# UNITED STATES /'-d'.

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## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

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

[Pub. Avail.: Nov. 23, 1999]
November 17, 1999

RESPONSE OF THE OFFICES OF CHIEF COUNSEL
DIVISION OF CORPORATION FINANCE

DIVISION OF MART REGULATION
DIVISION OF INVESTMENT MANAGEMENT

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,

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
mailng and qtler e.xpenses to
Consent Matter (including the procedures that require

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 14a13, 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
of
Rule 144(a)(3). The Division's view is that the Common
securities" within the meaning
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);

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
(2) and (3), such p.ersons m"y not take into
periods for purposes of Rules 1 45( d)
Interests.
account the holding period for their Policyholders' Membership

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
and notdetrimental to the
the.interest of MetLife and its policyholders
public;

Adoption of the Plan requires the affrmative vote of at least two-thirds of
by proxy by Eligible Policyholders;
the votes cast in person or
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
Program wil
Stock is sold in any given day through the Purchase and Sale

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.

Metropolitan Life Insurance Company
Page 4

Any purchases of Common Stock made by the Holding Company, or the
in effe~t wil be
Program Agent while the Purchase and Sale Program is
Program and no
. made for purposes independent of the Purchase and Sale

purchases wil knowingly be made directly from a Beneficiary;

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.

but without necessarily concurring in

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
to the
to the-statf,and are strictly limited to the application of those provisions
presented
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.
any other applicable provisions of the federal
Responsibility for compliance with these and
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
not recommend enforcement action to the
necessarily agreeing with your analysis, wil
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
call

indirectly, for his or her efforts in connection with the activities described in the letter; (3)

".
,

Metropolitan Life Insurance Company
Page 5

center personnel will be

basis; (4) theAssociates'

compensated on an hourly or salaried

the provisions set fort in

activities wil.be strictiy limited and supervised in accordance with

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

the letter; (5) the Associates wil not handle customer.

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

MetLife proposes to convert from a mutual life insurance company to a
You state that
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:

of MetLife Common Stock that wil be allocated to Trust Eligible Policyholdets
(1) the shares
wil be issued to the Trust established for the exclusive benefit of the policyholders2; (2) Trust
in the Trust equal to the numbtr of shares of
Eligible Policyholders wil be allocated Interests
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
certain
closely related activities, such as receiving and distributing cash dividends and registering the.
Trust Shares under the Securities Act.
or activity other than voting and holding the Common Stock of the Holding Company and

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
sell
those.
shares or to
their allocated shares of Common Stock and to
any appreciation of
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
or
MetLife directly
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
You state also that MetLife is registered

with the

Commission

as an

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,
engaged
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
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
issue any security, or has outstanding
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. "
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.

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
depositors in the trust are
trustees in whom

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

. .

The assets of a voting trust relying on the exception provided by
consist exclusively of

Section 3(c)(12)mus(.

the securities of a single issuer. Youstate that, in addition to the Trust

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
further that MetLife's special Delaware counsel has advised you

that the Trust is valid under

Delaware law, even though the Trust does not meet all of the requirements of Section 218 of
trusts.
voting'
of
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
5

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

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
have not previously addressed
believe that your letter presents a novel or unusual issue. We
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.

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
the Trust would
asked, and we take no position regarding, whether the eventual dissolution of
result in an assignment of the Advisory Contracts.
23, 1997). Accordingly, we take no position regarding whether other aspects of

l

Metropolitan Life Insurance Company
Page 9
contract

result in an assignment of an advisory

between the adviser and a registered investment

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 recommendation given by the

Trustee wil vote' inac,cordance with
Holding Company

to itsstockhölders, or, if no

board of direc#)rs of

the

such recommendation i~given,as ~irecte:d by

Beneficiary Consent Matter, the Trustee willsolicit
all of the Trust
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..
the board. . You state that, for

a

You argue that the presumption of control in Section 2(a)(9) is not triggered by the
the Holding Company, because
securities of
the voting
more than 25% of
Trust's ownership 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
the 1940 Act. We believe that an
Section 15(a)(4) of
whether an assignment wil occur as a

transaction which does not result in a change of actual control or management of
adviser is not an assignment for purposes of
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").
9

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.

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
Advisory Contacts,10 Because
of the

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
MetLife's Registration
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.
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

10

You state that youbelieve that, in connection with the Trust's ownership of the Trust
the Holding Company to instruct the Trustee how
the board of directors of

Shares, the ability of

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.
the primarily factual nature of
because of

Metropolitan Life Insurance Company
Page 1 1
conclusions. Furter, this response expresses the positions of the Divisions

to reach different

of Corporation Finance and Market Regulation on enforcement action only and do.es no.t
the questions presented.
express any legal conclusions oIl
Sincerely,

~k~

For the Division of Corporation Finance

SpecIål. Counsel .
l

For the Division of Market Regulation
Office of Risk Management and Control

\\~ (¿ d j) ,

¿¡v~.J d io///GR~
James A. Brigagliano
Assistant Director

L...
.,!
')

Office of the 'Chief Counsel

¡).1 i j l::~- /.;1. I ' a

-l'i,t¿.Lf(( c~) 71 GZitr
i ¡Laúra Pruitt

'"./ SpecIal Counsel

./
.'
LA/ -./,r.~
'1n'-"7
,. I If
..i-- -,.//
. .: . -7 ..

For the Division of Investment Management
r ,/ /;::"'1 ; j "..,,/
1.\ F J \_\:::~.i ~.("':-d'Y

1 \..l'-i,lk/ ""2-.1
,i. - \..
/

Kathleen Knisely

Senior Counsel

.¡

)EBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NY 10022

(212) 909-00

555 13TH STREET. N.W.

WASHINGTON. DC 2004
TELEPHONE (202) 383.80
TELECOPIER (202) 383.8118

21 AVENUE GEORGE V
75008 PARIS
TELEPHONE (33 1) 40 73 12 12
TELECOPIER (33 1) 47 20 50 82

. OLD BROAD STREET
LONDON EC2N IHQ
TELEPHONE (44 171) 786 90
TELECOPIER (44 171) 58 4180

13/F ENTERTAINMENT BUILDING
30 QUEEN'S ROAD CENTRAL
HONG KONG

BOLSHOI PALASHEVKY PER. 13/2

TELEPHONE (852) 2160 980
TELECOPIER (852) 28109828

TELECOPIER: (212) 909-6836

INTERNA TlONAL ANANCIAL CENTRE

MOSCOW 103104
TEL.EPHONE (7.503) 956.3858
TELECOPIER (7.503) 956.3868

Securities Act of 1933
5

Sections 3(a)(10) and

Rules 144 and 145

Securities Exchange Act.. of 1934

(1 0), W(b), 12(g),
12(h), 13(d), 13(e), 14, 15(a) and
Sections3( a)

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 Yorkdomiciled 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

Lar Bergman Esq.

C.atherine T. Dixon, Esq.
Catherine McGuire, Esq.
Scheidt, Esq.
Douglas

November 16, 1999

-2-

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
Life (which will then be exchanged for an equal number
Met
of share~ of common stock of
of shares of common stock of the Holding Company to be held through the trust described
adjustment to their policy values, known as policy credits. Under New
an
below), cash or
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
Life and its policyholders and not detrimental to
Met
Reorganzation is inthe interest of
the public. The Plan must also be approved by a vote of

Met

Life's policyholders whose

Directors

policies were in force on September 28, 1999, the date MetLife's Board of

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
policyholders (collectively, the "Policyholders' Membership Interests") will

Met

Life's
be extinguished

and in exchange therefor Eligible Policyholders will be entitled to receive consideration in
Life ("MetLife Common Stock"), which will
Met
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

the form of shares of common stock of

credits. The Plan provides that on the Effective Date,

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;
(i) the shares of

Met

(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

.

Lar Bergman, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

(iii).by-operation of

"
-~-

Life Common Stock willbe
equal number of shares of Common Stock to be.held

the Plan, the shares of

immediately.exchaiged for an

November 16,1999

Met

the Trust.

through

Under

the

Plan the Holding Company must complete a registered~underWtten
(the '.'InitialPublIC Offering"),:

publicoffering.ofthe Common Stock on the Effective Date

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
occur inthe first
factors. In connection with the Initial Public Offerig, (the Holding Company intends to
on the New York Stock Exchange (the "NYSE"),
the Common Stock
apply for a listing of
the
connection
therewIcwll
register
the
Common
Stock
under
Section 12 of
and
in
Securities Exchange

Act -of1934,asàmended (the "Exchange Act").

the

The Trust will be established in accordance with the terms and conditions of

Policyholder Trust Agreement (the "Trust Agreement") to hold the shares of Common
which will become a
Eligible Policyholders, each of
Stock allocated to the Trut
the Trust (collectively, the "Beneficiares"). The consideration payable to
beneficiar of
as
Eligible Policyholders in the form of cash and policy credits will be distributed as soon
reasonably.practicable afer the Effective Date, but in any event not later than 60 days
after that date.

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

., '.

-..

Lar Bergmann, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-4-

November 16, 1999

by the Holding Company's stOCkholders,

Company (which would be borne, indirectly,

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
stock, and the commissions

charged to sell

their

shares would be relatively .mol"e

burdensome on these policyholders.

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
will be exercised by the trustee of
. . recommendation or direction of the Holding Company's board of directors. The
The Trust is designed to give Trust Eligible Policyholders benefits 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,
(iv) issuances of

Common Stock prior to the first aniversar 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,
(v) before the first anversar of

the Effective Date, any matter that

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

,

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

that is submitted to a

the Holding Company

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
instructions are
received,
and, if
they willnGt be binding on thed'frustee. Beneficiares will also be informed anually
mailings to
(which is expected to be in connection with the anual dividend check
Beneficiares) of
the avaiability of
the Holding Company's anual report, proxy statement

and any inormation statement (collectively, "Anual Stockholder Reports") on the
upon request at the Holding Company's expense;

Holding Company's website or by mail
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
deadline for submission of

the expected date of

the Holding Company's anual meeting and the

the Anual Stockholder

stockholder proposals, and when

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

-

LarryBergman, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-6-

November 16, i 999

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
The Plan and the Trust will give policyholders the opportunity to dispose of
allocated shares or hold their ownership interests in the Holding Company directly, instead
of
may

they prefer. Under the Plan, any Eligible Policyholder
through the
Trust, if
elect, .at the time of the policyholder vote on the Reorganzation, to receive cash in

indirectly

lieu òfthe Eligible Policyholder's allocated shares at the Effective Date, subject to limits
cash
to group Eligible Policyholders allocated
on
the amounts that are available to provide
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
arangements and

trading restrictions in connection with the Initial Public Offering and (ii)

the
of
Common Stock will also be entitled to purchase additional shares in the Purchase and Sale
to
bring their Interests up to 1,000 shares, subject to a minimum of$250 per
Program
purchase (or such lesser amount that would cause it to hold, at the closing price on the
options

which

the closing of

all underwters' over-allotment

expiration of

all unexerCised options. Beneficiares allocated less than 1,000 shares

have been exercised and

purchase funds, the..l,OOO maxmum
number ofInterests). Purchases may be made at any time beginnng on the first trading
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).

trading day immediately prior to the mailing of

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

Lar Bergman Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-7-

N o.vember 16, 1999

Manyofthese employees will also be employees of CMSS. oCMFS is a
employees;
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
will not be permitted so long as
Program. These purchases
through the Purchas.ad Sale
the Holding Company.is otherwse engaged in a distribution as defined in Regulation M of
the Exchange Act. .
the liquidity provided by the Purchase and
SaleProgr;the ability to elect cash consideration under the Plan and the right to
one year, shares from the Trust, the Trust will, afer a short waiting
withdraw, afer
MetLifebelevesthat~as a result of

period,

be essential a -voluntar mechansm that addresses the extaordinar issues faced
wishig to hold their
the

by MetLfe whie.providig signficant benefits to those policyholders
allocated shares

in

the Trust. A'S par of

the Plan, the purpose, terms and effects of

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
of the Eligible

Policyholders

two-thirds

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
their respective afliates, offcers, directors or employees or any Associates (as defined
of
below):
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
(i) if

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

20665944.56

Interests under the Securities Act of

Lar Bergman, Esq.

Catherie T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esg.

-8-

November 16,1999

exemption from

1933, as amended (the "Securities Act"), in reliance on the

registration provided by Section 3(a)(1O) thereunder;
(ii) if

Common Stock

MetLife Common Stock and

the issuance of shares of

Eligible Policyholders.

and thè allocation öfthe Interests to-and Ön behalf of the Trust

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

the

stockholders of

Holding Company, except, as described in this letter, in
Beneficiares, (b)

connection with a Beneficiar Consent Matter or upon request of

connection
mailing and
are followed

the procedures descnbed in this letter for the distribution of materials in
with a Beneficiar Consent Matter (including the procedures for requiring
'other expenses be reimbursed by a stockholder in certain circumstances )
and (cl none of

the Holding

Company, the Trust, the

Trustee or Custodian, any

of

directors or employees inquires
connection with such vote or
consent, or provides information in connection with those inquiries, except in

their respective afliates, or

as to the ~en~ficial ownership of

their respective offcers,

in

the Trust Shares

connection with a Beneficiar Consent Matter;
Directors of
the Holding Company provide the
(v) ifthe Board of
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;

Shares may be withdrawn from the Trust without compliance
(vii) if T rust
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;

the Trust is not registered under the Investment Company Act of
1940, as amended (the "Investment Company Act"); and
(ix) if

.'?L.,t~OI.I. ~L.

Lar Bergman, Esq.

Catherine T _ Dixon, Esq.
Esq.
Catherine McGuire,

November 16, 1999

-9-

Douglas Scheidt, Esq.

(x) ifMetLife's insurance agency sales force, brokers, dealers and other
personnel and offcers, directors
its insurance products, its call center.
MetLifeand its affliates (collectively, the "Associates"), including
and employees of
distributors of

. . '.
-.
dicuons with Eligible Policyholders under thecircumstance.s

securities transactions, recommend approval

persons not licensed to .engagein equity
.

of

the

Pla

in

described in this letter -wi.thoutMetLife, the Holding Company or the Associates

the

as broker-dealtrs with the COIIssion pursuantto Section 15(a) of

registering

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
investment company advisory contracts of

Met

Life or its affliated investment advisers.

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 Trust,

or the procedures for

the Purchase and Sale Program described herein) might

require different conclusions.

METLIFE
life insurance company organzed under the laws of the State

MetLife is a mutual

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
Columbia,
whom hold more than
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

of
of

the largest life insance company in the U.S. in terms oflife insurance in force.
As a mutual

life insurance company, MetLife has no authorized, issued or

outstanding capital stock. The policyholders of MetLife, through the purchase of

2. MetLife and certain of its afliates are registered with the Commssion as brokerthe 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
Association of Securities Dealers, Inc. (the "NASD"). Many members of

Met

Life's

insurance agency sales force and other distributors of its products are licensed by the
NASD as registered representatives of

20665944.56

Met

Life or these afliates.

.

Lar Bergman, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-10-

November 16, 1999

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

Life.

Met

event ofthê liquidation of

THE PROPOSEDREURGANATION
life insurance company to a stock life
MetLife proposes to convert from a mutual
insurance company in accordance with the New York Statute. The New York Statute
life insurance
. provides for the conversion, by operation oflaw, of a New York mutual
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
of

the plan of

reorganzation by a vote of

policyholders and (iv) the satisfaction of

the mutual insurance company's eligible
all conditions

in the

plan ofreorganzation. For

the New York Statute is attached hereto as Exhbit A.

your convenience, a copy of

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

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

the records of

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:

Lar Bergman Esq.
Catherie T. Dixon, Esq.

November 16, 1999

-11-

Càtherine McGuire, Esq.
Douglas Scheidt, Esq.

amount of

public and that, afterging effect to,thReorgantion, MetLife will have an

necessar for its future
capital.and surplus the Superintendei-t deems to be reasonably.
solvency. ,TheSuperiendents appi:oval will be final and binding, subject only to judicial

New York law.

review in accordace with

Under.

Eligible

York Statute, the

the New

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
Policyholders' Vote
the
of
date of

the

Policyholders' V..te.(unless MetLife, afer a reasonable effort to locate an

Eligible Policyholder,

that the most recent mailing address of

has reasonable belief

Eligible Policyholer.Dn.therecords of
Policyholders'Vote must be preceded or
summary-thereofapproved-bythe Superintendent) and any

Met

Life is no longer valid). The notice of

the
the

accompaned by acopy ofthe Plan (or a
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
to
materials were.submitted to the Deparent and its staf for their review and comment,

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
Met
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

afer the Effective Date, but in any event not later than 60 days afer that date.

20665944.56

Lar Bergman, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-12-

Eligible Policyholders thatwill receive consideration in the
policyholders whose maiing address is outside the U.S., owners of

November 16, 1999

form of cash include
life insuranc~
industrial

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

retirement anuities or tax sheltered anuities, and that elect to receive cash.3

individual

Cash willa1~o be distributed to Eligible Policyholders that elect, at the

time oftbe

Policyholders' Vote, to receive cash for their allocated shares. If the Initial

Public Offering

and any Other Capital Raising Transactions are not of a suffcient size to fund the payment
of cash to all Eligible Policyholders that elect to receive cash, however, it is
the Plan will become effective but that cash will not
electing to receive cash. If this were to

possible that

be paid to all Eligible Policyholders
happen, cash will be paid as follows:

(i) .each individual Eligible Policyholder that elects to receive cash will

receive compensation in the form of cash;
(ii) each group Eligible Policyholder that elects to receive cash

and is

allocated not more than 25,000 shares will receive compensation in the form of cash;
and

elects to receive cash and is
allocated more than 25,000 shares will receive compensation in the form of:
(iii) each group Eligible Policyholder that

(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
cash and shares of
allocated to the Eligible Policyholder. Such cash
respect to the remaining shares
will be allocated to each such Eligible Policyholder on a pro rata basis based on
combination of

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

Lar Bergman, Esq.

Catherine T. Dixon, Esq.

November 16, 1999

-13-

Catherine McGuire, Esq.
DouglasScheidt, Esq.

shares in excess of25,OOO shares

the proportion that-hetotal number of

bears to the total number of shares in
all such Eligible Policyholders allocated
,.excessof25jOOO,shares-allocated to.
more th 25,000 shares that have elected to receive cash.
-allocated

to .suchEligible Policyholder

u'!

if there is an uncler;tten public offering of,

Until:he secohä year-afer the Effecive Date,
Holding Company

Common Stöck, 'the
time more

25,000

than

Interests and whose cash

Trust Shares equal to all ofthe Trust Beneficiar's

opportnity tojndudea number of
Trust

will offer to each Trust Beneficiar holding at the . .
'election was not fully satisfied the

Intere:ssIn the offering, subject to certain limitations set forth in the Trust

Agreement.

Eligible Policyholders that will receive consideration in
policy credits include policyholders holding policies that are individual
the form of
retirement anuities; ta.sheltered anuities, certain tax-favored individual anuity
The

Plan-provides

that

accounts. .c

contr.acts,,ad.indi\UchiaUifeiilrancepolicies and life and health insurance funding

Regardlessufwhether an Eligible Policyholder is receiving Interests, cash or
policy Lredits, the
based.on the nùmber of

consideration an Eligible Policyholder receives under the Plan will be
shares of

Met

Life Common Stock allocated to the Eligible

the Plan (collectively, the "Allocable Common
Shares"). The formula for allocating the Allocable Common Shares among the Eligible
Life Common:
Met
two components. A fixed number of shares of
Policyholders consists of
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.

Policyholder pursuant to

the terms-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

Lar Bergman, Esq.
Catherie T. Dixon, Esq.

-14-

Caiheririe McGuire, Esq.
Douglas Scheidt, Esq.

November 16, 1999

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
Initial PublicOffering
their best effort to ensure that the managing underwters for the
conditions in general. The Plan

c;onduct the Initial Public Offering process in a maner that is generally consistent with
custòmarpractices forînitiälpublic offerings, and that MetLife and the
Companyiwillallow the Superintendent and its financial

Holding
advisors reasonable access to

permt them to observe the Initial Public Offering process. Special pricing commttees of
Life and the Holding Company wil determne the price of
Met
Directors of

the Boards of

Common Stockin the Initial Public Offering, which wil also be subject to ratification by
these Board committees will consist of directors who are not.
Life or the Holding Company, and no employees, offcers or
Met
offcers or employees of
directors of or legal counsel to any ofthe underwters for the Initial Public Offerig may

those boards. A majority of

serve on these commttees. The Plan also provides that the terms and provisions of the

the

be subject to approval of

Intial Public Oferig and underwting agreement will

Superintendent;:mid neither MetLife nor the Holding Company will enter into an
. 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
respects with the requirements of
complied in all material
Superintendent with a letter, dated the date of the signing of the underwting agreement,

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.
of that

Superintendent with a letter confrmng

these representations

as

date.
Under the New York. Statute the Superintendent must find that the consideration

is fair and equitable to policyholders, a determnation

received by Eligible Policyholders

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

Lar Bergman Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-15-

November 16, 1999

borrowings (or a combination of such

debt. securities, commercial paper issuanc-es-of ban

offerings, issuances andbanbolTowigs). Under the Plan, the Holding Company canot
offering relaed.to..yOther Capital Raising Transactions without the

proceed with any

of

the Supertenden whomiist alsoapprove the final terms

approval of

any Other

Capital Raing Tranactons~~""fhe-total proceeds raised in all Other Capital Raising
will notexceed_,one,,.thd pfthe combin~d t?tal proceeds raised in theJnitial

Transactions

all Other,Capital Rasing Transactions. . .

'and

Public Offerig

- .The Plan provides that the.proceeds from the Initial Public Offering, together
with the proceeds from any Other

Capital Raising Transactions, net of

commssions and related expenses,

must be used as follows:

underwting

(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.
any Other Capital

If any additional proceeds are raised in the Initial Public Offering and
RaisingTransactions, those proceeds, net of

underwting commssions and related

shall be used as follows:

expenses,

exceeding $240 million, or'
(A) the Holding Company will i:etain an amount not
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;¡:

Lar Bergman, Esq.

C~therine T Dixon,Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

November 16, 1999

-16""

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.

Intial PÙ.blic offering, together with ary Other Capìtal Raising

The p1áh requires that the

proceeds, net 9f

Transactions completed on the plan effective.date, must raise

amount

underwting coIDssions and related expenses, in an amount at least equal to the

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
paid by its Canadian
demutualization, as well as to reimburse MetLife for amounts to be
branch to certai former Canadian policyholders.

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
the Plan, both theSuperinténdent
. demutualìzation. In connection with their approval of
The Trust.

and a minimum of
the establishment of

The Plan

the Eligible Policyholders that vote will have approved of
this Reorganzation,
the Trust. Under the unique circumstances of

two-thirds of

the Trust. MetLife
whom
will be allocated a small
estimates that it has over ii million policyholders, many of
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
the largest publicly held U.S. corporation. The Trust is designed
stockholders a~ that of

there are paricularly compellng reasons for the establishment of

to givepolicyhplders benefits of stock ownership -- namely, the. ability to paricipate in any

to sell those
shares or to purchase additional shares on a commssion-free basis through the Purchase
Company effciently manage the
and Sale Program -- while helping the Holding

appreciatiòn of

their allocated shares of

Common Stock and the opportnity

. 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
the Holding Company; as a
Directors of
the Board of
recommendation and direction of
Holding Company wil avoid the costs of mailing Anual Stockholder
consequence, the
. Reports to the Beneficiaries, except in connection with a solicitation on a Beneficiar
a quorum is obtained
help ensure that
Consent Matter. These voting provisions will also
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.

Bergmann, Esq.
Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.
Lar

November 16,1999

-17-

set outmthePlanand the Trust Agreement. Under

The terms öftheTrust are

Policyholder will

the Trust Agreement, each Ti:st Eligible

the Plan and

be allocated a

MetLife Common Stock allocated to
the Trust Eligible Poliholder in accordançewith the Plan. The Trust Shares will be held .
number

number oflnterests.equalto the

"1:ftlre"Troee, .on'hehalf of

in the name

of shares

over thé

the Trust, which shall-have legal title
Trust

. Trust Shåtes.As atèsultofthe Reorganatioh, the
25%..ofthe Common Stock of

the Beneficiares more than

of

behalf of
the Holding Company,

will

initially

own on

_ As a:.generalrule, Beneficiares will be prohibited from sellng, transferrng,
assigning, pledging or otherwse diposing of their Interests; however, Interests may be
transferred

beneficiares taking

(i)-nom-the estate of a-deceased-Beneficiar to one or more
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
gift and estate tax puroses under Sections 170, 2055 and 2522 of

are deductible for Federal income,
the Internal

Revenue Code of 1986, as amended, . or to a trust established for the exclusive benefit
the following: (x) Beneficiares, (y) individuals described in this
of one oLmore of
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,

the Beneficiar is not a natral person, by operation oflaw to the
survving entity upon the merger or consolidation of such Beneficiar into another entity, 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,
(iv) if

(v) by

the banptcy or insolvency of

operation oflaw as a consequence 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,,:

.-,-.,

Lar Bergman Esq.
Catherine T. Dixon, Esq.

November 16, 1999

-18-

CätherieMcGuire, Esq.
Douglas Scheidt, Esq:

the Trust Agreement.

trst.4A tranfereeofInterests win become subject to
will

Interests

he held in

the

the naieofthe Custodian, which shall k~epa record of

the Custodian.

. Interestsofthe Beneficiares on a book-entry system maintained by
may

Interests

name. "

5. .

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
oWnership.

The Trustee will prepare and deliver to the Custodian an anual report regarding

and distributions it has received on the
Trust Shares, as well as any interest accrued thereon from investments made in accordance

the statusofthe Trust Shares and any dividends

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
Interests and any dividends and

distributions received by

to such

the Trustee with respect

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
Company's

Holding

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

4. In addition, if
is, at

the Board of

Directors of

any time, a material risk that the assets of

the Holding Company determnes that there
the Trust maybe characterized as

"plan assets" under United States Deparment of
Asset Regulations"), the

Board may direct the

for distiibution to one or

more Beneficiares, a number of

Labor Reg. § 2510.3-101 (the "Plan

Custodian,
Trust Shares (not to exceed

Trustee to distribute to the

the total number of suchBeneficiares' Interests) as the Board may detemine to be .
necessar or appropnate to ensure that the assets of

the Trust will not

be so

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 Delaware General
the requirements of Section 218 of
Trust does not meet all of
Corporation Law, which validates the use o.f certain forms of

voting trusts. Section

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,

Esq.
Esq.

Lar Bergman
Catherine T. Dixon,

-19-

Catherie McGuire, Esq.

November l6,1999

Douglas Scheidt, Esq.

where to obtaiifinformatíon about the Progr; of the expected date of the Holding
stockholder proposals, and

for submission of

Company's anniiatmeeting.and deadline

the
aggregate .aonn..f:dvienandiier.st paid to. all Beneficiares in that dividend
are expected to become available;

when the Anual Stockholder Reports

and of

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,
after the completion of

all, but not less than'

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
the Policyholders'Vo1e, to receive cash for their allocated shares at
elect, at
the tie of
the Effective Date at the IPO Price, subject to the limits on the amounts that are available
to
group EIigible-Rolicyholders allocated more than 25,000 shares.
to provide cash
EffectiveDate~~As..iscusseù.:above,.the Plan

In'addition;'the-Plan provides that
to withdraw their allocated shares from the Trust for sale

Beneficiares may instruct the Program Agent
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
expiration of

all unexercised options. Beneficiares allocated less than 1,000 shares

of

Common Stock will also be entitled to purchase in the Purchase and Sale Program
additional shares to bring
their Iiiterests 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), begig on the first trading day following the 90th day
will be
after the Effective Date. The
number oflnterests allocated to Beneficiares
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
their holding Interests in the
holding shares acquired outside of
the Trust by virte of
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
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

jnL.L.r:ol.l. i:.(

their withdrawal rights,

together with a

-, :-~

Lar Bergman, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-20-

November 16, 1999

the withdrawal date is
the Holding Company's annual report, the
maling of
withinÖtìemonthofthe expected
current year's
may include the
anual report).
Trust wil âelayrnailing untilsuchtime as it
extent
BeneficiarieswithdtaWgtheir shares will receive them in book-entry form, to the
which case a certificate
certificate, in
perrtted by lãw~unless the Beneficiar requests a
will be provided.
copy of thê prioryear's anual report mailed to stockholders (or, if

Trust Agreement provides that the Trustee will. have the exc1usiveand

The

the Trust Shares to vote, assent or

absolute right in respect of
all

times

during the term of

voting the Trust Shares. On

consent the Trust Shares at

the Trust. However, the Trustee will have no discretion in

the

all matters brought for a vote before the stockholders of

will
Directors ofthe
Holding Company to its stockholders or, if no such recommendation is given, as directed
Holding Company, with the exception of a Beneficiar Consent Matter, the Trustee

vote in aècÖrdance with the recommendation given by the Board of

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,
vote all of
the Trustee will
the Trust Shares in favor of, in opposition to or abstain from
the
Beneficiares that returned voting
the matter in the saie ratio as the Interests of
in favor of, in opposition to or
instructions to the Trustee indicated preferences for voting
abstaining from such matter. As a result, Trust Shares for which no instructions have been
the

received by

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

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.
Beneficiares to

the Holding Company
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

6. The Amended and Restated Certificate oflncorporation of

provides that while the Trust is in existence, each director of

or

her duties as a director under Delaware law.

.,nJ:J:i:ol.l. l:J:

Lar Bergian, Esq.

Catherine T. Dixon, Esq.
. Catherine McGuire, Esq.
Douglas Scheidt, Esq.

November 16, 1999

-21-

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
matter involves

a contested electon for directors of the Holding Company, promptly after

receipt ofa contest

request, the

stockholder's

Holding Company will inform

solicitation materials must

contestng"S'dckholeruf1he-nnbe:r"ofBeneficiares to whom
the contesting stockholder's designation) and of

be maied (inatcordance with

a proxy-statement,

estimated cost of mailing
all the Beneficiares (or

to

a group

the

of

intruction card or

the
other communication to

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
from the Beneficiares in connection with
such matter. Ifthe.Custodianshal.have receIYed suffcient copies of any proxy statement,

costs of

the Custod-ian-tø.request instructions

envelope, mailing envelope or other proxy materials, together with
payment of estiated postage and reasonable expenses to effect the mailing of such
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
within the requirements of
enable the Custodiant-ocomplete-such mailing
and the By-Laws of the Holding Company, then the Custodian wil cause the mailing of
Beneficiaries designated by the
the proxy materials to the Beneficiares, or a group of
instrction-cad, retu

,

.. i

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
include the financial statements required under Regulation S-X of
addition, such materials will include the anual audited financial statements included:in the
current anual report (or, if the proxy materals are not being distributed in connection

:'0665944.56

Esq.
Catherine T. Dixon, Esq.
McGuire, Esq.
Catherine
Douglas Scheidt, Esq.
Lar Bergman

with

-22-

November 16, 1999

an anualmeetíig, the prior.,year's.anual report), even ifnot otherwise required to

be provided under the Exchange Act.7
solicitio.n

Proxy

and information statements received.
matter not involving a EeneficiarCo¡isent

anual reports .

m,atenals,

any

by the.C'Uodian"Í'-connecton with

mad available by the Holding. Company to Beneficiares for their

Matter wi be

website, inaintàIned by

infonnationon a

at the Holding Company's expense;

upon request and
but voting instructions to the Trustee wil not be
the Holding Company or by mail

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
with

the

check mailings to Beneficiares) of

anual-dividend

the availability of

the Anual

at the
the availability ofthe Holding Company's and the Trust's
Holding-Gomp-any's expense; of
and the SEC's web
sites or by
filings under the Exchange Act on the Holding Company's
. mail upon request at the Holdig Company's expense; of their rights to paricipate in the
Stockholder Rtports on,J:he Holding C,ompany's website or by mail upon request

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
that telephone the toll-free number in order to
that dividenddistnbiitIon Beneficiares
and
Sale
Program
or to obtain further information will be
Purchae
paricipate in the
available; and of

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

in

còInence or

connection with a Beneficiar Consent Matter, such matenalswill.not

otherwse be disseminated to the Beneficiares.
In addition, except in connection with a Beneficiar Consent
Holding Company, the Trust, the Trustee or Custodian, any of

Matter, none of the
their respective afliates,

or their respective offcers, directors or employees will be required to inquire as to the
Holding
the Trust Shares in connection with a vote or consent of
Company stockholders, including whether any Trust Shares are held by beneficial'owners

beneficial ownership of

7. The Trust Agreement permts notices and other communications to be mailed to
Beneficiares by electronic

media, e-mail or other electronic means, if

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.

20665944.56

Lar Bergman, Esq.

Catherine T. Dixon, Esq.

November 16, 1999

-23-

Catherine M'cGuire, Esq.

Douglas Scheidt, Esq.

or requestingihformation-tobeprovided with respect to consenting and non-objecting
the Exchane Act.
owners under

beneficial

cash dividends, if any, collected pr

IhTrustAgeementpro:vdestht reglar

received.by.th-e: Trostee-'witft'respecuo the Trust Shares will be distributed by. the
Beneficiaries withn 90 days afterTeceipt by the trustee.
Custödiansem,;analy to the
divdends
will be made by the Ciistodian to the Ben,eficiares
Distribution/of all-other. cash
after the Trust receives the dividends.

orithe first business day£oUowng the 30t day

Alternatively, the- Trustee may arange with the-Holding Company for the direct payment

such cash dividends to the Beneficiares. The Trust
AgreementfurterHprovides.that pending such distribution, cash dividends may be invested

by the Holding Company of

in short.,term:òbliatons of
instrumentality thereof, and in certificates

or

or
guaranteed by the United States,

any agency or

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
the
Agreement, the Trustee will be required to act as a fiduciar in the best interests of

undivided loyalty to the Beneficiares and a duty to exercise
the Trust's business affairs. The Holding
in the administration of
care and prudence
Trustee
and
the
Custodian and reimburse them for their
will pay fees to the
Company
expenses under the Trust.

Beneficiares, with aduty of

The Trust will termnate on the 90th day after the date on which the Trustee shåll
Trust Shares held by
have received notice fromtheHolding Company that the number of
issued and outstandingshares'of
the Trust is equal to 10% or less ofthe number 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,
issued and
the number of
Tnist Shares is 25% or less of
of
that the number

outstanding shares of Common Stock;

?n"-"-~ol.l. ~"-

Lar Berg Esq.
Catherine T. Dixon, Esq.

November 16, 1999

-24-

Catherie McGuire, Esq.

Douglas Scheidt, Esq.

wrtten notice from the Holding

(ii)on the date''On wruch the Trustee receives

Company has determned, as a
amendment of, or change (including any anounced prospective change)
Directors of

Company that the Board of
result of any

the Holding

the United States or any State,
'Comfonwëâlhot"btherpoliticälsubdivision or authority thereof or therein" or any
decision interpreting or applying
bffcià.à:dmstrativeptOnouncement or judicial
the facts or circumstances relatingto the
sÚcli.la'WoT iegilatiOhVorany changes in
Tn.st,that mäntaining the Trust is or is reasonably expected to become burdensome -'
the Beneficiares;
to the Holding Compàny or
of

injthe laws (oraly regUlations thereunder)

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
(iii). on.thê date

(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

circumstances.

Upon termnation of

termination under certà.n

Trust, the remaining Trust Shares will be distributed in

the

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
so offers to
the Holding Company
purchase. If
CommOn Stock at the time of the
the
offer
wil
be
distributed
to
the
Beneficiares
prior to
purchase Tmst Shares, notice of

the Trust. Beneficiares that
elect to have the Trust accept such offer with respect to their Interests wil receive cash .
the assets of

the distribution of

for all or par

of

the Trust upon termnation of

their Interests, in accordance with the terms of

Company wil comply with al applicable provisions of

the offer. The Holding
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

?n¡;¡;i;o¿.¿. . Sf,

the Trust Agreement, provided that the action does not

Lar Bergman Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq_

. November 16, 1999

-25-

adversely äffect theintet-ests'.ofthe Beneficiares,'

(ii) to modify, eliminate or add to. any

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
the

provisions of

be reqired to register as an investment

al timesorto-ensue thtthe Trust\V not

(iii) to reflect the
effect of a merger or consolidation in wruch the Holding Company is not the survving

compan nrtlerthe"Invent'Compan 'Act of 1940, as amended,

corporation and the other
consolidated assmes its. obligations

or

company into which the Holding Company is merged or
the Trust Agreement. The Trust Agreement
under

Beneficiares representing more than one-half of
the Interests, provided that no such amendment or waiver shall, without the consent of
the

may-asobe amended with

consent of

each Benefieiar-afected thereby, rediice the Interests or otherwse eliminate or materially

Beneficiar to receive divdends or other distributions or to
"Purchase and Sale Program or to withdraw Trust Shares. Any

postponethe-.rght of any
make..elections under the
such amendment made prior to the first
of

prior approval

anversar of the Effective Date will require the

the Superintendent.

and the Plan, including the relative risks and benefits of
Beneficiaries and
the voting rights of
holding Interests and investing in stock versus cash,
. The terms of the Trust

the provisions for disclosure of information, the Purchase and Sale Program procedures,
Common Stock in the public
the ability ofBen~ficiares to purchase and sell snares of
the Trust, the Trust termnation provisions and the fee and expense
market outside of
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 .
the Trust, each Beneficiar will have the right,
Offering and lasting until the termnation of
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
the Purchase and Sale Program are described below.
provisions of

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
directly or to dispose of them as they see fit. Beneficiares may also purchase
such shares
of
Common Stock (and sell these shares) on the open market without the
additional shares.

70MSQL.L..Sf,

Esq.
Catherine T. Dixon, Esq.
Catlierine McGuire, Esq.
Douglas Scheidt, Esq.
Lar Bergman

in

restrictions sétfcirf

the

November 16, 1999

-26-

Trust

Agreement. MetLife.desires to give policyholders the

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
benèfit of

additiönalshares .orr.a..commsion': free basis.
Under the Purchase
equal in number

to

and Sale Program

each

Beneficiar may have Trust Shares

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

than 1991nterests, full or paral withdrawals for sale may be

Beneficiarholds more

made.p'However, paral withdrawals for sale may only be in 100-share increments (for
but not 250). Following any paral
example, 200 shares may be withdrawn for sale,
withdrawal for sae, the Beneficiar must stil hold at least 100 Interests. If a Beneficiar
,afer the_partal withdrawal for sale, a full withdrawal for
less th 100 Interests
will
hold
made. Forthe first 300 days following

sale must be

the Effective Date, a Beneficiary

holding more than 25,000 Interests will be subject to the volume limitations described
below.
Common Stock will
also be entitled to purchase additional shares in the Purchase and Sale Program to bring
minimum of $250 per purchase (or such
tlieir Interests up to 1,000 shares, subject to a
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.
In addition, Beneficiares allocated less than 1,000 shares of

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 .

Trust Shares through the Purchase and Sale Program by wrtten
request to the Program Agent or orally or electronically though a toll-free telephòne
entitled to initiate sales of

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

Lar Bergman Esq.
Catherine T. Dixon, Esq.
Esq.
Catherine McGuire,
Douglas Scheidt, Esq.

. November 16, 1999

-27-

a

. Beneficiareswi beable to initiate

pur:ç!ase by sending fuds, together with

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
position in the shaes viill bemcreased and the number oflnterests

whorn.will:also b.e;e.loyes of.CNLS. Upon a
Trustee's book-entry

allocated to the Benefia increased accordingly.
......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

to be satisfied out ofthose sale instrctions will be allocated among
Beneficiaries on a pro rata basis. The satisfaction of

the Large Trust
purchase instructions out

of sale

made at a share price equal to the opening price on the trading day
following the day.the Batch is formed.
instructions wil

be

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
the Holding Company does
order with one or more executing brokers, which may include CMFS (the "Brokers"), to
event that purchase instructions exceed saleinstructions,
sell the excess shares. In the
purchase suffcient shares to
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, .
there has occurred any act of

(a) if

God or nature, mechancal or electrical

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
supply, in each case the. effect of
system or power
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

20665944.56

Lar Bergman Esq.

c:~therlne T. Dixon, Esq.
CàtherineMcGuire, Esq.

-28-

November 16, 1999

. Douglas Scheidt, Esq.

trading

(b). if

the Holding Company has been suspended or
by the Commssion or the NYSE, or if trading generally on the

in anyequiNsecurities of

materially limited

NYSE..or .has been suspended or'materially limited,ot

.. . authorities, . .

(èY.Ifa'hang moratòrium has been. decIà.rt:d by either F edetal. or New York

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

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

Date,

behalf

below) on

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

such shorter period, if fewer than 20 trading days have
elapsed since the Effective Date) preceding such day (the "Daily Trading Limit"),C11S
the Large Trust Beneficiares though market orders
will process instructions on behalf of
for only a number of shares equal to the Daily. Trading Limit for that day. Shares
volume for the 20 tradig days (or

submitted for sale byLarge Trust Beneficiares exceeding the Daily Trading Limit in a
Batch are referred to herein-as the

"Surplus Shares."

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.
If

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
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

behalf of

;:n",,,i;Q~~ i;",

Lar Bergman, Esq.

Catherine T. Dixon, Esq.

November 16, 1999

-29-,

Cåtneririe MèGuire, Esq.

Douglas Scheidt, Esq.

sold

Shares ántLthe:oershaes to be

on behalf

of

Large Trust Beneficiares in

the next day's Batch exceed~,the Daily n'?ding Limit on that day, then the
Shares.shalL.he sold_beforetheother shares to be

Surplus

Trust Beneficiares in that Batch. . This

Large
priority wil continue in any succeeding
sold on behalf of

trooing day.:scl.that:i:shares are to

be SGld on that trading day on behalf of

Largè1"rust Beiieficiares from more

than one

the order:I which the

the

,(ii) (a) If

request

Batches

Batch, the shares wilLbesold in

were form~d.

Batch is formed withi 90 days"ofthe Effective Date, CMFS may
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 sell all or a portion of the Surplus Shares
to act exclusively as joint agents
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.
the Batch is formed more than 90 days after the Effective Date, CMFS

(b) If

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
sell the shares off
Surplus Shares which it has agreed to sell on the NYSE or will
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
the
no one bid becomes the highest, then CMFS will sell the block to one of

4

Lar Beremann; Esq.

Catherine T. Dixon, Esq.

-30-

Catherine McGuire, Esq.

November 16, .i 999

Douglas Scheidt, Esq.

randomly selected by CMFS (provided that
or use other
CMFS wil alternate between firms iIiany subsequent tied-bid
that no firm is favored if there is more than
equitable .procedures to ensure
.. _ßli-,occaonin. wllchthereis a.tied-bid).
highest bids,'

firm submittg the

: (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

such bid is the highest bid, Cl\S will request new bids from each of
bid and
._. thefis..pr-eviously submitting the.highest bid until one becomes the highest.
highest, then CMFS will sell the block to one of
the
:Jf.no ß.nebid becomes
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
to ensure that no firm is

other.equitable procedures

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
Large Trust Beneficiares and do not apply to
forth above apply only to sales on behal of
Small Trust Beneficiares.

to be processed on any given trading
day, CMFS will process instructons in the order that the Batches are formed. Subject to
Ifinstructions in more than one Bàtch are

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,
Brokers may also cross,

the Brokers will effect brokers' transactions solely as agent. The

20665944.56

Lar Bergman, Esq.

Catherine T. Dixon, Esq.
Catherine McGuire, Esq.
Douglas Scheidt, Esq.

-31-

November 16, 1999

basis, sales and purchase orders iIi Holding Company common stock
and purchase instructions received by CMFS. All
submitted by
the NYSE anò
such cmssing:tranactionswill be effected by the Brokers on the floor of

solely on ar agency

their .custome"fswith sale

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
Holding Company. Neither the Tnistèe, the Holding Company nor
the
or
the Trustee
in Rule 144 under the Securities Act will
respective "affliates,lI,as"thLtermis used
their.

be eligible to effect sales through the Purchase and Sale Program, except that (i directors
Life that owns a policy on behalf on
Met
and offcer-s-ofMetLife and-(iDany subsidiar of
any employee benefit plan that receive shares in the Reorganzation as policyholders of
might be considered "affliates" may sell shares through the Purchase
that
MetLifè, and
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.
shares available for purchase on
the number of
CMFSwill noti the Holding Company of
the
any trading day, as determned by CMFS, no later than 1/2 hour after the open of
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
the shares covered by sale instructions received from Large
Beneficiares. lfnot all of
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
with these pr-visions. Any repurchase -of shares by the Holding Company
accordance
and Sale Program will comply with volume limitations set forth in Rule
from the Purchase
10b-18 under the Exchange Act.

ó

Lar Bergmam Esq.

Catherine T. Dixon, Esq.
Càtherine McGuire, Esq.
Douglas Scheidt, Esq.

November 16, 1999

-32-

sale instructions that are offset

Iftheonlytransattio.nsthat.occur intheB.atch are
and Sale

against ptichaseinstrctions underthe Purchase

Program, the price at which

will bt the opening price on the trading day
fOllbwingtheday 1hèBatch is formed. IfCMFS .places.a purchase .order, all purchase
assigned the same price per share. Such purchase price
be
instructons'mthe Bath will
sale.s and

purchases shall

be processed

will be the :volume weighted averge price per share of the shares in the Batch purchased
on

the daythepurclases in the Batch oGcur(incIuding any

instructions as descrbed

purchases

offset against sales

above ).If CMF'S places a sales order, all sale instructions in thee

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
purchases and salesIna Batch, the

above.

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
shares"othe Cus.todian which will deposit them
Custodian will input the price paid for the shares on its records and update the
the
increase in Interests. The Custodian will promptly mail
Beneficiars account to. reflect

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
- four trading days afer the date for the last transaction effected in

the Batch. The

will also mail a check to theBeneficiarforany excess offunds used to acquire
Custodian
four tràding days, unless the
withn
that Beneficiar
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

[Text truncated at 120,000 characters. The full text is on the page linked above.]

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ae7e563fbae7f5af1. Public record. Not legal advice.