As filed with the Securities and Exchange Commission on July 10, 2008

Registration No. 333-151390

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

Amendment No. 1

to

Form S-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

 

REINSURANCE GROUP OF AMERICA, INCORPORATED

(Exact name of Registrant as specified in its charter)

 

 

 

 

 

 

 

 

1370 Timberlake Manor Parkway
Chesterfield, Missouri 63017
(636) 736-7439
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

 

 

Jack B. Lay

Senior Executive Vice President and Chief Financial Officer

Reinsurance Group of America, Incorporated

1370 Timberlake Manor Parkway

Chesterfield, Missouri 63017-6039

(636) 736-7000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

 

Copies to:

 

 

 

 

 

Approximate date of commencement of proposed sale to the public:  As promptly as practicable after the filing of this Registration Statement and other conditions to the commencement of the exchange offer described herein have been satisfied or waived.

 

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

 

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission (the “SEC”), acting pursuant to said Section 8(a), may determine.

 

 

EXPLANATORY NOTE

 

This Registration Statement contains two forms of prospectuses:

 

 

 

The Proxy Statement/Prospectus appears at the beginning of this Registration Statement, and the Exchange Offer Prospectus appears after the Proxy Statement/Prospectus. Certain sections of the Proxy Statement/Prospectus and the Exchange Offer Prospectus will be identical. Instead of repeating those sections in the Exchange Offer Prospectus included in this Registration Statement, a notation has been added. The final Exchange Offer Prospectus will eliminate the notation, and the full text will be included. In addition, the page numbers in the final Proxy Statement/Prospectus will not include “Proxy” and the page numbers in the final Exchange Offer Prospectus will not include “Offer”.

 

SUBJECT TO COMPLETION, DATED JULY 9, 2008

 

 

                    

 

[ • ], 2008

 

To the Shareholders of Reinsurance Group of America, Incorporated:

 

You are cordially invited to attend the special meeting of the shareholders of Reinsurance Group of America Incorporated, a Missouri corporation (which is referred to as “RGA”), which will be held at RGA’s corporate headquarters at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017, on [ • ], 2008, at [ • ] [ • ].m, local time. This is an important special meeting that affects your investment in the company.

 

At the special meeting, you will be asked to consider and vote to approve a proposed recapitalization of RGA (which is referred to as the “recapitalization”), certain changes to the RGA articles of incorporation to be implemented in connection with the recapitalization, and ratification of a Section 382 shareholder rights plan. In the recapitalization, each issued and outstanding share of RGA common stock will be reclassified as RGA class A common stock. Immediately after such reclassification, MetLife, Inc. and its subsidiaries, which currently hold approximately 52% of RGA’s outstanding stock, will exchange each share of RGA class A common stock that they hold (other than 3,000,000 shares of RGA class A common stock) with RGA for one share of RGA class B common stock. Holders of the RGA class A common stock, voting together as a class, will be entitled to elect up to 20% of the RGA board of directors, and holders of the RGA class B common stock, voting together as a class, will be entitled to elect at least 80% of the RGA board of directors.

 

The recapitalization is proposed in conjunction with, and is conditioned upon, an offer by MetLife to MetLife stockholders to exchange all of the shares of RGA class B common stock that MetLife will receive following the recapitalization, for shares of MetLife common stock (which is referred to as the “exchange offer” or, when completed, the “split-off”). The exchange offer is being conducted pursuant to a separate exchange offer prospectus and is subject to the terms and conditions set forth in the exchange offer prospectus. The recapitalization and exchange offer will not be completed unless MetLife stockholders validly tender and not withdraw a sufficient number of shares of MetLife common stock that would result in the distribution of at least 26,319,186 shares (representing 90% of such shares) of RGA class B common stock in the split-off.

 

If MetLife continues to hold any shares of RGA class B common stock following the exchange offer, MetLife will exchange such shares of RGA class B common stock with its security holders in one or more private or public debt exchanges (each of which is referred to as a “debt exchange”) or one or more subsequent split-offs (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 exchanges or subsequent split-offs is referred to as the “divestiture.” RGA presently expects that, following the divestiture, the RGA board of directors will consider submitting to a vote of RGA shareholders a proposal to convert the dual-class structure adopted in the recapitalization into a single class structure (which is referred to as the “conversion”). There is, however, 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.

 

In connection with the recapitalization, you will also be asked to consider and vote upon some amendments to the RGA articles of incorporation (which is referred to as the “governance proposals”) and to ratify the decision of the RGA special committee (as defined below) to adopt and implement a Section 382 shareholder rights plan. The RGA board of directors believes that, together, the governance proposals and the Section 382 shareholder rights plan will help preserve the ability of RGA and its subsidiaries to use certain of their tax assets, and help protect the RGA class A shareholders from potentially coercive or abusive

takeover tactics and attempts to acquire control of RGA at a price or on terms that are not in the best interests of RGA class A shareholders.

 

RGA common stock is currently listed on the New York Stock Exchange (which is referred to as the “NYSE”) under the symbol “RGA”. RGA has applied to have the RGA class B common stock listed on the NYSE, subject to official notice of issuance. Following the recapitalization and the split-off, RGA class A common stock is expected to be listed on the NYSE under the symbol “RGA.A”, and RGA class B common stock is expected to be listed on the NYSE under the symbol “RGA.B”.

 

The recapitalization is being effected pursuant to a recapitalization and distribution agreement, dated as of June 1, 2008, by and between MetLife and RGA. The RGA board of directors believes that the recapitalization and the other transactions contemplated by the recapitalization and distribution agreement are fair to, and in the best interests of, RGA and its shareholders (other than MetLife and its subsidiaries), and has approved these transactions. Prior to the approval of the RGA board of directors, a specially constituted committee of the RGA board of directors, composed of four independent directors (which is referred to as the “RGA special committee”), determined that the recapitalization and the other transactions contemplated by the recapitalization and distribution agreement are fair to RGA and its shareholders (other than MetLife and its subsidiaries) and unanimously recommended that the RGA board of directors approve the recapitalization and the other transactions contemplated by the recapitalization and distribution agreement.

 

Upon unanimous recommendation of the RGA special committee, the RGA board of directors has approved the recapitalization and the other transactions contemplated by the recapitalization and distribution agreement, and recommends that you vote for the approval of each of the proposals. Your participation and vote are important. The transactions will not be effected without the affirmative vote of at least a majority of RGA’s outstanding common stock held by RGA shareholders (other than MetLife and its subsidiaries), present and entitled to vote at the RGA special meeting.

 

Your vote is important. Even if you plan to attend the RGA special meeting in person, please complete, sign, date and promptly return the enclosed proxy card in the enclosed postage-prepaid envelope. This will not limit your right to attend or vote at the RGA special meeting.

 

This document provides detailed information about the proposed transactions. The RGA board of directors encourages you to read the entire document and its appendices carefully. Please pay particular attention to the “Risk Factors” section beginning on page 23. You may also obtain more information about RGA from documents RGA has filed with the SEC.

 

Thank you for your continued support.

 

REINSURANCE GROUP OF AMERICA, INCORPORATED

 

Sincerely,

 

[ • ]

 

[ • ], 2008

 

Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued in connection with the recapitalization, exchange offer, any debt exchanges and/or any subsequent split-offs or passed upon the adequacy or accuracy of this document. Any representation to the contrary is a criminal offense.

 

The accompanying document is dated [ • ], 2008 and is first being mailed to RGA shareholders on or about [ • ], 2008.

REINSURANCE GROUP OF AMERICA, INCORPORATED
1370 Timberlake Manor Parkway,
Chesterfield, Missouri 63017

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held [ • ], 2008

 

A special meeting of the shareholders of RGA will be held at RGA’s corporate headquarters at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017, on [ • ], [ • ] [ • ], 2008, at [ • ][ • ].m, local time, for the following purposes:

 

1. Recapitalization Proposal.  To consider and vote upon a proposal to approve the recapitalization and distribution agreement, dated as of June 1, 2008, by and between MetLife and RGA, and the transactions contemplated by the recapitalization and distribution agreement, including the recapitalization and the related amendment and restatement of RGA’s articles of incorporation. In the recapitalization, each issued and outstanding share of RGA common stock will be reclassified as RGA class A common stock. Immediately after this reclassification, MetLife and its subsidiaries will exchange each share of RGA class A common stock that they hold (other than 3,000,000 shares of RGA class A common stock) with RGA for one share of RGA class B common stock. 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 subsequent reclassification of shares or in any merger or consolidation of RGA with any other company. The recapitalization is proposed in conjunction with, and is conditioned upon, an offer by MetLife to MetLife stockholders to exchange all of the shares of RGA class B common stock for shares of MetLife common stock.

 

2. Governance Proposals.  To consider and vote upon a number of proposals that would amend the RGA articles of incorporation, subject to and conditioned upon completion of the recapitalization, as follows:

 

 

 

 

3. Section 382 Shareholder Rights Plan Proposal.  To consider and vote upon a proposal that RGA shareholders ratify the decision of the RGA special committee 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.

 

4. Adjournment Proposal.  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 RGA special meeting proposals.

5. Other Business.  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.

 

RGA shareholders of record at the close of business on [ • ], 2008 are entitled to notice of, and to vote at, the RGA special meeting and any adjournment or postponement of the special meeting. A complete list of RGA shareholders entitled to vote at the RGA special meeting will be available for 10 days prior to the RGA special meeting during ordinary business hours at RGA’s headquarters located at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017.

 

By Order of the Board of Directors of

Reinsurance Group of America, Incorporated.

 

Secretary

 

Whether or not you plan to attend the RGA special meeting, please complete, date and sign the enclosed proxy and mail it promptly in the enclosed stamped envelope.

 

ADDITIONAL INFORMATION

 

This document, which forms part of a registration statement on Form S-4 filed with the SEC by RGA (File No. 333-151390), constitutes a prospectus of RGA under Section 5 of the U.S. Securities Act of 1933, as amended (which is referred to as the “Securities Act”), with respect to the shares of RGA class A common stock to be issued to RGA public shareholders in the recapitalization. This document also constitutes a proxy statement of RGA under Section 14(a) of the U.S. Securities Exchange Act of 1934, as amended (which is referred to as the “Exchange Act”), and the rules thereunder, and a notice of the RGA special meeting of shareholders, at which the shareholders of RGA will consider and vote upon a proposal to approve the recapitalization and distribution agreement, along with other matters described herein.

 

This document incorporates by reference important business and financial information about RGA from documents that are not included in or delivered with this document. For a list of the documents incorporated by reference into this document, see “Where You Can Find More Information.” This information is available to you without charge upon your written or oral request. You can obtain documents related to RGA that are incorporated by reference in this document, without charge, from the SEC’s website at www.sec.gov or by requesting them in writing or by telephone from the company.

 

 

Reinsurance Group of America, Incorporated

1370 Timberlake Manor Parkway

Chesterfield, MO 63017

Attn: Corporate Secretary

(636) 736-7000

www.rgare.com

 

(All website addresses given in this document are for information only and are not intended
to be an active link or to incorporate any website information into this document.)

 

Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference into the documents. You also may ask any questions about the RGA special meeting or request copies of the documents, without charge, upon written or oral request to the proxy solicitor, MacKenzie Partners, at 105 Madison Avenue, New York, NY 10016, (800) 322-2885.

 

In order to receive timely delivery of requested documents in advance of the RGA special meeting, RGA shareholders should make their request no later than [ • ], 2008.

 

If you have questions about the RGA special meeting proposals or how to submit your proxy, or if you need additional copies of this document, the enclosed proxy card or voting instructions, you should contact the proxy solicitor, MacKenzie Partners, at 105 Madison Avenue, New York, NY 10016, (800) 322-2885.

 

In deciding whether to vote to approve the recapitalization and distribution agreement and the proposed recapitalization, including the governance proposals and the Section 382 shareholder rights plan, you should rely only on the information contained or incorporated by reference into this document. RGA has not authorized any person to provide you with any information that is different from, or in addition to, the information that is contained in this document. The information contained in this document speaks only as of the date indicated on the cover of this document unless the information specifically indicates that another date applies.

TABLE OF CONTENTS

 

QUESTIONS AND ANSWERS ABOUT THE RGA SPECIAL MEETING

 

The questions and answers below highlight only selected information from this document. They do not contain all of the information that may be important to RGA shareholders. RGA shareholders should read carefully this entire document, including its annexes, to understand fully the proposed transaction and the voting procedures for the special meeting of the RGA shareholders.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUMMARY

	•	references to RGA include Reinsurance Group of America, Incorporated and its consolidated subsidiaries; and

	•	references to MetLife include MetLife, Inc. and its consolidated subsidiaries.

 

The Companies

 

RGA’s Relationship with MetLife

	•	Ownership.  MetLife is currently RGA’s majority shareholder, beneficially owning approximately 52% of RGA’s outstanding common stock as of [ • ], 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.

 

Recapitalization and Distribution Agreement

	•	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
	•	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 (see “Proposal Two: RGA Class B Significant Holder Voting Limitation”).

The RGA Special Meeting Proposals

	•	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.

	•	the RGA board of directors determines, in its sole discretion, to propose the conversion to the RGA shareholders;

	•	the RGA board of directors adopts, in its sole discretion, a resolution submitting the proposed conversion to the RGA shareholders; and

	•	the holders of a majority of each class of RGA common stock represented in person or by proxy and entitled to vote at the meeting approve the proposal to convert the shares pursuant to the conversion, as discussed in “Proposal Four: Class B Potential Conversion Following Divestiture.”

	•	the transaction would be expected to eliminate the overhang on, and increase the liquidity and public float of, the market for RGA common stock by increasing the number of shares held by RGA’s public shareholders from approximately 30 million shares to approximately 62.3 million shares;

	•	the transaction would be expected to result in RGA being more widely followed by the equity research community because of its broader shareholder base;

	•	the transaction would be expected to facilitate the use of RGA common stock as an acquisition currency and as a source of capital;

	•	the transaction would be expected to allow RGA to pursue its future business initiatives free from the constraint of having a controlling corporate shareholder whose policies may conflict with the best interests of RGA’s business, as MetLife and RGA’s businesses evolve over time, and their business strategies diverge;

	•	the transaction would be expected to eliminate customer conflicts, given that a number of key customers of RGA are direct competitors of MetLife; and

	•	the transaction would be expected to permit the RGA shareholders to share in any premium associated with any subsequent change in control of RGA, should such an event occur.

	•	current public RGA shareholders will hold shares of RGA class A common stock which have inferior voting rights with respect to the election of directors as compared to RGA class B common stock;
	•	the divestiture makes it more likely that RGA could experience an “ownership change” under Section 382 of the Internal Revenue Code that could limit the ability of RGA and its subsidiaries to fully utilize their NOLs and other tax attributes;
	•	after the divestiture, RGA expects to incur increased shareholder servicing costs, for which MetLife will reimburse RGA a portion of such costs for four years;

	•	RGA may be restricted from engaging in certain transactions such as redeeming or purchasing its stock, issuing equity securities or engaging in certain business combinations, which, although otherwise in the best interests of RGA and its shareholders, could jeopardize the tax-free status of the split-off, any debt exchanges and any subsequent split-offs to MetLife;

	•	after the split-off, it is possible that some MetLife stockholders will sell all or part of the RGA class B common stock received by them, which could depress the market price of RGA class A common stock and RGA class B 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, RGA could be obligated to indemnify MetLife for significant tax liabilities;

	•	in the past, MetLife has provided director and officer liability insurance for RGA, for which it charged RGA an allocable cost. As an independent public company, RGA 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 split-off;

	•	it is possible that 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”);

	•	negotiation and consideration of the transactions contemplated by the recapitalization and distribution agreement required the incurrence of various costs and expenses for advisors and certain other transaction-related expenses (although 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; and
	•	MetLife is able to delay commencement of the split-off pending satisfaction of certain conditions or up to three times at its discretion, and MetLife is willing to consummate the split-off only during its customary window periods.

 

Risk Factors

	•	the transaction 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;

	•	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;

	•	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;

	•	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.

 

Regulatory Approval

 

MARKET PRICE DATA AND DIVIDEND INFORMATION

		RGA
For the Quarterly Period Ended:		High				Low				Dividends
2006
March 31, 2006		$	49.15			$	45.55			$	0.09
June 30, 2006			49.15				46.61				0.09
September 30, 2006			53.04				48.07				0.09
December 31, 2006			58.65				51.95				0.09
2007
March 31, 2007		$	59.84			$	53.47			$	0.09
June 30, 2007			64.79				57.42				0.09
September 30, 2007			61.49				48.81				0.09
December 31, 2007			59.37				49.94				0.09
2008
March 31, 2008		$	59.31			$	47.45			$	0.09
June 30, 2008			57.81				43.19				0.09
September 30, 2008 (through July 8, 2008)			44.24				42.28

		RGA Common Stock
		High				Low				Close
May 30, 2008		$	51.62			$	50.78			$	51.42
[ • ], 2008		$				$				$

 

SELECTED HISTORICAL FINANCIAL DATA FOR RGA

		Three Months Ended
		March 31,								Years Ended December 31,
		2008				2007				2007				2006				2005				2004				2003
		(In millions, except per share data)
Total revenues		$	1,360			$	1,355			$	5,718			$	5,194			$	4,585			$	4,039			$	3,205
Net income from continuing operations			37				77				308				293				236				245				178
Loss from discontinued accident and health operations, net of income taxes			(5	)			(1	)			(14	)			(5	)			(12	)			(23	)			(6	)
Cumulative effect of change in accounting principle, net of income taxes			—				—				—				—				—				—				1
Net income			32				76				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			0.59				1.25				4.98				4.79				3.77				3.94				3.47
Net income			0.51				1.24				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			0.57				1.20				4.80				4.65				3.70				3.90				3.46
Net income			0.49				1.19				4.57				4.57				3.52				3.52				3.36
Cash dividends declared per common share			0.09				0.09				0.36				0.36				0.36				0.27				0.24
Total assets			21,813				19,826				21,598				19,037				16,194				14,048				12,113
Long-term debt, including capital leases			926				944				896				676				674				350				398
Total stockholders’ equity			3,059				2,889				3,190				2,815				2,527				2,279				1,948

 

You should carefully consider the matters described in this section, as well as other information included in this document and the other documents to which you have been referred, in considering whether or not to vote to approve the RGA recapitalization proposal, as well as to approve the governance proposals and ratify the Section 382 shareholder rights plan. Past financial performance may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods.

 

In addition, for a discussion of additional uncertainties associated with (1) RGA’s businesses and (2) forward-looking statements in this document, see “Cautionary Statement Concerning Forward-Looking Statements.” In addition, you should consider the risks associated with RGA’s business that appear in RGA’s Annual Report on Form 10-K for the year ended December 31, 2007 as such risks may be updated or supplemented in RGA’s subsequently filed Quarterly Reports on Form 10-Q, which have been incorporated by reference into this document.

 

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.

 

MetLife and RGA each have received a ruling from the IRS to the effect that the divestiture will be tax-free to MetLife and its stockholders, and it is a condition to the completion of the divestiture that MetLife receive a 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. Notwithstanding the IRS ruling and tax opinion, however, the divestiture could become taxable to MetLife and its stockholders under certain circumstances. Therefore, MetLife and RGA have agreed to certain tax-related restrictions and indemnities set forth in the recapitalization and distribution agreement referred to herein, under which RGA may be restricted or deterred, following completion of the divestiture, from (i) redeeming or purchasing its stock in excess of certain agreed-upon amounts, (ii) issuing any equity securities in excess of certain agreed upon amounts, or (iii) taking any other action that would be inconsistent with the representations and warranties made in connection with the IRS ruling and the tax opinion. Except in specified circumstances, RGA has agreed to indemnify MetLife for taxes and tax-related losses it incurs as a result of the divestiture failing to qualify as tax-free, if the taxes and related losses are attributable solely to any breach of, or inaccuracy in, any representation, covenant or obligation of RGA under the recapitalization and distribution agreement or that will be made in connection with the tax opinion. This indemnity could result in significant liabilities to RGA.

 

The occurrence of various events may adversely affect the ability of RGA and its subsidiaries to fully utilize their NOLs and other tax attributes.

 

RGA and its subsidiaries have a substantial amount of NOLs and other tax attributes, for U.S. federal income tax purposes, that are available both currently and in the future to offset taxable income and gains. Events outside of RGA’s control, such as certain acquisitions and dispositions of RGA common stock, RGA class A common stock and RGA class B common stock, may cause RGA (and, consequently, its subsidiaries) to experience an “ownership change” under Section 382 of the Internal Revenue Code and the related Treasury regulations, and limit the ability of RGA and its subsidiaries to utilize fully such NOLs and other tax attributes. Moreover, the divestiture will increase the likelihood of RGA experiencing such an ownership change.

 

In general, an ownership change occurs when, as of any testing date, the percentage of stock of a corporation owned by one or more “5-percent shareholders,” as defined in the Internal Revenue Code and the related Treasury regulations, has increased by more than 50 percentage points over the lowest percentage of stock of the corporation owned by such shareholders at any time during the three-year period preceding such date. In general, persons who own 5% or more (by value) of a corporation’s stock are 5-percent shareholders, and all other persons who own less than 5% (by value) of a corporation’s stock are treated, together, as a

single, public group 5-percent shareholder, regardless of whether they own an aggregate of 5% or more (by value) of a corporation’s stock. If a corporation experiences an ownership change, it is generally subject to an annual limitation, which limits its ability to use its NOLs and other tax attributes to an amount equal to the equity value of the corporation multiplied by the federal long term tax-exempt rate.

 

If RGA were to experience an ownership change, it could potentially have in the future higher U.S. federal income tax liabilities than it would otherwise have had and it may also result in certain other adverse consequences to RGA. In this connection, RGA has adopted the Section 382 shareholder rights plan (described in “Description of RGA Capital Stock — Description of Section 382 Shareholder Rights Plan”) and the RGA board of directors recommends the adoption of new Article Fourteen to RGA’s articles of incorporation, as described in “Proposal Three: Acquisition Restrictions,” in order to reduce the likelihood that RGA and its subsidiaries will experience an ownership change under Section 382 of the Internal Revenue Code. There can be no assurance, however, that these efforts will prevent the divestiture, together with certain other transactions involving the stock of RGA, from causing RGA to experience an ownership change and the adverse consequences that may arise therefrom, as described below under “— 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.”

 

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.

 

Even if the divestiture otherwise qualifies as tax-free under Section 355 of the Internal Revenue Code, the divestiture would result in significant U.S. federal income tax liabilities to MetLife, (but not MetLife stockholders), if there is an acquisition of stock of MetLife or RGA as part of a plan or series of related transactions that includes the divestiture and that results in an acquisition of 50% or more of the outstanding common stock of MetLife or RGA (by vote or value).

 

For purposes of determining whether the divestiture is disqualified as tax-free to MetLife under the rules described in the preceding paragraph, current tax law generally creates a presumption that any acquisitions of the stock of MetLife or RGA within two years before or after the divestiture are presumed to be part of a plan, although the parties may be able to rebut that presumption. The process for determining whether a prohibited change in control has occurred under the rules is complex, inherently factual and subject to interpretation of the facts and circumstances of a particular case. If MetLife or RGA does not carefully monitor its compliance with these rules, it might inadvertently cause or permit a prohibited change in the ownership of MetLife or RGA to occur, thereby triggering tax to MetLife, which could have a material adverse effect. If the divestiture is determined to be taxable to MetLife, 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 divestiture over MetLife’s tax basis therein. In certain specified circumstances, RGA has agreed to indemnify MetLife for taxes resulting from such a 50% or greater change in RGA’s stock ownership.

 

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 has recognized and may continue to recognize substantial net operating losses for U.S. federal income tax purposes, and under the Internal Revenue Code, RGA may “carry forward” these NOLs, in certain circumstances to offset any current and future taxable income and thus reduce RGA’s federal income tax liability, subject to certain requirements and restrictions. To the extent that the NOLs do not otherwise become limited, RGA believes that it will be able to carry forward a substantial amount of NOLs and, therefore, these NOLs are a substantial asset to RGA. However, if RGA and its subsidiaries experience an “ownership change,” as defined in Section 382 of the Internal Revenue Code and related Treasury regulations, their ability to use the NOLs could be substantially limited, and the timing of the usage of the NOLs could be substantially delayed, which consequently could significantly impair the value of that asset.

 

To reduce the likelihood of an ownership change, in light of MetLife’s proposed divestiture of most of its RGA common stock, the RGA board of directors adopted a Section 382 shareholder rights plan. The Section 382 shareholder rights plan is designed to protect shareholder value by attempting to protect against a limitation on the ability of RGA and its subsidiaries to use their existing NOLs and other tax attributes. The proposed acquisition restrictions in the proposed RGA articles of incorporation are also intended to restrict certain acquisitions of RGA stock to help preserve the ability of RGA and its subsidiaries to utilize their NOLs and other tax attributes by avoiding the limitations imposed by Section 382 of the Internal Revenue Code and the related Treasury regulations. The acquisition restrictions and the Section 382 shareholder rights plan are generally designed to restrict or deter direct and indirect acquisitions of RGA stock if such acquisition would result in an RGA shareholder becoming a 5-percent shareholder or increase the percentage ownership of RGA stock that is treated as owned by an existing 5-percent shareholder.

 

Although the acquisition restrictions and the Section 382 shareholder rights plan are intended to reduce the likelihood of an ownership change that could adversely affect RGA and its subsidiaries, RGA can give no assurance that such restrictions would prevent all transfers that could result in such an ownership change. In particular, RGA has been advised by its counsel that, absent a court determination, there can be no assurance that the acquisition restrictions will be enforceable against all of the RGA shareholders, and that they may be subject to challenge on equitable grounds. In particular, it is possible that the acquisition restrictions may not be enforceable against the RGA shareholders who vote against or abstain from voting on the governance proposals or who do not have notice of the restrictions at the time when they subsequently acquire their shares.

 

Further, as described in “Proposal Three: Acquisition Restrictions,” “Proposal Five: Ratification of Section 382 Shareholder Rights Plan” and “Description of RGA Capital Stock — Description of Section 382 Shareholder Rights Plan,” the acquisition restrictions and Section 382 shareholder rights plan will not apply to, among others, any RGA class B common stock acquired by any person in the split-off, any debt exchanges, or any subsequent split-offs. Accordingly, the acquisition restrictions and Section 382 shareholder rights plan may not prevent an ownership change in connection with the divestiture.

 

Moreover, under certain circumstances, the RGA board of directors may determine it is in the best interest of RGA and its shareholders to exempt certain 5-percent shareholders from the operation of the Section 382 shareholder rights plan, in light of the provisions of the recapitalization and distribution agreement. In particular, the agreement becomes terminable by either party in the event any non-exempted person becomes a 5-percent shareholder prior to the closing of the exchange offer, as the exercisability of the rights, in certain instances, may jeopardize the tax-free nature of the divesture. Additionally, after the split-off, RGA may, under certain circumstances, incur significant indemnification obligations under the recapitalization and distribution agreement in the event that the Section 382 shareholder rights plan is triggered following the split-off in a manner that would result in the divestiture failing to qualify as tax-free. Accordingly, the RGA board of directors may determine that the consequences of enforcing the Section 382 shareholder rights plan and enhancing its deterrent effect by not exempting a 5-percent shareholder in order to provide protection to RGA’s and its subsidiaries’ NOLs and other tax attributes, are more adverse to RGA and its shareholders.

 

The acquisition restrictions and Section 382 shareholder rights plan also will require any person attempting to become a holder of 5% or more (by value) of RGA stock, as determined under the Internal Revenue Code, to seek the approval of the RGA board of directors. This may have an unintended “anti-takeover” effect because the RGA board of directors may be able to prevent any future takeover. Similarly, any limits on the amount of stock that a shareholder may own could have the effect of making it more difficult for shareholders to replace current management. Additionally, because the acquisition restrictions will have, and RGA’s Section 382 shareholder rights plan does have, the effect of restricting a shareholder’s ability to dispose of or acquire RGA common stock, the liquidity and market value of RGA common stock might suffer. The acquisition restrictions and the Section 382 shareholder rights plan will remain in effect until the earliest of (a) the date that is 36 months and one day from the completion of the recapitalization, or (b) such other date as the RGA board of directors in good faith determines that the acquisition restrictions are no longer in the best interests of RGA and its shareholders. The acquisition restrictions may be waived by the RGA board of directors. Shareholders are advised to carefully monitor their ownership of RGA stock and consult their

own legal advisors and/or RGA to determine whether their ownership of RGA stock approaches the proscribed level.

 

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.

 

As a result of the recapitalization, the holders of RGA class A common stock will have the right to elect up to 20% of the members of the RGA board of directors. Following the recapitalization, the RGA board of directors will consist of five members. Therefore, the holders of RGA class A common stock will have the right to elect one member of the RGA board of directors, whom RGA refers to as an “RGA class A director.” The initial RGA class A director will be J. Cliff Eason, who has served as a member of the RGA special committee. Mr. Eason has been designated to serve as the initial RGA class A director by a majority of the members of the RGA board of directors for a term that will commence upon the effectiveness of the recapitalization and end on the third annual meeting of RGA shareholders after the RGA special meeting or until his successor is duly elected and qualified. In the future, nominations of persons who are to stand for election as RGA class A directors will be made by the board of directors upon the recommendation of the nominating committee of the RGA board of directors or, in accordance with the applicable provisions of RGA’s amended bylaws, by a shareholder entitled to vote for the election of such director. RGA’s articles of incorporation impose significant limitations on the ability of the RGA shareholders to nominate directors, including a 60-to-90 day advance notice requirement for nominations for election at an annual meeting. In addition, RGA believes that, under Missouri law, an RGA class A director owes fiduciary duties to RGA and all of RGA’s shareholders, and accordingly does not act as an exclusive representative of the holders of RGA’s class A common stock. These factors may tend to diminish the value and effectiveness of the class voting rights of the holders of RGA class A common stock.

 

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.

 

Following the recapitalization, holders of the RGA class B common stock will be entitled to elect at least 80% of the RGA board of directors. If any person or group of persons acquires the ability to control the voting of the outstanding shares of RGA class B common stock, that person or group will be able to obtain control of RGA. This would also have negative consequences under some of RGA’s agreements. The creation and issuance of the RGA class B common stock could render RGA more susceptible to unsolicited takeover bids from third parties. In particular, an unsolicited third party may be willing to pay a premium for shares of RGA class B common stock not offered to holders of shares of RGA class A common stock.

 

In addition, because MetLife currently owns approximately 52% of the outstanding shares of RGA common stock, there is at present no likelihood of a person other than MetLife gaining control of the RGA board of directors without MetLife’s consent. In contrast, after completion of the divestiture, MetLife will no longer be RGA’s majority shareholder and approximately 95% of the outstanding RGA common stock will be publicly held. Accordingly, the divestiture could render RGA more susceptible to unsolicited takeover bids from third parties, including offers below RGA’s intrinsic value or other offers that would not be in the best interests of all of RGA’s shareholders.

 

The risk of an unsolicited takeover attempt may be mitigated in part by provisions of the amended and restated articles of incorporation that make it more difficult for third parties to gain control of the RGA board of directors, including through the acquisition of a controlling block of shares of RGA class B common stock. For example, the RGA class B voting limitation may have the effect of discouraging unsolicited takeover attempts as discussed under the caption “Proposal Two: RGA Class B Significant Holder Voting Limitation — Purpose and Effects of the RGA Class B Significant Holder Voting Limitation.” The RGA articles of incorporation, however, do not provide an absolute deterrent against unsolicited takeover attempts. For example, an unsolicited acquirer may condition its takeover proposal on acquiring all, but not less than all, of

the outstanding shares of RGA class B common stock. Notwithstanding the RGA class B voting limitation, there would be no other holder of RGA class B common stock to vote against the acquirer. If the unsolicited acquirer were successful in acquiring all outstanding shares of RGA class B common stock, it would then be able to control the election of all of the RGA class B directors at the next annual meeting of shareholders. See “Description of RGA Capital Stock — Anti-Takeover Provisions in the Articles of Incorporation and Bylaws of RGA.”

 

The recapitalization and distribution will increase the voting rights of the shares of common stock held by MetLife and its subsidiaries without the payment of any consideration by MetLife and its subsidiaries.

 

As a result of the recapitalization of RGA’s common stock, 29,243,539 of the 32,243,539 shares of RGA common stock held by MetLife and its subsidiaries will be converted into shares of RGA class B common stock having the right to elect 80% of the members of the RGA board of directors. As a result, MetLife and its subsidiaries will receive shares having superior voting rights with respect to the election of directors without being required to pay proportional consideration for their increased voting power. The increase in the voting power of a portion of the shares currently held by MetLife and its subsidiaries is necessary to permit MetLife and its subsidiaries to effect the divestiture in transactions that are tax-free to MetLife and its stockholders.

 

RGA presently expects that, following the divestiture, the RGA board of directors will consider submitting to a shareholder vote a proposal to convert the dual-class structure adopted in the recapitalization into a single class structure. The approval of the conversion would require approval by the holders of a majority of each class of common stock represented in person or by proxy and entitled to vote at the RGA special meeting. There is, however, 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 RGA shareholders. If submitted, there can be no assurance that the RGA shareholders would approve the conversion.

 

 

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. The prior performance of RGA common stock may not be indicative of the performance of the RGA common stock after the split-off.

 

RGA is currently a majority-owned subsidiary of MetLife and approximately 30 million shares of RGA common stock (or 48% of the total equity value of RGA) are held by the public. Following the divestiture, all shares of RGA common stock not held by its affiliates (other than the recently acquired stock held by MetLife, which represents approximately 5% of the equity value of RGA) will be held by the public. The distribution of such a large number of shares of RGA class B common stock could adversely affect the market prices of RGA class A common stock and RGA class B common stock after the exchange offer. In addition, prior performance of RGA common stock may not be indicative of the performance of RGA class A common stock and RGA class B common stock after the exchange offer.

 

Stock sales following the split-off or any additional divestiture transactions, including sales by MetLife, may affect the stock price of the RGA common stock.

 

After the split-off or any additional divestiture transactions, RGA shareholders (including the tendering MetLife stockholders who receive shares of RGA class B common stock pursuant to the exchange offer) may sell all or a substantial portion of their shares in the public market, which could result in downward pressure on the stock price of all RGA equity securities. Moreover, promptly after the split-off, in the event MetLife holds any RGA class B common stock, MetLife may effect a private debt exchange pursuant to an arrangement with one or more participating banks. Under this arrangement, 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 offer and/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. The participating banks may then sell the RGA class B common stock that they receive from MetLife 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, on terms and conditions reasonably satisfactory to RGA, which agreement will provide the participating banks with rights to request that RGA file a registration statement to register the sale of RGA class B common stock to the public.

 

MetLife may determine to conduct one or more subsequent split-offs (instead of or in addition to any debt exchanges) pursuant to which MetLife may offer to acquire MetLife common stock in exchange for shares of RGA class B common stock held by MetLife after the split-off. 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 will hold after the recapitalization but before the exchange offer.

 

In addition, MetLife will retain an approximate 5% interest in RGA through the retention of the recently acquired stock. MetLife has agreed, subject to an exception, that during the period commencing on June 1, 2008 and ending on the 60th day following the earlier of the distribution of all of MetLife’s shares of RGA class B common stock and the first anniversary of the closing of the split-off (such period is referred to as the “lock-up period”) it will not sell, transfer or otherwise dispose of the recently acquired stock. MetLife has further agreed that, following the expiration of the lock-up period, it will sell, exchange or otherwise dispose of the recently acquired stock within 60 months from the completion of the recapitalization. Any disposition by MetLife of its remaining shares of RGA class A common stock could result in a substantial amount of RGA equity securities entering the market, which may adversely affect the price of all RGA equity securities, including the RGA class B common stock.

 

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 price of RGA class A common stock and RGA class B common stock may fluctuate significantly following the recapitalization, split-off or any additional divestiture transactions as a result of many factors in addition to those discussed in the preceding risk factors. These factors, some or all of which are beyond RGA’s control, include:

 

 

 

In addition, the stock market has historically experienced volatility that often has been unrelated or disproportionate to the operating performance of particular companies. These broad market and industry fluctuations may adversely affect the trading price of RGA class A common stock and RGA class B common stock, regardless of RGA’s actual operating performance.

 

RGA class A common stock and RGA class B common stock may remain as separate classes for an indefinite period of time.

 

RGA currently expects that, following the completion of the divestiture, 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 submit such a proposal to the RGA shareholders. If submitted, there can be no assurance that the RGA shareholders would approve such a conversion. Accordingly, the two classes of RGA common stock may remain outstanding as separate classes for an indefinite period of time.

 

Since each class of RGA common stock, voting separately, would need to approve the conversion, it is possible that the proposal would fail because of opposition from holders of either class of RGA common stock. Depending on the facts and circumstances at the time a conversion is considered, including, among other things, trading volumes and prices of the separate classes, it is possible that holders of either class may view the benefits and detriments of a conversion differently.

 

RGA may not pay dividends on its common stock.

 

RGA shareholders may not receive future dividends. Historically, RGA has paid quarterly dividends ranging from $0.027 per share in 1993 to $0.09 per share in 2007. All future payments of dividends, however, are at the discretion of the RGA board of directors and will depend on RGA’s earnings, capital requirements, insurance regulatory conditions, operating conditions, and such other factors as the board of directors of RGA may deem relevant. The amount of dividends that RGA can pay will depend in part on the operations of its reinsurance subsidiaries. Under certain circumstances, RGA may be contractually prohibited from paying dividends on RGA common stock due to restrictions in certain debt and trust preferred securities.

 

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.

 

Certain provisions in the RGA articles of incorporation and bylaws, as well as Missouri law, may delay or prevent a change of control of RGA, which could adversely affect the prices of RGA class B common stock and/or RGA class A common stock. The RGA restated articles of incorporation and bylaws will contain some provisions that may make the acquisition of control of RGA without the approval of the RGA board of directors more difficult, including provisions relating to the nomination, election and removal of directors, the structure of the board of directors and limitations on actions by RGA shareholders. In addition, Missouri law also imposes some restrictions on mergers and other business combinations between RGA and holders of 20% or more of its outstanding RGA common stock.

 

Furthermore, the RGA articles of incorporation will limit the voting right in any vote to elect or remove directors, of any holder of more than 15% of the outstanding RGA class B common stock to 15% of the outstanding RGA class B common stock; provided, that, if such holder also has in excess of 15% of the RGA class A common stock, such holder of RGA class B common stock may exercise voting power of the RGA class B common stock in excess of 15% to the extent that such holder has an equivalent percentage of shares of RGA class A common stock. Furthermore, the RGA articles of incorporation are intended to limit stock ownership of RGA stock (other than any RGA common stock acquired through the divestiture or other exempted transactions) to less than 5% of the value of the aggregate outstanding shares of RGA stock during the restriction period. RGA also adopted in connection with the recapitalization and divestiture, a Section 382 shareholder rights plan designed to deter shareholders from becoming a “5-percent shareholder” (as defined by Section 382 of the Internal Revenue Code and the related Treasury regulations) without the approval of the RGA board of directors and the RGA board of directors intends to amend and restate the current rights plan in recognition of the effects of the recapitalization on RGA’s capital structure. See “Proposal Five: Ratification of Section 382 Shareholder Rights Plan — Anti-takeover Effect” for more information about the RGA Section 382 shareholder rights plan.

See “Description of RGA Capital Stock” for a summary of these provisions, which may have unintended anti-takeover effects. These provisions of the RGA articles of incorporation and bylaws and Missouri law may delay or prevent a change in control of RGA, which could adversely affect the price of RGA class B common stock.

 

The recapitalization and divestiture could trigger change-of-control provisions in RGA’s contracts, which could adversely affect RGA.

 

As a result of the completion of the divestiture, more than 80% of the voting control of RGA will be transferred from MetLife to its security holders. Under the terms of some of RGA’s agreements and other contracts, this transfer may be considered a change of control of RGA. The failure to obtain consents under any material contract may adversely affect RGA’s financial performance or results of operations.

 

Applicable insurance laws may make it difficult to effect a change of control of RGA.

 

Before a person can acquire control of a U.S. insurance company, prior written approval must be obtained from the insurance commission of the state where the domestic insurer is domiciled. Missouri insurance laws and regulations provide that no person may acquire control of RGA, and thus indirect control of RGA’s Missouri reinsurance subsidiaries, including RGA Reinsurance Company (which is referred to as “RGA Reinsurance”), unless:

 

 

Under Missouri insurance laws and regulations, any person acquiring 10% or more of the outstanding voting securities of a corporation, such as RGA common stock, is presumed to have acquired control of that corporation and its subsidiaries.

 

Canadian federal insurance laws and regulations provide that no person may directly or indirectly acquire “control” of or a “significant interest” in RGA’s Canadian insurance subsidiary, RGA Life Reinsurance Company of Canada, unless:

 

 

For this purpose, “significant interest” means the direct or indirect beneficial ownership by a person, or group of persons acting in concert, of shares representing 10% or more of a given class and “control” of an insurance company exists when:

 

 

Prior to granting approval of an application to directly or indirectly acquire control of a domestic or foreign insurer, an insurance regulator may consider such factors as the financial strength of the applicant, the integrity of the applicant’s board of directors and executive officers, the applicant’s plans for the future operations of the domestic insurer and any anti-competitive results that may arise from the consummation of the acquisition of control.

After the recapitalization and divestiture, RGA will no longer benefit from MetLife’s stature and industry recognition.

 

After the recapitalization and divestiture, RGA will cease to be a majority-owned subsidiary of MetLife. MetLife has substantially greater stature and financial resources than RGA. 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.

 

*****

 

RGA shareholders should also consider the risks associated with RGA’s business that appear in Item 1A of RGA’s Annual Report on Form 10-K for the year ended December 31, 2007, as such risks may be updated or supplemented in RGA’s subsequently filed Quarterly Reports on Form 10-Q, which have been incorporated by reference into this document.

 

This document and the documents incorporated by reference into this document contain both historical and forward-looking statements. Forward-looking statements are not based on historical facts, but rather reflect RGA’s current expectations, estimates and projections concerning future results and events. Forward-looking statements generally can be identified by the fact that they do not relate strictly to historical or current facts and include, without limitation, words such as “believe,” “expect,” “anticipate,” “may,” “could,” “intend,” “intent,” “belief,” “estimate,” “plan,” “foresee,” “likely,” “will” or other similar words or phrases. These forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors that are difficult to predict and that may cause RGA’s actual results, performance or achievements to vary materially from what is expressed in or indicated by such forward-looking statements. RGA cannot make any assurance that projected results or events will be achieved.

 

The risk factors set forth above in the section entitled “Risk Factors,” and the matters discussed in RGA’s SEC filings, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of RGA’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007 and RGA’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008, which reports are incorporated by reference in this document, could affect future results, causing these results to differ materially from those expressed in RGA’s forward-looking statements.

 

The forward-looking statements included and incorporated by reference in this document are only made as of the date of this document or the respective documents incorporated by reference herein, as applicable, and RGA has no obligation to publicly update any forward-looking statement to reflect subsequent events or circumstances.

 

See the sections entitled “Risk Factors” and “Where You Can Find More Information.”

 

Numerous important factors could cause RGA’s actual results and events to differ materially from those expressed or implied by forward-looking statements including, without limitation:

 

 

 

 

The RGA board of directors is using this document to solicit proxies from the holders of RGA common stock for use at the RGA special meeting, at which holders of RGA common stock will be asked to vote upon approval and adoption of the recapitalization and distribution agreement, among other matters.

 

MetLife and RGA entered into a recapitalization and distribution agreement, pursuant to which MetLife agreed to dispose of most of its equity interest in RGA to MetLife’s security holders. The transaction consists of the following:

 

 

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:

 

 

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 and its subsidiaries currently hold approximately 52% of the outstanding RGA common stock. In connection with the recapitalization, all RGA common stock will initially be reclassified as RGA class A common stock. Pursuant to the recapitalization, approximately 47% of the outstanding RGA class A common stock, which is then held by MetLife and its subsidiaries, will be exchanged with RGA for an equal number of shares of RGA class B common stock. The remaining approximately 5% of the outstanding shares of RGA stock held by MetLife and its subsidiaries (which is referred to as the recently acquired stock), as well as all of the outstanding shares of RGA stock held by persons other than MetLife and its subsidiaries, will remain outstanding as RGA class A common stock.

 

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. Immediately after the reclassification of each outstanding share of RGA common stock as one share of RGA class A common stock, RGA will exchange each share of RGA class A common stock that is held by MetLife and its subsidiaries after such reclassification (other than the recently acquired stock) for one share of RGA class B common stock.

 

RGA class A common stock and RGA class B common stock will be identical in all respects (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:

 

 

 

 

 

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. Following the recapitalization, MetLife and its subsidiaries will hold all of the outstanding shares of RGA class B common stock and thus can distribute to its security holders RGA stock having the right to elect at least 80% of the members of the RGA board of directors.

 

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 subsequent reclassification of shares or in any merger or consolidation of RGA with any other company.

 

In general, 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 (as described above), (2) a reduction in the voting power with respect to directors 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 or privileges of the RGA class A common stock or the 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 that may be required under the RGA articles of incorporation.

Exchange Offer

 

In the exchange offer, MetLife will offer to acquire outstanding shares of MetLife common stock from MetLife stockholders in exchange for all the shares of RGA class B common stock that MetLife and its subsidiaries will hold immediately after the recapitalization.

 

The number of shares of MetLife common stock that will be accepted if the exchange offer is completed will depend on the final exchange ratio and the number of shares of MetLife common stock tendered. MetLife is offering to exchange 29,243,539 shares of RGA class B common stock in the exchange offer. Accordingly, the largest possible number of shares of MetLife common stock that will be accepted in the exchange offer equals 29,243,539 divided by the final exchange ratio. If the exchange offer is oversubscribed, the tendered shares will be subject to proration when the exchange offer expires.

 

MetLife will not be required to complete the exchange offer unless certain conditions are met, including, among others, that at least 26,319,186 shares of RGA class B common stock would be exchanged in the exchange offer for shares of MetLife common stock that are validly tendered and not properly withdrawn prior to the expiration of the exchange offer. See “The Recapitalization and Distribution Agreement — Recapitalization — Conditions to Completing the Recapitalization — Minimum Tender Condition.” This number of

shares of RGA class B common stock will represent 90% of the outstanding shares of RGA class B common stock as of immediately following the recapitalization.

 

For each share of MetLife common stock that MetLife stockholders tender in the exchange offer and do not withdraw, they will receive a number of 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 below, subject to a limit of [ • ] shares of RGA class B common stock per share of MetLife common stock. Stated another way, subject to the limit described below, 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 final calculated per-share values equal to:

 

 

 

The last two trading days of the originally contemplated exchange offer period are [ • ] and [ • ]. Although the last two trading days of the originally contemplated exchange offer period could change if the originally contemplated exchange offer period 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, as described in the second paragraph below. As used in this document, “VWAP” means the “volume-weighted average price” per share of the stock on the NYSE during the period specified, as reported by [ • ], and “daily VWAP” means VWAP for 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 New York Stock Exchange) 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 [ • ], except that, on the last trading day of the originally contemplated exchange offer period, the data based on which the VWAP is determined will only take into account any adjustments made to reported trades included by 4:10 p.m., New York City time, on that day.

 

The exchange offer period will be automatically extended if a market disruption event occurs with respect to MetLife common stock or the RGA common stock on either of the two days during which the value of each share of MetLife common stock and RGA common stock was originally expected to be determined.

 

In addition, if the limit on the number of shares that can be received for each share of MetLife common stock tendered described below 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 automatically extended until [ • ], New York City time, at the end of the second following trading day.

 

The number of shares of RGA class B common stock that tendering MetLife stockholders can receive in the exchange offer is subject to a limit of [ • ] shares of RGA class B common stock for each share of MetLife common stock tendered and accepted in the exchange offer. If the limit is in effect, for each $1.00 of MetLife common stock validly tendered and not properly withdrawn, and accepted by MetLife, tendering MetLife stockholders will receive less than $[ • ] of RGA class B common stock, and they could receive much less. This limit was calculated based on a [ • ]% discount for the 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 an 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. The exchange offer does not provide for a minimum exchange ratio.

 

The following formula will be used to calculate the number of shares of RGA class B common stock tendering MetLife stockholders will receive for shares of MetLife common stock accepted in the exchange offer: the exchange offer:

 

 

The “calculated per-share value” for the MetLife common stock and for the RGA common stock will be the average of the daily VWAP for MetLife common stock and RGA common stock, respectively, on the last two trading days of the exchange offer period. The last two trading days of the originally contemplated exchange offer period are [ • ] and [ • ]. Although the last two trading days of the originally contemplated exchange offer period could change if the originally contemplated exchange offer period 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.

 

To help illustrate the way this calculation works, below are two examples:

 

 

 

For purposes of illustration, the table below 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 limit described above, assuming a range of averages of the daily VWAP of MetLife common stock and RGA common stock on the last two trading days of the exchange offer. The first line of the table below shows the indicative calculated per-share values of MetLife common stock and RGA common stock and the indicative exchange ratio that would have been in effect following the official close of trading on the NYSE on [ • ], 2008, based on the daily VWAPs of MetLife common stock and RGA common stock on [ • ] and [ • ]. The table also shows the effects of a 10% increase or decrease in either or both the calculated per-share values of MetLife common stock and RGA common stock based on changes relative to the values on [ • ], 2008.

 

 

 

 

If the trading price of MetLife common stock were to increase during the last two days of the exchange offer period, 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 fewer shares of 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. Similarly, if the trading price of RGA common stock were to decrease during the last two 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 have if that per-share value were calculated on the basis of the closing price of RGA common stock on the expiration date.

 

To the extent that MetLife holds any RGA class B common stock after the split-off, MetLife will dispose of such RGA class B common stock in one or more public or private debt exchanges and/or one or more subsequent split-offs, thus completing the divestiture on or prior to the first anniversary of the split-off.

 

MetLife currently expects that, to the extent it holds any RGA class B common stock after the split-off, it will divest such shares in a private debt exchange pursuant to an arrangement with one or more investment banks. MetLife currently expects that these investment 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 offer and/or in private transactions) so that, when such MetLife debt securities are exchanged with MetLife in any debt exchanges, these investment banks will receive any remaining shares of RGA class B common stock then held by MetLife, thereby completing the divestiture. The investment 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 investment banks will enter into a registration rights agreement with RGA, on terms and conditions reasonably satisfactory to RGA, which agreement will provide the investment banks with rights to request that RGA 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 connection with the recapitalization.

 

On January 6, 2000, MetLife acquired from General American Mutual Holding Company all of the issued and outstanding shares of capital stock of GenAmerica Financial Corporation, which at that time beneficially owned approximately 48% of the outstanding RGA common stock. This acquisition, together with MetLife’s direct investment in RGA in 1999 made MetLife the majority shareholder of RGA. MetLife made additional direct investments in RGA in 2002 and 2003, and, as of the date of this document, beneficially owns approximately 52% of the outstanding RGA common stock. In addition, three of RGA’s eight directors, including the chairman of the RGA board of directors, are currently officers of MetLife.

 

On November 5, 2003, MetLife disclosed in its report on Schedule 13D that it continuously evaluates its businesses and prospects, alternative investment opportunities and other factors in determining whether it will acquire additional shares of RGA common stock or dispose of its shares of RGA common stock, and that such acquisition or disposition could occur at any time, depending on a variety of factors. MetLife disclosed that, as part of its ongoing evaluation of its investment in RGA common stock and investment alternatives, MetLife may consider a variety of strategic and other alternatives relating to RGA and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, may hold discussions with or make formal proposals to management or the RGA board of directors, or other third parties regarding such matters.

 

On January 31, 2005, MetLife advised RGA management of, and announced publicly, an agreement to acquire Citigroup Inc.’s (which is referred to as “Citigroup”) Travelers Life & Annuity business and substantially all of Citigroup’s international insurance businesses (which are referred to as “Travelers”). On February 1, 2005, MetLife management disclosed in an investor conference call that, while no decision had been made, MetLife would consider selling some or all of its stake in RGA to provide some of the capital required to finance the acquisition. After discussion of this possible sale and its impact on RGA’s credit rating and other aspects of RGA, the RGA board of directors formed a committee composed of Messrs. William J. Bartlett, J. Cliff Eason, Stuart I. Greenbaum and Alan C. Henderson, for the purpose of addressing issues that could arise in the event that MetLife proceeded with a disposition of its stake in RGA. Later that day, the committee met and, after discussion, decided to interview a financial advisor and RGA’s outside counsel, Bryan Cave LLP (which is referred to as “Bryan Cave”), to serve as advisors to the committee.

 

On February 9, 2005, the RGA special committee met with representatives of RGA’s financial advisor at that time and Bryan Cave to review, among other things, its relationships with MetLife and ability to serve as independent advisors.

 

On February 11, 2005, MetLife amended its report on Schedule 13D to disclose that, to finance its acquisition of Travelers, it would consider select asset sales, including its holdings of RGA common stock.

 

On several occasions during February and March 2005, the RGA special committee reviewed with its financial advisor and outside counsel the status of the pending transaction between MetLife and Citigroup, and its potential effect on RGA.

 

On April 22, 2005, MetLife publicly announced that it was no longer considering selling some or all of its RGA shares for the purpose of financing the Travelers acquisition, and, on April 25, 2005, MetLife disclosed that it continuously evaluates RGA’s businesses and prospects, alternative investment opportunities and other factors in determining whether additional shares of RGA common stock will be acquired by MetLife or whether MetLife will dispose of shares of RGA common stock. Additionally, MetLife indicated that, at any time, depending on a variety of factors, MetLife may acquire additional shares of RGA common stock or may dispose of some or all of the shares of RGA’s common stock beneficially owned by MetLife, in either case in the open market, in privately negotiated transactions or otherwise.

 

On October 9, 2006, the chief financial officer of MetLife contacted management of RGA to indicate that MetLife planned to present a possible transaction involving its stake in RGA at the upcoming meeting of the

RGA board of directors. MetLife representatives and its financial advisor met with RGA management to discuss the possible transaction, which involved a recapitalization of RGA common stock and a tax-free split-off of the RGA common stock held by MetLife to MetLife stockholders.

 

On October 17, 2006, MetLife, together with its financial advisor, Merrill Lynch & Co. (which is referred to as “Merrill Lynch”), presented the recapitalization/split-off transaction to the RGA board of directors at the board’s regularly scheduled meeting. MetLife and Merrill Lynch explained that, in the transaction, MetLife would exchange its existing shares of RGA common stock for an equivalent number of newly authorized and issued shares of RGA class B common stock, and would subsequently exchange those shares with its security holders in a split-off transaction, thus widely distributing the shares of RGA class B common stock (the holders of the class B common stock would have the right to elect at least 80% of the RGA board of directors). Merrill Lynch also reviewed certain items, including:

 

 

Members of the RGA board of directors discussed the potential transaction, with particular focus on the treatment of and effect on RGA’s public shareholders other than MetLife.

 

To facilitate a full and fair evaluation of any transactions to be discussed with MetLife, at that meeting, the RGA board of directors appointed a special committee, consisting of Messrs. Bartlett, Eason, Greenbaum and Henderson, to review and consider the potential transaction, and to negotiate with MetLife with respect to the potential transaction and possible alternatives. The RGA board of directors viewed each member of the RGA special committee as independent from MetLife and its management, and able to evaluate independently the potential transaction, free from the influence of MetLife or its management. The RGA special committee was charged with, among other things, reviewing, considering and negotiating the terms, conditions and merits of a potential recapitalization/ split-off transaction and any related transactions, and determining whether such transactions would be advisable, fair to and in the best interests of RGA’s shareholders (other than MetLife), and whether or not to approve and/or recommend the transactions to RGA’s shareholders.

 

On October 18, 2006, the RGA special committee held a meeting to discuss the potential recapitalization/split-off transaction and to interview a possible financial advisor and possible outside counsel with respect to the possibility of their serving as advisors to the RGA special committee, and to consider their independence with respect to MetLife and, in the case of the financial advisor, its ability to render a fairness opinion with respect to the proposed transaction. At this meeting, representatives of the possible financial advisor discussed the possible advantages and disadvantages of the proposed transaction, including the possible implications of the transaction on RGA’s corporate governance, shareholder value and business strategy. At this meeting, members of RGA management provided input with respect to the potential transaction and its potential effect on RGA. Members of the RGA special committee asked a number of questions of the possible financial advisor regarding its views as to possible trading disparities between the two classes of stock, the extent to which the dual class structure would have to be maintained, the potential impact on minority shareholders, and the ability of RGA to receive some other economic benefits from the transaction given the tax benefits to MetLife in undertaking the transaction. After discussion, the RGA special committee took no action but requested the financial and legal advisors to provide formal proposals or engagement letters for consideration.

 

On October 25, 2006, the RGA special committee met with representatives of Morgan Stanley & Co. Incorporated (which is referred to as “Morgan Stanley”) with respect to serving as the RGA special committee’s financial advisor, and considered its independence with respect to MetLife. Morgan Stanley reviewed its expertise in serving special committees and advising as to separation transactions and insurance

clients, as well as with respect to equity offerings. Additionally, it reviewed its past contacts and relationship with MetLife and its belief as to its independence. Further, Morgan Stanley reviewed with the RGA special committee aspects of the recapitalization/split-off transaction, including:

 

 

 

Following the discussion, the RGA special committee discussed the various possible transaction structures for accomplishing a split-off and the potential benefits and relative drawbacks of each structure to RGA and its public shareholders. At this meeting, members of RGA management provided their input with respect to the potential transactions and the potential effects of such transactions on RGA. After discussion, the RGA special committee discussed the potential advantages and disadvantages of the transaction, including:

 

 

On the basis of these considerations taken as a whole, the RGA special committee concluded it was not yet prepared to proceed with the recapitalization/split-off transaction, but remained ready to consider other alternative transactions structures if presented. The RGA special committee also determined that it would request MetLife to pay any costs of the RGA special committee in connection with considering alternative transaction structures.

 

On October 25, 2006, the position of the RGA special committee was communicated to MetLife through MetLife’s financial advisor, Merrill Lynch.

 

On October 27, 2006, outside counsel to MetLife, Wachtell, Lipton, Rosen & Katz (which is referred to as “Wachtell Lipton”), contacted Bryan Cave to suggest that the two companies and their advisors meet to discuss the RGA special committee’s concerns.

 

On October 30, 2006, the RGA special committee met to consider the retention of financial and legal advisors and, after discussion, decided to engage Morgan Stanley to serve as its financial advisor and Bryan Cave as its outside counsel. In addition, the RGA special committee requested that Morgan Stanley contact MetLife’s financial advisor to discuss the RGA special committee’s concerns with respect to the recapitalization/split-off transaction. Subsequently, the RGA special committee entered into formal engagement letters with Morgan Stanley and Bryan Cave.

 

On December 7, 2006, representatives of MetLife, including its financial and legal advisors, and representatives of the RGA special committee, including its financial and legal advisors and RGA’s

management, met to discuss the recapitalization/split-off transaction and possible alternative structures presented by Morgan Stanley, with a view to responding to the concerns of the RGA special committee. The representatives determined to investigate further various business, legal and tax considerations regarding the alternative transaction structure, as well as corporate governance and capital market considerations, with a view to determining whether other information might address the concerns of the RGA special committee. Following the meeting, RGA’s representatives reported to the members of the RGA special committee regarding matters discussed at the meeting.

 

During December 2006 through February 2007, the parties reviewed various business, legal and tax considerations regarding the possible transaction structures. During such period, RGA consulted with Skadden, Arps, Slate, Meagher & Flom LLP (which is referred to as “Skadden”) regarding certain tax considerations relating to the alternative transaction structures. In February 2007, Skadden was engaged as special tax counsel to the special committee, and MetLife engaged Goldman, Sachs & Co. as an additional financial advisor in connection with the transactions.

 

On February 20, 2007, the RGA special committee met to review the status of discussions regarding the proposed transactions. Representatives of RGA management discussed the parties’ review of the alternative transaction structure, and analyses of information provided by MetLife. The RGA special committee also discussed the possibility the IRS would issue a ruling that addressed certain of the committee’s concerns with the dual class structure, including the possibility of converting to a single class structure at some point following the transaction.

 

On April 17, 2007, MetLife contacted RGA management representatives regarding the status of RGA’s analysis of the possible alternative structure. The RGA management representatives explained that it would discuss with the RGA special committee its willingness to move forward with the recapitalization/split-off transaction or the possible alternative structure.

 

On April 19, 2007, the RGA special committee met with its legal and financial advisors to review the current status of the discussions with MetLife. Among other things, representatives of Morgan Stanley reviewed with the RGA special committee:

 

 

At this meeting, members of RGA management provided input with respect to the potential transaction and its potential effect on RGA as well as the difficulties in identifying and valuing a MetLife business to be included in the possible alternative transaction. After further deliberation, the RGA special committee determined that its advisors and representatives should pursue discussion with MetLife and its advisors regarding the recapitalization/split-off transaction instead of the possible alternative transaction structure, and should update the RGA special committee periodically regarding such discussions, provided that the representatives should seek the best possible terms for RGA and RGA’s public shareholders, with any material terms and conditions remaining subject to approval by the RGA special committee.

During late April through mid-May, 2007, representatives of MetLife and its financial and legal advisors and representatives of the RGA special committee, including its financial advisor, outside counsel and RGA’s management, discussed the terms of a possible recapitalization/split-off transaction, possible future discussions with the IRS to confirm each parties’ understanding of the tax implications of such transaction, and corporate and securities law considerations regarding any such transaction.

 

On May 22, 2007, MetLife presented to the RGA special committee a term sheet setting forth potential terms for a recapitalization/split-off transaction and a possible timetable for completion of such transaction. The term sheet contemplated a recapitalization of RGA common stock into two classes of stock, a split-off following such recapitalization in which MetLife would offer to exchange its RGA common stock for MetLife common stock, and a possible spin-off to MetLife’s stockholders of any shares not exchanged in the split-off. The term sheet also contemplated that RGA would indemnify MetLife for tax and other liabilities resulting from actions by RGA that would result in the split-off being taxable to MetLife.

 

From May 2007 through June 1, 2008, the RGA special committee met with its legal and financial advisors from time to time to review and discuss the terms and conditions of the recapitalization/ split-off transaction. At the direction of the RGA special committee, representatives of its advisors and RGA management negotiated the structure, terms and timing of the proposed transaction with MetLife and its financial and legal advisors. At selected points during the process, a representative of Bryan Cave reviewed with the members of the RGA special committee their fiduciary duties and related considerations with respect to service on a special committee and responded to questions raised by members of the committee. Among the issues discussed at various points included the following:

 

 

 

 

 

 

 

 

In addition, during this period, the RGA special committee reviewed the independence of its advisors and did not find any basis to reevaluate any prior determinations as to their independence.

 

On August 7, 2007, RGA management, representatives of MetLife management and their respective financial and legal advisors met at the offices of Wachtell Lipton to discuss the terms, conditions and status of the recapitalization/split-off transaction.

 

In late August 2007, a third party approached MetLife indicating that it had an interest in acquiring MetLife’s stake in RGA and possibly acquiring all of the outstanding stock of RGA in a negotiated transaction. The third party indicated a range of prices to acquire the stake, which was at a substantial premium to the then market price of RGA common stock, but indicated that any price was only preliminary and would be subject to a due diligence review of RGA.

 

Following the approach, MetLife contacted representatives of RGA management and representatives of the RGA special committee to confirm whether the RGA special committee remained interested in pursuing the recapitalization/split-off transaction. MetLife indicated that it continued to evaluate other alternatives with respect to its stake in RGA, including possibly pursuing a sale to the third party. The RGA representatives indicated that they believed the RGA special committee remained interested in the recapitalization/split-off transaction and that it, together with its advisors, was continuing to review the latest version of the term sheet and planned to respond.

 

On September 11, 2007, MetLife and RGA submitted to the IRS a request for a private letter ruling.

 

In November 2007, the RGA board of directors adopted resolutions expanding its delegation to the RGA special committee of authority to include the adoption of a Section 382 shareholder rights plan, subject to certain conditions.

 

In November 2007, the chief financial officer of MetLife contacted Mr. Woodring to advise that the same third party had indicated possible interest in acquiring the outstanding stock of RGA, including shares held by RGA’s public shareholders, at a price that represented a substantial premium to the then current trading price of RGA common stock. In December 2007, the RGA special committee met with its financial and legal advisors and RGA’s management and, after discussions with management of MetLife and representatives of MetLife’s financial and legal advisors, authorized RGA’s advisors and management to explore the possible indication of interest. In addition, MetLife agreed to reimburse RGA for its out-of-pocket expenses (subject to a cap) incurred in connection with consideration of the recapitalization/split-off transaction.

 

In January 2008, the third party and its proposed source of partial financing entered into confidentiality and standstill agreements with RGA, and RGA shared certain due diligence information with them. Representatives of Morgan Stanley, an additional financial advisor and management of RGA met with representatives of the third party, its proposed source of partial financing and MetLife and its financial advisors, to discuss the information.

 

Following that meeting, the third party indicated that it was not prepared to move forward with a potential acquisition transaction until after it conducted extensive due diligence, and that the proposed price would depend on its view of the results of such due diligence.

 

After discussion with its advisors, the RGA special committee directed RGA management to provide certain additional limited financial due diligence to the third party and asked it to submit a written proposal. Additionally, in January 2008, the RGA special committee interviewed and ultimately engaged Morgan Stanley, as well as the additional financial advisor, for assistance in evaluating discussions with and/or proposals from third parties.

 

On February 21, 2008, RGA received a letter from the third party setting forth a preliminary non-binding indication of interest for a potential acquisition transaction involving the acquisition of 100% of the outstanding RGA common stock. The letter included a preliminary price that represented a substantial premium to the then current market price of RGA common stock. The preliminary non-binding indication of interest was subject to a number of caveats and exceptions including significant financing contingencies and a request for competitively sensitive proprietary information.

 

On March 10, 2008, the RGA special committee sent a letter to the third party stating its position that the proposal had several shortcomings, including significant financing contingencies and the third party’s request for sharing competitively sensitive proprietary information. Neither the RGA special committee nor its advisors received any subsequent response from the third party or its advisors. However, MetLife reported that on March 12, 2008, the third party again approached MetLife to state that it would still like to move forward with a potential acquisition of either all of the outstanding RGA common stock or alternatively of only MetLife’s stake in RGA.

 

During the period from early February 2008 through the end of May 2008, representatives of MetLife and representatives of the RGA special committee, including their respective financial and legal advisors, exchanged drafts and negotiated the terms of the relevant transaction documents for the recapitalization/split-off transaction, with the advisors and management providing updates to and meetings with the chairman of the special committee and/or the special committee.

 

On March 14, 2008, MetLife and RGA received the requested private letter ruling from the IRS regarding the tax free-treatment of the recapitalization/split-off transaction and certain other tax issues relating to the divestiture.

 

On May 22, 2008, the RGA special committee met with its financial and legal advisors and RGA’s management to review and discuss the current drafts of the transaction documents and the proposed Section 382 shareholder rights plan.

 

On May 30, 2008, the MetLife board of directors convened a meeting at which MetLife management reported to the MetLife board of directors the result of their consideration of the proposed transactions and their recommendations. The MetLife board of directors reviewed the potential strategic and other benefits of the proposed transactions. The MetLife board of directors approved the execution of the recapitalization and distribution agreement and the consummation of the transactions contemplated by the recapitalization and distribution agreement.

 

On June 1, 2008, the RGA special committee reconvened and continued its review of the transaction documents and Section 382 shareholder rights plan. Morgan Stanley reviewed its financial analyses related to the recapitalization and the divestiture and rendered its oral opinion, subsequently confirming in writing, to the RGA special committee to the effect that, as of the date of the opinion and based upon and subject to the assumptions, qualifications and limitations set forth in its opinion, the recapitalization and the divestiture, taken as a whole, were fair, from a financial point of view, to the holders of RGA common stock other than MetLife and its subsidiaries (excluding RGA and its subsidiaries). MetLife did not provide any information to Morgan Stanley in connection with Morgan Stanley’s opinion or in connection with the financial analysis conducted by Morgan Stanley in connection with such opinion. After a careful evaluation of the recapitalization/split-off transaction and its anticipated effects on RGA and RGA’s shareholders (other than MetLife and its subsidiaries), the RGA special committee unanimously approved and adopted the Section 382 shareholder rights plan, subject to execution and delivery of definitive agreements relating to the recapitalization/split-off transaction, and recommended that the RGA board of directors approve the proposed transactions, the transaction documents and the Section 382 shareholder rights plan. The RGA special committee also unanimously resolved to submit the proposed transactions to RGA shareholders for approval.

 

Subsequently that day, the RGA board of directors convened a meeting at which the RGA special committee, together with its legal and financial advisors, reported to the RGA board of directors the results of their consideration of the recapitalization/divestiture transaction and their recommendations. The RGA special committee advised that the proposed transactions were advisable to, fair to and in the best interests of RGA and RGA’s shareholders (other than MetLife and its subsidiaries) and recommended to the RGA board of directors that it should approve or ratify the proposed transactions, the transaction documents and the Section 382 shareholder rights plan and that the RGA board of directors should submit such proposals to RGA’s shareholders. Based upon the recommendation of the special committee, the RGA board of directors, with Steven A. Kandarian, Georgette A. Piligian and Joseph A. Reali (each of whom is an officer of MetLife) abstaining, determined that the proposed transactions were advisable, fair to and in the best interests of RGA and RGA’s shareholders (other than MetLife and its subsidiaries) and it approved or ratified the proposed

transactions, the transaction documents and the Section 382 shareholder rights plan. The RGA board of directors also resolved to submit the proposed transactions to RGA’s shareholders for their approval.

 

On June 1, 2008, MetLife and RGA entered into the recapitalization and distribution agreement and, on June 2, 2008, issued a joint public announcement regarding the recapitalization, split-off and related transactions.

 

Following the completion of the recapitalization and divestiture, RGA will have an equity capitalization that consists of approximately 53% RGA class A common stock and approximately 47% RGA class B common stock. RGA’s reclassification of each outstanding share of RGA common stock as one share of RGA class A common stock and the subsequent exchange of the RGA class A common stock held by MetLife and its subsidiaries (other than the recently acquired stock) for one share of RGA class B common stock is governed by the recapitalization and distribution agreement. See “The Recapitalization and Distribution Agreement.”

 

RGA’s common stock is currently listed on the NYSE under the symbol “RGA.” RGA has applied for listing following the recapitalization and split-off, and expects that RGA class A common stock will be listed on the NYSE under the symbol “RGA.A”, and RGA class B common stock will be listed on the NYSE under the symbol “RGA.B”.

 

MetLife has agreed to cause the members of the RGA board of directors who are also officers of MetLife to resign from the RGA board of directors effective upon completion of the split-off. These individuals are: Mr. Steven A. Kandarian, Executive Vice President and Chief Investment Officer of MetLife; Ms. Georgette A. Piligian, Senior Vice President of MetLife and Chief Information Officer, Institutional Business, of Metropolitan Life Insurance Company; and Joseph A. Reali, Senior Vice President and Tax Director of MetLife. In accordance with the RGA bylaws, these vacancies may be filled by a vote of the majority of the RGA directors remaining in office and/or the authorized number of directors on the RGA board of directors will be reduced. As of the date of this document, the RGA board of directors has not identified the individuals who will fill these vacancies or what changes, if any, it will make to the size of the RGA board of directors.

 

Certain acquisitions of RGA common stock under the exchange offer may require a pre-merger notification filing under the Hart-Scott-Rodino Act. If MetLife stockholders decide to participate in the exchange offer and consequently acquire enough shares of RGA class B common stock to exceed the $63.1 million threshold provided for in the Hart-Scott-Rodino Act and associated regulations, and if an exemption under the Hart-Scott-Rodino Act or regulations does not apply, RGA and tendering MetLife stockholders would be required to make filings under the Hart-Scott-Rodino Act and tendering MetLife stockholders would be required to pay the applicable filing fee. A filing requirement could delay the exchange of shares with tendering MetLife stockholders until the waiting periods in the Hart-Scott-Rodino Act have expired or been terminated.

 

In connection with the exchange offer, and following the recapitalization, General American will distribute to GenAmerica Financial, LLC the shares of RGA class B common stock that it holds. GenAmerica Financial, LLC will then, in turn, distribute all of those shares to its parent, Metropolitan Life Insurance Company. Metropolitan Life Insurance Company will in turn distribute all of those shares to its parent, MetLife, Inc. Both General American and Metropolitan Life Insurance Company are insurance companies that are subject to various statutory and regulatory restrictions that limit their ability to dividend these shares without first obtaining approval from the applicable state regulatory authorities. The Missouri Department of Insurance will need to approve the dividend distribution by General American, and the New York State Insurance Department will need to approve the dividend distribution by Metropolitan Life Insurance Company

before MetLife can complete the exchange offer. These approvals are both conditions to complete the exchange offer. See “The Recapitalization and Distribution Agreement — Recapitalization — Conditions to Completing the Recapitalization.”

 

Apart from the registration of shares of RGA class B common stock offered in the exchange offer under federal and state securities laws and MetLife’s filing of a Schedule TO with the SEC, and the other approvals described above, MetLife and RGA do not believe that any other material U.S. federal or state regulatory filings or approvals will be necessary to consummate the exchange offer and any subsequent split-offs or any debt exchanges.

 

This document is furnished in connection with the solicitation of proxies by the RGA board of directors for use at the special meeting of RGA’s shareholders to be held at [ • ][ • ].m. on [ • ][ • ], 2008, at RGA’s headquarters, 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017, and at any adjournments or postponements thereof. At the RGA special meeting, shareholders will be asked:

 

 

 

 

 

 

 

 

RGA does not expect a vote to be taken on any other matters at the RGA special meeting. If any other matters are properly presented at the RGA special meeting for consideration, however, the holders of the proxies, if properly authorized, will have discretion to vote on these matters in accordance with their best judgment. The mailing of this document and accompanying form of proxy is expected to commence on or about [ • ], 2008.

When this document refers to the RGA special meeting, it is also referring to any adjournments or postponements of the RGA special meeting.

 

All shares of RGA common stock will be voted in accordance with the instructions contained in the proxies, but if the proxies which are signed and returned do not specify a vote for any proposal, the proxies will be voted “FOR” the approval of each of the proposals described in this proxy statement. Any proxy may be revoked by an RGA shareholder at any time before it is exercised by providing written notice of revocation to RGA’s corporate secretary (at 1370 Timberlake Manor Parkway, Chesterfield, Missouri 63017), by executing a proxy bearing a later date, or by voting in person at the RGA special meeting.

 

This document is being furnished in connection with the solicitation of proxies by the RGA board of directors. All costs of soliciting proxies, including reimbursement of fees of certain brokers, fiduciaries and nominees in obtaining voting instructions from beneficial owners, will be borne by RGA, subject to MetLife’s expense reimbursement obligations described below. In addition, RGA has retained MacKenzie Partners to assist in the solicitation of proxies and will pay such firm a fee estimated not to exceed $15,000, plus reimbursement of expenses. Banks, brokerage houses, fiduciaries, and custodians holding in their names shares of RGA’s common stock beneficially owned by others will be furnished copies of solicitation materials to forward to the beneficial owners. RGA may reimburse persons representing beneficial owners of RGA’s common stock for their costs of forwarding solicitation materials to the beneficial owners. In addition to the solicitation of proxies by mail, solicitation may be made personally, by telephone, and by fax, and RGA may pay persons holding shares for others their expenses for sending proxy materials to their principals. In addition to solicitation by the use of the mails, proxies may be solicited by RGA’s directors, officers, and employees in person or by telephone, e-mail, or other means of communication. No additional compensation will be paid to RGA’s directors, officers, or employees for their services in connection with this solicitation.

 

The RGA board of directors has fixed the close of business on [ • ], 2008 as the record date for determining the RGA shareholders who have the right to vote at the RGA special meeting. At the RGA special meeting, each outstanding share of RGA common stock is entitled to one vote. At the close of business on the record date, there were [ • ] shares of RGA’s common stock outstanding and entitled to vote at the RGA special meeting.

 

Each outstanding share of existing RGA common stock is entitled to one vote on each matter which may properly come before the RGA special meeting.

 

Recapitalization Proposal.  Pursuant to the recapitalization and distribution agreement, the vote required for approval of the recapitalization proposal is (1) approval by a majority of the outstanding shares of RGA common stock, including shares held by MetLife and its subsidiaries, and (2) approval by the holders of a majority of the shares of RGA common stock present in person or by proxy at the RGA special meeting and entitled to vote on such proposal, other than the shares held by MetLife and its subsidiaries.

 

Governance Proposals.  Each of the governance proposals requires the affirmative vote of a majority of the outstanding shares of RGA common stock.

 

Section 382 Shareholder Rights Plan Proposal.  The proposal to ratify the Section 382 shareholder rights plan requires the affirmative vote of the holders of a majority of the outstanding shares of RGA common stock present in person or by proxy and entitled to vote on the proposal.

Adjournment Proposal.  The proposal to permit adjournment of the RGA special meeting will require the affirmative vote of the RGA shareholders holding at least a majority of the RGA common stock represented at the RGA special meeting, whether or not a quorum is present.

 

The approval of the divestiture requires the approval of each of the recapitalization proposal, the governance proposals and the Section 382 shareholder rights plan proposal, with each proposal conditioned upon approval of the others. Accordingly, RGA shareholders who vote against one proposal will be effectively voting against the divestiture and the other proposals.

 

MetLife Voting Agreement.  MetLife, which owns approximately 52% of RGA’s outstanding common stock, has agreed to vote its and its subsidiaries’ shares of RGA common stock in favor of each of the RGA special meeting proposals unless RGA withdraws or modifies its recommendation that RGA’s shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement. Accordingly, approval of the governance proposals and the Section 382 shareholder rights plan proposal are assured. For specific information about MetLife’s agreement to vote its and its subsidiaries’ shares of RGA common stock pending the completion of the divestiture, see “The Recapitalization and Distribution Agreement — Voting.”

 

The required quorum for the transaction of business at the special meeting is a majority of the issued and outstanding shares of RGA common stock on the record date. Abstentions and broker non-votes each will be included in determining the number of shares present at the RGA special meeting for the purpose of determining the presence of a quorum. Each proposal (other than the Section 382 shareholder rights plan and adjournment proposals) requires the approval of the holders of a majority of the outstanding shares of RGA common stock. In addition, MetLife and RGA have agreed that the approval of the recapitalization and distribution agreement will also require the approval by the holders of a majority of the shares of RGA common stock, other than MetLife and its subsidiaries, that are present in person or by proxy and entitled to vote at the RGA special meeting. The Section 382 shareholder rights plan proposal and the adjournment proposal require the approval of the holders of a majority of the outstanding shares of RGA common stock present in person or by proxy and entitled to vote on the proposal.

 

Abstentions will be deemed to be votes “against” each of the special meeting proposals. Under the rules applicable to broker-dealers, brokers, banks and other nominee record holders holding shares in “street name” have the authority to vote on routine proposals when they have not received instructions from beneficial owners. However, brokers, banks and other nominee record holders are precluded from exercising their voting discretion with respect to the approval of non-routine matters such as the approval of the proposals set forth in this document. As a result, absent specific instructions from the beneficial owner, brokers, banks and other nominee record holders are not empowered to vote those “street name” shares.

 

Since the vote required for approval of the recapitalization proposal and the governance proposals is based on a percentage of the shares outstanding, broker non-votes will have the same effect as a vote “against” these proposals. However, broker non-votes will have no effect on the outcome of the vote for the Section 382 shareholder rights plan proposal or the adjournment proposal because the vote required for approval of these proposals is based on the number of shares actually voted, whether in person or by proxy.

 

The approval of the divestiture requires the approval of each of the recapitalization proposal, the governance proposals and the Section 382 shareholder rights plan proposal, with each proposal conditioned upon approval of the others. Accordingly, RGA shareholders who vote or are deemed to vote against one proposal will be effectively voting against the divestiture and the other proposals. All beneficial owners of RGA common stock are urged to return the enclosed proxy card marked to indicate their votes or to contact their brokers to determine how to vote.

 

Recapitalization Proposal.  The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have determined that the divestiture and the related transactions are advisable and favorable to and, therefore, fair to and in the best interests of RGA and its shareholders other than MetLife and its subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the recapitalization proposal.

 

Governance Proposals.  The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have determined that each of the governance proposals is advisable and favorable to and, therefore, fair to and in the best interests of RGA and RGA’s shareholders other than MetLife and its subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the governance proposals.

 

Section 382 Shareholder Rights Plan Proposal.  The RGA special committee has unanimously determined that the Section 382 shareholder rights plan is advisable and favorable to and, therefore, fair to and in the best interest of RGA and its shareholders other than MetLife and its subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the Section 382 shareholder rights plan proposal.

 

Adjournment Proposal.   The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the adjournment proposal.

 

As of the record date, MetLife and its subsidiaries beneficially owned 32,243,539 shares of RGA common stock, representing approximately 52% of the shares outstanding as of such date. Subject to certain conditions, MetLife has agreed to cause all shares of RGA common stock held by MetLife or any of its other subsidiaries to be voted in favor of each of the proposals described in this document.

 

In addition, as of the record date, RGA’s executive officers and directors beneficially owned [ • ] shares of RGA common stock, representing approximately 1% of the shares outstanding as of such date, excluding beneficial ownership of such shares which may be deemed to be attributed to such executive officers and directors through their ownership interest in MetLife.

 

RGA common stock has been quoted on the NYSE under the symbol “RGA” since 1993. On May 30, 2008, the last full trading day prior to the public announcement of the proposed divestiture, the reported last sale price per share of RGA common stock on the NYSE was $51.42. On [ • ], 2008, the most recent practicable date prior to the date of this document, the reported last sale price of RGA common stock on the NYSE was $[ • ] per share.

 

If the RGA special meeting is adjourned to a different place, date, or time, RGA need not give notice of the new place, date, or time if the new place, date, or time is announced at the meeting before adjournment, unless the adjournment is for more than 90 days. If a new record date is or must be set for the adjourned meeting, notice of the adjourned meeting will be given to persons who are RGA shareholders of record entitled to vote at the RGA special meeting as of the new record date.

 

No physical substitution of stock certificates will be required as a result of the recapitalization, and the existing certificates will continue to represent the shares of RGA class A common stock after the recapitalization.

The matters to be considered at the RGA special meeting are of great importance to RGA shareholders. Accordingly, RGA shareholders are urged to read and carefully consider the information presented in this document and the attachments hereto, and to complete, date, sign and promptly return the enclosed proxy in the enclosed postage-paid envelope.

 

The RGA special committee and the RGA board of directors are proposing that the RGA shareholders approve the recapitalization and distribution agreement, dated as of June 1, 2008, by and between MetLife and RGA, and the transactions contemplated by the recapitalization and distribution agreement, including the recapitalization and the amendment and restatement of the RGA articles of incorporation (which proposal is referred to as the “recapitalization proposal”). In the recapitalization, each issued and outstanding share of RGA common stock will be reclassified as one share of RGA class A common stock. Immediately after this reclassification, MetLife and its subsidiaries will exchange with RGA each share of RGA class A common stock that they hold (other than the recently acquired stock) for one share of RGA class B common stock. The RGA articles of incorporation would be amended and restated to, among other things, create the RGA class A common stock and RGA class B common stock and define their relative rights, powers, preferences, restrictions and conditions. The recapitalization is proposed in conjunction with, and is conditioned upon, an offer by MetLife to MetLife stockholders to exchange shares of RGA class B common stock for shares of MetLife common stock.

 

The RGA board of directors, upon the unanimous recommendation of the RGA special committee, has determined that the recapitalization and distribution agreement, the recapitalization and each of the special meeting proposals are advisable and favorable to and, therefore, fair to and in the best interests of RGA and RGA shareholders other than MetLife and its subsidiaries. In arriving at this determination, the RGA board of directors and the RGA special committee considered a number of factors, which are listed below. A copy of the recapitalization and distribution agreement is attached as Appendix A. See “The Recapitalization and Distribution Agreement.”

 

Expected Benefits of the Divestiture to RGA and its Shareholders.  The RGA special committee and the RGA board of directors considered the following expected benefits of the divestiture. The recapitalization will allow the public holders of RGA class A common stock to elect one director (based on the current size of the RGA board), compared to their current inability to influence significantly the election of any members of the RGA board of directors due to MetLife’s majority voting control. Apart from the increased influence over the election of one director, the recapitalization itself will not result in any material benefits to RGA shareholders. However, the recapitalization is necessary so that the divestiture is tax-free to MetLife and its stockholders under Section 355 of the Internal Revenue Code. Accordingly, the RGA special committee and the RGA board of directors reviewed the proposed divestiture in its entirety, and considered the benefits from the divestiture, including the following:

 

 

 

Economic and Financial Factors.  The RGA special committee and the RGA board of directors considered certain economic and financial factors associated with the divestiture, such as the effect of the recapitalization and the exchange offer, any debt exchanges and any subsequent split-offs on the expected trading price of both classes of RGA common stock following the recapitalization and the impact on RGA’s financial position following the exchange offer and other transactions. In this regard, they considered certain economic and financial considerations, including the following: