Metropolitan Life Insurance Company

us-sec-no-action-letters-metropolitanlife111399-56d347f232b9Metropolitan Life Insurance CompanyGuidance

UNITED STATES /'-d'.
SECURITIES 	AND 	EXCHANGE 	COMMISSION 	(.
WASHINGTON. 	D.C. 	20549 	'.~
DIVISION OF
CORPORATION FINANCE
November 17 ,1999
James C. Scovile
Debevo.ise & Plimpton
875 Third Avenue
New York, New York 10022
Re: Metropolita Life Insurance Company
Dea Mr. Scovile:
In regard to your letter of November 16, 1999, our response thereto is attached to
the enclosed :photocopy of your correspondence. By doing this, we avoid having to
recite or summarze the facts set forth in your letter.
Sincerely,
¡Jr;/ - ~ c:~ ~
(;~ 	/g 	l3tm
Catherine T. Dixon
Chief Counsel
Complete printed PDF page 1
RESPONSE OF THE OFFICES OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE
DIVISION OF MART REGULATION
DIVISION OF INVESTMENT MANAGEMENT
November 17, 1999
RESPONSE OF THE OFFICE OF RISK MANAGEMENT AND CONTROL
DIVISION OF MARKET REGULATION
Re: Metropolitan Life Insurance Company
Incoming Letter dated November 16, 1999
Based on the facts presented and the representations made in your letter, the positions
of the Divisions of Corporation Finance, Market Regulation and Investment Management are
as follows. Except as otherwise noted, capitalized terms have the same meanings as in your
letter.
Division of Corporation Finance
The Division of Corporation Finance wil not recommend enforcement action to the
Commission if, in reliance on your opinion of counsel that an exemption from registration
under Section 3(a)(lO)of the Securities Act of 1933 (the "Securities Act") is available,
MetLife issues MetLife Common Stock to the Trust, the Trust exchanges such shares for
shares of Common Stock, and the Trust allocates Interests to Trust Eligible Policyholders
withQ.ut registration under the Securities Act.
While disagreeing with your analysis, the Divisiòn concurs in your view that the
issuances of MetLife Common Stock and Common Stock, and the allocation of Interests,
should not be integrated with the Initial Public Offering.
The Division wil not object if the Trust registers the Interests after the Initial Public
Offering under Section 12(g) of the Securities Exchange Act of 1934 (the "Exchange Act") on
Form 8-A and includes in the Form 8-A the disclosures described in your letter.
The Division will not object if the Trust files reports in the manner described in your
letter to comply with Section 13(a) of the Exchange Act.
The Division wil not object if, only with respect to Tiust Shares (common stock of the
Holding Company held through the Trust), and not with respect to any Common Stock
acquired by a Beneficiary in open market purchases,
[Pub. Avail.: Nov. 23, 1999]
Complete printed PDF page 2
Metropolitan Life Insurance Company
Page 2
. neither the Trust, the Trustee, the Custodian of the Trust nor the Holding Company
disseminates any proxy soliciting materials, annual and quarterly reports. or
information statements of the Holding Company to Beneficiariesin connection with
a vote or consent of stockholders of the Holding Company, except in connection
with a Beneficiary Consent M.atter or upon request of any Beneficiary;
. the Trust, the Trustee, the Custodian of the Trust and the Holding Company follow
the procedures described in your letter for the distribution of proxy soliciting
materials, annual reports or information statements in connection with a Beneficiary
Consent Matter (including the procedures that require mailng and qtler e.xpenses to
be reimbursed by a stockholder in certain circumstances, instead of following the
reimbursement procedures outlined. in Rule 14a-7 under the Exchange Act); .aiid
e if none of the Holding Company, the Trust, the Trustee or Custodian of the Trust,
inquires as to the beneficial ownership of the Trust Shares, pursuant to Rules 14a-
13, 14b-2 and 14b-1under the Exchange Act, respectively, in connection with such
votes or consents of stockholders of the Holding Company, or provides information
in connection with those inquiries, except in connection with a Beneficiary Consent
Matter.
The Division, in reaching its position regarding compliance with Rule 14a-7 of the
Exchange Act witl respect to any stockholder solicitation of Trust Shares, particularly notes
the Holding Company's representation thatit wil always elect to mail, rather than provide a
shareholder list, with respect to a Beneficiary Consent Matter.
The Divisiòn wil not object if the members of the Board of Directors of the Holding
Company provide the infonnation required by Schedule 13D pursuant to Section 13(d) of the
Exchange Act, and by Section 16(a) of the Exchange Act as described in your letter.
The Division wil not recommend enforcement action to the Commission if, in reliance
on your opinion of counsel that. 	an exemption from registration of the 	Securities Act is
available, the Purchase and Sale Program is implemented without registration under the
Securities Act.
The Division agrees that a Beneficiary's withdrawal of Trust Shares from the Trust is
not an event requiring registration under the Securities Act.
Common Stock to be issued in the Reorganization wil not be considered "restricted
securities" within the meaning 	of 	Rule 144(a)(3). The Division's view is that the Common
Stock may be resold through the Purchase and Sale Program, or otherwise, as followr
t) Persons who arc unaffiiated with MetLife at the time the Plan is submitted for
approval and unaffiliated with the Holding Company after the Reorganization may
resell without regard to Rules 144 and 145(d);
Complete printed PDF page 3
MetropolitanLife Insurance Company
Page 3
. Persons affiiated with MetLife who become..affiiates .of the Holding Company
. after the Reorganization may resell under 	Rule t45(d) (1); and
. 	Persons affiiated with MetLife who do not become affilates of the Holding
Company.after the Reorganization may resell under Rule 145(d). In computing
periods for purposes of Rules 1 45( d) 	(2) and (3), such p.ersons m"y not take into
account the holding period for their Policyholders' Membership
Interests.
Division of 	Markèt Regulation
On the. båsis ;of your 	representations and the 	facts 	and circumstanc~s. presented in your
letter, in particular the following:
The Purchase and Sale Program, as a component of the Plan, must be
approved by the Office of the Superintendent (" Superintendent") of the New
York Insurance Departent after finding, among other things, that the Plan
is fair and equitable to policyholders;
The Superintendent must hold a public hearing to consider, among other
things, the fairness of the terms and conditions of the Plan, the reasons and
purposes for MetLife to demutualize, and whether the Reorganization is in
the.interest of MetLife and its policyholders 	and notdetrimental to the
public;
Adoption of the Plan requires the affrmative vote of at least two-thirds of
the votes cast in person or 	by proxy by Eligible Policyholders;
Eligible Policyholders wil receive a Policyholder Information Booklet and
other 	documents that contain comprehensive disclosures that
are comparable
to those in a registration statement, providing all of the information required
by Schedule 13E-4 under the Exchange Act that is relevant in the context of
the Purchase and Sale Program;
The consideration to be paid to Beneficiaries on whose behalf Common
Stock is sold in any given day through the Purchase and Sale
Program wil
generally be determined by a uniformly applied formula based on the market
price of the subject security;
Beneficiaries who sell Common Stock through the Purchase and Sale
Program wil receive the proceeds of the sales within four trading days;
The Purchase and Sale Program wil not remain open for a fixed period of (
time, but rather throughout the term of the Trust; and i.
Complete printed PDF page 4
Metropolitan Life Insurance Company
Page 4
Any purchases of Common Stock made by the Holding Company, or the
Program Agent while the Purchase and Sale Program is 	in effe~t wil be
. made for purposes independent of the Purchase and Sale Program and no
purchases wil knowingly be made directly from a Beneficiary;
but without necessarily concurring in 	your analysis thatthe Purchase and Sale Program does
not cónstitute a tender offer, the Division of Market Regulation wil not recommend that the
Commission take enforcement actÍon pursuant to Rule 13e-4under the Exchange Act if.the
Purchase and Sale Progrm is conducted in the manner described in your letter.
In addition, the Division wil not recommend that the Commission take enforcement
action pursuant to Rule lOb-13 under the Exchange Act intheeventthättheBoldingCompany
or the Program Agent purchases Common Stock while the Purchase and Sale Program is in
effect.
Furtermore, you have not asked for relief from, and we do not address, Regulation M
with respectto purchases of Common Stock by the Holding Company or any other party while
the Purchase and Sale Program is in effect.
The foregoifg no-action positions taken under Sections 13(e) of the Exchange Act and
Rules 13e-4 and 10b-13:.thereunder are based solely on your representations and the facts
presented 	to the-statf,and are strictly limited to the application of those provisions
to the
transactions described in your correspondence. . Such transactions should be discontinued,
pending presentation of the facts for our consideration, in the event that any material change
occurs with respect to any of those facts or representations.
In addition, your attention is directed to the anti-fraud and anti-manipulation provisions
of the Exchange Act, particularly Sections 9(a), lO(b), and 14(e), and Rule lOb-5 thereunder.
Responsibility for compliance with these and 	any other applicable provisions of the federal
securities laws must rest with MetLife, the Holding Company, the Program Agents, CMSS,
CMFS, and their affliated purchasers. The Division expresses no view with respect to any
other questions that the proposed transactions may raise, including, but not limited to, the
adequacy of disclosure concernng, and the applicability of any other federal or state laws to,
the pïoposed transactions.
The Office of the Chief Counsel for the Division of Market Regulation, without
necessarily agreeing with your analysis, wil 	not recommend enforcement action to the
Commission under Section 15(a) of the Exchange Act if the Associates recommend approval of
the Plan in discussions with Eligible Policyholders without the Associates, MetLife or the
Holding Company registertng as broker-dealers in accordance with Section 15(b) of tle
Exchange Act. In reaching this position, the staff particularly notes that (1) the
demutualization and the related Associates' activities are one-time extraordinary events; (2) no
Associate, with the exception of call center personnel, wil be compensated, directly or
indirectly, for his or her efforts in connection with the activities described in the letter; (3)
call
Complete printed PDF page 5
".
,
Metropolitan Life Insurance Company
Page 5
center personnel will be 	compensated on an hourly or salaried 	basis; (4) theAssociates'
activities wil.be strictiy limited and supervised in accordance with 	the provisions set fort in
the letter; (5) the Associates wil not handle customer. 	funds andsecurities inconnection with
the activities discussed; (6) excepting the call center personnel, no Associate wil be hired
solely for purposes of effecting the demutualization; (7) the Associates (except the call center
personnel) wil have substantial, full-time duties unrelated to the activities discus,sed in the
letter, and (8) 	employees 	of the demutualization call center wil not discuss the Purchase .and
Sale Program with Eligible PolicYliolders except to the extent that the questions relate to the
nature of the Purchase and Sale Program and are relevant to the decision o.n whether or~ot to
vote for the Plan.
Division òf Investment 	Management
The Facts
You state that 	MetLife proposes to convert from a mutual life insurance company to a
stock life insurance company that wil be a subsidiary. of the Holding Company. The
Reorganization. wil occur through a transaction in which certain policyholder~ of insurance
policies and contracts issued by MetLife wil receive, in exchange for their membership
interests in MetLife, consideration in the form of MetLife Common Stock, cash or an
adjustment to their policy values, known as policy credits. MetLife's Pian~ must be approved
by, among others, ,the Eligible Policyholders. You state that on the Effective Date of 	the Plan:
(1) the shares 	of MetLife Common Stock that wil be allocated to Trust Eligible Policyholdets
wil be issued to the Trust established for the exclusive benefit of the policyholders2; (2) Trust
Eligible Policyholders wil be allocated Interests 	in the Trust equal to the numbtr of shares of
stock allocated to them; and (3) by operation of the Plan, the shares of MetLife Common
Stock wil be imediately exchanged for an equal 	number of shares of Common Stock.
The Trust wil be established in accordance with the terms and conditions of the Trust
Agreement to hold shares of Common Stock allocated to the Trust Eligible Policyholders, 	each
of which wil be a Beneficiary of the Trust. Although the Trust Agreement providès that thè'
Trustee wil have the right to vote, assent, or consenUhe Trust Shares, the Tflstee wíii have
no discretion in doing so. An0ng other things, the Trut Agreement provides that the rightto
. vote the shares of Common Stock held by the Trust wil be exercised by the Trustee, generally
You state that, under the Plan, the Holding Company must complete an Initial Public
Offering, and may also conduct one or more Other Capital Raising Transactions. You state that
the Initial Public Offering is expected to occur in the first quarter of 2000, depending on market
conditions and other relevant factors. '
2 You state that the Trust is a single-purpose trust and will not engage in any othèr business
or activity other than voting and holding the Common Stock of the Holding Company and 	certain
closely related activities, such as receiving and distributing cash dividends and registering the.
Trust Shares under the Securities Act.
Complete printed PDF page 6
Metropolitan Life Insurance Company
Page 6
acting upon the directions or instructions of the board of directors of the Holding Company.
The Beneficiaries, however, wil have the rightto instruct the Trustee how to vote the Trust
to give the Trust	Shares for Beneficiary Consent Matters. You.state that the Trust is designed
Eligible Policyholders the benefits of stock ownership -- namely, theabiltycto participate in
any appreciation of 	their allocated shares of Common Stock and to 	shares or to	sell 	those.
purchase additional shares though the Purchase and Sale Program -- while. helping the
Holding Company efficiently manage the administration of the Beneficiaries i accounts and the
3
costs associated with a large number of stockholders.
investment adviser	with the 	Commission 	as an	You state also that MetLife is registered
MetLife directly 	or	under the Investment Advisers Act of 1940 (the "Advisers Act"), and that
indirectly owns controllng interests in 29 other investment advisers that are registered with the
Commission. Furthermore, you state that N.etLife and these firms (collectively, the "MetLife
advisers") serve as investment advisers to registered investment companies.
Investment Company Act Status of the Trust
Section 3(a)(1) of the Investment Company Act of 1940 (the" 1940 Act") provides, in
relevant part, that:
"investment company" means any issuer which -: (A) is or holds itself out as being
primarily , or proposes to engage primarily, in the business of investing,
reinvesting, or trading in securities; . . . or (C) is engaged or proposes to engage in the
business of investing, reinvesting, owning, holding, or trading in securities, and owns
or proposes to acquire investment securities having a value exceeding 40 per centum of
engaged
the value of such issuer's total assets (exclusive of Governent securities and cash
items) on an unconsolidated basis.
Section 2(a)(22) of the 1940 Act defines "issuer" as any "personwho issues or proposes to
any security which it has issued." You state that the
Interests issued by the Trust may be securities and, because the Trust primariIy holds Trust
Shares, it is possible that the Trust comes within the definition of "investment company. "
issue any security, or has outstanding
You believe, however, that the Tmst is excluded from regulation as an investment.
company by Section 3(c)(12) of the 1940 Act, which excepts from the definition of an
investment company "any voting trust the assets of which consist exclusively of securities of a
You state that MetLife estimates that it has over 1 1 million policyholders, many of which
wil be allocated only a small number of shares of Common Stock under the Plan. If aifof them
were individually to hold shares pf stock in the Holding Company, you assert that the Holding
Company would have several times the number of stockholders as that of the largest publicly held
corporation.
Complete printed PDF page 7
Metropolitan Life Insurance Company
Page 7
single issuer which is not an investment company. ,,4 Neither the 1940 Act nor the legislative
history defines the term "voting trust" or provides any guidance regarding a definition of the
term. You assert, however, that one accepted definition of the term is: a "device whereby two
or more persons owning stock with voting powers divorce voting rights from ownership,
retaining to all intents and purposes the latter in themselves and transferring the former to
that this	pooled. ,,5 You believe
trustees in whom 	depositors in the trust are	voting rights of all
definition describes the essence of the Trust,.in which Beneficiaries retain theirecbnomic
ownership interest in the Trust Shares, but transfer voting rights to the Trustee. We agree that
a voting trust for purposes of Section 3(c)(12) may include a single-purpose trust that is
of a company to retain all oLthe economic benefits of stock	stockholders	formed to allow the
ownership, while transferring their voting rights hi tlecompany to the trustee ofthe trust. 6
. 	.Section 3(c)(12)mus(.The assets of a voting trust relying on the exception provided by
the securities of a single issuer. Youstate that, in addition to the Trust	consist exclusively of
Shares, the Trust wil temporarily have cash to the extent that there are cash dividends paid on
the Trust Shares, but that these cash dividends wil be distributed promptly to the
Beneficiaries. You also state that the cash dividends wil not be invested pending their
that the. Trust is not precluded from relying on	distribution to the. Beneficiaries . We believe
Section 3(c)(12) even though the Trust temporarily wil hold cash in addition to the Trust
Shares because any cash held by the Trust wil relate solely to any dividends paid on the Trust .
Shares, wil be distributed promptly and wil not be invested pending its distribution to the
Beneficiaries. -"
the 1940 Act from the	
We agree that the Trust is excepted by Section 3(c)(12) of
company, and is not required to register with the Commission as an
investment company: Because our position is based on the facts and representations in your
definition of investment
4._. You state that Delaware law does not specifically define the term voting trust. You state
that the Trust is valid underfurther that MetLife's special Delaware counsel has advised you
Delaware law, even though the Trust does not meet all of the requirements of Section 218 of
of voting' 	trusts.
Delawåre General Corporation Law, which validates the use of certain forms
You state that Section 218 expressly provides that it does not invalidate a voting or other
arrangement which is not otherwise ilegal, and that, before the enactment of Section 218,
voting trusts.	Delaware case law generally recognized the validity of
Black's Law Dictionary 1577 (6th ed. 1990).
6 You believe that the status of the Trust as a voting trust is not affected by the fact that the
Trustee has the right to vote the Trust Shares, but has no discretion over how it will vote the
the Trust is to serve as a voting trust; and (2) the	shares. We agree because: (I) the purpose of
Trust Agreement grants the Holding Company's board of directors and the Beneficiaries the
power to direct the Trustee how to vote the Trust Shares, and the Eligible Policyholders will
the Plan.	
approve the Trust Agreement in connection with their approval of
5
Complete printed PDF page 8
Metropolitan Life Insurance Company
Page 8
letter, you should note that any different facts or representations may require a different
conclusion.
. Whether the Trust's Ownership of 	Trust Shares wil Result in a Change in Control of MetLife
Section 15(a)(4) of the 1940 Act makes it unlawful for any person to serve or act as
investment adviser of a registered investment company, except pursuant to ,a written contract
that has been approved by a majority of the outstanding voting securities of the investment
company and that provides, in substance, for its automatic termination in the event of its
assignmeni. If th Reorganization results in an assignment of the investment advisory .
contracts between the MetLife advisers and the registered invespnent companies for which 	the
MetLife,advisersserve as;investment advisers (the "Advisory Contractstlfth~. contracts would
terminate and'the MetLife advisers could not lawfully serve as investment.advisers to the
investment companies, unless and until a majority of the outstanding voting securities of those
companies approve new advisory contracts with the MetLife advisers.
Section 2(a)(4) of the 1940 Act defines "assignment" to include any direct or indirect
transfer of a contollng block of the assignor's outstanding voting securities by a security
holder of the assignor. Although the 1940 Act does not define "controllng block," Section
2(a)(9)of the 1940 Act defines "control" as the power to exercise a controllng influence over
the management or policies of a company. Section 2(a)(9) also provides a rebuttable
presumption of control when any person owns beneficially, either directly or through one or
more controlled companies, more than 25 % of the voting securities of a company. You state
that as a result of the Reorganization, the Trust may initially own, on behalf of the
Beneficiaries, more than 25% of the outstanding shares of the Common Stock. Due to the
unique nature and purpose of the Trust and the provisions of the Trust Agreement concerning
the voting o.f the Trust Shares, you request our concunence that no assignment wil occur by
virtt. of the Trust owning more than 25 % of the outstanding shares of the Common Stock.
We previously stated that we wil no longer respond to letters relating to the effect of
proposed corporate transactions on existing investment advisory contracts of investment
. companies registered under the 1940 Act Unless they present novel or unusual issues.? vVe
believe that your letter presents a novel or unusual issue. We 	have not previously addressed
whether the establishment of a voting trust that owns, but does not have voting discrétion with
respect to, more than 25% of the voting securities of a registered investment adviser would
See American Century Companies, Inc./lP. Morgan & Co. Incorporated (pub. avaiL. Dec.
23, 1997). Accordingly, we take no position regarding whether other aspects of 	the
Reorganization, including the proposed Initial Public Offering and the Other Capital Raising
Transactions, may result in an assignment of the Advisory Contracts. In addition, you have not
asked, and we take no position regarding, whether the eventual dissolution of 	the Trust would
result in an assignment of the Advisory Contracts.
l
Complete printed PDF page 9
Metropolitan Life Insurance Company
Page 9
between the adviser and a registered investment	contract	result in an assignment of an advisory
company.8
You argue that the Trust's ownership of the Common Stock wil not result in an
assignment of the Advisory Contracts. You argue that the Trust wil have no power to
exercise a controlling infuence over the management or policies of the Holding Company or
the MetLife advisers within the meaning öfthe term "control" under Section 2(a)(9) ofthe
1940 Act. Although the Trusteewil have the right to vote, assent or consent the Common
Stock, you assert that the Trustee wil have no discretion in doing so. You state that the the	board of direc#)rs of	the recommendation given by the	Trustee wil vote' inac,cordance with
such recommendation i~given,as ~irecte:d by	Holding Company 	to itsstockhölders, or, if no
Beneficiary Consent Matter, the Trustee willsolicit
all of the Trust
the board. . You state that, for 	a
instructions from all of the Beneficiaries and wil vote, assent, o.r consent
Shares in favor of or in opposition to such matter or abstain from voting on su~h matter in
proportion to the instructions received from the Beneficiaries that give instructions..
You argue that the presumption of control in Section 2(a)(9) is not triggered by the
the Holding Company, because	the voting 	securities of	Trust's ownership of 	more than 25% of
note in this regard that	you believe that the Trust does not beneficially own the shares. You
Rule 13d-3 under the Exchange Act provides that beneficial ownership is determined by
reference to investment power and voting power.9 You represent.that the Trustee, on behalf of
the Trust, has neither investment power nor discretionary voting power with respect to the
Trust Shares.
8 . You note that in Babson Organization, Inc. (pub. avaiL. Apr. 26, 1973) ("Babson"), the .
staff disagreed with counsel's legal opinion that an assignment would not occur upon the
dissolution of a voting trust that held securities of a registered investment adviser. The staff
issued Babson prior to the Commission's adoption, in 1980, ofRule.2a-6 under the 1940 Act (and
the corresponding provision under the Advisers Act, Rule 202(a)(I)-1). Rule 2a-6 provides that a
an investment	transaction which does not result in a change of actual control or management of
Section 15(a)(4) of 	the 1940 Act. We believe that an	adviser is not an assignment for purposes of
whether an assignment wil occur as a	adviser may rely on Rule 2a-6 to make a determination of
result of any transaction, including a transaction involving a voting trust. See Zurich lnsurance
Company (pub. avaiL. Aug. 31, 1998) ("Zurich").
Rule 13d-3 under the Exchange Act provides generally that, for purposes of Section B(d)
and 13 (g) of the Exchange Act, the beneficial owner of a security includes any person who,
directly or indirectly, through any contract, arrangement, understanding, relationship, o'r otherwise
has or shares: (I) voting power, which includes the power to vote or direct the voting of, such
security; and/or (2) investment power, which includes the power to dispose, or direct the
disposition of, such security.
9
Complete printed PDF page 10
Metropolitan Life Insurance Company
Page 10
We agree that the Trust's ownership of more than 25% of the Common Stock wil not
our position is based on the facts	of the 	Advisory Contacts,10 Because	result in an assignment
and representaons in your letter, you should note that any different facts or representations
may require a different conclusion.
General
The request for confidential treatment pursuant to Rule 81(b) of the Commission's
Regulation Concernng Information and Requests (17 C.F.R. §200.81(b)), submitted by
dated November 16, 1999, has been granted until the earlier of (a) the date	separate lettr
Statement on Form S-l for the initial public offering in connection with
the demutualization is fied publicly; (b) 45 days from the date of this response; or (c) the date
that any information contained in your letter or this response is made publicly available by
MetLife.
MetLife's Registration
The above positions are based on representations made to the. Divisions in your letter
and your opinions of c?unsel, and any different facts or conditions might require the Divisions
You state that youbelieve that, in connection with the Trust's ownership of the Trust
Shares, the ability of 	the board of directors of 	the Holding Company to instruct the Trustee how
to vote the Trust Shares as to matters other than Beneficiary Consent Matters, also wil not result
in a change of control of the MetLife advisers or an assignment of the Advisory Contracts. You
state that it is your opinion that the MetLife advisers may rely on Rule 2a-6 under the 1940 Act in
will not respond	connection with the Reorganization. As we stated in Zurich, however, the staff
to inquiries as to whether a particular transaction falls within Rule 2a-6 under the 1940 Act
this inquiry.	because of 	the primarily factual nature of
10
Complete printed PDF page 11
Metropolitan Life Insurance Company
Page 1 1
to reach different 	conclusions. Furter, this response expresses the positions of the Divisions
of Corporation Finance and Market Regulation on enforcement action only and do.es no.t
the questions presented.	express any legal conclusions oIl
Sincerely,
For the Division of Corporation Finance
~k~l
SpecIål. Counsel .
For the Division of Market Regulation
Office of Risk Management and Control
\\~ (¿ d j) ,¿¡v~.J d io///GR~
James A. Brigagliano
Assistant Director
Office of the 'Chief Counsel
L... .,!')¡).1 i j l::~- /.;1. I ' a
-l'i,t¿.Lf(( c~) 71 GZitr
i ¡Laúra Pruitt
'"./ SpecIal Counsel
For the Division of Investment Management
./ 	.'r ,/ /;::"'1 ; j "..,,/	LA /,r.~ '1 '-"7 -,.//	/ -. ,. I If n ..i-- . .: . -7 ..	1.\ F J \_\:::~.i ~.("':-d'Y
1 \. l'-i k/ ,i. - \../ 	. ,l ""2-.1Kathleen Knisely
Senior Counsel
Complete printed PDF page 12
.¡
)EBEVOISE & 	PLIMPTON
INTERNA TlONAL ANANCIAL CENTRE	21 AVENUE GEORGE V	555 13TH STREET. N.W.	
875 THIRD AVENUE 	75008 PARIS 	. OLD BROAD STREET	WASHINGTON. DC 2004
NEW YORK, NY 10022 	TELEPHONE (202) 383.80 	TELEPHONE (33 1) 40 73 12 12 	LONDON EC2N IHQ
TELEPHONE (44 171) 786 90	TELECOPIER (33 1) 47 20 50 82	TELECOPIER (202) 383.8118 	TELECOPIER (44 171) 58 4180	(212) 909-00
13/F ENTERTAINMENT BUILDING
30 QUEEN'S ROAD CENTRAL 	BOLSHOI PALASHEVKY PER. 13/2
MOSCOW 103104	HONG KONG
TELEPHONE (852) 2160 980 	TEL.EPHONE (7.503) 956.3858
TELECOPIER (852) 28109828 	TELECOPIER (7.503) 956.3868
TELECOPIER: (212) 909-6836
Securities Act of 1933
5	Sections 3(a)(10) and
Rules 144 and 145
Securities Exchange Act.. of 1934
Sections3( a) 	(1 0), W(b), 12(g),
12(h), 13(d), 13(e), 14, 15(a) and
16; Regulations" 	14A-E, Rules 10b~
13, 13e-4, 14a-7, l4a.;13, 14b-l,
14b-2 and 14c-3
Investment Company Act of 1940
Sections 2(a)(9),2(a)(36), 2(a)( 41),
3(a), 3(c)(12) and l5(a)(4)
Rule 2a-6
November 16, 1999
Confidential Treatment Requested
Catherine T. Dixon, Esq.
Division of Corporation Finance
Catherine McGuire, Esq.
Division of Market Regulation
Larr Bergmann, Esq.
Division. of Market Regulation
Douglas Scheidt, Esq.
Division of Investment Management
Securities and Exchange Commssion
450 Fifth Street, N.W.
Washington, D.C. 20549
Metropolitan Life Insurance Company
Dear Ms. Dixon, Ms. McGuire, Mr. Bergmann and Mr. Scheidt:
We are specialcounsel to Metropolitan Life Insurance Company, a New York-
domiciled mutual life insurance company ("MetLife"), in connection with MetLife's
life insurance company to a stock life insurance	proposed conversion from a mutual
20665944.56
Complete printed PDF page 13
Lar Bergman Esq.
C.atherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas 	Scheidt, Esq.
-2- 	November 16, 1999
company. This process, described in detail below, is referred to herein as the "Reorganzation."
As a result of the Reorganzation, MetLife will become a stock life insurance
company that is a subsidiar of a newly-formed holding company (the "Holding
Company"). The Reorganzation will occur through a transaction in which certain holders
of insurance policies and contracts issued by MetLife will receive consideration in the form
of share~ of common stock of 	Met 	Life (which will then be exchanged for an equal number
of shares of common stock of the Holding Company to be held through the trust described
below), cash or 	an 	adjustment to their policy values, known as policy credits. Under New
York Insurance Law Section 7312 (the "New York Statute"), MetLife's Plan of
Reorganation, dated September 28, 1999 (as such may be amended from time to time,
the "Plan"), must.be approved in advance ofthe effective date ofthe Plan (the "Effective
Date") by the Superintendent (the "Superintendent") ofthe New York Insurance
Deparment (the "Deparment") afer finding, among other things, that the Plan is fair and
equitable to policyholders. Under the New York Statute, the Superintendent must hold a
public hearng to consider, among other things, the fairness of the terms and conditions of
the Plan, the reasons and purposes for MetLife to demutualize and whether the
Reorganzation is inthe interest of 	Met 	Life and its policyholders and not detrimental to
the public. The Plan must also be approved by a vote of 	Met 	Life's policyholders whose
policies were in force on September 28, 1999, the date MetLife's Board of 	Directors
adopted the Plan ("Eligible Policyholders").
On the Effective Date MetLife, by operation ofthe New York Statute, wil
become a stock life insurance company. The membership interests of 	Met 	Life's
policyholders (collectively, the "Policyholders' Membership Interests") will 	be extinguished
and in exchange therefor Eligible Policyholders will be entitled to receive consideration in
the form of shares of common stock of 	Met 	Life ("MetLife Common Stock"), which will
then be exchanged for an equal number of shares of common stock of the Holding
Company ("Common Stock") to be held in the trust described below, cash or policy
credits. The Plan provides that on the Effective Date,
(i) the shares of 	Met 	Life Common Stock allocated to Eligible Policyholders wil
be issued to the MetLife Policyholder Trust (the "Trust") established for the exclusive
benefit of the policyholders;
(ii) policyholders allocated stock undtr the Plan ("Trust Eligible Policyholders")
will be allocated beneficial interests in the Trust ("Interests") equal to the number of
shares of stock allocated to them; and
20665944.56
Complete printed PDF page 14
.
Lar Bergman, Esq.
Catherine T. Dixon, Esq. "
Catherine McGuire, Esq. 	-~- 	November 16,1999
Douglas Scheidt, Esq.
(iii).by-operation of 	the Plan, the shares of 	Met 	Life Common Stock willbe
immediately.exchaiged for an 	equal number of shares of Common Stock to be.held
through 	the Trust.
Plan the Holding Company must complete a registered~underWtten	Under 	the
publicoffering.ofthe Common Stock on the Effective Date 	(the '.'InitialPublIC Offering"),:
and may also conduc one.or more other capital raising transactions ("Other Capital
Raising Transactions"). These may include one or more ora publìc offèring of
convertible preferred securities, a public offering of convertible preferred
securities and up to $500 million aggregate principal amount of publicly-issued debt
securities, .commercial paper issuances or ban borrowings (or a combination of such
mandatorily
offerings, issuanes and ban borrowings). The Effective Date is currently expected to
quarer of2000, depending on market conditions and other relevant
factors. In connection with the Initial Public Offerig, (the Holding Company intends to
occur inthe first
on the New York Stock Exchange (the "NYSE"),	apply for a listing of 	the Common Stock
and 	in connection therewIcwll register the Common Stock under Section 12 of 	the
Act -of1934,asàmended (the "Exchange Act").	Securities Exchange
the
Policyholder Trust Agreement (the "Trust Agreement") to hold the shares of Common
The Trust will be established in accordance with the terms and conditions of
Eligible Policyholders, each of 	which will become a	Stock allocated to the Trut
the Trust (collectively, the "Beneficiares"). The consideration payable to	beneficiar of
as
reasonably.practicable afer the Effective Date, but in any event not later than 60 days
after that date.
Eligible Policyholders in the form of cash and policy credits will be distributed as soon
MetLife adopted the trust structure to address certain unique challenges arsing
out of its Reorganzation while providing policyholders receiving stock consideration witn.
Met 	Life's Reorganzation is unprecedented in the	benefits of stock ownership. The size of
United States. MetLife estmates that it has over 11 million policyholders, many 9fwhich
Will be allocated only a small number of shares of Common Stock under the Plan. If all of
them were individually to hold shares of stock in the new Holding Company, the Holding
Company would ~ave several times the number of stockholders as that of the largest
publicly held U.S. corporation. Many of 	these policyholders would receive only 	a small
amount of stock and many hold policies that, while techncally in force and eligible tQ
receive consideration under the Plan, have been issued decades earlier. MetLife expects
that many of these policyholders would be inactive stockholders, makng it diffcult, if not
impossible, to achieve a quorum for stockholder votes after the Reorganation. Such a
large number of stockholders would also result in significant costs for the Holding
20665944.56
Complete printed PDF page 15
., '. -..
Lar Bergmann, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-4- 	November 16, 1999
Douglas Scheidt, Esq.
Company (which would be borne, indirectly, 	by the Holding Company's stOCkholders,
including policyholders), including the costs of mailing proxy materials and anual reports.
In addition, since many of these policyholders would be receiving small amounts of stock,
it would be inconvenient for them to establish brokerage accounts in order to sell their
shares would be relatively .mol"e
burdensome on these policyholders.
stock, and the commissions 	charged to sell 	their
The Trust is designed to give Trust Eligible Policyholders benefits of 	stock
ownership -- namely, the ability to paricipate in any appreciation of their allocated shares
of Common Stock and to sell those shares or purchase additional shares through the
purchase 	and sale program described below -'- while helping the Holding Company
effciently manage the administration of 	Beneficiar accounts and the costs associated with
such a large number of stockholders. Among other thngs, the Trust Agreement provides
that the right to vote the shares of 	Common Stock held by the Trust (the "Trui.t Shares")
the Trust (the "Trustee"), generally acting upop.the
. . recommendation or direction of the Holding Company's board of directors. The
will be exercised by the trustee of
.. B.eneficiares, however, will have the right to instruct the Trustee on how to vote the Trust
Shares on matters involving certain specified actions fundamental to the interests of
stockholders. These matters are (each, a "Beneficiar Consent Matter"):
(i) a contested election of directors or, subject to certain conditions, the
removal of a director,
(ii) a merger or consolidation, a sale, lease or exchange of all or
substantially all of the assets or a recapitalization or dissolution of the Holding
Company, if it requires a vote of stockholders under applicable Delaware law,
(iii) any transaction that would result in an exchange or conversion of the
Trust Shares for cash, securities or other property,
Common Stock prior to the first aniversar of	(iv) issuances of 	the'
Effective Date at a price matenally below the prevailing market price, if a vote is
required to approve the issuance under Delaware law, other than issuances in an
underwtten public offering or pursuant to an employee benefit plan,
the Effective Date, any matter that	(v) before the first anversar of
requires approval by a vote of more than a majority of the outstanding stock of 	the
Holding Company entitled to vote thereon under Delaware law or the certificate of
,20665944.56
Complete printed PDF page 16
,
Lar Bergmann, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-5- 	November 16, 1999
incorporationur the.by-lawsofthe Holding Companyl, and any amendment to the
certificate of 	incorporation or 	by-laws of 	the Holding Company 	that is submitted to a
vote ofstodcholders for approval and '
.'~("~)'-pfOpOSalS submitted to sto.ckho1dersrequiring the Board Ç)fDirectors t9-
amend the HoldingC.o.nipany's Stockholder RightspJan, o.r redeem rights under tiiat.
plan other than a proposal with respect to which the Holding Company has received,
adviceofnationally."recognized legal counsel to the effect that the proposal is not a:.
_ propeLsubject for stockholder action under Delaware law.
_ .£roxy s.olicitation materials, anual reports and information statements received
by the Trutee in connection with any matter not involving a Beneficiar Consent Matter
will 	be made available1:O Beneficiares for their information on a website maintained by the
Holdig Company or by mail upon request (requested either by mail or through a toll-free
number maintained by the Holding Company) and at the Holding Company's expense, but
votingintrctions totli Trutee will not be solicited 	and, if 	instructions are 	received,
they willnGt be binding on thed'frustee. Beneficiares will also be informed anually
(which is expected to be in connection with the anual dividend check 	mailings to
Beneficiares) of 	the avaiability of 	the Holding Company's anual report, proxy statement
and any inormation statement (collectively, "Anual Stockholder Reports") on the
Holding Company's website or by mail 	upon request at the Holding Company's expense;
of the availability of 	the Holding Company's and the Trust's filings under the Exchange 	Act
on the Holding Company's and the SEC's websites or by mail upon request atthe Holding
Company's expense; of their rights to paricipate in the purchase and sale program ._
described below (the "Purchase and Sale Program") and where to obtain information
about the Program; of 	the expected date of 	the Holding Company's anual meeting and the
deadline for submission of 	stockholder proposals, and when 	the Anual Stockholder
Reports are expected to become available; and 	of the aggregate amount of dividends and.
interest paid to all Beneficiares in that dividend distribution. Beneficiares that telephone
the toll-free number in order to parcipate in the Purchase and Sale Program or t9 obtain
further information will be informed that the Anual Stockholder Reports are available on
1. Under the Holding Company's certificate of incorporation and by-laws, the only
matters requiring super-majority approval of stockholders is the amendment of certain
specified sections of 	the certificate of 	incorporation and amendment of 	the by-laws,
which each require approval of holders of at least three-quarers of the outstanding
stock of the Holding Company entitled to vote generally in the election of directors.
There are no provisions in Delaware law requiring a super-majority vote.
20665944.56
Complete printed PDF page 17
-
LarryBergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-6- 	November 16, i 999
Douglas Scheidt, Esq.
the website or by mail upon request. Anual Stockholder Reports will generally not
otherwse be disseminated to the Beneficiares. As a consequence, the Holding Company
will avoid the costs of mailing Anual Stockholder Reports to the Beneficiares except in
connection with a solicitation on a Beneficiar Consent Matter. In addition to the
realize, these voting	administrative'costsavings that the Holding Company expects to
is obtairiedon máttèrs putto astockholder	provisions will also help ensure that a quorum
vote.
their
allocated shares or hold their ownership interests in the Holding Company directly, instead
The Plan and the Trust will give policyholders the opportunity to dispose of
they prefer. Under the Plan, any Eligible Policyholder	of indirectly 	through the 	Trust, if
elect, .at the time of the policyholder vote on the Reorganzation, to receive cash in	may
lieu òfthe Eligible Policyholder's allocated shares at the Effective Date, subject to limits
to group Eligible Policyholders allocated	on 	the amounts that are available to provide 	cash
more than 25,000 shares. Beneficiares will also be able to withdraw all, but not less than
al, their alocated shares of Common Stock at any time beginnng one year afer the
Effective Date.
In addition, the Plan provides that Beneficiaries may instruct the Trustee, subject
to limited restrictions described below, to withdraw their allocated shares from the Trust
for salë through the Purchase and Sale Program established by the Holding Company.
Sales may be made at any time afer the later of (i) termnation of any stabilization
trading restrictions in connection with the Initial Public Offering and (ii)	arangements and
the closing of 	all underwters' over-allotment 	options 	which 	have been exercised and 	the
expiration of 	all unexerCised options. Beneficiares allocated less than 1,000 shares 	of
Common Stock will also be entitled to purchase additional shares in the Purchase and Sale
bring their Interests up to 1,000 shares, subject to a minimum of$250 per
purchase (or such lesser amount that would cause it to hold, at the closing price on the
Program 	to
purchase funds, the..l,OOO maxmum
number ofInterests). Purchases may be made at any time beginnng on the first trading
trading day immediately prior to the mailing of
day following the 90th 	day after the Effective Date (which will be more than 90 dåys afer
the Holding Company becomes subject to the reporting obligations under the Exchange
Act).
The Purchase and Sale Program will be administered by the Program Agent The
initial Program Agent is expected to be ChaseMellon Shareholder Servces, L.L.c.
(ItCMSSIt), which will also be the initial transfer agent for the Holding Company and the
initial custodian ofthe Trust (the ItCustodianlt). All purchase instructions will be
processed and supervised by ChaseMellon Financial Servces L.L.C.(ItCMFSIt), using its
20665944.56
Complete printed PDF page 18
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-7- 	N o.vember 16, 1999
employees; 	Manyofthese employees will also be employees of CMSS. oCMFS is a
registered broker-dealer.
Purchase and Sale 	Program transactions (other than purchases and sales in a
batch that:ae.,offsetagnst eachother)~will generally be effectedin the qpen market in
ordinar .brokerage_tranactions. The Plan and the. Trust Agi-eement also pennt tht
Holding Company, in its discretion, to purchase shares withdrawn from the Trust for sale
through the Purchas.ad Sale 	Program. These purchases 	will not be permitted so long as
the Holding Company.is otherwse engaged in a distribution as defined in Regulation M of
the Exchange Act. .
MetLifebelevesthat~as a result of 	the liquidity provided by the Purchase and
SaleProgr;the ability to elect cash consideration under the Plan and the right to
withdraw, afer 	one year, shares from the Trust, the Trust will, afer a short waiting
period, 	be essential a -voluntar mechansm that addresses the extaordinar issues faced
by MetLfe whie.providig signficant benefits to those policyholders 	wishig to hold their
allocated shares 	in the Trust. A'S par of 	the Plan, the purpose, terms and effects of 	the
Trust will be fully disclosed to .policyholders and subject to extensive regulatory review by
the Superintendent in connection with his consideration of whether to approve or
disapprove the Plan. In paricular, both the Superintendent and a minimum of 	two-thirds
of the Eligible 	Policyholders 	tht vote will need to approve the Plan, and thus the Trust,
before it goes into effect. ThéNew York Statute expressly permts the use of a trust
structure in connection with a demutualization.
We are writing to request confrmation that, based upon the facts and
representations below, the stafwill not recommend thatthe Securities and Exchange
Commission (the "Commssion") take any enforcement action against MetLife, the
Holding Company, the Program Agent, CMFS, the Trust, the Tru$tee, the Custodian, any
of 	their respective afliates, offcers, directors or employees or any Associates (as defined
below):
(i) if 	in the transaction that will result in MetLife's Reorganzation,
(a) MetLife issues shares ofMetLife Common Stock to the Trust, (b) the Trust
exchanges such shares ofMetLife Common Stock (including the preferred stock
purchase rights associated with the Common Stock that will be distrbuted pur~uant
to the Holding Company' s~Stockholder Rights Plan) for an equal number of shares of
Common Stock, and (c) the Trust allocates Interests to Trust Eligible Policyholders,
in each case without registering such shares and 	Interests under the Securities Act of
20665944.56
Complete printed PDF page 19
Lar Bergman, Esq.
Catherie T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esg.
-8- 	November 16,1999
1933, as amended (the "Securities Act"), in reliance on the 	exemption from
registration provided by Section 3(a)(1O) thereunder;
(ii) if 	the issuance of shares of 	MetLife Common Stock and 	Common Stock
and thè allocation öfthe Interests to-and Ön behalf of the Trust 	Eligible Policyholders.
is not integrated WÍth the lritial Pûblic Offering;
(iii) if the Interests are registered under the Exchange Act and the Trust files.
reports under that Act as described herein;
(iv) if(a) no proxy soliciting materials, anual and quarerly reports or
information statements are disseminated to Beneficiares in connéction with a vote or
consent of 	stockholders of 	the 	Holding Company, except, as described in this letter, in
connection with a Beneficiar Consent Matter or upon request of 	Beneficiares, (b)
the procedures descnbed in this letter for the distribution of materials in 	connection
with a Beneficiar Consent Matter (including the procedures for requiring 	mailing and
'other expenses be reimbursed by a stockholder in certain circumstances ) 	are followed
and (cl none of 	the Holding 	Company, the Trust, the 	Trustee or Custodian, any 	of
their respective afliates, or 	their respective offcers, 	directors or employees inquires
as to the ~en~ficial ownership of 	the Trust Shares 	in 	connection with such vote or
consent, or provides information in connection with those inquiries, except in
connection with a Beneficiar Consent Matter;
(v) ifthe Board of 	Directors of 	the Holding Company provide the
information required by Schedule I3D pursuant to SectionI3(d)oftheExchange Act
and 	by 	Section 16 of 	the Exchange Act in the 	maner 	described herein;
(vi) under Sectio.n 5o.fthe Securities Act, Sections B(e), 14(d) or 14(e) of.
the Exchange Act and Rules 10b-l3 and 13 e-4 under the 	Exchange Act, if the .
Purchase and Sale Program is implemented as described herein;
(vii) if T rust 	Shares may be withdrawn from the Trust without compliance
with the registration provisions of the Securities Act;
(viii) if 	Beneficiares that elect to withdraw their allocated shares may~sell
such shares in accordance with the resale guidelines described in Section Gherein;
(ix) if 	the Trust is not registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
.'?L.,t~OI.I. ~L.
Complete printed PDF page 20
Lar Bergman, Esq.
Catherine T _ Dixon, Esq.
-9- 	November 16, 1999	Esq.
Douglas Scheidt, Esq.
Catherine McGuire,
(x) ifMetLife's insurance agency sales force, brokers, dealers and other
personnel and offcers, directors	distributors of 	its insurance products, its call center.
MetLifeand its affliates (collectively, the "Associates"), including	and employees of
securities transactions, recommend approval	. . '.	persons not licensed to .engagein equity 	-. . .dicuons with Eligible Policyholders under thecircumstance.s
described in this letter -wi.thoutMetLife, the Holding Company or the Associates
. of the 	Pla 	in
the	registering 	as broker-dealtrs with the COIIssion pursuantto Section 15(a) of
Exchange Act?
In addition, we seek the staffs concurrence with our conclusion thauhe Trust's
ownersh_of more than 25% of the Common Stock will not result in an assignent of any
Life or its affliated investment advisers.	Met	investment company advisory contracts of
We understand that the stafs positions rendered in response to this letter will be
based on the representations mae to you and our opinions set forth in ths letter, and that
any dierent facts or conditions.(including, without limitation, any amendment to the Plan,
the Purchase and Sale Program described herein) might	the Trust, 	or the procedures for
require different conclusions.
METLIFE
life insurance company organzed under the laws of the State	MetLife is a mutual
of New York and is licensed to conduct insurance business in all U.S. states, the District
Puerto Rico, the U.S. Virgin Islands and Canada. MetLife estimates that it
whom hold more than
of 	Columbia,
currently ha more than 11 millon Eligible Policyholders, some of
December 31, 1998, MetLife had assets of over $215.3 bilion and was	one policy. As of
the largest life insance company in the U.S. in terms oflife insurance in force.
life insurance company, MetLife has no authorized, issued or	As a mutual
outstanding capital stock. The policyholders of MetLife, through the purchase of
2. MetLife and certain of its afliates are registered with the Commssion as broker-
the Exchange Act in order to distribute varable	dealers under Section 15(b) of
insurance products, mutual fund securities and other tyes of securities. As required
the National	under the Exchange Act, MetLife and these afliates are members of
Life's	Met	
Association of Securities Dealers, Inc. (the "NASD"). Many members of
insurance agency sales force and other distributors of its products are licensed by the
Met 	Life or these afliates.	NASD as registered representatives of
20665944.56
Complete printed PDF page 21
.
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-10- 	November 16, 1999
Douglas Scheidt, Esq.
insurance policies and anuity contracts, acquire insurance coverage or annuities and,
bylaws or otherwse by law, certain membership interests in
MetLife,including any right to vote and any rights that may exist with respect.to. the
surplûs ofMetLìfe, including any right to a distribution 6fMetLife's surplus (if any) in the
under MetLife's charer or
event ofthê liquidation of 	Met 	Life.
THE PROPOSEDREURGANATION
life insurance company to a stock life
insurance company in accordance with the New York Statute. The New York Statute
MetLife proposes to convert from a mutual
. provides for the conversion, by operation oflaw, of a New York mutual 	life insurance
company to a stock form of ownership upon the occurrence of certain events, including
(i) adoption of a formal plan of reorganzation by the mutual insurance company's board of
directors, (ii) approval of the plan of reorganation by the Superintendent,. (iii) approval
the mutual insurance company's eligible	of the plan of 	reorganzation by a vote of
policyholders and (iv) the satisfaction of 	all conditions 	in the 	plan ofreorganzation. For
your convenience, a copy of 	the New York Statute is attached hereto as Exhbit A.
The Plan. The Plan 'Will be subject to extensive regulatory review by the
Deparment and its outside legal, financial and actuaral advisors. MetLife's Board of
Directors adopted the Plan on September 28, 1999, and has subsequently amended and
restated the Plan. The New York Statute requires that the Plan be submitted 	to the
Superintendent and that the Superintendent hold a public hearng (the "Hearng") upon the
the Plan, the reasons and purposes for MetLife to	fairness of 	the terms and conditions of
demutualize, and whether the Reorganzation is in the interest of 	Met 	Life and its
policyholders and not detrimental to the public~ MetLife will mail a notice of the Hearng
approved by the Superintendent not less than 30 days prior to the Hearng to all Eligible
Policyholders (unless MetLife, afer a reasonable effort to locate an Eligible Policyholder,
has reasonable belief 	that the most recent mailing address of 	the Eligible Policyholder on
the records of 	Met 	Life is no longer valid). MetLife will also give notice of the date, time,
place and purpose of the Hearng by publication in three newspapers of general circulation
not less than 15 days nor more than 60 days before the Hearng and will post notice of 	the
Hearng on its website.
The Superintendent is required by the New York Statute to issue an order ~
approving or disapproving the Plan within 60 days following the closing of the Hearng
record. Under the New York Statute, the Superintendent shall approve the Plan if 	he or
she finds that the proposed Reorganzation, in whole and in par, does not violate the New
York Statute, is fair and equitable to MetLife's policyholders and is not detrimental to the
"'n.lLc,." r;L:
Complete printed PDF page 22
Lar Bergman Esq.
Catherie T. Dixon, Esq.
Càtherine McGuire, Esq. 	-11- 	November 16, 1999
Douglas Scheidt, Esq.
amount of	public and that, afterging effect to,thReorgantion, MetLife will have an
capital.and surplus the Superintendei-t deems to be reasonably. 	necessar for its future
solvency. ,TheSuperiendents appi:oval will be final and binding, subject only to judicial
New York law.	review in accordace with
Under. 	the New 	York Statute, the 	Eligible 	Policyholders must 	also app,rove the
Plan (the "Policyholders' Vote"). 'le PlanTequires that MetLifemail a noticeofthe date
to each Eligible Policyholder not later than 30 days before the	of the 	Policyholders' Vote
date of 	the 	Policyholders' V..te.(unless MetLife, afer a reasonable effort to locate an
the	Eligible Policyholder, 	has reasonable belief 	that the most recent mailing address of
Eligible Policyholer.Dn.therecords of 	Met 	Life is no longer valid). The notice of 	the
Policyholders'Vote must be preceded or 	accompaned by acopy ofthe Plan (or a
summary-thereofapproved-bythe Superintendent) and any 	other explanatory information
as the Superintendent may approve or require, and may be combined with the notice of the
Hearng described above. MetLife apticipates maling a Policyholder Information Booklet
Eligible P9J.cy~olde.rs prior to the..fIearg and the Policyholders' Vote. These
materials were.submitted to the Deparent and its staf for their review and comment,
to
prior to mailing. MetLife also anticipates posting the Policyholder Information Booklet on
its website. The disclosure regarding MetLife and the proposed Reorganzation contained
in the Policyholder Information Booklet will include information similar to that which will
be included in the Form S'-l registration statement to be filed with the Commission in
connection with the Initial Public Ofring. Under the New York Statute, the Plan will be
approved by the Eligible Policyholders if at least two-thirds of the votes cast in the
Policyholders' Vote in person or by proxy are cast in favor of the Plan.
The Effective Date of the Plan is the date on which the closings of the Initial
Public Offering, as well as any Other Capital Raising Transactions, occurs. The Effective
Date may not be later than the first anversar of the date the Plan is approved by the
Superintendent, although this one-yea period may be extended upon approval of the
Superintendent for one or more additional periods if requested by MetLife's Board of
Directors. On the Effective Date, (i) the Policyholders' Membership Interests will "be
extinguished and each Eligible Policyholder will be entitled to receive consideration in the'
Life Common Stock (which will then be exchanged for an equal
number of shares of Common Stock to be held through the Trust), cash or policy credits
and (ii) MetLife will become a stock life insurance company and a wholly-owned ,
subsidiar ofthe:Holding Company. .The consideration payable to Eligible Policyholders
in the form of cash and policy credits will be distributed as soon as reasonably practicable
form of shares of 	Met
afer the Effective Date, but in any event not later than 60 days afer that date.
20665944.56
Complete printed PDF page 23
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-12- 	November 16, 1999
Douglas Scheidt, Esq.
Eligible Policyholders thatwill receive consideration in the 	form of cash include
life insuranc~	industrial	policyholders whose maiing address is outside the U.S., owners of
poliCies in reduced paid-up status that MetLife has reasonable belief (afer a reasonable .
effort to locate the policyholder) that the address shown on MetLife's records is an
address at which mail is undeliverable, other policyholders for whom MetLife determnes
in g6ódfà:tlí;subjed to the consent of the Superintendent, that it is not reasonably feasible
oråppropriå.teto ptovidècohsideration in the form that such policyho.lderwould owners of	othefWse have been eligible to receive and group Eligible Policyholders that are
individual 	retirement anuities or tax sheltered anuities, and that elect to receive cash.3
time oftbe	Cash willa1~o be distributed to Eligible Policyholders that elect, at the
Public Offering	Policyholders' Vote, to receive cash for their allocated shares. If the Initial
and any Other Capital Raising Transactions are not of a suffcient size to fund the payment
possible that	of cash to all Eligible Policyholders that elect to receive cash, however, it is
be paid to all Eligible Policyholders	the Plan will become effective but that cash will not
happen, cash will be paid as follows:	electing to receive cash. If this were to
(i) .each individual Eligible Policyholder that elects to receive cash will
receive compensation in the form of cash;
and is	(ii) each group Eligible Policyholder that elects to receive cash
allocated not more than 25,000 shares will receive compensation in the form of cash;
and
elects to receive cash and is	(iii) each group Eligible Policyholder that
allocated more than 25,000 shares will receive compensation in the form of:
(a) cash, with respect to the first 25,000 shares allocated to the Eligible
Policyholder, and
(b) either shares of Common Stock (to be held in the Trust) or a
Common Stock (to.be held in the Trust), with	combination of 	cash and shares of
allocated to the Eligible Policyholder. Such cash
will be allocated to each such Eligible Policyholder on a pro rata basis based on
respect to the remaining shares
3. In addition to the cash payments under the Plan, MetLife's Canadian branch will make
cash payments to certain persons that were policyholders of the Canadian branch of
accordance with undertakngs given to Canadian regulators when most of	MetLife in
MetLife's Canadian business was sold to a Canadian mutual insurer.
20665944.56
Complete printed PDF page 24
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-13- 	November 16, 1999
DouglasScheidt, Esq.
shares in excess of25,OOO shares	the proportion that-hetotal number of
-allocated 	to .suchEligible Policyholder 	bears to the total number of shares in
all such Eligible Policyholders allocated
more th 25,000 shares that have elected to receive cash.
,.excessof25jOOO,shares-allocated to.
u'!
if there is an uncler;tten public offering of,	Until:he secohä year-afer the Effecive Date,
will offer to each Trust Beneficiar holding at the . .	Common Stöck, 'the 	Holding Company
'election was not fully satisfied the	time more 	than 	25,000 	Interests and whose cash
Trust Shares equal to all ofthe Trust Beneficiar's	opportnity tojndudea number of
Intere:ssIn the offering, subject to certain limitations set forth in the Trust	Trust
Agreement.
Eligible Policyholders that will receive consideration in	The 	Plan-provides 	that
policy credits include policyholders holding policies that are individual	the form of
retirement anuities; ta.sheltered anuities, certain tax-favored individual anuity
contr.acts,,ad.indi\UchiaUifeiilrancepolicies and life and health insurance funding
accounts. .c
Regardlessufwhether an Eligible Policyholder is receiving Interests, cash or
consideration an Eligible Policyholder receives under the Plan will be	policy Lredits, the
Life Common Stock allocated to the Eligible	based.on the nùmber of 	shares of 	Met
the Plan (collectively, the "Allocable Common
Shares"). The formula for allocating the Allocable Common Shares among the Eligible
Policyholder pursuant to 	the terms-of
two components. A fixed number of shares of 	Met 	Life Common:
Stock will be allocated to each Eligible Policyholder. Additional shares will also be
allocated to an Eligible Policyholder holding a "paricipating" policy, that is, a policy that
is generally eligible for dividend payments or is considered to be a "paricipating policy"
for purposes of the Plan. The number of additional shares will var for each such Eligible.
Policyholders consists of
Policyholder based upon an actaral formula; specified in the Plan, that takes into
account, among other things, the past and future contributions to MetLife's surplus from
paricipating policies held by the Eligible Policyholder, as determned by historical
future pedormance.	experience and expected
The Plan provides that the value of the consideration to be paid to an Eligible
Policyholder in the form of cash or policy credits will be equal to the number of Allocable
Common Shares allocated to the Eligible Policyholder multiplied by the price per share at
which Common Stock is offered to the public in the Initial Public Offering (the "IPO
Price"). The JPO Price, which will be established through ar's-length negotiations with
representatives ofthe underwters, is an objective measure ofthe value of 	the stock
Complete printed PDF page 25
Lar Bergman, Esq.
Catherie T. Dixon, Esq.
Caiheririe McGuire, Esq. 	-14- 	November 16, 1999
Douglas Scheidt, Esq.
allocated to the Eligible Policyholders, and will be based on, among other things" factors
related to the Holding Company and the life insurance industry and prevailing market
provides thatMetLife and the Holding Company will use	conditions in general. The Plan
Initial PublicOffering
c;onduct the Initial Public Offering process in a maner that is generally consistent with
their best effort to ensure that the managing underwters for the
Holding
Companyiwillallow the Superintendent and its financial 	advisors reasonable access to
custòmarpractices forînitiälpublic offerings, and that MetLife and the
permt them to observe the Initial Public Offering process. Special pricing commttees of
Life and the Holding Company wil determne the price of	the Boards of 	Directors of 	Met
Common Stockin the Initial Public Offering, which wil also be subject to ratification by
those boards. A majority of 	these Board committees will consist of directors who are not.
Life or the Holding Company, and no employees, offcers or
directors of or legal counsel to any ofthe underwters for the Initial Public Offerig may
offcers or employees of 	Met
serve on these commttees. The Plan also provides that the terms and provisions of the
the
Superintendent;:mid neither MetLife nor the Holding Company will enter into an
Intial Public Oferig and underwting agreement will 	be subject to approval of
. underwting agreement for the Irutial Public Offering if it is notified that the
Supeñntendent has not received confrmation from its financial advisors to the effect that
MetLife, the Holding Company and the underwters for the Initial Public Offering have
Plan. MetLife shall provide the
Superintendent with a letter, dated the date of the signing of the underwting agreement,
complied in all material 	respects with the requirements of
that as of that date it has complied with those requirements as to the. conduct	representing
of the Irutial Public Offering and that it will continue to do so. On the Effective Date,
MetLifewill provide the. 	Superintendent with a letter confrmng 	these representations 	as
of that 	date.
Under the New York. Statute the Superintendent must find that the consideration
received by Eligible Policyholders 	is fair and equitable to policyholders, a determnation
that may be based, among other thngs, on (a) the integrty of 	the security 	markets in
pricing stock, (b) opiruons rendered by MetLife'sfinancial advisors and consulting
actuares to its Board of 	Directors as 	to certain financial and actaral matters, as well. 	as
advice from the financial, legal and actuaral advisors engaged by the Deparment, and
( c) the provisions relating to the Initial Public Offering process described above.
In addition to the Initial Public Offering, the Plan also permts the Holding,
Company to raise capital through one or more Other Capital Raising Transactions, which
would be completed on the Effective Date. These may include one or more of a public
offering of mandatorily convertible preferred secunties, a public offering of convertible
preferred securities and up to $500 million aggregate principal amount of publicly-issued
Complete printed PDF page 26
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-15- 	November 16, 1999
debt. securities, commercial paper issuanc-es-of ban 	borrowings (or a combination of such
offerings, issuances andbanbolTowigs). Under the Plan, the Holding Company canot
proceed with any 	offering relaed.to..yOther Capital Raising Transactions without the
approval of 	the Supertenden whomiist alsoapprove the final terms 	of 	any Other
Capital Raing Tranactons~~""fhe-total proceeds raised in all Other Capital Raising
Transactions 	will notexceed_,one,,.thd pfthe combin~d t?tal proceeds raised in theJnitial
Public Offerig 	'and 	all Other,Capital Rasing Transactions. . .
- .The Plan provides that the.proceeds from the Initial Public Offering, together
with the proceeds from any Other 	Capital Raising Transactions, net of 	underwting
commssions and related expenses, 	must be used as follows:
(i) theHolding Company will'contribute to MetLife an amount equal to the sum
of 	(x) the amount required to fund,the paying of cash and crediting of policy credits
pursuant to the ,Plan and. (y) an amount equal to the amount required to reimburse
MetLife for the cash payments to he-made by MetLife' s Canadian branch to the
holders ofpoiicies included Inthe Canadian business sold to a Canadian mutual
insurer; and
(ii) the Holding Company will contribute to MetLife an amount equal to the
amount of fees and expenses incurred by MetLife in connection with the
Reorganzation, to the extent required by the undertaking delivered by the Holding
Company to the Superintendent in accordance with the New York Statute.
If any additional proceeds are raised in the Initial Public Offering and 	any Other Capital
RaisingTransactions, those proceeds, net of 	underwting commssions and related
expenses, 	shall be used as follows:
(A) the Holding Company will i:etain an amount not 	exceeding $240 million, or'
such greater amount as the Superintendent may approve, for workig capital,
payment of dividends on the common stock of the Holding Company and other
general corporate purposes;
(B) the Holding Company will retain an 	amount not exceeding $100 million, or
such greater amount as the Superintendent may approve, to pay the fees and
reimburse the expenses ofthe Trustee and Custodian; and
(C) to the extent that such net proceeds exceed the aggregate amounts identified
in clauses (A) and (B), and to the extent of any amounts retained by the Holding
?n¡:¡:i;Q!.!. i;¡:
Complete printed PDF page 27
Lar Bergman, Esq.
C~therine T Dixon,Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-16"" 	November 16, 1999
Company pursuant to clause (A) and (B) that are not used for the purpose stated in
each such'Clause, tIie Holding.Company will contribute to MetLife any remaining
aiounts to be used' for the general corporate purposes of MetLife. or to repay debt
incured in connection With MetLife's acquisition of GenAnerica Corporation.
. 	. 	.The p1áh requires that the 	Intial PÙ.blic offering, together with ary Other Capìtal Raising
Transactions completed on the plan effective.date, must raise 	proceeds, net 9f
underwting coIDssions and related expenses, in an amount at least equal to the 	amount
paid by MetLifeto fud mandatory cash payments pursuant to the plan and policy credits
to policyholders and to pay fees ard expenses incurred by MetLife related to the
demutualization, as well as to reimburse MetLife for amounts to be 	paid by its Canadian
branch to certai former Canadian policyholders.
The Trust. 	The Plan 	requires MetLife to establish the Trust for the exclusive
benefit oftheBeneficiares to hold the shares of stock allocated to them under the Plan.
The New York Statute expressly permts the use of a trust structure in connection with a
. demutualìzation. In connection with their approval of 	the Plan, both theSuperinténdent
and a minimum of 	two-thirds of 	the Eligible Policyholders that vote will have approved of
the establishment of 	the Trust. Under the unique circumstances of 	this Reorganzation,
there are paricularly compellng reasons for the establishment of 	the Trust. MetLife
estimates that it has over ii million policyholders, many of 	whom will be allocated a small
number of shares under the Plan. If all of them were individually to hold shares of stock in
tlè new Holding Company, the Holding Company would have several times the number of
stockholders a~ that of 	the largest publicly held U.S. corporation. The Trust is designed
to givepolicyhplders benefits of stock ownership -- namely, the. ability to paricipate in any
appreciatiòn of 	their allocated shares of 	Common Stock and the opportnity 	to sell those
shares or to purchase additional shares on a commssion-free basis through the Purchase
and Sale Program -- while helping the Holding 	Company effciently manage the
. administration of Beneficiar accounts and the costs associated with such a large number
of stockholders. Among other things, the Trust Agreement provides that the right to vote
the Trust Shares will be exercised by the Trustee, generally acting upon the
recommendation and direction of 	the Board of 	Directors of 	the Holding Company; as a
consequence, the 	Holding Company wil avoid the costs of mailing Anual Stockholder
. Reports to the Beneficiaries, except in connection with a solicitation on a Beneficiar
Consent Matter. These voting provisions will also 	help ensure that 	a quorum is obtained
on matters put to a stockholder vote. In addition, the Trust is intended, through the
Purchase and Sale Program, to permt Beneficiares to sell their allocated shares or to
p~rchase additional shares on a commission-free 	basis.
Complete printed PDF page 28
Lar 	Bergmann, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-17- 	November 16,1999
The terms öftheTrust are 	set outmthePlanand the Trust Agreement. Under
the Plan and 	the Trust Agreement, each Ti:st Eligible 	Policyholder will 	be allocated a
number oflnterests.equalto the 	number 	of shares 	of 	MetLife Common Stock allocated to
the Trust Eligible Poliholder in accordançewith the Plan. The Trust Shares will be held .
in the name 	"1:ftlre"Troee, .on'hehalf of 	the Trust, which shall-have legal title 	over thé
. Trust Shåtes.As atèsultofthe Reorganatioh, the 	Trust 	will 	initially 	own on 	behalf of
the Beneficiares more than 	25%..ofthe Common Stock of 	the Holding Company,
_ As a:.generalrule, Beneficiares will be prohibited from sellng, transferrng,
assigning, pledging or otherwse diposing of their Interests; however, Interests may be
transferred
(i)-nom-the estate of a-deceased-Beneficiar to one or more 	beneficiares taking
by 	operaton oflaw or pursuant to testamentar succession,
(ii) ,.to..th spouse orissue ora Beneficiar or to an entity, selected by a
Beneficiar,provided-tattransfersto- such entity 	are deductible for Federal income,
gift and estate tax puroses under Sections 170, 2055 and 2522 of 	the Internal
Revenue Code of 1986, as amended, . or to a trust established for the exclusive benefit
of one oLmore of 	the following: (x) Beneficiares, (y) individuals described in this
clause (ii), or (z) entities described in this dause (ii),
(iii) to a trust established to hold Interests on behalf of an employee benefit plan,
(iv) if 	the Beneficiar is not a natral person, by operation oflaw to the
survving entity upon the merger or consolidation of such Beneficiar into another en-
tity, to the purchaser of substantially all the assets of such Beneficiar or to the
appropriate persons upon the dissolution, termnation or winding up of such
Beneficiar,
(v) by 	operation oflaw as a consequence of 	the banptcy or insolvency of
such Beneficiar or the granting of 	relief 	to such Beneficiar under the Federal
banptcy laws, or
(vi) from a trust holding an insurance policy on behalfofthe insured person
under.such-policy, to such persons as shall be required pursuant to the terms of such
?n':':r:or.l. r,,:
Complete printed PDF page 29
.-,-.,
Lar Bergman Esq.
Catherine T. Dixon, Esq. -18- 	November 16, 1999	CätherieMcGuire, Esq.
Douglas Scheidt, Esq:
the Trust Agreement.	trst.4A tranfereeofInterests win become subject to
the	will 	he held in 	the naieofthe Custodian, which shall k~epa record of	Interests
the Custodian.	. Interestsofthe Beneficiares on a book-entry system maintained by
name. "	Interests 	may 	not be held bya B~neficiar through a noIlnee or in "street
be the initial Trustee anc: CMSS the initial..;	WilmingtönTrust Company will
Custodian. The Interests will.not be r.e.presented.bycertificates or other evidence of
5. 	.oWnership.
The Trustee will prepare and deliver to the Custodian an anual report regarding
and distributions it has received on the	the statusofthe Trust Shares and any dividends
Trust Shares, as well as any interest accrued thereon from investments made in accordance
with the Trust Agreement. Based upon that report, the Custodian will promptly prepare
and mailan anual report tò- each Beneficiar regarding the status of such Beneficiary's
to such	the Trustee with respect	distributions received by	Interests and any dividends and
Interests, as well as any such accrued interest. Those reports (which are expected to be
connection with the anual dividend check mailings to Beneficiares) will also
inform the Beneficiares of the availability of the Anual Stockholder Reports on the
provided in.
website or by mail upon request at the Holding Company's expense;
of the availability of the Holding Company's and the Trust's filings under the Exchange Act
Holding 	Company's
on the Holding Company's and the SEC's websites or by mail upon request at the Holding
Company's expense;oftheir rights to paricipate in the Purchase and Sale Program and
the Holding Company determnes that there	Directors of	4. In addition, if 	the Board of
the Trust maybe characterized as	is, at any time, a material risk that the assets of
Labor Reg. § 2510.3-101 (the "Plan	"plan assets" under United States Deparment of
Board may direct the 	Trustee to distribute to the 	Custodian,	Asset Regulations"), the
Trust Shares (not to exceed	more Beneficiares, a number of	for distiibution to one or
the total number of suchBeneficiares' Interests) as the Board may detemine to be .
the Trust will not 	be so	necessar or appropnate to ensure that the assets of
characterized as "plan assets".
5. The Trust is designed to be a voting trust under Delaware law. Delaware law does
not specifically define the term voting trst. We have been advised by MetLife's
special Delawae counsel that the Trust is valid under Delaware law, even though the
the requirements of Section 218 of 	the Delaware General	Trust does not meet all of
voting trusts. Section	Corporation Law, which validates the use o.f certain forms of
218 expressly provides that it does not invalidate a voting or other arangement which
is not otherwise illegal, and before the enactment of Section 218, case law recognized
voting trusts. Ringling BrOS.-Barum & Bailev Combined Shows. Inc.	the validity of
v. Ringling, 29 DeL. Ch. 610,622,53 A.2d 441, 447 (DeL. 1947).
?n¡;¡;i:ol.l. i:t,
Complete printed PDF page 30
Esq.	Lar Bergman
Esq.
Catherie McGuire, Esq. 	-19- 	November l6,1999
Douglas Scheidt, Esq.
Catherine T. Dixon,
where to obtaiifinformatíon about the Progr; of the expected date of the Holding
Company's anniiatmeeting.and deadline 	for submission of 	stockholder proposals, and
when the Anual Stockholder Reports 	are expected to become available; 	and of 	the
aggregate .aonn..f:dvienandiier.st paid to. all Beneficiares in that dividend
distrbutiön.Nc:r other:'a:cCbnIltingÎ:s.exp~cted to be made by the Trust, except upon tht
termnationand.winding-up-Of the Trust..
Importantly, Beneficiaresthat do not desire to hold Interests may choose (i) to
receive cashinearl.atthe-EffeceÐate or, through the Purchase and Sale Program,
all, but not less than'	after the completion of 	the Intial Public Offerig, or (ii) to withdraw
all, of their allocated shares.of Common Stock at any time beginnng one year afer the
provides that Eligible Policyholders may	EffectiveDate~~As..iscusseù.:above,.the Plan
the Policyholders'Vo1e, to receive cash for their allocated shares at
the Effective Date at the IPO Price, subject to the limits on the amounts that are available
elect, at 	the tie of
group EIigible-Rolicyholders allocated more than 25,000 shares.	to provide cash 	to
Beneficiares may instruct the Program Agent	In'addition;'the-Plan provides that
to withdraw their allocated shares from the Trust for sale 	through the Purchase and Sale
Program beginnng on the later of (i) the termnation of any stabilization arangements
and trading restr~ions in connection with the distribution of the offering and (ii) the
closing of all underwters' over-allotment options that have been exercised and the
of
Common Stock will also be entitled to purchase in the Purchase and Sale Program
expiration of 	all unexercised options. Beneficiares allocated less than 1,000 shares
additional shares to bring 	their Iiiterests up to 1,000 shares, subject to a minimum of$250.
per purchase 	the Beneficiar to hold the 1,000	(or such lesser amount that would cause
maxmum number of Interests), begig on the first trading day following the 90th day
will be
adjusted for any shares of Common Stock purchased or sold in the Purchase and Sale.
Program such that the Interests held by a Beneficiar wil always equal the number of
Common Shaes allocated to the Beneficiar. Beneficiares will not be restricted from
after the Effective Date. The 	number oflnterests allocated to Beneficiares
their holding Interests in the
Trust. Accordingly, Common Stock may be purchased and sold by Beneficiares in the
public market outside the Trust and any stock so purchased will notbe subject to the
holding shares acquired outside of 	the Trust by virte of
Trust's provisions.
. Beginnng one year afer the Effective Date, Beneficiares may also withdraw all,
but not less than all, of 	their allocated shares of 	Common Stock at any time by providing
wrtten notice to the Trustee. Prior to the date withdrawals may commence, the Trust will
mail notice to Beneficiares informing them of 	their withdrawal rights, 	together with a
jnL.L.r:ol.l. i:.(
Complete printed PDF page 31
-, :-~
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-20- 	November 16, 1999
copy of thê prioryear's anual report mailed to stockholders (or, if 	the withdrawal date is
withinÖtìemonthofthe expected 	maling of 	the Holding Company's annual report, the
Trust wil âelayrnailing untilsuchtime as it 	may include the 	current year's 	anual report).
BeneficiarieswithdtaWgtheir shares will receive them in book-entry form, to the 	extent
perrtted by lãw~unless the Beneficiar requests a 	certificate, in 	which case a certificate
will be provided.
The 	Trust Agreement provides that the Trustee will. have the exc1usiveand
absolute right in respect of 	the Trust Shares to vote, assent or 	consent the Trust Shares at
all times 	during the term of 	the Trust. However, the Trustee will have no discretion in
voting the Trust Shares. On 	all matters brought for a vote before the stockholders of 	the
Holding Company, with the exception of a Beneficiar Consent Matter, the Trustee 	will
vote in aècÖrdance with the recommendation given by the Board of 	Directors ofthe
Holding Company to its stockholders or, if no such recommendation is given, as directed
by the Board.6 On all Beneficiar Consent Matters, proXies which provide voting
instructions will be voted as described herein. The Trustee will engage in "mirror voting"
with respect to any .stockholder vote that involves a Beneficiar Consent Matter -- that is,
the Trustee will 	vote all of 	the Trust Shares in favor of, in opposition to or abstain from
the matter in the saie ratio as the Interests of 	the 	Beneficiares that returned voting
instructions to the Trustee indicated preferences for voting 	in favor of, in opposition to or
abstaining from such matter. As a result, Trust Shares for which no instructions have been
received by 	the 	Trust-ee will 	be voted 	in the same proportion as Trust Shares for which
instruction.s have been received. The voting provisions described above will 	last through
tlié life of the Trust. Beneficiares wishing to make a stockhölderproposal in connection
with a meetiIlgofthe Holding. 	Company's stockholders may do so in accordance with
Rule 	14â.-8 of 	the 	Exchange 	Act. The Trust also contains 	provisions allowing
Beneficiares to 	inStct the 	Custodian to withdraw their allocated Trust Shares to
paricipate in any tender or exchange offer for the Common Stock and to make any cash
or share election,orpedect any dissenter's rights, in connection with a merger of 	the
Holding Company.
6. The Amended and Restated Certificate oflncorporation of 	the Holding Company
provides that while the Trust is in existence, each director of 	the Holding Company
shall, in exercising his or her duties 	as a director, take the interests ofthe Beneficiares
into account as if 	they were holders of 	the Trust Shares, except to the extent that any
such director determnes, based on advice of counsel, that to do so would violate his
or her duties as a director under Delaware law.
.,nJ:J:i:ol.l. l:J:
Complete printed PDF page 32
,
.. i
Lar Bergian, Esq.
Catherine T. Dixon, Esq.
. Catherine McGuire, Esq. 	-21- 	November 16, 1999
Douglas Scheidt, Esq.
If astockholder.vote involves a Beneficiar Consent Matter, then the Trustee,
through the. Custodian will solicit votig instnictions from all of the Beneficiares. If the
a contested electon for directors of the Holding Company, promptly after	matter involves
the	receipt ofa contest 	stockholder's 	request, the 	Holding Company will inform
contestng"S'dckholeruf1he-nnbe:r"ofBeneficiares to whom 	solicitation materials must
the	be maied (inatcordance with 	the contesting stockholder's designation) and of
estimated cost of mailing 	a proxy-statement, 	intruction card or 	other communication to
all the Beneficiares (or 	to 	a group 	of Beneficiares designated by the contesting
stockholder-in a.maner thtIs available or retrievable under the Custodian's security
holder data system), including, to the extent known or reasonably available, the estimated
costs of 	the Custod-ian-tø.request instructions 	from the Beneficiares in connection with
such matter. Ifthe.Custodianshal.have receIYed suffcient copies of any proxy statement,
envelope, mailing envelope or other proxy materials, together with
payment of estiated postage and reasonable expenses to effect the mailing of such
instrction-cad, retu
and such security as th Custodian may reasonably request to cover expenses in	material
excess.ofthLestite,.from a contesting stockDlder by such time that is suffcientto
applicable law
and the By-Laws of the Holding Company, then the Custodian wil cause the mailing of
within the requirements of	enable the Custodiant-ocomplete-such mailing
Beneficiaries designated by the	the proxy materials to the Beneficiares, or a group of
contesting stockholder, as soon as reasonably practicable afer receiving the materials,
payment and security. With respect to a Beneficiar Consent Matter that is subject to
Rule 14a-7 of the Exchange Act, the Holding Company will mail to its stockholders
holding Common Stock outside of 	the Trust the contesting stockholder's materials in
accordance with Rule 14a-7 and promptly provide the Custodian with any materials it
receives from the contesting stockholder for distribution to the Beneficiares in accordance.
with the Trust Agreement (as opposed to providing a list of stockholders and Beneficiares -
to the contesting stockholder for mailing). The Holding Company will comply with Rule
14a-7 in connection with non-Beneficiar Consent Matters.
The Holding Company will agree in the Trust Agreement that any proxy tlnd
other materials provided by it will meet the requirements of the Exchange Act and that it
will reimburse or advance the Trustee and the Custodian for their fees and expenses for
mailing these materials. All proxy materials provided by the Holding Company will
the Exchange Act. In
addition, such materials will include the anual audited financial statements included:in the
include the financial statements required under Regulation S-X of
current anual report (or, if the proxy materals are not being distributed in connection
:'0665944.56
Complete printed PDF page 33
Esq.
Catherine T. Dixon, Esq.
Lar Bergman
McGuire, Esq. 	-22- 	November 16, 1999
Douglas Scheidt, Esq.
Catherine
an anualmeetíig, the prior.,year's.anual report), even ifnot otherwise required to	with
be provided under the Exchange Act.7
Proxy 	solicitio.n 	and information statements received.	anual reports .	m,atenals,
matter not involving a EeneficiarCo¡isent	by the.C'Uodian"Í'-connecton with 	any
Matter wi be 	mad available by the Holding. Company to Beneficiares for their
upon request and	infonnationon a 	website, inaintàIned by 	the Holding Company or by mail
but voting instructions to the Trustee wil not be	at the Holding Company's expense;
solicitedand,ifinstructons are received, they will not be binding on the Trustee.
be inormed anually (which is expected to be done in connection	Beneficiares will also
the Anual
Stockholder Rtports on,J:he Holding C,ompany's website or by mail upon request 	at the
with 	the 	anual-dividend 	check mailings to Beneficiares) of 	the availability of
the availability ofthe Holding Company's and the Trust's	Holding-Gomp-any's expense; of
and the SEC's web 	sites or by
. mail upon request at the Holdig Company's expense; of their rights to paricipate in the
filings under the Exchange Act on the Holding Company's
Purchase.an.5aleProgram and where to obtain information about the Program; of the
expected date of 	the Holding Company's anual meeting and deadline for submission of
when the Annual Stockholder Reports are expected to become .	stockholder proposals, and
the aggregate amount of dividends and interest paid to all Beneficiares in	available; and of
that telephone the toll-free number in order to	that dividenddistnbiitIon Beneficiares
and Sale Program or to obtain further information will be	paricipate in the 	Purchae
Stockholder Reports are available on the website or by mail
upon request. Except for the one-time mailing by the Trust at the time withdrawals may
informed that the Anual
connection with a Beneficiar Consent Matter, such matenalswill.not	còInence or 	in
otherwse be disseminated to the Beneficiares.
Matter, none of the	In addition, except in connection with a Beneficiar Consent
Holding Company, the Trust, the Trustee or Custodian, any of 	their respective afliates,
or their respective offcers, directors or employees will be required to inquire as to the
Holding
Company stockholders, including whether any Trust Shares are held by beneficial'owners
beneficial ownership of 	the Trust Shares in connection with a vote or consent of
7. The Trust Agreement permts notices and other communications to be mailed to
the Beneficiar
has previously consented. All such communications will comply with all applicable
releases issued by the Commission regarding dissemination of materials by electronic
means.
Beneficiares by electronic 	media, e-mail or other electronic means, if
20665944.56
Complete printed PDF page 34
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine M'cGuire, Esq.
Douglas Scheidt, Esq.
-23- 	November 16, 1999
or requestingihformation-tobeprovided with respect to consenting and non-objecting
beneficial 	owners under 	the Exchane Act.
IhTrustAgeementpro:vdestht reglar 	cash dividends, if any, collected pr
received.by.th-e: Trostee-'witft'respecuo the Trust Shares will be distributed by. the
Custödiansem,;analy to the 	Beneficiaries withn 90 days afterTeceipt by the trustee.
Distribution/of all-other. cash 	divdends will be made by the Ciistodian to the Ben,eficiares
orithe first business day£oUowng the 30t day 	after the Trust receives the dividends.
Alternatively, the- Trustee may arange with the-Holding Company for the direct payment
by the Holding Company of 	such cash dividends to the Beneficiares. The Trust
AgreementfurterHprovides.that pending such distribution, cash dividends may be invested
in short.,term:òbliatons of 	or 	guaranteed by the United States, 	or 	any agency or
instrumentality thereof, and in certificates 	of deposit of any ban or trust company having
a combined capital and surplus not less than $500,000,000. Notwthstanding these
provisions, the Holding Company currently expects to pay anual dividends directly to the
Beneficiares without any interim investment. Dividends or other distributions in Common
Stockwill-be allocated to the Beneficiares and held by the Trustee as Trust Shares.
Generally, an other distributions by the Holding Company to its stockholders will be held
and distributed by the Trustee to the Beneficiares in proportion to their Interests.
The Trustee shall have only the powers ,set forth in the Trust Agreement and the
Purchase and Sale Program procedures. In penormng its duties under the Trust
Agreement, the Trustee will be required to act as a fiduciar in the best interests of
the
Beneficiares, with aduty of 	undivided loyalty to the Beneficiares and a duty to exercise
care and prudence 	in the administration of 	the Trust's business affairs. The Holding
Company 	will pay fees to the 	Trustee and the Custodian and reimburse them for their
expenses under the Trust.
The Trust will termnate on the 90th day after the date on which the Trustee shåll
have received notice fromtheHolding Company that the number of
Trust Shares held by
the Trust is equal to 10% or less ofthe number of 	issued and outstandingshares'of
Common Stock ofthe Holding Company, or on the date on which the last Trust Share
shall have been withdrawn, distributed or exchanged. The Trust may be termnated
earlier:
(i) on the 90th day after the date on which the Trustee receives wrtten notice
from the Holding Company, given in the Holding Company's discretion at any time,
that the number 	of Tnist Shares is 25% or less of 	the number of 	issued and
outstanding shares of Common Stock;
?n"-"-~ol.l. ~"-
Complete printed PDF page 35
Lar 	Berg Esq.
Catherine T. Dixon, Esq.
Catherie McGuire, Esq.
Douglas Scheidt, Esq.
-24- 	November 16, 1999
(ii)on the date''On wruch the Trustee receives 	wrtten notice from the Holding
Company that the Board of 	Directors of 	the Holding 	Company has determned, as a
result of any 	amendment of, or change (including any anounced prospective change)
injthe laws (oraly regUlations thereunder) 	of 	the United States or any State,
'Comfonwëâlhot"btherpoliticälsubdivision or authority thereof or therein" or any
bffcià.à:dmstrativeptOnouncement or judicial 	decision interpreting or applying
sÚcli.la'WoT iegilatiOhVorany changes in 	the facts or circumstances relatingto the
Tn.st,that mäntaining the Trust is or is reasonably expected to become burdensome -'
to the Holding Compàny or 	the Beneficiares;
(iii). on.thê date 	on which any rights issued under a stockholder rights plan
adopted..by the Holdig Company and held by the Trust become separately tradeable
fromthe TnistShares to which they relate; or
(iv) on the date on wruch there is an entry of a final order for termnation or
._ ..dissolution ofthe-Tmst or similar relief 	by a court of competent jurisdiction.
The Trust also contà.nsa ruleagà.nst perpetuities clause causing 	termination under certà.n, .circumstances.
Upon termnation of 	the 	Trust, the remaining Trust Shares will be distributed in
book entry form to eaG-hBeneficiar;ifbook entry shares are permtted by applicable law,
together with the Beneficiar's proportionate share orall unpaid distributions and
diVidends and interest eared thereon. The Trust Agreement provides thatthe Holding
Company may, in its dicretion;. offer to purchase such shares at the market price of the
CommOn Stock at the time of the 	purchase. If 	the Holding Company 	so offers to
purchase Tmst Shares, notice of 	the offer wil be distributed to the Beneficiares prior to
the distribution of 	the assets of 	the Trust upon termnation of 	the Trust. Beneficiares that
elect to have the Trust accept such offer with respect to their Interests wil receive cash .
for all or par 	of 	their Interests, in accordance with the terms of 	the offer. The Holding
Company wil comply with al applicable provisions of 	the Exchange Act with respect to
any such purchase.
The Trust Agreement may be amended from time to time by the Trustee, the
Custodian, the Holding Company and MetLife, without the consent of any Beneficiar, (i)
to cure any ambiguity, correct or supplement any provision therein that may be
inconsistent with any other provision therein, or to make any other provision with respect
to matters or questions arsing under the Trust Agreement, which shall not be inconsistent
with the other provisions of 	the Trust Agreement, provided that the action does not
?n¡;¡;i;o¿.¿. . Sf,
Complete printed PDF page 36
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq_
-25- 	. November 16, 1999
adversely äffect theintet-ests'.ofthe Beneficiares,' 	(ii) to modify, eliminate or add to. any
provisions of 	the 	IrutAgreement to.such extent as shall be necessar to ensure that the
Trust will be Classifedfor United States federal income tax purposes as a grantor trust at
al timesorto-ensue thtthe Trust\V not 	be reqired to register as an investment
compan nrtlerthe"Invent'Compan 'Act of 1940, as amended, 	or 	(iii) to reflect the
effect of a merger or consolidation in wruch the Holding Company is not the survving
corporation and the other 	company into which the Holding Company is merged or
consolidated assmes its. obligations 	under 	the Trust Agreement. The Trust Agreement
may-asobe amended with 	the 	consent of 	Beneficiares representing more than one-half of
the Interests, provided that no such amendment or waiver shall, without the consent of
each Benefieiar-afected thereby, rediice the Interests or otherwse eliminate or materially
postponethe-.rght of any 	Beneficiar to receive divdends or other distributions or to
make..elections under the 	"Purchase and Sale Program or to withdraw Trust Shares. Any
such amendment made prior to the first 	anversar of the Effective Date will require the
prior approval 	of the Superintendent.
. The terms of the Trust 	and the Plan, including the relative risks and benefits of
holding Interests and investing in stock versus cash, 	the voting rights of 	Beneficiaries and
the provisions for disclosure of information, the Purchase and Sale Program procedures,
the ability ofBen~ficiares to purchase and sell snares of 	Common Stock in the public
market outside of 	the Trust, the Trust termnation provisions and the fee and expense
reimbursement provisions of the Trust will be set forth in the Policyholder Information
Booklet. .In addition, the Policyholder Information Booklet will disclose the effect that the
Trust win have on stockholder votes, including the effective control by the Board of
Directors of the Holdig Company over non-contested elections and other non~
Beneficiar Consent Matters.
The Purchase and Sale Program. Following the completion ofthe Initial Public .
Offering and lasting until the termnation of 	the Trust, each Beneficiar will have the right,
subject to limited exceptions described below, at any time to withdraw the Beneficiar's
allocated shares for sale at prevailing market prices or, beginnng on the first trading day
following the 90th day after the Effective Date, to purchase additional shares, at prevailing
market prices on a commssion-free basis, under the Purchase and Sale Program. The key
provisions of 	the Purchase and Sale Program are described below.
As noted above, beginnng one year after the Effective Date, each Beneficiar
may withdraw the Beneficiar's allocated shares of Common Stock at any time, to hold
such shares 	directly or to dispose of them as they see fit. Beneficiares may also purchase
additional shares. 	of 	Common Stock (and sell these shares) on the open market without the
70MSQL.L..Sf,
Complete printed PDF page 37
Lar Bergman 	Esq.
Catherine T. Dixon, Esq.
Catlierine McGuire, Esq.
Douglas Scheidt, Esq.
-26- 	November 16, 1999
restrictions sétfcirf 	in the 	Trust 	Agreement. MetLife.desires to give policyholders the
benèfit of 	sellng their shares or purchasing additional shares on a commssion-free basis
through. the Purchase and Sale Program. MetLife believes that the Purchase and Sale
Program wil pmmot.amorecorderly maret for the Common Stock while bentfitting
Beneficiarès by-gvìngthenrthe.oppornity to selltheir allocated shares or to purchase
additiönalshares .orr.a..commsion': free basis.
Under the Purchase 	and Sale Program 	each 	Beneficiar may have Trust Shares
equal in number 	to 	the Benèficiar~:sInterests withdrawn for sale through the Purchase
and Sale Program by giving instrctons to the Program Agent. If the Beneficiar holds
199 or fewer Interèsts, all ofthe Beneficiar's Interests must be withdrawn 	for sale. If the
Beneficiarholds more 	than 1991nterests, full or paral withdrawals for sale may be
made.p'However, paral withdrawals for sale may only be in 100-share increments (for
example, 200 shares may be withdrawn for sale, 	but not 250). Following any paral
withdrawal for sae, the Beneficiar must stil hold at least 100 Interests. If a Beneficiar
will 	hold 	less th 100 Interests 	,afer the_partal withdrawal for sale, a full withdrawal for
sale must be 	made. Forthe first 300 days following 	the Effective Date, a Beneficiary
holding more than 25,000 Interests will be subject to the volume limitations described
below.
In addition, Beneficiares allocated less than 1,000 shares of 	Common Stock will
also be entitled to purchase additional shares in the Purchase and Sale Program to bring
tlieir Interests up to 1,000 shares, subject to a 	minimum of $250 per purchase (or such
lesser amount that would cause the Beneficiar to hold the 1,000 maxmum number of
Interests). The Holding Company will pay the commssions and related charges of
Beneficiares that purchase or sell shares through the Purchase and Sale Program.
The Purchase and Sale Program will be administered by the Program Agent or by
a servce organation acting on behalf ofthe Program Agent. Beneficiares will be .
entitled to initiate sales of 	Trust Shares through the Purchase and Sale Program by wrtten
request to the Program Agent or orally or electronically though a toll-free telephòne
number maintained by the Program Agent and stafed by representatives of the Program
Agent or the servce organzation.8 Upon a sale of shares in the program, the Trustee's
book-entry position in the shares will be decreased and the number oflnterests allocated
to the 	Beneficiar decreased accordingly.
8. The phone operators will be strictly instructed not to provide recommendations or
advice, and they will be closely monitored and supervsed.
?OMo:Ql..0:6
Complete printed PDF page 38
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Esq. 	-27- 	. November 16, 1999	Catherine McGuire,
Douglas Scheidt, Esq.
a pur:ç!ase by sending fuds, together with	. Beneficiareswi beable to initiate
written notice of the purchase, to a ban lock boxc The check will be deposited by ban
employees into a non-interest-bearng Trust acCOUllt maitained at the Ban. All purchase
and supervsed by CMFS using its employees, many of	instructions will be processed
purchase of sn.ares in th,eprogram, the	whorn.will:also b.e;e.loyes of.CNLS. Upon a
position in the shaes viill bemcreased and the number oflnterests
allocated to the Benefia increased accordingly.
Trustee's book-entry
......ALsale..d.pii.cseintnctions receive.d on a paricular business day wil be
combined and processed together by CMFS (each, a "Batch"). CMFS v.ill first satisfy any
purchase instrctions-out of sale instructions received under the Purchase and Sale
Program fist offsettg against sale instructions received from Beneficiares holding no
moretha1i25,-OOO InterestS: ("Small :Trust Beneficiares") and then against sale instructions
received from Beneficiares holding more than 25,000 Interests ("Large Trust
there are more shares covered by sale instructions from Large Trust
Beneficiares than the remaining shares covered bycpurchase instructions, then the shares
Beneficiares"). If
the Large Trust	to be satisfied out ofthose sale instrctions will be allocated among
purchase instructions out 	of sale	Beneficiaries on a pro rata basis. The satisfaction of
be 	made at a share price equal to the opening price on the trading day
following the day.the Batch is formed.
instructions wil
If sale instructions exceed purchase instrctions, all or a portion of the excess
shares will be made available for purchase by the Holding Company as described below; if
not so purchase all of such excess shares, CMFS will place an
order with one or more executing brokers, which may include CMFS (the "Brokers"), to
the Holding Company does
event that purchase instructions exceed saleinstructions,
purchase suffcient shares to
sell the excess shares. In the
the Brokers to	CMFS will place an order with one or more of
satisfy the deficiency.
CMFS and the Brokers will process purchase and sale instructions for a Batch on
the trading day following the day the Batch is formed, provided, however, .
God or nature, mechancal or electrical	there has occurred any act of	
(a) if
breakdown, computer failure, failure or unavailability of the Federal Reserve
Ban wire, facsimile, Internet, telex, or other transaction or communicatioIls
which is such as to make it, in
the judgment of CMFS, afer takng into account all commercially reasonable
means of doing so, impracticable to process purchase and sale instructions under
the Purchase and Sale Program, or
system or power 	supply, in each case the. effect of
20665944.56
Complete printed PDF page 39
Lar Bergman Esq.
c:~therlne T. Dixon, Esq.
CàtherineMcGuire, Esq.
. Douglas Scheidt, Esq.
-28- 	November 16, 1999
(b). if 	trading 	in anyequiNsecurities of 	the Holding Company has been suspended or
materially limited 	by the Commssion or the NYSE, or if trading generally on the
NYSE..or .has been suspended or'materially limited,ot
(èY.Ifa'hang moratòrium has been. decIà.rt:d by either F edetal. or New York
.. . authorities, . .
then 	instructions will not be processed during the pendency of such events. Instructions
will--be processed 	by the dose of 	the NYSE on the trading day following the expiry of
such events.
_ _ Notwthstanding theforegoing, if, during the first 300 days afer the Effective
Date, 	the-number of shares to be sold in a Batch (after satisfying purchase instructions out
of sale instructons as descrbed above and sales to the Holding Company as described
below) on 	behalf 	of Large Trust Beneficiares 	exceeds 	the lesserof(i) 1/20th of 1% of 	the
numb.e .o.shaes.ofCommonStock outstanding and (ii) 25% ofthe average daily trading
volume for the 20 tradig days (or 	such shorter period, if fewer than 20 trading days have
elapsed since the Effective Date) preceding such day (the "Daily Trading Limit"),C11S
will process instructions on behalf of 	the Large Trust Beneficiares though market orders
for only a number of shares equal to the Daily. Trading Limit for that day. Shares
submitted for sale byLarge Trust Beneficiares exceeding the Daily Trading Limit in a
Batch are referred to herein-as the 	"Surplus Shares."
If there are Surplus Shares in a Batch;the shares covered by sale instructions
from Large Trust Beneficies' shall be allocated between the shares to be sold within the
Daily 	Trading Limt (and thus IlOt subject to the limits described below) and Surplus
Shares subject to these limits on a pro rata basis.
CMFS will process the Surplus Shares in accordance with one or more of the
foIiowing options:
(i) CMFS shall include all of the Surplus Shares not sold in accordance with
paragraph (ii) or (iii) below in the Batch formed on the next succeeding trading
day. These Surplus Shares will be deemed to be included in that next trading
day's Batch (and no longer will be included in the original trading day's Batch) for
purposes of determning the price and date at which the related sale instructions
are processed. The Surplus Shares, together with other shares to be sold on
behalf of 	Large Trust Beneficiares in the next day's Batch, will be subject to the
Daily Trading Limit applicable to that Batch. Ifthe total number of Surplus
;:n",,,i;Q~~ i;",
Complete printed PDF page 40
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Cåtneririe MèGuire, Esq.
Douglas Scheidt, Esq.
-29-, 	November 16, 1999
Shares ántLthe:oershaes to be 	sold 	on behalf 	of Large Trust Beneficiares in
the next day's Batch exceed~,the Daily n'?ding Limit on that day, then the
Surplus 	Shares.shalL.he sold_beforetheother shares to be 	sold on behalf of 	Large
Trust Beneficiares in that Batch. . This 	priority wil continue in any succeeding
trooing day.:scl.that:i:shares are to 	be SGld on that trading day on behalf of
Largè1"rust Beiieficiares from more 	than one 	Batch, the shares wilLbesold in
the order:I which the 	Batches 	were form~d.
,(ii) (a) If 	the 	Batch is formed withi 90 days"ofthe Effective Date, CMFS may
request 	Goldman, Sachs & Co. and Credit Suisse First Boston Corporation
... __ (which are expected to be the Holding Company's lead managing
underters for the Initial PublicOifering) (the "Initial Investment Bans")
to act exclusively as joint agents 	to sell all or a portion of the Surplus Shares
at market clearing prices. The lnitial)nvestment Bans will not be obligated
to accept the request, and the Initial lnvestment Bans will be deemed to
have accepted such a request if and an1y if both Initial Investment Bans
agree to act on a joint basis.
(b) If 	the Batch is formed more than 90 days after the Effective Date, CMFS
may request any nationally recognid brokerage firm to act as agent to sell
all or a portion of the Surplus Shares at market clearing prices.
Any institution acting as agent as descnòed in paragraph (ii) will either cross the
Surplus Shares which it has agreed to sell on the NYSE or will 	sell the shares off
exchange, in which case the agent will have a general obligation to obtain the
best price reasonably available in the circumstance. Sales effected in accordance
with paragraph (ii) will be 	processed on the trading day following the day the
Batch is formed.
(iÜ) CMFS may sell all or a portion of the Surplus Shares in a block trade.
(a) If 	the Batch is formed within 90 days ofthe Effective Date, CI\S may
request bids for a fixed number of shares (determned hy CMFS in its sole
discretion) from each of the Initial Investment Banks and one other
nationally re~ognzed brokerage firm. The block of shares will be sold to the
firm submitting the highest bid. If more than one firm submits the same bid
and such bid is the highest bid, CI\S will request new bids from each of the
firms previously submitting the highest bid until one becomes the highest. If
no one bid becomes the highest, then CMFS will sell the block to one of 	the
Complete printed PDF page 41
4
Lar Beremann; Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-30- 	November 16, .i 999
firm submittg the 	highest bids,' 	randomly selected by CMFS (provided that
CMFS wil alternate between firms iIiany subsequent tied-bid 	or use other
equitable .procedures to ensure 	that no firm is favored if there is more than
.. _ßli-,occaonin. wllchthereis a.tied-bid).
: (b) If-the 	Batch:Ìs fomìed more 	than 	90 days aferthe:Effective Date,CI\S
may request bids from any threènationally reeognized.brokerage firms
selected by CMFS in its sole discretiòn. The block of shares will be sold to
thefu submitting the highestbid. If more than one firm submits the same
bid and 	such bid is the highest bid, Cl\S will request new bids from each of
._. thefis..pr-eviously submitting the.highest bid until one becomes the highest.
:Jf.no ß.nebid becomes 	the 	highest, then CMFS will sell the block to one of
the firms submitting the highest bids, randomly selected by Cl\S (provided
that Cl\S wi alternate between fis in any subsequent tied-bid or use
other.equitable procedures 	to ensure that no firm is 	favored if 	there is more
1hOli occasIonIn which there isa tied-bid).
- Notwithstanding the foregoing, no institution will be obligated to submit a bid for
any 	Surplus Shares if 	requested 	by CMFS pursuant to paragraph (iii), and CMFS
will not be obligated to accept any bid it receives. Sales effected in accordance
with paragraph (iü) will be processed on the trading day following the day the
Batch is formed.
Subject to paragraph (i) above, CMFS may determne which option or options to
use in 	its sole discretion. If more than one option is used, the Surplus Shares will be
allocated among the Large Trust Beneficiares on a pro rata basis. The limitations set
forth above apply only to sales on behal of 	Large Trust Beneficiares and do not apply to
Small Trust Beneficiares.
Ifinstructions in more than one Bàtch are 	to be processed on any given trading
day, CMFS will process instructons in the order that the Batches are formed. Subject to
the requirements, the timing of processing instructions and the frequency of transaction
intervals will be subject solely to the control ofCMFS and the Brokers.
The Brokers will effect all transactions intonnectionwith the Program in the
open market on the floor of 	the New York Stock Exchange (the "NYSE") in the ordinar
course of their business, except as described in this leter with respect to sales on behalf of
Large Trust Beneficiares or sales to the Holding Company. Except as described above,
the Brokers will effect brokers' transactions solely as agent. The 	Brokers may also cross,
20665944.56
Complete printed PDF page 42
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-31- 	November 16, 1999
solely on ar agency 	basis, sales and purchase orders iIi Holding Company common stock
submitted by 	their .custome"fswith sale 	and purchase instructions received by CMFS. All
such cmssing:tranactionswill be effected by the Brokers on the floor of
the NYSE anò
the Brokers vvll not conduct negotiations. off the floor of the NYSE with respect to. such
transacts. .
A Broker inay bean_affte of the Program Agent but will not be an affliate öf
the Trustee 	or 	the 	Holding Company. Neither the Tnistèe, the Holding Company nor
their. 	respective "affliates,lI,as"thLtermis used 	in Rule 144 under the Securities Act will
be eligible to effect sales through the Purchase and Sale Program, except that (i directors
and offcer-s-ofMetLife and-(iDany subsidiar of 	Met 	Life that owns a policy on behalf on
any employee benefit plan that receive shares in the Reorganzation as policyholders of
MetLifè, and 	that 	might be considered "affliates" may sell shares through the Purchase
and 	Sale Program subjecttotherestrctions set forth in Rule 145 under the Securities Act
as described in Section G ofthis:ietter. In this respect, the Program Agent will request
appropriteinormtion from the Holding Company 	and the Trustee to identify control
persons and will structure its procedures and records 10 prevent such persons'
paricipation.
The Plan .and the Trust Agreement generally permt the Holding Company, in its
discretion, to purchase shares withdrawn from the Trust for sale through the Purchase and
Sale Program; however, no such repurchase will be permtted while the Holding Company
is-otherwise engaged in a distribution as defined in Regulation M under the Exchange Act.
CMFSwill noti the Holding Company of 	the number of 	shares available for purchase on
any trading day, as determned by CMFS, no later than 1/2 hour after the open of
the
NYSE on thát trading day., and the Holding Company will notify CMFS no later than one
hour after the open of the NYSE on that trading day of the number of shares it wishes to
purchase. Shares sold to the Holding Company will be sold at a purchase price equal to
the average of the high and low prices on the day of sale. Shares will be deemed to be
purchased first from Small Trust Beneficiares and, second, from Large Trust
Beneficiares. lfnot all of 	the shares covered by sale instructions received from Large
Trust Beneficiares are purchased by the Holding Company, the shares that are purchased
shall be allocated among the Large Trust Beneficiares on a pro rata basis. If any shares in
a Batch remain to be sold afer the first trading day, the remaining shares, together with
shares in any subsequent Batch, will be available for purchase by the Holding Company in
accordance 	with these pr-visions. Any repurchase -of shares by the Holding Company
from the Purchase 	and Sale Program will comply with volume limitations set forth in Rule
10b-18 under the Exchange Act.
Complete printed PDF page 43
ó
Lar Bergmam Esq.
Catherine T. Dixon, Esq.
Càtherine McGuire, Esq. 	-32- 	November 16, 1999
Douglas Scheidt, Esq.
sale instructions that are offset	Iftheonlytransattio.nsthat.occur intheB.atch are
Program, the price at which	and Sale	against ptichaseinstrctions underthe Purchase
will bt the opening price on the trading day
fOllbwingtheday 1hèBatch is formed. IfCMFS .places.a purchase .order, all purchase
sale.s and 	purchases shall 	be processed
assigned the same price per share. Such purchase price	be	instructons'mthe Bath will
will be the :volume weighted averge price per share of the shares in the Batch purchased
purchases 	offset against sales	on 	the daythepurclases in the Batch oGcur(incIuding any
above ).If CMF'S places a sales order, all sale instructions in thee	instructions as descrbed
Batch will be assignedthe sae price per share. Such sale price will be the volume
weighted average price per share of the shares in the Batch sold on the day the sales in the
Batch-occur.(inc1udipg any saes töthe Holding Company and sales offset against
purchase.intrctionsas descrbtd above). For purposes of determning the prices of
prices will be those reported on the New York Stock
Exchange Composite Tape on the date the purchase and sale is made, except for the prices
of shares sold to the Holding Company, which shall be the priced determned .as described
above.
purchases and salesIna Batch, the
Upon settlement of a purchase transaction, CMFS wil promptly (i) transint to
the Custodian a cOnPrmation statement prepared by CMFS,and (ii) deliver the acquired
as Trust Shares inthe Trust. The
Custodian will input the price paid for the shares on its records and update the
shares"othe Cus.todian which will deposit them
the 	increase in Interests. The Custodian will promptly mail
revised beneficiar statements to. the Beneficiares, showing the revised number of .
Interests and the price per share of Trust Shares acquired, but in any event no later than
Beneficiars account to. reflect
the Batch. The	- four trading days afer the date for the last transaction effected in
will also mail a check to theBeneficiarforany excess offunds used to acquire	Custodian
four tràding days, unless the	that Beneficiar 	withn	up to the 1,000 Interest maxum for
check is for more than $1,000, in which case the Custodian may delay mailing fOLup to 14
days in order to determne that the check deposited by the Trust Beneficiar has cleared.
Upon settlement of a sale transaction, CMFS will promptly transmit to the
Custodian. a confrmation statement prepared by CMFS and the funds received from the
Custodian will update the Beneficiar's account to reflect the reduction in	sale. The
Int.erests, and will promptly mail revised beneficiar statements to the Beneficiares,
Trust Shares sol4, but
in any event no later than four trading days, after the date for the last transaction effected
Interests and the price per share of	showing the revised number of
received to the
Beneficiar within the four trading days.
in the Batch. The Custodian will also mail a check for the funds
Complete printed PDF page 44
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire,. Esq.
Douglas Scheidt, Esq.
""-;);)- 	November 16, 1999
On or bëfore theEffective-D-atè,theBolding Company will mail Trust Eligible
Policyholders a 	brochure that 	contains a summar of 	the Purchase and Sale Program,
including 	information on 	how to make purchases and sales through the Program, the
expected commencement 	dates for purchases and sales, PLaI limitations on the number of
shares-hat may'bepurcha-sed."ad'seld;-taxconseqences from 	purchasing and sellng
shares thrùugh:theProgramand information on how to obtain purchase and sale
instruction ronns, instctions to make 	checks 	payable to the "MetLife Purchase Programll_
for purchases, 	an 	explanation on how instructions.are cõmbined into a Batch and
processed, and further information on the Program The brochure shall indicate that
transfers of shares purchased on behalf of a Beneficiar paying by check through the
Program maybe .restricteduntil the check has cleared. The brochure will also be available
to Trust Eligible Policyholders and other Beneficies upon request in wrting or through
the toll-free number maintained by the Program Agent, and will be posted for the duration
of 	the Trust on the Holding Companis website. The Trust will mail a wrtten notice to
Beneficiares each year (which is expected to be done in connection with the anual
dividend check mailings to Beneficiares) informng 	them 	ofthe of 	the 	availability of 	the
Annual Stockholder Reports on the Holding Company's website or by mail upon request
at the Holding Company's expense; of 	the availability of 	the Holding Company's and the
Trust's filings under the Exchange Act on the Holding Company's and the SEC's websites
or by mail upon request at the Holding Company's expense; of 	their rights to paricipate in
the Purchase and Sale Program and where to obtain inormation about the Program; of the
e)(pecteddate of 	the Holding Company's anual meeting 	and deadline for submission of
stockholder proposals, and when the Anual Stockholder Reports are expected to become
available; and of 	the aggregate amount of dividends and interest paid to all Beneficiares in -
that dividend distrbution. Beneficiares that telephone the toll-free number in order to
parcipate in the Purchase and Sale Program o.r to obta fuher information will be
informed that the Anual Stockholder Reports are avaible on the website or by mail
upon request at the Holding Company's expense.
The brochure mailed to Beneficiares will be plain and factual in tone and
approach, and describe all material features of the Purchase and Sale Program. It will
contain no information specifically describing the business, financial condition or results of
operations of 	the Holding Company. Readers will not be encouraged or discouraged to
engage in any purchases or sales, and no advice or recommendations will be included in
the information or be otherwse given by or on behalf of 	the Holding Company or the
Trustee during the administration of 	the program. Instead, readers will be informed
specifically that they are to make independent investment decisions based on their own
judgment and research. All information regarding the Purchase and Sale Program
Complete printed PDF page 45
-i.,	..
Lar Bergman, Esq.
Catherine T. Dixon, Esq. .34- 	. :November 16, 1999	Catherie McGuire, Esq.
Douglas Scheidt, Esq.
provided by 	the Trust willbeprÎed and 	to Beneficiáres atthe Holding	distributed
Company's expense.
In addition, thébroc~re wil. inc1udeaprom.ent statement. to the.. fo.llowing
is administered by:thecpro'gram Agent. The
Purchase ândSåle Program isnot.ad:mruStered bythe:HoldingComparyor the.Tmst;.
shares ofEommonStock held
effect" "The 	Purchase áìdSà.e Program
The Puichåse.aÎd Sale Prôgram alsow111 ihdicåtethat the
are not subjecttoprotectlon .	of Beneficiares	
in the Purchase ahd'Sale Program on behalf
under theSecuritiés Investor Protection Act.
The Program Agentwillestablish a Purchase and Sale Program call center,
about the Purchase and	with employees of 	the Progr Agent, to answer inquiries	staffed
be effected. No recommendation
employees, nor will any
Sale 	Program 	and though which sale transactions can
or solicitation will be made by the Program Agent or these
them about the price that will bereceived for shares sold or the	assurarcebe 	by	
given
price that will be paid for purcbingadditional shares. In addition, no purchase
accepted by 	the call center.	instruction will be
the Associates to inform Eligible	Informational Activities. MetLife intends to use
the Plar. The Associates may (i) contact Eligible Policyholders to ensure	Policyholders of
the Policyho.ders'Voteand the Policyholder	that they 	have received the notice of
InformatioáBooklet, (ii) answer any-questions Eligible Policyholders may have in
the Policyholders' Vote, the	the. 	Hearng, notice of	.connection with the notice of
Policyholders' Vote,	the 	Plan 	or the	
Polieyholderlnformation Booklet, the mechanics of
and (iiiY~iscuss With Eligible Policyholders thecReorganzation. The Associates will not
be compensatéd,directly or indirectly, for their efforts in connection with such activities,
except to the 	extent that call centér personnel have been 	employed specifically to pedorm
the call center function.9 -
9. MetLife expects that the demutualization call center will be staffed with employees of
the Program Agent or of an agent engaged by the Transfer Agent. Such employees
will be compensated on an hourly or salared basis.
~f'"r,.ii r.c
Complete printed PDF page 46
""I
~'6i2
(\
š
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-35- 	November 16, 1999
In 	discussions withEligible Policyholders concernng the Plan, the Associates wilt
be specifically instructed in wrting and through other procedures to be implemented by ,
MetLife to refrain from:
(a) _:isi.:en_materi :otherth the notice ()f the Hearng, 	notice of the ,
Policyholders' Vote, Policyholder Information Booklet or other documents prepared
by MetLife for us.ein connection with. 	the Policyholders~ Vote, or makng any
. revisions to such documents;
(b) makng .any statements not derived from the Policyholder Information
.. Booklet -mother documents approved by MetLife for use in connection with the
Policyholders' Vote;
(c) 	discussing the potential 	market value of 	Common Stock or advising Eligible
Policyholders on whether or 	not 	to receive cash in respect of 	their allocated shares at
the tie of the Initial Public Offering; or
(d) discussing with Policyholders their personal plans to invest or not invest in
Common Stock.
MetLife will communicate these restrictions to its insurance agency sales force,
brokers, dealers and other distbutors of 	its insurance products, as well as its offcers,
dírectors and employees, through offcial bulletins from MetLife's senior management.
MetLife will designate persons to assist Associates with inquiries related to the
Reorganation.
CMSS, as conversion agent to the Reorganzation, will establish a
demutualization call center to anwer questions about the Reorganzation. CMSS intends
to use a servcing organzation to assist it administering the call center. The call center
will be stafed with employees ofCMSS or this servcing organation, many of 	which,
due to the unprecedented size ofthe transaction and the expected number of calls, will
have been hired specifcally for that purose. CMSS, MetLife and the servcing
organation will provide special training to such persons about issues related to the
Reorganzation, including adherence to the above restrictions.
The demutualization call center will be operated separately from the Purchase
and Sale Program call center described above, although it win have the same toll-free
number. However, since the Purchase and Sale Program will commence shortly after the
Effective Date, it is likely that the two call centers will overlap. Employees of 	the
Complete printed PDF page 47
.
Lar Bergman, Esq.
Catherine T"Dixo.n, Esq.
Catherine 	McGuire, Esq.
Douglas Scheidt, Esq.
-36- 	Nòvember 16, 1999
demutualizatiqncallcenter.wiÚbe instrtcted to dir~ct callers with inquiries abOut 	the
Purchase and Sale Program (other than ql1estioris relating to the nature of the Purchase
and SaleProgram that are relevant to the decision on whether or not to vote for the Plan)
to the -1~ur~hase âId Sale Pr0gi~ cali~~nter, which is expected to be accessible at the
sametolJ-rree nnnhernyselectrig a dìf~rentoption at the beginning of 	the calL.
Duringtlîe period prior to 	the Reorganzation, including the period when Eligible
Policyholders will be asked to vote on the Plan, MetLife's insurance agency sales force,
brokers, dealers and other distbutors'ofits insurance products, as well as its offcers,
directors 	and employees, will go about their normal activities, subject to the restrictions
set forth abÒve. MëtLife anticipates tlt such activities may well include general
discussion ofthe 'effects that the Reorganzation may have on MetLife.
DISCUSSION
A. Application of 	Section 3 	(a)(l0) of 	the Securities Act
to Exchange of 	Policyholders' Membership Interests for
MetLife Common Stock. Common Stock and Interests
Absent an exemption or exclusion from the registration provisions of the
Securities Xct, the securities issued pursuant to the Plan would need tobe registered
under Section 5 of 	the Securities Act. For the reasons set forth below, it is our view that
such securities are not required to be registered because of 	the exemption 	from
registration provided by Section 3(a)(1 0) of 	the S~curities Act. 10 We note that the staf
has previously taken no-action positions involving Section 3(a)(1O) in the context of
reorganzations 	comparable 	to the MetLife Reorganzation.
11
10. The securties 	to be issued under the Plan include the Series A Junior Paricip~ting
Preferred Stock purchase rights associated with 	the Common Stock that will be
distributed in accordance with the Holding Company's Stockholders' Rights Plan. It
is our opinion that those rights may be issued to the Trust on behalf of 	Beneficiares in ..
reliance on the exemption provided by Section 3(a)(l0) under the Securities Act for
the same reasons discussed above relating to the Common Stock.
11. See,~.g., John Hancock Financial Servces. Inc. (Nov. 8, 1999), Standard Ins. Co.
(Jan. 	26, 1999), Far Famlv Mut. Ins. Co., 1996 SEC No-Act. LEXIS 410 (April 	2,
1996); Blue Cross and Blue Shièld of 	Virginia, 	1996 SEC No-Act. LEXIS 554
(continued... )
Complete printed PDF page 48
¡¡
Lar Bergman Esq.
CatherineT. Dixon, Esq.
Catherine McGuire, Esq. 	-.-37- 	November 16, 1999
Douglas Scheidt, Esq.
provides an exemption .from the registration requirements oftpe	Secton 3(a)(1O)
Securities Act for, in relevant par:
any secuty which is issued in exchange for one or more bona fide
outstanng seciiries,:claimsor propert interests, or. partly in such
exchange and parly for cash, wherethe terms and. cond.iions of such
hearng upon the fairness of	issuance and _exchange are approved, afer a
suchtermsand conditions atwhIch all persons to whom it is proposed
to issue.securti ID.suchexchange.sh have .the right to appear, by
any court, or by any offcial or agency of the United States, or by any
State or Terrtorial banng or 	insurance commssion or other
governental authority expressly authonzed by law to grant such
approval.
In Securities Act Release No. 312,12 the Commission's General Counsel stated
the
following conctitions:
that the Section 3(a)(1 0) exemption depends, among other things, upon satisfaction of
(i) The approving authority must be expressly authorized by law to hold a
hearng on the exchange, although it is not necessar that the hearing be mandatory;
the hearng must be given to all persons to whom it	(ii) Adequate notice of
is- proposed to issue the secuties in the exchange; and
(iii) If the approval of a state governental autbority is involved, that
agency must be expressly authorized by law to approve the fairness of the terms and
the proposed exchange.	conditions of
11. (...continued)
(June 14, 1996); Guarantee Mut. Life Co., 1995 SEC No-Act. LEXIS 461 (April 13,
America, 1995 SEC No-Act. LEXIS 414
the United States, 1992 SEC
1995); State Mut. Life Assurance Co. of
(March 23, 1995); Equitable Life Assurance Soc'v of
No-,Act. LEXIS 234 (Feb. 20, 1992) ("Equitable I"); Empire Mut. Ins. Co., 1987
SEC No-Act. LEXIS 2866 (Dec. 21, 1987); Californa Mut. Ins. Co., 1986 SEÇ No-
Act. LEXIS 1748 (Feb. 14, 1986); Home Servce Mut. Ins. Co., 1981 SEC No~Act.
LEXIS 4239 (Nov. 9,1981); Beacon Mut. Indem. Co., 1980 SEC No-Act. LEXIS
3885 (Nov. 3, 1980).
12. 1 Fed. Sec. L. Rep. (CCH) iiii 2181-2184 (Mar. 15, 1935).
Complete printed PDF page 49
Lar Bergman~ Esq.
Catherine T. Dixon, Esq.
Esq. 	-38- 	November 16, 1999	Catherine McGuire,
Douglas Scheidt, Esq.
(CF),1997SEGNo-Act:LEXIS 755 (July 25, 1997)
(revised October 20, 1999), the Commission's staf stated that Inits view the conditions
In Staff 	Legal 	Bulletiñ No. 3
exemption include the following:	0)	for satisfyng the 	Section 3 	(a)(l
u--i):-1fire .secies-mst'beissued in eXGhangeJo.rsecurities, claims, or
cash;	propert intetests;theycà.ot:be off.ered for
approve the fairness of	or 	authorized .governental entity 	must	
(ii) Acourt
the terrsc.a conditiOns of 	the exchange;
entity must (a) find,(iii) The reviewiri-court.er authorized governental
the exchange are fair to	before..approvingthetransaction,~thattheJerms and conditions of
those who will be issued securities and (b) be advised before the hearing that the issuer
will rely on the Section 3 	(a) (1 0) exemption based on the court's or authorized
the transaction;	of	goverrental entity's approval
entity must hold	Before approval, the 	court or authorized governmental	
(iv)
a hearng to approve the fairness ofthe terms and conditions of the transaction;
be expressly authorized by law to hold the	(v) A governental entity must
hearng, although it is not necessar that the law require the hearng;
(vi) The faiess hearng must be open to everyone who is proposed to be
issued securities in the exchange;
notice must be given to all those persons;	(vii) Adequate
improper impediments to the appearance by those.	(viii) There canot be any
persons at the hearng.
pursuant	For the 	reasons stated below, we believe that the securities to be issued
to the PLàI will satisfy each of these conditions. We note that the New York Statute has
previously been the subject 	of a no-action letter from the staf in connection with the
demutualization of The Equitable Life Assurance Society of the United States in 1992.13
13. See Equitable I, supra note 11.
?n~~r:o/.l. r:¡,
Complete printed PDF page 50
~
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire; 	Esq.
Douglas Scheidt, Esq.
-39- 	November 16, 1999
The Plan 	provides 	that 	the shares of 	Met 	Life Common Stock alocated as
consideration under the Plan to Trust Eligible Policyholders will be issued to the Trust,
and that Interests will be allocated to Trust Eligible Policyholders equal to the number of
such shares. Then the Trust wilL by 	operation of 	the Plan, immeqiately.exchange its
shares of 	Met 	Life Common_Stock for an. equal number of shares of Common Stock.
This structure is consstent with the requirements for the exemption from
registration 	provided by Section 3(a)(10). The MetLife Common Stock will be issued in
exchange for the Policyholders' Membership Interests, which have been recognized by the
staff as exchangeable under Section 3(a)(10).14 Likewise, the Common Stock and
Interests (a "security" as defined under Section 2(a)(I) of 	the Securities Act) will be issued
in exchange for the MetLife Common Stock. Each step is a necessar and integral step to
the receipt by Trust Eligible Policyholders oflnterests in exchange for their Policyholders'
Membership. Interests.
. Under the Plan, each step will be consummated pursuant to the New York
Statute. As noted above, the New York Statute requires the Superintendent to hold a
public heañng on the Plan. The Deparment has been recognized by the staff as an
authorized governental entity.15 A notice of 	the Hearng, together with a summary of
the Plan, will be mailed to Eligible Policyholders (unless MetLife has reasonable beliefthat
the most recent mailing address of an Eligible Policyholder on the records of 	Met 	Life is no
longer vald), which includes the entire class of persons to whom it is proposed that the
securities will be issued under the Plan, and will be published as described above. The
notice and the accompanying materials sent to each Eligible Policyholder will state that
any Eligible Policyholder will have the right to appear and be heard at the Hearng, and 	set
out the procedures to be followed in order to exercise such rights. Therefore, "all persons
14. See John Hancock Financial Servces, supra note 11 (permtting reliance on 	Section
3(a)(10) in an exchange of 	policyholders' membership interests in a mutual insurance
company for securities); Standard Ins. Co., supra note 11; Far Famly Mut. Ins. Co.,
supra note 11 (same); Blue Cross and Blue Shield ofVirgInia, supra note 11 (same);
Guarantee Mut. Life Co., supra note 11 (same); State Mut. Life Assurance Co. of
America, supra note 11 	(same); Equitable I, supra note 11 (same); Empire Mut.Jns.
Co., supra note 11 (same); Californa Mut. Ins. Co., supra note 11 (saíe); Home
ServceMut. Ins. Co., supra note 11 (same); Beacon Mut. Indem. Co., supra note 11
(same).
15. See Equitable 1, supra note 11.
Complete printed PDF page 51
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-40- 	November 16; 1999
Douglas Scheidt, Esq.
to whom it is 	proposed to issue securities" under the Plan will receive adequate notice of
the Hearing.
York . Statute requires. thatthe Superintendent	Afer 	the Hearg, the NeW
approve the Plan 'ôruy'ífhenndsltthe-pròposed reorganzation, inwhole and in 	par, 	does.
not violate (the New York Insurance Law), is fair and equitable to the policyholders 	and is
the reorganation,thë	not detrimental to 	the publitam thãt,afèr' giving effect to
reorganzed insurer will 	have an amount 	of capital and surplus the superintendent 	deems to
future solvency." The N ew York Statute and the Plan	be reasonably 	necessar for its
their capacity as
policyholders of a mutual insurancè company, and on the terms and conditions of the
focus on the effect of 	the Plan on the Eligible Policyholders, in
exchange of;their POIÌcyholders~ Membership Interests for consideration in the form of
credits. The Hearng record also will include	stock held in 	the 	Trust, cash 	or policy
by MetLife's financial and actuaral advisors as to certain financial and	opinions delivered
Life's special counselor Internal
RevenueSeiceiungs as to certn ta matters arsing out of the consideration payable
under the Plan.
actuaral matters relating to the Plan, and opinions of 	Met
advised before the hearng that the	Furtermore, the Superintendent will be
Holding Company will rely on the Section 3( a)(1 0) exemption for the securities issued to
Eligible Policyholders under the Plan based on the Superintendent's approval of 	the 	Plan.
T~e issuance of 	the securities is an integr-a component of 	the Plan as a whole.
or her determnation that the reorganzation will be "fair and	Accordingly, in makng his
equitable to the 	policyholders," theSupèrintendentwi also need 	to 	conclude that the
the	issuance ofMetLIfe Common Stock ardCommon Stock 	and the allocation of
to be taken under the Plan, meets that same	Interests, as contemplated and required
standard. Based on the foregoing, the Superintendent's determnation with respect to the
Plan necessarly will meet the requirement of Section 3(a)(1 0) that the terms and
the issuance of securities be approved by the Superintendent, afer a hearng	conditions of
all persons to whom it is proposed to issue securities shall have the right'to
appear. Accordingly, in our opinion the securities issued pursuant to the Plan are exempt
at which
from registration pursmint to Section 3 	(a) (1 0) of the Securities Act.16
16. If Section 3 	(a) (1 0) exempts from registration under the Securities Act securities'
issued pursuant to the Plan it is also our view that Rule 145 under the Securities Act
would not otherwse require the registration of 	such securities because of 	the
language in the Preliminar Note to Rule 145, which states that "(t)ransactions for
(continued... )
Complete printed PDF page 52
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-41- 	.November 16, 1999
B. Integration of 	Securities Issued to
Policyholders and the Initial Public Offering
It i~ our view that 	the issuance of securities in the Reorganzation should not be
integrated with the Initial Public Offering. Securities Act Release No. 4552 (November 6,
1962) identifies five factors that the Commission considers relevant in determing
whether offerings should be 	integrated. Set forth below is an 	analysis of 	each of the five
factors as applied to the Initial Public Offering, on the one hand, and the Reorganzation,
on the other. Additionally, strong policy considerations 	support the conclusion that the
Commssion should not integrate the offerings.
1. Are the offerings par of a single plan of financing? The issuance of securities to
Trust Eligible Policyholders in the Reorganzation is not a financing transaction as the
Holding Company will raise no new capital through the reorganzation distribution.17 By
contrast, the Initial Public Offering is a financing transaction that will raise capital for the
Holding Company in addition to amounts necessar to fund policy credits and make cash
payments to Eligible Policyholders not receiving Interests under the Plan. Therefore, the
Reorganzation distnoution canot be par of a single plan of financing with the Initial
Public Offering. As was the case in previous reorganizations, the Plan requires that
proceeds from the Intial Public Offering fund the crediting of policy credits and the
payments of cash as consideration under the Plan. The Plan provides that a portion of the
proceeds may be retained by the Holding Company, with the remainder 	contributed to
16. (...contiued)
which statutory exemptions under the (Securities) Act, including those contained in
Section (3 	(a) (1 0)), are otherwse available are not afected by Rule 145." See John
Hancock Financial Servces, supra note 11; Standard Ins. Co., supra note 11; Far
Famlv Mut. Ins. Co., supra note 11; Guarantee Mut. Life Co., supra note 11; State
Mut. Life Assurance Co. of America, supra 	note 11; Equitable 1, supra note l 1;
Provident Life & Accident Ins. Co., 1987 SEC No-Act. LEXIS 2371 (Aug. 24,
1987); American Banerslns. Group. Inc., 1980 SEC No-Act. LEXIS 3319 (May 5,
1980); see also Securities Act Release No. 5463, Fed. Sec. L. Rep. (CCH)~. 3058
(Par I, Ilustration B).
17. See John Hancock Financial Servces, supra note 11; Standard Ins. Co., supra note
11; Far Famlv Mut. Ins. Co., supra note 1 I; Blue Cross and Blue Shield of "
Virginia, supra note 11; Guarantee Mut. Life Co., supra note 11; State Mut. Life
Assurance Co. of America, supra note 11; Ohio Valley Bank Companv/Ohio Vallev
Bank 1992 SEC No-Act LEXIS 897 (Aug. 27, 1992); Bavswater Realtv & Capital
Corp. SEC No. Action Letter, W1 File No. 050382004 (Apr. 30, 1982).
Complete printed PDF page 53
Lar. 	B ergman, 	Esq.
Catherine T. Dixon, Esq.
McGuire, Esq. 	-42- 	November 16, 1999
Douglas Scheidt, Esq.
Catherine
MetLife àld used for general corporate purposes, as well as for the other purposes
ofa 	portion of 	the 	proceeds 	of the lnitial.Public	specified in the PLan Therefore, the use
credits and cash payments to certain Eligible Policyholders does	Offering to fund policy
securities to Eligible	not vitìate the 	existence of 	the :Seètiòn 3(a)(1O) distribution 	of
Policyhôlders.'2. Do the Òfferings involve thë 	issuance 	of thesaine class of securities? Common
Stock wil be issued through the Initial Public Offering to new investors and, through the
Trust, to Trust Eligible Policyholders. However, the Interests themselves are a discrete
class of security from a dierent issuer.
3.--. Aretheufferings mae at or about the same time? Although the Initial Public
Offering wiU close simultaneously with the Effective Date, the actual offers to Eligible
,Public Offering will not occur at the same	Policyholders and to purchasers in the Initial
and the New York Statute provide that the Eligible Policyholders will vote	time. The Plan
Effective Date. Thus, there will 	be a	on whether-to.appro.ve1he-Plan prior to the
.. signficantar0unt oftimeh~twen the offering to Eligible Policyholders, 	which will
conclude with the Policyholders' Vote, and the offering to investors, which will conclude
with closing of the Initial Public Offering, even tho.ugh both issuances occur on the same
date.
... 4. Is the same tye of consideration to bereceived? The Holding Company 	will
receive cash consideration in the Initìal Public Offering which differs from the
the Policyholders' Membership Interests, received by	consideration, the extinguishment of
MetLife and the Holding Company in consideration for issuing securities to TrustEligible
Policyholders in the Reorganzation.
5. Are the offerings made for the same general purose? The Initial Public Offering
and the issuance of secures to Trust Eligible Policyholders will beconducted for
different purposes. The Intial Public Off~ring will be made for the purpose of raising
capital. for both fuiidig cash payments and crediting of policy credits under. the Plan and
for general corporate purposes and for the other purposes specified in the Plan. The
issuance of securities to Trust Eligible Policyholders will not raise new capital, but will be
made for the purpose of effecting the Reorganzation and converting MetLife from a
life insurance company to a stock corporation.	mutual
In addition to the foregoing analysis, we note that the exemption from registra-
the Securities Act is based on a policy determination	tion provided by Section.3(a)(10) of
the registration requirements of the	that the protections provided to securityholders by
Complete printed PDF page 54
..
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-43- 	November 16, 1999
Securities Act are unnecessar in the case of securities issued in an exchange offer which
is found tobe fair by a 	governent authority following a public hearng. Therefore, no
purpose would be served by integrating such exempt offerings with registered offerings.
Accordingly, we believe that it would not be appropriate to integrate the offerings of
securities in the Reorganzation with the Initial Public Offering.
C. Registration of 	the Interests under 	the 	Exchange Act
Section 12(g) of 	the Exchange Act and Rule 12g-1 thereunder provide that
certain "issuers" with total assets exceeding $10,000,000 and a class of 	"equity securities"
. held of record by 500 or more persons must register under the Exchange Act. An
"issuer" is defined under Section 3(a)(8) as "any person who issues or 	proposes to issue
any security." MetLife and the Trust intend that the Trust will register 	the Interests under
a registration statement on Form 8-A under the Exchange Act. The registration statement
will include descriptions of 	the Interests, the Common Stock and the rights issued under
the stockholder rights plan 	adopted by the Holding Company required by Item 202(a)of
Regulation S-K, including information which will be 	incorporated by reference from the
Holding Company's registration statements on Form 8-A for 	the Common Stock and
rights. In addition, the Trust will file, at the time of mailing of dividends and other
distributions to B~neficiares under the Trust Agreement, financial statements of 	the Trust
only, showing the distributions received and paid by the Trust during the period ending on
. the financial statement date and the Trust Shares and other assets held on that date. The
. filing made in connection with the anual distribution of cash dividends will be 	on a Form
10-K, and the financial statements included therein will be audited. Any fiings made in
connecton with distributions made at other times of the year will be on Form 8-K, with
unaudited financial statements. The Trust will also file reports on Form 8-K ifthereIs an
event relating to the Trust that requires disclosure under that form.
We believe that these filings will provide Beneficiares with adequate 	disclosure
regarding the Interests and the Trust's operations. These filings will provide public
disclosure of 	the Trust's assets and its operations (namely, the receipt, 	any investIent and .
distribution of dividends to Beneficiares). Information about the Holding Company itself
will be publicly available through the Holding Company's Exchange Act reports.
Furthermore, since the Beneficiares alone will have the authority to determne when and if
Trust Shares are to be sold on their behalf 	though the Purchase and Sale Program or,
afer one year, withdrawn from the Trust, they will not be relying on advice of the Trust
or the Trustee (which is essentially a passive entity) in makng investment decisions
affecting their Interests that would benefit from disclosure. We do not believe that
subjecting the Trust to the further periodic reporting requirements of 	the Exchange Act
?nJ'J'r:ol.l. r:J'
Complete printed PDF page 55
LarryBergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-44- 	November 16, 1999
wouldserve-toHbeìíeft the~BeneficiaresOI- the public. Therefore; . 	we' 	request confrmation
that thestafwiH notTecommendth the Commssion take any 	enforcement 	action if 	the
Interest 	à.eregitered 	uri.der the;Exchange~Act and 	the Trust files 	Teports under 	that. 	Act .
as descrbed 	above. . .;
D. AppliCation .of Section 14 	of the Exchange Act
and 	Rëlevant Rules to Mailings ofP:toXy Statements
and. Anual and Ouarterlv Reports to Beneficiares
Section 14.ofthe Exchange Act and 	the regulations 	thereunder provide,.in
certain circumstances, thatpfOXY materal, anual reports orjnformational statements
must he dissemnated.to beeficial owners 	of registered securities 	and that certain
procedures be followed in c.onnectionwith a stockholder vote or consent. In addition,
such regulations require, -in certain circumstances, that registrants and others inquire. asto
the beneficial ownership of its registered securities, and proVide certain information
responsive toth:requesLHWe requestthsfafs confrmation that 	it will not recommend
that the Comrssion tae any enforcement action if (i) no proxy soliciting materials,
anual and quarerly reports or infonnation statements are disseminated to Beneficiares in
connection with a vote 	or consent of 	stockholders of 	the Holding Company, except, as
described in this letter, in co.nnection with a Beneficiar Consent Matter or 	upon request
of 	Beneficiares, (ii) the procedures described in this letter for the distribution of materials
iii connection 	with a Beneficiar Consent 	Matter (including the procedures for requing
mailing and 	other expenses be reimbursedby.a stockholder in certain circumstances) are
followed. and 	(Üi) . none of the Holding Company, the Trust, the Trustee or Custodian, any
of their respective afliates; or their respective offcers, directors or employees inquires as
to the 	beneficial ownership of 	the Trust Shares in connection with a vote or 	consent of 	the
Holding Company's stockholders, or provides information in connection with those
inquiries, except in connection with a Beneficiar Consent Matter. The relief sought in
this letter applies only to the shares. 	of Common Stock held in the Trust and not to any
other shares of Common Stock outstanding. We are furthermore not 	seeking relièf in
connection with a solicitation of consents from Trust Beneficiares to amend the Trust
Agreement (except to the extent the solicitation is viewed to have been made in
connection with a Beneficiar Consent Matter), to the extent that any such solicitation
would be subject to the proxy rules under the Exchange Act.
As discussed above, pursuant to the terms of 	the Trust Agreement, Beneficiares
are entitled 	to instruct the Trustee on how to vote the Trust Shares only with respect to a
Beneficiar Consent Matter. On all other matters, the Trustee will vote in accordance
Complete printed PDF page 56
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-45- 	November 16, 1999
with the recommendation given by the Board of Directors of the Holding Company to its
stockholders or, if no such recommendation is given, as directed by the Board.
We 	note that this 	structure is an integral component 	of 	the Plan and the Trust
Agreement 	and, as such, will be fully disclosed to Eligible Policyholders in 	connection
with 	their consideration ofthe Plan; These 	provisions, moreover, will 	not go into 	effect
unless the Plan, including the Trust Agreement; is approved by the Superintendent and by
two-thirds of 	the Eligible Policyholders that vote. Prior to the Policyholders' Vote, the
Eligible Policyholders will be mailed the Policyholder Information Booklet which wil
describe in detail the Trust structure and the voting mechansm under the Trust. It will
disclose the distiction that will be drawn under the Plan between Beneficiar Consent
Matters (upon which the Beneficiares wil direct the voting of 	Trust Shares) and those
matters upon which the Beneficiares, in 	effect, will be deemed to have authoried the
Board of 	Directors of 	the Holding Company to direct the voting of 	Trust Shares. It will
further disclose that; unless otherwse requested, Beneficiares will be mailed the Anual
Stockholder Reports only with respect to a matter upon which the Beneficiares will direct
the voting.
Absent the relief 	sought by this letter, Rules 14a-13, 14b-l and 14b-2 under the
Exchange Act may require the Holding Company, the Custodian (to the extent that it or
its affliates is a registered broker-dealer subject to that provision) and the Trustee,
respectively, to comply with certain requirements in connection with the distribution of
proxy material and anual reports to the Beneficiares, as beneficial owners of the Trust
Shares, in connection with matters that are submitted to a vote of stockholders.
Regulation 14C contas comparable requirements for the distribution of information
statements and anual reports. We believe thatno purpose would be served by requiring
the Holding Comp91Y, Custodian and Trustee to comply with these requirements in
connection with matters other than Beneficiar Consent Matters. In those non-Beneficiar
Consent matters, the Trustee will vote as recommended or directed by the board of
directors of 	the Holding Company and, accordingly, Beneficiares do not have the right to
direct the voting of 	the Trust Shares.
As discussed above, the Trust has been structured to eliminate the costs
associated with mailing the Anual Stockholder Reports to the over 10 million
Beneficiares in circumstances where they do not have the right to vote or direct the"
voting of 	the Trust Shares. Importantly, such materials will be made available to
Beneficiares on a website maintained by the Holding Company, and Beneficiares will be
able to obtain any such materials, at the Holding Company's expense, by notifyng the
Trustee in wrting or through a toll-free number. Beneficiares will be informed anually
20665944.56
Complete printed PDF page 57
Lar Bergman-Esq.
Catherine T. Dixon, Esq,
Cåtherine McGuire, 	Esq.
Douglas Scheidt, Esq.
-46- 	November 16, 1999
(which is 	expected 	to be 	done 	in connection with the anual 	dividend check mailings to
Beneficiares) of 	the availability of the Anual 	Stockholder Reports on the Holding
Company's website 	or by mail. 	upon request at the Holding Company's expense; of 	the
availability 	of th 	Holdig Company's 	and the. Trust's fiings 	under the' Exchange Act on
the H0idingiGpanyiS.and.tlie'~E-Gs~websit.es or by riailupon request auhe Ho.lding
Company'sexpense;..dfthein:ightsto paricipate 	in the Purchase and SalePro.gram and
where toobtainirionnation about the. Pr~gr~; of theexpeèted. date. of the Holding
Company's 	anual meeting and deadline foršubmissionof stockholder proposals,. and
when the 	Anual Stockholder Reports,ae ex,pected to become available; and. of the
aggregate amount of dividends and interest paid to all Beneficiares in that dividend
distribution.. 	Beneficiares thattelephoneihe toll-free 	number in order 	to paricipate in the
Purchase and 	Sale PrO,.,ram or to obtain furter information will 	be informed that the
Anual-Stockholder Reports 	are available on the website or by mail upon request and at
the Holding 	Company's expense. Beneficiares desiring to receive these materials as
stockholders of 	the Holding Company will be. 	able to do so by selling their shares in the
Purchae and. Sale 	Program 	and buying 	new ::ares or, after the first.anversar'ofthe
Effecte Date, withdrwig their shares from the Trust.
Furthermòre, when decidig whether or not to purchase or sell their 	allocated
shares of 	Common Stock though the Purchase and Sale 	Program; the Beneficiares, will
be adequately informed, from reports filed under the Exchange Act by the Holding
Company, of 	material events regarding the Holding Company. Like stockholders of 	the
Holding Company, they will be able to rely on the disclosure system contemplated by the
Exchange Act when makng investment decisions regardig their 	allocated shares of
Common Stock and will not need to have transmitted to them personally the Anual
Stockholder ReportsOin order to be inforted of 	the Holding Company's activities.
Beneficiares may always request the Anual Stockholder Reports to be mailed to them 	at
the Holding Company's expense and, if 	they acquire 	shares outsidétheTrust, will also be'
receiving these matenals as.stockholders of 	the Holding Company.
Rule 14a-7 requires that mailings made by registrants on behalf of security
holders satisfy certai requirements, including that the registrant be reimbursed for its
reasonable expenses incurred in mailing materials on behalf of the requesting security
holder (other than expenses of effecting the mailing, which must be tendered prior to
mailing 	under Rule 14a-7(a)(I)). We believe that the Trust Agreement provisions camply
substantialy with these requirements. As noted above, the Trust Agreement contains
detailed provisions for the mailing of materials on behalf of contesting stockholders to
Beneficiares, including requiring that the Custodian receive, prior to mailing, payment of
estimated postage 	and reasonable expenses to effect the mailing of such materials and such
Complete printed PDF page 58
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-47- 	November 16, .1999
security as the Custodian may reasonably request to cover expenses in excess of that
estimate. Due to the 	unprecedented number of 	Beneficiares that would receive any such
mailing and, as a result, the significant costs 	required to effect mailings to Beneficiares,
MetLife believes thatthe provisions in 	the Trust Agreement establish reasonable
requirements to 	ensure that ~ch materials are disseminated to Beneficiares without
imposing any 	undue hardship on 	any 	of the 	paries 	involved.
E. Reports Filed under Section l3Cd) and 16(a) under the Exchange Act
Section B( d). For Section l3( d) reporting purposes, a beneficial owner of a
security is defined as any person who, directly or indirectly, through any contract,
arangement, understanding, relationship, or otherwse has or shares voting power (which
includes the power to vote, or to direct the voting of, such security), and/or investment
power (which includes the power to dispose, or to direct the disposition of, such security).
See Rule 13d-3(a).
We believe. 	tht the Beneficiares should be considered the beneficial owners of
their allocated Trust Shares since 	they have investment power over those shares. As
discussed above, the Trustee may dispose of 	Trust Shares only in 	accordance 	with 	the
Beneficiares'instructions. We believe thatthe power to instruct the Trustee to withdraw
Trust Shares for sale through the Purchase and Sale Program or, after one year afer the
Effective Date, to be held or otherwse disposed of 	by the Beneficiar, would constitute
investment power under Rule 13d-3(a). Thus, we believe that the Beneficiares should be
considered the beneficial owners 	of 	the Trust Shares allocated to them for purposes of
Section 13(d) and the rules promulgated thereunder. The relief 	requested in this letter
does not address a Beneficiar's individual obligation to file a Schedule 13D if 	the
Beneficiar beneficially owns, directly and through the Trust, more than five percent of 	the
outstanding shares of Common Stock.
We understand that the staf 	may believe that members of 	the Board ofI?irectors
of the Holding Company may together be considered a beneficial owner of the Trust
Shares as defined under Rule 13d-3(a). As discussed above, the Trust Agreement
provides that, in all cases other than a Beneficiar Consent Matter, all Trust Shares will be
voted in accordance with the recommendation given by the Board to its stockholders or, if
no such recommendation is given, as directed by the Board. With respect to those .'
matters, therefore, the Board of 	Qirectors may be 	considered a beneficial owner of 	the
Trust Shares for purposes of 	Rule 13d-3(a). We request confrmation from the staff 	that it
will not recommend enforcement action if 	the filings required under Section 13(d) are
made in the maner described below.
20665944.56
Complete printed PDF page 59
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.'
-'8- 	November 16, 1999
It is expected-that"fre initial-statement on 	Schedule 13D to be filed by the Board
of Directors, reporting 	the acquisition of 	voting 	securities registered under Section 12 of
the ExchangeAct,wilbe.'liled within i 0 daYSafer such acquisition. The Schedule 13D to
be filed by thèBD.ariLofDirectors is 	expected 	to be.made as a siiìgle filing under Rule 13d-
1 (k)(2).."l'he-Sc1iëdU1é'13lYiVn.'Iòtétna'Fthè~'Board 'of Directors 	,has shared voting 	power
over all TrustShareswithrespect1:o-máttêr.s sûbIIëd 'fora vöte of stockholders of the
Holding 	Company other than 13enefici Consent Matters. The filling will be made on
behalf of 	the boardasawholé;and notthè.individual members, 	although they will each
sign the 	sttement.
The:coverpageto-5cledule 13D and Item 5 therein each require disclosure by
each reporting- persOI-of the -"aggregate number and percentage of the class of securities
.., beneficialy owned ..~ by".such reporting person. Although the Board of 	Directors may
be deemed a beneficial owner of 	Trust Shares, we do not believe that any individual
member of 	the Board of 	Directors oftlie Holding Company should be considered a
beneficial owner underRule13d-3(a). The Board may only act by majority vote and no
individual membermay actindividually to instct 	the stockholders~genera1ly or the
Trustee how tö vote the Trust Shares. As a result;. no individual member of the Board of
Directors has the power 	to 	direct the voting ofthe shares and, accordingly, no such person
shoùld be considered to be'aberieficial owner of 	Trust 	Shares (other than those allocated.
to the member as 	an Eligible Policyholder) for Section B(d) purposes.18 Accordingly, it is
expected that the statement 	on Schedule 13D to 	be filed by the Board of 	Directors 	will
disclose only the Tnist Shares held by the Trut at the time the filing is made. To the
extent that any individual member would 	be required to file a Schedule 13D by virtue of
the investment or voting 	power held by such member over other shares of Common Stock,
that member would .beexpetted to file a Schedule 13D with respect to those shares. The
member's individual Schedule 13D would not include the shares owned by any other
member of 	the Board of 	Directors.
Rule 13d-2(a) under the Exchange Act requires 	prompt amendment of a
Schedule 13D upon a material change in facts set forth therein, including an acquisition or
disposition of 	beneficial ownership of securities in an amount equal to one or more percent.
ofthe class. As discussed above, the initial 	Schedule 13D to be filed by the Board of
Directors will include all of 	the Trust Shares 	held by the Trust at the time of 	the filing.
Once the Purchase and Sale Program commences, however, the number of 	Trust Shares
will change on a daily basis due to purchase and sale instructions made by Beneficiares
18. See The Southland Corp., 1987 WL 108107 (Aug. 10, 1987).
Complete printed PDF page 60
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.,
Douglas Scheidt, Esq.
-49- 	November 16, 1999
over which neither the Board 	nor the Trust has any control. It would be unduly
burdensome to require the Board of 	Directors to amend the Schedule 13D every time such
transactions resulted in a material increase or decrease in the 	number of 	Trust Shares.
Furthermore, the inormation disclosed in the Board's Schedule 13D -- the number 	of
shares over which they share voting power in connection with matters otne.rthan.
Beneficiar 	Consent Matters.... is of importance onlyin connection with 	a Stockholder's
meeting atwhich those matters are considered. Thus, it is expected, 	and we believe it is
appropriate, that the Schedule 13D will be amended at the time offiling of 	the Holding
Company's Quarterly Reports 	on Form lO-Q and Anual Reports 	on Form 10-1( aswell
as prior to any special meeting at which instructions from Beneficiaries will not be
solicited. It is not expected that an amendment will be made during the periods between
these filings, even if 	the number of 	Trust Shares changes by one or more percent.
Section 16(a). Section 16 applies to, among others, the beneficial owner of 	more
than ten percent of any class of equity securities registered pursuant to Section 12 of the
Act (a "ten percent beneficial ownerll). For the sole purpose of determning whether a
person is a ten percent beneficial owner, the term "beneficial ownerll is defined in Rule
16a-l as any person who is deemed a beneficial owner pursuant to Section B(d) and 	the
rules thereunder. See Rule 16a-l(a)(1). In the release promulgating Rule 16a-l(a), the
Commssion stated that IIfor purposes. of determning status as.a ten percent 	holder under
Section 16, the.securities beneficially 	owned by (a Section l3(d)) group must be included
in the calculation by each individual member of 	the group.1I Ownership Reports 	and
Trading by Offcers, Directors and Principal Security Holders, Release No. 34-28869,
(1990-91 Transfer Binder) Fed. Sec. L. Rep. (CCH) if84,709, at 81,254 n.54 (Feb. 8,
1991). As discussed above, we believe that both the Beneficiares and the 	Board of
Directors of 	the Holdig Company should be deemed the beneficial owners of 	the Trust
Shares 	pursuant to Rule l3d-3(a), but that the individual members of 	the Board 	of
Directors 	should not. We request that the staf confrm that the Board of 	Directors may
file a Form 3 reporting ownership ofthe Trust Shares prior to effectiveness of 	the
registration statement for the lnitic: Public Offering but that each member of 	the BQard of
Directors need not include the Trust Shares (other than Trust Shares allocated to such
individual member as an Eligible Policyholder) in either the member's initial statement of
beneficial ownership or subsequent statements of changes of 	beneficial oWnership or for
.. the purpose of determng whether such member is a "ten percent holder" as defined in
Rule 16a-l(a)(1) under the Exchange Act. The Form 3 and 	the Schedule 13D filed q.y the
Board of 	Directors wil disclose the number of 	Trust Shares held by the Trust at the time
of filing, and the Holding Company's anual proxy statement will disclose the number of
Trust Shares over which the Board of 	Directors shares voting power at the time of 	that
statement. Moreover, changes in beneficial 	ownership required by Section 16(a) would
20665944.56
Complete printed PDF page 61
Lar 	Be¡:gman, Esq.
Catherine T. Dixon; Esq.
Esq. 	-50- 	November 16,1999
Douglas Scheidt, Esq.
Catherine McGuire,
include only-those changes in shares over which_the member has or shares a direct or
indirect 	pecuniar interest pursuant to Rule 16a-l (a)(2). . The Board and its individual
solely by virtue	. members have:no:diect or 	indirect pecuniar int~rest in the Trust Shares
of the votiprovisionsofthe Trust, and thus any statement of changes would be
exp.ect-edte'hèiiled:.Yâ.'membef"0ftle...ßoard~øf:Directors only when the number of
interest (including the Trust Shares	shares overw.bChsuth'n:eIIherhas a. pecuniary
allocated 	to the IIemberasanEligible Policyholder) 	changes. 	We believe that 	no 	purpose
would be seIved by requiring 	the members oft4e Board to 	include Trust Shares other than
beneficial	those allocated to the memberio either the member's initial statement of
beneficial ownership.	ownership_ or subsequent statements of changes of
Sale Program	F. Purchase and
The Purchase and Sale Program has been structured to satisfY the conditions
imposed on non-registered stock purchase and sale plans that have been subject to prior
releases.adJong..standingno-.ationJetters.19 We believe that the Purchase and Sale
Program 	meets 	all ufthe substaniveTequirementsimposed in the no-action letters
regarding those plans. We therefore request confirmation that the staffwill not
recommend that the Commssion take any enforcement action against the Holding
Company, the Trust,. the Truee and Custodia the Program Agent, CMFS or the
the Securities Act, Sections 13(e), 14(d) or 14(e) ofthe
Exchange Act and Rule 10b-13 under the Exchange Act, if the Purchase and Sale Program
is implemented as described herein.
Brokers under Section 5 of
foregoing views are set forth below.	Our reasons for the
Securities Act Registration. The Purchase and Sale Program will operate well
within the parameters and criteria set forth in long.-standing no-action letters respecting
appropriately-limited issuer involvement in dividend reinvestment and employee stock
purchase plans, including the Securities Transfer Association and First 	Chicago 	no-action
19. See, ~.g., Securities Transfer Ass'n. Inc., SEC No-Action Letter, WSB File No.
091895010 (publicly available Sept. 14, 1995) ("Securities Transfer Association");
New York, 1994 SEC No-Act. LEXIS 796 (Dec. 2,	First Chicago Trust Company of
1994) ("First Chicago"); Securities-Act Release No. 5515, (1974-1975 Transfer
Binder) Fed. Sec. L. Rep. (CCH) ~ 79,907 at 84,323 (July 22, 1974); Employee
Stock Purchase Plans, Securities Act Release No. 33-4790, 30 Fed. Reg. 9059 (July
13, 1965).
Complete printed PDF page 62
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-51- 	November 16, 1999
letters.2o The 	Holding Company and the Trust wi be 	Involved in 	the Purchase and Sale
Program only in preparng and distributing 	descriptive information regarding the Purchase
and Sale Program in periodic Holding Company-paid mailings, in. 	relaying inquiries and.
requests from Beneficiares to the ProgramAgent_and in paying the 	Program Agent's
adminitrative and processing fees. Neither 	the Holding Company, the 	Trustee nor 	any of
their affliates 	(other than CD directors and offcers of 	Met 	Life 	and Üi) any subsidiary 	of
MetLifethatoWns a policy 	on behalf 	on any employee 	benefit 	plan, that receive 	shares in
the Reorganzation as policyholders of 	Met 	Life and 	that might 	be considered "afliates")
will be eligible to effect purchases or sales of Common Stocktliough the Purchase and
Sale Program. Neither the Holding Company nor the Trust wil have any role in the
administration of 	Purchase and Sale Program services or the processing of 	Purchase and
Sale Program transactons, except to the limted degree described herein. All such
functions are traditional issuer functions in dividend reinvestment and employee stock
purchase plans 	that operate in accordance with Securities Act Release Nos. 4790 and
5515 and long-standing no-action letters.
In.performng Purchase and Sale Program services, the Program Agent and
Cl\S will take. instructions from the Beneficiares, and CMFS will forward aggregate
purchase and sale instructions to the Brokers for processing. Neither the Holding
Company nor the Trust has any ability to infuence or control the Brokers in respect of
sales of the Coinon Stock through the Purchase and Sale Program or the timing or
maner of execution of such sales. Accordingly, the Holding Company and the Trust will
have no control or infuence with respect to order or transaction processing through the
Purchase and Sale Program in respect of 	the Common Stock.
20. An example of appropriately-limited issuer involvement with respect to dividend
reinvestment and employee stock purchase plans is where the issuer that appointed a
program agent "would be involved in ( such plan), at the most, only by identifyng,
from among the possible servce features established by the (program agent), the
parcular servces to be incorporated in the servce package for that (issuer's
securities), by permtting the (program agent) to include the descriptive brochure in
quarerly or less frequent issuer-paid mailings, by making the brochure available to
current employees either in connection with an initial anouncement of the Program
or at the time a new employee is hired, by processing payroll deductions to the extent
Program servces are made available to employees, and by paying some or all of the
(pro.gram agent's) administrative and processing fees." Securities Transfer
Association, supra note 19.
?n"-L-~ol.. ~"-
Complete printed PDF page 63
Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-52- 	November 16, 1999
Douglas Scheidt, Esq.
Lar Bergm
the allocating of	activities in respect of	The Holding Company's.and the 	Trusts
Program willJikewise be limited. As describe.d above,	and Sale	InterestsIn the Purchase
or sale of.Co.monStock fora Beneficiar under the Program, the	upori 	purchase
shares of	Beneficiai'slnt~r~sts wi be adjiistedtoreflect the changed number of
Comron-Stockaocated.tu::he::Beneficiar.Totle extent thatthe allocatingof .
upon àp.uche oEComon Stock Inight be deemed tp pearissuanc~	additlomi. Interests
the Securities Act, 	request
confrmation from the Staf.that.suchissuances may be made as described herein without "
of securities 	subject 	to registration under Secton? of 	we
purely a mechancal feature
resulting from the Trust strcture, will only be made to reflect a purchase of an identical
Such issuances, which are	registration under SectionS.
of an offering or sale is present; on the	number of shares of Common Stock. No indicia
contrar, the.tranaction aÜtsbasis isan.investment decision by a Beneficiar to purchase
payment of commssions or fees) without	stock 'on the open market 	(but without the
of
Interests is not a transaction which would benefit from the safeguards of registration under
control or infuence by the Holding Company or Trust. As a result, the issuance
the Securties Act.
Trust Shares by Beneficiares, either for.	We do not believe that the withdrawal of
at any time beginning one year afer the	sale through the 	Purchase and Sale Program or
Effective Date, is subject to registration under the Securities Act. No new consideration is
given, and no investment decision is made at that time. Hence, we do not believe that
s~ch withdrawal 	constitues a "sale" under Section 2(3) of 	the Securities Act.21
Based on the foregoing, it is our opinion that (i) transactions in Common Stock _H
Beneficiares through the Purchase and Sale Program as described	effected on behalf 	of
the Securities Act
and (ii) consequently, registration under the Securities Act would not be required in
herein would be exempt from registration under Section 4(1) or 4(4) of
Purchase and Sale Program transactions (or specific securities that are the	respect of
21. See, e.g., Invest-Tex, Inc., 1987 SEC No-Act. LEXIS 1493 (Jan. 12,1987); Jet
Florida Sys.. Inc., Airport Svs., Inc., 1987 SEe No-Act. LEXIS 1490 (Jan. 12,
Energv Co., L.P., 1985 SEC No-Act. LEXIS 2192 (May 9,1985).	1987); Damson
Complete printed PDF page 64
..,.
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-53- 	November 16, 1999
Douglas Scheidt, Esq.
subject of such transactions).22 We also request confrmation that any related issuance of
Interests may be made without registration under the Securities Act.
the 	Exchange Act and Rule l3e-4.A tender offer
purchase securities for
Sections l3(e) and 14(d) of
Eorgmup ) to	typically involves an offer by an issuer or a third party
its own account. We believe that, giyen th.e fundamental. differences between the Purchase
and Sales Program and the tyes of transactions that the tender. offer provisions were
designed to address, the Program should not be deemed to constitute a "tender offer"
within the meanng of the Exchange Act. We therefore request that the staf provide us
with assurance that it will not recommend enforcement action under Sections B(e) and
the Program is conducted inthe maner	l4(d) of 	the Exchange Act and Rule l3e-4 if
described herein.
would be appropriate in this case because the Purchase and Sale
Program does not involve the factors that traditionally have been considered in
No-action relief
-determning whether a tender offer exists. The factors that courts have looked to in
considering whether a tender offer exists are: (1) whether an active and widespread
solicitation of public shareholders is made for shares of an issuer; (2) whether the
the 	issuer's stock; (3) whether the offer
to purchase is made at a premium above the prevailing market price; (4)whether the terms
solicitation is made for a substantial percentage of
of the offer are firm rather than negotiable; (5) whether the offer is contingent on the
tt-nder of a fixed minimum number of shares to be purchased; (6) whether the offer is open
time; (7) whether offerees are subjectto pressure to sell their
stock; and (8) whether public anouncements of an acquisition program precede or
for only a limited period of
22. We understand that previous issuer purchase and sale programs that were the subject
of no-action relief involved issuers that were subject to the reporting requirements of
the Exchange Act, or, in the case ofa closed-end	Sections l3(a) or 15(d) of
the Investment Company Act of 1940, for at least
90 days prior to the commencement .of purchase and sale program operations for that
investment company, Section 30 of
issuer's securities. See, e.g., Securities Transfer Association, supra note 19; First
Chicago, supra note 19. MetLife proposes to permt sales to commence immediately
after completion of the Initial Public Offering but does not believe that doing so
implicates any of the concerns addressed by such no-action request letters, since such
Beneficiar sales could not be considered to be "sales" or "offers to sell" securities in
violation of Section 5.
Complete printed PDF page 65
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-54- 	November 16, 1999
accompanythe-accumûlatîon ()fstock;23 These factors will not be present in the 	case of
the proposed Program. Specifically:
. There 	will 	be no 	"so1icitation" of 	sale authoriations in the sense of 	any 	of
tire Hôldiiig€--mpany;,thè TïÜst or1héProgr Agent makng. any
recommendation to B'eneficiaies. To the. contrar; the Purchase and: Sale
._ Program disc10surematerialsWiHexpressly state that no sûchpary is
makng 	any recommendation regarding the purchase or sá1e of Common
'Stock inthe'Progra.
. Beneficiares that sell shares through the Purchase and Sále Program will not
receive any premium overthe market price on the date of sale. In this
regard, the "terms of 	the offer" will 	be "firm" only in the sense that
Beneficiares that sell 	shares in a trading day's Batch through the Purchase
and Sale Program will invaràbly receive a price based on the price of all
.shares.sold. though theP.urchase and 	Sale Program in that Batch.
. The Purchase and Sale Program will not be contingent upon théparicipation
of any fixed number ófBeneficiares or the sale of any fixed number of
shares of Common Stock.
. The Purchase and Sale Program will not remain open only for a 	fixed period
of time, but rather throughout the term of the Trust.
. Beneficiares will not be subject to any pressure to paricipate in the
Purchase and Sale Program. The Purchase and Sale Program is being
pwvided solely as an accommodation to Beneficiares that may wish to
purchase or sell shares of Common Stock without the payment of
commssions or other expenses. As indicated above, the disclosure materials
provided to Beneficiares will merely advise them that the Purchase and Sale
Program exists, without makg any recommendation.
. The Purchase and Sale Program will not be preceded or accompaned by a
rapid accumulation of stock. Except for purchases by the Holding Company
23. See, e.g., SEC v. Carer Hawlev Hale Stores, Inc., 760F.2d 945, 950 (9th Cir. 1985);
Wellman v. Dickinson, 475 F. Supp. 783, 823-24 (S.D.N.Y. 1979);afld. 682 F.2d
355 (2d Cir. 1982).
Complete printed PDF page 66
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-55- 	November 16, 1999
as described herein, none of 	the Holding Company, the Trust or the Program
Agent will enter into any arangement with the Brokers with respect to
purchases of shares of Common Stock sold pursuant to the Purchase and
Sale 	Program
Because Rule13e-4 was designed 	with 	a conventional issuer tender offer 	in
mind, many of 	its substantive provisions are either irrelevant in the context of the Purchase
and Sale Program or would lead to an anomalous result if 	applied literally. In orderto
avoid subjecting Beneficiares to market risk, for example, the Purchase and Sale Program
contemplates that the Broker-Dealer Afliate will generally forward all purchase and sale
instructions to the Brokers for execution on the next trading day. If 	the Purchase and Sale
Program had to comply with the "withdrawal right" requirement of 	paragraph (f)(2) of
Rule 13e-4, it would need to permt Beneficiares to withdraw their instructions afer they
had been processed. Accordingly, it would not be feasible to 	provide a withdrawal right
of the type contemplated by Rule 13 e-4.
Similarly, the '~best price" requirement of 	paragraph (f)(8)(ii) of 	Rule 13e-4-is
designed to ensure that the issuer does not favor a selected group of shareholders by
offering them a 	price higher than that paid to other shareholders. Applied literally in the
context of the Purchase and Sale Program it would require all Beneficiares that sell
shares through. the Purchase à.d Sale Program to be paid the highest price received by 	any
Beneficiar that sells through the Purchase and Sale Program. No Beneficiar on whose
behalf sales are sold in any given day wil receive preferential treatment under the Purchase
and Sale Program, however, because the consideration paid to each Beneficiar that sells
shares through the Program on any given 	trading day will generaly be determned on the .
basis ofaunformy applied formula based on the market price of 	the subject security.24
24. We believe that provisions regarding sales on behalf 	of 	Large Trust Beneficiar.es
likewise will ensure that they will be treated in a uniform, objective maner. As noted
above, if sale instructions made by Large Trust Beneficiares in any given Batch
exceed specified volume limitations for that Batch, then the excess shares will either
be deferred until the next trading day (which will be sold with the next day's Batch,
subject to the volume limitations on that day) or sold on the same day other sales in
the Batch are sold, through brokerage firms, acting as agent or in a block trade. These
provisions have been included in order to assure that the 	price used to determnè the
selling price for all shares sold in a Batch is not adversely afected iflarge
Beneficiares deliver sale instructions for a large number of shares to be sold on any
given day. These restrictions, however, provide objective guidelines for the sale
( continued...)
Complete printed PDF page 67
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	- 5.6- 	Novemqer 16, 1999
Douglas Scheidt, Esq.
This is essentially tli.samecondition that appliesto'the exemption for odd-lot tender
Rule 13e-4. .	offers under paragraph (h)(5) of
.Re 13e-4:aso contains filing, disclosure, and dissemination requirements that
the information necessar to make	are designed.: ensethat..hareholders-r.ceive.a1 of
an informed investment decIsioninthe contexíofa;tender offer. 	Paragraph ,(c:) of 	Rule
13e-4 requires that an issner or an 	affliate makg 	an issuer tender offertile with.the
Commission an Issuer Tender Offer Statement on 	Schedule 13EA. Paragraph (d) requires ;..
that the issuer publis.send.orgive to security holders certain information; including the
information required by Items 1 though. 8 of Schedule 13E-4 or a fair and adequate
summar thereof Paragraph ( e)( 1) specifies the maner in which the informationrequired
by paragraph (d) may be disseminated to shareholders.
In light of the natue of the Purchase and Sale Program andthe disclosures that
all Trust Eligible Policyholders will receive in connection with both the demutualization
and.the.Purchae,aid Sale Program, it should not be necessar to comply with the filing
the Policyholder
Information Booklet provided in connection with the demutualization contains
comprehensive disclosures that are comparable to those contained in a registration -
statement. Sub.sequent financial information will be available through the Holding
Rule 13e-4. As indicated above,	and disc10surerequirements of
Company's public filings, which will be available on the Holding Company's website or by
Eligible Policyholders will also receive a
detailed description of the Puchase and Sale Program itself, which will provide complete
m_ail upo.n request of any Beneficiar. Trust
information regardig the terms of 	the Program. These documents will contan al ofthe
information needed 	by Beneficiares to make an informed 	decision as to whether or not to
sell shares though the Purchase and Sale Program. The other line-item disclosure
requirements contained in Schedule 13E-4, such as those relating to 'Withdrawal and
proration rights, the sources of funds used to make the tender offer, and persons retained .
to make solicitations or recoinendatioÍis, are simply not applicable in the context of the
Purchase and. Sale Program.
paragraph (e)(l), it is
important to note that the disclosure documents described above will be sent directly to all
Trust Eligible Policyholders. This goes beyond what is required by paragraph (e)(I),
With respect to the dissemination 	requirements of
24. (...continued)
instructions to be processed, and will apply to all Large Trust Beneficiares on a
uniform basis.
Complete printed PDF page 68
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-57- 	November 16, 1999
which permts dissemination of 	cash issuer 	tender 	offers by long-form or summary
publication.
We 	also believe that the ability of 	the Holding 	Company to repurchase 	shares
does ngt afect our analysis. The Holding Company wil not repurchase shares while it~s
otherwise 	engaged in a distribution as definedinRes.ation M, and 	any such repiircha~e
willbe made in 	compliance 	with applicable provisions 	of the Exchange Act. The sta.ffha.s_
previouslyissued no-action letters for odd~lot sale and round up programs where issuers .~..
were permitted to purchase shares sold in purchase and sale programs. See Shareholders
Communications Corp. (avaiable July 25, 1996). Any such purchases, furthermore, will
not affect the timing and quantities of sales made by Beneficiares through the Purchase
and Sale Program. Although such purchases will 	necessary reduce the number of shares
sold in the Purchase and Sale Program, they will have no different effect on the market
than if such purchases were made in open-market programs permtted by the Exchange
Act. The fact that purchases are being made by the Holding Company on a particular day
will not be disclosed to Beneficiares and thus will have no bearng on any investment
decision made by them.
We believe that the Purchase and Sale Program should be distinguished from a
commssion-free odd-lot sales program, which we understand the stafviews as an issuer
tender offer within the meang of 	Section B(e) of 	the Exchange Act and Rule 13e-4
thereunder, in par because the issuer obtains. some indirect benefit (in the form of reduced
stockholder servcing costs) froIIthose programs. See Merrll Lynch, Pierce, Fenner &
Smith Inc., 1986 SEC No-Act. LEXIS 1880JMarch 7, 1986).. Unlike a commssion-free
odd-lot program, which is structured so that odd-lot holders may sell their shares without
brokerage commssions or simlar costs and thereby reduce the cost to the issuer of
servcing those small holders, the Purchase and Sale Program is intended not to reduce the
costs to the Holding Company of servcing Beneficiares. Indeed, it is the Trust itself,
through the voting mechanisms discussed above, that is designed to result in reduced
stockholder costs for the Holding Company. Intead, the Purchase and Sale Program is
designed to allow Beneficiares maxmum flexibility to dispose of 	their allocated shares on
a commssion-free basis. Furthermore, unlke odd-lot programs, which 	are usually limited
in time (and thus may be seen to create an implied pressure for the holders to sell their
shares during the period in which the program is offered in order to do so at a reduced
commission rate), the Purchase and Sale Program will be open indefinitely with no "
pressure on the Beneficiares to sell at any given time.
Rule 1 Ob- i 3 under the Exchange Act. Rule 10b-13 prohibits any person that
makes a cash tender offer or exchange offer from purchaing or aranging to purchase a
Complete printed PDF page 69
Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-58- 	NovembeI-16, 1999
secunty that 	is the subject ofthe offer, otherwse than pursuant to the offer. None of the
Holding Company, the Trust or the Trustee or Custodian (in its capacity as such) wil have
any material involvement in the Purchase and Sale Program. In addition, the Program
Agent and cM:s,operating in accordance with reliefrésponsivè to this request, Wiii be
acting-ìndepeíÍdent1y'òf-l~eHo1çiing Comp.åny, and 	as 	a result would 	be distanced from
issner'tendet o.ffers (or 	third-par 	tei1der 	offers) 	for COmmon Stock. Wethus believe thât
purchases initiated atthe request of'BenefiCiaresard èffected thfdugh the Purchasè and .
Sale Program should 	not beconsiderea purchases 	effected 	or aranged by àn issuer under
Rule .iOb-13 or purchass othere occunig in a maner inconsistent with that Rule, and
we 	request the staf 	to affrm that it will notrecommend enforcement action against any of
the Program Agent, CMFS, the Holding Company, the 	Trust orthe Trustee or Custodian
under Rule 10b-13 if-the Purchase and Sale Program is implemented a:d operated as
described herein.
- In addition, we request that an 	exemption be granted, orin the alternative; that
the sta:.confrmthat they wilnot recommend 	enforcement action, for open-market
purchases of 	shares ofComm()l! Stock outside of 	the Pur~hase and Sale Program 	that the
Holding Company or the Program Agent (or their affliates) may make while the Purchase
and Sale Program isin effect. Any such purchases will be made for purposes independent
of 	the Purchase and Sale Program, and no purchases will 	knowingly be made directlyfrom
a Beneficiar. Furthermore, the Purchase and Sale Program will comply with the purposes
Qf Rule 1 Ob-13 (to ensure that 	shareholders to whom an offer is extended are treated
equally, and to prevent larger shareholders from dem~ding greater or different .
consideration forthe tender of 	their shares than that which 	is paid pursuant to the 	offer)
because it Will extend to all Beneficiares 	and wiI1 treat all paricipants equally (subject to
. the volumeliirtations descrbed in this letter). Consequently, such purchases should not
raise 	any 	regulatory concerns 	about disparate treatment of 	persons to whom 	a tender offer
is directed.
In the adopting release issued in connection with the most recent amendments to
Rule 13e-4,the Commssion 	granted a class exemption from Rule 10b-13 to permt any
issuer or agent acting on 	behalf of an issuer in connection with an odd-lot tender offer to
purchase or arange to purchase the security that 	is the subject of the offer outside of the
offer.25 In so doing, the Corrssion noted that odd-lot tender offers do not raise the
25. See Odd-Lot Tender Offers by Issuers, Exchange Act Release 	No. 38068 96-97 Fed.
Sec. L. Rep. (CCH) 1985, 869 (Dec. 20, 1996).
Complete printed PDF page 70
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-59- 	November 16, 1999
concerns that Rule 1 Ob-13 was designed to address. 26 We believe that the. proposed
Purchase and Sale Program, which will do nothing more than assist Beneficiares in
purchasing or selling shares of Common Stock on a commssion-free basis, will present
even less potential for 	abuse, Accordingly, 	exemptive relief 	would. qe apprOpriate.
Regulation M under the Exchange Act, The Purchase and. Salel;rpgram will not
involve any special 	selling efforts o.r selling methods, and thus will not involve. 	a
"distribution" as defined in Rtde 100 of 	Regulation M. .Furthermore, this letter request is
being made on the basis that the Brokers will be selecteq by ClvS, not the Holding
Company, and thus the Program Agent and ClvS would meet the requirements of an
"agent independent of the issuer". Accordingly, no relief is sought from Regulation M for
purchases of Common Stock by the Holding Company or any other par durng the
pendency of 	the Program or for purchases of 	Common Stock under the Purchase and Sale
Program during a distrbution by the Holding Company.
G. Resales of 	Common Stock
Based on our review of 	Rules 144 and 145 under the Securities Act and the no-
action positions taken by the staff with respect to the resales of securities issued without
registration under the Securities Act in reliance upon Section 3(a)(1 0), we are prepared to
advise MetLife that unregistered Trust Shares allocated to Trust Eligible Policyholders in
the Reorganzation will not be "restricted securities" within the meanng of 	Rule 144, and
that Beneficiares may elect to withdraw their allocated shares for sale, thongh the .
Purchase and Sale Program or otherwse, without registration under the Securities 	Act in.
accordance with the following guidelines:
1. Beneficiares that are neither (i) afliates of 	Met 	Life at the time that the Plan
is submitted to Eligible Policyholders for approval nor (ii) afliates 	of 	the Holding
Company following the Reorganation may withdraw their allocated sháfes for sale,
through the Purchase and Sale Program or otherwse, without regard to Rults 144 or
145( c) or (d) under the Securities Act.
2. Beneficiares that are afliates of 	Met 	Life and that become 	afliates 	of 	the
Holding Company following the Reorganzation 	may withdraw their allocated shares
26. The Commission recently codified the exemption for odd-lot offers. See Regulation
of 	Takeovers and Security Holder Communication, Exchange Act Release No.
42055,1999 SEC LEXIS 2291 at * 167-68 (Oct. 22,1999).
Complete printed PDF page 71
Lar Bergman Esq.
Catherine T. Dixon, Esq. -60- 	November 16, 1999Catherin:eMtGuirè, Esq.
Douglas Scheidt, Esq.
Purchase and Sale Progtam or otherwse by the Beneficiares,
pursuant toRule 145(d)(I).
for 	sale, through the
the	are not 	affliates of	
3. Bene:ficiaresthat:ae-afliates ofMétLife but
Reorganzation are-persons dèscribed in Rule 145(c) and	the	. HöldingCompany after
rhayhdiáw theitallócated sharês forsale~dthr01igh the Purchåse and Sale Program
the holding
or otherwse 	Ii1the manerperitted by Rule 145(d)(I):In computing
Rule 145(d)(2)or (d)(3), however, such	periodófTrustShares for purposes of
holding period of their interest in the Policyholders'	the	personslIay not "tack"
Membership Inerest. 27
withdrawn from the Trust prior to being	Trust Shares are being	The fact that the
and (d).
sold should not afect the treatment of such shares under Rules 144 and 145( c )
As discussed above, withdrawal of shares from the Trust is not a registrable event, and
accordingly, should not afect the application of these resale rules.
Trust	
H. Investment Companv Act Status of
1940, as amended (the	the Investment Company Act of	Section 7(b) of
"lnvéstmentCompany Act") prohibits a depositor or trustee of any investment company
organzed under the laws of the United States or of a State from engaging in certain
coriduct in connection with the sale of a security through the means of interstate
commerce unless the investment company is registered under the Investment Company
in Section 3(a)(I) as "any issuer" who engages	Act. An "investment company" is defined
in certain securties tranctions or issues face-amount certificates ofthe installment tye.
An "issuer" is defined in Secton 2(a)(22) as "every person who issues or proposes to issue
securities received in Section 3(a)(10)	27. The stafhas previously allowed resales of
offers pursuant to similar guidelines. See, ~.g., John Hancock Financial
Servces, supra note 11; Standard Ins. Co., supra note 11; Far Famlv Mut: Ins. Co.,
supra note 11; Blue Cross and Blue Shield ofVirgini!l supra note 8; Guarantee Mut.
Life Co., supra note 11; State Mut. Life Assurance Co. of America, supra note 11;
EquitableI, supra note 11; Citizens Security Life Ins. Co., 1990 SEC No-Act. LEXIS
907 (June 18, 1990); National Security Ins. Co., 1990 SEC No-Act. LEXIS 669
(April 12, 1990); see also Revisions to the Resale Provisions Applicable to Seclirities
Acquired in Registered Business Combinations, Securities Act Release No. 6508,
(1983-1984 Transfer BinderJ Fed. Sec. L. Rep. (CCH) ii 83,489, at 86,453 n.l (Feb.
10, 1984); see also St. Ives Holding Co., Inc., SEC No-Act. (July 22, 1987); Staff
Legal Bulletin No.3 (CF), 1997 SEC No-Act. LEXIS 755 (July 25, 1977).
exchange
Complete printed PDF page 72
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine 	McGuire, Esq.
Douglas Scheidt, Esq.
-61- 	November 16, 1999'
any security, or has outstanding any security which it has issued~." Because the Interests
may be securities, and because the Trust primarly holds Trust Shares, it is
possible that
the Trust comes within the definition of 	"investment company" in Section 3(a)(I).
We believe, 	however, thatthe Trust is exc1udedfrom regulation as an investment
company 	by Section 3(c)(12) of 	the Investment Company Act~,; That section 	excludes
from the 	definition ofirivestmentcompany any "voting trusttheassets'ofwhich consist
exclusively of securities of a single issuer which is not an investment
company. " The Trust
fits within this definition. It is a voting trust whose assets will.consist entirely of
Trust
Shares. The Trust is a single-purpose trust and will not engage in any 	other business 	or
activity other than voting and holding the Trust Shares and certain closely-related
activities, such as receiving and distributing cash dividends and registering the Trust
Shares under the Exchange Act. In 	addition, as described above, 	the Trustee will 	vote
Trust Shares on all issues presented to stockholders. Thus, the Trust is consistent with the
commonly-understood meanng of 	the term voting trust. For example, one accepted
meanng of the term is a It device whereby two or more persons ownng stock with voting
powers divorce voting rights from ownership, retaining to all intents and purposes the
latter in themselves and transferrng the former to trustees in whom voting rights of all
depositors in the trust are pooled." Black's Law Dictionary 1577 (6th ed. 1990V8 This
describes the essence ofthe Trust, in which Beneficiares retain their economic ownership
interest in the Trust Shares, but transfer to the Trustee voting rights. The fact that the
Trustee votes Trust Shares as to matters other than Beneficiar Consent Matters as
instructed by the Board of Directors of the Holding Company in no way afects the status
of 	the Trust as a voting trst, because a voting trust agreement may providefor suchan
arangement in that it may define the 	rights of 	the paries and define and limit the trustee's
duties and powers. See 5 Fletcher Cyc. Corp. §2091.10 (rev. perm. ed. 1996). Insum,
the Trust is a single-purpose vehicle that is intended to give policyholders the economic
benefits of stock ownership, while transferrng voting rights away from them, thus
28. Delaware law does not specificaly define the term voting trst. We have been
advised by MetLife's special Delaware counsel that the Trust is valid under Delaware
law, even though the Trust does not meet all of the requirements of Section 218 of
the Délaware General Corporation Law, which validates the use of certain forms of
voting trusts. Section 218 expressly provides that it does not invalidate.
a voting or
other arangement which is not otherwse ilegal, and before the
enactment of Section
218, Delaware case law generally recognized the validity of voting trusts. Ringling
BroS.-Barum & Bailev Combined 	Shows. Inc. v. Ringling, supra note 5.
Complete printed PDF page 73
Larr Bergman 	Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-62- 	November 16, 1999
enabling the Holding Company to 	effciently manage the administration of Beneficiar
accounts and the costs associated with its large number of stockholders.
Th vDtitr exception 	has 	rarely been interpreted, 	either by the Commssion
orby.thecos. In Broadw.avanu58thStreet Corporation,29 the Commssionfound it
unnecessar 	10 address the application 	under Section 6( c) of 	the InvestmentCoIipany Act
by trustees ofa votingtrust,.sincethe:trust was excepted under. Section 3(c)(14).(since
redesignated Section 3(c)(l2)). In Greater Iowa Corporation v. McLendon, the
court, in
dicta, stated that a trst wi 	subst cas and with "wide investment powers, including
power to manage real estate," could not rely on the voting trust exception.30 The Trust
will not have substantial cash. It will temporarly have cash to the extent there are cash
dividends paid on the TrusLShares.ad the Custodian will distrbute those dividends
promptly. It wi not invest the proceeds pending distrbution.
1. The Trust's Ownership of 	the Trust Shares Will Not Result an AssÜmment of
Advisory Contracts
Section 15(a)(4) ofthe Investment Company Act, in effect, requires that all
investment advisory contracts 	with registered investment companes provide, in substance,
for their automatic termnation in the event of an assignent.31 For the reasons discussed
below, we believe that in connection with the Trust's ownership of the Trust Shares, the
ability of 	the Board of 	Directors of 	the Holding Company to instrct the Trustee to vote
the Trust Shares as to matters other than Beneficiar Consent 	Matters, will not result in a
. change of control of 	Met 	Life or its afliated investment advisers and that therefore no
"assignment" of advisory contracts 	of 	MetLife or its afliated investment advisers will
have been effected.
29. 12 S.E.C. 1128 (1943)
30. 378 F.2d 783, 793 (8th Cir. 1967).
31. MetLife is registered with the Commssion as an investment adviser under the
Advisers Act. In addition, MetLife, directly or indirectly, owns controlling interests
in the 29 other investment advisers registered with the Commssion listed in Exhbit
B. In addition, MetLife expects to own, directly or indirectly, a controlling interest in
other investment advisers listed in Exhbit B in connection with its proposed "
acquisition of 	GenAmerica Corporation. MetLife and these firms serve 	as adviser to
registered investment companes, as well as institutional and individual clients.
Management 	of these firms will not change due to the Reorganation generally or as
a result of 	the Trust's ownership of 	Common Stock.
Complete printed PDF page 74
Lar Bergman, Esq.
Catherine T. Dixon, Esq. -63- 	November 16, 1999 -
Gatherine McGuire, Esq.
Douglas Scheidt, Esq.
Include -,	of the Investment Company Act defines "assignment~' to	Section 2(a)(4)
any direct or indirect transfer of a. controllng block of the assignor's outstanding voting
power to exercise a controllipgsecurities. Section 2(a)(9) defines "control" to mean the
company 	,and also próvides that 	any
infuence over the management or policies of the
who ownsbëneficiallymore than 25% ofthevotingsecuritiesofa company shall..	person
d!voting 	security". ,as;,any',.'..
be presumed., to contröl such êompanyPSection 2(a)(42) defines
holder thereof to vote for the election of	security "presentlyentitlIng the owner or
directors ofa company." Rule 2a-6 provides that a transaction that does not result in a
change of actual. control or management, of the investment adviser of an investment
Section 15(a)(4).	purposes of	
company is not an assignent for
of the Division	We are mindful of the policy position recently taken by the staf
or
oflnvestment Management that it will no longer respond to routine no-action
amend	arangement would materially
	interpretive requests regarding 	whether a proposed
an adviser relationship between an adviser and a fund requiring stockholder approval	')
Act.33 Accordingly, we are not seeking	5 	the Investment Company	under Section 1 	(a) of
the stafs views with respect to the Reorganization generally, but rather are requesting the
the Trust ownng morestafs concurrence that no "assignment" will occur by virtue of
the Holding Company, dueto the unique	the outstanding Common Stock of	than 25% of
the Trust andthe provisions ofthe Trust Agreement concernng	nature and purpose of
Trust Shares. We believe that this question is novel and is appropriate for	voting 	of
interpretive relief
The Division oflnvestment Management has considered whether an assignent
Babson
might occur due to changes with respect to a voting trust only once, in
No-AcL LEXIS 2249 (April 26, 1973). There the staf without
explanation, refused to provide no-action assurances as to the absence of an assignent
Organzation. Inc., 1973
upon the dissolution of a voting trust holding shares of an adviser. The trust involved in
32. The Investment Advisers Act of 1940, as amended, has nearly identical definitions of .
"assignment" and "control", albeit without the presumption provided by Section
2(a)(9). In light ofthe Division's position in American CenturY Cos., Inc./J.P.
Morgan & Co.. Inc., 1997 SEC No-Act LEXIS 1107 (Dec. 23, 1997), regarding
assignment questions under the Investment Advisers Act, we are not seeking the
Division's views under that ACL '
stated that it will address only no-action letters presenting novel or
unique issues. American Express Fin. Corp., 1998 SEC No-Act. LEXIS 993 (Nov.
33. The Division has
17, 1998); American CenturY Cos.. Inc/J.P. Morgan & Co.. Inc., supra note 32.
-in£L.Cn/J ~L
Complete printed PDF page 75
Lar Bergmann, Esq.
Catherine T. Dixon, Esq.
Cathçrine McGuire, Esq.
Douglas Scheidt, Esq~
-64- 	November 16, 1999
Babson, however, was 	very different from the'Trust, in that the trustees did not receive
voting instrctions from others. Moreover, 	although in Babson there was 	a great 	deal of
overlap 	between the identity of 	the directors of 	the adviser.and the identity of 	the trust~es,
there were 	some 	differeces. Finally, the Babson 	letter preceded the Commission's
adoption of 	Rule 2a;.6 under the Investent Company Act and 	Rllle 	202.( a)(l ).,1 under the
Investment Advisers Act. Accordingly,. we request your. confnnation that, given the,
subsequent adoption ofRule2a-6 and 	the Diýision's interpretationsofthatrule,34Babson
would not necessarly be 	decided the same 	way today. Moreo:ver, we note that we are not.
asking the Division to mae factual determnations as to actual control or management.
Rather, the question we raise turns on.the effect of 	the 	provisions in the Trust Agreement.
Although, as described above, 'the Trust Agreement provides that the Trustee will
have the rightto vote, assent or consent the Trust Shares, the Trustee will have no
discretion in doing so~ On 	all matters brought for a 	vote before the stockholders of 	the
Holding Company, except for Beneficiar Consent Matters, the Trustee will vote in
accordance with the recommendation given by the Board of 	Directors of the Holding
Company to 	its stockholders or, ifno such recommendation is given, as 	directed by the
Board. For a Beneficiar Consent Matter, the Trustee will solicit instructions from all of
the Beneficiares and will vote, assent or consent all of 	the Trust Shares in favor of or in
opposition 	to such matter 	or abstain from voting 	on such matter in proportion to the
instructions received from the Beneficiares that 	give such instructions, Thus, in any
contested election of directors of the Holding Company, the vote of the Trust Shares is in
the discretion of 	the Beneficiares.35
It is therefore clear from the provisions of the Trust Agreement that the Trust
will have no "power to 	exercise a controlling infuence over the management or policiesll
of the Holding Company or MetLife and its afliated investment advisers within the
meaning ofthe definition of 	"control" provided by Section 2(a)(9) ofthe Investment
Company Act. The presumption of control, which under that section is triggered by
34. Zurich Ins. Co.. 1998 SEC No-Act. LEXIS 811 (Aug. 31, 1998).
35.. See Benham Management Corp., 1983 SEC No-Act. LEXIS 2623 (March 7, 1983)
(founder and controlling stockholder of a fund adviser transferred a controllng
interest to a trust, of which he and his wife were co-trustees; to address the coiìcern
that appointing the wife as co-trustee, thus giving her the right to vote a controllng
interest in the shares, was a change in control, the co-trustees agreed to amend the
trust agreement to provide that the controlling stockholder had the 	sole right to vote
the shares as long as he was living.)
Complete printed PDF page 76
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq. 	-65- 	November 16, 1999
Douglas Scheidt, Esq.
. beneficial ownership of more than 25% ownership of the voting securities,. is not trggered."
the Holding	by the Trust's ownership ofrnore than25%ofthe voting securities of
Trust does not beneficially own the Trust Shares.36 Accordingly,	Company because 	the
the Trust's ownership will not result in an assignent.
Directors oftlieHolding Comp¡iy to	In addition" the ability of 	the Board of 	, ..""'. ;, .--'. ;-, .
instruct the Trustee as tp howto vote on unconttsted,elections;()f clirectorsandpther
change in the "coIlrol" of MetLife and --	matters not requiring a Beneficiar consent is not a
analysis are the provisions	its affliated investment advisers. Paricularly important to this
ofN ew York law regarding voting .rights of policyholders. In this regard, the procedures
the Holding Company 	are	for Beneficiar paricipation in an election of directors of
comparable to those that MetLife is currently subject to as a New York mutual life
insurance company. New York insurance law applicable to MetLife provides that in an
uncontested eleption no proxies are required to be solicited (although insurance companies
they wish), wrte-in votes are not permtted and directors are
elected by a plurality of the votes cast.
may distrbute ballots if
Thus, in uncontested elections, MetLife's directors are currently eÍected in
Life's Board. Although we are not aware of
any judicial or admiiustrative interpretation as to whether this power vests in the Board
"control" within the meanng of Section 2( a)(9), we believe it does. The provisions of the
Met	accordance with the recommendation of
Trust Agreement, however, operate so that the Board's power in uncontested elections
effectively will be the same afer the Effective Date and thus the 	Board will continue to
have control.
As a result, we believe that thepolicyholder's voting rights to 	elect the members.
of the Reorganzation, and thus there
will be no change in actual control or management. Accordingly, in our opiiuon, there wjll
be no assignent of advisory contracts as a result of the Reorganation. As the
of the Board effectively will not change as a result
Commssion noted when it proposed Rule 2a-6, investment advisers "may be involved in
36. In this regard, Rule 13d-3 under the Exchange Act provides that beneficial ownership
is deter.ned by reference to investment power and voting power. See also Calvar
Holdings. Inc. v. Chandler, 948 F.2d 59 (1 st Cir. 199 I), which holds in an analogous
context that the mere power to vote shares as record owner does not confer beneficial
ownership for purposes of 	Rule 13d-3. The Trustee, on behalf of 	the Trust, has
neither investment power nor discretionar voting power with respect to the Trust
Shares.
20665944.56
Complete printed PDF page 77
Larr Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuie, Esq.
Douglas Scheidt, Esq.
-66- 	November 16, 1999
certain transactions '--" paricularly, modifications of corporate structure" that may involve
a transfer of a controlling blockofvoting securities but no change in actuälcontroL37 In
further interpreting the rule lastyëar, the Division of 	Investment 	Management noted:
Rule 2a-6may apply to 	any transaction, provided that there is no change
i~ actual control or'manage~érit of 	the 	investment adviser. . The (rule is)
not limited to nominal reorga:za.tions suo ch as changes in an 	adviser's- . . .domicile or legal form. We believe that the Commission's admoIltion
that Rule 2a-6 be construed narowly inlight of 	investor protection
concerns applies not to the type of transaction involved, but to whether
there is a change in actual control or management as a result of the
transaction. The legislative history of the * * * Investment Company
Act indicates that the assignent (provisions of the Act were) meant to
address concerns about fiduciares traffcking in investment advisory
contracts. In our view, if 	there is no change in the actual control or
management of an investment adviser, the investor protection concerns
associated with the 	trafcking of advisory contracts are not implicated.3&
\.
We believe that the Reorganzation is exactly the tye of transaction for which
Rule 2a-6 was intended and it is our opinion that 	MetLife and its afliated invëstment
advisers may rely on Rule 2a-6 in connection with the Reorganization. Although the
Reorganzation is not merely a change in corporate form (in this case from
a N ew York
mutual 	life insurance company to a Delaware corporation acting 	as a holding company)
because of 	the role ofthe Trust, the Trust's ownership of25% of 	the outstanding voting
securities of 	the Holding Company will not result in a change in 	actual control or
management of 	Met 	Life or its affliated 	investment advisers. The provisions of 	the Trust.
Agreement do not vest "control" in the Trust or the Tristeeand thus will not result in a
change of actual control or management of 	Met 	Life or 	its afliated investment 	advisers. .
Also, the ability of 	the Board of 	Directors to instructthe Trustee how to vote on matters
other than Beneficiar Consent Matters win not result in a change in actual control or
management. Accordingly, we seek the stafs concurrence with our opinion that the
Trust's ownership of 	more than 25% ofthe Common Stock will not result in an
assignment of any advisory contracts under the Investment Company Act.
37. Exemptions for Certain 	Investment Advisers and Principal Underwters of
Investment Companes, Investment Company Act Release No. 10809, 1979 SEC
LEXIS 953 (Aug. 6, 1979).
38. Zurich Insurance 	Company, supra note 34.
Complete printed PDF page 78
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-67- 	N~vember i 6, 1999,
J. Informational Activities
For the reasons set forth below, we believe that the activities ofthe Assoc~atesin
connection with 	promoting the Plan will not f€$ult in the Associatt1s being "engagedin the"
business. of effectingtransactio.ns in securitles for tlieaccount of others,':' and, therefo.re,
that these 	activities will not cause the. Associates to b,e brokers.39 .
First, we are of 	the 	view that the vote takng placein the Policyholders' Vote will
not involve a "transaction in securities" for purposes of Section 3 	(a) (4) of 	the Exchange
Act. An Eligible Policyholder's. vote for or against the Plan is not fundamentally a decision
about purchasing or selling a security (i.~., a "transaction in securities"), although most
Eligible Policyholders will receive Common Stock (to be held through
the Trust) in the
Reorganzation if 	the Plan is approved.. Moreover, the issue on which 	Eligible
Policyholders wil be asked to vote -- whether MetLife should convert to a stockform of
ownership or remain a mutual company -- is a question of corporate
organzation required
to be submitted to a policyholder vote under the New York Statute. The decision before
Eligible Policyholders, therefore, is not whether they should acquire Comron Stock,. but
whether they should approve the conversion of the issuer of their insuranCe policies to a
more flexible ownership structure which will facilitate raising additional equity capital
from sources unavailable to it as a mutual company. This is the centi-al focus of the Plan,
the Hearng and the vote on the Plan.
Second, 	we believe that if 	the Associates recommend voting in 	favor of 	the Plan,
they wilnot, in 	any event, be "effecting transactions" for purposes of Section 3(a)( 4).
The Associates' primar function will be to help Eligible Policyholders uiiderstand the Plan
and the consequences of the Reorganzation. No Associate will receive any compensation
in connection with activities related to the vote 	on the Plan (except to the extent that call
center personnel have been 	employed specifically to pedorm the callcenter function), or'
be in a position to handle customer funds or 	securities. Importantly, the Associates'
39. Section 15(a)(1) of 	the Exchange Act provides that it "shall be unlawfl for any
broker or dealer which is either a person other than a natural person or a natural
person not associated with a broker or dealer which is a person other than a natural
person . . . to make use of the mails or any means or instrumentality of interstate
commerce to effect any transaction in, or to induce or attempt to induce the purchase
or sale of, any security. . . unless such broker or dealer is registered in accordance
with" Section 15(b) of the Exchange Act.
20065944.56
Complete printed PDF page 79
r¿-"'~.	/ '.
Lar Bergman, Esq. (
\
Catherine T. Dixon, Esq.
-68- 	November 16, 1999	Cåtherine McGuire, Esq.
Douglas Scheidt, Esq.
activities will be strictly limited and supervsed. Whle discussing the Plan with Eligible
Policyholders, the Associates will be instructed by MetLife not to discuss the potential
market value of Common Stock or advise policyholders on whether or not to express a
preference for Common Stock rather than cash. Intact, the Associates wil'be directed to
discussion about the ReorganzatioÍ1 to statementS that can.oefotind in,' or.
derivêd from, the Policyholder Infòrmati6n Bòoklet or other- related approved doCuments,;.
In effect, the Associates willberhêreconduitsofpublìCinfó11iatÍon aboutthePlan and the
limit any
Reorganization between MetLife and Eligible Policyholders for purposes of a vote of
corporate reorganation, and will not be "effecting" any transaction in securities.
the Associates will be "engaged in the business" of soliciting	Third, none of
recommending	securities tranactions withi the meanng of Section 3(a)(4) by virtue of
the business"	that Eligible Policyholders approve the Plan. The phrase "engaged in
"connotes a certain regularty of paricipation in purchasing and selling activities rather
than a few isolated transactions. ,,40. MetLife's conversion from a mutual company to a
the Associates' activities in connection therewith are, by.their nature~	stock company and
call center	one-time, extraordinar events. Moreover, the Associates (other than the
Eligible Policyholders vote in	personnel) have not 	been hired solely to recommend that
favor of 	the Plan 	but have other substantial, full-time 	duties related to the insurance
MetLife. Although certain Associates are licen.sed with the NASD, we believe
these Associates should not be regarded as anything other than full-time insurance agents
business of
in the 	business" of acting as
Diokers by recommending approval of the Plan in discussions with Eligible Policyholders.
for 	purposes of determining whether they are "engaged
previous occasion on whichthestàfhas advised any
person who proposed to engage in limited activities in. connection with the solicitation of
We are not aware of any
person would be a broker, or requited such a	consents to an exchange offer that such
staf	person to register as a broker-dealer. Indeed, the 	has issued no~action letters to
companes engaged indemutualizations in which the stafa-ssured the companes thattheir
brokers for purposes of.	offcers, employees and agents would not be regarded as
Section 15(a) of 	the Exchange Act ifthey solicited acceptances of 	the offer without
40. Louis Loss, Fundamentals of Securities Regulation 604 (2d ed. 1988).
Complete printed PDF page 80
Lar Bergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
-69- 	November16,1999
receiving 	any special remuneration.41 We believe the stafspositions in tnese prior no-
action letters are .consistent with granting no-action relief here.
***** .~.,..'
Based onthefor~going, we request confrmationthat thesta:f'oilnqt
recommend that the CoIIssion take any 	enforcement actionagainstM~tLife) the
Holding Company, the Program Agent, ClvS, the Trust, the Trustee or Custodian, any
of 	their respective afliates, offcers, directors or employees or any Assocjates:
(i) if in the transaction that will result in MetLife's Reorganzation, (a) MetLife
issues shares of 	Met 	Life Common Stock to the Trust, (b) the Trust exchanges 	such
shares of 	Met 	Life Common Stock for an equal number of shares of Common Stock
(including the preferred stock purchase rights associated with the Common Stock that
will be distributed pursuant to the Holding Company's Stockholder Rights Plan), and
(c) the Trust allocates Interests to Trust Eligible Policyholders, in each case without
registering such shares and Interests under the Securities A~t, in reliance on the
exemption from registration provided by Section 3(a)(10) thereunder;
(ii) if the issuance of shares of 	Met 	Life Common Stock 	and Common Stock and
the allocation of 	the Interests to and on behalf of 	the Trust Eligible Policyholders is
not integrated with the Initial Public Offering;
(Iii) if the Interests are registered under the Exchange Act and the Trust files
reports under that Act as described herein;
(iv) if (a).no proxy soliciting materials, anual and 	quarerly reports or
information statements are disseminated to Beneficiares in connection with a vote or
consent 	of stockholders of 	the Holding Company, except, as described in this letter, in
connection with a Beneficiar Consent Matter or upon request of 	Beneficiares, (b)
the procedures described in this letter for the distribution of materials in cOiliection
with a Beneficiar Consent Matter (including the procedures for requiring mailing and
other expenses be reimbursed by a stockholder in 	certain circumstances) are followed .
and (c) none ofthe Holding Company, the Trust, the Trustee or Custodian, any 	of
their respective afliates, or their respective offcers, directors or employees inquires
41. See, ~.g., Guarantee Mut. Life Co., supra note 11; The Equitable Life Assurance
Soc'v ofthe United States, 1992 SEC No-Act. LEXIS314 (Feb. 28, 1992).
20665944.56
Complete printed PDF page 81
Lar Bergman, Esq.
Catherine T..Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
':70- 	November 16, 1999
as to the benefic:al owrershipofthe Trust Shares in connection with suchvote or
consent, or provides infòîmation il co.iiectIon with those inquiries;
except in
connection with a Beneficiar Consent Matter;
(v) if 	the Board of 	Directors ofthe Holding Company provide the information
required byScnedule 13D'pursuaittö Section B(d) öfthe
Exchange 	Act 	aidby
SectionI6 of 	the Exchange ActiIithe maretdescribed herein;
(vi)under Section 50fthe Securities Act, Sections l3(e), 14(d) or 14(e) ofthe
Exchange Act and Rules 10b-l3 and l3e-4 under the Exchange Act, if
the Purchase
and Sale Program is implemented as described herein;
(vii) 	if Trust Shares may be withdrawn from the Trust without compliance with
the registration provisions of 	the Securities Act;
(viii) ifBeneficianes that elect to withdraw their allocated shares
may sell such
shares, either though 	the Purchase 	and Sale Program or otherwse, inaccordance
with the resale guidelines described in Section G herein;
(ix) if 	the Trust is not registered under the Investment.Company.Act; and
(x) if 	the Associates recommend approval of 	the Plan in discussions with Eligible
Policyholders under the circustances descnbed in this letter without MetLife, the
Holding Company or the Associates registering as brokers with the Commssion
pursuant to Secton 15(a) of 	the Exchange Act.
In addition, we seek the stafs concurrence with our conclusion that.he Trust's
ownership of more than 25% of the Common Stock wil not result in
an assignment of any
investment company 	advisory contracts of 	Met 	Life or its affliated investment 	advisers.
** * * * * * *
Because ofthe importance of 	the reorganzation to MetLife, we would appreciate
hearng from you at 	your earliest convenience. If 	you should have any questions or would
Complete printed PDF page 82
Larr Bergmann, Esq.
Catherine T.. Dixon, Esq. November 16, 1999 '	-71-
Catherine McGuire, Esq.
Douglas Scheidt, Esq;.
please 	telephone the
like additional informtion about the matters addressed in this letter,
undersigned at (212) 909-6655.
Since:- (, g~
~s C Scoville
Attachment
cc: Ira Friedman, Esq.
Metropolitan Life Insurance Company
20665944.56
Complete printed PDF page 83
EXHIBIT A Pag 1
INS § 7312, Reorgation of a domestc mutilie iner in a domestic stock lie inr
Law § 7312	*92652 McKiney's Insurance
MCKY'S 	CONSOLIATED
LAWS OF NEW YORK.
ANOTATED
INSURCE 	LAW
CHR2S.0F TH
CONSOLIDATED LAWS
ARTICL73-CONVRSION 	TO
DIFRENT 	TYE 	OF 	INSURR
Current 	through L1999,chs 6-13.
§ 7312. Reorganization of a domestic
mutual life insurer into a domestic
stock life insurer
(a) Defitions. As used in ths section, the
followig teris shal have the followig
meamgs:
(1) "Mutu life inurer" mean a domestic
mutuallife inurer.
(2) "Policyholder" mean a person, as
lie inurer, .	determed by the records of a mutual
who is deeed to be the "policyholder" of a policy
or anuity contract which is of a tye descrbed in
paragraphs one, two or thee of subsection (a) of
section one thousand one hundred thee of ths
chapte for puroses of paragraph thee of
subsection (a) of section four thousand two
hundred ten of ths chapte.
(3) "Policyholder' memberp interest" mean
and includes al policyholder' rights "as members
lie iner	aring under the charer of the mutual
or ths chapte or otherse by law includig, but
not lite to, the rights to vote and to parcipate
in any distrbution of surlus whether or not
lie iner.	incident to a liqudation of the mut
The ter "policyholders' membershp inteest"
does not include rights, includig without
litation the right to parcipate in the
dibuton of surlus, expressly confered upon
the policyholders by their policies or contract
other than any right to vote. .
(4) "PIan of reorganation" mean a plan of
conversion or conversion and merger in
accordance with ths section.
(5) "Reorganed iner" mean. the domestc
lie iner	stock lie inurer into which a mutal
has been, reorgan.. in ,accrdace with th
section.' .
(6) "Statement date" mean the Decmber th-
fist imedately prior to the date the plan of
reorganation was adopted.
(7) "Person" mean an individual, parership,
:f association, corporation, joint-stock
company, tr, any simar entity or any
the foregoing actig in concert.	combination of
(b) Demutalation. Any other provision of
ths chapter to the contrar notwthandig, upon
compliance with the requiements of and
completion of the proceegs prescribed by ths
section and with the wrtten approval of the
supertendent, a mutu lie inurer may either
(1) reorgane iito a domestic stock lie inurer or
(2) reorgane as par of a pIan of reorganation
in which a majority or all of the common shares of
the domestic stock lie iner is acquied by
another intituon which may be an intitution
organ for such purose. As par of the
lie insurer may merge
with a domestc stock inurer, provjded that the
reorganation, the mutual
mergig iner shal comply v.i.th the proviions
of ths chapte applicable to their parcipation in
such a merger.
*92653 ( c) PIan of reorganzation. A pIan of
reorgantion must: (1) demonsate a pi.ose
reaons for the proposed	and specif
reorganation; (2) be in the best ipteest of the
mut 	lie iner and its policyholders; (3) be
fai and equtable to policyholders; (4) provide
for the enhancement of. the operations of the
reorganed iner; and (5) not substatialy
lessen compettion in any lie of 'inurance
business.
(d) Reoganation. The proposed
reorgantion shal be accomplished by a plan
Copynght (c) West Group 199 No cla to ongi U.S. Govt. works
Complete printed PDF page 84
.'
Pag 2
lie iner into a domestic stocklit inr
INS § 7312, Reorgantion of a domestic mutu
which '.. mus be fai- andequtable to the
policyholders and mus comply with th te and
fort inparagra.ph one, two Or fOur	conditions set
of th subsection provided howevçi,that a ínuta1
surlus to policyholders,	lie inurer which has
excludig contigently repayable. obligations of
the mutual 	lie iner uncler section one thousand
thee hundred seven of this c4apter, of less than
and which.. has indusal	:f mion dollars
comply 	with the ter and	in force 	mus	inance
conditions set fortm paragraph one, two,thretor
four of.th subsecon.;Notbgh~t:ii contaed
shal.be deeme to give: anyclass, of policyholders
suchpriority with respec to theássets of any
reorgaiediner in .liquidation, other than as
ths	stated in .paragraph two of	exPressly
subsection.
(1) (A) The mutual lie inurer's parcipatig
business compried of its-parcipatig policies
and contracts in force on the effective date of
be operated by the	reorganation shal
reorganed inurer as a closed block of
parcipatig .._ business in. accordance with
"Sbsection excet that, at	paragraph five of ths
lie inurer, some or al	the option of the mutu
classes of group policies and contracts may be
excluded from thè closed block of parcipatig
business and in such event such group policies and
contrcts shal contiue to be eligible to recive
diviciøids based on the experence of such class or
classes; (B) subject to the proviions of
subparagraph (D) of ths paragraph, the plan of
reorganzation provides that the policyholders'
memberhip interes wi be exchanged for al of
the. common shares of the reorganed iner or
its parent company, if an, or foreithfr, or a
combination of (i) the common shares . of. the
reorgan iner or its parent company, if any,
and (ü) consideration equal to the proc of the
shes	such common	in the 	market of	.public sale
by the issuer thereof or by a tr or other entity
exstg for the exclusive benefit. of the
policyholders and estblished solely for the
pmpose of effectig the reorganation to which
such common shares are issued by the issuer on
the effective date of reorgantion, such
consideration to be distribute to policyholders
durg a procss of reorgantion specifed in the
pIan and not to last more, thtl ten y~ws afer the,
effective dae of reorgantion. orunw....
notication of the death of a policyholder or thë..
death of the inured whichever ocur fi (C)
the co~ideration to b~ given.to the policyholder
a, iD,annei	is alocate aiongthe policyholder in.
which is fai. and.. equiìable . tô policyhóldersan4.
wmch may tae intQ... accoUnt the. estiaie. .	.', . _. . -.' ' .'..",'	..- '. -
proportonate contrbution. of each class of
parcipfitig .PQlicies. and ,contracts to the,
aggregateconsideratioi being 	given .... 1.0
policyhol~rs; (p)un,ess such. issmc, \Vthin. a
shorter. or 10ngerperiodis disclosed in the l?la¡p(
reorganation" the iSSlerof such comnonsharesu,
not issue with two years
any
has notIssued and does
of the.effective date of the reorganation (i)
of its common shares, (ü) any secuties
convertble, with or without consideration,. into
carg any warant or	such common shares or
right to subscrbe to or to purchase common
shares, or (iü) any warants or rights to subscrbe
to or purchase such .common. sharesoi- other
securties descrbed in item (ü) of ths
subparagraph, except for the issue of common
shares to or for the benefit of the policyholders
pursuant .tothe reorganzation. ,and the iSsÜe of
stock in anticipation of options for the purchase of
common shares being granted to offçes or
employees of the reorganed inurer or its holdig
company, if any, pursuat to ths chapter and a
pIan approved. by the supertedent; (E) the .
issuer shal 	use its best effort to encourage and
in the 	estblishment of apublic market for	assist
such common shares with tWo years of the
the reorganation (or such longer
in .. the pIan of
effective date of
period 	as may be disclosed
reorganation); (F) with one year afer the
offerg of stock other than the intial dibution,
but no late th six yeas afer the effective dat .
of the reorganation the inurer, under a pIan
approved by the suertendent, which he fids
not to be ha to the reorganed inurer, sha
offer to make avaiable to policyholders who
recived.and retaed shaes of stock with m;n;mal
values on reorgantion, a procure~to dispose
market value without	of those. shares of stock .at .
brokerage commssions or simar fees; and (G)
the cost and 	exenes of the reorgantion shal
be borne by the inurer but no costs and expenses
C~.gt (c) West Grou 199 No cla to ongi U.S. Govt. works
Complete printed PDF page 85
Pag 3
INS § 7312, Reorgantion ofå domesc mu lie iner ino a domestic stock lie iner the
inèUediÏåny iier incoriectiDn with. the
recrganatiDn shal be charged to' the dDSed
block.
*92654'(2) (A);1ñem1Ial lie insurer's
parcipatig '. BlÌiness. cömpnse(f of . its
parcipatig pDlides,àld contracts il_force Dn thebe
effêctivedat Df tieteorganzation shal
operated 	by tle reorgaied iier as aclDsed
bloCk Dfparcipatig btiiless.íi äcCrdaCe with
paragraph. five Df ths SUbS~Dtl except that, at
inurer some Dr al
th~ Dpt:Dní?f the mUtal lie
clas'S6š' OfgrDUppdliciesaIdcDntracts maybe
parcipatigexcíudêd . from the Closed blóck of
bUsiness åIdin such event such group policies and
contracts shal contiue to be eligible to' receive
dividends based Dn the expenence of such class or
classes; '(B)the reorganed insuer or its parent
corporation is to issue and sell shaes Df Dne Dr
more classes of stock havig a tota Dfferg pnce
public market	the estiated value in the	equal to
lie inurer; (C) the pDlicyholders'	of the mutal.
equty is equal to' the excess of (i) the amount of
the mutual iner's assets accUmulated :fom the
operatiDns of parcipatig pDlicies and contracts
in, fDrce on the effective dateDf the reorganation,
over thesll of (ü) the amount of assets alOCated
to the. clo.sed block Df parcipatig busiless and
(il) an amount equal to' the statuory reserves and
other sttutDry liabilties attbutable to any grDup
parcipatig policies and contracts il force on the
.effective date Df reorganation and not included
in the closed blDCk Df parcipatig business,
provided however, that the policyholders' equity
canDt be less than the amount Df the
policyhDlders' preference accunt. The amount of
the policyhDlders'equty shal be determed as of
the statement. elte and adjus by the estited
in the mutal iners tDta	percege chage
assets, as repDrt in its story stteênts,
date and the effective date	betwee the stateent
Df the reorgantiDn. Any deteatiDn Df
policyholders' equty shall include adjusents for
any events or matts deeed by the
suertendent appropnate, which have a matenal
effect Dn policyholders'equity and occed 'with
seven years pnor to' the sttement date; (0) the
plan Df reorganation provides that the
policyholders' membership interest wi be
exchanged for consideratiDn equa to (i)
policyholders' equity, (ü) nontranferable
ofsubscrption nghts. to purchae al.	preeptive
such issuer, (il) ten percent of the	the shares of
prDcee net Df underwtig coinssionsand
inurer upDn the sale of its	fees raised by the
intial Dfferg of shares, and' (iv) the
establishment of a pDlicyholders' preference
acct fDr the benefit of pDlicyholders' existig
Dn the effective date of reorgantiDn, and fDr the
beefit . óf the fûtïepolicyholders of .the
subsequent	in the event Df a	
reorganed iner,
cDmplete liquidåtion. of the.. reorganediner,
havig thesuch policyholders' preference account
(E). 	the
term descrbed belDwin ths paragraph; .
conideration to be given to' the pDlicyholders is
allocated amDng the policyholders in a maner
wmch is fai and equitable to policyholders and
which may tae intO' accoimt the estiated
prDportonate contrbution Df each. class of
parcipatig pDlicies and contracts to' the
aggegate consideration being given to .
liepolicyholders; (F) at the Dption of the mutu
inurer, any common shares of the reorganed
inurer or its parent company, if any, included in
the policyholders' consideration, other than thDse
acquied as a result Df a policyholder exercising
any preemptive subscrptiDn ngbts, may be place
in a tr or other entity existig fDr the exè1usive
benefit of the policyholders and established solely
for the purose of effectig the reorganation to
which such common shares are issued by the
issuer on the effective date Dfreorganation,.such
coìiiderationDr. the procee. of the sale of such
consideratiDn to' be distbuted to policyholders
dung a procs spifed in the plan ard not to'
last more than ten years afer the effective date Df
reorgantion or unti nDtication of the death of
the policyhDlder or the death Df the inured
wmchever ocur fist; (G) the issùer shal use its
best effort to encOurage and assist in the
establihment Df a public market for such common
shaes with two years of the effective date Df the
reorgantiDn; (H) with one year afr the
Dfferg of stock other than the intial dibution,
but no later than six year af the effective date
Df the reorganaton the iner, under a pIan
approved by the supertendent wmch he fids not
be har to' the reorganzed inurer, shal	to
Copyrght (c) West Group 199 No cla to ongi U.S. Govt. works
Complete printed PDF page 86
lie inr
	INS § 7312, Reorgantion of a 	domstic mutu
offer to make avaiable to policyholder who
shares of stock with mial	reêived and retaied
includig 	but not lite	values on reorgantion,
to shaes acquied bypolicyholdersexercising
their preemptive subscrption rights, a procure
to dispose of those shaes of stock at market value
without brokerage commssions or simar fees;
(I) the cost and. expenses of the reorgantion
the iner, however if the	shal be borne by
effecte 	no cost. and expenses	reorgantion is
connection with the	inCWed '. in any maner in
reörganzation shall . be chaged to the
parcipatig-business.in force on the effective
shal	date of reorgantion. Costs and expenses
include but not be limte to legal fees, appraial
fees, pnntig and/or maig costs; (1)
notwthtandig subparagraph (I of ths
provides	paragrap~ if the plan of reorganation.
for or permts a person to diectly or indiectly
acquie in any maner the beneficial ownership of
of the votig securties of	five percet or more
such reorgan iner or of any intituon
which own a majority or al of the votig
iner, or if the	securties of the reorgan
supertendent detees that a person wi
control, as defied in paragraph sixten of
hundred seven of ths	subsection (a) of section one
chapter, such reorganed inurer or any
intitution which own a majori or al of the
votig securties of the reorganzed inurer then
uness the supertedent detees that it is in
the policyholders' inteest to waive al or par of
ths condition, the mutu lie iner shal not,
or indiecy, pay for any of the costs or	. diectly
expenes of a proposed reorgantion whether or
effecte and in no event	not such reorgantion is
sha an of the cost and expenes *92654
incmed in any maner in connection with the
reorgantion be charged to the parcipatig
busess in forCe on the effecve date of
reorgantion Costs and expenes shal include
but not be lite to legal fees, appraisal fees,
pritig and/or mailig costs; (K) the
policyholder' preference accunt refered' to
excess of the amoimt	above sha be. equa to the
admtt assets over	of the mutal inurer's tota
the su of (i) the tota amoimt of assets alocated
to the closed block of parcipatig business and
(ü) the policyholders' equi and (il) statuory
stk lie inr 	. Pag 4.	ino a domestic
reserves. and liabilties attbute to policies ard
of	block	
contracts not included in the closed
business. The policyholders'	parcipatig
preferenèe acclIt shal be calculate asiofthe
stteent date. and adjus.. appropriatelyto
the 	components usectin	reflect any changes in
deterg the amount of the policyholders!,
preference accolIt betwee the sttement date.ard
effective date of reorgantion;(L) a mutu	the
lie iner whosepolicyholders".eqùity Is'paid in
of 	stock 	may sl)ow, asawrte-in)ite	the form
la.beled "Reorganation ;(sulus"inediaiely
paid .up'! on :thèamua,	followig "Capita
inurer, a 'negative",	statement · of the' reorganed
arOlUt. equa to'the excess 'ofthe.. policyholdel'
was paid in 	of stock over its	the form	equity which
unassigned smplus on the date of reorganation;
and eM. the policyholders' preference accunt
shall be so designate and shown as a footnote to
the sulus of the reorganed inurer in al of its
published and fied statements. In the event ofa
subsequent complete liquidation of the
reorganed inurer, and only in such event, the
policyholders' preference accunt sha be
among the then policyholders in a
maner found by the suenntedent to be fai and
alocated
equitable to policyholders, fist to policyholders
havig 	parcipatig policies and contracts in force
on the effective date of the reorganation and then
to al other policyholders of the reorgan
inurer. The fuction of the policyholders'
preference account shal be solely to establish a
priority 'on liqUidation and its existce sha.not
operate to resct the use or application of the
sulus. of the reorgan iner except that. the
reorganed iner, af complyig with al other
requements of ths chapte, canot declare or pay
dividend on, or. repurchase any . of, its
payment, the
a cash
shares. if af such declaration or
amolUtof net preference-assets of the reorgan
iner is less than the aiount of the
policyholders' preference acclIt For ths
purose, the net preference assets shal be equ to
ofthe. iner's tota admtt assets less the su
(i) the assets in the closed block of p'acipatig
business (ü) the sttuory reseres and liabilties
with respect to business not in such closed block
and 	(üi) the reorganed inurer's capital and paid
in sulus.
cop (c) West Group 199 No cla to ongi U.S. Govt works
Complete printed PDF page 87
INS§ 7312, Reorgation of a domestic mutu
lie inr ino 	a domestic stk lie iner Pag 5
(3) (A) The mutual lie iner's parcipatig
business comprised of its parcipatig policies
and~contractsin force on the effective date of the
reorgantion shal be operate by the
reorganed iner as a closed block of
parcipatig. business, for policyholder dividend
puroses only, to which shal be alocate
admtt assets of the mutu 	lie 	iner in an
amount equal to the 	sttutory reseres and
statitory liabilties of 	the mutuallie insurer; (B)
the 	consideration to be 	given in exchange for the
policyholder' membership interest shal be equal
to"thestatttory surlus of 	the mutuallieinureq
(C) 	the amount of statutory reserves and statutory
liabilities and statutory sulus shal be
deteed as of the statement date and adjusted
by the estiate percentage change in the mutu
iner's tota admttd assets between the
stateent date and the effective date of
reorganzation. Any deteation of sttutory
sulus shal include adjustments for any events or
matts deemed 	by the supertendent appropriate,
which have a mateal effect on policyholders'
consideration and occured with seven years
prior to the sttement date; (0) the consideration
shal be allocated among the policyholders in a
maner which is fai and equitable to the
policyholders and wmch may tae into account the
estiate proportonate contrbution of each class
of parcipatig policies and contracts to the
aggegate consideration being given to
policyholders; (E) the reorganed inurer or its
parent corporation is to issue and. sell shares of
one or. more classes of stock havig a tota
offerg price 	equ to the estate value in the
market of the mutual lie iner; (F) the cost
and expenes of the reorganation shal be borne
by the iner; however, if the plan of
reogantion provides for or perts a peron to
diecy or indiectly acque in any maner the
beneficial ownership of five percet or more of
any class of a votig secty of such reorgan
iner or of any intuon wmch own a majority
or al of the votig securties of the reorganed
inurer, or if the supertedent detees that a
peron wi control, as defied in paragraph
six of subsection (a) of secon one hundred
seven of th chapter, such reorganed inurer or
any intution which own a majority or al of the
votig securties of the reorganed iner thèn
uness the superitendent 	detees tht it is in
the policyholders' interes to waive 	al or 	par of
ths 	condition, 	the mutual 	life inurer shall not,
diectly or indiecy, pay 	for an of the costsor
expenes of a proposed reorgantion whether or
not such reorganation is effecte Costs and
expenes shal include but not 	be lited to legal
fee, appraisal fees, pritigand!or maig
cost;
and (G) none of the assets, includig therevenu~
therefrom, alocated in accordance :, iwith
subparagraph 	(A) . of ths paragraph shallrevelHo
~e benefit of the stockholders. of the reorganed
1Ier.
*92655 (4) (A) Any method approved 	by the
superitedent under wmch. the policyholders'
membermp interest is convert into
or
exchanged for consideration detered by the
superitendent to be fai and equitale to
policyholders and meetig the requiements of th
section; (B) the consideration to be given to the
policyholders is alocated among 	the policyholders
in a maner wmch is fai and equitable; . (C)
uness the superitendent detennesthat it is
in
the policyholders' interest to waive al or par of
ths condition, the mutual life inurer does not,
diectly or indiectly, pay for any of the cost or
expenes of a proposed reorganzation whether.or
not such reorgantion is effecte. . Costs . and
expenses shal include but not be lite to
legal
fee, appraisal fees; pritig. and! or mailig cost;
and (0) in deterg whether any reorgantion
is fai and equtable, the supertendent shal be
guded by the legiti ecnomic inteests of
parcipatig policyholders as delieat iI ths
secon.
(5) (A) When the mutal lie iners
parcipatig business compried of its
parcipatig policies and contracts in force on the
effecve . date of the reorganation shal .be
operate by the reorganed inurer as a closed
block of parcipatig business in accrdace with
paragraphs one and two of ths. subsection, then. it
shal be so operated for the exclusive benefit of
such policies and contracts included therei for
policyholder dividend puroses only; (B) to such
closed block shal be . alocated assets of the
Copyrght (c) 	West Group 199 No cla to origi U.S. Govt. work
Complete printed PDF page 88
. Pag 	6
INS § 7312, 	ReorgantiOD ofa domeStc mutulieinerinto a dometic stk lieïnr
mutual lie inurer in an. amount wmch together
wìth aiticipated revenue :fom such business. is
sucient to 	suport	reasbnably expecte to be
but not liitéd to,	such business includig,
pioVÌoÏì for payment of clai, expenes ard
contiuation 'of cuent'	taes, and to provìde for
payabledivìdend scaes, jf th expeñencê
underlyig . such scales.. coritiues ànd.' .'. for
appropriate adjustments in such, scales if. tle
experence changes; (C) the amount of such
assets shall bedeteri as ófthe stateêntd.te.
ald brought forward to theeffeètiê date'òfthe
reorgânåtî6fi usI'g metbodswhiòh woUld have
bee:nused had the closed blOCK beenêstablished
on the stateent datéWith appropñaterecogntion
the assets,	
(D) none of	of new issues; and
Tevenue therefrom, aÎocatéd in	includig the
(B) of ths	accrdance with subpargraph
benefit of the
paragraph shal rever to the
of the 	reorganze iner.	stockholders
an 	amount of the policyholders'	(6) If
consideration for cert classes of policies or
contracts is to be paid in theTorm of increased
anua divìdends to the policyholders in those
be addéd to the assets	classes, that amount is to
prevìously allocatéd in accordance \\'ith paragraph
thee or five of ths subsecon and is to bê'paid
out to those classes in a fai and equitable maner.
(e) Adoption of pIan of reoganation. (1) A
mutiiù lie iner seekig to reorgane. under
ths section shal, by action of thee-fourof its
plan consistent
entie board of diectors, adopt a
with the provìsions of th section and tht it fids
is fai ard equtable to the policyholder. The
board of diectors of the mut lie'iner, in
selectig one of the method descñbédìn
subsection (d) of ths section shall set fort the
basis for their selecon. The pIan. of
reorgantion shal set fort (A) a demonstion
of the pmpose for the proposéd reorganation;
(B) the form of the reorganzation; (C) the
proposed charer of the reorgan iner set out
in accrdace with section onetholland two
hundréd one of th chapte, and its proposédby-
the
laws whch shal provìde for the removal of
word "mut" from the name of the company;
(D) the maner and ba by which the
(E).. tl~	reorganaton .shal tae place;
consideration to be given toth~ PQlicyhold~sin
exchange for their policyholders' membership
interest ,or the i.maner of converg the
p'Olicyholders' membership interes into..sècties
'other consideration; (F) the method of	or
alocatigtheconsdertion among policyholder;
of operation of the mutual lie .	the 	method	
(G)
iner's parcipatig business compñsed of its;
contract inforce on :the	parcipatig policies and
the .. reorganation; and (Ha,	effective. date, of
reorganed iner	the	
pianofoperat:on for
i:cludig àctuaral. projections for ... a. tei;-year
indicatig itsÍ1tentiòPs'	period' and a statement
with 	regard to issug any nonparcipatig
business. If the reorganed inurer proposes to
contiue to issue for delivery in ths state
parcipatig pqlicies or contract, the plan of
reorganation shal so specif. In such event,
of
upon the supertendent's approval of the pIan
reorganation pursuant to ths section, the
with section.	supertendent shal in accordance
of ths
four thousand two hundred th-one
chapter, issue a revocable pert to the
reorgan iner authorig it to, issue
parcipatig policies and contracts in this .state.
other
The 	pIan ofreorganation may conta any
conditions. and provìsions which the board of
diectors of the mutual life iner maydee
necssar or advìsable in connecon with the
proposéd reorganation.
consideration to be given in	*92656(2) The
exchange for the.' policyholders' membership
such membership inteest is	inteest or into which
to. be conver may consist of cash, securties of
the reorganed iner or securties of another
intution or intutions, a ceCtlte of
contrbuton, additional lie inance or anuity
benefits, increaed divìdeids or other
such form ofconsideration or any combintion of
considertion. The consideration, if an, given to
any class or category of policyholder nee not be
the same as the considertion given to any other
class or category of policyholder. Thè cecate
be
of contrbuton referéd to above shal
repayable in five years and bear anual interest at
as defied inthe published monthy average,
section thee thousand two hmidrèd six of ths
Cop~ (c) West Group 199 No cla to origi U.S. Govt works
Complete printed PDF page 89
lie 	inr 	Pag '7
lie inr in a domestic stock	
of a domestc mutu	
INS§ 7312, Reorgantion
chapte, for the caendar month endig two
before 	the effective date of reorganzation.	month
be entitled to
(3) The. policyholders who shal
notice. of and to vote upon the proposal to appröve
the plan of reorganation and to notice of the.
shal be the
public hearg requed by ths section
are . in
policyholders whose policies or contracts
forc on the date of adoption of the plan of
reorgantion. Each such policyholder whose
be	such 'date shall	
policY has bee in force on
consideration, ifany~ provided fpr	entitled to the
based on.. sùch	such. policyholder in the pIan.
policyholder's membership inteest deteIled
pursuant to th secton but only to the extent tht
such policyholder's membership inteest arose
from policies or contracts that shal be in force on
the effective date of the reorganation and shal
bee in force on the date of adoption of the	have
pIan 	and for ths purose disregardig an
changes in statu of, or premum in excess of
those requied on, such policies or contracts
occug or made afer the date of adoption of the
plan.
reorganzation,	the pIan of	
(4) Upon adoption of
it shal. be du1y executed by the chaian of the
board, the president or . a vice president and
attsted by the seceta or an assistat seceta
of the mutual lie inurer 1.der such inurer's
corporate seal and shall be submitted to the
supeitedent with a copy of the resolutions
adoptig such pIan and fidig that it.is fai.and
.eqitable to the policyholders, accmpaned bya
cecate . of adoption of such resolutOl
subscrbed by such offces and afed by them
as tre 1.der penties of perjuI and miderthe
lie iner.	the mut	seal of
of the mutu lie iner mider such inurer's
corporate seal and. shal be ,subIDtt . to . 	the 	,
with 	,a copy of the iesolutiöns,-	sueritedent
adoptig such amendments subscribedby. sucli
and afed by them as tremiCler	offces
peiialties of perjuIand under the . seal of the
mlltulie inurer. In case of an amendnent, al
ofreferences in ths section to. the pIan
rtOrgantion shal be deeed to refer to the plai
anyas. amended No amendment .made afer
by .. ths sectlo!lorafer	p:ubijchearg requied
approval .bythepoIicyholders . (i.. providedIIlithis
section .snal change tlie, plan,ii ,a. maner1Yi..clf.,
the superitendent detees is:.. materaly
the policyholders uness	disadvantageous to any of
a fuer public hearg is held on the plan as
amended if the amendment is made afer the
plan as amend¥ is	public hearg, or the
submitt for recnsideration by the policyholders
if the amendment is made afer the pIan has bee
approved by the policyholders, 1.der the
conditions and procures detered' by the
superitendent in accordance with ths section.
*92657 (g) Additional inormation. . Upon
submission to lu of the pIan of reorganation,
the superitendent may request any additional
thedocuments or inormation and may exame
mutual lie inurer or an of its afliates, to the
extent he may determe to be necessar to enable
hi to make the fidigs requied by ths section
approval by hi of the plan of	for the
reorganation. If the reorgan iier
proposes to contiue to iS$Ue for deliver in tl
the	stw. parcipatig policies,Qr contracts, .
supertendent may also request. such iiornation
or agreeents relative thereto as he may. reque
purt to section four thousand two hmidred
ths chapter.	th-one of
(f) Amendment or withdrawal of pIan The
by action of a majority of
the entie board of diectors, at ~y tie before the
mutual 	lie iner may,
plan of reorganaton becmes effective as
provided by ths secon 	(I) amend the pIan of
reorganation; or (2) withdraw the pIan of
reorganation. On adoption of an amendment it
shal be du1y exected by the chaian of the
board, the president or a vice president and
attst by the seceta or an assistant secreta
(h) Constats and cecations. (1) The
superitedent may appoint one or more quaed
diinterested persons or intituons as constats
to advise hi on any mattrs related to the
reorganation. The appointment of a~ canstat
shal be in wrtig and shal set fort the dutes
of the constat. Copies of	and responsibilties
such appointment shal be given to the consu1tat
lie iner.	the mutual	and concurently to
Copyrght (c) West Group 1999 No cla to origi U.S. Govt. work
Complete printed PDF page 90
PagS
INS § 7312, Reorgaonofa domesc muli ïnerinoa dometic stk lie in~r
,(
the pIan of reorgantion satisfes the	(2) If
conditions' set fort in paragraph one or I\O,of:
section, 	the supertendent.
subsection (d) of ths
appoint one... pr . more qualed and	shal .
the purose spe(,tin
disintereste. actuanes for,
paragraph thee of th subsectic)l.;. Such actuar
Academy of	.te 	Aman
shal be a member of
Actues, and shal .be knowledgeable ... and
to thema to be cered	experence as
as.to 	(A)
(3) Suchaç, tu..ce in :wtig
in the, çase-of a'plan. ofTeogantion purt to .th se:ctiai..	,of
paragraphtw().of'SlP~ection (d)
the amomitof th .mi i.s, assets
acculate from the-operations. ofparpatigeffective dåte
policies and contracts iniorce on the
case of a pIan	and (B) in the	
of the reorgantion
of reorganzan .pursuat to paragraphs one or
two of subsection' (d) of th section, theasset	of the
reasonableness - and suciency.
alocation refered to. in subparagraph (B) of
paragraph five of subsection (d) ,of ths section.
Such certcation shal be in form satisfactory toin
the superte-_and .sh.,,'be made
accordace with. .professiona -sdads and
practice generaly accepte by the actuanal
profession and such other factors as such actuar
in hi professional judgment believes are
reasonable and appropriate at :te tie such
certcation is made. Any such certcation shal
the actuar,	of	
memorandum,	
bea~companed by a
in form satisfactory to the sueritendent,
descrbing the calculations made in support of
and the. assuptions used in	such cecation
calculations.	such
(4) The constat and the actuar may request
lie iner accs to its books and	of the mutu
recrds and the fushig by it of any other
inormtion in its possession, to the extent it.may
reasonably be deeed necessar to make the
valuations and certcations conteplate by.ths
subsecon, or to adve the suertedent on any
matters relate to the reorganaton. The
consultat and the actuar sha report to the
superitedent any intace. in which the mutual
lie iner fai to provide an inormation
requested by them The constat and the
actu shal not, under jucEcial process or
otheise, be obligated orp~tt to.diVUg€1. to.
anyone except the supertendeÏt any inomiäton
nat otl~se.,publicly avaiabl~L",hichis sq
ontaed by tbem.. Tli, constat and the~tu
shci reciVe: reasonblt cçmpenaton and sha
b~iei,bwsedfo¡' r~asonable; expenes incuiedni
p~rronng their duties. "
*9Z658 (S) The report of the, consUIìa(3ld.tJe' .
certcation ,. of the actsha1peni4e:, t(). the
suert~4~t. ,In m~g. ,the . ~9t~~n~ti~
contemplate by th seçton"Jh,e,sieritt4ent
stlaIL J.0t.be .b,ound by~y fic\g¿"çanph.islPPS, ,..
cérCatiOI1S ;or .recmtp~dàiiôÍ1' wade..by',tÌr '
consultat or the actm.' AUinonÍation
by the superitendent pursuant- to, ths	obtaed
section, includig without litation ino¡matioll
obtaed though examations by hi the report
of the constat, the cecation of the actu,
the memorandum of the actu and other
inormation secured by the constat or the
actuar an4 tued over to thesupertedent, are
hereby specifcaly exemptëd,. as conteplated by
paragraph 	(a) of subdivision two of section
eighty-seven of the public offcers law, fr()m
disclosUre by the supenntendent mider said
section eighty-seven of such law. Such exemption
shall not preclude or exempt the suerte~~t
to
from disclosue of such inormàtion. pursuant
judicial process under provisions of law other than
said s~tion eighty-seven of the public offcer
the
law, nor prohibit any disclosue which in
opinon of the supertendent, and af an
opportty for the iner to be . heard, the
suertena.ent dee should be made public; for
the benefit of the iner, its, policyholders or the
public. . If the deparent inteds to make an
cercation public, then such report or
cecation shal be made avaiable to the
report or
company at lea fi days prIC?r to such public
disclosue.
in th section shal be
(6) Nothg contaed
constred to exclude any person or employee or
member of an intuon from the category of
"diinteeste peron" solely because such
individual is a policyholder of the inurer or that
such person or intuon is to be one of the
underters of any shaes to be sold plluant to
Copyrg1) Wes Group 199 No cla to origi U.S. Govt. works
Complete printed PDF page 91
Pag9 (INS § 7312, Reorganüon of a domesuc ínni lie iner inoå domesuc stklieiner
the plan ofreorganation.
(i) Public hearg. The supertedent shal hold
a public hearg upon the faiess of the term and
con.dtions of the plan, of reö:rgaÍatiôn, the
lie iner toreasons and puroses for the mut
demut, and whether the reorgantion is .in
the inteest of the mutu life iner and its
policyholders, aId _not detrenta to the.public.
Notice statig the tie, place and purose of the
heargslialbe maied by the mutuaflieiner
each poli¿yholder. entitled. to notice of "the	to.,
hearg in.. accordancé ,with para~aphthree .,of
known
subsection' (e)oftbsection, at his las
life
address as shown on the recrds of the mutual
inurer; such notice shall be maied at least th
days before the date of the hearg. Such notice
shal be preced or acèmpaned by a tre . and
complete copy of the plan or by a suar
thereof approved by the supertendent, and such
other explanatory . IIormation as the
supertedent shal approve or requie. In
lie insurer shal give notice	addition, the mutual
of the. tie, place and purose of the hearg by
p~~~oo in wee ~w~~ers of general
inercirculation, one in the county in which the
pricipal offce and two in other cities	has its
with or without ths. stte approved by the
superitendent. Such new~aper publications
shal be made not less than fin days nor more
than~ix days before the hearg, and shal be in
a form approved by the suertedent
G) Approval. of pIan by suertedent. The
SUpertendent shal afer the public hearg
reqed by subsection (i) of ths section approve
the plan of reorgantion if he fids tht the
par	proposed reorgantion, in whole and in
doe not violate this cha.pter, is fai and equitable
to the policyholders and ¡shot detrenta to the
and that, afr givig effect to the
reorgantion, the reorgan iner wi have
public
an amoùnt of capita and sulu. the
supertedent dee to be reasonably necssar
for its futue solvency. If approval is dened the
deal sha be in v.tig setg fort a sttement
lie inerof the reasons therefor and the mutu.
shal have the nght to a hearg' before the
sueritendent witl th days of the date of
suchdenàl. The sueritendent shaf not
disapprove of a plan of reorganation fÖrthe
mut 	lie iner selecte0fie öf .	that the	reason
'of ths'.the methods provided for in subsection (d)
The supertendent	seètión rather th another.
shal approve or disapprove the pIan iiiwrtig'on
the	af 	the 	eonclusioÌl of	
six days	or-before
public hearg requied by subsection (i)o:f,ths
section.
*92659 (k) Approval by policyhòld~' (l)A
propÔs~ -to approve.. the plaiì 'of reorganZation
sl1ållbe sùbmitt topölicyholdeis:"'Notice
siåtìg thedatè, timeånd plaêefor votIg'on such
the mutUallife iner	proposal shal be maied by
to notice of and to	to eachpolicyholdei entitled
vote on the proposal in accrdåce with paragraph'
thee of subsection (e) of ths secon, at his las
known address as shoWn on the records öf the
at
mutual 	lie inurer; such notice sha be maed
least th days before the date of the actiOn.
may be coinbined with notice of the	Such notice
public hearg requied. by ths section. Such.
notice sha be preceded or accompaned by. a tre
plan or by a suar	the	
and 	complete copy of
thereof approved by the supertedent, and. such
other explanatory inormation as the
superitendent shal approve or requie.
(2) Each policyholder entitled to vote on the
proposal shall. be entitled to cas. one vote, uness
otherwse provided in the charr or by-lawsofthe
mut. 	lie iner, on the proposal, eitherín
the
person.or by mai or by proxy, irespective of
number or amomit of the policies or contract he
holds. Any proxy shal be revocable at any tie
excet to the extt that, at the tie of exercise,
the power confered therëby has bee exercied
Al votes sha be by wrtt balot cas in person
or by
or by mai by policyholder entitled to vote
proxy agents duly . appointed by policyholdes .
entitled to vote. The votig on the proposal shal
liebe MId at the home offce of the mut
iner. The poll shal be opeed at te o'clock in
the forenoon and remai open miti four o'clock in
the aferoo' of the da fied for such votig, at
which tie they shal be closed. The proposal to
. approve the pIan of reorganzation may be
adopte by the afative vote of two-thds of
Group 199 No cla to origi U.S. Govt. works	Copynght (c) Wes
Complete printed PDF page 92
Pa 10 .
INS § 7312, Reorganon of a dQniestC mutilie iner -in a dönisti~ stk lie iner
al votes cas by policyholders entitled to vote.
power to
(3) The suertendent. shaii- have
supervse aiddieet and prescrbe rues governg
the procure for the conduct of the votig on the
proposal to such extent, consistent with the
necsarproVisions" of ths. secon as he. dee
to ine ä fai and accate vote. Such powers
be li to;' power to	shall 	include, but not
supervse and reguate (A) the determation of
policyholder entit1ed-io~notcenf'and to vote .on .
the 	gig '"of notice of the	the proposal (B)
propos¡¡; . (C)th-receip1;cuto, safegiardig,
and
verfication and tabulation.. of proxy form .
balots; and (D) the resolution of disputes.
(4) The supertedent s4a appoint as
inpectors an adequate number of personne1 of the
inance deparent ,or other competent. and
diinterested perons . and may appoint, if
necesar, expert accounts and other assistats
and may authonze the procurement of stationervotig	coductig the
and. suplies neèSSar for
on the proposal .and canvassing .the vote. The
inectors 'shal have power to detere al
questions concemigthe verficaton of the ballots
and präxies, the ascertent of the valdity
thereof, the qualcation of t1e voters and the
canvass of the vote, and with resec thereto shal
act under such Iues as shal be prescrbed by the
suertendent. Any disagreeen among the	be
inectors shall be. reported to and shal
resolved by the superden. Any
detations by the inectors or the
sueritedent shall be subject tojudicial revew.
*92660 (5) Reresentatives of the policyholders,
includig. representatives of policyholders.'
the plan
favorig or opposing the approval of
shal be entitled to be present durg the casg,
vercation and canvassing of the proxies' and
be entitled to exae and object	balots and shal
to any such proxy or balot. The suertedent or
the inpectors may lit the number of persons
representig any inteest person or group and
procures for the	reasonable	
may specif fai and
examation of and presentation of objections to
and expenes
the proxies and balots. Cost
incured in providig such represento.n shal not
of the	paid from the fuds	
bea charge. upon. or
lie insurer or'~the peron resonsible for	mutual
and expenses of the reorganti()n.	the cost
iner nor any	lie
(6) Neither the mutal
o£fce~ agent or employte thereofshallmowigly
policyholder entitled ,to	any list of	omit, from
proposal the name.. of	and to vote on the	notice of
an policyholder requed to be inCh,lged thçrein
or shal in connection with. any such list
lmowigly omit .tQgivethe ii~e and adgiç~s, ~;
last., shown on the recrds .of the mutual. lie
inurer,ofany,po.licy9ld~. ,. No"pers~ii- .~~~
conceaiorwithold or,.aiq,orabetanY, p$et
concealing or witholdig anY proxY or	person in
the authoried cusodan therëof or	balot. from .
sell or. .
from the inpectors. ,No policyholder shal
offer to sell any vote .or. proxy for, any su of
money or anytg of value other thai the
consideration provided for in . the plan or
if such pIan becomes effective.	reorganation
(7) All ballots and proxies received by the
inpectors shall imedately upon thecompletion
packages and	
canvass be place in sealed	of the
be preseied by the inectors for a period of	shall
subject to the order of any cour havig
junsdiction of any proceegs relatig thereto,
and then shal be tued over to the mutual lie
four years,
the
iner, or the reorganed inurer if
reorganation has become effecve.
proposal	votig on the
(8) The conduct of the
shal at al ties, on petition of the supertendent
whose rights may be	persons	
or of any peron or
afected be subject to the superion and cotrol
of the supreme cour in the judicial distct in
lie iner has its home offce.	which the mutual
(9) The inclusion by the mutual lie iner of
the name of any peron in any list of policyholder
requed by ths section shal not be consed as
anadnssion by such iner of the valdity of any
policy or contract and no such lit shal be
competent evidence agait such iner in any
action or prog in which the queson of the
valdity of any policy or contract or of any clai
under it is involved.
Copyrght (c)WtS_Group 199 No cla to origi U.S. Govt. works
Complete printed PDF page 93
Pag. 	11
INS § 7312, Reorgantion of a doniêsc mutiialÍÏemsr in adomestic stok lie iner
thousand two
(10) The provisions of secon four
shil not apply to the
hundred ten of ths chapter
section.
action by policyholders pursùantto ths
of the vote, the mutual	the 	conclusion
(11) Upon 	(A)
lie iner. shil sùbmitto the suertedent
a ceed' copy. of. the. plan of reorgantiOn,
subscrbed by the chaian of the board, the
any vice presideiit and atested by the	president or
the . mutu
seceta or an. assistat seceta of 	by the
lie inurer (B) a cecate, subscrbed
chaiaroftheboárd, the preSident oninyvice
atteste bythesêceta or ,assistat	and	presiden
seceta 'of the mutual.lieinûrer, or subscrbed	the
by the person or persons, if any, designate by
suertendent to superse the giVig Of n.otice of
the date. for action on the proposal to the effect
in accordace with ths
tht such notice was given
section to al policyholders. entitled to such notice;
the inpectors
and (C) a certcate subscrbed by
of the resuts of the vote, as evidence by vald
bilots received before the polls were closed.
Each such cercate shil be afed as tre
under the penalties of peimy by the person or	of a
the same and, in the case	subscrbing	persons
ceficate signed by offcers of the mutual life
be afed under the corporate sea	inurer, shil
life iner.	of the mutual
*92661 (1 ). Effective date of reorganation.
When the superitedent has given his approval of
the plan of reorganation as provided in
subsecon (j) of ths section and' cecation of
approval of. the plan has beemade to the
supertedent as provided in subsecon. (k) of
ths secon, a copy of the pIan of reorganation,	endorsed
with the supertendent's approval
thereon,. shal be fied in the offce of the
suertedent A copy of such pIan ceed by	fied by the
the suertedent sha alo be
mutu 	lie iner in the offce of the clerk of the
lie
county where the pricipal offce of the mutu
iner is iocat. The pIan of reorgantion
shal tae effect in accrdace with. its ter on
the date when the fi1gs requed by ths
made or on such later date,	subsecorihave bee
if an, as may have bee specifed in or
detered in accrdance with said pIan or
pursnt thereto. The suertendent shil issue
an amended cecat ,.ofautority to the
reorganed iner and such licee, if any, as
may be requed under section one thousand two
hundred four of ths chapter for the sa1e of its
its plan of reorganation.	securties as speced in
(m) Corporate existece. Upon the
reorganation of .the mutu lie inurer in the
the . reorganed inurermaner. herein provided
corporate	of 	the	
a contiuation	deeed	shil be
case	or, in the..
existence of the mutual 	lie inurer
plan	the.
of.amerger, ofthe.companysp~ifed in
contiuig .coinpany,
of ,reorgaization as the .
either themutuallieineJiorthe	which maybe
domestic.stock lie iner with which it is
merged. Al the rights, franchises and interests of
the mutual life inurer and, in the case of a merger,
. of the domestic stock iner, in and to every.
species of propert, real, personal and mied, and
thgs in action thereunto belongig, ,.shal be
the contiuig	and veste in	
deeed tranfered to
tranfer; and
company, without any- other dee or
simultaeously therewith such contiuig
to have assumed il of
company shil be deemed
the obligations and liabilities. of the. mutal lieof the
inurer and, in the case of a merger,
domestic stock inurer, other than obligations and
liabilitieswith respect to the policyholders'
membership interest eliated by the plan of
reorgantion.
(n) Actions and procgs.. No action or
procg pendig at the. tie of. the
reorgantion to which. the mutual lie inurer
may be a par shal be abat or Qiscontiued by
reason of such reorgantion, but the same may
fial judgment in the same	be prosecute to
if the reorgantion had not taen	maer as
plac, or the reorgan iner may be'lie iner bysubsttu in place of such mutual
the cour in which the action or	order of
procg may be pendig.
(0) Directors and offces. The diecors and
lie iner, uness'othere	the mutu	offces of
specifed in the plan of reorgantion, shal sere
as diecors and offcer of the reorgan iner
wtI new diectors and offcers have bee duly
elected and quaed pursuant to the char and
copyright (c) West Group 199 No cla to origi U.S. Govt. works
Complete printed PDF page 94
Pag 	12	inr	stók lie	a domestic
INS § 7312. Reorgaüonofa dO:meSt mutrlie iner in
the reorgan in.	by4aws of
(P) Cost and expenes. - (1 )'Themutúal lie
iner sli delivertO the. superitedent. at. the
tie of sibmissionofthe plan ofreorgaiàtion a
writt Undertg in fotm and Substace
satisfaêtory.-to the Sutedent'.a signed bypersons	other	
life iner, and by such	the mut
as the sûperendent ma:requie, spifg.the
expenses incured in	which an cost and	màneI in
any man ..:m. co . Wi ' thê ,. . pläî' of
reòrgâñíi.afionsliållbe.pãìarörteiibiíèd:.: Such
underlgCshl-l'roVide. for thep~ent or
reiibrisenent of all exêiés inêuredby the
the tiepärent 'in cODnection
suenntedent . or
with th plan of reorganzan,.other than normal
deparent	operatig expenss-of the
*92662 (2).slichimderg, oter.. than aof
reorgantion pursuant to :paragrph one
subsection (d) of th section, shil also provide
that no payment of cost and expenes by the
lie inUrer or the reorganzed iner shan,	mutual
af givig--eiIec. ..te- any . -reibllement or.
contrbution received by such iner With respect
thereto, have the effect of reducing the
consideration, other than the policyholders'
preference.account refered to in paragraph two of
paid to. 	the
súbsection (d) of ths section, to be
policyholders purt to the plar of
reorganation. The requiements of ths
in a reorgantion	
paragrph may be waived
purant to paragraphS thee an four of
subsection (d) of th seetioítifthe suertedent
detees that it is in thepolicyholder'inteest
to do so.
(3) The said miderg shal apply to cost and
expenes incued prior to the submision of the
plan of reorganzation as well as those incued
thereaf and shal be bindig whether or not the
plan of reorgantion taes effec The
consideration to be given to policyholders
pursuantto the pIan shal notbe deeed a cost or
expene of the reorganation subject to ths
subsection nor to such underg.
(q) Notice of proposed reorgantion. Notice of
of the proposed reorganation and	the pendency
shal be given by the mutu	of the effect thereof
lie inerIr a maer 'satisfactory tò the
persons to whom. the mutusuertendent to al
iiteinerdeliverspolicies or cóntracts which are
of	which the plan	date ,'on	issUed 	afer 	the
reorganzation is adopte by the., mutual lie
iner and before the pIan taes effect or is
the right,	withdrawn. Such persons shal have
uness the laws of their domicilar stre gives
rescind 	such 'Policies or.cØJitracts,.	other rights, to
and to 	refuded aiy:amounts.paid:withrespect	be
or its
thereto; by. :wrtt notice. to'. such iner
recipt öf,the:	days: of 	their	
agent given-with ten.
aforesaidnotie-egivenby'such inureL.
pIan of
(r) Effect of reorganation. If the
reorganation takes effect, the rights. of al
policyholders thereaf shal be as specifed in
of the
their 	policies or contracts, in the char
reorganzed iner and in the plan of
the c:liation of the	reorgantion, except for
shal have no rights	right to vote, jf an, and they .
lie inurer. The	under 	the char of the mutual
reorganed iner shalL, thereafer be subjec to
all laws, rues and reguations applicable to
domestic stock lie insurers andshall not be
of thssubject to any laws, rues or. reguations
domestic mutual inurers and	state applicable to
not to domestic stock lie inurers.
(s) Faiure to give notice. If the mutual life
inurer complies substatialy and in goo faith
with the requiements of ths section with respect
to the givig of any requied notice to
policyholders, its faiure. In'any case to. give such
persons entitled thereto	notice 	to any person or
shall nötiipaithe valdity of the actons. and
ptocegs taen under ths section or' entitle.
such peron to any injunctive or other equtable
relief with resect thereto, but- th subsecon
shal not iipai an clai for damage such person
or perons would otherse have due to such
failure.
*92663 (t) Limtation of actions; sècty. (1)
Any action chalengig the valdity of. or ansing
out of acts taen or proposed to be taen under
th section mus be. commenced with one year
afr a copy of the pIan of reorganation, with the
Copynght (c) W.eGroup 199 No cla to origi U.S. Govt works
Complete printed PDF page 95
lie 	insurer intO
INS §7312. Reorgantion of a domestic mutu
suertendent's approval endotsed;thereon;shal
or six	supertedent	
be:fedil the. offCe. of the
month. from the. effective date of. the
plan of	if the	is late; or	
reorganation, whichever
of	six month
reorganon is withdrawn with
withdrawal.	such
action arsing out of acts taen or	(2).In any
proposed .. to be taen tmdeI th section, the
shalmutûliein òf the reorgand iner
the próceèdgsbefore	any 	stge. 	of	
be 	entitled at
to . reque	court	
fial jüdgment to petition the
pláIti or plaiti to give secty for the
reasonable expenes, c iincludigattomeys'... fees,
which may be incmred by it in connecon with
pares defendant in	other	
such acton and by any
life
connection therewith or for. which the mutual
inmer or the reorganed inmer may become
liableiinder ths chapter, tmder any contract or
lieotherse by law, to whith secty the mutual
iner or the reorgan iner shal have
recoure. in such amotmt as the cour havig
jursdiction of such action shal detenneupon
such acton. The amotmIof	the teration of
secty may thereafer from tie to tie be
or deceased in the discretion of the .	increaed
cour havig jursdiction .of such action upon
securty provided has or may	showing that the
exceSsive.	becme inadequate or
((3) 	Repealed )
((4) Repealed)
(u) Modcation or exchange of eXitig
precludepolicies. Nothg in th section shal
eïtherthe mut .lie iner or the reorgan
al applicable	iner, on compliance with
from offerg at any	requements of ths chapter,
tie or from tie to tie to anyclass or category
of policyholders to mod their . policies or
contract or to exchage their policies or contract
for other policies or contracts il the maner set
fort in the offer.
(v) Prohibitions on ce offers to acque and
acqusitions of shares. Prior to, and for a perod
of five yeas followig the date when the
distributon of consideration to the policyholder
Pag 	13	a domestic stk lie iner
in exchange for their memberp inteest is
completed pursuant to . such pIan of
reorganation, no person, other tl the
reorganzed iner or an intution refered to in
subsecon (b) of ths sect:on tht is a par of the
pIan of reorganation as provided by said
subsection 	(b) or an intution that is formed
with the approval of the superitendent,
thesubsequent to the effective date of
in order . to acquie al of the	reorgantion
cöinon shares of the reorganed, inmerin a
tranaction whereholçiers pf commonshiRes of
inurer receive al of the con:qn
shaes of sUch. intution on a basis. that ' is
the reorganed
proportonate to the niiber of commonshaIs of
the reorganed iner held by each such holder,
shal diectly or indiectly offer to acquie or
acquie in any maner the beneficial ownership of
five percet or more of any class of a votig
securty of such reorganzed inmer or of any
intitution which own a majority or al of the
votig securties of the reorganed inurer,
without the prior approval of the sueritendent.
il the event of any violation. of th subsection, or
of any action which, if consumate might
constitute such a violation, (1) al votig securties
of the reorganed inmer or of such intution
acquied by any person in excess of the maxmn
amOlmt pertted to be acquied by such person
bepursuant. to ths subsection shal be deemed to
inurer or	
non-votig securties of the reorganed
as the case may be, and (2)
such . violation or action may be enorce or
of such intution,
enjoined as the case may be, by appropriate
proçeeg commence by the reorganed iner, ..
such intitution or the supertendent, the attorney
gener or any policyholder or stockholder of the
reorga 	iner or such intution on behal of
the reorganed iner or such intuon in the
supreme cour in the judicial distct in which the
reorganed iner has its home offce or in any
other comt havig jursdiction, and such comt
may issue any order, injtmctive or otherse, it
necsar to cme such violation or to	fids
prevent such acton. For the puroses of ths
subsection, the te "beneficial ownership", with
respect to any secmity, mean the sole or shared
power to vote, or diect the votig. of, such
securty and/or the sole or shared power to
Copyrght (c) West Group 199 No cla to ongi U.S. Govt work
Complete printed PDF page 96
.'. ( ..
INS § 7312, Reorganon of a domeStc mun:lie inr into a domeStc stok lie
diose, or direct the.dispositio~.of suchsecty .
the te "votig secmity" include votig
secties as defied in pargraph fort-fiyç of
subsecon (a) of secon one hUldred seven oHhis
chapte, any. .preorgaitioni ceficate or
subscrption (includig subscrption rights issued
pursuat to a plan of reorgantion), or al
wioutsecty converòle (with or'
consideration) into anpsuch secty, or carg
any wart or right to.,subscribe.for, or purhase
sneli wâant 9I.nglt;any such securty".o,.a .
the term"offer"~inc1udesever"'ófer tobJlor
acquie, solicion ofan offto:sell tedéroffer
for, or reques orinviot for'tèndmof,' 'ã
securty or interes in a secty for value; and the
ter "person" mean an individual gioup, ~
corporatio~ parerp, associatio~ joint stock
company, trt, imy sin entity or an
combination of the foregoing actg in cbncert
*92664 (w)Prohibitetranactions by offcers,
diectors or employee. (1) Prior to, and for athe
perod of five years followig the date when
ditnòution.of.cidetion-to.t policyolders
in exchange for their. mebership interests is
complete puran to such . plæi of
reorganzatio~ no offcer, diecor or employee of
or of the reorgaed inurer,	the. mutu inurer
includig famy members and their spouses, shal
diectly or indiecy offer to acque or shal
the beneficial ownerhip of	acql.e in an maner
any securties of the reorganed inur-er or of the
intitution refer to in subsecon (b) of ths
section uness the acquon is (A) made
approved by thepursuat to a ,stock option plan
suertedent; (B) made pursuant to the pIan of
reörgaition; . (C) made by emloyees, includig
their famy members and their spouses, from a
broker or dealer regired with the Securties and
Exchange Commsion at the then quote prices
on the date of purchase; or (D) made by offce
or diectors,includig thei famy members and
their spouses, at lea two yea afer the intial
public offeng from a broker or dealer regired
",ith the Secmities and Exchange Commssion at
the then quote price on the date of purchase.
(2) For puroses of ths subsection, the term
''beneficial ownership", with resect to any
inr 	. Pag 14
power '.0vote,
sec, mean the sole or shared
or diect the votig of, Such secty andior the
sole or shared power to diose, or diect the
disposition, of such secty.
(3) For puroses of th subsecto~ the te
"secmities", includes votig secties as defied
in section one hmidredseven of ths chapte, an
subscrptionpreorganation cercate or
(includig subsçrptionrights issued Purt, tQ a
plan ofreorganation)~orany secmity converble
(with. or without consid~ration), into any such	to
seciity, or.. èwrg.ary . ~arant Of right
subsçrbe for or purchase aiy suchsecurty~ otany
such warant or right -~-
(4) For puroses of ths subsection, the ter
"famy member", incl'lcles a brother, sister,
spouse, ancestor .or descendat of the offcer,
diector or employee of the mutual iner or of
the reorganed inurer.
(5) No offce, diector or employee shal recive
any fee or other consideratio~ other th reguar
salar, diector fees, or consideration as a
policyholder in connecon with an proposed
reorganation. Ths paragraph, however; snal
not prohibit the mutu lie inurer from
compenatig in cash any fi with which one of
its diectors is associated for serces rendered in
connection with any proposed reorganzation.
(x) Effect on deparent personneL.
Notwthdig subsection (a) of section two
hmidred four of ths chapte, the sueritendent,
any deputy or other emloyee of the deparent
shal be pertt to recive and exercise any
rights recived as a policyholder in connection
with a reorganation.
CRDIT(S)
1999 Elecronic Update
(Added L1988, c. 683. § 5; amended L.1981$, c. 684, § 2;
L.1992, c. 24, § 1.) ,
.:4NSURCE LA W~~
.: Laws 1984, Chapter 367, § 1 ~
Copyrght (c) W:etGroup 199 No cla to origi U.S. Govt works
Complete printed PDF page 97
Pag 15
lie iner into a domestic st lie inr
INS§7312, Reorgantion of a domestic mutu
~GèerMatenals (GM) - Reference,
Amotations,or Tables:
llTORICALNOTES
llTORlCALAN STATUORY NOTES
1999 Eleconic Update
1992Amendments. Subsc. (t), par. (1). L.1992, c. 24, §
1, _ ¥.seredreference to par.(3i See Effective Date of
ÆIcidinènt by L.1992, CC 24 note below.
pa. (3)	SubSC. (t),par. (3). L.1992, c. 24, § 1, added
relatig to the 30-:y commencement perod fÓran action
against the. superitendent or other boy or offcer acting
pursuat to ths setion. See Effective Date of Amendment
byL.1992, c. 24 note below.
~92665 Subse. (t), par. (4). L.1992, c. 24, § 1, added par.
(4) relatig to arcle 78 judicial review for actions taen
pursuat to ths setion. See Effective Date of Amendment
by L.1992, c. 24 note belo,N.
1988 Amendment Subse. (d), par. (4), subpar. (D).
L.1988, c. 684, § 2, eff. Sept. 1,1988, added subpar. (D).
Date 	of Amendment by L.1992, c. 24~ Expiration.	Effective
L.1992, c.24, § 2, provided: "This act (amending ths
setion) shall tae effect imediately (eff. Mar. 27, 19921
and shal expire and be deemed repeed on Janua 1, 1993,
provisions of law amended by this act	upon which date the
shall rever to the text as set out pnor to its effective date. "
Effective Date. Section effective Sept. 1, 1988, pursuat to
L.1988, c. 683, § 7.
Legislative Findings. Section 1 of L.1988, c. 683~
amended L.1988, c. 684, § 1, eff. Sept. 1,1988, provided:
"The legislature herby fids that it is in the interest of the
stte. to maitan a fiancialy sound and competitive lie
insuce indus in ths stte and to provide sttutory
autoñty for domestic mutu lie inurce companies that
the company and its policyholder	find it in the be interest of
to co~vert to stock form to do so purt to ths legislation.
In doing so, the legislature is cognt that two searte
stte-~ppointed comms~ions exained, among other thgs,
and both	the issue of conversion from mut form
life insurace companes should be	recommended that mutu
alowed to demutu. Each recgned that flexbilty of
corprate form ca be. an importt factor in an environment
of rapidly changing economic conditions.
"W.ith the proposa of ths legilation, the legilatue
~rovides for the demutution of lie insurace companes
10 accordace with provisions spific enough forthe insurer
to plan. suffci~tly for a major reorgantion of it corporate
enough têillSSUre thêsttethat any	form, and stda~s broad
such reorgantion must. be fai and equitable to its
and detaL. In settng fort
policyholders in both. substce
severa detaed methods of conversion, the legislatue intends
to give gudace to insurers seeking to reorgane by offerg
thre speifc converion methods; by also authoñzng any
fai and equitable method of reorgantion approved by the
supetendent of insurace, eiter completely diferent from
the thee specific methods enumerated or any vañant thereof
the legislature recognes the complexity of the process and
the need for flexibility. Moreover, notwithstdig the
relative . in~xpeñence with life insurace company
demututions, the legislature hereby recgnes that the
stte's authoñty is broad enough, in requig tht any
reoTganiztion be fair and equitable, to bñng wi the scpe
of its regulatory review and approval any concepts related to
demutualiztion, unanticipated as of the effective date. of ths
legislation, that could matenally afect a reorgantion."
Provisions. Section 6 ofL.1988, c.	*92666 Separbility of
ths act (addig ths	683, provided: "In the event any par of
section and provisions set out as notes under this section and
amendig sections 1106,4210, and 42191 should be declared
invalid by any court of competent junsdction, such
the remanig	the validi of any of	decl~tion shal not afect
ths act which shal contiue in force".	portons of
REFERENCES
CROSS REFERENCES
Reorgantion of domesc life insurace companes, se
Insurace 	Law § 7315.
Copyrght (c) West Group 1999 No cla to ongi U.S. Govt works
Complete printed PDF page 98
,'; '~
~:.:".~:."..	
/."-
1
\
Exhbit B
'..Registered Investment Advisers Controlled bv MetLife
AEW Advisors, Inc.
AEW Capital Management, L.P:
AEW Management ànd Advisors, L-P_
Back Bay Advisors, L.P. ..
Management Limted Parnership	Capital Growth
Fulcru Financial Adviors
Graystone parers;-L.r.
Hars Associates, L.P.
Jurika & V oyles, L.P.
Sayles & Company, L.P-
MetLife Securities, Inc.
Metric Capital Corporation
Nathan & Lewis Securities, Inc.
Loomis,
Management,-L.P .	Funds	
New Englad
Inc.	Nvest Associates,
Nvest, L.P.
New England Portfolio Advisors, Inc.
New Engl.Securtie£orpora1on
Reich & Tang Asset Management,LP.
Securty First Investment Management Corporation
Snyder Capital Management, L.P-
SSR Realty Advisors, Inc.
State Street Research & Management Company
The NewEngland Investment Advisors Inc.
Vaugham, Nelson, Scarborough & McCullough, L.P.
VNSM Trust Company
Westpeak Investment Advisors, L.P.
The following are registered investment advisers controlled by GenAerica Corporation,
which MetLife has agreed to acquire:
Connng Asset Management Company
Cova Investment Advisory Corporation
Cova Investment Allocation Corporation
Walnut Street Advisers, Inc.
__ii~""l' rL
Complete printed PDF page 99

Continua la tua ricerca in ChatGPT o Claude

Collega Omnilex per cercare nel corpus legale dal tuo assistente IA.