As filed with the Securities and Exchange Commission on June 3, 2008

Registration No. 333-      

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

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):

 

 

 

 

 

CALCULATION OF REGISTRATION FEE

 

 

 

 

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 that 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.

 

SUBJECT TO COMPLETION, DATED JUNE 3, 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 acquired by MetLife during the fourth quarter of 2003) 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 the 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 in the recapitalization, for shares of MetLife common stock (which is referred to as the “exchange offer” or 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.

 

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 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 can be no assurance, however, that the RGA board of directors will consider proposing a conversion or resolve to submit such a proposal to the RGA shareholders and, if submitted, 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 RGA board of directors’ decision 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 foster RGA’s long-term growth as an independent company following the divestiture, preserve RGA’s ability to use certain of its 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 intends to apply 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 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 is 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. 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 amendment and restatement of RGA’s articles of incorporation. In the recapitalization, each issued and outstanding share of RGA common stock will be reclassified into 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 acquired by MetLife during the fourth quarter of 2003) for one share of RGA class B common stock. 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.

 

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 the RGA shareholders ratify the RGA special committee’s decision to adopt and implement a Section 382 shareholder rights plan in connection with the recapitalization and divestiture.

 

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-[ • ]), 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 information agent, [ • ].

 

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 [ • ].

 

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.

REGULATORY STATEMENT

 

This document is not an offer to sell or exchange and it is not a solicitation of an offer to buy or exchange any shares of MetLife common stock, RGA common stock, RGA class A common stock or RGA class B common stock in any jurisdiction in which the offer, sale or exchange is not permitted. The restrictions set out below apply to persons in the specified countries. There may be additional restrictions that apply in other countries. Non-U.S. stockholders should consult their advisors in considering whether they may participate in either the recapitalization or the exchange offer in accordance with the laws of their home countries and, if they do participate, whether there are any restrictions or limitations on transactions in the RGA common stock, RGA class A common stock or RGA class B common stock that may apply in their home countries. RGA cannot provide any assurance about whether such limitations may exist.

 

Australia.  This document does not constitute a disclosure document under Part 6D.2 of the Corporations Act 2001 of the Commonwealth of Australia (the “Australian Corporations Act”) and has not been, and will not be, lodged with the Australian Securities and Investments Commission. No offer of securities is being made in Australia, and the distribution or receipt of this document in Australia does not constitute an offer of securities capable of acceptance by any person in Australia, except in the limited circumstances described in this document relying on certain exemptions in Section 708 of the Australian Corporations Act.

 

Canada.  The solicitation of proxies in connection with the recapitalization is not being made directly or indirectly in Canada or by use of the mails, or any means or instrumentality of Canada and cannot be made by any such use, means or instrumentality or otherwise from within Canada. Copies of this document and any related documents are being mailed to holders of RGA common stock with registered addresses in Canada for information purposes only.

 

European Economic Area.  In relation to each Member State of the European Economic Area that has implemented the Prospectus Directive (each, a “Relevant Member State”), no offer to the public of any shares of RGA class A common stock or class B common stock as contemplated by this document may be made in that Relevant Member State, except in the limited circumstances specified in this document, provided that no such offer of shares of RGA class A common stock or RGA class B common stock will result in a requirement for the publication by MetLife, RGA or any manager of a prospectus pursuant to Article 3 of the Prospectus Directive. In this document, the expression “Prospectus Directive” means Directive 2003/71/EC of the European Parliament and of the Council of the European Union, and includes any implementing measures in each Relevant Member State.

 

Japan.  The solicitation of proxies in connection with the recapitalization is not being made directly or indirectly in Japan. Copies of this document and any related offering documents are being mailed to holders of RGA common stock with registered addresses in Japan for information purposes only.

 

United Kingdom.  This document is only being distributed to and directed at (1) persons outside the United Kingdom, (2) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (3) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons, “relevant persons”). Shares of RGA class A common stock or RGA class B common stock are only available to, and any invitation, offer or agreement to subscribe or otherwise acquire such shares will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

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 MetLife include MetLife, Inc. and its consolidated subsidiaries; and
	•	references to RGA include Reinsurance Group of America, Incorporated 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 April 30, 2008.
	•	Directors.  Three of RGA’s eight directors, including RGA’s current chairman, are officers of MetLife. These three directors will resign in connection with the completion of the exchange offer.
	•	Reinsurance Business.  RGA has direct policies and reinsurance agreements with MetLife and some of its affiliates. Under these agreements, RGA has net premiums of approximately $250.9 million in 2007, $227.8 million in 2006, and $226.7 million in 2005. The net premiums reflect the net business assumed from and ceded to such affiliates of MetLife. The pre-tax income (loss) on this business, excluding investment income allocated to support the business, was approximately $16.0 million in 2007, $10.9 million in 2006, and ($11.3) million in 2005.

 

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.

	•	the holders of RGA class A common stock, voting together as a single class, will be entitled to elect no more than 20% of the directors of RGA;
	•	the holders of RGA class B common stock, voting together as a single class, will be entitled to elect at least 80% of the directors of RGA; and
	•	holders of 15% or more of the RGA class B common stock will have reduced voting power 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 the divestiture);
	•	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 shareholders;
	•	the RGA board of directors adopts, in its sole discretion, a resolution submitting the proposed conversion to 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 “Risk Factors — Risks Relating to an Investment in RGA Common Stock” and “Proposal Four: Class B Potential Conversion Following Divestiture.”

	•	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;
	•	expected to result in RGA being more widely followed by the equity research community because of its broader shareholder base;
	•	expected to facilitate the use of RGA common stock as an acquisition currency and as a source of capital. See “Proposal One: Approval of the Recapitalization and Distribution Agreement — RGA’s Reasons for the Recapitalization;”
	•	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;
	•	expected to eliminate customer conflicts, given that a number of key customers of RGA are direct competitors of MetLife; and
	•	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 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 exchange offer, 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, RGA could be obligated to indemnify MetLife against MetLife’s 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 completion of the split-off;
	•	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

 

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 (through June 2, 2008)			57.81				48.49				0.09

		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.

 

The risks described below and elsewhere in this document are not the only ones that relate to the RGA special meeting proposals. The risks described below are considered to be the most material. However, there may be other unknown or unpredictable economic, business, competitive, regulatory, geopolitical or other factors that also could have material adverse effects on the recapitalization and on any investment in RGA class A common stock or RGA class B common stock. 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 MetLife expects to receive a tax opinion to the effect that certain requirements for tax-free treatment have been met. 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, 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 to any breach of, or inaccuracy in, any representation, covenant or obligation of RGA under the recapitalization and distribution agreement or any representations and warranties 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 net operating loss carryforwards and other tax attributes.

 

RGA has a substantial amount of net operating loss carryforwards (“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 to experience an “ownership change” under Section 382 of the Internal Revenue Code and the related Treasury regulations, and limit the ability of RGA to utilize 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, 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% (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 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 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 exchange offer.

 

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 exchange offer or any additional divestiture transactions, including sales by MetLife, may affect the stock price of the RGA common stock.

 

After the exchange offer or any additional divestiture transactions, RGA shareholders (including the tendering MetLife stockholders who receive shares of RGA class B common stock in 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 exchange offer, 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, 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 recapitalization and the exchange offer. 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 later of the time of acceptance for payment and exchange of shares tendered in the exchange offer and the closing of any debt exchanges (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 five years from the split-off date. 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 exchange offer 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, exchange offer or any additional divestiture transactions as a result of many factors in addition to those discussed in the three immediately 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 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.

 

 

The existence of RGA class B common stock may make RGA more susceptible to takeover or control.

 

Holders of a majority of the RGA class B common stock will be entitled to elect at least 80% of the RGA board of directors. Thus, if any person or group of persons acquires a majority of the outstanding shares of RGA class B common stock, that person or group will be able to obtain control of RGA by electing a supermajority or substantially all of the RGA board of directors. The creation and issuance of the RGA class B common stock could therefore render RGA more susceptible to unsolicited takeover bids from third parties. This risk will be mitigated in part but not entirely by:

 

 

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 RGA class B common stock in excess of 15% of the outstanding RGA class B common stock, to that percentage of the shares of class B common stock that is equal to the lesser of such holder’s percentage ownership of class B common shares or such holder’s percentage ownership of class A common shares. 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 for a period of 36 months and one day after the recapitalization. RGA also adopted 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) without RGA Board approval in connection with the recapitalization, 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.

 

After the recapitalization and divestiture, RGA will no longer have access to the financial strength and resources of MetLife.

 

After the exchange offer, RGA will cease to be a majority-owned subsidiary of MetLife. MetLife historically had an incentive to ensure the financial health of RGA since it owned a majority of RGA and RGA’s financial results were consolidated into those of MetLife. After completion of the exchange offer, RGA will no longer be able to benefit from MetLife’s financial strength and resources to the same extent that it could as a majority-owned subsidiary of MetLife.

 

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. “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.

 

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 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 applicable 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 to use its 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 will 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, RGA cannot assure you that such restrictions would prevent all transfers that could result in such an ownership change. In particular, RGA has been advised by RGA’s 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 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 exchange offer, 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 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 closing of the exchange offer, RGA may, under certain circumstances, incur significant indemnification obligations under the recapitalization and distribution agreement in the event any person becomes a 5-percent shareholder after the completion of the exchange offer. 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 NOLs, are outweighed by other considerations.

 

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 will remain until the earliest of (a) the date that is 36 months and one day from the closing of the exchange offer, 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 consummation 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 over 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 and divestiture 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 any 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 shareholders.

 

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. However, there is no binding commitment by the RGA board of directors to do so. RGA cannot assure you that the RGA board of directors will consider the issue or resolve to present the proposal to RGA shareholders. Moreover, RGA cannot assure you that, if presented, RGA shareholders will approve the conversion. 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.

 

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 exchange offer, 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 currently holds 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 common stock held by MetLife, along with all of the outstanding shares of RGA common stock not held by MetLife, 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 recapitalization, RGA will exchange each share of RGA class A common stock that is held by MetLife or its subsidiaries after the recapitalization (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 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.

 

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 the election of RGA’s directors (as described above), a reduction in the voting power with respect to directors by holders of 15% or more 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 and 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 RGA class A common stock or RGA class B common stock, the holders of shares of that class would be entitled to a separate class vote on such proposal, in addition to any vote that may be required under the RGA articles of incorporation.

Exchange Offer

 

In the exchange offer, MetLife is offering to acquire outstanding shares of MetLife common stock from MetLife stockholders in exchange for all of the shares of RGA class B common stock that MetLife will hold after the recapitalization. MetLife will determine the exchange ratio, or the method of how the exchange ratio will be determined prior to launching the exchange offer, and such information will be set forth in a separate prospectus for the exchange offer.

 

To the extent that MetLife holds any RGA class B common stock after the exchange offer, 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.

 

MetLife currently expects that, to the extent it holds any RGA class B common stock after the completion of the exchange offer, it will divest such shares in a private debt exchange pursuant to an arrangement with one or more investment banks. 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 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, 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 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. Bartlett, Eason, Greenbaum and 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. 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 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 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 was 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 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.

 

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), the RGA special committee 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 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 recapitalization of RGA common stock into RGA class A common stock and the subsequent exchange of the RGA class A common stock held by MetLife (other than the recently acquired stock) for 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.” Following the recapitalization and exchange offer, RGA intends to apply for listing, 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 exchange offer. 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 Metropolitan Life Insurance Company. 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. Both the Missouri Department of Insurance and the New York State Insurance Department will need to approve these dividends before MetLife can engage in the exchange offer. These approvals are both conditions to complete the exchange offer. See “The Recapitalization and Distribution Agreement — 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 $[ • ], 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. MetLife, which owns approximately 52% of RGA’s outstanding common stock, has agreed to vote its RGA shares 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.

 

Recapitalization Proposal.  Pursuant to the recapitalization and distribution agreement, the vote required for approval of the recapitalization proposal is (a) approval by a majority of the outstanding shares of RGA common stock, including shares held by MetLife and its subsidiaries, and (b) 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. Subject to certain conditions, MetLife has agreed to vote its shares of RGA common stock in favor of each of these 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.

 

For specific information about MetLife’s agreement to vote its shares of RGA common stock pending the completion of the divestiture, see “The Recapitalization and Distribution Agreement — Voting.”

 

Section 382 Shareholder Rights Plan Ratification 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. Subject to certain conditions, MetLife has agreed to vote its shares of RGA common stock in favor of this proposal unless RGA withdraws or modifies its recommendation that RGA’s shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement.

 

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 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 recapitalization, the Section 382 shareholder rights plan and adjournment proposals) requires the vote of the holders of a majority of the outstanding shares of RGA common stock. 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. Abstentions will be deemed to be votes “AGAINST” each of the special meeting proposals. Pursuant to NYSE Rule 452, member brokers are permitted to vote on matters on a client’s behalf only if the matter is routine. The RGA special meeting proposals are not routine and, therefore, if you do not provide voting instructions, your broker will not vote on your behalf. Such broker non-votes will count as votes “AGAINST” each of the special meeting proposals. Accordingly, 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.

 

Transactions 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’s board of directors recommend that RGA shareholders vote “FOR” the approval of the transactions 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 Ratification 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 ratification 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 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 printing 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 into 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 the recently acquired stock) for one share of RGA class B common stock. 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 a 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:

 

 

Governance Matters.  The RGA special committee and the RGA board of directors considered that, as a result of the recapitalization and the exchange offer, RGA might be more vulnerable to third parties seeking to acquire control of RGA and/or the RGA board of directors. In that regard they considered certain governance matters, including the following:

 

 

 

Negative Factors.  The RGA special committee and the RGA board of directors considered and balanced against the potential benefits of the recapitalization and related transactions a number of actual or potential disadvantages, including the following:

 

 

 

 

Procedural Factors.  The RGA special committee and the RGA board of directors also considered certain procedural protections that were implemented to ensure a fair and impartial evaluation and negotiation of the proposed divestiture and to provide for consideration and approval of any transactions by RGA’s minority shareholders, including the following:

 

 

Other Factors Considered.  The RGA special committee and the RGA board of directors considered other factors in making their determination that the special meeting proposals 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, including the following:

 

 

 

After a detailed consideration of these factors, the RGA special committee and the RGA board of directors concluded that the recapitalization and distribution agreement, the recapitalization and each of the special meeting 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 discussion and factors described above were among the factors considered by the RGA special committee and by the RGA board of directors, as specified, in their assessment of the divestiture. The RGA special committee and the RGA board of directors did not quantify or attach any particular weight to the various factors that they considered in reaching their respective determinations. Different members may have assigned different weights to different factors. In reaching their respective determinations, the RGA special committee and the RGA board of directors took the various factors into account collectively and did not perform a factor-by-factor analysis.

 

Summary of Opinion of Morgan Stanley

 

Morgan Stanley served as financial advisor to the RGA special committee in connection with the recapitalization and the divestiture, which, taken as a whole, are collectively referred to below as the “transaction.” On June 1, 2008, Morgan Stanley rendered its oral opinion, subsequently confirmed in writing, to the RGA special committee to the effect that as of such date and based upon and subject to the assumptions, qualifications and limitations set forth in its opinion, the transaction was fair, from a financial point of view, to the holders of the RGA common stock (other than MetLife and its subsidiaries (excluding RGA and its subsidiaries), which are collectively referred to below as the “excluded parties”).

 

THE FULL TEXT OF MORGAN STANLEY’S WRITTEN OPINION IS ATTACHED AS APPENDIX E TO THIS DOCUMENT. RGA ENCOURAGES ITS SHAREHOLDERS TO READ MORGAN STANLEY’S OPINION IN ITS ENTIRETY FOR A DISCUSSION OF THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED, FACTORS CONSIDERED AND LIMITATIONS UPON THE REVIEW UNDERTAKEN BY MORGAN STANLEY IN RENDERING ITS OPINION. THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF SUCH OPINION. MORGAN STANLEY’S OPINION WAS FOR THE INFORMATION OF THE RGA SPECIAL COMMITTEE AND DID NOT IN ANY MANNER ADDRESS THE PRICES AT WHICH THE RGA COMMON STOCK WOULD TRADE SUBSEQUENT TO THE ANNOUNCEMENT OF THE TRANSACTION OR AS TO THE PRICE OR PRICES AT WHICH SHARES OF THE RGA CLASS A COMMON STOCK OR THE RGA CLASS B COMMON STOCK MAY TRADE SUBSEQUENT TO THE CONSUMMATION OF THE TRANSACTION. MORGAN STANLEY’S OPINION DID NOT CONSTITUTE A RECOMMENDATION TO THE RGA SPECIAL COMMITTEE OR ANY HOLDERS OF THE RGA COMMON STOCK AS TO HOW TO VOTE IN CONNECTION WITH THE TRANSACTION.

 

The RGA special committee informed Morgan Stanley that MetLife owned approximately 52% of the RGA common stock as of the date of Morgan Stanley’s opinion. The RGA special committee also informed Morgan Stanley that MetLife will undertake the divestiture only if it can be effected on a tax-free basis, which requires that MetLife hold shares of RGA having the right, voting together as a single class, to elect at least 80% of the directors of RGA. In addition, RGA informed Morgan Stanley that, as of the date of Morgan Stanley’s opinion, the RGA board of directors expected that, following the divestiture, the RGA board of directors will consider submitting to a shareholder vote at the next regularly scheduled annual shareholders’

meeting of RGA, or at a special meeting called for such purpose, a proposal to convert the RGA class B common stock to RGA class A common stock on a share-for-share basis. However, RGA informed Morgan Stanley that 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 or, if submitted, that the RGA shareholders will approve such a conversion.

 

For purposes of its opinion, Morgan Stanley:

 

 

Morgan Stanley assumed and relied upon without independent verification the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to it by MetLife and RGA and formed a substantial basis for its opinion. With respect to the information provided to Morgan Stanley relating to certain strategic, financial and operational benefits and costs anticipated from the transaction, Morgan Stanley assumed that such information was reasonably prepared on bases reflecting the best currently available estimates and judgments of the management of RGA as to such matters, and Morgan Stanley expressed no opinion with respect to such information or the assumptions on which it was based. Morgan Stanley did not make and did not assume responsibility for making any independent valuation or appraisal of the assets or liabilities, contingent or otherwise, of RGA, nor was Morgan Stanley furnished with any such appraisals. Morgan Stanley is not a legal or tax expert and relied upon, without independent verification, the assessment of RGA’s legal and tax advisors with respect to legal and tax matters related to the proposed transaction.

 

In arriving at its opinion, Morgan Stanley assumed, with RGA’s consent, that RGA would not incur any tax as a result of the recapitalization, the divestiture or a conversion, and that the recapitalization and the

divestiture would not result in any limitation on the ability of RGA or any of its subsidiaries to utilize their net operating losses, including under Section 382 of the Code. As part of the recapitalization, Morgan Stanley understood that RGA would adopt an amended and restated shareholder rights plan and amend its charter to restrict certain acquisitions and dispositions of RGA class A common stock and RGA class B common stock by certain persons, in each case to protect RGA’s ability to utilize its net operating losses and other tax attributes, and Morgan Stanley assumed, with RGA’s consent, that RGA would implement and enforce the amended and restated shareholder rights plan and those restrictions. Morgan Stanley assumed that the transaction would be consummated in accordance with the terms of the recapitalization and distribution agreement without amendments, waivers or modifications, regulatory or otherwise, that collectively would have a material adverse effect on RGA or the holders of the RGA common stock (other than the excluded parties).

 

Morgan Stanley’s opinion was rendered on the basis of securities markets, economic, and general business and financial conditions prevailing as of the date of its opinion, and the conditions and prospects, financial and otherwise, of RGA as they were represented to Morgan Stanley as of the date of its opinion or as they were reflected in the information and documents reviewed by Morgan Stanley. Morgan Stanley assumed no responsibility for updating or revising its opinion based on circumstances or events occurring after the date of its opinion. In addition, Morgan Stanley assumed that the shares of RGA would be fully and widely distributed among investors and would be subject only to normal trading activity. Morgan Stanley’s opinion noted that trading in the RGA common stock for a period commencing with the public announcement of the transaction, and RGA class A common stock and RGA class B common stock continuing for a time following completion of the transaction, might involve a redistribution of such securities among MetLife’s security holders and RGA’s shareholders and other investors and, accordingly, during such periods, such securities might trade at prices below those at which the RGA common stock traded prior to the public announcement and those at which RGA class A common stock and RGA class B common stock would trade on a fully distributed basis after the transaction. Morgan Stanley’s opinion further noted that the estimation of market trading prices of newly distributed securities is subject to uncertainties and contingencies, all of which are difficult to predict and beyond the control of the firm making such estimates. In addition, Morgan Stanley’s opinion noted that the market prices of such securities would fluctuate with changes in market conditions, the conditions and prospects, financial and otherwise, of RGA, and other factors which generally influence the prices of securities. Morgan Stanley assumed that there would not be a material adverse effect on the business as it relates to RGA’s credit rating as a result of the consummation of the proposed transaction. Morgan Stanley expressed no opinion with respect to the fairness of the amount or nature of the compensation to any of RGA’s officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of the RGA common stock in the transaction.

 

Morgan Stanley’s opinion was approved by a committee of Morgan Stanley investment banking and other professionals in accordance with its customary practice. In addition, Morgan Stanley’s opinion did not address RGA’s underlying business decision to pursue the transaction, the relative merits of the transaction as compared to any alternative business strategies that might exist for RGA, or the effects of any other transaction in which RGA might have engaged.

 

Morgan Stanley was not authorized to solicit, and did not solicit, any indications of interest or proposals for the acquisition of, or any business combination or extraordinary transaction involving, either the stock or assets of RGA.

 

The following is a summary of the material financial analyses used by Morgan Stanley in connection with its opinion to the RGA special committee. The financial analyses summarized below include information presented in tabular format. In order to fully understand the financial analyses used by Morgan Stanley, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Rather, the analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying Morgan Stanley’s opinion.

Historical Trading Analysis

 

Morgan Stanley reviewed the historical trading of the RGA common stock and performed several analyses that are summarized below to compare the stock trading performance of the RGA common stock relative to MetLife common stock and a composite index comprised of the following life insurance companies, which are collectively referred to as the “life insurance comparable companies”:

 

 

Morgan Stanley reviewed the share price trading history of the RGA common stock by evaluating the historical trading performance of the RGA common stock for the 5-year, 3-year and 1-year periods ending May 30, 2008 relative to the trading performance of MetLife common stock and to an index comprised of MetLife and the other life insurance comparable companies. This analysis showed the following:

 

 

Historic Valuation Multiples

 

Using publicly available information, Morgan Stanley reviewed the share price trading history of the RGA common stock by comparing the average historical next-twelve-month price to earnings ratio of the RGA common stock for the 5-year, 3-year and 1-year periods ending May 30, 2008 relative to MetLife common stock and the median multiple for the life insurance comparable companies. This analysis showed the following:

 

 

Using publicly available information, Morgan Stanley also reviewed the share price trading history of the RGA common stock by comparing the average price to book value multiples of the RGA common stock for

the 5-year, 3-year and 1-year periods ending May 30, 2008 relative to MetLife common stock and the median multiples for the life insurance comparable companies. This analysis showed the following:

 

 

Regression Analysis

 

Morgan Stanley performed a regression analysis to evaluate the relationship between the return on average equity and the price to adjusted book value of RGA common stock and the life insurance comparable companies. This regression analysis showed a statistically significant relationship between the ratio of trading price to average book value as compared to return on average equity.

 

Based upon the analyses summarized above, Morgan Stanley noted that the trading multiples for the RGA common stock price have generally been in line with the life insurance comparable companies during these trading periods.

 

Liquidity Analysis

 

Morgan Stanley conducted an analysis of the trading liquidity of the RGA common stock and the following large capitalization and mid-sized capitalization life insurance companies:

 

Large capitalization insurance companies

 

 

Mid-sized capitalization insurance companies

 

 

Based on this analysis, Morgan Stanley observed that the RGA common stock generally has had less trading liquidity as compared to the large capitalization and mid-sized capitalization life insurance companies that Morgan Stanley reviewed. In particular, as compared to the other life insurance companies listed above, Morgan Stanley noted that RGA:

 

 

 

Precedent Recapitalization Transaction Analysis

 

Morgan Stanley reviewed the trading characteristics of seven companies that recapitalized the common stock into a high-vote, low-vote capital structure in contemplation of a spin-off by a significant stockholder. These recapitalization transactions, and the month and year in which they were completed, were as follows:

 

 

Based on this analysis, Morgan Stanley observed that the low-vote stock often had significant trading liquidity as compared to the high-vote stock following completion of a recapitalization into a high-vote, low-vote structure, and there was no conclusive evidence indicating that the low-vote stock would trade at a discount to the high-vote stock. Further, Morgan Stanley observed that the average trading volume of the low vote often increased following the completion of the spin-off by the significant shareholder.

 

Low-Vote Stock Price Performance Analysis

 

Morgan Stanley also reviewed the low-vote stock price performances of the companies listed above under “Precedent Recapitalization Transaction Analysis” relative to the S&P 500 index and to the applicable S&P industry index for each company. Based on this analysis, Morgan Stanley observed that there was no conclusive evidence to suggest that the recapitalization of the common stock into a high-vote, low-vote structure would necessarily negatively affect the trading levels of the companies as compared to the S&P 500 index and the applicable S&P industry index.

 

Current Dual – Class Trading Summary

 

Morgan Stanley reviewed the trading characteristics of forty-five companies with dual classes of stock where both classes are exchange-traded and total market cap is greater than $200 million. Morgan Stanley observed that while in some cases the high-vote stock or low-vote stock trades at a premium relative to the other class, the two classes generally trade in line with each other.

 

No company or transaction utilized in the comparable company analyses or precedent transaction analyses is identical to RGA or the proposed transaction. In evaluating the comparable companies and the precedent transactions, Morgan Stanley made judgments and assumptions with regard to general business, market and financial conditions and other matters, which are beyond the control of RGA and MetLife, such as the impact of competition on the business of RGA, MetLife or the industry generally, industry growth and the absence of any adverse material change in the financial condition of RGA, MetLife or the industry or in the financial markets in general, which could affect the public trading value of the companies and the trading performance of the precedent transactions to which they are being compared.

Miscellaneous

 

In connection with the review of the transaction by the RGA special committee, Morgan Stanley performed a variety of analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, Morgan Stanley considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. Morgan Stanley believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, Morgan Stanley may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions.

 

Morgan Stanley conducted the analyses described above solely as part of its analysis of the fairness of the transaction from a financial point of view to the holders of the RGA common stock (other than the excluded parties) and in connection with the delivery of its opinion to the RGA special committee. These analyses do not purport to be appraisals or to reflect the prices at which the RGA common stock might actually trade.

 

The terms of the transaction were determined through arm’s-length negotiations between RGA and MetLife and were approved by each company’s board of directors. Morgan Stanley provided advice to the RGA special committee during these negotiations. Morgan Stanley did not, however, recommend any specific terms to the RGA special committee or that any specific terms constituted the only appropriate terms for the transaction.

 

Morgan Stanley’s opinion and its presentation to the RGA special committee was one of many factors taken into consideration by the RGA special committee in deciding to recommend the transaction. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the RGA special committee with respect to the transaction.

 

Morgan Stanley acted as financial advisor to the RGA special committee in connection with the transaction and will receive a fee in the amount of $[ • ] million for its services, a significant portion of which is contingent upon the closing of the transaction. RGA has also agreed to reimburse Morgan Stanley for certain expenses incurred by Morgan Stanley, including fees of outside legal counsel, and to indemnify Morgan Stanley and related parties against liabilities arising out of Morgan Stanley’s engagement. In the two years prior to the date of its opinion, Morgan Stanley and its affiliates have provided financing services for RGA and MetLife, and have received fees for the rendering of those services. In the ordinary course of its trading, brokerage, investment management and financing activities, Morgan Stanley and its affiliates may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or the accounts of customers, in debt or equity securities or senior loans of MetLife, RGA or any other company or any currency or commodity that may be involved in the transaction.

 

In considering the unanimous recommendation of the RGA special committee and the RGA board of directors, RGA shareholders should be aware that certain officers and directors of RGA are also stockholders and/or employees of MetLife and may have certain interests in the recapitalization that are different from, or in addition to, the interests of the RGA public shareholders. In addition, three of RGA’s eight current directors, including the current chairman, are also officers of MetLife. The RGA special committee and RGA board of directors were aware of these interests and considered them, among other matters, in approving the special meeting proposals.

 

As of [ • ], 2008, RGA’s directors and executive officers beneficially owned an aggregate of [ • ] shares of RGA common stock, including shares that may be acquired within 60 days of such date upon the exercise of outstanding stock options (or less than one percent of the then outstanding shares of RGA’s common stock), as described in “Security Ownership of Certain Beneficial Owners and Management of RGA.”

 

As of [ • ], 2008, RGA’s directors and executive officers beneficially owned [ • ] shares of MetLife, as described in “Security Ownership of Certain Beneficial Owners and Management of RGA.”

 

The recapitalization and distribution agreement requires that MetLife cause Messrs. Kandarian and Reali and Ms. Piligian, its designees on the RGA board of directors, to resign effective as of closing of the exchange offer. In addition, Mr. Eason will become the RGA class A director at that time.

 

All persons who are presently executive officers of RGA are expected to continue to serve in such capacities following the consummation of the recapitalization and exchange offer.

 

RGA and MetLife have other relationships and engage in certain transactions, as described in “Other Arrangements and Relationships between MetLife and RGA.”

 

The RGA class A common stock will be identical in all respects to RGA’s current common stock, and will also be identical in all respects to the RGA class B common stock (including with respect to voting and dividends and voting on other than director-related matters), and will vote together as a single class, except with respect to certain limited matters required by Missouri law, and except that:

 

 

If, for example, the RGA board of directors were to consist of five directors, four would be designated for election by the holders of the RGA class B common stock and one would be designated for election by the holders of the RGA class A common stock.

 

All shares of RGA class A common stock or RGA class B common stock received by stockholders of MetLife following the recapitalization and exchange offer will be freely transferable, except that either class of shares of RGA common stock received by persons who are deemed to be affiliates of RGA may be resold by them only in transactions permitted by the resale provision of Rule 144 promulgated under the Securities Act, or otherwise in compliance with (or pursuant to an exemption from) the registration requirements of the Securities Act. Persons deemed to be affiliates of RGA are those individuals or entities that control, are controlled by, or are under common control with, RGA and generally include the executive officers and directors of RGA.

 

Because MetLife is an affiliate of RGA, and may continue to be an affiliate following the exchange offer due to its continued ownership of the recently acquired stock, MetLife will not be able to freely sell the recently acquired stock that its subsidiary will hold after the divestiture. Accordingly, MetLife has requested, and RGA has agreed to provide in the recapitalization and distribution agreement, to ensure an orderly sale of the recently acquired stock, registration rights with respect to the recently acquired stock. The recapitalization and distribution agreement provides that any sale of the recently acquired stock must occur no earlier than

60 days after the completion of the divestiture and no later than 60 months after the completion of the exchange offer.

 

After the disposition of MetLife’s recently acquired stock, it is not expected that MetLife will be an affiliate of RGA.

 

Holders of RGA’s common stock are not entitled to appraisal rights under Section 351.455 of the MGBCL in connection with the recapitalization.

 

The following discussion is a general summary of the material U.S. federal income tax consequences that may be relevant to RGA holders (as defined below) that hold shares of RGA common stock which are reclassified into shares of RGA class A common stock pursuant to the recapitalization. This summary is based upon the provisions of the Internal Revenue Code, Treasury regulations promulgated under the Internal Revenue Code, administrative rulings and judicial decisions as of the date hereof, all of which may change, possibly with retroactive effect, resulting in U.S. federal income tax consequences different from those discussed below. MetLife received a private letter ruling from the IRS regarding the recapitalization, the divestiture and certain other related transactions and ancillary issues. RGA subsequently received an identical private letter ruling from the IRS. Although a private letter ruling from the IRS generally is binding on the IRS, if MetLife or RGA do not comply with the undertakings made to the IRS in connection with obtaining the ruling, or if the representations made by MetLife or RGA to the IRS in connection with obtaining the ruling are determined to be inaccurate or untrue in any material respect, neither MetLife nor RGA will not be able to rely on the ruling.

 

This summary assumes the shares of RGA common stock are held as capital assets within the meaning of Section 1221 of the Internal Revenue Code. This summary does not address tax consequences arising under the laws of any foreign, state or local jurisdiction and does not address U.S. federal tax consequences other than income taxation. In addition, this summary does not address all tax consequences that may be applicable to an RGA holder’s particular circumstances or to an RGA holder that may be subject to special tax rules, including, without limitation: (i) RGA holders subject to the alternative minimum tax; (ii) banks, insurance companies, or other financial institutions; (iii) tax-exempt organizations; (iv) dealers in securities or commodities; (v) regulated investment companies or real estate investment trusts; (vi) partnerships (or other flow-through entities for U.S. federal income tax purposes and their partners or members); (vii) traders in securities that elect to use a mark-to-market method of accounting for their securities holdings; (viii) RGA holders whose “functional currency” is not the U.S. dollar; (ix) persons holding shares of RGA common stock as a position in a hedging transaction, “straddle,” “conversion transaction,” “constructive sale transaction” or other risk reduction transaction; (x) persons who acquired shares of RGA common stock in connection with employment or other performance of services; or (xi) U.S. expatriates. If a partnership (including any entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds shares of RGA common stock, the tax treatment of an RGA holder that is a partner in the partnership generally will depend upon the status of the partner and the activities of the partnership. Such holders should consult their tax advisors regarding the tax consequences of the recapitalization.

 

This summary of certain U.S. federal income tax consequences is for general information only and is not tax advice. RGA holders are urged to consult their tax advisors with respect to the application of U.S. federal income tax laws to their particular situations as well as any tax consequences arising under the U.S. federal estate or gift tax rules, or under the laws of any state, local, foreign or other taxing jurisdiction or under any applicable tax treaty.

 

For purposes of the discussion below, an “RGA holder” is a beneficial owner of shares of RGA common stock, other than MetLife and its subsidiaries, and other than a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes).

Based upon the ruling, the reclassification of shares of RGA common stock into shares of RGA class A common stock and the amendment of the RGA articles of incorporation will constitute a “recapitalization” for U.S. federal income tax purposes. Consequently, an RGA holder will not recognize gain or loss upon the recapitalization. An RGA holder’s adjusted tax basis in each share of RGA class A common stock received in the recapitalization will equal such holder’s adjusted tax basis in the share of RGA common stock reclassified in the recapitalization. An RGA holder’s holding period for the each share of RGA class A common stock received in the recapitalization will include such holder’s holding period for the share of RGA common stock reclassified in the recapitalization.

 

The recapitalization proposal requires (a) approval by a majority of the outstanding shares of RGA’s common stock, including shares held by MetLife and its subsidiaries, and (b) approval by the holders of a majority of the shares of RGA common stock present in person or by proxy at the special meeting and entitled to vote on such proposal, other than the shares held by MetLife and its subsidiaries.

 

The RGA special committee, and the RGA board of directions upon the unanimous recommendation of the RGA special committee, have approved the recapitalization proposal and have determined that the recapitalization proposal is advisable and favorable to and, therefore, fair to and in the best interests of the RGA and RGA 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.

 

The governance proposals will not be implemented if the recapitalization proposal is not approved. The following descriptions of the proposals are qualified in their entirety by reference to the text of the proposed amendments to RGA’s amended and restated articles of incorporation and bylaws, which are attached to this proxy statement/prospectus as Appendices B and C, respectively. RGA shareholders are urged to read carefully the proposed amended and restated articles of incorporation and the proposed restated bylaws in their entirety.

 

The RGA board of directors and the RGA special committee believe the governance proposals are necessary to effect the recapitalization, exchange offer and related transactions. Additionally, they believe the RGA class B significant holder voting limitation is necessary to protect RGA class A shareholders from potentially unfair or discriminatory takeover tactics and efforts to acquire control of RGA at a price or on terms that are not in the best interests of all of RGA’s shareholders. Further, they believe the acquisition restrictions are necessary to protect the ability of RGA and its subsidiaries to use their NOLs and other tax attributes.

 

The RGA special committee and board of directors has also approved amendments to RGA’s bylaws that are more fully described below. Under the terms of RGA’s existing restated articles of incorporation, separate approval by RGA shareholders is not required to effect the bylaw amendments. However, the bylaws amendments relating to the governance proposals are subject to the approval of the recapitalization proposal, and the governance proposals and will become effective only upon the completion of the recapitalization. In addition to containing the amendments to RGA’s bylaws discussed in “Description of RGA Capital Stock — Description of Bylaw Amendments,” the bylaw amendments contain changes necessary to conform RGA’s bylaws to RGA’s amended and restated articles of incorporation if the governance proposals are approved.

 

The following is a brief summary of the RGA class B significant holder voting limitation, which is contained in Article Three of RGA’s proposed amended and restated articles of incorporation, a copy of which, as amended, is attached in its entirety as Appendix B to this document and is incorporated herein by reference. You are urged to read the full text of the RGA class B significant holder voting limitation in its entirety.

 

This provision states that so long as any person or entity, or group of persons or entities acting as a group, beneficially owns 15% or more of the outstanding shares of RGA class B common stock, then the voting power of that holder in the election of directors or other exercise of voting rights with respect to the election or removal of directors will be restricted to 15% of the outstanding RGA class B common stock. However, if such holder also has in excess of 15% of the outstanding RGA class A common stock, then the holder may exercise the voting power of the RGA class B common stock in excess of 15% to the extent that such holder has an equivalent percentage of outstanding RGA class A common stock. To the extent that voting power cannot be exercised, such voting power will be deemed entitled to vote for purposes of determining whether a quorum is present. A person will not be deemed to be the beneficial owner of voting power solely because the person holds or solicits a revocable proxy that is not then reportable on Schedule 13D under the Exchange Act.

 

For example, a beneficial owner of 17% of the class B common stock, and no class A common stock, would be limited to 15% voting power in the election of the class B directors. On the other hand, if this person beneficially owned both 17% of the class B common stock and 16% of the class A common stock, then the person would be able to exercise 16% of the class B voting power.

 

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 reclassification of shares or in any merger or consolidation of RGA with any other corporation. The purpose of this provision is to ensure that any person, entity or group cannot seek to obtain control of the RGA board of directors solely by acquiring a majority of the outstanding shares of RGA class B common stock. This provision is intended to protect RGA’s public shareholders by ensuring that

anyone seeking to take over RGA must acquire control of the outstanding shares of each class of common stock.

 

The proposed recapitalization and exchange offer may make it easier for a single person or group of related persons to gain control over RGA. Because MetLife currently holds approximately 52% of RGA’s common stock, it is unlikely at the present time that any person could gain control of RGA without MetLife’s consent.

 

However, after the recapitalization and divestiture, a person or group of related persons could gain control of RGA by gaining control of the RGA board of directors through the acquisition of a majority of the outstanding RGA class B common stock, or the votes represented by those shares. Since the outstanding RGA class B common stock will represent approximately [ • ]% of the total outstanding shares of RGA voting stock, the special class voting right of the RGA class B common stock would permit a person or group to gain control of the RGA board of directors by acquiring only approximately [ • ]% or more of RGA’s total outstanding voting securities.

 

If at any time RGA issues additional shares of RGA class A common stock, without issuing at least an equal number of shares of RGA class B common stock, the equity interest in RGA represented by the RGA class B common stock will be diluted. Thus, over time, shares of RGA class B common stock may represent a smaller percentage of the outstanding RGA equity. Nevertheless, in order to preserve the tax-free status of the divestiture, the RGA class B common stock will be entitled to elect 80% of the RGA board of directors following the recapitalization. The RGA board of directors was concerned that, in order to take control of RGA, an unsolicited acquirer may attempt to purchase all or a majority of the outstanding shares of RGA class B common stock and pay a “control premium” over the market price for such shares without making any offer to the holders of the RGA class A common stock who at such time may continue to own a majority of the outstanding equity in RGA. The RGA class B significant holder voting limitation is designed to discourage the acquisition of control of RGA through the purchase of less than all of the outstanding shares of each class of RGA common stock.

 

In addition, the substantial control or influence that MetLife may exert in matters voted on by RGA shareholders will be eliminated as a result of the recapitalization and divestiture. For these reasons, the proposed recapitalization and divestiture could render RGA more susceptible to unsolicited takeover bids from third parties, including offers below the intrinsic value of RGA or other offers that would not be in the best interests of all of RGA’s shareholders.

 

However, the ability of a person to gain control of the RGA board of directors by acquiring shares of RGA class B common stock would be hindered by the proposal to include the Class B significant holder voting limitation in RGA’s amended and restated articles of incorporation.

 

The RGA class B significant holder voting limitation proposal requires the affirmative vote of a majority of the outstanding shares of RGA’s common stock. Each outstanding share of RGA common stock is entitled to one vote on each matter which may properly come before the special meeting. MetLife, which owns approximately 52% of the outstanding shares of RGA common stock, has agreed to vote its shares of RGA common stock in favor of each of the RGA special meeting proposals unless RGA withdraws or modifies its recommendation that RGA shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement.

 

However, the governance proposals will not be implemented if the recapitalization proposal is not approved, which requires the affirmative vote of (1) holders of a majority of the outstanding shares of RGA common stock and (2) the holders of a majority of the outstanding shares of RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy and entitled to vote on the recapitalization proposal.

 

The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have approved the RGA class B significant holder voting limitation proposal and have determined that the RGA class B significant holder voting limitation proposal 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 other subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the RGA class B significant holder voting limitation proposal.

 

The following is a brief summary of the acquisition restrictions, which are contained in Article Fourteen of RGA’s proposed amended and restated articles of incorporation, a copy of which is attached in its entirety as Appendix B to this document and is incorporated herein by reference. You are urged to read the full text of the acquisition restrictions in their entirety.

 

The proposed acquisition restrictions would generally apply until the date that is 36 months and one day after the completion of the exchange offer (or earlier, if 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, which date is referred to as the “restriction release date”), but would not apply to any part of the divestiture. Any attempted direct or indirect sale, transfer, assignment, exchange, issuance, grant, redemption, repurchase, conveyance, pledge or other disposition, whether voluntary or involuntary, and whether by operation of law or otherwise, by any person other than RGA of RGA’s common stock or any other securities that would be treated as RGA’s “stock” under Section 382 of the Internal Revenue Code and the applicable Treasury regulations (which are described in more detail under Proposal Five: Ratification of Section 382 Shareholder Rights Plan and are referred to in this section as “RGA stock”) to a person or group of persons who own, or who would own as a result of such transfer, 5% or more (by value) of the RGA stock. The acquisition restrictions also restrict any other attempted transfer of RGA stock that would result in the identification of a new “5-percent shareholder” of RGA, as determined under the Internal Revenue Code and applicable Treasury regulations; this would include, among other things, an attempted acquisition of RGA stock by an existing 5-percent shareholder. For these purposes, numerous rules of attribution, aggregation and calculation prescribed under the Internal Revenue Code (and applicable regulations) will be applied in determining whether the 5% threshold has been met and whether a group exists. The acquisition restrictions may also apply in certain cases to proscribe the creation or transfer of various “options,” which are broadly defined, in respect of the RGA stock to the extent, generally, that exercise of the option would result in a proscribed level of RGA stock ownership. As previously stated, the RGA board of directors may waive the acquisition restrictions, and acquisitions of RGA stock directly from RGA, whether by way of option exercise or otherwise, are not subject to the acquisition restrictions.

 

Generally, the restrictions are imposed only with respect to the number of shares of RGA stock, or options with respect to RGA stock, purportedly transferred in excess of the threshold established in the acquisition restrictions, which is referred to in this document as the “excess stock.” In any event, the restrictions do not prevent a valid transfer if either the transferor or the purported transferee obtains the approval of the RGA board of directors. In deciding whether to approve any proposed transfer, the RGA board of directors would consider whether the transfer would result in the application of any limitations under Section 382 of the Internal Revenue Code by RGA and its subsidiaries of their NOLs and other tax attributes.

 

If the proposal is approved, the acquisition restrictions would remain in effect until the restriction release date, unless Article Fourteen of RGA’s articles of incorporation is otherwise amended to remove the restrictions in accordance with the provisions of Missouri law and RGA’s articles of incorporation.

 

The acquisition restrictions generally restrict any person or entity, or group of persons or entities, from acquiring sufficient RGA stock to cause that person, entity or group to become the owner of 5% or more (by

value) of RGA stock and prohibits RGA shareholders who are “5-percent shareholders,” as determined under Section 382 of the Internal Revenue Code and applicable Treasury regulations, from increasing their ownership of RGA stock without obtaining the approval of the RGA board of directors.

 

The acquisition restrictions will not apply to the following:

 

 

RGA believes the acquisition restrictions are narrowly tailored to minimize their anti-takeover effects, that they are limited to the extent believed to be appropriate for protecting the ability of RGA and its subsidiaries to use their NOLs and other tax attributes and that they are in the best interest of all shareholders of RGA. For example, they have only a limited duration, which is determined by the application of the Internal Revenue Code. Similarly, there are numerous exceptions which would not have been included if not narrowly tailored to protect RGA’s NOLs. In addition, the RGA board of directors does not intend to discourage offers to acquire substantial blocks of RGA common stock that would clearly improve shareholder value beyond the loss of the NOLs. In the case of any such proposed acquisition that the RGA board determines to be in the best interest of RGA and its shareholders, the RGA board would grant approval for such acquisition to proceed.

 

Any person permitted to acquire or own 5% or more (by value) of RGA stock pursuant to any of the foregoing bullet points will not be permitted to acquire any additional RGA stock at any time during the restriction period (except, with respect to the participating banks, to the extent otherwise described above), unless and until such person owns less than 5% (by value) of the aggregate outstanding shares of RGA stock, at which point such person may acquire RGA stock only to the extent that, after such acquisition, such person owns less than 5% (by value) of the aggregate outstanding shares of RGA stock.

 

Article Fourteen will provide that all certificates representing RGA stock bear the following legend:

 

“THE TRANSFER OF SECURITIES REPRESENTED BY THIS CERTIFICATE IS (AND OTHER SECURITIES OF THE CORPORATION MAY BE) SUBJECT TO RESTRICTION PURSUANT TO ARTICLE FOURTEEN OF THE CORPORATION’S AMENDED AND RESTATED ARTICLES OF INCORPORATION. THE CORPORATION WILL FURNISH A COPY OF ITS AMENDED AND RESTATED ARTICLES OF INCORPORATION SETTING FORTH THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS TO THE HOLDER OF RECORD OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN REQUEST ADDRESSED TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS.”

 

In accordance with the acquisition restrictions, RGA will not permit any of RGA’s employees or agents, including the transfer agent, to record any transfer of RGA stock purportedly transferred in excess of the threshold established in the acquisition restrictions. As a result, requested transfers of RGA stock may be delayed or refused.

 

The RGA articles of incorporation would provide that any transfer attempted in violation of the acquisition restrictions would be null and void from the start, even if the transfer has been recorded by the

transfer agent and new certificates issued. The purported transferee of the RGA stock would not be entitled to any rights of shareholders with respect to the excess stock, including the right to vote the excess stock, or to receive dividends or distributions in liquidation in respect thereof, if any. If the RGA board of directors determines that a purported transfer has violated the acquisition restriction, RGA will require the purported transferee to surrender the excess stock and any dividends and other distributions the purported transferee has received on them to an agent designated by the RGA board of directors. The agent will then sell the excess stock in one or more arm’s-length transactions, executed on the NYSE, if possible, to a buyer or buyers, which may include RGA, or otherwise privately; provided that nothing will require the agent to sell the excess stock within any specific time frame if, in the agent’s discretion, the sale would disrupt the market for the RGA stock or adversely affect the value of the RGA stock. If the purported transferee has resold the excess stock before receiving RGA’s demand to surrender the excess stock, the purported transferee generally (unless RGA agrees in writing to permit the purported transferee to retain a portion of the proceeds up to the amount of reimbursement and refund it would otherwise receive pursuant to the next sentence) will be required to transfer to the agent the proceeds of the sale and any distributions the purported transferee has received on the excess stock. From any sale proceeds it receives, the agent will pay any amounts remaining, after repaying its own expenses and after reimbursing the purported transferee for the price paid for the excess stock (or the fair market value of the excess stock at the time of the attempted transfer to the purported transferee), to a named charity or, in certain circumstances, charities selected by the RGA board of directors.

 

The acquisition restrictions impose restrictions on the transfer of RGA common stock (and any other capital stock that RGA issues in the future) to designated persons. Without these restrictions, it is possible that certain transfers of RGA stock could, under Section 382 of the Internal Revenue Code and applicable Treasury regulations, result in limitations on the ability of RGA and its subsidiaries to utilize fully the substantial NOLs and other tax attributes currently available to them for U.S. federal income tax purposes. The RGA board of directors believes it is in RGA’s best interests to attempt to prevent the imposition of such limitations by adopting the proposed acquisition restrictions.

 

It should be noted that the acquisition restrictions do not apply to issuances of RGA’s common stock by RGA. As a result, the acquisition restrictions do not prevent the exercise of either currently outstanding employee stock options or employee stock options that may be granted in the future under RGA’s flexible stock or other benefit plans. These have been excluded from the operation of the acquisition restrictions because the RGA board of directors will be able to consider the effect on the NOLs and other tax attributes of RGA and its subsidiaries of future issuances of RGA stock at the time of issuance, whether as a result of transactions with third parties, or the issuance of RGA stock in a private placement or public offering, or as compensation to RGA’s employees, officers or directors, or otherwise. Consequently, persons or entities who are able to acquire RGA stock directly from RGA, including RGA’s employees, officers and directors, may do so without application of the acquisition restrictions, irrespective of the number of shares of RGA stock they are acquiring. As a result, those persons or entities dealing directly with RGA may be seen to receive an advantage over persons or entities who are not able to acquire RGA stock directly from RGA and, therefore, are restricted by the terms of the acquisition restrictions. It should be noted, however, that any direct acquisitions of RGA stock from RGA first requires the RGA board’s approval and in granting such approval, the RGA board will review the implications of any such issuance on the NOLs and other tax attributes of RGA and its subsidiaries.

 

RGA believes that, absent a court determination:

 

 

It is possible that the acquisition restrictions may not be enforceable against RGA’s shareholders who vote against or abstain from voting on the amendment, as discussed under “Risk Factors — Risks Relating to the Governance Proposals and the Section 382 Shareholder Rights Plan — The proposed acquisition restrictions

and RGA’s existing 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.” However, RGA believes that the acquisition restrictions are in the best interests of RGA and RGA shareholders and are reasonable, and RGA will act vigorously to enforce them against all current and future holders of RGA stock regardless of how they vote on the amendment.

 

RGA believes that each of its shareholders who votes in favor of the amendment will in effect have consented to the acquisition restrictions and therefore will be bound by them. In those circumstances, RGA intends to assert that any such shareholder would be estopped from challenging the legality, validity or enforceability of the acquisition restrictions. Consequently, all RGA shareholders should carefully consider this in determining whether to vote in favor of the proposal.

 

If approved, the acquisition restrictions would take effect prior to completion of the exchange offer, but they would not apply to the immediate transferees of MetLife in the exchange offer or in any debt exchanges or subsequent split-offs.

 

At December 31, 2007, RGA had recognized a gross deferred tax asset associated with NOLs of it and its subsidiaries. The amount of NOLs as of such date were approximately $932.4 million. NOLs may be carried forward to offset taxable income in future years and eliminate income taxes otherwise payable on such future taxable income, subject to certain adjustments. RGA believes its NOLs could provide significant future tax savings, depending upon the amount of RGA’s taxable income in future taxable years. If RGA does not have sufficient taxable income in future years to use the tax benefits before they expire, RGA will lose the benefit of these NOLs permanently. RGA currently expects to have sufficient future taxable income against which to fully utilize such NOLs.

 

The benefit of a company’s existing NOLs and other tax attributes, can be reduced substantially as a result of Section 382 of the Internal Revenue Code and applicable Treasury regulations thereunder. Section 382 of the Internal Revenue Code limits the use of NOLs and other tax attributes by a company that has undergone an “ownership change,” as defined in Section 382 of the Internal Revenue Code and applicable Treasury regulations thereunder. Generally, an “ownership change” occurs if one or more shareholders, each of whom owns 5% or more (by value) of a company’s capital stock, increase their aggregate percentage ownership by more than 50 percentage points over the lowest percentage of stock owned by such shareholders over the preceding three-year period. For this purpose, all holders who each own less than 5% of a company’s capital stock (by value) are generally treated together as one “five-percent shareholder,” subject to certain exceptions. In addition, certain attribution and constructive ownership rules, which generally attribute ownership of stock to the ultimate beneficial owner thereof without regard to ownership by nominees, trusts, corporations, partnerships or other entities, are applied in determining the level of stock ownership of a particular shareholder. Options (including warrants) to acquire capital stock may be treated as if they had been exercised, on an option-by-option basis, if the issuance, transfer or structuring of the option meets certain tests. All percentage determinations are based on the fair market value of a company’s capital stock, including any preferred stock that is voting or convertible (or otherwise participates in corporate growth) to any significant extent. If a company experiences an ownership change, the amount of taxable income in any taxable year (or portion thereof) subsequent to the ownership change that can be offset by NOLs existing prior to such ownership change generally can not exceed the product of (x) the aggregate value of the company’s stock and (y) the federal long-term tax-exempt rate. Certain complex subgroup rules may apply to such determinations.

 

The acquisition restrictions are designed to restrict transfers of RGA stock that could cause an “ownership change” under Section 382 of the Internal Revenue Code and applicable Treasury regulations thereunder and, therefore, could limit the ability of RGA and its subsidiaries to utilize fully their substantial NOLs and other tax attributes currently available for U.S. federal income tax purposes. The divestiture will increase the likelihood that RGA and its subsidiaries will experience such an ownership change and, therefore, that the NOLs of RGA and its subsidiaries could be subject to such limitations.

Although RGA does not believe that the divestiture, by itself, is likely to cause an ownership change, RGA cannot assure you that the acquisition restrictions will be effective, as discussed in “Risk Factors — Risks Relating to the Governance Proposals and the Section 382 Shareholder Rights Plan — The proposed acquisition restrictions and RGA’s existing 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 have unintended negative effects.” In particular, the restrictions will not apply to any shares acquired by any person in the exchange offer or additional divestiture transaction. Further, they may not be enforceable against shareholders who vote against or abstain from voting on the governance proposals or who do not have notice of the restrictions at the time they acquire their shares.

 

Moreover, the application of the rules under Section 382 of the Internal Revenue Code are highly complex and there can be no assurance that the divestiture, together with other transactions, will not cause RGA and its subsidiaries to experience an ownership change. Accordingly, the RGA special committee and the RGA board of directors believe their actions to safeguard the value of RGA’s NOLs and other tax attributes is in the best interests of RGA and its shareholders.

 

In addition to the significant potential adverse cash tax impact of an ownership change discussed above, if RGA and its subsidiaries experience an ownership change, their ability to continue to recognize the deferred tax asset associated with their NOLs could be materially affected. In such case, RGA’s management would likely need to reevaluate the recoverability of the related deferred tax asset. The outcome of this reevaluation could involve the write-off of all or a portion of that asset which would adversely affect RGA’s results of operations and net income in a material manner. Such write-off could, among other things, increase RGA’s cost of capital or reduce its ability to raise capital.

 

Therefore, while it is not possible to predict with certainty all of the consequences of an ownership change under Section 382 of the Internal Revenue Code, RGA believes that an ownership change would likely result in materially higher cash taxes payable by it and its subsidiaries in future taxable years as well as the write-off of all or a portion of a significant deferred tax asset, which would adversely affect its results of operations and net income.

 

Despite the adoption of the acquisition restrictions, there would still remain a risk that certain changes in relationships among shareholders or other events will cause an ownership change of RGA and its subsidiaries under Section 382.

 

RGA cannot assure you that the acquisition restrictions are enforceable under all circumstances, particularly against shareholders who do not vote in favor of this proposal or who do not have notice of the acquisition restrictions at the time they subsequently acquire their shares.

 

Further, as described above, the acquisition restrictions will not apply to, among others, any shares of RGA class B common stock acquired by any person in the exchange offer or any debt exchange or subsequent split-off as part of the divestiture. Accordingly, RGA cannot assure you that an ownership change will not occur as a result of the exchange offer or other transactions. However, RGA has adopted a Section 382 shareholder rights plan (see “Description of RGA Capital Stock — Description of Section 382 Shareholder Rights Plan”) which is intended to act as a deterrent to any non-exempted person becoming a 5-percent shareholder and endangering RGA’s ability to use its NOLs.

 

The RGA special committee and the board of directors believe that attempting to safeguard the substantial NOLs and other tax attributes as described above is in the best interests of RGA and its shareholders. Nonetheless, the acquisition restrictions will restrict a shareholder’s ability to acquire additional RGA stock in excess of the specified limits. Furthermore, a shareholder’s ability to dispose of its RGA stock, or any other RGA stock which the shareholder may acquire, may be restricted as a result of the acquisition restrictions.

The RGA board of directors has the discretion to approve a transfer of stock that would otherwise violate the acquisition restrictions in circumstances where it determines such transfer is in the best interests of RGA and RGA’s shareholders. In determining whether or not to permit a transfer which may result in violation of the acquisition restrictions, the RGA board of directors may consider both the proposed transfer and potential future transfers, in light of factors it deems relevant, including the likelihood that the transfer would result in an ownership change that would limit the use by RGA and its subsidiaries of their NOLs and other tax attributes. For example, the RGA board of directors may grant a waiver of the acquisition restrictions in connection with a sale of common stock that the RGA board of directors believes is not reasonably likely to result in a material limitation on the use by RGA and its subsidiaries of their NOLs and other tax attributes.

 

The RGA special committee and the board of directors are not aware of any person or entity, or any group of persons or entities, that owns or intends to own 5% or more (by value) of RGA stock for Section 382 purposes. Nonetheless, if the RGA board of directors decides to permit a transfer that would otherwise violate the acquisition restrictions, that transfer or later transfers may result in an ownership change that would limit RGA’s and its subsidiaries ability to use their NOLs. The RGA board of directors intends to consider any attempted transfer individually and determine at the time whether it is in the best interests of RGA, after consideration of any factors that the board deems relevant, to permit the transfer notwithstanding that an “ownership change” may occur.

 

In addition, the RGA board of directors is authorized to eliminate the acquisition restrictions, modify the applicable allowable percentage ownership interest or modify any of the terms and conditions of the acquisition restrictions provided that the RGA board of directors determines that such change is reasonably necessary or advisable to preserve the ability of RGA and its subsidiaries to utilize their NOLs and other tax attributes, or that the continuation of the affected terms and conditions of the acquisition restrictions is no longer reasonably necessary for such purpose.

 

As a result, the acquisition restrictions serve to reduce, but not necessarily eliminate, the risk that Section 382 will cause the limitations described above to apply to RGA and its subsidiaries’ use of their NOLs.

 

The RGA special committee and the RGA board of directors recommend that the acquisition restrictions should be approved for the reasons set forth in this document. However, you should be aware that the acquisition restrictions may have an “anti-takeover” effect because they restrict the ability of a person or entity, or group of persons or entities, from accumulating in the aggregate 5% or more (by value) of the RGA stock and the ability of persons, entities or groups now owning 5% or more (by value) of the RGA stock from acquiring additional RGA stock. The acquisition restrictions discourage or prohibit a merger, some tender or exchange offers, proxy contests or accumulations of substantial blocks of shares for which some shareholders might receive a premium above market value. In addition, the acquisition restrictions may delay the assumption of control by a holder of a large block of capital stock and the removal of incumbent directors and management, even if such removal may be beneficial to some or all RGA shareholders.

 

The indirect “anti-takeover” effect of the acquisition restrictions is not the reason for the acquisition restrictions. The RGA special committee and the RGA board of directors consider the acquisition restrictions to be reasonable and in the best interests of RGA and its shareholders because, among other things the acquisition restrictions reduce some of the risks that RGA and its subsidiaries will be unable to fully utilize their substantial tax assets described above. In the opinion of the RGA special committee and the RGA board of directors, the fundamental importance to RGA’s shareholders of maintaining the availability of such tax assets outweigh the indirect anti-takeover effect the acquisition restrictions may have. In addition, RGA does not believe that the acquisition restrictions will adversely affect the continued listing of RGA’s common stock on the NYSE. In addition, the RGA special committee and the RGA board of directors do not intend to discourage offers to acquire substantial blocks of RGA common stock that would clearly improve shareholder value beyond the loss of the NOLs. In the case of any such proposed acquisition that the board determines to

be in the best interest of RGA and its shareholders, the board would grant approval for such acquisition to proceed.

 

The anti-takeover effects should also be considered in light of other existing charter, bylaw and statutory provisions applicable to RGA, which could also have the effect of preventing a takeover, as described in “Description of RGA Capital Stock — Anti-Takeover Provisions in the RGA Articles of Incorporation and Bylaws.”

 

The acquisition restrictions will restrict an RGA shareholder’s ability to acquire, directly or indirectly, additional RGA stock in excess of the specified limitations. Further, an RGA shareholder’s ability to dispose of its shares is restricted as a result of the acquisition restrictions, and an RGA shareholder’s ownership of capital stock may become subject to the acquisition restrictions upon the actions taken by related persons. If the acquisition restrictions are approved, a legend reflecting the acquisition restrictions will be placed on certificates representing newly issued or transferred shares of RGA capital stock. These restrictions may also result in a decreased valuation of RGA capital stock due to the resulting restrictions on transfers to persons directly or indirectly owning or seeking to acquire a significant block of RGA capital stock.

 

The acquisition restrictions proposal requires the affirmative vote of a majority of the outstanding shares of RGA common stock. Each outstanding share of RGA common stock is entitled to one vote on each matter which may properly come before the special meeting. MetLife, which owns approximately 52% of the outstanding shares of RGA common stock, has agreed to vote its shares of RGA common stock in favor of each of the RGA special meeting proposals unless RGA withdraws or modifies its recommendation that RGA shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement.

 

However, the governance proposals will not be implemented if the recapitalization proposal is not approved, which requires the affirmative vote of (1) holders of a majority of the outstanding shares of RGA common stock and (2) the holders of a majority of the outstanding shares of RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy and entitled to vote on the recapitalization proposal.

 

The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have approved the acquisition restrictions proposal and have determined that the acquisition restrictions proposal is advisable and favorable to and, therefore, fair to and in the best interests of RGA and RGA shareholders other than MetLife and its other subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” approval of the RGA class B significant holder voting limitation proposal.

 

RGA is proposing the dual class structure at MetLife’s request to permit MetLife to proceed with the divestiture on a tax-free basis. RGA presently expects that, following the divestiture, the RGA board of directors will consider submitting to a shareholder vote at the next regularly scheduled annual shareholders’ meeting of RGA (anticipated to be held on May 20, 2009), or at a special meeting called for such purpose, a proposal to convert the dual class structure into a single class structure. While there is no binding commitment by the RGA board of directors to, and there can be no assurance that the RGA board of directors will, consider the issue or resolve to present the proposal to RGA shareholders, the proposed provision in RGA’s amended and restated articles of incorporation would set forth the method for the conversion to take place. Further, there can be no assurance that, if submitted, RGA shareholders would approve the conversion.

The terms of the RGA class B common stock will provide that such shares would convert into RGA class A common stock, on a share-for-share basis, if:

 

 

RGA will not enter into any reorganization, or into any merger, share exchange, consolidation or combination of RGA with one or more other entities (whether or not RGA is the surviving entity), unless each holder of an outstanding share of class A common stock is entitled to receive the same kind and amount of consideration receivable upon such transaction by a holder of an outstanding share of class B common stock, and each holder of an outstanding share of class B common stock shall be entitled to receive the same kind and amount of consideration receivable upon such transaction by a holder of an outstanding share of class A common stock, in each case without distinction between the two classes of common stock. However, that the RGA board of directors may permit the holders of shares of class A common stock and the holders of shares of class B common stock to receive different kinds of shares of stock in such transaction if the RGA board of directors determines in good faith that the only difference in such shares is the inclusion of voting rights that maintain the different voting rights of the holders of class A common stock and holders of class B common stock with respect to the election of the applicable percentage of the authorized number of members of the board of directors as described in “The Recapitalization and Distribution Agreement — Recapitalization.”

 

The potential conversion proposal requires the affirmative vote of a majority of the outstanding shares of RGA’s common stock. Each outstanding share of RGA common stock is entitled to one vote on each matter which may properly come before the special meeting. MetLife, which owns approximately 52% of the outstanding shares of RGA common stock, has agreed to vote its shares of RGA common stock in favor of each of the RGA special meeting proposals unless RGA withdraws or modifies its recommendation that RGA shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement.

 

However, the governance proposals will not be implemented if the recapitalization proposal is not approved, which requires the affirmative vote of (1) holders of a majority of the outstanding shares of RGA common stock and (2) the holders of a majority of the outstanding shares of RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy and entitled to vote on the recapitalization proposal.

 

The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have approved the potential conversion proposal and have determined that the potential conversion proposal is advisable and favorable to and, therefore, fair to and in the best interests of RGA and RGA shareholders other than MetLife and its other subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the approval of the potential conversion proposal.

PROPOSAL FIVE: RATIFICATION OF SECTION 382 SHAREHOLDER RIGHTS PLAN

 

The RGA board of directors and the RGA special committee believe that the adoption of the Section 382 shareholder rights plan is necessary to protect the ability of RGA and its subsidiaries to use their NOLs and other tax attributes without limitation under Section 382 of the Internal Revenue Code and applicable Treasury regulations thereunder. Consequently, the RGA board of directors adopted a Section 382 Rights Agreement dated as of June 2, 2008, between RGA and Mellon Investor Services LLC, as Rights Agent (which is referred to as the “rights agent”). If the recapitalization is completed, the RGA board of directors and the RGA special committee believe that the current rights plan should be amended and restated in recognition of the effects of the recapitalization and divestiture on RGA’s capital structure. If the recapitalization is not approved by RGA’s shareholders, and the recapitalization and distribution agreement terminates in accordance with its terms before the exchange offer is completed, then the Section 382 shareholder rights plan will automatically terminate in accordance with its terms.

 

The Section 382 shareholder rights plan, as it may be amended and restated in connection with the recapitalization, is not designed to protect RGA shareholders against abusive takeover tactics. Instead, it 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 as described under “Proposal Three: Acquisition Restrictions — Reasons for the Acquisition Restrictions.”

 

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 to use its existing NOLs. 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 fully their NOLs and other tax attributes by avoiding the limitations imposed by Section 382 of the Internal Revenue Code and applicable Treasury regulations thereunder. 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 will 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.

 

RGA believes the restrictions under the Section 382 shareholder rights plan are narrowly tailored to minimize their anti-takeover effects, that they are limited to the extent believed to be appropriate for protecting the ability of RGA and its subsidiaries to use their NOLs and other tax attributes and that they are in the best interest of all shareholders of RGA. For example, they have only a limited duration, which is determined by the application of the Internal Revenue Code. Further, there are numerous exceptions available under the Section 382 shareholder rights plan which would not have been included in a traditional shareholder rights plan that was not narrowly tailored to protect RGA and its subsidiaries’ NOLs. In addition, the RGA board of directors does not intend to discourage offers to acquire substantial blocks of RGA stock that would clearly improve shareholder value beyond the loss of the NOLs. In the case of any such proposed acquisition that the RGA board determines to be in the best interest of RGA and its shareholders, the board would grant approval for such acquisition to proceed.

 

The Section 382 shareholder rights plan ratification proposal is an opportunity for RGA shareholders to ratify the RGA board of director’s decision to adopt the Section 382 shareholder rights plan. The RGA special committee has unanimously approved the Section 382 shareholder rights plan and is unanimously recommending that the RGA shareholders demonstrate their approval by ratifying the plan at the special meeting. The RGA special committee and the RGA board of directors believe that the Section 382 shareholder rights plan is in the best interests of RGA and its shareholders.

 

The following description of the rights plan proposal is qualified in its entirety by reference to the text of the amended and restated Section 382 shareholder rights plan, which is attached to this proxy statement/prospectus as Appendix C. RGA shareholders are urged to read carefully the amended and restated Section 382 shareholder rights plan in its entirety.

 

The Section 382 shareholder rights plan is intended to act as a deterrent to any person being or becoming a “5-percent shareholder” (as defined in Section 382 of the Internal Revenue Code and the applicable Treasury regulations) without the approval of the RGA board of directors (such person is referred to as an “acquiring person”). The holdings of independently managed mutual funds will not be combined for purposes of calculating ownership percentages under the rights plan. The meaning of the term acquiring person does not include:

 

 

Shareholders who owned 5% or more (by value) of RGA common stock outstanding at the time of adoption of the current rights plan will not trigger the amended and restated rights plan so long as they do not acquire any additional shares. These shareholders, which include MetLife and its other subsidiaries, are referred to as “grandfathered persons.”

 

For purposes of the Section 382 shareholder rights plan, the acquisition restrictions of Section 382 of the Internal Revenue Code and the applicable Treasury regulations, RGA “stock” means: (i) common stock, (ii) preferred stock (other than preferred stock described in Section 1504(a)(4) of the Internal Revenue Code), (iii) warrants, rights, or options (including options within the meaning of Treasury Regulation § 1.382-2T(h)(4)(v)) to purchase stock (other than preferred stock described in Section 1504(a)(4) of the Internal Revenue Code), and (iv) any other interest that would be treated as “stock” of RGA pursuant to Treasury Regulation § 1.382-2T(f)(18).

 

Following the recapitalization of RGA common stock, pursuant to the recapitalization and distribution agreement, holders who receive common stock directly from MetLife in any part of the divestiture which causes them to hold 5% or more (by value) of RGA stock, will not trigger the rights plan. However, the rights plan does not exempt any future acquisitions of common stock by such persons. In addition, the RGA board of directors may, in its sole discretion, exempt any person or group from being deemed an acquiring person for purposes of the rights plan at any time prior to the time the rights are no longer redeemable. The persons described in this paragraph are “exempt persons.”

 

Under certain circumstances, the RGA board of directors may determine it is in the best interest of RGA and its shareholders to exempt 5-percent shareholders from the operation of the 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, as the exercisability of the rights, in certain instances, may jeopardize the tax-free nature of the divesture. Additionally, after the closing of the exchange offer, RGA may, in certain circumstances, incur significant indemnification obligations under the recapitalization and distribution agreement in the event any person becomes a 5-percent shareholder after the completion of the exchange offer. 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 NOLs, are outweighed by other considerations.

 

The Rights.  Upon adoption of the amended and restated rights plan and completion of the recapitalization, the RGA board of directors will issue one preferred share purchase right (which is referred to as a

“right”) for each outstanding share of class B common stock of RGA issued pursuant to the recapitalization. The rights associated with the common stock will be adjusted to clarify that they will have become rights to acquire, under specified circumstances, shares of class A common stock. After the current rights plan is amended and restated, with respect to holders of class A common stock, each right will entitle the registered holder to purchase from RGA one one-hundredth of a share of Series A-1 Junior Participating Preferred Stock, par value $0.01 per share (which is referred to as the “series A-1 junior participating preferred stock”), of RGA at a price of $[•] per one one-hundredth of a share of series A-1 junior participating preferred stock (which is referred to as the “series A purchase price”), subject to adjustment. With respect to holders of class B common stock, each right entitles the registered holder to purchase from RGA one one-hundredth of a share of Series B-1 Junior Participating Preferred Stock, par value $0.01 per share (which is referred to as the “series B-1 junior participating preferred stock”), of RGA at a price of $[•] per one one-hundredth of a share of series B-1 junior participating preferred stock (which is referred to as the “series B purchase price”), subject to adjustment.

 

No right is exercisable until the earlier to occur of (i) the close of business on the tenth business day following the date of public announcement that a person has become, or obtained the right to become, an acquiring person without the prior express written consent of RGA; or (ii) the close of business on the tenth business day following the commencement of a tender offer or exchange offer, without the prior written consent of RGA, by a person which, upon consummation, would result in such person becoming an acquiring person (the earlier of the dates in clause (i) or (ii) above being referred to in this document as the “distribution date”).

 

Until the distribution date, the rights will be transferred with and only with the applicable class of RGA common stock. Until the distribution date, new common stock certificates issued after the record date upon transfer or new issuances of common stock will contain a notation incorporating the rights plan by reference. As soon as practicable following the distribution date, separate certificates evidencing the rights (“right certificates”) will be mailed to holders of record of the common stock as of the close of business on the distribution date and such separate certificates alone will then evidence the rights.

 

Expiration.  The rights will expire, if not previously exercised, on the earlier to occur of (i) the final expiration date (as defined below) or (ii) the time at which the rights are redeemed or exchanged pursuant to the amended and restated rights plan. The final expiration date is the earlier of (a) the date that is 36 months and one day following the effective date of the recapitalization, or (b) such other date as the RGA board of directors may determine in good faith in accordance with the amended and restated Section 382 shareholder rights plan.

 

Junior Participating Preferred Stock.  The rights of series A-1 junior participating preferred stock and series B-1 junior participating preferred stock (which are referred to collectively as the “junior participating preferred stock”) are identical, except that holders of series A-1 junior participating preferred stock would vote with holders of class A common stock in the election or removal of RGA’s class A directors, and holders of series B-1 junior participating preferred stock would vote with holders of class B common stock in the election or removal of RGA’s class B directors. Shares of junior participating preferred stock purchasable upon exercise of the rights will not be redeemable and will be junior to any other series of junior participating preferred stock RGA may issue (unless otherwise provided in the terms of such stock). Each share of junior participating preferred stock will have a preferential dividend in an amount equal to 100 times any dividend declared on each share of common stock. In the event of liquidation, the holders of the junior participating preferred stock will receive a preferred liquidation payment per share of series junior participating preferred stock equal to the greater of $100 and 100 times the payment made per share of common stock. Each share of junior participating preferred stock will have 100 votes, voting together with the applicable class of common stock. In the event of any merger, consolidation or other transaction in which shares of common stock are converted or exchanged, each share of junior participating preferred stock will be entitled to receive 100 times the amount and type of consideration received per share of common stock. The rights of the junior participating preferred stock as to dividends, liquidation and voting, and in the event of mergers and consolidations, are protected by customary anti-dilution provisions. Because of the nature of the junior participating preferred stock’s dividend, liquidation and voting rights, the value of the one one-hundredth interest in a share of junior

participating preferred stock purchasable upon exercise of each right should approximate the value of one share of the applicable class of RGA common stock.

 

Effects of Triggering Events.  If any person or group becomes an acquiring person without the prior written consent of the RGA board of directors (and such person is not an exempt person or a grandfathered person), each right, except those held by such persons, would entitle each holder of a right to acquire such number of shares of the applicable class of RGA common stock as will equal the result obtained by multiplying the then current purchase price by the number of one one-hundredths of a share of the applicable class of junior participating preferred stock for which a right is then exercisable and dividing that product by 50% of the then current per-share market price of the applicable class of RGA common stock.

 

If any person or group becomes an acquiring person without prior written consent of the RGA board of directors, but beneficially owns less than 50% of the outstanding RGA common stock, each right, except those held by such persons, may be exchanged by the RGA board of directors for one share of the applicable class of RGA common stock.

 

Redemption.  At any time prior to the tenth business day after the time an acquiring person becomes such, the RGA board of directors may redeem the rights in whole, but not in part, at a price of $0.001 per right (which is referred to as the “redemption price”). Immediately upon any redemption of the rights, the right to exercise the rights will terminate and the only right of the holders of rights will be to receive the redemption price.

 

Adjustments.  The purchase price payable, and the number of shares of junior participating preferred stock or other securities or property issuable, upon exercise of the rights are subject to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the junior participating preferred stock, (ii) upon the grant to holders of the junior participating preferred stock of certain rights or warrants to subscribe for or purchase preferred stock at a price, or securities convertible into junior participating preferred stock with a conversion price, less than the then-current market price of the junior participating preferred stock or (iii) upon the distribution to holders of the junior participating preferred stock of evidences of indebtedness or assets (excluding regular periodic cash dividends or dividends payable in junior participating preferred stock) or of subscription rights or warrants (other than those referred to above).

 

The number of outstanding rights and the number of one one-hundredths of a share of junior participating preferred stock issuable upon exercise of each right are also subject to adjustment in the event of a stock split of the common stock or a stock dividend on the common stock payable in shares of common stock or subdivisions, consolidations or combinations of the common stock (other than the recapitalization) occurring, in any such case, prior to the distribution date.

 

The terms of the rights may be amended by the board of directors of RGA without the consent of the holders of the rights, including, without limitation, in connection with the recapitalization, except that from and after such time as any person becomes an acquiring person, no such amendment may adversely affect the interests of the holders of the rights.

 

Until a right is exercised, the holder thereof, as such, will have no rights as a shareholder of RGA, including, without limitation, the right to vote or to receive dividends.

 

The RGA special committee and the RGA board of directors recommend that RGA shareholders ratify the Section 382 shareholder rights plan for the same reasons described above with respect to the proposed acquisition restrictions described under “Proposal Three: Acquisition Restrictions — Reasons for the Acquisition Restrictions.” As such restrictions may not be enforceable in all circumstances (as described in “Proposal Three: Acquisition Restrictions — Purpose and Effects of Acquisition Restrictions”) the RGA special committee and the RGA board of directors believe it is in the best interest of RGA and its shareholders to adopt the Section 382 shareholder rights plan.

 

The RGA special committee and the RGA board of directors recommend that RGA shareholders ratify the Section 382 shareholder rights plan for the reasons set forth in this document. However, you should be aware that the amended and restated Section 382 shareholder rights plan may have an “anti-takeover” effect because it will restrict the ability of a person or entity, or group of persons or entities, from accumulating in the aggregate 5% or more (by value) of the RGA stock and the ability of persons, entities or groups now owning 5% or more (by value) of the RGA stock from acquiring additional RGA stock. Like the acquisition restrictions being proposed to be added to RGA’s articles of incorporation, both the current rights plan and the amended and restated Section 382 shareholder rights plan could discourage or prohibit a merger, tender offer, proxy contest or accumulations of substantial blocks of shares for which some shareholders might receive a premium above market value. In addition, the amended and restated Section 382 shareholder rights plan may delay the assumption of control by a holder of a large block of capital stock and the removal of incumbent directors and management, even if such removal may be beneficial to some or all or RGA’s shareholders.

 

The indirect “anti-takeover” effect of the current rights plan and the amended and restated Section 382 shareholder rights plans is not the reason the RGA board of directors implemented the current rights plan or intends to implement the amended and restated Section 382 shareholder rights plan. The RGA special committee and RGA board of directors considers the plans to be reasonable and in the best interests of RGA and its shareholders because they reduce certain of the risks that RGA and its subsidiaries will be unable to utilize the substantial tax assets described above. In the opinion of the RGA special committee and RGA board of directors, the fundamental importance to RGA shareholders of maintaining the availability of RGA’s tax benefits outweigh the indirect anti-takeover effect the amended and restated Section 382 shareholder rights plan may have. In addition, RGA does not believe that the Section 382 shareholder rights plan will adversely affect the continued listing of RGA common stock on the NYSE. In addition, the RGA board of directors does not intend to discourage offers to acquire substantial blocks of RGA common stock that would clearly improve shareholder value beyond the loss of the NOLs. In the case of any such proposed acquisition that the RGA board of directors determines to be in the best interest of RGA and its shareholders, the RGA board of directors would grant approval for such acquisition to proceed.

 

The anti-takeover effects should also be considered in light of other charter, bylaw and statutory provisions applicable to RGA, which could also have the effect of preventing a takeover, as described in “Proposal Two: RGA Class B Significant Holder Voting Limitation,” “Proposal Three: Acquisition Restrictions” and “Description of RGA Capital Stock — Anti-Takeover Provisions in the RGA Articles of Incorporation and Bylaws.”

 

The rights plan will restrict a shareholder’s ability to acquire, directly or indirectly, additional RGA stock in excess of the specified limitations. Further, a shareholder’s ownership of RGA capital stock may become subject to the effects of the rights plan upon the actions taken by related persons. A legend reflecting the existence of the current rights plan, as it may be amended (including as it may be amended and restated in connection with the recapitalization as the amended and restated Section 382 shareholder rights plan) is and will be placed on certificates representing newly issued or transferred shares of capital stock. These restrictions may also result in a decreased valuation of RGA capital stock due to the resulting restrictions on transfers to persons directly or indirectly owning or seeking to acquire a significant block of RGA capital stock.

 

The Section 382 shareholder rights plan proposal requires the affirmative vote of a majority of the outstanding shares of RGA’s common stock present in person or by proxy and entitled to vote on the proposal. Each outstanding share of existing RGA common stock is entitled to one vote on each matter which may properly come before the special meeting. MetLife, which owns approximately 52% of the outstanding shares of RGA common stock, has agreed to vote its shares of RGA common stock in favor of each of the RGA

special meeting proposals unless RGA withdraws or modifies its recommendation that RGA shareholders vote in favor of the transactions contemplated by the recapitalization and distribution agreement.

 

However, the Section 382 shareholder rights plan proposal will not be implemented if the recapitalization proposal is not approved, which requires the affirmative vote of (1) holders of a majority of the outstanding shares of RGA common stock and (2) the holders of a majority of the outstanding shares of RGA common stock (other than MetLife and its subsidiaries) present in person or by proxy and entitled to vote on the recapitalization proposal.

 

The RGA special committee, and the RGA board of directors upon the unanimous recommendation of the RGA special committee, have approved the Section 382 shareholder rights plan proposal and have determined that the Section 382 shareholder rights plan is advisable and favorable to and, therefore, fair to and in the best interests of RGA and RGA shareholders other than MetLife and its subsidiaries. The RGA special committee and the RGA board of directors recommend that RGA shareholders vote “FOR” the ratification of the Section 382 shareholder rights plan.

 

MetLife and RGA entered into a recapitalization and distribution agreement as of June 1, 2008, which provides for the transactions described in this document. The recapitalization and distribution agreement governs the rights and obligations of MetLife and RGA relating to the recapitalization and the divestiture. The following is a summary of the material terms of the recapitalization and distribution agreement, a copy of which is attached as Appendix A and incorporated herein. This summary does not contain, and is qualified by, all of the terms of the recapitalization and distribution agreement. All RGA shareholders are urged to read carefully the recapitalization and distribution agreement in its entirety.

 

Generally

 

MetLife, through its subsidiary General American, currently holds approximately 52% of the outstanding RGA common stock. In the recapitalization and distribution agreement, MetLife and RGA agreed that each outstanding share of RGA common stock will be reclassified as one share of RGA class A common stock. Immediately after such reclassification, MetLife will exchange shares representing approximately 47% of the outstanding RGA class A common stock that it holds with RGA for an equal number of shares of RGA class B common stock, which will represent all of the outstanding shares of RGA class B common stock. The remaining approximately 5% of the outstanding RGA common stock held by MetLife, along with all of the outstanding RGA class A common stock not held by MetLife, will remain outstanding as RGA class A common stock.

 

Pursuant to the recapitalization and distribution agreement, RGA will amend and restate its articles of incorporation to, among other things, effect the recapitalization. The proposed RGA amended and restated articles of incorporation are attached as Appendix B. The RGA class A common stock will be identical in all respects to RGA’s current common stock, and will be substantially identical in all respects to the RGA class B common stock (including with respect to dividends and voting on matters other than director-related matters), except that, in each case:

 

 

If, for example, the RGA board of directors were to consist of five directors, four would be designated for election by the holders of the RGA class B common stock and one would be designated for election by the holders of the RGA class A common stock.

 

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, except for certain limited matters required by Missouri law. Missouri law requires a separate class voting right if an amendment to the RGA articles of incorporation would alter the aggregate number of authorized shares or par value of either such class or alter the powers, preferences or special rights of either such class so as to affect these rights adversely. These class voting rights provide each class with an additional measure of protection in the case of a limited number of actions that could have an adverse effect on the holders of shares of such class. For example, if the RGA board of directors were to propose an amendment to the RGA articles of incorporation that would adversely affect the rights and privileges of RGA class A common stock or RGA class B common stock, the holders of the class being adversely affected 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.

In connection with the recapitalization, RGA is submitting to the RGA shareholders a set of additional amendments to the RGA articles of incorporation for approval. The amendments will be filed and become effective immediately prior to the exchange offer. The recapitalization (and therefore the exchange offer) is conditioned on receipt of RGA shareholder approval of these amendments and ratification of the Section 382 shareholder rights plan adopted by the RGA special committee. For a description of these proposals, see “Summary — The RGA Special Meeting Proposals.”

 

IRS Letter Ruling Matters

 

MetLife received a private letter ruling from the IRS regarding the divesture, which contemplates that MetLife will retain and not exchange the recently acquired stock in the divestiture. It is a condition to MetLife’s obligation to complete the exchange offer that, if the recapitalization and exchange offer will not be complete by November 11, 2008, it receive a supplemental IRS private letter ruling that it either may exchange the recently acquired stock for RGA class B common stock and distribute such shares in the divestiture or retain the recently acquired stock as RGA class A common stock. It is a condition to RGA’s obligation to complete the recapitalization that, if the recapitalization and exchange offer will not be complete by November 11, 2008, it receive a supplemental IRS private letter ruling that MetLife can continue to retain the recently acquired stock as RGA class A common stock. If MetLife receives a supplemental IRS private letter ruling that it may exchange the recently acquired stock and distribute such shares in the divestiture (but not that it may retain the recently acquired stock), RGA can decide whether or not to waive the condition set forth in the immediately preceding sentence.

 

Conditions to Completing the Recapitalization

 

The obligation of RGA and MetLife to effect the recapitalization is subject to the satisfaction or waiver of a number of conditions, including those described below. Each of the conditions are for the sole benefit of the relevant party and do not give rise to or create any duty on the part of either party to waive or not waive any such condition.

 

The recapitalization and distribution agreement provides that the obligation of RGA and MetLife to consummate the recapitalization is subject to the satisfaction or waiver by both MetLife and RGA of the following conditions at the time of completion: