special committee, the potential effect of two classes of RGA common stock and the potential volatility of the market for and liquidity of the RGA class A common stock; | |
• | the expectation that the RGA board of directors could consider submitting to the RGA shareholders at the next regularly scheduled annual shareholders’ meeting of RGA or at a special shareholders’ meeting of RGA, a proposal to convert the RGA class B common stock into RGA class A common stock, as discussed under “Description of RGA Capital Stock — Common Stock — Conversion;” and | |
• | the existence of certain protections against an “ownership change” under the Internal Revenue Code, so as to protect against an ownership change that would limit, under Section 382 of the Internal Revenue Code, the use by RGA and its subsidiaries of their NOLs and other tax attributes, although RGA cannot assure its shareholders that such protections will be sufficient, as described under “Risk Factors — Risks Relating to the Governance Proposals and the Section 382 Shareholder Rights Plan — The proposed acquisition restrictions and RGA’s Section 382 shareholder rights plan, which are intended to help preserve RGA and its subsidiaries’ NOLs and other tax attributes, may not be effective or may have unintended negative effects.” |
• | RGA’s agreement not to engage in any transactions, such as certain issuances of stock and business combinations with third parties, that would be likely to, or that do invalidate, the tax-free status of the divestiture, as well as the reduced likelihood of such a transaction because of the potential liability to RGA associated with invalidating such status, such as certain issuances of RGA stock, as described under “Risk Factors — Risks Relating to the Exchange Offer and the Divestiture — The tax-free distribution by MetLife could result in potentially significant limitations on the ability of RGA to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA” and “— The divestiture may be taxable to MetLife if there is an acquisition of 50% or more of the outstanding common stock of MetLife or RGA and may result in indemnification obligations from RGA to MetLife;” | |
• | RGA’s obligation to indemnify MetLife in the event that RGA takes any actions, subject to certain exceptions, which result in all or any part of the divestiture failing to qualify as a tax-free distribution, as described under “Risk Factors — Risks Relating to the Exchange Offer and the Divestiture — The tax-free distribution by MetLife could result in potentially significant limitations on the ability of RGA to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA” and “— The divestiture may be taxable to MetLife if there is an acquisition of 50% or more of the outstanding common stock of MetLife or RGA and may result in indemnification obligations from RGA to MetLife;” | |
• | the risk that the dual class structure could lead to a person or group gaining control of the RGA board of directors by acquiring a majority of the RGA class B common stock, even though such person or group would require at least two annual elections to gain control, and the benefits of having the protections described under “Description of RGA Capital Stock — Common Stock — Voting Rights;” | |
• | the ability of the holders of RGA class B common stock to elect at least 80% of the RGA board of directors will not provide such holders with materially different rights than MetLife currently possesses because MetLife presently has the practical ability to elect the entire RGA board of directors; | |
• | prior to the receipt of approval, if any, of the recapitalization and other proposals at the RGA special meeting, RGA’s ability to consider “alternative proposals,” and MetLife’s agreement to consider such |
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proposals only under specified circumstances, and MetLife’s ability to terminate the recapitalization and distribution agreement in order to accept a superior proposal from a specific third party, as described under “The Recapitalization and Distribution Agreement — Termination;” |
• | MetLife’s agreement not to participate in certain other takeover or change of control activities affecting RGA prior to completion of the exchange offer or termination of the recapitalization and distribution agreement; | |
• | the potential for certain protections against an “ownership change” under the Internal Revenue Code, which are designed to protect against a limitation on RGA’s and its subsidiaries’ ability to utilize their NOLs and other tax attributes, as set forth in the proposed acquisition restrictions and Section 382 shareholder rights plan, to discourage a potential acquirer of RGA; | |
• | that, subsequent to the completion of the exchange offer, MetLife has agreed to vote the recently acquired stock and any additional shares of either class of RGA common stock then held by MetLife and its subsidiaries (1) in any election of directors, in proportion to the votes cast by the other holders of the same respective class of RGA common stock, and (2) in all other matters, in proportion to the votes cast by the other holders of both classes of RGA common stock; and | |
• | in the case of the RGA special committee, that, although the vote of MetLife would be sufficient to approve the recapitalization proposal and each of the governance and other special meeting proposals, the recapitalization proposal will not be implemented unless the recapitalization and distribution agreement is approved by a majority of shareholders other than MetLife and its subsidiaries and the other proposals are conditioned upon approval of such recapitalization proposal. |
• | after the recapitalization, RGA’s current public shareholders will hold shares of RGA class A common stock, which have voting rights that are inferior to those of the RGA class B common stock with respect to the election of directors. As a result, RGA’s current public shareholders will have diminished voting power in the election of directors since RGA’s current public shareholders will only have the right to elect directors comprising 20% or less of the RGA board of directors. The market value of RGA class A common stock could be adversely affected by the inferior voting rights of this class; | |
• | the divestiture makes it more likely that RGA could experience an “ownership change” that would limit the ability of RGA and its subsidiaries to utilize their NOLs and other tax attributes. Although RGA has adopted its Section 382 shareholder rights plan (described under “Description of RGA Capital Stock — Description of Section 382 Shareholder Rights Plan”) and proposed acquisition restrictions, as described in “Description of RGA Capital Stock — Common Stock — Acquisition Restrictions” which are designed to protect RGA from experiencing an ownership change, RGA cannot assure RGA shareholders that those provisions will be sufficient. In particular, the acquisition restrictions may not be enforceable under certain circumstances and do not apply to acquisitions of shares in the divestiture, due, in part, to federal securities law limitations. Additionally, under certain circumstances, the RGA board of directors may determine to exempt5-percent shareholders from the operation of the Section 382 shareholder rights plan. See “Risk Factors — Risks Related to the Governance Proposals and the Section 382 Shareholder Rights Plan — The proposed acquisition restrictions and RGA’s Section 382 shareholder rights plan, which are intended to help preserve RGA’s NOLs and other tax attributes, may not be effective or may have unintended negative effects”; | |
• | after the completion of the divestiture, RGA may incur increased shareholder servicing costs; however, MetLife has agreed to reimburse RGA for a portion of these shareholder printing and mailing expenses of $12.50 per holder for additional record or beneficial holders over a specified number, for a period of four years, as described in “The Recapitalization and Distribution Agreement — Fees and Expenses”; | |
• | RGA has agreed with MetLife that RGA will not engage in transactions that would be likely to, or that do invalidate, the tax-free status of the divestiture. This obligation could limit RGA’s ability to engage in certain transactions, such as redeeming or purchasing its stock, issuing equity securities or engaging in certain business combinations with third parties,even if they would otherwise be in the best interests |
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of RGA’s shareholders. See “Risk Factors — Risks Relating to the Exchange Offer and the Divestiture — The tax-free distribution by MetLife could result in potentially significant limitations on the ability of RGA to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA” and “— The divestiture may be taxable to MetLife if there is an acquisition of 50% or more of the outstanding common stock of MetLife or RGA and may result in indemnification obligations from RGA to MetLife”; |
• | RGA has also agreed with MetLife that RGA will not engage in certain transactions prior to completion of the divestiture, or to engage in any equity-related capital raising activity for specified periods, without MetLife’s prior consent, which will not be unreasonably withheld or delayed; however, RGA is permitted to undertake certain capital-raising activities subject to certain conditions, in each case, as described in “The Recapitalization and Distribution Agreement — Additional Divestiture Transactions — Interim Operating Covenants” and“— Lock-Up Period”; | |
• | after or during the pendency of the divestiture, it is likely that some MetLife security holders who receive shares of RGA class B common stock in the divestiture will sell all or part of such shares, which could depress the market price of the RGA class A common stock and RGA class B common stock and consequently could affect the terms of later divestiture transactions. See “Risk Factors — Risks Relating to an Investment in RGA Common Stock — Stock sales following the exchange offer or any additional divestiture transactions, including sales by MetLife, may affect the stock price of RGA common stock”; | |
• | under certain circumstances, if RGA were to cause the divestiture to be taxable to MetLife due to any breach of, or inaccuracy in, any representation, covenant or obligation of RGA under the recapitalization and distribution agreement or any representations or warranties that will be made in connection with the tax opinion, it could be obligated to indemnify MetLife against significant tax liabilities. See “Risk Factors — Risks Relating to the Exchange Offer and the Divestiture — The tax-free distribution by MetLife could result in potentially significant limitations on the ability of RGA to execute certain aspects of its business plan and could potentially result in significant tax-related liabilities to RGA” and “— The divestiture may be taxable to MetLife if there is an acquisition of 50% or more of the outstanding common stock of MetLife or RGA and may result in indemnification obligations from RGA to MetLife”; | |
• | in the past, MetLife has provided director and officer liability insurance for RGA for which it charged an allocable cost. Following the divestiture, RGA will be a public company independent of MetLife control and will be required to replace this insurance, although MetLife has agreed for six years to continue to provide coverage for claims arising from facts or events occurring on or prior to the completion of the exchange offer, as described under “The Recapitalization and Distribution Agreement — D&O Liability Insurance”; | |
• | by becoming independent from MetLife, RGA would lose any positive perceptions from which it may benefit as a result of being associated with a company of MetLife’s stature and industry recognition; however, none of the three principal rating agencies that meet with RGA on a regular basis (S&P, Moody’s and A.M. Best) has advised RGA of any expected change in the ratings of the financial performance or condition of RGA’s reinsurance subsidiaries related to the proposed divestiture. Although Fitch Ratings has placed RGA on “rating watch negative” after the announcement of the proposed divestiture, and has indicated that it expects to downgrade RGA’s ratings by no more than two notches, RGA does not consider Fitch’s ratings as significant, as RGA has not met with or discussed its business or plans with Fitch in the past. In particular, RGA has not met with or discussed the proposed divestiture with Fitch, and has not provided it with any nonpublic information regarding the transaction or its business or plans; | |
• | it is possible that the conversion of the RGA class B common stock into RGA class A common stock, if proposed by the RGA board of directors, will not be approved. See “Risk Factors — Risks Relating to an Investment in RGA Common Stock — RGA class A common stock and RGA class B common stock may remain as separate classes for an indefinite period of time”; | |
• | MetLife stockholders that participate in the exchange offer will be exchanging their shares of MetLife common stock for shares of RGA class B common stock at a discount to the per-share value of RGA |
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common stock, subject to a limit of [ • ] shares of RGA class B common stock per share of MetLife common stock. The existence of a discount, along with the distribution of shares of RGA class B common stock pursuant to the exchange offer, may negatively affect the market price of RGA class A common stock. See “The Transactions — Exchange Offer” to obtain additional information regarding the discount; |
• | negotiation and consideration of the divestiture has required, and the registration of securities in connection with the transactions will require, the incurrence of various costs and expenses by RGA for which MetLife has agreed to reimburse RGA for certain expenses, whether or not the divestiture is completed, and completion of the divestiture requires RGA to register securities under federal securities laws, which entails time, expense and risk of potential liabilities, as described in “The Recapitalization and Distribution Agreement — Fees and Expenses”; and | |
• | the ability of MetLife to delay commencement of the exchange offer pending satisfaction of the conditions described under “The Recapitalization and Distribution Agreement — Exchange Offer/Split-Off — Commencing the Exchange Offer — Conditions to Commencing the Exchange Offer” or due to a decline of 25% in RGA’s stock price from the closing price on May 30, 2008 or up to three times in its discretion, and MetLife’s willingness to conduct the exchange offer and any subsequent split-offs or debt exchanges only during its customary window periods, in each case, as described under “The Recapitalization and Distribution Agreement — Exchange Offer/Split-Off — Commencing the Exchange Offer — Delay Rights and Blackout Rights.” |
• | the RGA board of directors formed a special committee composed solely of its outside, independent directors, which was delegated broad authority to consider and approve the proposed divestiture and to consider alternative proposals; | |
• | the RGA special committee hired a financial advisor and legal counsel to assist and advise the RGA special committee; | |
• | the RGA special committee, with the assistance of its financial advisor and legal counsel and RGA management, evaluated, negotiated and approved the proposed transactions and made a unanimous recommendation to the RGA board of directors to ratify and approve the proposed transactions; and | |
• | to approve the recapitalization proposal, holders of a majority of the shares of RGA’s common stock present in person or by proxy, and entitled to vote, other than MetLife and its subsidiaries, must vote in favor of approving the recapitalization and distribution agreement, and the approval of the other special meeting proposals is conditioned upon approval of such recapitalization proposal. |
• | that MetLife had publicly disclosed its view of RGA as non-core and did not expect to maintain the status quo with RGA continuing as a majority-owned subsidiary of MetLife; | |
• | the limitations on seeking alternatives to the divestiture because of MetLife’s control of a majority of the outstanding shares of RGA common stock; | |
• | the presence of officers of MetLife on the RGA board of directors, and the formation of a special committee comprised solely of directors viewed as independent of MetLife and its management; and | |
• | the terms of the recapitalization and distribution agreement and the proposals to be considered at the special meeting of RGA shareholders, as described in “— RGA Special Meeting and Proposals”, and the potential that the conditions to the closing of the divestiture would be satisfied. |
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• | Facilitate MetLife’s and RGA’s Respective Expansion and Growth. MetLife and RGA have significantly different competitive strengths and operating strategies, and, with RGA generating only a small portion of MetLife’s consolidated operating earnings, each company believes that the divestiture will strengthen its ability to focus its managerial and financial resources on developing and growing its core businesses. | |
• | Reduce MetLife’s Exposure to Global Reinsurance Business. The divestiture will enable MetLife to significantly reduce its current exposure to the reinsurance business, a segment of the global insurance industry that produces more volatile earnings and whose growth lags behinds MetLife’s core business segments. | |
• | Facilitate Investment Decisions by Shareholders. Following the divestiture, it will be easier for potential investors to assess MetLife and RGA on an independent basis and determine their investment in the companies and in what relative percentages. The divestiture is expected to enable MetLife stockholders who currently own an indirect interest in RGA through MetLife to convert their investment to a direct ownership of RGA in a tax-efficient manner. |
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• | MetLife stockholders who exchange all of their shares of MetLife common stock will, if the exchange offer is fully subscribed, no longer have an interest in MetLife, but instead will directly own an interest in RGA. As a result, their investment will be subject exclusively to risks associated with RGA and not risks associated with MetLife. | |
• | MetLife stockholders who exchange some, but not all, of their shares of MetLife common stock will, regardless of whether the exchange offer is fully subscribed, own a decreased number of shares of MetLife common stock (unless they acquire MetLife common stock other than through the exchange offer), while the number of shares of RGA common stock they own will increase. As a result, their investment will be subject to risks associated with both MetLife and RGA. | |
• | MetLife stockholders who do not exchange any of their shares of MetLife common stock will, if the exchange offer is fully subscribed, have an increased interest in MetLife on a percentage basis, while their indirect ownership in RGA will decrease (and pursuant to any debt exchanges, any subsequent split-offs and eventual disposition by MetLife of the recently acquired stock, their indirect ownership in RGA will be further reduced and eventually be eliminated). As a result, their investment will be subject almost exclusively to risks associated with MetLife and not risks associated with RGA because shares of MetLife common stock will no longer include a substantial investment in the RGA business. |
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• | Recapitalization and Distribution Agreement Proposal. RGA shareholders will be asked to approve the recapitalization and distribution agreement and the transactions contemplated by the recapitalization and distribution agreement, including the recapitalization and the amendment and restatement of RGA’s articles of incorporation. | |
• | RGA Governance Proposals. RGA shareholders will be asked to approve a number of proposals that would amend the RGA articles of incorporation, subject to and conditioned upon completion of the recapitalization, as follows: |
• | RGA Class B Significant Holder Voting Limitation. This provision would restrict the voting power with respect to directors of a holder of more than 15% of the outstanding RGA class B common stock to 15% of the outstanding RGA class B common stock unless such holder also has in excess of 15% of the outstanding RGA class A common stock, in which case such holder could exercise an equivalent percentage of the voting power of the RGA class B common stock; | |
• | Acquisition Restrictions. This provision would, subject to limited exceptions, restrict for a period of 36 months and one day from the completion of the recapitalization, RGA shareholders from becoming a“5-percent shareholder” for purposes of Section 382 of the Internal Revenue Code and restrict any permitted5-percent shareholder from further increasing its ownership interest in RGA; | |
• | Potential Conversion of Class B Stock Following the Divestiture. This provision would allow the RGA board of directors, at its discretion, to convert the RGA class B common stock into RGA class A common stock on a one-for-one basis, if and only if the RGA board of directors proposes such conversion to the RGA shareholders and the RGA shareholders approve such proposal. There is no binding commitment by the RGA board of directors to, and there can be no assurance that the RGA board of directors will, consider proposing a conversion or resolve to submit such a proposal to the RGA shareholders. If submitted, there can be no assurance that the RGA shareholders would approve such a conversion; |
• | Ratification of the Section 382 Shareholder Rights Plan. RGA shareholders will be asked to ratify the RGA board of director’s decision to adopt and implement an amended and restated Section 382 shareholder rights plan in connection with the recapitalization and divestiture, subject to and conditioned upon completion of the recapitalization; | |
• | Adjournment Proposal. RGA shareholders will be asked to adjourn the RGA special meeting if necessary or appropriate to permit further solicitation of proxies if there are not sufficient votes at the time of the RGA special meeting to approve the special meeting proposals; and | |
• | Other Business. RGA shareholders will be asked to transact such other business as may properly be brought before the RGA special meeting or any adjournment or postponement of the RGA special meeting. |
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• | with respect to the MetLife common stock, the average of the daily VWAP of MetLife common stock on the NYSE for the last three trading days of the originally contemplated exchange offer period as reported by Bloomberg L.P. for the equity ticker MET.N; and | |
• | with respect to the RGA class B common stock, the average of the daily VWAP of RGA common stock on the NYSE for the last three trading days of the originally contemplated exchange offer period as reported by Bloomberg L.P. for the equity ticker RGA.N. |
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Number of shares of RGA class B common stock | = | Number of shares of MetLife common stock tendered and accepted, multiplied by the lesser of: | [ • ] and | 100% of the calculated per-share value of MetLife common stock [ • ]% of the calculated per-share value of RGA common stock |
• | Example 1: Assuming that the average of the daily VWAP on the last three trading days of the originally contemplated exchange offer period is $[ • ] per share of MetLife common stock and $[ • ] per share of RGA common stock, tendering MetLife stockholders would receive [ • ] shares ($[ • ] divided by [ • ]% of $[ • ]) of RGA class B common stock for each share of MetLife common stock accepted in the exchange offer. In this example, the limit of [ • ] shares of RGA class B common stock for each share of MetLife common stock would not apply. | |
• | Example 2: Assuming that the average of the daily VWAP on the last three trading days of the originally contemplated exchange offer period is $[ • ] per share of MetLife common stock and $[ • ] per share of RGA common stock, the limit would apply and tendering MetLife stockholders would only receive [ • ] shares of RGA class B common stock for each share of MetLife common stock accepted in the exchange offer because the limit is less than [ • ] shares ($[ • ] divided by [ • ]% of $[ • ]) of RGA class B common stock for each share of MetLife common stock accepted in the exchange offer. Because the limit would apply, the originally contemplated exchange offer period would be automatically extended until 12:00 midnight, New York City time, at the end of the second following trading day, and the exchange ratio would be fixed. |
• | Indicative calculated per-share values: A web page will be maintained atwww.dfking.com/metlifethat provides indicative exchange ratios and calculated per-share values of the MetLife common stock and the RGA common stock. |
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• | From the third to the seventeenth trading day of the exchange offer, the web page will show indicative calculated per-share values, calculated as though that day were the expiration date of the exchange offer, of (1) the MetLife common stock, which will equal the average of the daily VWAP of MetLife’s common stock on each of the three prior trading days; and (2) the RGA class B common stock, which will equal the average of the daily VWAP of RGA common stock on each of the three prior trading days. For example, after 4:30 p.m., New York City time, on [ • ], the web page will show an indicative exchange ratio based on indicative per-share values of MetLife common stock and RGA common stock on [ • ], [ • ] and [ • ]. During this period, the indicative calculated per-share values will be updated on each trading day by 4:30 p.m., New York City time. Such data will not, however, be included in the calculation of the final calculated per-share value for either MetLife common stock or RGA common stock. | |
• | During the last three trading days of the originally contemplated exchange offer period, when the values of MetLife common stock and RGA common stock are calculated for the purposes of the exchange offer, the web page will show the indicative calculated per-share values of MetLife common stock and RGA common stock which will equal, with respect to each, (1) on the third-to-last day, the intra-day VWAP during the elapsed portion of the day (2) on the second-to-last day, theintra-day VWAP during the elapsed portion of that day averaged with the actual daily VWAP on the preceding day; and (3) on the last day, theintra-day VWAP during the elapsed portion of that last day averaged with the actual daily VWAP for each of the two preceding days.“Intra-day VWAP” means VWAP for the period beginning at the official open of trading on the NYSE and ending as of the specific time in such day. During this period, the indicative calculated per-share values and indicative exchange ratio calculated using such values will be updated every 30 minutes (on approximately the hour andhalf-hour mark). The data used to derive theintra-day VWAP during the last three trading days of the originally contemplated exchange offer period will reflect a20-minute reporting delay, and will be included as an element of the actual final VWAP that will be used to determine the final calculated per-share values. | |
• | The final exchange ratio that shows the number of shares of RGA class B common stock that a tendering MetLife stockholder will receive for each share of MetLife common stock tendered and accepted in the exchange offer, assuming no proration, will be available atwww.dfking.com/metlifeby 4:30 p.m., New York City time, on the last day of the exchange offer and separately announced by press release. |
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Calculated | Shares of RGA Class | |||||||||||||
per-Share Value of | Calculated | B Common Stock per | ||||||||||||
MetLife | RGA Class A | MetLife Common | per-Share Value of | MetLife Share | ||||||||||
Common Stock | Common Stock | Stock | RGA Common Stock | Tendered | ||||||||||
As of [ • ], 2008 | $ | [ • ] | $ | [ • ] | [ • ] | |||||||||
Down 10% | Up 10% | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Down 10% | Unchanged | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Down 10% | Down 10% | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Unchanged | Up 10% | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Unchanged | Down 10% | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Up 10% | Up 10% | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Up 10% | Unchanged | $ | [ • ] | $ | [ • ] | [ • ] | ||||||||
Up 10% | Down 10% | $ | [ • ] | $ | [ • ] | [ • ] | (1) |
(1) | In this scenario, the limit is in effect. Absent the limit, the exchange ratio would have been [•] shares of RGA class B common stock per MetLife share tendered and accepted. In this scenario, MetLife would announce that the limit on the number of shares that can be received for each share of MetLife common stock tendered is in effect at the expiration of the exchange offer period by 4:30 p.m., New York City time, on the expiration date, the exchange ratio would be fixed at the limit and the exchange offer would be extended until 12:00 midnight, New York City time, at the end of the second following trading day. |
• | persons who directly held shares of MetLife common stock on August 14, 2008; and | |
• | banks, brokerage houses, fiduciaries, and custodians holding in their names shares of MetLife common stock on August 14, 2008 beneficially owned by others or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of MetLife common stock. |
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• | certificates for those shares of MetLife common stock (or a confirmation of a book-entry transfer of those shares of MetLife common stock in the exchange agent’s account at DTC) pursuant to the procedures set forth in the section below entitled “— Procedures for Tendering;” | |
• | a properly completed and duly executed letter of transmittal (or a manually signed facsimile of that document), with any required signature guarantees, or, in the case of a book-entry transfer, an agent’s message; and | |
• | any other required documents. |
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• | they make their tender by or through an eligible institution; | |
• | a properly completed and duly executed notice of guaranteed delivery, substantially in the form made available by MetLife, is received by the exchange agent as provided below on or prior to the expiration of the exchange offer; and | |
• | the certificates for all tendered shares of MetLife common stock (or a confirmation of a book-entry transfer of such securities into the exchange agent’s account at DTC as described above), in proper form for transfer, together with a properly completed and duly executed letter of transmittal (or a manually signed facsimile thereof), with any required signature guarantees (or, in the case of a book-entry transfer, an agent’s message) and all other documents required by the letter of transmittal are received by the exchange agent within three NYSE trading days after the date of execution of such notice of guaranteed delivery. |
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• | any such stockholder has the full power and authority to tender, sell, assign and transfer the tendered shares (and any and all other shares of MetLife common stock or other securities issued or issuable in respect of such shares); | |
• | when MetLife accepts the shares for exchange pursuant to the exchange offer, MetLife will acquire good and unencumbered title to such shares, free and clear of all liens, restrictions, charges and encumbrances; | |
• | none of such shares will be subject to an adverse claim at the time MetLife accepts such shares for exchange; | |
• | any such stockholder owns the shares being tendered within the meaning ofRule 14e-4 promulgated under the Exchange Act; and | |
• | any such stockholder’s participation in the exchange offer and tender of such shares complied withRule 14e-4 and the applicable laws of both the jurisdiction where they received the materials relating to the exchange offer and the jurisdiction from which the tender is being made. |
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• | Pricing Delay Right. MetLife has a right to delay commencement of the exchange offer if the VWAP of RGA common stock for the 10-trading-day period ending on the second trading day prior to the proposed commencement date of the exchange offer is less than $38.565, or 75% of the closing price of RGA common stock on the NYSE on May 30, 2008. MetLife may continue this delay until the second business day following the first testing date (as described in the next sentence) on which the VWAP of RGA common stock for the 10-trading-day period ending on such testing date is 75% or more than the closing price of RGA common stock on the NYSE on the date prior to announcement of the recapitalization and distribution agreement. “Testing date” means each of the two business days immediately prior to the commencement of a window period and each business day within a window period that is at least 23 business days prior to the end of such window period. | |
• | Discretionary Delay Right. In addition to a pricing delay right, the recapitalization and distribution agreement provides MetLife with a right to delay commencement of the exchange offer to the extent permitted by law with respect to not more than three window periods. If MetLife exercises a discretionary delay right, MetLife must commence the exchange offer (subject to any pricing delay right, remaining discretionary delay rights and blackout rights) on any business day that is 21 or more business days prior to the end of the first window period for which at least 21 business days remain, and, subject to compliance with applicable laws, shall complete the exchange offer during such window period. |
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• | Blackout Right. Each of MetLife and RGA also has a right to delay commencement or completion of the exchange offer if such delaying party shall determine that commencing or completing the exchange offer during one of their respective window periods will (1) have a material detrimental effect on the completion of another transaction then being negotiated or a plan then being considered by the board of such delaying party or (2) involve disclosure obligations that are not in the best interests of such delaying party’s stockholders. |
• | trading in securities generally on the NYSE, the American Stock Exchange, the Nasdaq Stock Market or any other national securities, futures or options exchange or in the over-the-counter market, or trading in any of MetLife common stock or RGA common stock (or any options or futures contracts related to such securities) on any exchange or in the over-the-counter market, is suspended or the settlement of such trading generally is materially disrupted or minimum prices are established on any such exchange or such market by the SEC, by such exchange or market, or by any other regulatory body or governmental authority having jurisdiction; |
• | a material disruption or banking moratorium occurs or has been declared in commercial banking or securities settlement or clearance services in the United States; | |
• | there is such a material adverse change in general U.S. domestic or international economic, political or financial conditions, including as a result of terrorist activities, or the effect of international conditions on the financial markets in the United States (in each case, as compared to conditions on the date of execution of the recapitalization and distribution agreement), so as to make it materially impracticable to proceed with the exchange offer; or | |
• | an event occurs and is continuing as a result of which this document would contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading and either (i) the public disclosure of that event at such time would have a material adverse effect on MetLife’s business or RGA’s business or (ii) the disclosure relates to a previously undisclosed proposed or pending material business transaction, the public disclosure of which would impede MetLife’s or RGA’s ability to consummate such transaction. |
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• | HSR Waiting Period. Any waiting period (and any extension thereof) applicable to the divestiture has not terminated or expired; | |
• | No Illegality or Injunctions. There is in effect any law, restraining order, injunction, judgment or ruling enacted, promulgated, issued or entered by any governmental authority (whether permanent, temporary or preliminary (as applicable)) preventing or prohibiting the recapitalization or the exchange offer; | |
• | Governmental Action. There is instituted or pending any material action by any governmental authority seeking to restrain or prohibit the exchange offer or the recapitalization; | |
• | IRS Ruling. The conditions described under “The Recapitalization and Distribution Agreement — Exchange Offer/Split-Off — Commencing the Exchange Offer — Conditions to Commencing the Exchange Offer — IRS Ruling” do not continue to have been satisfied; | |
• | Tax Opinion. Counsel to MetLife shall not have issued the tax opinion, in form and substance reasonably satisfactory to MetLife (which opinion RGA shall have had the opportunity to review, but not approve); | |
• | Recapitalization. The recapitalization shall not have occurred; | |
• | Form S-4. TheForm S-4 relating to the exchange offer has not been declared effective by the SEC or has become subject to a stop order or proceeding seeking a stop order; | |
• | NYSE Listing. The shares of RGA class B common stock to be distributed in the exchange offer have not have been authorized for listing on the NYSE, subject to official notice of issuance; | |
• | Accuracy of Representations and Warranties. The representations and warranties of RGA in the recapitalization and distribution agreement are not true and correct in all material respects when made and as of the closing date as though made as of such date (except to the extent relating to a specified date, in which case as of such specified date) (or an officer’s certificate to such effect has not been furnished to MetLife); and | |
• | Compliance with Covenants. RGA has failed to perform in any material respect any obligation, agreement or covenant required to be performed by it under the recapitalization and distribution agreement (or an officer’s certificate to such effect has not been furnished to MetLife). |
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• | terminate the exchange offer and as promptly as practicable return all tendered shares of MetLife common stock to tendering stockholders; | |
• | extend the exchange offer and, subject to the withdrawal rights described in the section above entitled “— Withdrawal Rights,” retain all tendered shares of MetLife common stock until the extended exchange offer expires; or | |
• | waive the unsatisfied condition and, subject to any requirement to extend the period of time during which the exchange offer is open, complete the exchange offer. |
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• | “professional investors” referred to in section 708(11) and as defined in section 9 of the Australian Corporations Act. For instance, this includes Australian financial services licensees, certain institutions regulated by the Australian Prudential Regulatory Authority, trustees of certain kinds of superannuation funds, persons who control at least A$10 million, listed entities and certain investment funds; | |
• | “sophisticated investors” that meet the criteria set out in section 708(8) of the Australian Corporations Act. This includes persons who have a certificate from an accountant (issued in the last 6 months) to indicate that the person has net assets of at least A$2.5 million, or gross income for each of the last 2 years of at least A$250,000; | |
• | investors who receive the offer through an Australian financial services licensee, where all of the criteria set out in section 708(10) of the Australian Corporations Act are satisfied. These criteria relate (amongst other things) to the licensee’s knowledge of the investor’s experience in investing in securities; or | |
• | a senior manager of MetLife (or a related body, including a subsidiary), their spouse, parent, child, brother or sister, or a body corporate controlled by any of those persons, as referred to in section 708(12) of the Australian Corporations Act. A senior manager is defined as a person (other than a director or secretary of the corporation) who makes, or participates in making, decisions that affect the whole or a substantial part of the business of the corporation, or has the capacity to affect significantly the corporation’s financial standing. |
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• | to legal entities which are authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; | |
• | to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; | |
• | by any managers to fewer than 100 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the dealer manager, if any, for any such offer; or | |
• | in any other circumstances falling within Article 3(2) of the Prospectus Directive. |
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• | an individual who is a citizen or resident of the United States; | |
• | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia; | |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
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• | a trust if (1) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person. |
• | no gain or loss will be recognized by, and no amount will be included in the income of, U.S. holders of MetLife common stock upon their receipt of shares of RGA class B common stock in the exchange offer; | |
• | the basis of the shares of RGA class B common stock received by U.S. holders of MetLife common stock in the split-off will equal the basis of their shares of MetLife common stock surrendered in exchange therefor; | |
• | the holding period of the shares of RGA class B common stock received by U.S. holders of MetLife common stock in the split-off will include the period during which such U.S. holders held their shares of MetLife common stock surrendered in exchange therefor; and | |
• | a U.S. holder of MetLife common stock who receives cash in lieu of a fractional share of RGA class B common stock will recognize gain or loss measured by the difference between the basis of the fractional share deemed received and the amount of cash received. Any gain or loss will be treated as capital gain or loss, provided the fractional share of stock would be held as a capital asset on the date of the split-off. |
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• | MetLife would recognize gain equal to the excess of the fair market value of the RGA class B common stock held by it immediately before the completion of the exchange offer, debt exchange or subsequent split-off over MetLife’s tax basis therein; | |
• | The exchange of MetLife common stock in the exchange offer would be a taxable exchange, and each U.S. holder that participated in the exchange offer would recognize either (1) a capital gain or loss equal to the difference between the fair market value of the shares of RGA class B common stock received and the holder’s tax basis in the MetLife common stock exchanged therefor; or (2) in certain circumstances (including where a holder increased its percentage ownership of MetLife common stock (directly or by attribution) as a result of the exchange offer), a taxable distribution equal to the fair market value of the shares of RGA class B common stock received which would be taxed (i) as a dividend to the extent of the holder’s pro rata share of MetLife’s current and accumulated earnings and profits (including the gain to MetLife described above), then (ii) as a non-taxable return of capital to the extent of the holder’s tax basis in MetLife common stock with respect to which the distribution was made, and finally (iii) as capital gain with respect to the remaining value; and | |
• | An individual U.S. holder would generally be subject to U.S. federal income tax at a maximum rate of 15% with respect to the portion of the exchange offer that was treated as a dividend or capital gain, subject to certain exceptions for certain short term and hedged positions (including positions held for one year or less, in the case of a capital gain), which could give rise to ordinary income rates. |
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MetLife | RGA | |||||||||||||||||||||||
For the Quarterly Period Ended: | High | Low | Dividends | High | Low | Dividends | ||||||||||||||||||
2006 | ||||||||||||||||||||||||
March 31, 2006 | $ | 52.07 | $ | 48.14 | $ | 49.15 | $ | 45.55 | $ | 0.09 | ||||||||||||||
June 30, 2006 | 53.48 | 48.00 | 49.15 | 46.61 | 0.09 | |||||||||||||||||||
September 30, 2006 | 57.80 | 49.33 | 53.04 | 48.07 | 0.09 | |||||||||||||||||||
December 31, 2006 | 60.00 | 56.08 | $ | 0.59 | 58.65 | 51.95 | 0.09 | |||||||||||||||||
2007 | ||||||||||||||||||||||||
March 31, 2007 | $ | 66.25 | $ | 58.74 | $ | 59.84 | $ | 53.47 | $ | 0.09 | ||||||||||||||
June 30, 2007 | 69.35 | 62.35 | 64.79 | 57.42 | 0.09 | |||||||||||||||||||
September 30, 2007 | 70.27 | 58.48 | 61.49 | 48.81 | 0.09 | |||||||||||||||||||
December 31, 2007 | 71.23 | 59.73 | $ | 0.74 | 59.37 | 49.94 | 0.09 | |||||||||||||||||
2008 | ||||||||||||||||||||||||
March 31, 2008 | $ | 62.53 | $ | 52.46 | $ | 59.31 | $ | 47.45 | $ | 0.09 | ||||||||||||||
June 30, 2008 | 63.60 | 52.61 | 57.81 | 43.19 | 0.09 | |||||||||||||||||||
September 30, 2008 (through August 5, 2008) | 54.50 | 47.73 | 51.16 | 40.95 | 0.09 |
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June 30, 2008 | ||||
(In millions) | ||||
Short-term debt | $623 | |||
Long-term debt | 9,694 | |||
Collateral financing arrangements | 5,847 | |||
Junior subordinated debt securities | 5,224 | |||
Shares subject to mandatory redemption | 159 | |||
Total debt | 21,547 | |||
Stockholders’ Equity: | ||||
Preferred stock, at par value | 1 | |||
Common stock, at par value | 8 | |||
Additional paid-in capital | 17,647 | |||
Retained earnings | 21,441 | |||
Treasury stock, at cost | (4,047 | ) | ||
Accumulated other comprehensive income (loss) | (2,509 | ) | ||
Total stockholders’ equity | 32,541 | |||
Total capitalization | $ | 54,088 | ||
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June 30, 2008 | ||||
(In millions) | ||||
Debt: | ||||
Long-term debt | $926 | |||
Collateral financing facility | 850 | |||
Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated debentures of the Company | 159 | |||
Total debt | 1,935 | |||
Stockholders’ Equity: | ||||
Preferred stock, at par value | — | |||
Common stock, at par value | 1 | |||
Warrants | 67 | |||
Additional paid-in capital | 1,115 | |||
Retained earnings | 1,660 | |||
Accumulated other comprehensive income | 255 | |||
Treasury stock, at cost | (37 | ) | ||
Total stockholders equity | 3,061 | |||
Total capitalization | $4,996 | |||
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• | holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the members of the RGA board of directors; | |
• | holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the members of the RGA board of directors; | |
• | there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | |
• | holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of the outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock. |
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• | RGA Shareholder Approval. RGA shareholders approve the recapitalization proposal, the governance proposals and the Section 382 shareholder rights plan proposal. | |
• | Successful Exchange Offer. Except for the occurrence of the recapitalization itself, all of the conditions to the exchange offer, as set forth in the recapitalization and distribution agreement, will have been satisfied or waived, and MetLife irrevocably agrees with RGA that it will accept the shares of MetLife common stock tendered and not withdrawn in the exchange offer effective immediately following the completion of the recapitalization. | |
• | Minimum Tender Condition. The minimum tender condition established by MetLife is satisfied prior to the expiration of the exchange offer, which is required to be a number of shares of MetLife common stock that, when tendered, would result in at least 26,319,186 shares, or 90%, of the RGA class B common stock held by MetLife being distributed in the split-off. | |
• | Illegality or Injunctions. There is in effect no temporary, preliminary or permanent law, restraining order, injunction, judgment or ruling enacted, promulgated, issued or entered by any governmental authority (whether permanent, temporary or preliminary) preventing or prohibiting the recapitalization or the exchange offer. | |
• | Governmental Action. There is not instituted or pending any material action by any governmental authority seeking to restrain or prohibit the recapitalization or the exchange offer. |
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• | IRS Ruling. The IRS ruling (which is referred to as the “IRS ruling”) and any supplemental IRS ruling will remain effective and there is no change in, revocation of, or amendment to the IRS ruling or applicable law that could reasonably be expected to cause MetLife or its subsidiaries to incur any Section 355 taxes (other than anyde minimisSection 355 taxes) or other Section 355 tax-related liability as a result of the recapitalization, the exchange offer, any debt exchanges and any subsequent split-offs or the conversion, and there will be no other change in, revocation of, or amendment to the IRS ruling or applicable law that could reasonably be expected to adversely affect MetLife. There is no change in, revocation of, or amendment to such rulings or the applicable law that could reasonably be expected to impose a limitation on the ability of RGA or any of its subsidiaries to utilize its, or their, NOLs (other than anyde minimisNOLs) as a result of the recapitalization, the exchange offer or any debt exchanges and any subsequent split-offs, and there is no other change in, revocation of, or amendment to such rulings or the applicable law that could reasonably be expected to adversely affect RGA or any of its subsidiaries. | |
• | Form S-4. TheForm S-4 relating to both the recapitalization and the exchange offer, of which this document forms a part, is declared effective by the SEC, and suchForm S-4 does not become subject to a stop order or proceeding seeking a stop order. | |
• | NYSE Listing. Both the shares of RGA class A common stock to be issued in the recapitalization and RGA class B common stock to be distributed in the exchange offer are authorized for listing on the NYSE, subject to official notice of issuance, and the relevant RGA registration statements onForm 8-A will have been filed with the SEC and become effective. | |
• | Insurance Regulatory Approvals. Certain insurance regulatory approvals required for the recapitalization and divestiture are obtained. See “The Transactions — Regulatory Approval.” | |
• | Acquiring Person Under Section 382 Shareholder Rights Plan. No person or group has qualified or has otherwise become an acquiring person under the Section 382 shareholder rights plan. | |
• | Accuracy of Representations and Warranties. Each party’s representations and warranties (except for certain representations and warranties deemed unrelated to the recapitalization) are true and correct in all material respects, in each case when made and as of the date on which the recapitalization will occur (except to the extent that such representations and warranties expressly related to a specified date, in which case as of such specified date), and RGA’s representation and warranty as to capital stock set forth in the recapitalization and distribution agreement will be true and correct (except for anyde minimisinaccuracy) (and an officer’s certificate to such effect has been furnished to the other party). | |
• | Covenants. Each party has performed in all material respects the obligations, agreements and covenants required to be performed by it prior to the recapitalization (and an officer’s certificate to such effect has been furnished to the other party). | |
• | Comfort Letter. Deloitte & Touche LLP has furnished to each party certain “comfort letters” containing statements and information of the type customarily included in the accountant’s initial and bring-down “comfort letters” to underwriters with respect to the financial statements and certain financial information of the parties contained and incorporated by reference in theForm S-4 of which this document forms a part. | |
• | Legal Opinion. Each party has received certain legal opinions from internal and external counsel to the other party. |
• | Supplemental IRS Ruling. If the exchange offer would not expire on or prior to November 10, 2008 (with completion no more than one business day thereafter), MetLifeand/or RGA shall have received a supplemental IRS ruling substantially to the effect that each share of recently acquired stock shall be reclassified into one share of RGA class A common stock and that such shares of RGA class A common stock shall not be included in the split-off, debt exchangeand/or subsequent split-offs. |
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• | Resignation of MetLife Designees to RGA Board of Directors. RGA has received the resignation of Steven A. Kandarian, Georgette A. Piligian and Joseph A. Reali, effective as of the close of the exchange offer. |
• | Supplemental IRS Ruling. If the recapitalization and distribution agreement is amended to include the recently acquired stock in the divestiture, then MetLife and/or RGA shall have received a supplemental IRS ruling substantially to the effect that the recently acquired stock shall be exchanged for RGA class B common stock and such stock shall be part of the RGA class B common stock divested in the split-off, the debt exchangeand/or subsequent split-offs. |
• | the conditions described below under “— Conditions to Commencing the Exchange Offer” were satisfied or waived; | |
• | subject to the delay rights and blackout rights described below under “— Delay Rights and Blackout Rights,” the exchange offer would commence no later than the first customary trading window established by MetLife following announcement of its earnings for each fiscal quarter (each of which is referred to as a “window period”) for which there is at least 25 business days between (1) the date on which theForm S-4 of which this document forms a part is declared effective by the SEC and the IRS ruling has not been adversely modified and (2) the last day of such window period; | |
• | the exchange offer will be open for at least five business days following the RGA special meeting; and | |
• | MetLife may elect to delay the commencement of the exchange offer if it believes the insurance regulatory approvals described in “The Transactions — Regulatory Approval” will not be obtained prior to completion of the exchange offer. |
• | IRS Ruling. There is no change in, revocation of, or amendment to the IRS ruling, any supplemental IRS ruling or applicable law that could reasonably be expected to cause MetLife or its subsidiaries to incur any Section 355 taxes (other than anyde minimisSection 355 taxes) or other Section 355 tax-related liability as a result of the recapitalization, any debt exchanges and any subsequent split-offs or the conversion, and there is no other change in, revocation of, or amendment to such rulings or applicable law that could reasonably be expected to adversely affect MetLife. There is no change in, revocation of, or amendment to the IRS ruling, any supplemental IRS ruling or the applicable law that could reasonably be expected to impose a limitation on the ability of RGA or any of its subsidiaries to utilize its, or their, NOLs (other than anyde minimisNOLs) as a result of the recapitalization, exchange offer, any debt exchanges and any subsequent split-offs, and there is no other change in, revocation of, or amendment to such rulings or the applicable law that could reasonably be expected to adversely affect RGA or any of its subsidiaries. | |
• | Form S-4. TheForm S-4 of which this document forms a part will have been declared effective, or the SEC staff has advised that it has no further comments on theForm S-4 such that suchForm S-4 will become effective upon request to the SEC, and suchForm S-4 has not become subject to a stop order or proceeding seeking a stop order. |
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• | No Illegality or Injunctions. There is no temporary, preliminary or permanent restraints in effect preventing or prohibiting the exchange offer or the recapitalization. | |
• | Governmental Action. There is no instituted or pending material action by any governmental authority seeking to restrain or prohibit the exchange offer or the recapitalization. | |
• | Acquiring Person Under Section 382 Shareholder Rights Plan. No person or group has qualified or has otherwise become an acquiring person under the Section 382 shareholder rights plan. | |
• | Representations and Warranties. Each party’s representations and warranties in the recapitalization and distribution agreement are true and correct in all material respects, in each case when made and as of the closing date (except to the extent that such representations and warranties expressly related to a specified date, in which case as of such specified date); and certain of RGA’s representations and warranties in the recapitalization and distribution agreement regarding its capital stock is true and correct (except for anyde minimisinaccuracy) (and an officer’s certificate to such effect has been furnished to the other party). | |
• | Covenants. Each party has performed in all material respects its obligations, agreements or covenants required to be performed by it on or prior to the commencement date of the exchange offer under the recapitalization and distribution agreement (and an officer’s certificate to such effect has been furnished to the other party). |
• | Supplemental IRS Ruling. If the exchange offer would not expire on or prior to November 10, 2008, (with completion no more than one business day thereafter) MetLifeand/or RGA shall have received a supplemental IRS ruling substantially to effect that each share of recently acquired stock shall be reclassified into one share of RGA class A common stock and that such shares of RGA class A common stock shall not be included in the split-off, debt exchangeand/or subsequent split-offs. |
• | Pricing Delay Right. MetLife has a right to delay commencement of the exchange offer if the VWAP of RGA common stock for the 10-trading-day period ending on the second trading day prior to the proposed commencement date of the exchange offer is less than $38.565, or 75% of the closing price of RGA common stock on the NYSE on May 30, 2008, which was $51.42. MetLife may continue this delay until the second business day following the first testing date (as described in the next sentence) on which the VWAP of RGA common stock for the 10-trading-day period ending on such testing date is 75% or more than the closing price of RGA common stock on the NYSE on the date prior to announcement of the recapitalization and distribution agreement. “Testing date” means each of the two business days immediately prior to the commencement of a window period and each business day within a window period that is at least 23 business days prior to the end of such window period. | |
• | Discretionary Delay Right. In addition to a pricing delay right, the recapitalization and distribution agreement provides MetLife with a right to delay commencement of the exchange offer to the extent permitted by law with respect to not more than three window periods. If MetLife exercises a discretionary delay right, MetLife must commence the exchange offer (subject to any pricing delay right, remaining discretionary delay rights and blackout rights) on any business day that is 21 or more business days prior to the end of the first window period for which at least 21 business days remain, and, subject to compliance with applicable laws, shall complete the exchange offer during such window period. | |
• | Blackout Right. Each of MetLife and RGA also has a right to delay commencement or completion of the exchange offer if such delaying party shall determine that commencing or completing the exchange offer during one of their respective window periods will (1) have a material detrimental effect on the completion of another transaction then being negotiated or a plan then being considered by the board of such delaying party or (2) involve disclosure obligations that are not in the best interests of such delaying party’s stockholders. |
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• | Minimum Tender Condition. The minimum tender condition established by MetLife is satisfied prior to the expiration of the exchange offer, which is required to be a number of shares of MetLife common stock that, when tendered, would result in at least 26,319,186 shares, or 90%, of the RGA class B common stock held by MetLife being distributed in the split-off; | |
• | HSR Waiting Period. Any waiting period (and any extension thereof) applicable to the exchange offer or the recapitalization under the HSR Act has terminated or expired prior to the expiration of the exchange offer; | |
• | Illegality or Injunctions. There are no temporary, preliminary or permanent restraints in effect preventing or prohibiting the recapitalization, the exchange offer or any additional divestiture transaction; | |
• | Governmental Action. There is no instituted or pending material action by any governmental authority seeking to restrain or prohibit the recapitalization, the exchange offer or any additional divestiture transaction; | |
• | IRS Ruling and Tax Opinion. The IRS ruling condition to commencing the exchange offer shall continue to be satisfied, and counsel to MetLife shall have issued the tax opinion (with respect to certain requirements for tax-free treatment under Section 355 of the Internal Revenue Code on which the IRS will not and did not rule), in form and substance reasonably satisfactory to MetLife (which opinion RGA shall have had the opportunity to review, but not approve); | |
• | Recapitalization. The recapitalization shall have occurred; | |
• | Form S-4. TheForm S-4 relating to the exchange offer shall have been declared effective by the SEC, and suchForm S-4 shall not have become subject to a stop order or proceeding seeking a stop order; | |
• | NYSE Listing. The shares of RGA class B common stock to be distributed in the exchange offer shall have been authorized for listing on the NYSE, subject to official notice of issuance; | |
• | Representations and Warranties. The representations and warranties of RGA set forth in the recapitalization and distribution agreement shall be true and correct in all material respects, when made and as of the closing date as though made at the closing date (except to the extent that such representations and warranties expressly relate to a specified date, in which case as of such specified date) (and an officer’s certificate to such effect has been furnished to MetLife); | |
• | Covenants. RGA shall have performed in all material respects its obligations, agreements and covenants under the recapitalization and distribution agreement (and an officer’s certificate to such effect has been furnished to MetLife); | |
• | Insurance Regulatory Approvals. Certain insurance regulatory approvals required for the recapitalization and divestiture have been obtained, as described in “The Transactions — Regulatory Approval.” |
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• | except in connection with certain shareholder rights plans, amend or propose to amend its articles of incorporation or by-laws or equivalent organizational documents (other than as contemplated by the recapitalization and distribution agreement) in a manner that would adversely affect the rights of RGA shareholders in any material respect or that would reasonably be expected to delay or impair the transaction or the parties’ ability to comply with their obligations under the recapitalization and distribution agreement; | |
• | adopt a plan or agreement of complete or partial liquidation or dissolution (except with respect to subsidiaries of RGA that are not significant subsidiaries); | |
• | change the principal business of RGA and its subsidiaries from the life reinsurance business to a different line of business; | |
• | enter into any line of business that is not reasonably related or complementary to the life reinsurance business; | |
• | prior to the 90th day after completion of the exchange offer, acquire, or enter into an agreement to acquire, any businesses, assets, product lines, business units, business operations, stock or other properties, including by way of merger or consolidation, where the total consideration paid, or to be paid, by RGA in such acquisition is in excess of $500 million; or | |
• | authorize any of, or commit to do or enter into any binding contract with respect to any of the foregoing actions. |
• | except in connection with the Section 382 shareholder rights plan or certain other permitted shareholder rights plans, issue, sell or grant any shares of its capital stock, any other voting securities, or any other securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for any shares of its capital stock, or any rights, warrants or options to purchase any shares of its capital stock, or any securities or rights convertible into, exchangeable or exercisable for, or evidencing the right to subscribe for, any shares of its capital stock; provided that RGA may, subject to certain of RGA’s indemnification obligations, (1) issue or grant any options, rights, shares, units or other awards |
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and issue shares of RGA common stock upon exercise, conversion or settlement of any options, rights, shares, units or other awards issued in the ordinary course of business consistent with past practice pursuant to employee, director or consultant stock or benefit plans; (2) issue shares pursuant to or amend solely in order to modify an existing warrant agreement, to adjust the exchange ratio of the warrants so that such warrants are convertible into RGA class A common stock following the recapitalization; (3) issue shares pursuant to or amend, in order to make modifications that are consistent with those made to the warrant agreement described in the preceding item (2) to an existing unit agreement, and (4) enter into, or cause its subsidiaries to enter into, one or more transactions to finance regulatory or operational requirements, including regulatory reserve collateral requirements, under Regulation XXX; |
• | except in connection with the Section 382 shareholder rights plan or certain shareholder rights plans, (1) redeem, purchase or otherwise acquire any of its outstanding shares of capital stock, or any other securities thereof or any rights, warrants or options to acquire any such shares or securities, except in connection with the exercise of any options, rights, shares, units or other awards pursuant to employee, director or consultant stock or benefit plans, (2) declare, set aside for payment or pay any dividend on, or make any other distribution (whether in cash, stock or other form) in respect of, any shares of its capital stock (other than ordinary course quarterly cash dividends (including any increases in such quarterly dividends) or dividends by any RGA subsidiary), (3) adjust, split, combine, subdivide or reclassify any shares of its capital stock, or (4) enter into any contract, understanding or arrangement with respect to the sale, voting, registration or repurchase of RGA common stock or the capital stock of any subsidiary of RGA, other than employee, director or consultant stock or benefit plans or agreements or as an inducement to employment; | |
• | acquire or enter into an agreement to acquire any businesses, assets, product lines, business units, business operations, stock or other properties, including by way of merger or consolidation, other than acquisitions that are not material to RGA and its subsidiaries, taken as a whole; | |
• | enter into or discontinue any line of business material to RGA and its subsidiaries, taken as a whole; or | |
• | authorize any of, or commit to do or enter into any binding contract with respect to any of the foregoing actions. |
• | solicit, initiate or knowingly encourage any inquiries or the making of any proposal that constitutes or is reasonably likely to lead to an alternative proposal (as defined below); and | |
• | other than informing persons of the provisions on non-solicitation in the recapitalization and distribution agreement, participate in any discussions or negotiations regarding any alternative proposal, or furnish any information concerning MetLife, RGA and their respective subsidiaries to any person in connection with any alternative proposal. |
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• | furnish information regarding MetLife, RGA and their respective subsidiaries to the person making such alternative proposal (and its representatives), subject to the confidentiality provisions of the agreement; and | |
• | participate in discussions or negotiations with the person making such alternative proposal (and its representatives) regarding such alternative proposal. |
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• | effect or seek, offer or propose (whether publicly or otherwise) to effect, or cause or participate in or in any way knowingly assist any other person to effect or seek, offer or propose (whether publicly or otherwise) to initiate, effect or participate in or support, (a) any acquisition of any securities (or beneficial ownership thereof) or material assets of RGA or any of its subsidiaries, (b) any tender or exchange offer or merger or other business combination involving RGA or any of its affiliates, (c) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to RGA or any of its subsidiaries; and (d) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are defined or used in Regulation 14A under the Exchange Act) with respect to the voting of any shares of RGA common stock, RGA class A common stock or RGA class B common stock; | |
• | form, join or in any way participate in any “group” (other than with respect to MetLife’s affiliates) with respect to any of the shares of RGA common stock; | |
• | otherwise act, either alone or in concert with others, to seek control of RGA, including by submitting any written consent or proposal in furtherance of the foregoing or calling a special meeting of RGA shareholders; | |
• | publicly disclose any intention, proposal, plan or arrangement with respect to any of the foregoing; or | |
• | take any action, or request any amendment or waiver, that would reasonably be expected to require RGA to make a public announcement with respect to the matters set forth in the first and third bullet points above. |
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• | issuing any common equity securities, equity-linked securities (including convertible securities) or equity-forward sale agreements, relating to the capital stock of RGA (any such equity securities or agreements are referred to as “RGA Common Equity-Based Securities”) in connection with certain specified potential transactions, following the 90th day after the split-off; | |
• | adopting or taking action pursuant to the Section 382 shareholder rights plan or, after the earlier to occur of (1) termination of the recapitalization and distribution agreement or (2) the 90th day following the split-off, any other shareholder rights plan; or | |
• | issuing RGA Common Equity-Based Securities if and to the extent that RGA reasonably determines in good faith that such issuance, at such time, is necessary to prevent a downgrade from any nationally recognized rating agency (or restore a rating) so long as, prior to such determination (1) RGA will have discussed with such rating agency prior to commencement of the exchange offer the time frame and potential necessity for such an issuance, (2) RGA will have used commercially reasonable efforts to persuade such rating agency to maintain or restore its ratings without the need for such an issuance, and (3) RGA will have used commercially reasonable efforts to raise capital through the issuance of securities, other than the RGA Common Equity-Based Securities, if RGA reasonably believes that the issuance of such securities could maintain or restore its ratings, unless the board of directors of RGA believes in good faith, after consultation with its financial advisors, that it would be in the best interests of RGA to issue Common Equity-Based Securities instead of such securities. |
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• | organizational existence, good standing and requisite corporate power; |
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• | corporate authorization to enter into the recapitalization and distribution agreement and the transactions contemplated thereby; | |
• | approval by the party’s board of directors of the recapitalization and distribution agreement; | |
• | no conflicts with or violations of governance documents, material agreements or laws as a result of the execution and delivery of the recapitalization and distribution agreement or the completion of the transactions contemplated thereby; | |
• | governmental approvals required in connection with the transactions contemplated by the recapitalization and distribution agreement; | |
• | no litigation pending that would reasonably be expected to have a material adverse effect; | |
• | completeness and accuracy of certain information filed with the SEC by each party, including with respect to each party’s respective capitalization and financial statements and related information and the absence of any material changes; | |
• | only the named brokers and other advisors are entitled to receive fees from the applicable party; | |
• | title to property; | |
• | neither party is an investment company; | |
• | internal system over financial reporting and disclosure controls and procedures; | |
• | disclosure controls and procedures in accordance with the Sarbanes-Oxley Act of 2002; | |
• | no material adverse effect since the date of such party’s latest audited financial statements; | |
• | insurance regulatory status of the insurance subsidiaries of each party; | |
• | the independence and regulatory status of each party’s independent registered public accounting firm; | |
• | filing of material tax filings; | |
• | accuracy of information in IRS ruling requests; and | |
• | neither party has knowledge or reason to believe that it will not be able to deliver the tax certificate contemplated by the recapitalization and distribution agreement. |
• | breaches of representations, warranties or covenants of such first party in the recapitalization and distribution agreement or in any certificate delivered by such first party to the other party pursuant to the recapitalization and distribution agreement; and | |
• | statements or omissions in any of the documents filed with the SEC in connection with the transactions and any other documents filed by such first party with the SEC in connection with the transactions and any other documents filed by the first party with the SEC that is incorporated into such documents, based on any information furnished by or on behalf of such first party for inclusion in such documents. |
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• | by mutual written consent of MetLife and RGA; |
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• | by either party if the recapitalization and the split-off are not completed on or prior to December 31, 2009 (other than as a result of a breach by the terminating party or, after obtaining SEC clearance and required insurance regulatory approvals, there are not four complete window periods prior to the termination date, in which case the termination date will be extended until after the fourth window period); provided that this date may be automatically extended under certain circumstances to ensure that there are at least four trading windows during which the exchange offer can take place; | |
• | by either party if there is a final and non-appealable injunction or restraint prohibiting the recapitalization or the exchange offer; | |
• | by either party if RGA shareholders do not approve the RGA special meeting proposals; | |
• | by either party if the exchange offer expires or is terminated in accordance with the terms of the agreement without MetLife having accepted for purchase any shares of MetLife common stock, other than due to a breach of the agreement by the terminating party; | |
• | by either party, if any person or group qualifies as or otherwise becomes an acquiring person under the Section 382 shareholder rights plan; | |
• | by either party, if the other party has breached its representations or covenants in such a manner that it would result in the failure of certain conditions to occur and which breach is not cured within 30 days of notice; | |
• | by MetLife, if its board of directors authorizes it to enter into a binding written agreement with a specific third party providing for a transaction that constitutes a proposal for 90% or more of the RGA common stock owned by MetLife and its other subsidiaries that the MetLife board of directors determines in good faith, after consultation with its advisors, that such alternative proposal is more favorable to MetLife than the divestiture; provided that MetLife shall have provided RGA with at least three business days prior written notice of such termination and a complete copy of such agreement; and | |
• | immediately after the expiration of the exchange offer if MetLife has not provided to RGA certain certificates as set forth in the agreement unless such failure has been waived by RGA. |
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AND RGA
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• | any director; | |
• | any nominee for director; | |
• | any executive officer; | |
• | any holder of more than five percent of RGA’s voting securities; | |
• | any immediate family member of such a person, as that term is defined in the policy; and | |
• | any charitable entity or organization affiliated with such person or any immediate family member of such person. |
• | MetLife, if the transaction is entered into in the ordinary course of RGA’s business and the terms are comparable to those that are or would be negotiated with an unrelated client or vendor; or | |
• | any charitable entity or organization affiliated with a director, nominee for director, executive officer, or any immediate family member of such a person if the amount involved is $2,500 or less. |
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• | each director of RGA; | |
• | each executive officer of RGA; | |
• | the current directors and executive officers of RGA as a group; and | |
• | persons who are known to be holders of 5% or more of shares of RGA common stock. |
Beneficial Ownership of Equity Securities | ||||||||
Number of | ||||||||
Name | Title of Equity Security | Equity Shares(1) | Percent of Class | |||||
David B. Atkinson | MetLife common stock | — | ||||||
RGA common stock | 148,597(2) | * | ||||||
William J. Bartlett | MetLife common stock | — | ||||||
RGA common stock | 5,500 | * | ||||||
J. Cliff Eason | MetLife common stock | — | ||||||
RGA common stock | 18,750(3) | * | ||||||
Stuart I. Greenbaum | MetLife common stock | — | ||||||
RGA common stock | 24,633(4) | * | ||||||
Alan C. Henderson | MetLife common stock | — | ||||||
RGA common stock | 12,996(5) | * | ||||||
Steven A. Kandarian | MetLife common stock | 46,112(6) | * | |||||
RGA common stock | — | |||||||
Jack B. Lay | MetLife common stock | 200(7) | * | |||||
RGA common stock | 80,231(8) | * | ||||||
Georgette A. Piligian | MetLife common stock | 69,167(9), 20(10) | * | |||||
RGA common stock | — | |||||||
Joseph A. Reali | MetLife common stock | 138,933(11), 170(12) | * | |||||
RGA common stock | — | |||||||
Paul A. Schuster | MetLife common stock | |||||||
RGA common stock | 91,211(13) | * | ||||||
Graham Watson | MetLife common stock | |||||||
RGA common stock | 156,718(14) | * | ||||||
A. Greig Woodring | MetLife common stock | 90 | * | |||||
RGA common stock | 444,824(15) | * | ||||||
All directors and executive officers as a group (14 persons) | MetLife common stock | 254,502(16) | * | |||||
RGA common stock | 1,056,765(17) | 1.7 | % |
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* | Number of shares represents less than one percent of the number of shares of common stock outstanding at June 30, 2008. | |
(1) | Unless otherwise indicated, each named person has sole voting and investment power over the shares listed as beneficially owned. None of the shares held by directors, nominees or named executive officers are pledged as security. | |
(2) | Includes for Mr. Atkinson 113,077 shares of common stock subject to stock options that are exercisable within 60 days and 28,972 shares for which he shares voting and investment power with his spouse. Also includes 6,548 restricted shares of common stock that are subject to forfeiture in accordance with the terms of the specific grant, as to which Mr. Atkinson has no investment power. | |
(3) | Includes for Mr. Eason 8,250 shares of common stock subject to stock options that are exercisable within 60 days. | |
(4) | Includes for Mr. Greenbaum 13,433 shares of common stock subject to stock options that are exercisable within 60 days. | |
(5) | Includes for Mr. Henderson 6,000 shares of common stock subject to stock options that are exercisable within 60 days. | |
(6) | Includes for Mr. Kandarian 38,334 shares of MetLife common stock subject to stock options that are exercisable within 60 days and 7,778 deferred share units payable in shares of MetLife common stock under MetLife’s Deferred Compensation Plan for Officers. | |
(7) | Includes for Mr. Lay 200 shares of MetLife common stock subject to stock options that are exercisable within 60 days. | |
(8) | Includes for Mr. Lay 44,233 shares of common stock subject to stock options that are exercisable within 60 days and 16,816 shares for which Mr. Lay shares voting and investment power with his spouse. Also includes 6,548 restricted shares of common stock that are subject to forfeiture in accordance with the terms of the specific grant, as to which Mr. Lay has no investment power. | |
(9) | Includes for Ms. Piligian 47,967 shares of MetLife common stock subject to stock options that are exercisable within 60 days and 21,200 deferred share units payable in shares of MetLife common stock under MetLife’s Deferred Compensation Plan for Officers. | |
(10) | Represents for Ms. Piligian shares held through the MetLife Policyholder Trust, which has sole voting power over such shares, other than with respect to 20 shares jointly held with Ms. Piligian’s spouse, with whom she shares investment power. | |
(11) | Includes for Mr. Reali 109,125 shares of MetLife common stock subject to stock options that are exercisable within 60 days, and 21,840 deferred share units payable in shares of MetLife common stock under MetLife’s Deferred Compensation Plan for Officers. | |
(12) | Represents for Mr. Reali shares held through the MetLife Policyholder Trust, which has sole voting power over such shares, other than with respect to 10 shares jointly held with Mr. Reali’s spouse with whom Mr. Reali shares investment power. | |
(13) | Includes for Mr. Schuster 63,162 shares of common stock subject to stock options that are exercisable within 60 days, and 22,238 shares for which Mr. Schuster shares voting and investment power with his spouse. | |
(14) | Includes for Mr. Watson 94,415 shares of common stock subject to stock options that are exercisable within 60 days and 6,187 shares owned by Intercedent Limited, a Canadian corporation of which Mr. Watson has a majority ownership interest. | |
(15) | Includes for Mr. Woodring 344,195 shares of common stock subject to stock options that are exercisable within 60 days. | |
(16) | Includes a total of 195,426 shares of MetLife common stock subject to stock options that are exercisable within 60 days and 50,818 deferred share units payable in shares of MetLife common stock under MetLife’s Deferred Compensation Plan for Officers. | |
(17) | Includes a total of 741,038 shares of common stock subject to stock options that are exercisable within 60 days; and 13,096 shares of restricted common stock that are subject to forfeiture in accordance with the terms of the specific grant, as to which the holder has no investment power. |
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Amount and Nature of | ||||||||
Name and Address of Beneficial Owner | Beneficial Ownership(1) | Percent of Class | ||||||
MetLife, Inc. | 32,243,539 | (2) | 52 | % | ||||
200 Park Avenue New York, New York10166-0188 | ||||||||
Wellington Management Company, LLP | 4,870,951 | (3) | 7.9 | % | ||||
75 State Street Boston, Massachusetts 02109 |
(1) | Unless otherwise indicated, each named person has sole voting and investment power over the shares listed as beneficially owned. None of the shares held by directors, nominees or named executive officers are pledged as security. | |
(2) | The amount in the table reflects the total beneficial ownership of MetLife, Inc., Metropolitan Life Insurance Company, GenAmerica Financial, LLC, and General American and contained in a Schedule 13D/A filed with the SEC on June 2, 2008. Each of the filing companies shares voting and dispositive power with each other. | |
(3) | As reported on a Schedule 13G/A filed February 14, 2008, Wellington Management Company, LLP (“WMC”) is an investment adviser. Shares are owned of record by clients of WMC, none of which is known to have beneficial ownership of more than five percent of our outstanding shares. WMC has shared voting power of 3,584,626 shares and shared dispositive power of 4,842,151 shares. |
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Common Stock | ||||||||
Amount and | ||||||||
Nature of | ||||||||
Beneficial | ||||||||
Ownership | Percent of | |||||||
Name | (1)(2)(3)(4) | Class | ||||||
C. Robert Henrikson | 634,036 | * | ||||||
Sylvia M. Burwell | 10,307 | * | ||||||
Eduardo Castro-Wright | 2,212 | * | ||||||
Burton A. Dole, Jr. | 22,159 | * | ||||||
Cheryl W. Grisé | 7,223 | * | ||||||
R. Glenn Hubbard | 5,103 | * | ||||||
John M. Keane | 12,713 | * | ||||||
James M. Kilts | 4,071 | * | ||||||
Hugh B. Price | 8,384 | * | ||||||
David Satcher | 1,895 | * | ||||||
Kenton J. Sicchitano | 11,645 | * | ||||||
William C. Steere, Jr. | 27,098 | * | ||||||
Lulu C. Wang | 2,212 | * | ||||||
William J. Toppeta | 458,278 | * | ||||||
Lisa M. Weber | 341,650 | * | ||||||
William J. Wheeler | 219,162 | * | ||||||
MetLife board of directors, but not in each director’s individual capacity(5) | 253,046,331 | 36.5 | % | |||||
All directors and executive officers, as a group(6) | 2,197,141 | * |
* | Number of shares represents less than one percent of the number of shares of MetLife common stock outstanding at July 15, 2008. | |
(1) | Each director and executive officer of MetLife has sole voting and investment power over the shares of MetLife common stock shown in this column opposite his or her name, except as indicated in notes (2) and (3) below. Additionally, Mr. Henrikson has shared investment and voting power over 479 shares of MetLife common stock included in this column and he disclaims beneficial ownership of 20 shares of MetLife common stock included in this column. | |
(2) | Includes shares of MetLife common stock held by the MetLife Policyholder Trust allocated to the directors and named executive officers in their individual capacities as beneficiaries of the MetLife Policyholder Trust, as follows: |
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Shares Held in | Shares Held in | Shares Held in | ||||||||||||||
Policyholder | Policyholder | Policyholder | ||||||||||||||
Name | Trust | Name | Trust | Name | Trust | |||||||||||
Henrikson | 509 | Satcher | 260 | Weber | 10 | |||||||||||
Dole | 15 | Steere | 10 | Wheeler | 10 | |||||||||||
Price | 10 | Toppeta | 344 |
Directors and executive officers as of July 15, 2008, as a group, were allocated 1,289 shares of MetLife common stock as beneficiaries of the MetLife Policyholder Trust in their individual capacities. The beneficiaries have sole investment power and shared voting power with respect to such shares. Note (5) below describes additional beneficial ownership attributed to the Metlife board of directors as an entity, but not to any director in an individual capacity, of shares of MetLife common stock held by the MetLife Policyholder Trust. | ||
(3) | Includes shares of MetLife common stock that are subject to options which were granted under the 2000 Directors Stock Plan, the 2000 Stock Incentive Plan or the 2005 Stock and Incentive Compensation Plan and are exercisable within 60 days of July 15, 2008. The number of such options held by each director and named executive officer is shown in the following table: |
Number of | Number of | |||||||||||||||
Options | Options | |||||||||||||||
Exercisable | Exercisable | |||||||||||||||
Name | within 60 days | Name | within 60 days | |||||||||||||
Henrikson | 578,334 | Sicchitano | 1,536 | |||||||||||||
Burwell | 553 | Steere | 6,836 | |||||||||||||
Dole | 6,836 | Toppeta | 390,327 | |||||||||||||
Grisé | 178 | Weber | 311,668 | |||||||||||||
Keane | 1,210 | Wheeler | 207,542 | |||||||||||||
Price | 6,836 |
All directors and executive officers as of July 15, 2008, as a group, held 1,870,760 options exercisable within 60 days of July 15, 2008. | ||
(4) | Includes Deferred Shares that the director or executive officer could acquire within 60 days of July 15, 2008, such as by ending employment or service as a director, or by taking early distribution of the Deferred Shares not subject to Internal Revenue Code Section 409A (“Section 409A”) at any time with a 10% deduction. The number of such Deferred Shares held by each director and named executive officer is shown in the following table: |
Number of | Number of | Number of | ||||||||||||||
Deferred | Deferred | Deferred | ||||||||||||||
Shares | Shares | Shares | ||||||||||||||
That Can Be | That Can Be | That Can Be | ||||||||||||||
Acquired | Acquired | Acquired | ||||||||||||||
Name | within 60 days | Name | within 60 days | Name | within 60 days | |||||||||||
Henrikson | 45,193 | Hubbard | 4,103 | Sicchitano | 770 | |||||||||||
Burwell | 9,754 | Keane | 8,257 | Steere | 19,252 | |||||||||||
Castro-Wright | 1,887 | Kilts | 4,071 | Toppeta | 41,507 | |||||||||||
Dole | 13,071 | Price | 1,538 | Weber | 28,157 | |||||||||||
Grisé | 3,487 | Satcher | 615 | Wheeler | 5,643 |
Does not include Deferred Shares to the extent MetLife would delay payment in order to comply with Section 409A. | ||
(5) | The MetLife board of directors, as an entity, but not any director in his or her individual capacity, is deemed to beneficially own the shares of MetLife common stock held by the MetLife Policyholder Trust because the MetLife board of directors will direct the voting of those shares of MetLife common stock on certain matters submitted to a vote of MetLife stockholders. | |
(6) | Does not include shares of MetLife common stock held by the MetLife Policyholder Trust that are beneficially owned by the MetLife board of directors, as an entity, as described in note (5), but includes the shares of MetLife common stock allocated to the directors in their individual capacities, as described in note (2). Includes 1,870,760 shares of MetLife common stock that are subject to options that are exercisable within 60 days of July 15, 2008 by all directors |
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and executive officers of MetLife as of July 15, 2008, as a group, including the shares of MetLife common stock that are subject to options described in note (3). |
Amount and Nature of | ||||||||
Name and Address of Beneficial Owner | Beneficial Ownership | Percent of Class | ||||||
Beneficiaries of the MetLife Policyholder Trust(1) | 251,874,705 | 35.3 | % | |||||
c/o Wilmington Trust Company, as Trustee Rodney Square North 1100 North Market Street Wilmington, DE 19890 | ||||||||
AXA Financial, Inc.(2) | 45,825,114 | 6.2 | % | |||||
1290 Avenue of the Americas New York, NY 10104 |
(1) | The MetLife board of directors has reported to the SEC that, as of August 4, 2008, it, as an entity, had shared voting power over 255,104,694 shares of MetLife common stock held in the MetLife Policyholder Trust. The MetLife board of directors’ report is in Amendment No. 33, filed on August 4, 2008 to the MetLife board of directors’ Schedule 13D. MetLife created the MetLife Policyholder Trust when Metropolitan Life Insurance Company, a wholly owned subsidiary of MetLife, converted from a mutual insurance company to a stock insurance company in April 2000. At that time, eligible Metropolitan Life Insurance Company policyholders received beneficial ownership of shares of MetLife common stock, and MetLife transferred these shares to a Trust, which is the record owner of the shares. Wilmington Trust Company serves as Trustee. The policyholders, as Trust beneficiaries, have sole investment power over the shares, and can direct the Trustee to vote their shares on matters identified in the Trust Agreement. However, the Trust Agreement directs the Trustee to vote the shares held in the MetLife Policyholder Trust on some stockholder matters as recommended or directed by the MetLife board of directors and, on that account, the MetLife board of directors, under SEC rules, shares voting power with the Trust beneficiaries and the SEC has considered the MetLife board of directors, as an entity, a beneficial owner under the rules. | |
(2) | This information is based solely on a Schedule 13G filed with the SEC on February 14, 2008 by AXA Financial, Inc. (“AXA Financial”), a holding company, filing on behalf of itself, AXA Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle, and AXA. AXA Financial reported beneficial ownership of 43,268,423 shares of MetLife common stock, constituting 5.8% of the class of shares, with sole voting power for 29,147,223 of such shares, shared voting power for 6,260,993 of such shares, sole dispositive power for 43,268,393 of such shares, and shared dispositive power for 30 of such shares. The other reporting persons each indicated beneficial ownership of 45,825,114 shares of MetLife common stock, constituting 6.2% of the class of shares, over which they each claimed sole voting power for 30,431,589 of such shares, shared voting power for 6,260,993 of such shares, sole dispositive power for 45,825,084 of such shares, and shared dispositive power for 30 of such shares. The reporting persons indicated that a majority of the shares reported are held by unaffiliated third-party client accounts managed by Alliance Capital Management L.P., as investment adviser. Alliance Capital Management L.P. is a majority-owned subsidiary of AXA Financial. |
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• | 140 million shares will be designated as common stock, par value $0.01 per share; and | |
• | 10 million shares will be designated as preferred stock, par value $0.01 per share. |
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• | holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the members of the RGA board of directors; | |
• | holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the members of the RGA board of directors; | |
• | there will be a separate vote by class on any proposal to convert RGA class B common stock into RGA class A common stock; and | |
• | holders of more than 15% of the RGA class B common stock will be restricted to 15% of the voting power of the outstanding RGA class B common stock with respect to directors if they do not also hold an equal or greater proportion of RGA class A common stock. However, if such holder also beneficially owns in excess of 15% of the outstanding RGA class A common stock, then the holder may exercise the voting power of the RGA class B common stock in excess of 15% to the extent that such holder has an equivalent percentage of outstanding RGA class A common stock. To the extent that voting power of any share of class B common stock cannot be exercised, such share of class B common stock will be deemed entitled to vote for purposes of determining whether a quorum is present. A person will not be deemed to be the beneficial owner solely because the person holds or solicits a revocable proxy that is not then reportable on Schedule 13D under the Exchange Act. |
• | the RGA board of directors determines, in its sole discretion, to propose conversion to RGA shareholders; | |
• | the RGA board of directors adopts, in its sole discretion, a resolution submitting the proposal to convert the shares to RGA shareholders; and | |
• | the holders of a majority of each class of common stock represented in person or by proxy at the meeting approve the proposal to convert the shares. |
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• | any RGA stock held by MetLife or its subsidiaries prior to the recapitalization; | |
• | any RGA stock acquired in connection with the divestiture; | |
• | any RGA stock acquired by the participating banks in a private debt exchange (it being understood, however, that the limitation will apply to any person who acquires RGA stock from such participating banks and to such participating banks other than in connection with a private debt exchange); | |
• | any transaction directly with RGA, including pursuant to the exercise of outstanding options or warrants; | |
• | tender or exchange offers for all of the RGA common stock meeting certain fairness criteria; or | |
• | any transaction approved in advance by the RGA board of directors. |
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• | the specific designation of the shares of the series; | |
• | the consideration for which the shares of the series are to be issued; | |
• | the rate and times at which, and the conditions under which, dividends will be payable on shares of that series, and the status of those dividends as cumulative or non-cumulative and, if cumulative, the date or dates from which dividends will be cumulative; | |
• | the price or prices, times, terms and conditions, if any, upon which the shares of the series may be redeemed; | |
• | the rights, if any, which the holders of shares of the series have in the event of RGA’s dissolution or upon distribution of RGA’s assets; | |
• | from time to time, whether to include the additional shares of preferred stock which RGA is authorized to issue in the series; | |
• | whether or not the shares of the series are convertible into or exchangeable for other securities of RGA, including shares of RGA common stock or shares of any other series of RGA preferred stock, the price or prices or the rate or rates at which conversion or exchange may be made, and the terms and conditions upon which the conversion or exchange right may be exercised; | |
• | if a sinking fund will be provided for the purchase or redemption of shares of the series and, if so, to fix the terms and the amount or amounts of the sinking fund; and | |
• | any other preferences and rights, privileges and restrictions applicable to the series as may be permitted by law. |
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• | increase or decrease the aggregate number or par value of authorized shares of the class or series; | |
• | create a new class of shares having rights and preferences prior or superior to the shares of the class or series; | |
• | increase the rights and preferences, or the number of authorized shares, of any class or series having rights and preferences prior to or superior to the rights of the class or series; or | |
• | alter or change the powers, preferences or special rights of the shares of such class or series so as to affect such shares adversely. |
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• | RGA, any subsidiary of RGA, any employee benefit plan or compensation arrangement of RGA or any subsidiary of RGA, or any entity holding securities of RGA to the extent organized, appointed or established by RGA or any subsidiary of RGA for or pursuant to the terms of any such employee benefit plan or compensation arrangement; | |
• | any grandfathered person (as defined below); | |
• | any exempted person (as defined below); or | |
• | any person who or which inadvertently may become a 5-percent shareholder or otherwise becomes such a 5-percent shareholder, so long as such person promptly enters into, and delivers to RGA, an |
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irrevocable commitment promptly to divest, and thereafter promptly divests (without exercising or retaining any power, including voting, with respect to such securities), sufficient securities of RGA so that such person ceases to be a 5-percent shareholder of RGA. |
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• | delaying, deferring or preventing a change in control of RGA; | |
• | delaying, deferring or preventing the removal of RGA’s existing management or directors; | |
• | deterring potential acquirors from making an offer to RGA shareholders; and | |
• | limiting RGA’s shareholders’ opportunity to realize premiums over prevailing market prices of the RGA common stock in connection with offers by potential acquirors. |
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• | provisions regarding certain shareholder rights; | |
• | provisions relating to directors; | |
• | provisions related to shareholders’ meetings; | |
• | provisions specifying the procedure for amendment of bylaws; | |
• | provisions relating to indemnification and related matters; and | |
• | provisions relating to the amendment of the articles of incorporation. |
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• | the holders of a majority of the outstanding voting stock, other than the stock owned by the interested shareholder, or any affiliate or associate of such interested shareholder, approve the business combination; or | |
• | the business combination satisfies certain detailed fairness and procedural requirements. |
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MetLife | RGA | |||
Capital Stock | The MetLife certificate of incorporation authorizes MetLife to issue 3,000,000,000 shares of common stock, par value $0.01 per share, and 200,000,000 shares of preferred stock, par value $0.01 per share. | The amended and restated articles of incorporation of RGA will authorize RGA to issue 140,000,000 shares of RGA common stock, par value $0.01 per share, of which 107,700,000 shares are designated RGA class A common stock and 32,300,000 shares are designated RGA class B common stock, and 10,000,000 shares of RGA preferred stock, par value $0.01 per share. | ||
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MetLife | RGA | |||
Dividend Policy | MetLife has no legal or contractual obligation to pay dividends. The MetLife bylaws provide that dividends may be declared by the MetLife board of directors at any regular or special meeting of the board, and any such dividend may be paid in cash, property or shares. | RGA has no legal or contractual obligation to pay dividends on its common stock. The RGA amended and restated bylaws provide that the RGA board of directors may, from time to time, declare and RGA may pay dividends on its outstanding shares in the manner, and upon the terms and conditions provided by law and the RGA articles of incorporation. | ||
Voting Rights | Each share of MetLife common stock entitles its holder to one vote on all matters on which stockholders are entitled to vote. | The RGA articles of incorporation and bylaws will provide that holders of RGA class A common stock and holders of RGA class B common stock will vote together, as a single class, on all matters to be voted on by the RGA shareholders, except with respect to the election of directors or when separate class votes are required by law. Each share of RGA class A common stock and each share of RGA class B common stock will entitle its holder to one vote per share on all matters to be voted on by such holder. | ||
The holders of RGA class A common stock and holders of RGA class B common stock will not be entitled to cumulate their votes in the election of directors. | ||||
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MetLife | RGA | |||
Voting Power Restrictions | None. | The RGA articles of incorporation will restrict the voting power with respect to directors of a holder of more than 15% of the outstanding RGA class B common stock to 15% of the outstanding RGA class B common stock unless such holder also holds in excess of 15% of the outstanding RGA class A common stock, in which case such holder will be able to exercise an equivalent percentage of the voting power of the RGA class B common stock. | ||
Stockholder Action by Written Consent | The MetLife certificate of incorporation and bylaws each provide that no action of stockholders may be taken by written consent without a duly called annual or special meeting of MetLife stockholders. | The RGA articles of incorporation and bylaws will provide for shareholder action by unanimous written consent of the RGA shareholders entitled to vote with respect to such matter. | ||
Conversion Rights | MetLife common stock is not subject to any conversion rights. | The RGA articles of incorporation will provide that shares of RGA class B common stock will convert into shares of RGA class A common stock, on a one-for-one basis, if and when: | ||
RGA currently expects that, following the consummation of the divestiture, the RGA board of directors will consider submitting to a shareholder vote at the next regularly scheduled annual shareholders’ meeting of RGA (anticipated to be held on May 27, 2009), or at a special meeting called for such purpose, a proposal to convert the RGA class B common stock to RGA class A common stock on a |
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MetLife | RGA | |||
share-for-share basis pursuant to the conversion, subject to receipt of shareholder approval. However, there is no binding commitment by the RGA board of directors to, and there can be no assurance that the RGA board of directors will, consider the issue or resolve to present such a proposal to the RGA shareholders. If such a proposal is approved by the RGA board of directors and presented to the RGA shareholders, a vote by a majority of each of the RGA class A common stock and the RGA class B common stock represented in person or by proxy would be required for the proposal to be approved. There can be no assurance that the RGA shareholders would approve such conversion. | ||||
Quorum Requirements for Stockholder Meetings | The MetLife bylaws provide that a quorum will consist of one-third of the holders of record of shares of MetLife common stock entitled to vote, present in person or by proxy at a meeting of MetLife stockholders. | The RGA bylaws will provide that a majority of outstanding shares of RGA entitled to vote, represented by person or by proxy, will constitute a quorum at a meeting of the RGA shareholders. | ||
Number of Directors | The MetLife bylaws provide the MetLife board of directors may consist of no less than three directors, the exact number of directors to be determined from time to time by a majority of the entire MetLife board of directors. | The RGA articles of incorporation will set the number of members of the RGA board of directors at 10. Thereafter, the number of directors will be fixed in the manner specified in the bylaws, which provide that the number of directors will never be less than three, and that the RGA board of directors can amend the number of directors by majority vote. | ||
Classification of Board of Directors | The MetLife certificate of incorporation and bylaws provide that directors will be classified into three classes, as nearly equal in number as possible. The election of each class of directors will occur every third year, and one- | The RGA articles of incorporation and bylaws will provide that directors will be classified into three classes, as nearly equal in number as possible. The election of each class of directors will occur every third year, and one- |
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MetLife | RGA | |||
third of the directors will stand for election each year. | third of the directors will stand for election each year. | |||
Term of Directors | Each director will hold office for a term expiring at the annual meeting of MetLife stockholders held in the three years following the year of the director’s election, unless such director is elected to fill a vacancy on the MetLife board of directors, in which case, the director will hold office for the remaining term of the directorship. | Each director will hold office for a term expiring at the third succeeding annual meeting of RGA shareholders following the director’s election, unless such director is elected to fill a vacancy on the RGA board of directors, in which case, the director will hold office for the remaining term of the directorship. | ||
Removal of Directors | The MetLife bylaws provide that a director may be removed at any time, but only for cause, upon the affirmative vote of the holders of a majority of the combined voting power of the then outstanding stock of MetLife entitled to vote generally in the election of directors. | The RGA articles of incorporation will provide that a director may be removed at any time, but only for cause, upon the affirmative vote of at least 85% of the combined voting power entitled to vote generally in the election of directors, voting together as a single class at a special meeting of RGA shareholders called expressly for that purpose. | ||
Filling of Board Vacancies | The MetLife certificate of incorporation and bylaws provide that any vacancy created by the removal of a director for cause by MetLife stockholders may be filled by MetLife stockholders entitled to vote for the election of a director. A successor director filling such a vacancy will be of the same class as the director whose removal created the vacancy. | The RGA articles of incorporation and bylaws will provide that any vacancy created by any reason prior to the expiration of the term of the class in which the vacancy occurs will only be filled by a majority of the remaining directors, even if less than a quorum. A director elected to fill a vacancy will be elected for the unexpired term of his predecessor. Any directorship to be filled by reason of an increase in the number of directors may be filled by the board of directors and will be |
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MetLife | RGA | |||
resignation, an increase in the number of directors, or other reason, it may be filled by a majority of the directors then in office, although less than a quorum. | added to such class of directors so that all classes of directors will be as nearly equal in number as possible. | |||
Stockholder Proposals | The MetLife bylaws provide that any MetLife stockholder who intends to propose business to be considered at an annual meeting must deliver written notice of its intent to do so to MetLife’s Secretary. To be timely, such notice must be received by MetLife’s Secretary not less than 120 calendar days prior to the first anniversary of the previous year’s annual meeting. In the event that no annual meeting was held in the previous year or the date of the annual meeting was changed by more than 30 days from the anniversary of the previous year’s annual meeting, written notice must be received not later than 120 days prior to such annual meeting or 10 days following the date on which public announcement of the date of the meeting is first made. | The RGA articles of incorporation will provide that any RGA shareholder who intends to bring a matter before an annual meeting must deliver notice to RGA’s Secretary not less than 60 days nor more than 90 days prior to the meeting. In the event that less than 70 days’ notice or prior public disclosure of the date of the annual meeting is given to RGA shareholders, such written notice by the RGA shareholder must be received not later than the close of business on the 10th day following the day on which the notice of the date of the annual meeting was mailed or public disclosure was made, whichever occurs first. |
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MetLife | RGA | |||
Nomination of Directors | The MetLife bylaws provide that a MetLife stockholder may nominate one or more persons for election at an annual or special meeting called for the election of directors, but only if the MetLife stockholder delivers written notice of its intent to make the nomination to MetLife’s Secretary. For nomination of directors at an annual meeting, the timing requirements for providing notice to MetLife’s Secretary are the same as those described above for stockholder proposals. For nominations of directors at a special meeting, written notice must be delivered to MetLife’s Secretary not later than 150 calendar days prior to the special meeting or ten calendar days following the date on which the public announcement of the date of the special meeting and of the nominees to be elected at such meeting is first made. | The RGA articles of incorporation will provide that an RGA shareholder may nominate one or more persons for election at any meeting of RGA shareholders held at any time, but only if the RGA shareholder delivers timely notice of its intent to make such nomination(s) to RGA’s Secretary not less than 60 days nor more than 90 days prior to the meeting. In the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given to RGA shareholders, such notice by the RGA shareholder must be received not later than the close of business on the 10th day following the day on which the notice of the date of the meeting was mailed or public disclosure was made, whichever occurs first. |
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under Regulation 14A of the Exchange Act, and Rule 14a-11 thereunder, to be included in a proxy statement soliciting proxies for the election of the nominee as a director; | of RGA capital stock entitled to vote at the meeting and intends to appear in person or by proxy at the meeting to nominate the person(s) specified in the notice; | |||
Advance Notice of Stockholder Meetings | The MetLife bylaws provide that written notice of any annual or special meeting will be delivered to MetLife stockholders of record entitled to vote at such meeting not less than 10 nor more than 60 days prior to the meeting. In the case of a special meeting, such notice will include the purpose(s) for which the special meeting is called. | The RGA bylaws will provide that written notice of any annual or special meeting will be delivered to RGA shareholders not less than 10 nor more than 70 days prior to the meeting. In the case of a special meeting, such notice will include the purpose(s) for which the special meeting is called. | ||
Calling of Special Meeting of Stockholders | The MetLife bylaws provide that special meetings may only be | The RGA articles of incorporation will provide that special meetings |
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MetLife | RGA | |||
called by MetLife’s chief executive officer, or, in the event of its absence or disability, by MetLife’s president or any director who is also an officer, pursuant to a resolution approved by a majority of the entire MetLife board of directors. | may only be called by the chairman of the RGA board of directors, RGA’s president, or a majority of the RGA board of directors. Only such business will be conducted, and only such proposals acted upon, as are specified in the notice of the special meeting. | |||
Amendment of Certificate of Incorporation | The MetLife certificate of incorporation reserves the right to amend or repeal any provision contained in the certificate of incorporation in the manner prescribed by the DGCL. The MetLife certificate of incorporation further provides that (1) any amendment or repeal of any provisions relating to the liability of directors will not adversely affect any right or protection existing immediately prior to such an amendment or repeal and (2) the affirmative vote of at least 75% of the outstanding shares of MetLife stock entitled to vote generally in the election of directors is required to amend or repeal any of the following provisions: | The RGA articles of incorporation will provide that the articles of incorporation may be amended in accordance with Missouri law, which provides that a corporation may amend its articles of incorporation upon a resolution of the board of directors proposing the amendment and its submission to the shareholders for their approval by the holders of a majority of the shares of common stock entitled to vote. The RGA amended and restated articles of incorporation will provide that amendment of the following provisions requires an affirmative vote of at least 85% of the outstanding capital stock entitled to vote generally in the election of directors, voting together as a single class: | ||
Amendment of Bylaws | The MetLife bylaws provide that the MetLife bylaws may be amended, altered or repealed by (1) a | The RGA articles of incorporation and bylaws will provide that the RGA bylaws may only be |
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resolution duly adopted by the MetLife board of directors or (2) by the affirmative vote of at least 75% of the combined voting power of the outstanding shares of MetLife entitled to vote generally in the election of directors. | amended, altered, changed or repealed by a majority of the entire RGA board of directors. | |||
Certain Business Combinations | DGCL Section 203 prohibits a Delaware corporation from engaging in a business combination with a stockholder acquiring more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” unless prior to such date, the board of directors approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the board of directors and by the affirmative vote of at least 2/3 of the outstanding voting stock that is not owned by the interested stockholder. | MGBCL Section 351.459 prohibits a Missouri corporation from engaging in a business combination with an “interested shareholder” (beneficial owner of 20% of the voting shares) for a period of five years after the date of the transaction in which the person became an interested shareholder, unless the transaction in which the person became an interested shareholder or the business combination is approved by the board of directors or certain fair price requirements are met. After the five-year restricted period, the interested shareholder and the corporation may engage in a business combination if the business combination is approved by a majority of the voting stock that is not beneficially owned by the interested shareholder. | ||
Ownership Limitations | None. | The RGA articles of incorporation will provide that shareholders are subject to stock ownership limitations, which would generally limit shareholders from owning or acquiring 5% or more (by value) of the aggregate outstanding shares of RGA stock for a period of 36 months and one day from the completion of the recapitalization (it being understood that such limitation (i) would not apply to MetLife or its subsidiaries, (ii) would not apply to any participating banks that may participate in any debt exchanges and (iii) would not prohibit a person from acquiring or owning |
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5% or more (by value) of the RGA stock as a result of the divestiture). Any person permitted to acquire or own 5% or more (by value) of the RGA stock pursuant to the three exceptions described in the immediately preceding sentence will not be permitted to acquire any additional RGA stock at any time during the 36 month and one day restriction period, unless and until such person owns less than 5% (by value) of the aggregate outstanding shares of RGA stock, at which point such person may acquire RGA stock only to the extent that, after such acquisition, such person owns less than 5% (by value) of the RGA stock. | ||||
Stockholder Rights Plan | The MetLife board of directors has adopted a stockholder rights plan, which under certain circumstances, could cause substantial dilution to a person or group that attempts to acquire MetLife on terms not approved in advance by the MetLife board of directors. | The RGA board of directors has adopted a Section 382 shareholder rights plan, which under certain circumstances, could cause substantial dilution to a person or group that attempts to acquire RGA stock on terms not approved in advance by the RGA board of directors. |
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MetLife, Inc. 1 MetLife Plaza, Long Island City, NY 11101 Attn: Investor Relations (212) 578-2211 | Reinsurance Group of America, Incorporated 1370 Timberlake Manor Parkway Chesterfield, Missouri 63017 Attention: Corporate Secretary (636) 736-7000 |
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• | MetLife’s Annual Report onForm 10-K for the year ended December 31, 2007 (including the information incorporated by reference therein from MetLife’s definitive proxy statement filed March 18, 2008); | |
• | MetLife’s Quarterly Reports onForm 10-Q for quarterly periods ended March 31, 2008 and June 30, 2008; | |
• | MetLife’s Current Reports onForm 8-K dated January 11, 2008, February 6, 2008, February 19, 2008, March 1, 2008, April 8, 2008, April 22, 2008, April 22, 2008, May 1, 2008, May 15, 2008, June 2, 2008, July 15, 2008 and July 25, 2008 (other than the portions of those documents not deemed to be filed); and | |
• | The description of MetLife common stock set forth in MetLife’s Registration Statement on Form S-1 filed on November 23, 1999, as amended. |
• | RGA’s Annual Report onForm 10-K for the year ended December 31, 2007 (including the information incorporated by reference therein from RGA’s definitive proxy statement filed April 9, 2008); | |
• | RGA’s Quarterly Reports onForm 10-Q for the quarterly periods ended March 31, 2008 and June 30, 2008; | |
• | RGA’s Current Reports onForm 8-K filed April 17, 2008, June 2, 2008, June 5, 2008 and July 21, 2008 (other than the portions of those documents not deemed to be filed); | |
• | The description of RGA’s existing common stock contained in RGA’s Registration Statement onForm 8-A dated April 6, 1993, as amended by Amendment No. 1 onForm 8-A/A dated April 27, 1993, as updated by RGA’s Current Report onForm 8-K filed with the SEC on September 10, 2004; | |
• | The description of RGA’s Section 382 shareholder rights plan contained in RGA’s Registration Statement onForm 8-A dated June 2, 2008. |
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Name | Title | |
C. Robert Henrikson | Chairman of the Board, President and Chief Executive Officer | |
Ruth A. Fattori | Executive Vice President and Chief Administrative Officer | |
Steven A. Kandarian | Executive Vice President and Chief Investment Officer | |
James L. Lipscomb | Executive Vice President and General Counsel | |
Maria R. Morris | Executive Vice President, Technology and Operations | |
William J. Mullaney | President, Institutional Business | |
William J. Toppeta | President, International | |
Lisa M. Weber | President, Individual Business | |
William J. Wheeler | Executive Vice President and Chief Financial Officer | |
Sylvia Mathews Burwell | Director | |
Eduardo Castro-Wright | Director | |
Burton A. Dole, Jr. | Director | |
Cheryl W. Grisé | Director | |
R. Glenn Hubbard | Director | |
John M. Keane | Director | |
James M. Kilts | Director | |
Hugh B. Price | Director | |
David Satcher | Director | |
Kenton J. Sicchitano | Director | |
William C. Steere, Jr. | Director | |
Lulu C. Wang | Director |
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Name | Age at June 30, 2008 | Director Since | Principal Occupation | |||||||
Term Ending 2011: | ||||||||||
J. Cliff Eason | 60 | 1993 | Retired President and CEO of Southwestern Bell Telephone, SBC Communications, Inc. (“SBC”), from September 2000 through January 2001 | |||||||
Joseph A. Reali | 55 | 2002 | Senior Vice President and Tax Director of Metropolitan Life since 1999 | |||||||
Term Ending 2010: | ||||||||||
William J. Bartlett | 59 | 2004 | Retired partner, Ernst & Young Australia | |||||||
Alan C. Henderson | 62 | 2002 | President and Chief Executive Officer of RehabCare Group, Inc. from June 1998 until June 2003 | |||||||
A. Greig Woodring | 56 | 1993 | President and Chief Executive Officer of RGA | |||||||
Term Ending 2009: | ||||||||||
Stuart I. Greenbaum | 71 | 1997 | Professor Emeritus at the John M. Olin School of Business at Washington University since January 2007 | |||||||
Steven A. Kandarian | 56 | 2007 | Executive Vice President and Chief Investment Officer of MetLife since April 2005 | |||||||
Georgette A. Piligian | 43 | 2006 | Senior Vice President and Chief Information Officer, Institutional Business Metropolitan Life Insurance Company since February 2006 |
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Name | Age | Principal Occupation | ||||
David B. Atkinson | 55 | Executive Vice President | ||||
Todd C. Larson | 45 | Senior Vice President, Controller and Treasurer | ||||
Jack B. Lay | 54 | Senior Executive Vice President and Chief Financial Officer | ||||
Paul A. Schuster | 54 | Senior Executive Vice President, U.S. Division | ||||
James E. Sherman | 55 | Executive Vice President, General Counsel and Secretary | ||||
Graham S. Watson | 58 | Senior Executive Vice President, International and Chief Marketing Officer |
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Page | ||||||
ARTICLE I | DEFINITIONS | A-2 | ||||
Section 1.1 | General | A-2 | ||||
Section 1.2 | References; Interpretation | A-10 | ||||
ARTICLE II | THE RECAPITALIZATION | A-11 | ||||
Section 2.1 | The Recapitalization | A-11 | ||||
Section 2.2 | Closing Date | A-11 | ||||
Section 2.3 | Exchange of Certificates | A-11 | ||||
ARTICLE III | THE SPLIT-OFF | A-11 | ||||
Section 3.1 | The Split-Off | A-11 | ||||
Section 3.2 | Delay Right | A-15 | ||||
ARTICLE IV | ADDITIONAL DIVESTITURE TRANSACTIONS | A-15 | ||||
Section 4.1 | Generally | A-15 | ||||
Section 4.2 | Debt Exchanges | A-16 | ||||
Section 4.3 | Registration Rights with Participating Banks | A-17 | ||||
Section 4.4 | Additional Split-Offs | A-17 | ||||
ARTICLE V | REPRESENTATIONS AND WARRANTIES OF RGA | A-18 | ||||
Section 5.1 | Organization; Good Standing | A-19 | ||||
Section 5.2 | Authorization | A-19 | ||||
Section 5.3 | Non-Contravention | A-20 | ||||
Section 5.4 | Governmental Approvals | A-20 | ||||
Section 5.5 | Capital Stock | A-20 | ||||
Section 5.6 | Litigation | A-21 | ||||
Section 5.7 | Accuracy of Information | A-22 | ||||
Section 5.8 | Brokers and Other Advisors | A-22 | ||||
Section 5.9 | Property Title | A-22 | ||||
Section 5.10 | Investment Company | A-23 | ||||
Section 5.11 | Internal Control | A-23 | ||||
Section 5.12 | Disclosure Controls and Procedures | A-23 | ||||
Section 5.13 | Exhibits | A-23 | ||||
Section 5.14 | No Material Change | A-23 | ||||
Section 5.15 | RGA Insurance Subsidiaries | A-23 | ||||
Section 5.16 | Independent Auditors | A-24 | ||||
Section 5.17 | Tax | A-24 | ||||
Section 5.18 | Approvals | A-24 |
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ARTICLE VI | REPRESENTATIONS AND WARRANTIES OF METLIFE | A-25 | ||||
Section 6.1 | Organization; Good Standing | A-25 | ||||
Section 6.2 | Authorization | A-25 | ||||
Section 6.3 | Non-Contravention | A-25 | ||||
Section 6.4 | Governmental Approvals | A-26 | ||||
Section 6.5 | Title | A-26 | ||||
Section 6.6 | Litigation | A-26 | ||||
Section 6.7 | Accuracy of Information | A-26 | ||||
Section 6.8 | Brokers and Other Advisors | A-27 | ||||
Section 6.9 | Property Title | A-27 | ||||
Section 6.10 | Investment Company | A-27 | ||||
Section 6.11 | Capitalization | A-27 | ||||
Section 6.12 | Internal Control | A-27 | ||||
Section 6.13 | Disclosure Controls and Procedures | A-28 | ||||
Section 6.14 | Exhibits | A-28 | ||||
Section 6.15 | No Material Change | A-28 | ||||
Section 6.16 | MetLife Insurance Subsidiaries | A-28 | ||||
Section 6.17 | Broker-Dealer Subsidiaries | A-29 | ||||
Section 6.18 | Independent Auditors | A-29 | ||||
Section 6.19 | Investor Representations | A-29 | ||||
Section 6.20 | Tax | A-29 | ||||
Section 6.21 | Approvals | A-30 | ||||
ARTICLE VII | ADDITIONAL COVENANTS | A-30 | ||||
Section 7.1 | Interim Operations | A-30 | ||||
Section 7.2 | Non-Solicitation | A-32 | ||||
Section 7.3 | RGA Shareholders Meeting | A-33 | ||||
Section 7.4 | Standstill | A-34 | ||||
Section 7.5 | Efforts; Cooperation | A-34 | ||||
Section 7.6 | Further Assurances | A-35 | ||||
Section 7.7 | Access | A-35 | ||||
Section 7.8 | Confidentiality | A-36 | ||||
Section 7.9 | Public Announcements | A-36 | ||||
Section 7.10 | Litigation Cooperation | A-36 | ||||
Section 7.11 | Resignation of MetLife Designees to RGA Board | A-36 | ||||
Section 7.12 | Voting of RGA Common Stock by MetLife | A-36 | ||||
Section 7.13 | Tax Matters | A-37 | ||||
Section 7.14 | Lock-Up Period | A-38 | ||||
Section 7.15 | MetLife Registration Rights | A-39 | ||||
Section 7.16 | Payments in Respect of Excess Shareholders | A-42 | ||||
Section 7.17 | Directors’ and Officers’ Insurance | A-43 | ||||
Section 7.18 | Amendments Regarding Recently Acquired Stock | A-43 | ||||
Section 7.19 | Notice Regarding Section 382 Shareholder Rights Plan | A-43 | ||||
Section 7.20 | General American Name | A-43 |
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ARTICLE VIII | SURVIVAL AND INDEMNIFICATION | A-44 | ||||
Section 8.1 | Survival | A-44 | ||||
Section 8.2 | Indemnification by RGA | A-44 | ||||
Section 8.3 | Indemnification by MetLife | A-45 | ||||
Section 8.4 | Notice; Procedure for Third-Party Claims | A-45 | ||||
Section 8.5 | Tax Contests | A-46 | ||||
Section 8.6 | Contribution | A-46 | ||||
Section 8.7 | Remedies Exclusive | A-47 | ||||
Section 8.8 | Limitations on Indemnifiable Losses | A-47 | ||||
Section 8.9 | Subrogation and Insurance | A-47 | ||||
Section 8.10 | Excluded Representations | A-48 | ||||
ARTICLE IX | TERMINATION | A-48 | ||||
Section 9.1 | Termination | A-48 | ||||
Section 9.2 | Effect of Termination | A-49 | ||||
ARTICLE X | MISCELLANEOUS | A-49 | ||||
Section 10.1 | Entire Agreement | A-49 | ||||
Section 10.2 | Counterparts | A-49 | ||||
Section 10.3 | Expenses | A-50 | ||||
Section 10.4 | Notices | A-50 | ||||
Section 10.5 | Waivers | A-51 | ||||
Section 10.6 | Amendments | A-51 | ||||
Section 10.7 | Assignment | A-51 | ||||
Section 10.8 | Successors and Assigns | A-51 | ||||
Section 10.9 | No Third-Party Beneficiaries | A-51 | ||||
Section 10.10 | Annexes, Exhibits and Schedules | A-52 | ||||
Section 10.11 | GOVERNING LAW | A-52 | ||||
Section 10.12 | Consent to Jurisdiction; Waiver of Jury Trial | A-52 | ||||
Section 10.13 | Specific Performance | A-52 | ||||
Section 10.14 | Severability | A-53 | ||||
ANNEXES | ||||||
Annex A — Conditions to the Commencement of the Offer | ||||||
Annex B — Conditions to Completing the Recapitalization | ||||||
Annex C — Conditions to Completing the Split-Off | ||||||
EXHIBITS | ||||||
Exhibit A — Form of Amended and Restated RGA Articles of Incorporation | ||||||
Exhibit B — Form of Amended and Restated RGA Bylaws | ||||||
Exhibit C — Form of Section 382 Shareholder Rights Plan |
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THE RECAPITALIZATION
THE SPLIT-OFF
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ADDITIONAL DIVESTITURE TRANSACTIONS
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ADDITIONAL COVENANTS
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SURVIVAL AND INDEMNIFICATION
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TERMINATION
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MISCELLANEOUS
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1 MetLife Plaza
27-01 Queens Plaza North
Long Island City, New York 11101
Attention: James L. Lipscomb, Esq. and Richard S. Collins, Esq.
Facsimile:(212) 252-7288 and(212) 251-1538
51 West 52nd Street
New York, New York 10019
Attention: Adam O. Emmerich, Esq.
Facsimile:(212) 403-2000
1370 Timberlake Manor Parkway
Chesterfield, MO 63017
Attention: James E. Sherman, Esq.
Facsimile:(636) 736-7886
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One Metropolitan Square
211 North Broadway
Suite 3600
St. Louis, Missouri 63102
Attention: R. Randall Wang, Esq.
Facsimile:(314) 552-8149
4 Times Square
New York, New York 10036
Attention: Matthew A. Rosen, Esq. and Dean S. Shulman, Esq.
Facsimile:(212) 735-2000
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By: | /s/ William J. Wheeler |
Title: | Executive Vice President and |
By: | /s/ Jack B. Lay |
Title: | Senior Executive Vice President and Chief Financial Officer |
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I. | Conditions Waivable Only by Both Parties |
II. | Conditions Waivable by MetLife |
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I. | Conditions Waivable Only by Both Parties |
II. | Conditions Waivable by MetLife |
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A-58
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A-59
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ITEM 20. | Indemnification of Directors and Officers. |
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ITEM 21. | Exhibits and Financial Statement Schedules |
ITEM 22. | Undertakings |
II-2
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By: | /s/ A. Greig Woodring |
Title: | President, Chief Executive Officer and Director |
Signature | Title | Date | ||||
/s/ A. Greig Woodring A. Greig Woodring | President, Chief Executive Officer and Director (Principal Executive Officer) | August 6, 2008 | ||||
/s/ Jack B. Lay Jack B. Lay | Senior Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | August 6, 2008 | ||||
/s/ William J. Bartlett William J. Bartlett | Director | August 6, 2008 | ||||
/s/ J. Cliff Eason J. Cliff Eason | Director | August 6, 2008 | ||||
/s/ Stuart I. Greenbaum Stuart I. Greenbaum | Director | August 6, 2008 |
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Signature | Title | Date | ||||
/s/ Alan C. Henderson Alan C. Henderson | Director | August 6, 2008 | ||||
/s/ Steven A. Kandarian Steven A. Kandarian | Director | August 6, 2008 | ||||
/s/ Georgette A. Piligian Georgette A. Piligian | Director | August 6, 2008 | ||||
/s/ Joseph A. Reali Joseph A. Reali | Director | August 6, 2008 |
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Exhibit | ||||
Number | Description of Exhibit | |||
3 | .1 | Restated Articles of Incorporation of RGA, incorporated by reference to Exhibit 3.1 of RGA’s Current Report onForm 8-K filed June 30, 2004. | ||
3 | .2 | Bylaws of RGA, incorporated by reference to Exhibit 3.2 of RGA’s Quarterly Report onForm 10-Q filed August 6, 2004. | ||
3 | .3 | Form of Amended and Restated Articles of Incorporation of RGA proposed for approval by shareholders of RGA (included as Appendix B to the proxy statement/prospectus in Part I of RGA’s Registration Statement on Form S-4 (File No. 333-151390)). | ||
3 | .4 | Form of Amended and Restated Bylaws of RGA to become effective subject to and upon consummation of recapitalization, incorporated by reference to Exhibit 3.4 of RGA’s Current Report onForm 8-K filed June 5, 2008. | ||
4 | .1 | Specimen of the certificate representing RGA’s class A common stock, incorporated by reference to Exhibit 4 of RGA’s Registration Statement on Form 8-A filed July 17, 2008. | ||
4 | .2 | Specimen of the certificate representing RGA’s class B common stock, incorporated by reference to Exhibit 5 of RGA’s Registration Statement on Form 8-A filed July 17, 2008. | ||
4 | .3 | Section 382 Rights Agreement dated June 2, 2008 between RGA and Mellon Investor Services LLC, as Rights Agent, incorporated by reference to Exhibit 4.1 of RGA’s Registration Statement onForm 8-A filed June 2, 2008. | ||
4 | .4 | Form of Amended and Restated Section 382 Rights Agreement between RGA and Mellon Investor Services, LLC proposed for approval by shareholders of RGA (included as Exhibit C to the proxy statement/prospectus in part I of RGA’s Registration Statement on Form S-4 (File No. 333-151390)). | ||
5 | .1 | Form of Opinion of William L. Hutton, Esq. as to the legality of the class A common stock and class B common stock. | ||
8 | .1 | Form of Opinion of Wachtell, Lipton, Rosen & Katz regarding tax matters. | ||
10 | .1 | Recapitalization and Distribution Agreement, dated as of June 1, 2008, by and between MetLife and RGA (included as Appendix A to the proxy statement/prospectus in Part I of RGA’s Registration Statement on Form S-4 (File No. 333-151390)). | ||
21 | .1 | List of Subsidiaries of RGA, incorporated by reference to Exhibit 21.1 of RGA’s Annual Report onForm 10-K for the year ended December 31, 2007. | ||
23 | .1 | Consent of Deloitte & Touche LLP, independent registered public accounting firm for MetLife. | ||
23 | .2 | Consent of Deloitte & Touche LLP, independent registered public accounting firm for RGA. | ||
23 | .3 | Consent of William L. Hutton, Esq. (included in his opinion in Exhibit 5.1). | ||
23 | .4 | Consent of Wachtell, Lipton, Rosen & Katz (included in its opinion in Exhibit 8.1). | ||
24 | .1 | Powers of Attorney (included on signature page of this Registration Statement). | ||
99 | .1 | [Reserved]. | ||
99 | .2 | Letter of Transmittal for Exchange Offer (book entry) incorporated by reference to Exhibit 99.2 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .3 | Letter of Transmittal for Exchange Offer (certificates) incorporated by reference to Exhibit 99.3 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .4 | Instructions for Letter of Transmittal incorporated by reference to Exhibit 99.4 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .5 | Form of Notice of Guaranteed Delivery incorporated by reference to Exhibit 99.5 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .6 | Form of Notice of Withdrawal incorporated by reference to Exhibit 99.6 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .7 | Form of Letter to Brokers incorporated by reference to Exhibit 99.7 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). | ||
99 | .8 | Form of Letter to Clients incorporated by reference to Exhibit 99.8 of Amendment No. 2 to RGA’s Registration Statement on Form S-4 (File No. 333-151390 filed on July 29, 2008). |