As filed with the Securities and Exchange Commission on October 11, 2023

Registration Nos. 333-274058 and 333-274058-01

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

Amendment No. 2

to

FORM F-4

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

BROOKFIELD CORPORATION		BROOKFIELD REINSURANCE LTD.
(Exact name of Registrant as specified in its charter)		(Exact name of Registrant as specified in its charter)
Not Applicable (Translation of Registrant’s name into English)		Not Applicable (Translation of Registrant’s name into English)
Ontario, Canada (State or other jurisdiction of incorporation or organization)		Bermuda (State or other jurisdiction of incorporation or organization)
6512 (Primary Standard Industrial Classification Code Numbers)		6399 (Primary Standard Industrial Classification Code Numbers)
Not Applicable (IRS Employer Identification Numbers)		Not Applicable (IRS Employer Identification Numbers)
Swati Mandava Brookfield Corporation Brookfield Place 181 Bay Street, Suite 100 Toronto, Ontario, Canada M5J 2T3 Telephone: (416) 363-9491		Anna Knapman-Scott Ideation House, First Floor 94 Pitts Bay Road, Pembroke, Bermuda HM08 Telephone: (416) 956-5141
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)		(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Brookfield Asset Management LLC

Brookfield Place

250 Vesey Street, 15th Floor

New York, New York 10281-1023

(212) 417-7000

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

 

 

Copies to:

 

Mile T. Kurta Torys LLP 1114 Avenue of the Americas, 23rd Floor New York, New York 10036 (212) 880-6000		Karrin Powys-Lybbe Torys LLP 79 Wellington Street West 30th Floor Toronto, Ontario, Canada M5K 1N2 (416) 865-0400

 

 

Approximate date of commencement of proposed sale to the public: as soon as practicable after the effective date of this registration statement.

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

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

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

Exchange Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) ☒

Exchange Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) ☐

Indicate by check mark whether the registrants are emerging growth companies as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP (as defined below), indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

†	The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

The Registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

The information contained in this document may be changed. A registration statement relating to these securities has been filed with the U.S. Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This document is not an offer to sell these securities, and no person is soliciting an offer to buy these securities, nor shall there be any sale of these securities, in any jurisdiction where such offer, solicitation or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This document is important and requires your immediate attention. If you are in doubt as to any aspect of the document, you should consult your investment dealer, broker, lawyer or other professional adviser. The Offer has not been approved by any securities regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of the Offer, upon the securities offered pursuant to the Offer or upon the adequacy of the information contained in this document. Any representation to the contrary is a criminal offence.

PRELIMINARY AND SUBJECT TO CHANGE, DATED OCTOBER 11, 2023

October 11, 2023

BROOKFIELD REINSURANCE LTD.

 

OFFER TO EXCHANGE

up to 40,000,000 of issued and outstanding Class A Limited Voting Shares of

BROOKFIELD CORPORATION

for up to 40,000,000 of class A-1 exchangeable non-voting shares of Brookfield Reinsurance Ltd.

THE OFFER WILL BE OPEN FOR ACCEPTANCE UNTIL 5:00 P.M. (EASTERN TIME) ON NOVEMBER 13, 2023 UNLESS THE OFFER IS EXTENDED (the “Expiration Time”) OR WITHDRAWN.

 

 

Brookfield Reinsurance Ltd. (“Brookfield Reinsurance”, “company”, “we”, “our” or “us”) hereby offers (the “Offer”) to exchange, upon the terms and subject to the conditions described herein, up to 40,000,000 Class A Limited Voting Shares of Brookfield Corporation (“Brookfield Class A Shares”, and each, a “Brookfield Class A Share”), including the Brookfield Class A Shares that may become issued and outstanding after the date of the Offer and prior to the Expiration Time upon the exercise of options or any other rights to acquire the Brookfield Class A Shares (such options or rights, the “Other Securities”) for newly-issued class A-1 exchangeable non-voting shares of Brookfield Reinsurance (“class A-1 exchangeable shares”, and each, a “class A-1 exchangeable share”). Under U.S. securities laws, Brookfield Corporation may also be deemed an offeror with respect to the Offer.

Under the Offer, each holder of Brookfield Class A Shares (each, a “Brookfield Shareholder”, and collectively, “Brookfield Shareholders”) who has properly tendered Brookfield Class A Shares, and who has not properly withdrawn such Brookfield Class A Shares, will receive one class A-1 exchangeable share for each Brookfield Class A Share tendered, on the terms and subject to the conditions of the Offer, including the provisions relating to pro-ration described in this document.

 

The class A-1 exchangeable shares will be: (i) exchangeable into Brookfield Class A Shares; and (ii) convertible into class A exchangeable limited voting shares of Brookfield Reinsurance (“class A exchangeable shares”, and together with the class A-1 exchangeable shares, the “exchangeable shares”), in each case on a one-for-one basis and on the terms described in this document. Each class A exchangeable share of our company is also exchangeable with Brookfield Corporation for one Brookfield Class A Share (subject to adjustment to reflect certain capital events) or its cash equivalent (the form of payment to be determined at the election of Brookfield Corporation), subject to certain limitations. See Section 1 of the Circular (as defined herein), “Information with respect to Brookfield Reinsurance”.

The Offer is subject to a number of conditions, including the Listing Condition (as defined herein). Brookfield Reinsurance, subject to applicable law, including Rule 14e-1(c) under the United States Securities Exchange Act of 1934 (the “Exchange Act”), reserves the right to terminate the Offer and not take up and exchange any Brookfield Class A Shares tendered in the Offer if the conditions to the Offer are not satisfied or, where permitted, waived. See Section 8 of the Offer to Exchange (as defined herein), “Conditions to the Offer”.

Brookfield Reinsurance operates a leading capital solutions business providing insurance and reinsurance services to individuals and institutions. The purpose of the Offer is to increase the equity base and market capitalization of Brookfield Reinsurance to reflect the size and diversity of its operations, which have increased significantly since its formation as a result of organic and inorganic growth. We also believe that an increased equity base and market capitalization will provide a more liquid market for the exchangeable shares, which in turn will position Brookfield Reinsurance for future growth.

We refer to Brookfield Reinsurance as a “paired entity” to Brookfield Corporation because (i) the exchangeable shares (A) are exchangeable into Brookfield Class A Shares on a one-for-one basis and (B) receive distributions at the same time and in the same amounts as dividends on the Brookfield Class A Shares, and (ii) Brookfield Corporation owns 100% of the class C shares (as defined herein). These features enable the Offer to be structured so that the equity base and market capitalization of Brookfield Reinsurance can be enhanced without any dilution to Brookfield Shareholders. However, while the exchangeable shares provide Brookfield Shareholders the opportunity to hold their interest in overall Brookfield through the ownership of exchangeable shares, Brookfield Corporation and Brookfield Reinsurance are distinct legal entities and there are differences between the rights and privileges of holders of Brookfield Class A Shares and holders of our exchangeable shares. These differences may result in certain investors preferring to hold our exchangeable shares because Canadian and U.S. investors will have the opportunity to receive returns of capital instead of taxable dividends and non-Canadian investors will have the ability to receive distributions without the imposition of withholding tax. For a discussion of such differences under the governing documents of our company and Brookfield Corporation and laws of their respective jurisdictions of formation see Section 20 of the Circular, “Comparison of Shareholder Rights”. See also Section 14 of the Circular “Certain Material Canadian Federal Income Tax Considerations” and Section 15 of the Circular “Certain Material United States Federal Income Tax Considerations”.

The Offer also provides Brookfield Shareholders with an alternative, efficient means through which to hold an interest in overall Brookfield. While each class A-1 exchangeable share is exchangeable for a Brookfield Class A Share on a one-for-one basis, Brookfield Class A Shares are not by their terms exchangeable for class A-1 exchangeable shares. As described above, the Offer therefore provides an important opportunity for holders of Brookfield Class A Shares that would prefer to hold more of their interest in overall Brookfield through the ownership of exchangeable shares of Brookfield Reinsurance, which represents an alternative security through which to hold an interest in Brookfield Corporation. Following the completion of the Offer, it is expected that the Brookfield Class A Shares tendered in the Offer will either be returned to Brookfield Corporation for cancellation or, subject to applicable law and regulatory requirements, retained by Brookfield Reinsurance. The class A-1 exchangeable shares being offered are non-voting in order to address, among other things, certain insurance regulations applicable to Brookfield Reinsurance, which generally prohibit any person from owning more than 10% of the voting shares of our company without having received the requisite regulatory approvals.

 

ii

Following the Offer, investors who desire to do so will have the right to convert their class A-1 exchangeable shares into class A exchangeable shares on a one-for-one basis, subject to the conditions described in more detail in this document. See Section 1 of the Circular, “Information with respect to Brookfield Reinsurance — Description of Our Share Capital”, Section 5 of the Circular, “Purpose of and Background to the Offer” and Section 10 of the Offer, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.

At its annual general and special meeting of shareholders held on August 17, 2023 (the “Brookfield Reinsurance Meeting”), Brookfield Reinsurance received shareholder approval to issue up to a maximum of 101,899,808 exchangeable shares, during the twelve-month period from the date of the Brookfield Reinsurance Meeting, in connection with one or more exchange transactions whereby Brookfield Shareholders would have the option to exchange their Brookfield Class A Shares for newly-issued class A exchangeable shares and/or class A-1 exchangeable shares of Brookfield Reinsurance on a one-for-one basis (the “Share Issuance”).

The Brookfield Class A Shares are listed on the New York Stock Exchange (the “NYSE”) and the Toronto Stock Exchange (the “TSX”) under the symbol “BN”. On September 29, 2023, the closing price of the Brookfield Class A Shares on the NYSE and the TSX was $31.27 and C$42.47, respectively. The class A exchangeable shares are listed on the NYSE and the TSX under the symbol “BNRE”. On September 29, 2023, the closing price of the class A exchangeable shares on the NYSE and the TSX was $31.47 and C$42.45, respectively.

There is currently no public market for our class A-1 exchangeable shares. We intend to apply to list our class A-1 exchangeable shares on the NYSE under the symbol “BNRE.A”. We expect that trading of our class A-1 exchangeable shares will commence on November 16, 2023. The listing of our class A-1 exchangeable shares on the NYSE is subject to our company fulfilling all of the requirements of the NYSE. The NYSE has not authorized our listing application and there is no assurance that the NYSE will authorize the listing application. The TSX has conditionally approved the listing of our class A-1 exchangeable shares on the TSX under the symbol “BNRE.A”. The listing of our class A-1 exchangeable shares on the TSX is subject to our company fulfilling all of the requirements of the TSX. The Offer is subject to a number of conditions, including the Listing Condition. Brookfield Reinsurance may not waive the Listing Condition.

As of September 29, 2023, there were 10,450,952 class A exchangeable shares and 1,638,679,807 Brookfield Class A Shares issued and outstanding. The maximum of 40,000,000 Brookfield Class A Shares that Brookfield Reinsurance is offering to exchange pursuant to the Offer represents 2.44% of the total number of 1,638,679,807 Brookfield Class A Shares issued and outstanding as of September 29, 2023. Assuming the Offer is fully subscribed and assuming that the Brookfield Class A Shares tendered for exchange will be returned by Brookfield Reinsurance to Brookfield Corporation, and subsequently cancelled by Brookfield Corporation, after giving effect to the Offer, there will be 10,450,952 class A exchangeable shares, 40,000,000 class A-1 exchangeable shares and 1,598,679,807 Brookfield Class A Shares issued and outstanding. See Section 3 of the Offer to Exchange, “Number of Brookfield Class A Shares and Pro-Ration of Tenders”.

The securities offered in the Offer involve certain risks. For a discussion of risk factors that you should consider in evaluating the Offer, see the section entitled “Risk Factors” beginning on page 23.

Neither the SEC nor any state securities commission has approved or disapproved of the transaction or the securities to be delivered in connection with the Offer, passed upon the merits or fairness of transaction, or passed upon the adequacy or accuracy of the disclosure in the document. Any representation to the contrary is a criminal offense.

Shareholders should carefully consider the income tax consequences of the Offer. See the sections entitled “Certain Material Canadian Federal Income Tax Considerations” beginning on page 91 and “Certain Material United States Federal Income Tax Considerations” beginning on page 74.

 

iii

CURRENCY OF INFORMATION AND MEANING OF CERTAIN REFERENCES

Unless otherwise indicated, information in this document is given as of October 11, 2023.

Unless the context requires otherwise, the terms “we”, “us”, “our”, “Brookfield Reinsurance” or the “company” means Brookfield Reinsurance Ltd. together with all of its subsidiaries and the term “Brookfield” means Brookfield Corporation (formerly Brookfield Asset Management Inc.), its subsidiaries and controlled companies, including, unless the context otherwise requires, BAM (as defined herein), and any investment fund sponsored, managed or controlled by Brookfield Corporation or its subsidiaries, and does not, for greater certainty, include us or Oaktree Capital Group, LLC and Atlas OCM Holdings, LLC and its subsidiaries.

HISTORICAL PERFORMANCE AND MARKET DATA

This document contains information relating to our business as well as historical performance and market data. When considering this data, you should bear in mind that historical results and market data may not be indicative of the future results that you should expect from us or Brookfield.

FINANCIAL INFORMATION

The financial information contained in this document is presented in United States dollars. In this document, all references to “$” are to United States dollars and references to “C$” are to Canadian dollars.

The financial statements of Brookfield Reinsurance incorporated by reference herein have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”).

The financial statements of Brookfield Corporation incorporated by reference herein have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) as permitted by securities regulators in Canada, as well as in the United States under the status of a “foreign private issuer” under the Exchange Act.

MARKET DATA AND INDUSTRY DATA

Market and industry data presented throughout, or incorporated by reference in, this document was obtained from third party sources, industry publications and publicly available information, as well as industry and other data prepared by us and Brookfield on the basis of our collective knowledge of the Canadian, U.S. and international markets and economies (including estimates and assumptions relating to these markets and economies based on that knowledge). We believe that the market and economic data is accurate and that the estimates and assumptions are reasonable, but there can be no assurance as to the accuracy or completeness thereof. The accuracy and completeness of the market and economic data used throughout this document, or incorporated by reference herein, are not guaranteed and we do not make any representation as to the accuracy of such information. Although we believe it to be reliable, we have not independently verified any of the data from third party sources referred to or incorporated by reference in this document, analyzed or verified the underlying studies or surveys relied upon or referred to by such sources, or ascertained the underlying economic and other assumptions relied upon by such sources.

 

iv

FORWARD LOOKING STATEMENTS

In addition to historical information, this document contains “forward-looking information” and “forward looking statements” within the meaning of applicable securities laws, including those described under the heading “Risk Factors” in this document and under the headings “Risk Relating to Our Operating Subsidiaries and Industry” and “Risks Relating to Regulation” in Brookfield Reinsurance’s U.S. GAAP Financial Statements and MD&A (as defined herein), under the heading “Risk Factors” in Brookfield Reinsurance’s Annual Report (as defined herein) and under the heading “Business Environment and Risks” in Brookfield Corporation’s Annual Report (as defined herein), each incorporated by reference herein. Forward-looking information may relate to Brookfield Reinsurance’s and Brookfield’s outlook and anticipated events or results and may include information regarding the financial position, business strategy, growth strategy, budgets, operations, financial results, taxes, dividends, distributions, plans and objectives of the company. Particularly, information regarding future results, performance, achievements, prospects or opportunities of Brookfield Reinsurance, Brookfield Corporation or the Canadian, U.S. or international markets is forward-looking information. In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might”, “will” or “will be taken”, “occur” or “be achieved”. Forward-looking information contained in this document includes, but is not limited to, the expected timetable for the Offer; statements relating to the results, effects and timing of the Offer; statements relating to the AEL Acquisition (as defined herein), including the expected timing of closing of the AEL Acquisition; the expected timing of the dividend or distribution on the class C shares or the Preferred Shares (as defined herein), or other similar transaction, by Brookfield Reinsurance to Brookfield Corporation; the tax treatment of Brookfield Shareholders; the anticipated effects of the Offer; and expected benefits of tendering to the Offer, both to Brookfield Reinsurance and to Brookfield Shareholders.

The forward-looking statements are based on our beliefs, assumptions and expectations of future performance, taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control. If a change occurs, our business, financial condition, liquidity and results of operations may vary materially from those expressed in our forward-looking statements.

Brookfield Reinsurance cautions that the foregoing list of important factors that may affect future results is not exhaustive. The forward-looking statements represent our views as of the date of this document and should not be relied upon as representing our views as of any date subsequent to the date of this document. While we anticipate that subsequent events and developments may cause our views to change, we disclaim any obligation to update the forward-looking statements, other than as required by applicable law.

For further information, see also the section entitled “Risk Factors” beginning on page 23 and the sections entitled “Risk Relating to Our Operating Subsidiaries and Industry” and “Risks Relating to Regulation” in Brookfield Reinsurance’s U.S. GAAP Financial Statements and MD&A, the section entitled “Risk Factors” in Brookfield Reinsurance’s Annual Report and the section entitled “Business Environment and Risks” in Brookfield Corporation’s Annual Report, each of which is incorporated by reference in this document, for a discussion of the risk factors applicable to Brookfield Reinsurance’s business and an investment in our exchangeable shares and the risk factors applicable to Brookfield Corporation’s business and an investment in Brookfield Class A Shares. Copies of our and Brookfield Corporation’s continuous disclosure filings are available electronically on EDGAR on the SEC’s website at www.sec.gov or on SEDAR+ at www.sedarplus.ca. Readers are cautioned not to put undue reliance on forward-looking statements. Brookfield Reinsurance and Brookfield Corporation disclaim any intent or obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable law.

 

v

NOTICE TO BROOKFIELD SHAREHOLDERS IN THE UNITED STATES

In connection with the Offer, Brookfield Reinsurance and Brookfield Corporation have filed with the SEC a registration statement on Form F-4. This document, which forms a part of the Form F-4, constitutes a prospectus and offer to exchange with respect to the Offer. BROOKFIELD SHAREHOLDERS ARE URGED TO READ SUCH REGISTRATION STATEMENT, AS AMENDED, AND THIS DOCUMENT AND ANY AND ALL OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE OFFER, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO ANY SUCH DOCUMENTS, AS EACH BECOMES AVAILABLE, BECAUSE EACH CONTAINS OR WILL CONTAIN IMPORTANT INFORMATION ABOUT BROOKFIELD REINSURANCE, BROOKFIELD CORPORATION AND THE OFFER. The financial statements of Brookfield Corporation incorporated by reference herein have been prepared in accordance with IFRS, and thus may not be comparable to financial statements of U.S. companies.

Brookfield Shareholders in the United States should be aware that the disposition of their Brookfield Class A Shares and the acquisition of class A-1 exchangeable shares by them as described in this document may have tax consequences both in the United States and in Canada. Brookfield Shareholders should be aware that owning class A-1 exchangeable shares may subject them to tax consequences both in the United States and in Canada. Such consequences for Brookfield Shareholders who are resident in, or citizens of, the United States may not be described fully in this document. Brookfield Shareholders are encouraged to consult their tax advisers. See Section 14 of the Circular, “Certain Material United States Federal Income Tax Considerations” and Section 15 of the Circular, “Certain Material Canadian Federal Income Tax Considerations”.

The enforcement by Brookfield Shareholders of civil liabilities under U.S. federal securities laws may be affected adversely by the fact that each of Brookfield Reinsurance and Brookfield Corporation is formed under the laws of a non-U.S. jurisdiction, that some of their respective officers and directors may reside outside of the United States, that some or all of the experts named in this document may reside outside of the United States and that a substantial portion of the assets of Brookfield Reinsurance and Brookfield Corporation and such persons may be located outside the United States. Shareholders in the United States may not be able to sue Brookfield Reinsurance and Brookfield Corporation or their respective officers or directors in a non-U.S. court for violation of United States federal securities laws. It may be difficult to compel such parties to subject themselves to the jurisdiction of a court in the United States or to enforce a judgment obtained from a court of the United States.

The Offer is not subject to Section 14(d) of the Exchange Act, or Regulation 14D promulgated by the SEC thereunder. However, under U.S. securities laws, Brookfield Corporation may be deemed an offeror with respect to the Offer and therefore Brookfield Corporation has filed with the SEC an Issuer Tender Offer Statement on Schedule TO (the “Schedule TO”), which contains additional information with respect to the Offer. The Schedule TO, including the exhibits and any amendments and supplements to that document, may be examined, and copies may be obtained, at the same places and in the same manner set forth under Section 1 of the Circular, “Information with respect to Brookfield Reinsurance.” The Schedule TO will be amended to report any material changes in the terms of the Offer and to report the final results of the Offer as required by Rules 13e-4(c)(3) and 13e-4(c)(4) under the Exchange Act.

Brookfield Reinsurance, Brookfield Corporation or their respective affiliates and any adviser, broker or other person acting as the agent for, or on behalf of, or in concert with such persons, directly or indirectly, may bid for, make purchases of or make arrangements to purchase Brookfield Class A Shares outside the Offer pursuant to open market transactions at prevailing prices. Such bids, purchases or arrangements to purchase may be made during the period of the Offer or after expiration of the Offer.

 

vi

TABLE OF CONTENTS

 

				Page
CURRENCY OF INFORMATION AND MEANING OF CERTAIN REFERENCES					iv
HISTORICAL PERFORMANCE AND MARKET DATA					iv
FINANCIAL INFORMATION					iv
MARKET DATA AND INDUSTRY DATA					iv
FORWARD LOOKING STATEMENTS					v
NOTICE TO BROOKFIELD SHAREHOLDERS IN THE UNITED STATES					vi
QUESTIONS AND ANSWERS ABOUT THE OFFER					1
SUMMARY					12
RISK FACTORS					23
OFFER TO EXCHANGE					33
		1.  The Offer			33
		2.  Dissent/Appraisal Rights			35
		3.  Number of Brookfield Class A Shares and Pro-Ration of Tenders			35
		4.  Announcement of the Results of the Offer			36
		5.  Procedure for Tendering Brookfield Class A Shares			36
		6.  Return of Tendered Brookfield Class A Shares			40
		7.  Withdrawal Rights			40
		8.  Conditions to the Offer			42
		9.  Extension of the Expiration Time, Variation or Change of the Offer			45
		10.  Taking Up and Exchange of Tendered Brookfield Class  A Shares			46
		11.  Mail Service Interruption			47
		12.  Liens and Distributions			47
		13.  Notices and Delivery			48
		14.  Treatment of Brookfield Class  A Shares Not Deposited Under the Offer			48
		15.  Other Terms of the Offer			48
CIRCULAR					50
		1.  Information with respect to Brookfield Reinsurance			50
		2.  Information with respect to the Brookfield Reinsurance Meeting			59
		3.  Information with respect to Brookfield Corporation			59
		4.  Source of Offered Consideration			62
		5.  Purpose of and Background to the Offer			62
		6.  Brookfield Corporation’s Distribution Policy			65
		7.  Previous Purchases and Sales			66
		8.  Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Ownership of Securities of Brookfield Corporation			67
		9.  Acceptance of Offer and Arrangements with Brookfield Shareholders			73
		10.  Benefits from the Offer			74
		11.  Other Material Facts			74
		12.  Bona Fide Offers			74
		13.  Accounting Treatment of the Offer			74
		14.  Certain Material United States Federal Income Tax Considerations			74
		15.  Certain Material Canadian Federal Income Tax Considerations			91
		16.  Legal and Regulatory Matters			102

 

vii

TABLE OF CONTENTS

(continued)

 

				Page
		17.  Fees and Expenses			103
		18.  Interests of Experts			103
		19.  Additional Information / Documents Incorporated by Reference			105
		20.  Comparison of Shareholder Rights			109
		21.  Depositary			120
		22.  Promoter			120
		23.  Statutory Rights of Withdrawal and Rescission			120
		24.  Service of Process and Enforceability of Civil Liabilities			120
		25.  Canadian Securities Law Exemptions			121
GLOSSARY					122

 

viii

QUESTIONS AND ANSWERS ABOUT THE OFFER

This summary term sheet is solely for the convenience of Brookfield Shareholders and is qualified in its entirety by references to the full text and more specific details of the Offer described elsewhere in this document. We urge you to read this entire document, the related Letter of Transmittal and Notice of Guaranteed Delivery carefully and in their entirety as they contain a complete discussion of the Offer. Brookfield Shareholders are also urged to discuss their decisions with their financial, tax and legal advisers.

 

Who is offering to exchange my Brookfield Class A Shares?		Brookfield Reinsurance is offering to exchange one class A-1 exchangeable share for each Brookfield Class A Share tendered in the Offer, subject to pro-ration in the event that the total number of Brookfield Class A Shares tendered exceeds the maximum number of class A-1 exchangeable shares offered. Under U.S. securities laws, Brookfield Corporation may also be deemed an offeror with respect to the Offer. See Section 1 of the Offer to Exchange, “The Offer”.
Why is Brookfield Reinsurance making the Offer?		Brookfield Reinsurance operates a leading capital solutions business providing insurance and reinsurance services to individuals and institutions. The purpose of the Offer is to increase the equity base and market capitalization of Brookfield Reinsurance to reflect the size and diversity of its operations, which have increased significantly since its formation as a result of organic and inorganic growth. We also believe that an increased equity base and market capitalization will provide a more liquid market for the exchangeable shares, which in turn will position Brookfield Reinsurance for future growth. We refer to Brookfield Reinsurance as a “paired entity” to Brookfield Corporation because (i) the exchangeable shares (A) are exchangeable into Brookfield Class A Shares on a one-for-one basis and (B) receive distributions at the same time and in the same amounts as dividends on the Brookfield Class A Shares, and (ii) Brookfield Corporation owns 100% of the class C shares. These features enable the Offer to be structured so that the equity base and market capitalization of Brookfield Reinsurance can be enhanced without any dilution to Brookfield Shareholders. However, while the exchangeable shares provide Brookfield Shareholders the opportunity to hold their interest in overall Brookfield through the ownership of exchangeable shares, Brookfield Corporation and Brookfield Reinsurance are distinct legal entities and there are differences between the rights and privileges of holders of Brookfield Class A Shares and holders of our exchangeable shares. These differences may result in certain investors preferring to hold our exchangeable shares because Canadian and U.S. investors will have the opportunity to receive returns of capital instead of taxable dividends and non-Canadian investors will have the ability to receive distributions without the imposition of withholding tax. For a discussion of such differences under the governing documents of our company and Brookfield Corporation and laws of their respective jurisdictions of formation see Section 20 of the Circular, “Comparison of Shareholder Rights”. See also Section 14 of the Circular “Certain Material Canadian Federal Income Tax Considerations” and Section 15 of the Circular “Certain Material United States Federal Income Tax Considerations”. The Offer also provides Brookfield Shareholders with an alternative, efficient means through which to hold an interest in overall Brookfield. While each class A-1 exchangeable share is exchangeable for a

 

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		Brookfield Class A Share on a one-for-one basis, Brookfield Class A Shares are not by their terms exchangeable for class A-1 exchangeable shares. As described above, the Offer therefore provides an important opportunity for holders of Brookfield Class A Shares that would prefer to hold more of their interest in overall Brookfield through the ownership of exchangeable shares of Brookfield Reinsurance, which represents an alternative security through which to hold an interest in Brookfield Corporation. The class A-1 exchangeable shares being offered are non-voting in order to address, among other things, certain insurance regulations applicable to Brookfield Reinsurance, which generally prohibit any person from owning more than 10% of the voting shares of our company without having received the requisite regulatory approvals. Following the Offer, investors who desire to do so will have the right to convert their class A-1 exchangeable shares into class A exchangeable shares on a one-for-one basis, provided that no holder will be permitted to convert their class A-1 exchangeable shares, and our company will not effect any conversions of class A-1 exchangeable shares, into class A exchangeable shares unless the requesting holder has provided evidence satisfactory to the company that such holder or its affiliate either (i) will not, after giving effect to the conversion, have control or direction over more than 9.9% of the outstanding class A exchangeable shares or (ii) has received all necessary regulatory approval to obtain more than 9.9% of the class A exchangeable shares, as determined by our company acting reasonably. See Section 1 of the Circular, “Information with respect to Brookfield Reinsurance — Description of Our Share Capital” and Section 5 of the Circular, “Purpose of and Background to the Offer”.
		In the event that there is sufficient interest in the Offer from Brookfield Shareholders, our company may from time to time provide Brookfield Shareholders with other opportunities to increase their ownership of our exchangeable shares by way of further exchange offers, or private reverse exchange transactions or other similar transactions.
Who are Brookfield Reinsurance’s significant shareholders?		Brookfield Corporation owns all of the issued and outstanding class C shares, which are non-voting and entitle Brookfield Corporation to the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares and subject to the prior rights of holders of our Preferred Shares. This residual economic interest, together with the mechanisms to create economic equivalence between the class A exchangeable shares and Brookfield Class A Shares, creates alignment between the interests of Brookfield Corporation, our company and the holders of our exchangeable shares.   All of our class B shares are held in a voting trust, which we refer to as the BNRE Partnership. The class B shares entitle the BNRE Partnership to elect one-half of our board. The beneficial interests in the BNRE Partnership, and the voting interests in its trustee, are held as follows: (i) Bruce Flatt (48%), (ii) Brian W. Kingston (19%), and (iii) Sachin G. Shah, Anuj Ranjan, Connor Teskey, Cyrus Madon and Sam J. B. Pollock (33% in equal parts). As such, no single individual or entity controls the BNRE Partnership. See Section 8 of the Circular, “Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Ownership of Securities of Brookfield Corporation”.

 

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How will owning a class A-1 exchangeable share be different from owning a Brookfield Class A Share?		The class A-1 exchangeable shares are non-voting in order to address, among other things, certain insurance regulatory restrictions on ownership or control of our company but are otherwise intended to be economically equivalent in all respects to our class A exchangeable shares and the Brookfield Class A Shares.   Each class A-1 exchangeable share will be: (a) exchangeable for one Brookfield Class A Share (subject to adjustment to reflect certain capital events) or its cash equivalent (the form and payment to be determined at the election of Brookfield Corporation); and (b) convertible into one class A exchangeable share. No holder will be permitted to convert their class A-1 exchangeable shares into class A exchangeable shares unless the requesting holder has provided evidence satisfactory to our company that such holder, or its affiliate, either (i) will not, after giving effect to the conversion, have control or direction over more than 9.9% of the outstanding class A exchangeable shares or (ii) has received all necessary regulatory approval to obtain more than 9.9% of the class A exchangeable shares, as determined by our company acting reasonably.   Each class A exchangeable share is exchangeable for one Brookfield Class A Share (subject to adjustment to reflect certain capital events) or its cash equivalent (the form and payment to be determined at the election of Brookfield Corporation). See Section 1 of the Circular (as defined herein), “Information with respect to Brookfield Reinsurance”. Brookfield Shareholders exchanging their Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer will have different rights once they become shareholders of Brookfield Reinsurance. These material differences are described in Section 20 of the Circular, “Comparison of Shareholder Rights”.
Are there any conditions to the Offer?		Yes. The Offer is subject to a number of conditions, including the Listing Condition. Brookfield Reinsurance, subject to applicable law, including Rule 14e-1(c) under the Exchange Act, reserves the right to terminate the Offer and not take up and exchange any Brookfield Class A Shares tendered in the Offer if the conditions to the Offer are not satisfied or, where permitted, waived. Brookfield Reinsurance may not waive the Listing Condition. See Section 8 of the Offer to Exchange, “Conditions to the Offer”.
Where will I be able to trade the class A-1 exchangeable shares?		There is currently no public market for our class A-1 exchangeable shares. We intend to apply to list our class A-1 exchangeable shares on the NYSE under the symbol “BNRE.A”. The listing of our class A-1 exchangeable shares on the NYSE is subject to our company fulfilling all of the requirements of the NYSE. The NYSE has not authorized our listing application and there is no assurance that the NYSE will authorize the listing application. The TSX has conditionally approved the listing of our class A-1 exchangeable shares on the TSX under the symbol “BNRE.A”. Listing is subject to our company fulfilling all of the requirements of the TSX. The Offer is subject to a number of conditions, including the Listing Condition. Brookfield Reinsurance may not waive the Listing Condition.   We expect that trading of our class A-1 exchangeable shares will commence on November 16, 2023.

 

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How many class A-1 exchangeable shares will Brookfield Shareholders be entitled to receive per Brookfield Class A Share tendered?		Brookfield Shareholders will be entitled to receive one class A-1 exchangeable share for each Brookfield Class A Share tendered, upon the terms and subject to the conditions of the Offer, provided that the number of class A-1 exchangeable shares exchanged pursuant to the Offer will be pro-rated in the event that the total number of Brookfield Class A Shares tendered exceeds 40,000,000.
How many Brookfield Class A Shares will Brookfield Reinsurance exchange in the Offer?		Brookfield Reinsurance is offering to exchange up to 40,000,000 Brookfield Class A Shares, which represents approximately 2.44% of Brookfield Class A Shares. Since we will not know the number of Brookfield Class A Shares tendered in the Offer until after the Expiration Time (as defined herein), we will not determine the exact number of Brookfield Class A Shares that we will exchange until after the Expiration Time.   See Section 3 of the Offer to Exchange, “Number of Brookfield Class A Shares and Pro-Ration of Tenders”.
What will happen if more than 40,000,000 Brookfield Class A Shares are tendered in the Offer?		If the number of Brookfield Class A Shares properly tendered and not properly withdrawn pursuant to the Offer exceeds 40,000,000 Brookfield Class A Shares, then we will exchange the Brookfield Class A Shares on a pro rata basis according to the total number of Brookfield Class A Shares tendered by Brookfield Shareholders (with adjustments to avoid the exchange of fractional Brookfield Class A Shares).   See Section 3 of the Offer to Exchange, “Number of Brookfield Class A Shares and Pro-Ration of Tenders”.

 

What will happen to the Brookfield Class A Shares that are exchanged in the Offer?		Following the completion of the Offer, it is expected that the Brookfield Class A Shares tendered in the Offer will either be returned to Brookfield Corporation for cancellation or, subject to applicable law and regulatory requirements, retained by Brookfield Reinsurance. In either case, given that, for the reasons discussed above, we refer to Brookfield Reinsurance as a “paired entity” to Brookfield Corporation, the Offer is not dilutive to Brookfield Reinsurance or Brookfield Corporation. See Section 10 of the Offer, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.
Will I receive distributions as a shareholder of Brookfield Reinsurance?		Yes. The Brookfield Reinsurance Board of Directors may declare distributions, at its discretion, in the form of a dividend or a distribution made pursuant to a capital reduction resulting in a dividend or a combination, each of which we refer to as a distribution. Distributions on our class A exchangeable shares and our class A-1 exchangeable shares will be paid at the same time and in the same amount as cash dividends are paid on the Brookfield Class A Shares to provide holders of exchangeable shares with an economic return equivalent to holders of Brookfield Class A Shares. Distributions on our exchangeable shares are expected to provide Canadian and U.S. investors with the opportunity to receive returns of capital (instead of, in the case of the Brookfield Class A Shares, taxable dividends) and provide non-Canadian investors with the ability to receive distributions on our exchangeable shares without the imposition of withholding tax. Brookfield Shareholders should carefully consider the income tax consequences of the Offer and of holding our exchangeable shares. See Section 14 of the Circular “Certain

 

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		Material Canadian Federal Income Tax Considerations” and Section 15 of the Circular “Certain Material United States Federal Income Tax Considerations”.   Subject to completion of the Offer, we expect to commence paying distributions on our class A-1 exchangeable shares on or about December 29, 2023.
Are there risks associated with owning the class A exchangeable shares or class A-1 exchangeable shares?		Yes, the Offer, our business and the ownership of exchangeable shares are subject to both general and specific risks and uncertainties. Owning Brookfield Class A Shares is also subject to risks. For a discussion of the factors that you should consider, see “Risk Factors” in this document as well as the risks described under the heading “Risk Factors” in Brookfield Reinsurance’s Annual Report and under the heading “Business Environment and Risks” in Brookfield Corporation’s Annual Report, each of which is incorporated by reference herein.
Will I be entitled to fractional shares?		No. Brookfield Reinsurance will not take up or deliver any fractional shares in connection with the Offer. If necessary to avoid the creation of a fractional share, the number of Brookfield Class A Shares to be acquired from a Brookfield Shareholder will be rounded down to the closest whole number, and the remaining whole number of Brookfield Class A Shares not acquired will be returned to the tendering Brookfield Shareholders.
How long do I have to tender my Brookfield Class A Shares?		You may tender your Brookfield Class A Shares prior to the Expiration Time. The Offer will expire on November 13, 2023 at 5:00 p.m. (Eastern time), unless Brookfield Reinsurance extends or terminates the Offer prior to such time. Brookfield Reinsurance may choose to extend or vary the terms and conditions of the Offer by giving notice, at any time and for any reason, subject to applicable laws. See Section 9 of the Offer to Exchange, “Extension of the Expiration Time, Variation or Change of the Offer”.   If your Brookfield Class A Shares are held through a broker, dealer, commercial bank, trust company or other nominee, you must request that your broker, dealer, commercial bank, trust company or other nominee tender your Brookfield Class A Shares for you. If your Brookfield Class A Shares are so held, you should immediately contact such nominee in order to take the necessary steps to be able to tender such Brookfield Class A Shares under the Offer. In addition, it is likely that such broker, dealer, commercial bank, trust company or other nominee has an earlier deadline, for administrative reasons, for you to act to instruct such nominee to tender Brookfield Class A Shares on your behalf. We urge you to contact your broker, dealer, commercial bank, trust company or other nominee to confirm any earlier deadline. See Section 9 of the Offer to Exchange, “Extension of the Expiration Time, Variation or Change of the Offer”.
How do I tender my Brookfield Class A Shares?		To tender Brookfield Class A Shares pursuant to the Offer, you must (i) deliver prior to the Expiration Time the certificates or DRS position for all tendered Brookfield Class A Shares in proper form for transfer, together with a properly completed and duly executed related Letter of Transmittal (with signatures that are guaranteed if so required in accordance with the related Letter of Transmittal), and any other

 

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		documents required by the related Letter of Transmittal, to the Depositary, at the address listed in the related Letter of Transmittal, (ii) follow the procedure for guaranteed delivery described under Section 5 of the Offer to Exchange, “Procedure for Tendering Brookfield Class A Shares”, or (iii) transfer all tendered Brookfield Class A Shares pursuant to the procedures for book-entry transfer described under Section 5 of the Offer to Exchange, “Procedure for Tendering Brookfield Class A Shares”, in each case prior to the Expiration Time. If your Brookfield Class A Shares are held through a broker, dealer, commercial bank, trust company or other nominee, you must request that your broker, dealer, commercial bank, trust company or other nominee tender your Brookfield Class A Shares for you. See Section 5 of the Offer to Exchange, “Procedure for Tendering Brookfield Class A Shares” and the instructions to the related Letter of Transmittal.   Participants of CDS and DTC should contact CDS or DTC, as applicable, to obtain instructions with respect to the tender of Brookfield Class A Shares under the Offer. All CDS and DTC participants should tender Brookfield Class A Shares at the beneficial shareholder level. For example, a CDS or DTC participant tendering Brookfield Class A Shares on behalf of three beneficial shareholders should complete three separate tenders, one for each beneficial shareholder.
May I tender only a portion of the Brookfield Class A Shares I own?		Yes. Your participation in the Offer is voluntary, and you do not have to tender all of the Brookfield Class A Shares you own to participate in the Offer.
Do I have dissent rights and/or appraisal rights?		The Offer does not create any right of a Brookfield Shareholder to dissent in respect of any transaction or to make an application to receive the fair value of the Brookfield Class A Shares. See Section 2 of the Offer to Exchange, “Dissent/Appraisal Rights”.
Once I have tendered Brookfield Class A Shares in the Offer, can I withdraw my tender?		Yes. You may withdraw any Brookfield Class A Shares you have tendered (i) at any time prior to the Expiration Time, (ii) at any time before the Brookfield Class A Shares have been taken up by us, (iii) if we have not exchanged the Brookfield Class A Shares for class A-1 exchangeable shares within three business days of being taken up, (iv) at any time before the expiration of 10 days from the date that a notice of change or notice of variation has been given in accordance with the Offer to Exchange other than a variation that consists solely of the waiver of a condition of the Offer (which 10-day period may be extended to 10 business days where required under U.S. securities laws), or (v) if we have not accepted tendered Brookfield Class A Shares for exchange by December 7, 2023, which is 40 business days after commencement of the Offer. See Section 7 of the Offer to Exchange, “Withdrawal Rights”.
How do I withdraw Brookfield Class A Shares I previously tendered?		You must deliver, on a timely basis, a written or printed notice of your withdrawal to the Depositary at the address appearing on the back cover page of this document. A notice of withdrawal must specify your name, the number of Brookfield Class A Shares to be withdrawn and the name of the registered holder of the withdrawn Brookfield Class A Shares. Some additional requirements apply if the Brookfield Class A Share certificates to be withdrawn have been delivered to the Depositary or if your Brookfield Class A Shares have been tendered under the procedure for book-entry transfer. See Section 7 of the Offer to Exchange, “Withdrawal Rights” If you have tendered your Brookfield Class A

 

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		Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct your nominee to arrange for the withdrawal of your Brookfield Class A Shares. Please be advised that such nominees may have their own deadlines relating to the withdrawal of your Brookfield Class A Shares that differ from those set out in the Offer to Exchange. Brookfield Reinsurance recommends that you contact your nominee to find out its deadline.
Can the Offer be terminated, extended, changed or varied?		Yes. Brookfield Reinsurance may extend the Expiration Time, vary or change the Offer in its sole discretion, subject to applicable law. See Section 9 of the Offer to Exchange, “Extension of the Expiration Time, Variation or Change of the Offer”. We may also terminate the Offer under certain circumstances. See Section 8 of the Offer to Exchange, “Conditions to the Offer”.
How will I be notified if the Offer is extended, varied or terminated?		We will issue a press release announcing the extension and the new Expiration Time by 9:00 a.m. (Eastern time) on the business day after the previously scheduled Expiration Time if Brookfield Reinsurance decides to extend the Offer. Brookfield Reinsurance will announce any other variation to or termination of the Offer by issuing a press release announcing such variation or termination. See Section 9 of the Offer to Exchange, “Extension of the Expiration Time, Variation or Change of the Offer”.
Have the Brookfield Reinsurance Board of Directors or the Brookfield Corporation Board of Directors adopted a position on the Offer?		Each of the Brookfield Reinsurance Board of Directors (and the Governance and Nominating Committee of the Brookfield Reinsurance Board of Directors) and the Brookfield Corporation Board of Directors have approved the Offer. While both Brookfield Reinsurance and Brookfield Corporation believe that exchanges under the Offer by holders who prefer to invest in Brookfield overall through the ownership of exchangeable shares will be beneficial to Brookfield Reinsurance and Brookfield, neither of Brookfield Reinsurance, Brookfield Corporation or their respective affiliates, the Brookfield Reinsurance Board of Directors, the Brookfield Corporation Board of Directors or the Depositary makes any recommendation to you or to any other Brookfield Shareholders as to whether to tender or refrain from tendering Brookfield Class A Shares under the Offer.   Because the Offer relates to approximately 2.44% of the Brookfield Class A Shares, and Brookfield Reinsurance currently does not beneficially own any Brookfield Class A Shares, no directors’ circular or Schedule 14D-9 from the Brookfield Corporation Board of Directors with respect to the Offer will be sent to Brookfield Shareholders. Although supportive of the Offer, Brookfield Corporation is not making any recommendation to Brookfield Shareholders because each class A-1 exchangeable share has been structured with the intention of providing an economic return equivalent to one Brookfield Class A Share and because there are a number of factors specific to each Brookfield Shareholder that will affect a shareholder’s decision as to whether to tender their Brookfield Class A Shares pursuant to the Offer. You must make your own decisions as to whether to tender Brookfield Class A Shares under the Offer, and, if so, how many Brookfield Class A Shares to tender.

 

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		Although Brookfield Corporation is not making a recommendation to Brookfield Shareholders, it believes that the Offer is attractive to Brookfield Shareholders because the Offer provides shareholders with an opportunity, at their option, to increase their ownership of exchangeable shares of Brookfield Reinsurance. Although the exchange of Brookfield Class A Shares for class A-1 exchangeable shares in the Offer is itself a taxable event, the Offer provides Canadian and U.S. investors with the opportunity to receive returns of capital on the class A-1 exchangeable shares (instead of, in the case of the Brookfield Class A Shares, taxable dividends) and provides non-Canadian investors with the ability to receive distributions on their exchangeable shares without the imposition of withholding tax. Brookfield Shareholders should carefully consider the income tax consequences of the Offer and of holding our exchangeable shares. See Section 14 of the Circular “Certain Material Canadian Federal Income Tax Considerations” and Section 15 of the Circular “Certain Material United States Federal Income Tax Considerations”.
What is the relationship between Brookfield Reinsurance and Brookfield Corporation?		Brookfield Corporation holds, directly or indirectly, all of our class C shares, which are non-voting and entitle Brookfield Corporation to all of the residual value in our company after payment in full of the amount due to holders of exchangeable shares and class B shares and subject to the prior rights of holders of our Preferred Shares. This residual economic interest, together with the mechanisms to create economic equivalence between the class A exchangeable shares, the class A-1 exchangeable shares and Brookfield Class A Shares, creates alignment between the interests of Brookfield Corporation and the holders of our exchangeable shares. Brookfield Reinsurance was formed, among other things, to achieve the following objectives:   •  provide investors with alternative form for holding an interest in Brookfield Corporation;   •  provide access to new capital pools through a publicly traded company and the creation of a new insurance and reinsurance platform under Brookfield Reinsurance;   •  provide Canadian and U.S. investors with the opportunity to receive returns of capital instead of taxable dividends and provide non-Canadian investors with the ability to receive distributions without the imposition of withholding tax, which we believe will attract new investors who will benefit from investing in our business; and   •  establish a publicly traded company that owns and operates a leading financial services business focused on providing capital-based solutions to the insurance industry. Through our operating subsidiaries, we offer a broad range of insurance products and services to individuals and institutions, including life insurance and annuities and personal and commercial property and casualty insurance.   A number of important agreements have been entered into between our company and Brookfield to support Brookfield Reinsurance. See Section 8 of the Circular, “Interest of Directors and Executive Officers;

 

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		Transactions and Arrangements Concerning Ownership of Securities of Brookfield Corporation — Relationship with Brookfield” for further information.
Does Brookfield Corporation have any consent rights under the Offer?		Yes. Under the Support Agreement, Brookfield Corporation has the right to consent to any issuance of exchangeable shares. Brookfield Corporation has consented to the issuance of class A-1 exchangeable shares (which are convertible into class A exchangeable shares and exchangeable into Brookfield Class A Shares), and has approved the making of the Offer, and has no further consent rights relating to the making or conduct of the Offer. Brookfield Corporation has also approved the creation and issuance of the Brookfield Class A Shares issuable on exchange of the class A-1 exchangeable shares (including any exchange of class A exchangeable shares issuable on conversion of the class A-1 exchangeable shares).
Will any of Brookfield Corporation’s or Brookfield Reinsurance’s directors, officers or affiliates participate in the Offer?		The Offer is open to all holders of Brookfield Class A Shares. Therefore, any officer, director or affiliate of Brookfield that is a holder of Brookfield Class A Shares may participate in the Offer on the same terms as all other holders of Brookfield Class A Shares. To the knowledge of Brookfield Reinsurance and Brookfield Corporation, none of the Disclosable Persons (as such term is defined in Section 8 of the Circular, “Interest of Directors and Executive Officers; Transactions and Arrangements Concerning Ownership of Securities of Brookfield Corporation”) have indicated any present intention to tender Brookfield Class A Shares pursuant to the Offer. The intentions of the Disclosable Persons as described above may change during the period of the Offer depending on the change in circumstance of such parties.
When will Brookfield Reinsurance exchange the Brookfield Class A Shares I tender?		Brookfield Reinsurance will provide the applicable number of class A-1 exchangeable shares to Brookfield Shareholders for the Brookfield Class A Shares we take up promptly after the Expiration Time, but in any event, not later than three business days after the Brookfield Class A Shares are taken up. See Section 10 of the Offer to Exchange, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.
How will I receive the Brookfield Class A Shares pursuant to the Offer?		If you are a registered Brookfield Shareholder, you will receive a book-entry DRS account statement reflecting your ownership of the class A-1 exchangeable shares pursuant to the Offer in the mail. If you hold Brookfield Class A Shares through a broker, dealer, commercial bank, trust company or other nominee, your brokerage account will be credited for your ownership of the class A-1 exchangeable shares pursuant to the Offer.
Will I have to pay brokerage commissions if I tender my Brookfield Class A Shares?		If you are a registered Brookfield Shareholder and you tender your Brookfield Class A Shares directly to the Depositary, you will not incur any brokerage commissions. If you hold Brookfield Class A Shares through a broker, dealer, commercial bank, trust company or other nominee, we urge you to consult your broker, dealer, commercial bank, trust company or other nominee to determine whether transaction costs are applicable. See Section 10 of the Offer to Exchange, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.
What are the income tax consequences if I tender my Brookfield Class A Shares?		You should carefully consider the income tax consequences to you of tendering Brookfield Class A Shares pursuant to the Offer. We urge you to seek advice from your own tax advisers with respect to your

 

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		particular circumstances as to the tax consequences you may incur as a result of the exchange of your Brookfield Class A Shares under the Offer. For more information, see Section 14 of the Circular, “Certain Material United States Federal Income Tax Considerations” and Section 15 of the Circular, “Certain Material Canadian Federal Income Tax Considerations”.
What are the U.S. federal income tax consequences if I tender my Brookfield Class A Shares?		We intend to treat the class A-1 exchangeable shares as stock of our company for all U.S. federal income tax purposes, in which case a U.S. Holder (as defined herein) that tenders Brookfield Class A Shares pursuant to the Offer generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the fair market value of the class A-1 exchangeable shares received pursuant to the Offer and the holder’s adjusted tax basis in the Brookfield Class A Shares exchanged therefor. However, the characterization of the class A-1 exchangeable shares and related rights for U.S. federal income tax purposes is uncertain. It is possible for the class A-1 exchangeable shares to be treated as stock of Brookfield Corporation for U.S. federal income tax purposes, in which case a U.S. Holder that tenders Brookfield Class A Shares pursuant to the Offer generally should not recognize gain or loss for U.S. federal income tax purposes upon the receipt of the class A-1 exchangeable shares. It is also possible for the class A-1 exchangeable shares and related rights to be treated as a derivative financial instrument, in which case the exchange by a U.S. Holder of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer may be treated as a sale of the Brookfield Class A Shares or as a taxable distribution on Brookfield Class A Shares, depending on the circumstances. These uncertain U.S. federal income tax consequences are described in greater detail in Section 14 of the Circular under the heading “Certain Material United States Federal Income Tax Considerations — Consequences to U.S. Holders — Exchange of Brookfield Class A Shares Pursuant to the Offer”. U.S. Holders are urged to consult their tax advisers regarding the proper U.S. federal income tax treatment of the exchange of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer.
What are the Canadian federal income tax consequences if I tender my Brookfield Class A Shares?		The exchange of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer will result in a disposition of the Brookfield Class A Shares for Canadian federal income tax purposes. Resident Holders (as defined herein) generally will be subject to Canadian federal income tax on any resulting capital gain as further described in Section 15 of the Circular under the heading “Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders Resident in Canada”. Non-Resident Holders (as defined herein) generally will not be subject to Canadian federal income tax on any resulting capital gain unless the Brookfield Class A Shares constitute “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder as further described in greater detail in Section 15 of the Circular under the heading “Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders not Resident in Canada”.
How do I get my Brookfield Class A Shares back if I have		All Brookfield Class A Shares tendered but not taken up, including Brookfield Class A Shares not taken up due to pro-ration, improper tenders or Brookfield Class A Shares not taken up due to the termination

 

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tendered them pursuant to the Offer, but they are not taken up?		of the Offer, will be returned promptly after the Expiration Time or termination of the Offer without expense to the tendering Brookfield Shareholder. See Section 1 of the Offer to Exchange, “The Offer”.
Who can I call with questions about the Offer or for more information?		You can call the Depositary if you have any questions regarding how to tender your Brookfield Class A Shares, if you need assistance regarding the Offer or if you require additional copies of this document, the Letter of Transmittal or the Notice of Guaranteed Delivery (which documents will be provided without charge on request and are also available on SEC’s website at www.sec.gov and on SEDAR+ at www.sedarplus.ca).

NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF BROOKFIELD REINSURANCE, BROOKFIELD CORPORATION, OR THEIR RESPECTIVE AFFILIATES, THE BROOKFIELD REINSURANCE BOARD OF DIRECTORS OR THE BROOKFIELD CORPORATION BOARD OF DIRECTORS AS TO WHETHER BROOKFIELD SHAREHOLDERS SHOULD TENDER OR REFRAIN FROM TENDERING BROOKFIELD CLASS A SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THE OFFER OTHER THAN AS SET FORTH IN THE OFFER. IF GIVEN OR MADE, ANY SUCH RECOMMENDATION OR ANY SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE BROOKFIELD REINSURANCE BOARD OF DIRECTORS, THE BROOKFIELD CORPORATION BOARD OF DIRECTORS OR THE DEPOSITARY.

 

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RISK FACTORS

An investment in the class A-1 exchangeable shares and the acceptance of the Offer are subject to certain risks. In assessing the Offer, Brookfield Shareholders should carefully consider the risks described in this document and under the heading “Risk Factors” in Brookfield Reinsurance’s Annual Report and under the heading “Business Environment and Risks” in Brookfield Corporation’s Annual Report, each incorporated by reference in this document, for a discussion of the risk factors applicable to Brookfield Reinsurance’s business and an investment in our exchangeable shares and the risk factors applicable to Brookfield Corporation’s business and an investment in Brookfield Class A Shares. Additional risks and uncertainties not presently known by Brookfield Reinsurance or Brookfield Corporation, or that Brookfield Reinsurance or Brookfield Corporation currently believe are not material, may also materially and adversely impact the successful completion of the Offer or the business, operations, financial condition, financial performance, cash flows, reputation or prospects of the Brookfield Reinsurance or Brookfield Corporation. Except as context may otherwise require, the following risk factors assume that the Offer has been completed.

Risks Relating to the Offer and the Class A-1 Exchangeable Shares

Our class A-1 exchangeable shares have never been publicly traded and an active and liquid trading market for our class A-1 exchangeable shares may not develop.

The listing of our class A-1 exchangeable shares will be subject to our company fulfilling all of the listing requirements of the NYSE and the TSX. There is currently no public market for our class A-1 exchangeable shares. We cannot predict the extent to which investor interest will lead to the development of an active and liquid trading market for our class A-1 exchangeable shares or, if such a market develops, whether it will be maintained. We cannot predict the effects on the price of our class A-1 exchangeable shares if a liquid and active trading market for our class A-1 exchangeable shares does not develop. In addition, if such a market does not develop, relatively small sales of our class A-1 exchangeable shares may have a significant negative impact on the price of our class A-1 exchangeable shares. A number of factors, principally factors relating to our company but also including factors specific to Brookfield Reinsurance and Brookfield Corporation and their business, financial condition and liquidity, economic and financial market conditions, interest rates, availability of capital and financing sources, volatility levels and other factors, could lead to a decline in the value of class A-1 exchangeable shares and a lack of liquidity in any market for class A-1 exchangeable shares.

The Brookfield Reinsurance Board of Directors and Brookfield Corporation Board of Directors have not made a recommendation as to whether Brookfield Shareholders should tender their Brookfield Class A Shares under the Offer, and neither Brookfield Reinsurance nor Brookfield Corporation have obtained a third-party determination that the Offer is fair to Brookfield Shareholders.

While both Brookfield Reinsurance and Brookfield Corporation believe that exchanges under the Offer by holders who prefer to invest in Brookfield overall through the ownership of exchangeable shares will be beneficial to Brookfield Reinsurance and Brookfield, the Brookfield Reinsurance Board of Directors and the Brookfield Corporation Board of Directors have not made, and will not make, any recommendation as to whether Brookfield Shareholders should tender their Brookfield Class A Shares under the Offer. Brookfield Reinsurance has not retained and does not intend to retain any unaffiliated representative to act for purposes of making any recommendation concerning the fairness of the Offer to Brookfield Shareholders. Brookfield Corporation is not making a recommendation to Brookfield Shareholders because each class A-1 exchangeable share has been structured with the intention of providing an economic return equivalent to one Brookfield Class A Share and because there are a number of factors specific to each Brookfield Shareholder that will affect a shareholder’s decision as to whether to exchange a Brookfield Class A Share for a class A-1 exchangeable share, including the tax consequences of the exchange under the Offer and the tax attributes of the class A-1 exchangeable shares as compared to Brookfield Class A Shares. Brookfield Shareholders must make their own decisions as to whether to tender Brookfield Class A Shares under the Offer, and, if so, how many Brookfield Class A Shares to tender.

 

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Upon receipt of class A-1 exchangeable shares, you will become a shareholder in Brookfield Reinsurance, which will change some of the rights and privileges that you have as a shareholder of Brookfield Corporation.

Upon receipt of class A-1 exchangeable shares, you will become a shareholder in Brookfield Reinsurance, which will not entitle you to the same rights and privileges you had as a shareholder of Brookfield Corporation. For a detailed discussion of the material differences between the rights of holders of class A-1 exchangeable shares and holders of the Brookfield Class A Shares under the governing documents of our company and Brookfield Corporation, see Section 20 of the Circular, “Comparison of Shareholder Rights”.

As a result of certain regulatory limitations in our bye-laws, certain holders of class A-1 exchangeable shares may be unable to convert their class A-1 exchangeable shares into class A exchangeable shares.

Our bye-laws provide that no holder of our class A-1 exchangeable shares will be permitted to convert its class A-1 exchangeable shares into our class A shares unless the requesting holder has provided satisfactory evidence to us (in our reasonable determination), that either (i) it and its affiliates will not, after giving effect to the conversion, directly or indirectly, beneficially own, control or hold with the power to vote more than 9.9% of our class A exchangeable shares or (ii) it and its affiliates have received all required regulatory approvals and consents or, if applicable, exemptions or waivers, to beneficially own, control or hold with the power to vote more than 9.9% of our class A exchangeable shares (the “Regulatory Condition”). Investing in our class A-1 exchangeable shares and the acceptance of the Offer are subject to this risk and other risks.

Due to the Regulatory Condition in our bye-laws, investors may be limited in their ability to convert their class A-1 exchangeable shares into class A exchangeable shares, which could in effect limit such investors in their ability to vote on matters requiring approval of shareholders of Brookfield Reinsurance.

The class A-1 exchangeable shares generally will have no voting rights.

Except as otherwise required by Bermuda law and other than in the limited circumstances described in this document, holders of class A-1 exchangeable shares generally will have no voting rights. Our class A exchangeable shares and class B shares are the only classes that carry full voting rights. See Section 1 of the Circular, “Information with respect to Brookfield Reinsurance — Description of Our Share Capital — Class A Exchangeable Shares and Class A-1 Exchangeable Shares — Voting Rights of Class A-1 Exchangeable Shares”.

Holders of class A-1 exchangeable shares may be unable to convert their class A-1 exchangeable shares into class A exchangeable shares during certain periods.

Our bye-laws prohibit holders of class A-1 exchangeable shares from converting their class A-1 exchangeable shares into class A exchangeable shares during (i) the calendar month in which quarterly distributions are paid to holders of exchangeable shareholders or (ii) during the period commencing 10 business days prior to a record date for any special dividend or stock distribution and up to and including on the payment date for such dividend (the “Blackout Period”). Any notice given to the transfer agent to exercise the right of conversion on the class A-1 exchangeable shares purported to be delivered to the company during a Blackout Period will be deemed to have been received on the business day immediately following the date on which a Blackout Period expires.

As a result, holders of class A-1 exchangeable shares may be unable to convert their class A-1 exchangeable shares into class A exchangeable shares easily and during a desired time.

 

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Risks Relating to Taxation

General Tax Risks

Our aggregate tax liability and effective tax rate could be adversely affected in the future by changes in the tax laws of the countries in which we operate, including as a result of ongoing efforts by the member countries of the OECD.

We have operations in various countries that have differing tax laws and rates. Our tax reporting is supported by current domestic tax laws in the countries in which we operate and the application of tax treaties between the various countries in which we operate. Our income tax reporting is subject to audit by domestic and foreign authorities. Our effective tax rate may change from year to year based on changes in the mix of activities and income earned among the different jurisdictions in which we operate, changes in tax laws in these jurisdictions, changes in the tax treaties between various countries in which we operate, changes in our eligibility for benefits under those tax treaties, and changes in the estimated values of deferred tax assets and liabilities. Tax laws, regulations, and administrative practices in various jurisdictions may be subject to significant change, with or without notice, due to economic, political, or other conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these taxes. Such changes could result in a substantial increase in our aggregate tax liability and the effective tax rate on all or a portion of our income.

In recent years, the OECD, with the support of the G20, has developed proposals to address perceived base erosion and profit shifting (“BEPS”). BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with low or no tax and little or no economic activity, for the purpose of reducing a multinational group’s aggregate tax liability. In 2021, the OECD/G20 Inclusive Framework on BEPS published a statement updating and finalizing the key components of a “two pillar” plan for global tax reform, as agreed among a number of countries across the globe. Pillar I addresses tax nexus and the allocation of profits for tax purposes. Under Pillar II, a global minimum tax at the rate of 15% would be imposed on certain companies whose revenues exceed a threshold. In December 2022, the member states of the European Union unanimously voted to adopt the OECD’s minimum tax rules and phase them into national law, and in February 2023 the OECD released technical guidance on the global minimum tax which was agreed by consensus of the BEPS 2.0 (Pillars I and II) signatory jurisdictions. Under the European Union’s minimum tax directive, member states are to adopt domestic legislation implementing the minimum tax rules effective for periods beginning on or after December 31, 2023, with the “under-taxed profit rule” to take effect for periods beginning on or after December 31, 2024. Legislatures in multiple countries outside of the European Union have also drafted legislation to implement the OECD’s minimum tax proposal. As a result of these developments, the tax laws of certain countries in which we and our affiliates do business could change on a prospective or retroactive basis, and any such changes, including the adoption of the global minimum tax rules, could have a material adverse effect on our aggregate tax liability and effective tax rate in the future.

Bermuda Tax Risks

Our company could in the future become subject to income tax in Bermuda.

Under current Bermuda law, there is no income, corporate or profits tax or withholding tax, capital gains tax or capital transfer tax payable by the company. The company has applied for and has obtained from the Minister of Finance under The Exempted Undertaking Tax Protection Act 1966, as amended, an assurance that, in the event that Bermuda enacts legislation imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance, then the imposition of any such tax shall not be applicable to the company or to any of its operations or its shares, debentures or other obligations, until March 31, 2035. The company could be subject to taxes in Bermuda after that date. This assurance is subject to the proviso that it is not to be construed so as to prevent the application of any tax or duty to such persons as are ordinarily resident in Bermuda or to prevent the application of any tax payable in accordance with the provisions of the Land Tax Act 1967 or otherwise payable in relation to any property leased to the company. The company pays annual Bermuda government fees, and one or more licensed Bermuda subsidiaries pay annual insurance license fees. In addition, all entities employing individuals in Bermuda are required to pay a payroll tax and there are other sundry taxes payable, directly or indirectly, to the Bermuda government.

 

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Canadian Tax Risks

The exchange of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer, and the exchange of class A-1 exchangeable shares or class A exchangeable shares, as applicable, for Brookfield Class A Shares pursuant to the exercise of the exchange right, will result in a disposition of the Brookfield Class A Shares, class A-1 exchangeable shares or class A exchangeable shares, as applicable, for Canadian federal income tax purposes.

The exchange of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer and the exchange of class A-1 exchangeable shares or class A exchangeable shares, as applicable, for Brookfield Class A Shares pursuant to the exercise of the exchange right will result in a disposition of the Brookfield Class A Shares, class A-1 exchangeable shares or class A exchangeable shares, as applicable, for Canadian federal income tax purposes. Resident Holders (as defined herein) generally will be subject to Canadian federal income tax on any resulting capital gain as further described under “Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders Resident in Canada”. Non-Resident Holders (as defined herein) generally will not be subject to Canadian federal income tax on any resulting capital gain unless the Brookfield Class A Shares or class A-1 exchangeable shares or class A exchangeable shares, as applicable, constitute “taxable Canadian property” (as defined in the Tax Act) of the Non-Resident Holder as further described under “Certain Material Canadian Federal Income Tax Considerations — Taxation of Holders not Resident in Canada”.

Dividends received or deemed to be received by Resident Holders on the class A-1 exchangeable shares or class A exchangeable shares, as applicable, will not be subject to the same Canadian federal income tax treatment as taxable dividends received or deemed to be received by Resident Holders from “taxable Canadian corporations”.

Dividends received (or deemed to be received) on the class A-1 exchangeable shares or class A exchangeable shares, as applicable, by a Resident Holder who is an individual will be included in computing the Resident Holder’s income and will not be subject to the gross-up and dividend tax credit rules normally applicable under the Tax Act to taxable dividends received from “taxable Canadian corporations” (as defined in the Tax Act).

Dividends received on the class A-1 exchangeable shares or class A exchangeable shares, as applicable, by a Resident Holder that is a corporation will be included in computing the corporate Resident Holder’s income and such Resident Holder will not be entitled to the inter-corporate dividend deduction in computing taxable income which generally applies to dividends received from taxable Canadian corporations.

Changes in Canadian federal income tax law might adversely affect our shareholders.

There can be no assurance that Canadian federal income tax laws, the judicial interpretation thereof, or the administrative policies and assessing practices of the CRA will not be changed in a manner that adversely affects our shareholders or Brookfield Corporation, our company or their affiliates. Any such developments may have a material adverse effect on our shareholders or the business, financial condition, and operating results of Brookfield Corporation, our company or any of their affiliates.

There can be no assurance that the class A exchangeable shares, class A-1 exchangeable shares or Brookfield Class A Shares will continue to be qualified investments for Registered Plans.

Our company and Brookfield Corporation, as applicable, will endeavor to ensure that the class A exchangeable shares, class A-1 exchangeable shares and Brookfield Class A Shares, as applicable, continue to be qualified investments for Registered Plans. However, no assurance can be given in this regard. The Tax Act imposes penalties for the acquisition or holding of non-qualified investments by Registered Plans. See Section 15 of the Circular, “Certain Material Canadian Federal Income Tax Considerations — Eligibility for Investment”.

 

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U.S. Tax Risks

The U.S. federal income tax consequences to a U.S. Holder that tenders Brookfield Class A Shares pursuant to the Offer are uncertain.

We intend to treat the class A-1 exchangeable shares as stock of our company for all U.S. federal income tax purposes, in which case a U.S. Holder that tenders Brookfield Class A Shares pursuant to the Offer generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the fair market value of the class A-1 exchangeable shares received pursuant to the Offer and the holder’s adjusted tax basis in the Brookfield Class A Shares exchanged therefor. However, the characterization of the class A-1 exchangeable shares and related rights for U.S. federal income tax purposes is uncertain. It is possible for the class A-1 exchangeable shares to be treated as stock of Brookfield Corporation for U.S. federal income tax purposes, in which case a U.S. Holder that tenders Brookfield Class A Shares pursuant to the Offer generally should not recognize gain or loss for U.S. federal income tax purposes upon the receipt of the class A-1 exchangeable shares. It is also possible for the class A-1 exchangeable shares and related rights to be treated as a derivative financial instrument, in which case the exchange by a U.S. Holder of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer may be treated as a sale of the Brookfield Class A Shares or as a taxable distribution on Brookfield Class A Shares, depending on the circumstances. These uncertain U.S. federal income tax consequences are described in greater detail below under the heading “Certain Material United States Federal Income Tax Considerations — Consequences to U.S. Holders — Exchange of Brookfield Class A Shares Pursuant to the Offer”. U.S. Holders are urged to consult their tax advisers regarding the proper U.S. federal income tax treatment of the exchange of Brookfield Class A Shares for class A-1 exchangeable shares pursuant to the Offer.

The U.S. federal income tax treatment of the class A-1 exchangeable shares is uncertain.

The U.S. federal income tax consequences to U.S. Holders of the ownership and disposition of class A-1 exchangeable shares will depend, in part, on whether the class A-1 exchangeable shares are, for U.S. federal income tax purposes, treated as stock of our company. No authority directly addresses the U.S. federal income tax treatment of a security with terms and related rights similar to the class A-1 exchangeable shares, and therefore the tax treatment of the class A-1 exchangeable shares is uncertain. We intend to treat the class A-1 exchangeable shares as stock of our company for all U.S. federal income tax purposes, including for U.S. federal income tax reporting purposes, and we believe that U.S. Holders have a reasonable basis for taking this position. However, alternative characterizations are possible. For example, the U.S. Internal Revenue Service (“IRS”) or a court might characterize the class A-1 exchangeable shares and related rights as stock of Brookfield Corporation or as a derivative financial instrument, with complex and uncertain tax consequences. No assurance can be provided that the IRS or a court will agree with our position that the class A-1 exchangeable shares constitute stock of our company, and the U.S. federal income tax consequences of an alternative characterization of the class A-1 exchangeable shares could be materially adverse to U.S. Holders, as described in greater detail below under the heading “Certain Material United States Federal Income Tax Considerations — Consequences to U.S. Holders”. U.S. Holders are urged to consult their tax advisers regarding the proper U.S. federal income tax treatment of the class A-1 exchangeable shares.

The U.S. federal income tax consequences to U.S. Holders of the exchange, conversion or redemption of class A-1 exchangeable shares are uncertain.

We intend to treat the class A-1 exchangeable shares as stock of our company for all U.S. federal income tax purposes. In such case, a U.S. Holder that exchanges class A-1 exchangeable shares for Brookfield Class A Shares pursuant to the exercise of the exchange right generally will recognize capital gain or loss for U.S. federal income tax purposes equal to the difference between the fair market value of the Brookfield Class A Shares received (plus the amount of any cash received) and the holder’s adjusted tax basis in the class A-1 exchangeable shares exchanged therefor, a U.S. Holder that converts class A-1 exchangeable shares into class A exchangeable shares pursuant to the exercise of the conversion right may qualify for nonrecognition for U.S. federal income tax

 

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purposes, and the redemption of a U.S. Holder’s class A-1 exchangeable shares by our company generally will be treated with respect to the U.S. Holder either as (i) a sale or exchange eligible for capital gain or loss treatment or (ii) a distribution in respect of class A-1 exchangeable shares, depending on the circumstances. However, it is possible for the class A-1 exchangeable shares to be treated as stock of Brookfield Corporation for U.S. federal income tax purposes. In such case, a U.S. Holder that exchanges class A-1 exchangeable shares for Brookfield Class A Shares generally should not recognize gain or loss for U.S. federal income tax purposes, a U.S. Holder that converts class A-1 exchangeable shares into class A exchangeable shares may recognize gain or loss equal to the difference between the fair market value of the class A exchangeable shares received and the holder’s adjusted tax basis in the class A-1 exchangeable shares so converted, a U.S. Holder whose class A-1 exchangeable shares are redeemed by our company for Brookfield Class A Shares generally will be required to recognize gain or loss equal to the difference between the fair market value of such Brookfield Class A Shares and the holder’s adjusted tax basis in the class A-1 exchangeable shares so redeemed, and our company’s redemption of a U.S. Holder’s class A-1 exchangeable shares for cash generally will be treated with respect to the U.S. Holder either as (i) a sale or exchange eligible for capital gain or loss treatment or (ii) a distribution in respect of class A-1 exchangeable shares, depending on the circumstances. It is also possible for the class A-1 exchangeable shares and related rights to be treated as a derivative financial instrument, in which case the exchange or redemption of a U.S. Holder’s class A-1 exchangeable shares for Brookfield Class A Shares or the conversion by a U.S. Holder of class A-1 exchangeable shares into class A exchangeable shares may be a taxable event giving rise to ordinary income or loss. These uncertain U.S. federal income tax consequences are described in greater detail below under the heading “Certain Material United States Federal Income Tax Considerations — Consequences to U.S. Holders — Ownership and Disposition of Class A-1 Exchangeable Shares Received Pursuant to the Offer”. U.S. Holders are urged to consult their tax advisers regarding the U.S. federal income tax consequences of the exchange, conversion or redemption of class A-1 exchangeable shares.

The U.S. federal income tax treatment of the class A exchangeable shares received upon the exercise of the conversion right is uncertain.

The U.S. federal income tax consequences to U.S. Holders of the ownership and disposition of class A exchangeable shares received upon the exercise of the conversion right depend, in part, on whether the class A exchangeable shares are, for U.S. federal income tax purposes, treated as stock of our company. No authority directly addresses the U.S. federal income tax treatment of a security with terms and related rights similar to the class A exchangeable shares, and therefore the tax treatment of the class A exchangeable shares is uncertain. We treat the class A exchangeable shares as stock of our company for all U.S. federal income tax purposes, but alternative characterizations are possible. For example, the IRS or a court might characterize the class A exchangeable shares and related rights as stock of Brookfield Corporation or as a derivative financial instrument, with complex and uncertain tax consequences. No assurance can be provided that the IRS or a court will agree with our position that the class A exchangeable shares constitute stock of our company, and the U.S. federal income tax consequences of an alternative characterization of the class A exchangeable shares could be materially adverse to U.S. Holders. U.S. Holders are urged to consult their tax advisers regarding the proper U.S. federal income tax treatment of the class A exchangeable shares.

If our company is classified as a passive foreign investment company, U.S. persons who own exchangeable shares could be subject to adverse U.S. federal income tax consequences.

If our company is classified as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, a U.S. Holder who owns exchangeable shares could be subject to adverse tax consequences, including a greater tax liability than might otherwise apply, an interest charge on certain taxes deemed deferred as a result of our company’s non-U.S. status, and additional U.S. tax filing obligations, regardless of the number of exchangeable shares owned.

In general, a non-U.S. corporation will be a PFIC during a taxable year if (i) 75% or more of its gross income constitutes passive income or (ii) 50% or more of its assets produce, or are held for the production of, passive

 

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income. For these purposes, passive income generally includes interest, dividends, and other investment income. However, under an “active insurance” exception, income is not treated as passive if it is derived in the “active conduct” of an insurance business by a “qualifying insurance corporation”. The IRS has issued final and proposed regulations providing guidance on various aspects of the PFIC rules, including the active insurance exception. The proposed regulations will not be effective unless and until they are adopted in final form, although taxpayers generally may rely on the proposed regulations before adoption, provided the proposed regulations are applied consistently.

Based on the current and expected income, assets, and activities of our company, we do not expect our company to be classified as a PFIC for the current taxable year or in the foreseeable future. However, there is significant uncertainty regarding the application of the final and proposed regulations. The IRS has requested comments on several aspects of the proposed regulations governing the active conduct of an insurance business, and it is uncertain when the proposed regulations will be made final or whether the provisions of any final or temporary regulations will vary from the proposed regulations. Moreover, the PFIC determination is made annually at the end of each taxable year and depends on a number of factors, some of which are beyond our company’s control, including the value of our company’s assets and the amount and type of its income. Accordingly, there can be no assurance that our company or any of its non-U.S. subsidiaries will not be classified as PFICs for any taxable year or that the IRS will agree with our company’s belief regarding its PFIC status. U.S. Holders are urged to consult their tax advisers regarding the application of the PFIC rules, including the final and proposed regulations, with respect to their ownership and disposition of exchangeable shares.

If any of our non-U.S. subsidiaries are determined to have related person insurance income, U.S. persons who own exchangeable shares may be subject to U.S. federal income taxation on their pro rata share of such income.

If, for U.S. federal income tax purposes, any non-U.S. subsidiary is treated as recognizing “related person insurance income” (“RPII”) in a taxable year and is also treated for such purposes in such taxable year as a “controlled foreign corporation” (an “RPII CFC”), then each U.S. person that owns exchangeable shares directly or indirectly through non-U.S. entities as of the last day in such taxable year generally must include in gross income its pro rata share of the RPII, determined as if the RPII were distributed proportionately only to all such U.S. persons, regardless of whether that income is distributed (with certain adjustments). A U.S. Holder that is a tax-exempt organization would be required to treat RPII as unrelated business taxable income.

RPII generally is any income of a non-U.S. corporation attributable to insuring or reinsuring risks of a U.S. person that owns (or is treated as owning) stock of such non-U.S. corporation, or risks of a person that is treated as related to such U.S. person for U.S. federal income tax purposes. However, the RPII rules do not apply to income derived from a non-U.S. insurance subsidiary if (i) direct and indirect insureds and persons related to such insureds, whether or not U.S. persons, are treated as owning (directly or indirectly through entities) less than 20% of the voting power and less than 20% of the value of the shares of such non-U.S. insurance subsidiary or (ii) RPII, determined on a gross basis, is less than 20% of the gross insurance income of such non-U.S. insurance subsidiary for the taxable year. In general, our company believes that its non-U.S. insurance subsidiaries are likely to have operated in such a manner as to qualify for at least one of the foregoing exceptions. However, our company does not track the identity of shareholders or persons who are insured by its subsidiaries for this purpose, and therefore our company has made no formal determination as to whether either of the foregoing exceptions applies to any of its non-U.S. subsidiaries.

The IRS has issued proposed regulations providing guidance on certain aspects of the determination of RPII, including RPII arising from insurance coverage of a person related to a U.S. shareholder of a RPII CFC, as well as certain “cross-insurance” arrangements. Although we continue to evaluate the implications of the proposed regulations, we do not expect the proposed regulations, if finalized as proposed, to cause U.S. Holders to be treated as earning RPII.

 

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The application of the RPII rules to U.S. Holders is subject to uncertainty. Accordingly, there can be no assurance that the above RPII rules will not apply or that the IRS will agree with our company’s conclusions regarding the application of the RPII rules. U.S. Holders are urged to consult their tax advisers regarding the application of the RPII rules, including the proposed regulations, with respect to their ownership and disposition of exchangeable shares.

U.S. persons who sell or otherwise dispose of exchangeable shares in a taxable transaction may be required to treat gain as ordinary income for U.S. federal income tax purposes and comply with certain reporting requirements.

In general, if a U.S. person sells or taxably disposes of shares of a non-U.S. corporation that would be taxed under the provisions of the Code, applicable to U.S. insurance companies if it were a U.S. corporation, and the non-U.S. corporation is (or would be but for certain exceptions) treated as an RPII CFC, then any gain realized on the disposition may be recharacterized as a dividend to the extent of the U.S. person’s share of the corporation’s undistributed earnings and profits that were accumulated during the period that the U.S. person owned the shares (possibly whether or not those earnings and profits are attributable to RPII). In addition, the shareholder might be required to comply with certain reporting requirements, regardless of the number of shares owned.

Our company does not directly engage in an insurance or reinsurance business, but it has non-U.S. subsidiaries that do so. Based on the absence of legal authority, there is a strong argument that gain realized upon the disposition of exchangeable shares should not be recharacterized as a dividend for U.S. federal income tax purposes under this special rule, because our company is not directly engaged in the insurance business. However, there can be no assurance that the IRS will not successfully assert that this tax treatment applies in such circumstances and thus may apply to a U.S. Holder who recognizes taxable gain from the sale or other taxable disposition of exchangeable shares. U.S. Holders are urged to consult their tax advisers regarding the application of the foregoing rules to their ownership and disposition of exchangeable shares.

The U.S. federal base erosion and anti-abuse tax may significantly increase our tax liability.

Our U.S. subsidiaries may be subject to the base erosion and anti-abuse tax (the “BEAT”). The BEAT operates as a minimum tax and generally is calculated as a percentage (10% for certain taxable years before 2026 and 12.5% thereafter) of the “modified taxable income” of an “applicable taxpayer”. Modified taxable income is calculated by adding back to a taxpayer’s regular taxable income the amount of certain “base erosion tax benefits” with respect to certain payments made to non-U.S. affiliates, as well as the “base erosion percentage” of any net operating loss deductions. The BEAT applies only to the extent it exceeds a taxpayer’s regular corporate income tax liability (determined without regard to certain tax credits) and only in years in which the “base erosion percentage” exceeds a specified percentage. If applicable in any given year, the BEAT may significantly increase the tax liability of our U.S. subsidiaries for such year.

Our company or our non-U.S. subsidiaries may be subject to U.S. federal income taxation in an amount greater than expected, which could have a material adverse effect on our financial condition and operating results.

Our company and certain of its subsidiaries are treated as foreign corporations under the Code. Any such non-U.S. subsidiary that is considered to be engaged in a trade or business in the United States generally will be subject to U.S. federal income taxation on a net basis on its income that is effectively connected with such U.S. trade or business (including a branch profits tax on the portion of its earnings and profits that is attributable to such income, subject to certain adjustments), unless otherwise provided under an applicable income tax treaty. In addition, a non-U.S. subsidiary generally will be subject to U.S. federal income taxation on a gross basis on certain U.S.-source income, as well as a U.S. federal excise tax on certain premiums earned on insurance with respect to U.S. risks that are not effectively connected with a U.S. trade or business, unless otherwise provided under an applicable income tax treaty.

 

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We expect each of our non-U.S. subsidiaries to operate in a manner that will not cause it to be treated as engaged in a trade or business within the United States or, if applicable under an income tax treaty, as carrying on a business in the United States through a permanent establishment. However, the potential application of the BEAT (discussed above), the complex application of the rules for determining the U.S. federal income tax liability of a corporation under U.S. federal income tax reform legislation signed into law on December 22, 2017 (the “Tax Cuts and Jobs Act”), and other factors, including any future tax legislation, may cause some or all of the non-U.S. subsidiaries to conduct business differently. Moreover, there is considerable uncertainty as to when a foreign corporation is engaged in a trade or business within the United States and as to what constitutes a permanent establishment under the applicable tax treaties.

Based on such uncertainty, there can be no assurance that the IRS will not contend successfully that one or more of our non-U.S. subsidiaries is engaged in a trade or business (or carrying on business through a permanent establishment) in the United States. If one or more of the non-U.S. subsidiaries were treated as engaged in a trade or business (or carrying on business through a permanent establishment) in the United States, then such non-U.S. subsidiaries could be subject to U.S. federal income taxation on the portion of their net income treated as effectively connected with a U.S. trade or business (or their business profits attributable to a U.S. permanent establishment), as well as the U.S. branch profits tax. Any such U.S. federal income taxation could result in substantial tax liabilities and consequently could have a material adverse effect on our business, financial condition, and operating results.

Changes in U.S. tax law might adversely affect us or our shareholders.

The tax treatment of our company and its subsidiaries may be the subject of future U.S. tax legislation. We cannot predict whether any particular proposed legislation will be enacted or, if enacted, what the specific provisions or the effective date of any such legislation would be, or whether it would have any effect on our company or its subsidiaries. No assurance can be provided that future legislative, administrative, or judicial developments will not result in an increase in the amount of U.S. tax payable by our company, its subsidiaries, or shareholders. Any such developments could have a material and adverse effect on shareholders or our business, financial condition, and operating results.

We may become subject to U.S. withholding tax under FATCA.

The Foreign Account Tax Compliance provisions of the Hiring Incentives to Restore Employment Act of 2010 (“FATCA”) impose a 30% withholding tax on “withholdable payments” made to a “foreign financial institution” or a “non-financial foreign entity”, unless such financial institution or entity satisfies certain information reporting or other requirements. Withholdable payments include certain U.S.-source income, such as interest, dividends, and other passive income. We intend to comply with FATCA, so as to ensure that the 30% withholding tax does not apply to any withholdable payments received by our company or any of our non-U.S. subsidiaries. However, no assurance can be provided in this regard. We may become subject to withholding tax or penalties if we are unable to comply with FATCA.

There is U.S. income tax risk associated with reinsurance between U.S. insurance companies and their non-U.S. affiliates.

If a reinsurance agreement is entered into among related parties, the IRS is permitted to reallocate or recharacterize income, deductions, or certain other items, and to make any other adjustment, to reflect the proper amount, source, or character of the taxable income of each of the parties. If the IRS were to successfully challenge our reinsurance arrangements, then our business, financial condition, and operating results could be adversely affected.

 

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Risks Relating to the AEL Acquisition

Failure to complete the AEL Acquisition could negatively impact the future business and financial results of our company.

The closing of the AEL Acquisition is subject to satisfaction or waiver of a number of customary closing conditions, including, among other things, the approval of AEL shareholders and receipt of insurance regulatory approvals in relevant jurisdictions and the expiration or termination of the applicable waiting period (and any extension thereof) under the HSR Act. Although we expect that the AEL Acquisition will close in the first half of 2024, there is no guarantee that the AEL Acquisition will close on such timeline, or at all. If the AEL Acquisition is not completed, the ongoing businesses of our company may be adversely affected and our company will be subject to several risks, including (i) having to pay certain costs relating to the AEL Acquisition, such as legal, accounting, financial advisor, filing, printing and mailing fees; and (ii) the focus of management teams on the AEL Acquisition instead of on pursuing other opportunities that could be beneficial; in each case, without realizing any of the benefits of having the AEL Acquisition completed. In addition, if the AEL Acquisition is not completed, our company may experience negative reactions from the financial markets and from regulators, rating agencies, prospective customers and counterparties and other insurance industry participants. If the AEL Acquisition is not completed, these risks may still materialize and may adversely affect the business, financial results and stock prices of our company.

Following the AEL Acquisition, we may not realize the anticipated benefits of the AEL Acquisition.

Even if we are successful in closing the AEL Acquisition, we may fail to realize some or all of the anticipated benefits of the AEL Acquisition, including as a result of potential unknown liabilities and expenses within the business that were not identified by us during due diligence, or because of changes in our business or the business or industry of AEL between the time we entered into the AEL Merger Agreement and closing of the AEL Acquisition. Furthermore, following the AEL Acquisition, the size and complexity of our business will increase significantly, and we may be exposed to additional risk factors that we are not exposed to through our existing business, including risks relating to AEL’s business. Our future success depends, in part, upon our ability to manage our expanded business, and mitigate such risk factors, which may pose substantial challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity.

 

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OFFER TO EXCHANGE

TO: THE HOLDERS OF CLASS A LIMITED VOTING SHARES OF BROOKFIELD CORPORATION

The accompanying materials contain important information and should be read carefully before making a decision in respect of the Offer and the Circular, which is incorporated into and forms part of the Offer.

 

1.

The Offer

Brookfield Reinsurance invites Brookfield Shareholders to tender for exchange some or all of their Brookfield Class A Shares for newly-issued class A-1 exchangeable shares of Brookfield Reinsurance on the terms and subject to the conditions set forth in the Offer to Exchange, the Circular and the related Letter of Transmittal and the Notice of Guaranteed Delivery. Under applicable U.S. securities laws, Brookfield Corporation may also be deemed an offeror with respect to the Offer because the class A-1 exchangeable shares are exchangeable for Brookfield Class A Shares and the Brookfield Class A Shares acquired in the Offer may be returned to Brookfield Corporation in certain circumstances. See Section 10 of the Offer, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.

Brookfield Reinsurance was incorporated on December 10, 2020 under the Bermuda Act as an exempted company limited by shares. Our company operates a leading capital solutions business providing insurance and reinsurance services to individuals and institutions. Through our operating subsidiaries, we offer a broad range of insurance products and services to individuals and institutions, including life insurance and annuities and personal and commercial property and casualty insurance. In doing so, we seek to match our liabilities with a portfolio of high-quality investments in order to generate attractive, risk-adjusted returns within our business. We leverage our relationship with Brookfield in order to opportunistically source new business and deploy our capital in assets that are tailored to our investment needs. Our relationship with Brookfield provides us with access to a diverse mix of leading alternative investment strategies that we believe are well-suited for this purpose. For more information on Brookfield Reinsurance, see Item 4.A of Brookfield Reinsurance’s Annual Report, “History and Development of the Company”.

Brookfield Reinsurance operates a leading capital solutions business providing insurance and reinsurance services to individuals and institutions. The purpose of the Offer is to increase the equity base and market capitalization of Brookfield Reinsurance to reflect the size and diversity of its operations, which have increased significantly since its formation as a result of organic and inorganic growth. We also believe that an increased equity base and market capitalization will provide a more liquid market for the exchangeable shares, which in turn will position Brookfield Reinsurance for future growth.

We refer to Brookfield Reinsurance as a “paired entity” to Brookfield Corporation, which enables the Offer to be structured so that the equity base and market capitalization of Brookfield Reinsurance can be enhanced without any dilution to Brookfield Shareholders. However, while the exchangeable shares provide Brookfield Shareholders the opportunity to hold their interest in overall Brookfield through the ownership of exchangeable shares, Brookfield Corporation and Brookfield Reinsurance are distinct legal entities and there are differences between the rights and privileges of holders of Brookfield Class A Shares and holders of our exchangeable shares. These differences may result in certain investors preferring to hold our exchangeable shares because Canadian and U.S. investors will have the opportunity to receive returns of capital instead of taxable dividends and non-Canadian investors would have the ability to receive distributions without the imposition of withholding tax. For a discussion of such differences under the governing documents of our company and Brookfield Corporation and laws of their respective jurisdictions of formation see Section 20 of the Circular, “Comparison of Shareholder Rights”. See also Section 14 of the Circular “Certain Material Canadian Federal Income Tax Considerations” and Section 15 of the Circular “Certain Material United States Federal Income Tax Considerations”.

The Offer also provides Brookfield Shareholders with an alternative, efficient means through which to hold an interest in overall Brookfield. While each class A-1 exchangeable share is exchangeable for a Brookfield Class A

 

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Share on a one-for-one basis, Brookfield Class A Shares are not by their terms exchangeable for class A-1 exchangeable shares. As described above, the Offer therefore provides an important opportunity for holders of Brookfield Class A Shares that would prefer to hold more of their interest in overall Brookfield through the ownership of exchangeable shares of Brookfield Reinsurance, which represents an alternative security through which to hold an interest in Brookfield Corporation. Following the completion of the Offer, it is expected that the Brookfield Class A Shares tendered in the Offer will either be returned to Brookfield Corporation for cancellation or, subject to applicable law and regulatory requirements, retained by Brookfield Reinsurance. The class A-1 exchangeable shares being offered are non-voting in order to address, among other things, certain insurance regulations applicable to Brookfield Reinsurance, which generally prohibit any person from owning more than 10% of the voting shares of our company without having received the requisite regulatory approvals. Following the Offer, investors who desire to do so will have the right to exchange their class A-1 exchangeable shares into Brookfield Class A Shares or convert their class A-1 exchangeable shares into class A exchangeable shares on a one-for-one basis, provided that no holder will be permitted to convert their class A-1 exchangeable shares, and our company will not effect any conversions of class A-1 exchangeable shares, into class A exchangeable shares unless the requesting holder has provided evidence satisfactory to the company that such holder or its affiliate either (i) will not, after giving effect to the conversion, have control or direction over more than 9.9% of the outstanding class A exchangeable shares or (ii) has received all necessary regulatory approval to obtain more than 9.9% of the class A exchangeable shares, as determined by our company acting reasonably. See Section 1 of the Circular, “Information with respect to Brookfield Reinsurance — Description of Our Share Capital”, Section 5 of the Circular, “Purpose of and Background to the Offer” and Section 10 of the Offer, “Taking Up and Exchange of Tendered Brookfield Class A Shares”.

The Offer will commence on October 11, 2023 and expire at the Expiration Time, unless terminated, extended, varied or changed by Brookfield Reinsurance. Subject to applicable law, Brookfield Reinsurance may, in its sole discretion, extend the period of time during which the Offer will remain open. In the event of an extension, the term “Expiration Time” will refer to the latest time and date at which the Offer, as so extended, will expire.

The Offer is subject to a number of conditions, including the Listing Condition. Brookfield Reinsurance, subject to applicable law, reserves the right to terminate the Offer and not take up and exchange any Brookfield Class A Shares tendered in the Offer if the conditions to the Offer are not satisfied or, where permitted, waived. Brookfield Reinsurance may not waive the Listing Condition. See Section 8 of the Offer to Exchange, “Conditions to the Offer”.

Under the Offer, each Brookfield Shareholder who has properly tendered Brookfield Class A Shares, and who has not properly withdrawn such Brookfield Class A Shares, will receive one class A-1 exchangeable share for each Brookfield Class A Share tendered, on the terms and subject to the conditions of the Offer, including the provisions relating to pro-ration upon over subscription of the Offer as described herein.

The Depositary will return all Brookfield Class A Shares not exchanged under the Offer (including Brookfield Class A Shares not exchanged because of pro-ration, improper tenders, or Brookfield Class A Shares not taken up due to the termination of the Offer), or properly withdrawn before the Expiration Time, promptly after the Expiration Time or termination of the Offer, or the date of withdrawal of the Brookfield Class A Shares, in any case without expense to the tendering Brookfield Shareholders.

Each of the Brookfield Reinsurance Board of Directors and the Brookfield Corporation Board of Directors has approved the Offer. While both Brookfield Reinsurance and Brookfield Corporation believe that exchanges under the Offer by holders who prefer to invest in Brookfield overall through the ownership of exchangeable shares will be beneficial to Brookfield Reinsurance and Brookfield, neither of Brookfield Reinsurance, Brookfield Corporation or their respective affiliates, the Brookfield Reinsurance Board of Directors, the Brookfield Corporation Board of Directors or the Depositary makes any recommendation to you or to any other Brookfield Shareholders as to whether to tender or refrain from tendering Brookfield Class A Shares under the Offer. Because the Offer relates to approximately 2.44% of the Brookfield Class A Shares, and Brookfield

 

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Reinsurance currently does not beneficially own any Brookfield Class A Shares, no directors’ circular or Schedule 14D-9 from the Brookfield Corporation Board of Directors with respect to the Offer will be sent to Brookfield Shareholders. Although supportive of the Offer, Brookfield Corporation is not making any recommendation to Brookfield Shareholders because each class A-1 exchangeable share has been structured with the intention of providing an economic return equivalent to one Brookfield Class A Share and because there are a number of factors specific to each Brookfield Shareholder that will affect a shareholder’s decision as to whether to tender their Brookfield Class A Shares pursuant to the Offer. You must make your own decisions as to whether to tender Brookfield Class A Shares under the Offer, and, if so, how many Brookfield Class A Shares to tender.

Although Brookfield Corporation is not making a recommendation to Brookfield Shareholders, it believes that the Offer is attractive to Brookfield Shareholders because the Offer provides shareholders with an opportunity, at their option, to increase their ownership of exchangeable shares of Brookfield Reinsurance. Although the exchange of Brookfield Class A Shares for class A-1 exchangeable shares in the Offer is itself a taxable event, the Offer provides Canadian and U.S. investors with the opportunity to receive returns of capital on the class A-1 exchangeable shares (instead of, in the case of the Brookfield Class A Shares, taxable dividends) and provides non-Canadian investors with the ability to receive distributions on their exchangeable shares without the imposition of withholding tax. Brookfield Shareholders should carefully consider all relevant factors with their own financial advisers, including the income tax consequences of the Offer, of tendering their Brookfield Class A Shares pursuant to the Offer and of holding our exchangeable shares. See Section 14 of the Circular, “Certain Material United States Federal Income Tax Considerations” and Section 15 of the Circular, “Certain Material Canadian Federal Income Tax Considerations”.

The Offer is being made only for Brookfield Class A Shares and not for any Other Securities. Any holder of Other Securities who wishes to accept the Offer must exercise the rights under such Other Securities in order to acquire Brookfield Class A Shares and then tender those Brookfield Class A Shares to the Offer.

The Offer to Exchange and related Letter of Transmittal and Notice of Guaranteed Delivery contain important information and should be read carefully and in their entirety before making a decision with respect to the Offer.

Each Brookfield Shareholder who has properly tendered Brookfield Class A Shares and who has not properly withdrawn such Brookfield Class A Shares will be entitled to receive one class A-1 exchangeable share subject to proration as described below.

 

2.	Dissent/Appraisal Rights

The Offer does not create any right of a Brookfield Shareholder to dissent in respect of any transaction or to make an application to receive the fair value of the Brookfield Class A Shares.

 

3.	Number of Brookfield Class A Shares and Pro-Ration of Tenders

As of September 29, 2023, there were 10,450,952 class A exchangeable shares and 1,638,679,807 Brookfield Class A Shares issued and outstanding. The maximum of 40,000,000 Brookfield Class A Shares that Brookfield Reinsurance is offering to exchange pursuant to the Offer represents 2.44% of the total number of 1,638,679,807 Brookfield Class A Shares issued and outstanding as of September 29, 2023. Assuming the Offer is fully subscribed and assuming that the Brookfield Class A Shares tendered for exchange will be returned by Brookfield Reinsurance to Brookfield Corporation, and subsequently cancelled by Brookfield Corporation, after giving effect to the Offer, there will be 10,450,952 class A exchangeable shares, 40,000,000 class A-1 exchangeable shares and 1,598,679,807 Brookfield Class A Shares issued and outstanding.

If, at the Expiration Time, the aggregate number of Brookfield Class A Shares properly tendered and not properly withdrawn does not exceed 40,000,000, Brookfield Reinsurance will, upon the terms and subject to the conditions of the Offer, exchange one Brookfield Class A Shares tendered for one class A-1 exchangeable shares.

 

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If, at the Expiration Time, the aggregate number of Brookfield Class A Shares properly tendered and not properly withdrawn exceeds 40,000,000, Brookfield Reinsurance will accept 40,000,000 Brookfield Class A Shares for exchange on a pro rata basis according to the total number of Brookfield Class A Shares tendered. Brookfield Reinsurance’s determination as to pro-ration will be final and binding on all parties.

Brookfield Reinsurance will not take up or deliver any fractional shares in connection with the Offer. If necessary to avoid the creation of a fractional share, the number of Brookfield Class A Shares to be acquired from a registered holder will be rounded down to the closest whole number, and the remaining whole number of Brookfield Class A Shares not acquired will be returned to the tendering Brookfield Shareholders.

 

4.	Announcement of the Results of the Offer

Brookfield Reinsurance will publicly announce the results of the Offer, including the number of Brookfield Class A Shares validly tendered in the Offer, promptly after the Expiration Time.

 

5.	Procedure for Tendering Brookfield Class A Shares

Proper Tender of Brookfield Class A Shares

To tender Brookfield Class A Shares pursuant to the Offer, (i) all tendered Brookfield Class A Shares in proper form for transfer (including original share certificates, if such Brookfield Class A Shares are held in certificated form, or DRS positions), together with a properly completed and duly executed Letter of Transmittal (or a manually executed photocopy thereof) relating to such Brookfield Class A Shares with signatures that are guaranteed if so required in accordance with the Letter of Transmittal, and any other documents required by the Letter of Transmittal must be received by the Depositary at the address listed in the Letter of Transmittal prior to the Expiration Time, (ii) the guaranteed delivery procedure described below must be followed, or (iii) such Brookfield Class A Shares must be transferred pursuant to the procedures for book entry transfer described below (and a Book-Entry Confirmation through the CDSX system (in the case of Brookfield Class A Shares held by CDS) or an Agent’s Message (in the case of Brookfield Class A Shares held in DTC) must be received by the Depositary in lieu of a Letter of Transmittal). For greater certainty, Brookfield Shareholders whose Brookfield Class A Shares are held through DRS (or represented by an ownership statement must only deliver a completed and duly executed Letter of Transmittal), and any other documents required by the Letter of Transmittal, in order to validly tender Brookfield Class A Shares.

In accordance with Instruction 4 in the Letter of Transmittal or the Book-Entry Confirmation or Agent’s Message in lieu thereof, each Brookfield Shareholder desiring to deposit Brookfield Class A Shares pursuant to the Offer should indicate the number of Brookfield Class A Shares such Brookfield Shareholder desires to tender.

If your Brookfield Class A Shares are held through a broker, dealer, commercial bank, trust company or other nominee, you must request that your broker, dealer, commercial bank, trust company or other nominee tender your Brookfield Class A Shares for you. If your Brookfield Class A Shares are so held, you should immediately contact such nominee in order to take the necessary steps to be able to tender such Brookfield Class A Shares under the Offer. In addition, it is likely that such broker, dealer, commercial bank, trust company or other nominee has an earlier deadline, for administrative reasons, for you to act to instruct such nominee to tender Brookfield Class A Shares on your behalf. We urge you to contact your broker, dealer, commercial bank, trust company or other nominee to confirm any earlier deadline.

Participants of CDS and DTC should contact CDS or DTC, as applicable, to obtain instructions with respect to the tender of Brookfield Class A Shares under the Offer. All CDS and DTC participants should tender Brookfield Class A Shares at the beneficial shareholder level. For example, a CDS or DTC participant tendering Brookfield Class A Shares on behalf of three beneficial shareholders should complete three separate tenders, one for each beneficial shareholder.

 

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Signature Guarantees

No signature guarantee is required on the Letter of Transmittal if either (i) the Letter of Transmittal is signed by the registered holder of the Brookfield Class A Shares exactly as the name of the registered holder appears on the DRS position, ownership statement or Brookfield Class A Share certificate tendered therewith, and payment and delivery are to be made directly to such registered holder, or (ii) Brookfield Class A Shares are tendered for the account of an Eligible Institution. Members of these programs are usually members of a recognized stock exchange in Canada or the United States, members of the Investment Dealers Association of Canada, members of the Financial Industry Regulatory Authority or banks and trust companies in the United States. In all other cases, all signatures on the Letter of Transmittal must be guaranteed by an Eligible Institution. See Instruction 1 in the related Letter of Transmittal.

If a certificate, ownership statement or DRS position representing Brookfield Class A Shares is registered in the name of a person other than the signatory to a related Letter of Transmittal, or if payment is to be made, or certificates, ownership statements or DRS positions representing Brookfield Class A Shares not exchanged or tendered are to be issued to a person other than the registered holder, the certificate, ownership statement or DRS position must be endorsed or accompanied by an appropriate stock power, in either case, signed exactly as the name of the registered holder appears on the certificate, DRS position or ownership statement with the signature on the certificate or stock power signature guaranteed by an Eligible Institution.

Book-Entry Transfer Procedures – CDS

Any financial institution that is a participant in CDS may make book-entry delivery of the Brookfield Class A Shares through CDSX by causing CDS to deliver such Brookfield Class A Shares to the Depositary in accordance with the applicable CDS procedures. Delivery of Brookfield Class A Shares to the Depositary by means of book-entry through CDSX will constitute a valid tender under the Offer.

Brookfield Shareholders may accept the Offer by following the procedures for a book-entry transfer of Brookfield Class A Shares established by CDS, provided that a Book-Entry Confirmation through CDSX is received by the Depositary at its office in Toronto, Ontario prior to the Expiration Time in connection with the tender of such Brookfield Class A Shares. Brookfield Shareholders, through their respective CDS participants, who utilize CDSX to accept the Offer via book-entry of their holdings with CDS, shall be deemed to have completed and submitted a Letter of Transmittal and to be bound by the terms thereof and therefore such instructions received by the Depositary are considered to be a valid tender in accordance with the terms of the Offer. Delivery of documents to CDS does not constitute delivery to the Depositary.

Book-Entry Transfer Procedures – DTC

The Depositary may establish an account with respect to the Brookfield Class A Shares at DTC for purposes of the Offer. Any financial institution that is a participant in DTC may make book-entry delivery of the Brookfield Class A Shares by causing DTC to transfer such Brookfield Class A Shares into the Depositary’s account in accordance with DTC procedures for such transfer. Although delivery of the Brookfield Class A Shares may be effected under the Offer through book-entry transfer into the Depositary’s account at DTC, the related Letter of Transmittal (or a manually signed photocopy thereof) with any required signature guarantees, or (in the case of a book-entry transfer) an Agent’s Message in lieu of the related Letter of Transmittal and any other required documents must, in any case, be transmitted to and received by the Depositary at its Toronto, Ontario office address set forth on the back cover page of the Offer to Exchange and the Circular prior to the Expiration Time in connection with the tender of such Brookfield Class A Shares. Delivery of documents to DTC does not constitute delivery to the Depositary.

Brookfield Shareholders who are tendering by book-entry transfer to the Depositary’s account at DTC may execute their tender through DTC’s ATOP by transmitting their acceptance to DTC in accordance with DTC’s

 

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ATOP procedures. DTC will then verify the acceptance, execute a book-entry delivery to the Depositary’s account at DTC and send an Agent’s Message to the Depositary. Delivery of the Agent’s Message by DTC will satisfy the terms of the Offer in lieu of execution and delivery of a Letter of Transmittal by the participant identified in the Agent’s Message. Accordingly, the Letter of Transmittal need not be completed by a Brookfield Shareholder tendering through ATOP.

Method of Delivery

The method of delivery of certificates representing Brookfield Class A Shares and all other required documents is at the option and sole risk of the tendering Brookfield Shareholder. If certificates representing Brookfield Class A Shares are to be sent by mail, registered mail that is properly insured is recommended and it is suggested that the mailing be made sufficiently in advance of the Expiration Time to permit delivery to the Depositary prior to such time. Delivery of a certificate representing Brookfield Class A Shares will only be deemed to occur upon actual receipt by the Depositary of such certificate.

Procedure for Guaranteed Delivery

If a Brookfield Shareholder wishes to tender Brookfield Class A Shares pursuant to the Offer and cannot deliver certificates for such Brookfield Class A Shares, or time will not permit all required documents to reach the Depositary prior to the Expiration Time, or the procedures for book-entry transfer cannot be completed on a timely basis, such Brookfield Class A Shares may nevertheless be tendered if all of the following conditions are met:

 

(a)

such tender is made by or through an Eligible Institution;

 

(b)

a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by Brookfield Reinsurance with the Offer to Exchange, including (where required) a signature guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery is received by the Depositary, at its office in Toronto, Ontario prior to the Expiration Time; and

 

(c)

all tendered Brookfield Class A Shares (including original Brookfield Class A Share certificates, if such Brookfield Class A Shares are held in certificated form) in proper form for transfer, together with a properly completed and duly executed related Letter of Transmittal (or a manually executed photocopy thereof), or, in the case of a book-entry transfer, a Book-Entry Confirmation (in the case of Brookfield Class A Shares held in CDS) or Agent’s Message (in the case of Brookfield Class A Shares held in DTC), with signatures that are guaranteed if so required in accordance with the Letter of Transmittal, and any other documents required by the Letter of Transmittal, are received by the Toronto, Ontario office of the Depositary, before 5:00 p.m. (Eastern time) on or before the second trading day on the TSX and the NYSE after the Expiration Time.

The Notice of Guaranteed Delivery may be hand delivered, couriered, mailed or transmitted by e-mail transmission to the Toronto, Ontario office of the Depositary listed in the Notice of Guaranteed Delivery, and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, the exchange of Brookfield Class A Shares tendered and accepted for exchange pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates for such Brookfield Class A Shares (if such Brookfield Class A Shares are held in certificated form), (ii) a properly completed and duly executed related Letter of Transmittal (or a manually executed photocopy thereof) relating to such Brookfield Class A Shares, with signatures that are guaranteed if so required, (iii) in the case of a book-entry transfer, a Book-Entry Confirmation or Agent’s Message, and (iv) any other documents required by the Letter of Transmittal.

The tender information specified in a Notice of Guaranteed Delivery by a person completing such Notice of Guaranteed Delivery will, in all circumstances, take precedence over the tender information that is specified in the related Letter of Transmittal that is subsequently delivered.

 

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Return of Unexchanged Brookfield Class A Shares

Certificates or DRS positions for all Brookfield Class A Shares not exchanged under the Offer (including Brookfield Class A Shares not exchanged because of pro-ration, improper tenders or Brookfield Class A Shares not taken up due to termination of the Offer), or properly withdrawn before the Expiration Time, will be returned (in the case of certificates or DRS positions representing Brookfield Class A Shares all of which are not exchanged) or replaced with new certificates or DRS positions representing the balance of Brookfield Class A Shares not exchanged (in the case of certificates or DRS positions representing Brookfield Class A Shares of which less than all are exchanged), promptly after the Expiration Time or the date of withdrawal of the Brookfield Class A Shares, without expense to the Brookfield Shareholder. In the case of Brookfield Class A Shares tendered through book-entry transfer into the Depositary’s account at DTC or CDS, the Brookfield Class A Shares will be credited to the appropriate account maintained by the tendering Brookfield Shareholder at DTC or CDS, as applicable, without expense to the Brookfield Shareholder.

Determination of Validity, Rejection; Waiver of Defects; No Obligation to Give Notice of Defect

All questions as to the number of Brookfield Class A Shares to be taken up and exchanged, the number of Shares to be paid in consideration thereof, the form of documents and the validity, eligibility (including time of receipt) and acceptance for payment of any tender of Brookfield Class A Shares will be determined by Brookfield Reinsurance, in its sole discretion, which determination will be final and binding on all parties, except as otherwise finally determined in a subsequent judicial proceeding in a court of competent jurisdiction or as required by law. Brookfield Reinsurance reserves the absolute right to reject any or all tenders of Brookfield Class A Shares determined by them in its sole discretion not to be in proper form or not completed in accordance with the instructions set forth herein and in the related Letter of Transmittal or the acceptance for payment of, or payment for, which may, in the opinion of Brookfield Reinsurance’s counsel, be unlawful. Brookfield Reinsurance also reserves the absolute right to waive any defect or irregularity in the tender of any particular Brookfield Class A Shares, in each case prior to the Expiration Time. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as Brookfield Reinsurance shall determine. No individual tender of Brookfield Class A Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Brookfield Reinsurance will not be liable for failure to waive any condition of the Offer or any defect or irregularity in any tender of Brookfield Class A Shares. None of Brookfield Reinsurance, Brookfield Corporation, the Depositary or any other person will be obligated to give notice of defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notice. Brookfield Reinsurance’s interpretation of the terms and conditions of the Offer (including the related Letter of Transmittal and the Notice of Guaranteed Delivery) will be final and binding, except as otherwise finally determined in a subsequent judicial proceeding in a court of competent jurisdiction or as required by law. Under the Support Agreement, Brookfield Corporation has the right to consent to any issuance of exchangeable shares. Brookfield Corporation has consented to the issuance of class A-1 exchangeable shares (which are convertible into class A exchangeable shares and exchangeable into Brookfield Class A Shares), and has approved the making of the Offer, and has no further consent rights relating to the making or conduct of the Offer. Brookfield Corporation has also approved the creation and issuance of the Brookfield Class A Shares issuable on exchange of the class A-1 exchangeable shares (including any exchange of class A exchangeable shares issuable on conversion of the class A-1 exchangeable shares).

Formation of Agreement; Prohibition on “Short” Tenders

A tender of Brookfield Class A Shares under any of the procedures described above will constitute a binding agreement between the tendering Brookfield Shareholder and Brookfield Reinsurance, effective as of the Expiration Time, upon the terms and conditions of the Offer. In addition, a tender of Brookfield Class A Shares to Brookfield Reinsurance pursuant to any procedures described herein will constitute a representation by such Brookfield Shareholder that (i) such Brookfield Shareholder has a “net long position” in the Brookfield Class A Shares being tendered or equivalent securities at least equal to the Brookfield Class A Shares tendered within the

 

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meaning of Rule 14e-4 under the Exchange Act and (ii) the tender of such Brookfield Class A Shares complies in all respects with Rule 14e-4. It is a violation of Rule 14e-4 for a person (acting alone or in concert with others), directly or indirectly, to tender Brookfield Class A Shares for that person’s own account unless, at the time of tender and at the end of the pro-ration period or period during which Brookfield Class A Shares are accepted by lot (including any extensions thereof), the person so tendering has a net long position equal to or greater than the amount of (A) Brookfield Class A Shares tendered, or (B) other securities immediately convertible into, or exchangeable or exercisable for, the amount of the Brookfield Class A Shares tendered, and upon acceptance of such person’s tender, will acquire such Brookfield Class A Shares for tender by conversion, exchange or exercise of such other securities, and will deliver or cause to be delivered the Brookfield Class A Shares within the period specified in, and in accordance with the terms of, the Offer. Rule 14e-4 provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.

Lost or Destroyed Certificates

If any certificate representing Brookfield Class A Shares has been lost or destroyed, the Brookfield Shareholder should promptly notify the Depositary at the phone number or address set forth on the back cover page of the Offer to Exchange and the Circular. The related Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost or destroyed certificates have been followed. Brookfield Shareholders are requested to contract the Depositary immediately in order to permit timely processing of this documentation.

 

6.	Return of Tendered Brookfield Class A Shares

Certificates or DRS positions for all Brookfield Class A Shares not exchanged under the Offer (including Brookfield Class A Shares not exchanged because of pro-ration, improper tenders or Brookfield Class A Shares not taken up due to termination of the Offer), or properly withdrawn before the Expiration Time, will be returned (in the case of certificates or DRS positions representing Brookfield Class A Shares all of which are not exchanged) or replaced with new certificates or DRS positions representing the balance of Brookfield Class A Shares not exchanged (in the case of certificates or DRS positions representing Brookfield Class A Shares of which less than all are exchanged), promptly after the Expiration Time or the date of withdrawal of the Brookfield Class A Shares, without expense to the Brookfield Shareholder. In the case of Brookfield Class A Shares tendered through book-entry transfer into the Depositary’s account at DTC or CDS, the Brookfield Class A Shares will be credited to the appropriate account maintained by the tendering Brookfield Shareholder at DTC or CDS, as applicable, without expense to the Brookfield Shareholder.

Brookfield Reinsurance reserves the right, in its sole discretion, subject to applicable securities laws, to delay taking up or exchanging any Brookfield Class A Shares or to terminate the Offer and not take up or exchange any Brookfield Class A Shares if any event specified under Section 8 “Conditions to the Offer” of the Offer to Exchange occurs on or prior to the Expiration Time, by giving written notice thereof or other communication confirmed in writing to the Depositary. Brookfield Reinsurance also reserves the right, in its sole discretion and notwithstanding any other condition of the Offer, to delay taking up and exchanging Brookfield Class A Shares in order to comply, in whole or in part, with any applicable law.

 

7.	Withdrawal Rights

Except as otherwise provided in this Section 7, “Withdrawal Rights”, tenders of Brookfield Class A Shares pursuant to the Offer will be irrevocable. Brookfield Class A Shares tendered in the Offer may be withdrawn by the Brookfield Shareholder:

 

(a)

at any time prior to the Expiration Time;

 

(b)

at any time before the Brookfield Class A Shares have been taken up by Brookfield Reinsurance;

 

(c)

if the Brookfield Class A Shares have not been exchanged for class A-1 exchangeable shares by Brookfield Reinsurance within three business days of being taken up;

 

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(d)

at any time before the expiration of 10 days from the date that a notice of change or notice of variation has been given in accordance with the Offer to Exchange consists solely of the waiver of a condition of the Offer (which 10-day period may be extended to 10 business days where required under U.S. securities laws). See Section 9 of the Offer to Exchange, “Extension of the Expiration Time, Variation or Change of the Offer”; and

 

(e)

if Brookfield Reinsurance has not accepted tendered Brookfield Class A Shares for exchange by December 7, 2023, which is 40 business days after commencement of the Offer.

For a withdrawal to be effective, a written or printed copy of a notice of withdrawal must be actually received by the Depositary by the applicable date specified above at the place of deposit of the relevant Shares. Any such notice of withdrawal must be signed by or on behalf of the person who signed the Letter of Transmittal or Notice of Guaranteed Delivery in respect of the Brookfield Class A Shares being withdrawn or, in the case of Brookfield Class A Shares tendered by a CDS participant, be signed by such participant in the same manner as the participant’s name is listed on the applicable Book-Entry Confirmation through the CDSX system or, in the case of Brookfield Class A Shares tendered by a DTC participant, be signed by such participant in the same manner as the participant’s name is listed on the applicable Agent’s Message, and must specify the name of the person who tendered the Brookfield Class A Shares to be withdrawn, the name of the registered holder, if different from that of the person who tendered such Brookfield Class A Shares, and the number of Brookfield Class A Shares to be withdrawn. If the certificates for the Brookfield Class A Shares tendered in the Offer have been delivered or otherwise identified to the Depositary, then, prior to the release of such certificates, the tendering Brookfield Shareholder must submit the serial numbers shown on the particular certificates evidencing the Brookfield Class A Shares to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 5 of the Offer to Exchange, “Procedure for Tendering Brookfield Class A Shares”), except in the case of Brookfield Class A Shares tendered by an Eligible Institution. A withdrawal of Brookfield Class A Shares tendered in the Offer may only be accomplished in accordance with the foregoing procedure. The withdrawal will take effect only upon actual receipt by the Depositary of a written or printed copy of a properly completed and executed notice of withdrawal.

A Brookfield Shareholder who wishes to withdraw Brookfield Class A Shares tendered in the Offer and who holds Brookfield Class A Shares through a broker, dealer, commercial bank, trust company or other nominee should immediately contact such broker, dealer, commercial bank, trust company or other nominee in order to take the necessary steps to be able to withdraw such Brookfield Class A Shares under the Offer. Please be advised that such nominees may have their own deadlines relating to the withdrawal of your Brookfield Class A Shares that differ from those set out in the Offer to Exchange. We recommend that you contact your nominee to find out its deadline.

Participants of CDS and DTC should contact CDS or DTC, as applicable, with respect to the withdrawal of Brookfield Class A Shares under the Offer.

All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by Brookfield Reinsurance, in its sole discretion, which determination shall be final and binding, except as otherwise finally determined in a subsequent judicial proceeding in a court of competent jurisdiction or as required by law. None of Brookfield Reinsurance, Brookfield Corporation, the Depositary nor any other person will be obligated to give notice of defects or irregularities in notices of withdrawal, nor shall any of them incur any liability for failure to give any such notice.

Any Brookfield Class A Shares properly withdrawn will thereafter be deemed not tendered for purposes of the Offer. However, withdrawn Brookfield Class A Shares may be re-tendered prior to the Expiration Time by again following the procedures described in Section 5 of the Offer to Exchange, “Procedure for Tendering Brookfield Class A Shares”.

 

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If Brookfield Reinsurance extends the period of time during which the Offer is open or if Brookfield Reinsurance is delayed in its exchange of Brookfield Class A Shares or is unable to exchange Brookfield Class A Shares pursuant to the Offer for any reason, then, without prejudice to Brookfield Reinsurance’s rights under the Offer, the Depositary may, subject to applicable law, retain on behalf of Brookfield Reinsurance all tendered Brookfield Class A Shares. Such retention is limited by Rule 13e-4(f)(5) promulgated under the Exchange Act, which requires that Brookfield Reinsurance must pay the consideration offered or return the Brookfield Class A Shares tendered promptly after termination or withdrawal of the Offer. In the event of such retention, such Brookfield Class A Shares may not be withdrawn except to the extent tendering Brookfield Shareholders are entitled to withdrawal rights as described in this Section 7, or pursuant to applicable law.

 

8.	Conditions to the Offer

Notwithstanding any other provision of the Offer, but subject to applicable law, including Rules 14e-1(c) and 13e-4(f)(5) under the Exchange Act, and in addition to (and not in limitation of) Brookfield Reinsurance’s right to extend, vary or change the Offer pursuant to Section 9 of the Offer, “Extension of the Expiration Time, Variation or Change of the Offer”, Brookfield Reinsurance will not be required to accept for exchange or exchange any Brookfield Class A Shares and may withdraw, terminate, cancel or amend the Offer or extend the period of time during which the Offer is open if, at any time before the Expiration Time, any of the following events will have occurred (or will have been determined by Brookfield Reinsurance, in its reasonable judgment, to have occurred) which, in Brookfield Reinsurance’s reasonable judgment, in any such case and regardless of the circumstances, makes it inadvisable to proceed with the Offer or to take up Brookfield Class A Shares deposited under the Offer:

 

(a)

Brookfield Reinsurance will have concluded, in its reasonable judgment, that the class A-1 exchangeable shares to be issued pursuant to the Offer will not be authorized for listing on the NYSE and approved for listing on the TSX, subject to official notice or bulletin of issuance (the “Listing Condition”);

 

(b)

Brookfield Reinsurance will have concluded, in its reasonable judgment, that the Offer or the exchange of the Brookfield Class A Shares by Brookfield Reinsurance is illegal or not in compliance with applicable law or stock exchange requirements, or that necessary exemptions under applicable securities legislation, are not available to Brookfield Reinsurance or Brookfield Corporation, as applicable, for the Offer and, if required under any such legislation, Brookfield Reinsurance or Brookfield Corporation, as applicable, will not have received the necessary exemptions from or approvals or waivers of the appropriate courts or securities regulatory authorities or stock exchange(s) in respect of the Offer;

 

(c)

any changes will have occurred or been proposed to the Tax Act or the Code, the Treasury Regulations, the publicly available administrative policies or assessing practices of the CRA or the IRS, or to relevant tax jurisprudence that, in the reasonable judgment of Brookfield Reinsurance, are detrimental to Brookfield Reinsurance, Brookfield Corporation or any of their respective affiliates or a Brookfield Shareholder or a Brookfield Reinsurance shareholder, or with respect to making the Offer or exchanging the Brookfield Class A Shares pursuant to the Offer;

 

(d)

the completion of the Offer subjects Brookfield Reinsurance or Brookfield Corporation or any of their respective affiliates to any material tax liability;

 

(e)

(i) the Requested Relief is not granted or is granted in a manner that is not in form and substance reasonably satisfactory to Brookfield Reinsurance and Brookfield Reinsurance is not able to rely, in its reasonable judgment, on any of the statutory exemptions set out in MI 61-101 from the minority approval requirement, or (ii) the Requested Relief or any other regulatory relief obtained from securities regulatory authorities in Canada is rescinded or modified in a manner that is not in form and substance reasonably satisfactory to Brookfield Reinsurance or Brookfield Corporation and Brookfield Reinsurance is not able to rely, in its reasonable judgment, on any of the statutory exemptions set out in MI 61-101 from the minority approval requirement;

 

(f)

a final receipt from the Canadian securities regulatory authorities in each of the provinces and territories of Canada relating to the distribution of the class A-1 exchangeable shares (including the

 

42

underlying class A exchangeable shares and Brookfield Class A Shares) to be issued pursuant to the Offer will not have been obtained;

 

(g)

(i) the registration statement on Form F-4 for the class A-1 exchangeable shares (including the underlying class A exchangeable shares and Brookfield Class A Shares) to be issued pursuant to the Offer; and (ii) the registration statement on Form F-3 with respect to the delivery from time to time by Brookfield Corporation of Brookfield Class A Shares in connection with any redemption, exchange or purchase of class A exchangeable shares and class A-1 exchangeable shares, in each case, will not have become effective under the U.S. Securities Act and/or a stop order suspending the effectiveness of the registration statement will have been issued and/or there will have been any proceeding for that purpose that will have been initiated or threatened by the SEC and Brookfield Reinsurance and Brookfield Corporation will not have received all necessary state securities law or blue sky authorizations;

 

(h)

any other approval, permit, authorization, favorable review or consent or waiver of or filing with any domestic or foreign governmental entity or other authority or any third-party consent, required to be obtained or made in connection with the Offer will not have been obtained or made on terms and conditions satisfactory to Brookfield Reinsurance in its reasonable judgment;

 

(i)

any take-over bid or tender or exchange offer with respect to some or all of the securities of Brookfield Reinsurance or Brookfield Corporation, or any merger, business combination or acquisition proposal, disposition of assets outside of the ordinary course of business, or other similar transaction with or involving Brookfield Corporation or Brookfield Reinsurance, other than the Offer, or any solicitation of proxies, other than by management, to seek to control or influence our board or the Brookfield Corporation Board of Directors, as applicable, will have been proposed, announced or made by any individual or entity;

 

(j)

there will have been threatened in writing, taken or pending any action or proceeding by any government or governmental authority or regulatory or administrative agency in any jurisdiction, or by any other person in any jurisdiction, before any court or governmental authority or regulatory or administrative agency in any jurisdiction (i) challenging or seeking to cease trade, make illegal, delay or otherwise directly or indirectly restrain or prohibit the making of the Offer, the acceptance for exchange of the Brookfield Class A Shares by Brookfield Reinsurance or otherwise directly or indirectly relating in any manner to or affecting the Offer, or seeks to obtain material damages in respect of the Offer or (ii) that otherwise, in the reasonable judgment of Brookfield Reinsurance has or may have a material adverse effect on the securities or the business, income, assets, liabilities, condition (financial or otherwise), properties, operations, results of operations or prospects of Brookfield Reinsurance or Brookfield Corporation and their respective subsidiaries taken as a whole or has impaired or may materially impair the contemplated benefits of the Offer to Brookfield Reinsurance or Brookfield Corporation;

 

(k)

there will have been any action or proceeding threatened in writing, pending or taken or approval withheld or any statute, rule, regulation, stay, decree, judgment or order or injunction proposed, sought, enacted, enforced, promulgated, amended, issued or deemed applicable to the Offer or Brookfield Reinsurance, Brookfield Corporation or any of their respective subsidiaries by any court, government or governmental authority or regulatory or administrative agency in any jurisdiction that, in the reasonable judgment of Brookfield Reinsurance might directly or indirectly result in any of the consequences referred to in clauses (i) or (ii) of paragraph (a) above or would or might prohibit, prevent, restrict or delay consummation of or materially impair the contemplated benefits to Brookfield Reinsurance, Brookfield Corporation of the Offer or make it inadvisable, in the reasonable judgment of Brookfield Reinsurance, to proceed with the Offer;

 

(l)

there will have occurred a decrease in excess of 10% of the market price of the class A exchangeable shares or the Brookfield Class A Shares on the NYSE or the TSX since the close of business on October 10, 2023; or

 

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(m)

on or after the commencement of the Offer, any of the following, or, in the case of any of the following existing at the time of the commencement of the Offer, a material acceleration or worsening thereof:

 

(i)

any general suspension of trading in, or limitation on prices for, securities on any securities exchange or in the over-the-counter market in Canada or the United States,

 

(ii)

the declaration of a banking moratorium or any suspension of payments in respect of banks in Canada or the United States (whether or not mandatory),

 

(iii)

a natural disaster or the commencement or escalation of a war, armed hostilities, act of terrorism or other international or national calamity directly or indirectly involving Bermuda, Canada, the United States or any other country or region where Brookfield Reinsurance and or Brookfield Corporation maintains significant business activities (including the COVID-19 pandemic, to the extent that there is any material adverse development related thereto on or after the date hereof, or similar event or the escalation thereof),

 

(iv)

any limitation (whether or not mandatory) by any government or governmental authority or regulatory or administrative agency or any other event that, in the reasonable judgment of Brookfield Reinsurance, could negatively affect the extension of credit by banks or other lending institutions,

 

(v)

any increase or decrease in the market price of the class A exchangeable shares that would result in the market price of the class A exchangeable shares being (i) greater than 110% of the market price of a Brookfield Class A Share or, (ii) less than 90% of a Brookfield Class A Share, in each case based on the volume-weighted average price for such class A exchangeable shares and Brookfield Class A Shares on the NYSE for five (5) consecutive trading days,

 

(vi)

any decline or increase in any of the S&P/TSX Composite Index, the Dow Jones Industrial Average or the S&P 500 Composite Index by an amount in excess of 10%, measured from the close of business on October 10, 2023, or

 

(vii)

any extraordinary or material adverse change in the financial, banking or capital markets or in major stock exchange indices in Canada or the United States.

The foregoing conditions are for the exclusive benefit of Brookfield Reinsurance and may be asserted by Brookfield Reinsurance at any time prior to the Expiration Time in its reasonable discretion regardless of the circumstances giving rise to any such assertion (excluding any action or inaction by Brookfield Reinsurance), or may be waived by Brookfield Reinsurance, in its discretion, in whole or in part at any time prior to the Expiration Time, provided that any condition waived in whole or in part will be waived with respect to all Brookfield Class A Shares tendered, and provided further that Brookfield Reinsurance may not waive the Listing Condition set forth in paragraph (a) above. The failure by Brookfield Reinsurance at any time to exercise their rights under any of the foregoing conditions will not be deemed a waiver of any such right; the waiver of any such right with respect to particular facts and other circumstances will not be deemed a waiver with respect to any other facts and circumstances; and each such right will be deemed an ongoing right which may be asserted at any time or from time to time. In certain circumstances, if Brookfield Reinsurance waives any of the conditions described above, Brookfield Reinsurance may be required to extend the Expiration Time. Any determination by Brookfield Reinsurance concerning the events described in this Section 8 will be final and binding on all parties, except as otherwise finally determined by a court of competent jurisdiction or as required by law.

Any waiver of a condition or the termination of the Offer by Brookfield Reinsurance will be deemed to be effective on the date on which notice of such waiver or termination by Brookfield Reinsurance is delivered or otherwise communicated to the Depositary. Brookfield Reinsurance, after giving notice to the Depositary of any waiver of a condition or the termination of the Offer, will immediately make a public announcement of such waiver or withdrawal and provide or cause to be provided notice of such waiver or termination to the NYSE, the TSX, the SEC and the applicable Canadian securities regulatory authorities. If the Offer is terminated, Brookfield Reinsurance will not be obligated to take up, accept for exchange or exchange any Brookfield Class A Shares

 

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deposited under the Offer, and the Depositary will promptly return all certificates or the equivalent DRS positions for deposited Brookfield Class A Shares, Letters of Transmittal and Notices of Guaranteed Delivery and any related documents to the parties by whom they were deposited.

 

9.	Extension of the Expiration Time, Variation or Change of the Offer

Subject to applicable law, Brookfield Reinsurance expressly reserves the right, in its sole discretion, and regardless of whether or not any of the conditions specified in Section 8 of the Offer to Exchange, “Conditions to the Offer”, will have occurred, at any time or from time to time, to extend the period of time during which the Offer is open or to vary the terms and conditions of the Offer by giving notice, of extension or variation to the Depositary and by causing the Depositary to provide to all Brookfield Shareholders, where required by law, as soon as practicable thereafter, a copy of the notice in the manner set forth in Section 13 of the Offer to Exchange, “Notices and Delivery”. Promptly after giving notice of an extension of the Expiration Time, variation or change of the Offer to the Depositary, Brookfield Reinsurance will make a public announcement of the extension, change or variation (such announcement, in the case of an extension, to be issued no later than 9:00 a.m. (Eastern time), on the next business day after the last previously scheduled or announced Expiration Time) and provide or cause to be provided notice of such extension or variation to the TSX, the NYSE and the applicable securities regulatory authorities, including the SEC. Any notice of variation will be deemed to have been given and be effective on the day on which it is delivered or otherwise communicated, in writing, to the Depositary. Subject to applicable law (including Rules 13e-4(d)(2) and 13e-4(e)(3) under the Exchange Act, which require that any material change in the information published, sent or given to Brookfield Shareholders in connection with the Offer be promptly sent to those shareholders in a manner reasonably designed to inform them of that change) and without limiting the manner in which Brookfield Reinsurance may choose to make any public announcement, Brookfield Reinsurance assumes no obligation to publish, advertise or otherwise communicate any public announcement of this type other than in accordance with the section entitled “Notices and Delivery” below. During any such extension or in the event of any such variation or change in information, all Brookfield Class A Shares previously tendered and not taken up or withdrawn will remain subject to the Offer and may be accepted for exchange by Brookfield Reinsurance in accordance with the terms of the Offer, subject to the withdrawal rights described in Section 7 of the Offer to Exchange, “Withdrawal Rights”. An extension of the expiration time, a variation of the terms of the Offer or a change in information does not constitute a waiver by Brookfield Reinsurance of any rights described above in Section 8 of the Offer to Exchange, “Conditions to the Offer.”

Brookfield Reinsurances expressly reserves the right, in its sole discretion, subject to applicable law (i) to terminate the Offer and not take up and exchange any Brookfield Class A Shares not theretofore taken up and exchanged for upon the occurrence of any of the events specified under Section 8 of the Offer to Exchange, “Conditions to the Offer”, and (ii) at any time or from time to time, to vary the Offer in any respect, including increasing or decreasing the number of Brookfield Class A Shares Brookfield Reinsurance may exchange pursuant to the Offer.

Any such extension, delay, termination or variation will be followed promptly by a public announcement and by the filing and mailing of a notice of variation or extension, as applicable. Without limiting the manner in which Brookfield Reinsurance may choose to make any public announcement, except as provided by applicable law, Brookfield Reinsurance will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by making a release through its usual news wire service.

If Brookfield Reinsurance varies the terms of the Offer or a change occurs in the information concerning the Offer that would reasonably be expected to affect the decision of the Brookfield Shareholders to accept or reject the Offer, or if otherwise required by applicable Canadian or U.S. securities laws, Brookfield Reinsurance will extend the time during which the Offer is open to the extent required under such laws.

 

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10.	Taking Up and Exchange of Tendered Brookfield Class A Shares

If, at the Expiration Time, the Listing Condition has been satisfied and all other conditions described in Section 8 of the Offer to Exchange, “Conditions to the Offer” have been satisfied or waived by Brookfield Reinsurance, Brookfield Reinsurance will promptly take up the Brookfield Class A Shares validly tendered in the Offer and not withdrawn. Brookfield Reinsurance may not waive the Listing Condition.

Upon the terms and provisions of the Offer (including pro-ration) and subject to and in accordance with applicable Canadian and United States securities laws, Brookfield Reinsurance will exchange Brookfield Class A Shares properly tendered and not withdrawn under the Offer in accordance with the terms thereof promptly, but in any event, not later than three business days after the Brookfield Class A Shares are taken up.

Following the completion of the Offer, it is expected that the Brookfield Class A Shares tendered in the Offer will be returned by Brookfield Reinsurance to Brookfield Corporation by way of a dividend or distribution on the class C shares or the Preferred Shares, or other similar transaction, and then subsequently, such Brookfield Class A Shares will be cancelled by Brookfield Corporation, in which case after giving effect to the Offer and the distribution on the class C shares or the Preferred Shares, Brookfield Reinsurance would not own any Brookfield Class A Shares tendered in the Offer. However, subject to applicable law and regulatory requirements, Brookfield Reinsurance may determine to retain any or all of the Brookfield Class A Shares tendered in the Offer, in which case Brookfield Reinsurance would continue to hold such Brookfield Class A Shares, including in one or more insurance accounts. In either case, given that, for the reasons discussed above, we refer to Brookfield Reinsurance as a “paired entity” to Brookfield Corporation, the Offer is not dilutive to Brookfield Reinsurance or Brookfield Corporation. In the event that Brookfield Reinsurance retains any Brookfield Class A Shares tendered in the Offer, Brookfield Reinsurance intends to vote such Brookfield Class A Shares in its sole discretion. Brookfield Reinsurance will disclose the number of Brookfield Class A Shares tendered in the Offer that have not been returned to Brookfield Corporation for cancellation in the news release announcing the results of the Offer and or in the quarterly report of Brookfield Reinsurance immediately following the time at which a decision has been made, as applicable.

Number of Brookfield Class A Shares

For the purposes of the Offer, Brookfield Reinsurance will be deemed to have taken up and accepted for exchange, subject to pro-ration, Brookfield Class A Shares tendered and not withdrawn if, as and when Brookfield Reinsurance gives notice to the Depositary to that effect.

Exchange Procedure

The Depositary will act as agent of persons who have properly tendered Brookfield Class A Shares in acceptance of the Offer and have not withdrawn them, for the purposes of receiving the class A-1 exchangeable shares from Brookfield Reinsurance and transmitting such class A-1 exchangeable shares to such persons. Receipt by the Depositary from Brookfield Reinsurance of the class A-1 exchangeable shares will be deemed to constitute receipt of payment by persons tendering Brookfield Class A Shares. The settlement with each registered Brookfield Shareholder who has tendered Brookfield Class A Shares under the Offer will be effected by the Depositary by mailing a DRS statement representing such Brookfield Shareholder’s ownership of class A-1 exchangeable shares pursuant to the Offer to the person. The Depositary will also coordinate with CDS and DTC, as applicable, with respect to Brookfield Shareholders who have tendered Brookfield Class A Shares by way of book-entry transfer which are taken up and accepted by Brookfield Reinsurance, to arrange for transfer of such class A-1 exchangeable shares to be made to such Brookfield Shareholders in accordance with the settlement procedures of CDS and DTC, as applicable. Brookfield Shareholders who hold their Brookfield Class A Shares through a broker, dealer, commercial bank, trust company or other nominee will see their brokerage account credited for their ownership of class A-1 exchangeable shares pursuant to the Offer. Such Brookfield Class A Shares will be issued in the name of the person signing the Letter of Transmittal or in the name of such other

 

46

person as specified by the person signing the Letter of Transmittal by properly completing the appropriate box in such Letter of Transmittal.

Tendering Brookfield Shareholders will not be obligated to pay brokerage fees or commissions to Brookfield Reinsurance or the Depositary. However, Brookfield Shareholders are cautioned to consult with their own brokers or other intermediaries to determine whether any fees or commissions are payable to their brokers or other intermediaries in connection with a tender of Brookfield Class A Shares pursuant to the Offer. Brookfield Reinsurance will pay all fees and expenses of the Depositary in connection with the Offer.

Brookfield Reinsurance will exchange Brookfield Class A Shares taken up under the Offer by providing the Depositary with the requisite number of class A-1 exchangeable shares for transmittal to tendering Brookfield Shareholders.

 

11.	Mail Service Interruption

Notwithstanding the provisions of the Offer, certificates for any Brookfield Class A Shares and any other relevant documents will not be mailed if Brookfield Reinsurance determines that delivery by mail may be delayed. Persons entitled to certificates for any Brookfield Class A Shares or any other relevant documents that are not mailed for this reason may take delivery at the office of the Depositary at which the tendered certificates for the Brookfield Class A Shares were delivered until Brookfield Reinsurance has determined that delivery by mail will no longer be delayed. Brookfield Reinsurance will provide notice, in accordance with Section 13 of the Offer to Exchange, “Notices and Delivery”, of any determination under this section not to mail as soon as reasonably practicable after such determination is made. Notwithstanding Section 10 of the Offer to Exchange, “Taking Up and Exchange of Tendered Brookfield Class A Shares”, certificates and any other relevant documents not mailed for the foregoing reason will be conclusively deemed to have been delivered on the first day upon which they are available for delivery to the tendering Brookfield Shareholder at the appropriate office of the Depositary.

 

12.	Liens and Distributions

Brookfield Class A Shares acquired pursuant to the Offer shall be acquired by Brookfield Reinsurance free and clear of all hypothecs, liens, charges, encumbrances, security interests, claims, restrictions and equities whatsoever, together with all rights and benefits arising therefrom, provided that any dividends or distributions that may be paid, issued, distributed, made or transferred on or in respect of such Brookfield Class A Shares to Brookfield Shareholders of record on or prior to the date upon which the Brookfield Class A Shares are taken up and paid for under the Offer shall be for the account of such Brookfield Shareholders. Each Brookfield Shareholder of record on that date will be entitled to receive that dividend or distribution, whether or not such Brookfield Shareholder tenders Brookfield Class A Shares pursuant to the Offer.

A tender of Brookfield Class A Shares made pursuant to any method of delivery set forth in the Offer to Exchange will also constitute a representation and warranty to Brookfield Reinsurance (i) that the tendering Brookfield Shareholder has full power and authority to tender, sell, assign and transfer the tendered Brookfield Class A Shares and any and all distributions, payments, securities, rights, assets or other interests which may be declared, paid, issued, distributed, made or transferred on or in respect of the tendered Brookfield Class A Shares with a record date on or after the date that Brookfield Reinsurance takes up and accepts for purchase the tendered Brookfield Class A Shares and (ii) that, if the tendered Brookfield Class A Shares are taken up and accepted for purchase by Brookfield Reinsurance, Brookfield Reinsurance will acquire good and marketable title thereto, free and clear of all liens, charges, claims, encumbrances, security interests, restrictions and equities whatsoever, together with all rights and benefits arising therefrom. Any such tendering Brookfield Shareholder will, on request by the Depositary or us, execute and deliver any additional documents deemed by the Depositary or us to be necessary or desirable to complete the sale, assignment and transfer of the Brookfield Class A Shares tendered, all in accordance with the terms of the Offer.

 

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All authority conferred or agreed to be conferred by delivery of the Letter of Transmittal will be binding on the successors, assigns, heirs, personal representatives, executors, administrators and other legal representatives of the tendering Brookfield Shareholder and shall not be affected by, and shall survive, the death or incapacity of such tendering Brookfield Shareholder.

 

13.	Notices and Delivery

Without limiting any other lawful means of giving notice, any notice to be given by Brookfield Reinsurance, or the Depositary under the Offer will be deemed to have been properly given if it is mailed by first-class mail, postage prepaid, to the registered Brookfield Shareholders at their respective addresses as shown on the Brookfield Class A Share register maintained in respect of the Brookfield Class A Shares and will be deemed to have been received on the first business day following the date of mailing. These provisions apply despite (i) any accidental omission to give notice to any one or more Brookfield Shareholders or (ii) an interruption of mail service in Canada or the United States following mailing. In the event of an interruption of mail service following mailing, Brookfield Reinsurance will use reasonable efforts to disseminate the notice by other means, such as publication. If post offices in Canada or the United States are not open for deposit of mail, or there is reason to believe there is or could be a disruption in all or any part of the postal service, any notice which Brookfield Reinsurance or the Depositary may provide, give or cause to be given under the Offer will be deemed to have been properly given and to have been received by Brookfield Shareholders if it is (i) given to the NYSE and the TSX for dissemination through their respective facilities, (ii) published once in the National Edition of The Globe and Mail or The National Post and in Québec, in Le Journal de Montréal or Le Devoir, in French and in the Wall Street Journal, or (iii) it is delivered to any of GlobeNewswire or Cision for dissemination through their respective facilities.

Unless post offices are not open for the deposit of mail, the Offer to Exchange, the Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery will be mailed to registered Brookfield Shareholders by first class mail, postage prepaid or made available in such other manner as is permitted by applicable regulatory authorities and Brookfield Reinsurance will use its reasonable efforts to furnish such documents to brokers, banks and similar persons whose names, or the names of whose nominees, appear on the security holder list of Brookfield Corporation, or, if applicable, who are listed as participants in a clearing agency’s security position listing, for subsequent transmittal to the beneficial owners of Brookfield Class A Shares when such list or listing is received.

Wherever the Offer to Exchange calls for documents to be delivered to the Depositary, such documents will not be considered delivered unless and until they have been physically received at the Toronto, Ontario office of the Depositary specified in the Letter of Transmittal or the Notice of Guaranteed Delivery, as applicable.

 

14.	Treatment of Brookfield Class A Shares Not Deposited Under the Offer

Brookfield Class A Shares not deposited and purchased pursuant to the Offer will remain outstanding.

 

15.	Other Terms of the Offer

 

(a)

No broker, dealer or other person has been authorized to give any information or to make any representation on behalf of Brookfield Reinsurance, Brookfield, the Brookfield Reinsurance Board of Directors, the Brookfield Corporation Board of Directors or the Depositary other than as contained in the Offer, and, if any such information or representation is given or made, it must not be relied upon as having been authorized by Brookfield Corporation, the Brookfield Reinsurance Board of Directors, the Brookfield Corporation Board of Directors or the Depositary.

 

(b)

The Offer and all contracts resulting from the acceptance of the Offer will be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and applicable U.S. securities laws.

 

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(c)

Brookfield Reinsurance, in its sole discretion, will be entitled to make a final and binding determination of all questions relating to the interpretation of the Offer, the validity of any acceptance of the Offer and the validity of any withdrawals of Brookfield Class A Shares, except as otherwise finally determined in a subsequent judicial proceeding in a court of competent jurisdiction or as required by law.

 

(d)

While the Offer is being made to all holders of Brookfield Class A Shares, this document does not constitute an offer or a solicitation to any person in any jurisdiction in which such offer or solicitation is unlawful. The Offer is not being made to, and tenders will not be accepted from or on behalf of, Brookfield Shareholders residing in any jurisdiction in which the making of the Offer would not be in compliance with the laws of such jurisdiction. However, Brookfield Reinsurance may, in its sole discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and to extend the Offer to Brookfield Shareholders in such jurisdiction.

 

(e)

Neither Brookfield Reinsurance, Brookfield Corporation nor their respective boards of directors, in making the decision to present the Offer to Brookfield Shareholders, makes any recommendation to any Brookfield Shareholder as to whether to tender or refrain from tendering Brookfield Class A Shares. We urge Brookfield Shareholders to consult their own financial, legal, investment and tax advisers and make their own decision whether to tender Brookfield Class A Shares to the Offer and, if so, how many Brookfield Class A Shares to tender.

 

(f)

Because under U.S. securities laws Brookfield Corporation may be deemed an offeror with respect to the Offer, pursuant to Rule 13e-4(c)(2) promulgated under the Exchange Act, Brookfield Corporation has filed with the SEC a Schedule TO, which contains additional information with respect to the Offer. The Schedule TO, including any amendments and supplements thereto, may be examined, and copies may be obtained, at the same places and in the same manner as is set forth under Section 1 of the Circular, “Information with respect to Brookfield Reinsurance”.

 

(g)

The provisions of the cover pages, Summary, Questions and Answers About the Offer, the Glossary, Offer, the Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and the other documents disseminated therewith collectively comprise the terms and conditions of the Offer.

 

(h)

These securityholder materials are being sent to both registered and non-registered holders of Brookfield Class A Shares. If you are a non-registered holder, and Brookfield Reinsurance or their agents have sent these materials directly to you, your name and address, and information about your holding of Brookfield Class A Shares, have been obtained in accordance with applicable securities regulatory requirements from the intermediary holding on your behalf.

 

(i)

Brookfield Reinsurance reserves the right to waive any defect in acceptance with respect to any particular Brookfield Class A Share tendered or any particular Brookfield Shareholder. There will be no duty or obligation of Brookfield Reinsurance or the Depositary, or any other person to give notice of any defect or irregularity in the deposit of Brookfield Class A Shares or in any notice of withdrawal and, in each case, no liability will be incurred or suffered by any of them for failure to give such notice.

 

(j)

Where the Offer provides that the time for the taking of any action, the doing of anything or the end of any period, expires or falls upon a day that is not a business day, the time will be extended and action may be taken, the thing may be done or the period shall end as the case may be, on the next business day.

 

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CIRCULAR

The Circular is being furnished in connection with the Offer by Brookfield Reinsurance to exchange up to 40,000,000 Brookfield Class A Shares for 40,000,000 class A-1 exchangeable shares. Terms defined in the Offer to Exchange and not otherwise defined herein have the same meaning in the Circular. The terms and conditions of the Offer to Exchange, the related Letter of Transmittal and the Notice of Guaranteed Delivery are incorporated into and form part of the Circular. Reference is made to the Offer to Exchange for details of the terms and conditions of the Offer.

 

1.	Information with respect to Brookfield Reinsurance

Brookfield Reinsurance was incorporated on December 10, 2020 under the Bermuda Act as an exempted company limited by shares. Our company operates a leading capital solutions business providing insurance and reinsurance services to individuals and institutions. Through our operating subsidiaries, we offer a broad range of insurance products and services to individuals and institutions, including life insurance and annuities and personal and commercial property and casualty insurance. In doing so, we seek to match our liabilities with a portfolio of high-quality investments in order to generate attractive, risk-adjusted returns within our business. We leverage our relationship with Brookfield in order to opportunistically source new business and deploy our capital in assets that are tailored to our investment needs. Our relationship with Brookfield provides us with access to a diverse mix of leading alternative investment strategies that we believe are well-suited for this purpose.

The class A exchangeable shares are listed on the NYSE and the TSX under the symbol “BNRE”.

Brookfield Reinsurance’s head and registered office is located at Ideation House, 1st Floor, 94 Pitts Bay Road, Pembroke HM08 Bermuda.

Further information with respect to Brookfield Reinsurance is set forth in Brookfield Reinsurance’s Annual Report, which is incorporated by reference in this document.

Brookfield Reinsurance is subject to the information and reporting requirements of Canadian securities laws and the Exchange Act and the rules, policies and guidelines of the TSX and the NYSE and, in accordance therewith, files reports and other information with Canadian securities regulators, the SEC, the TSX and the NYSE. As a “foreign private issuer” under the Exchange Act, Brookfield Reinsurance is exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements (which are prepared in accordance with applicable Canadian securities laws), and its officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act.

Shareholders may read any document that Brookfield Reinsurance files with, or furnishes to, the SEC on the SEC’s website www.sec.gov. Shareholders may access documents filed with Canadian securities regulators through SEDAR+.

Description of Our Share Capital

Issued and Outstanding Capital

As of September 29, 2023, there were 10,450,952 class A exchangeable shares, 24,000 class B shares, 102,056,784 class C shares, 98,351,547 class A junior preferred shares, Series 1, 2,108,733 class A junior preferred shares, Series 2, no class B junior preferred shares, no class A senior preferred shares and no class B senior preferred shares issued and outstanding.

The transfer agent and registrar for the exchangeable shares is TSX Trust, at its principal office in Toronto, Ontario, Canada.

 

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Class A Exchangeable Shares and Class A-1 Exchangeable Shares

The following description of class A exchangeable shares and class A-1 exchangeable shares sets forth certain general terms and provisions of the class A exchangeable shares and class A-1 exchangeable shares, as applicable. This description is in all respects subject to and qualified in its entirety by applicable law and the provisions of our company’s bye-laws. Through the rights and governance structures described in the Circular, each exchangeable share is intended to provide its holder with an economic return that is equivalent to that of a Brookfield Class A Share. Consequently, we expect that the market price of our class A exchangeable shares, and our class A-1 exchangeable shares, when and if issued, should be impacted by the market price of the Brookfield Class A Shares and the business performance of Brookfield Corporation. Except for the voting rights and the conversion rights described below, the rights, privileges, restrictions and conditions attached to the class A exchangeable shares as a class and the class A-1 exchangeable shares as a class are identical in all respects.

Voting Rights of Class A Exchangeable Shares

Each holder of class A exchangeable shares is entitled to receive notice of, and to attend and vote at, all meetings of our shareholders, other than meetings at which only holders of a specified class or series of shares are entitled to vote or as otherwise required by law. Except as set out below under “— Election of Directors”, each holder of class A exchangeable shares is entitled to cast one vote for each class A exchangeable share held at the record date for determination of shareholders entitled to vote on any matter.

Except as otherwise expressly provided in our bye-laws or as required by law, all matters to be approved by shareholders must be approved by: (i) a majority or, where a higher threshold is specified under applicable law, the higher percentage of the votes cast by holders of class A exchangeable shares who vote in respect of the resolution, and (ii) a majority or, where a higher threshold is specified under applicable law, the higher percentage of the votes cast by the holder of our class B shares who vote in respect of the resolution. As a result, all matters that require shareholder approval must be approved by the holder of the class B shares.

Election of Directors

In the election of directors, holders of class A exchangeable shares are entitled to elect one-half of the board. Our bye-laws provide that each holder of a class A exchangeable share has the right to cast a number of votes equal to the number of votes attached to the class A exchangeable shares held by the holder multiplied by the number of directors to be elected by the holder and all holders of class A exchangeable shares entitled to vote with such holder in the election of directors. A holder may cast all such votes in favour of one candidate or distribute such votes among its candidates in any manner the holder sees fit. Where a holder has voted for more than one candidate without specifying the distribution of votes among such candidates, the holder shall be deemed to have divided the holder’s votes equally among the candidates for whom the holder voted.

Voting Rights of Class A-1 Exchangeable Shares

Except as otherwise required by law, each holder of class A-1 exchangeable shares will be entitled to notice of, and to attend, any meetings of shareholders of the company (except meetings at which only holders of another specified class or series of shares are entitled to vote), but will not be entitled to vote at any such meeting. The class A-1 exchangeable shares are non-voting to address certain regulatory restrictions on ownership, but are otherwise intended to be economically equivalent in all respects to our class A exchangeable shares.

Conversion Right of Holders of Class A-1 Exchangeable Shares

Subject to applicable law, a holder of class A-1 exchangeable shares will be entitled, from time to time, to convert their class A-1 exchangeable shares into class A exchangeable shares on a one-for-one basis (the “Conversion Right”). No holder will be permitted to convert its class A-1 exchangeable shares, and the

 

51

company will not authorize or effect any conversions of class A-1 exchangeable shares, unless the requesting holder has provided satisfactory evidence to the company, that either (i) it and its affiliates (as set forth in Rule 12b-2 of the Exchange Act) will not, after giving effect to the conversion, directly or indirectly, beneficially own, control or hold with the power to vote more than 9.9% of the class A exchangeable shares or (ii) it and its affiliates (as set forth in Rule 12b-2 of the Exchange Act) have received all required regulatory approvals and consents or, if applicable exemptions or waivers, to beneficially own, control or hold with the power to vote more than 9.9% of the class A exchangeable shares, as determined by the company acting reasonably (the “Regulatory Condition”).

The Conversion Right will be exercisable in accordance with the share conditions, which are attached to the bye-laws. The right of conversion may be exercised, provided the Regulatory Condition is satisfied, by notice in writing given to the transfer agent (a “Conversion Notice”), which notice shall specify the number of class A-1 exchangeable shares that the class A-1 exchangeable shareholder desires to have converted. No Conversion Notice will be accepted during (i) the calendar month in which quarterly distributions are paid to the holders of exchangeable shares, or (ii) during the period commencing 10 business days prior to the record date for any special dividend or stock distribution and up to and including on the payment date for such dividend (the “Conversion Blackout Period”). Any conversion notice purported to be delivered to the company during a Conversion Blackout Period will be deemed to have been received on the business day immediately following the date on which a Blackout Period expires. A converting holder will have no further right, with respect to any class A-1 exchangeable shares so converted, to receive any distributions on such shares with a record date on or after the Conversion Notice Date, without regard to the time of day on the Conversion Notice Date at which the exchange is completed. For greater certainty, a converting holder will, despite a notice of conversion being delivered, be entitled to receive any distributions on class A exchangeable shares and class A-1 exchangeable shares that have a record date prior to the Conversion Notice Date.

Distributions

The holders of exchangeable shares will be entitled to receive distributions as and when declared by our board subject to receipt of sufficient shareholder approval (where applicable) and the prior rights of the holders of all classes and series of the class A senior preferred shares and class B senior preferred shares and any other shares ranking senior to the class A exchangeable shares or class A-1 exchangeable shares with respect to priority in payment of distributions. It is expected that each exchangeable share will receive distributions at the same time and in the same amount as the cash dividends paid on each Brookfield Class A Share.

Subject to the prior rights of holders of all classes and series of Senior Preferred Shares at the time outstanding having prior rights as to distributions, and in preference to the Junior Preferred Shares and class C shares of the company, each exchangeable share will entitle its holder to cumulative distributions per share in an amount equal to (i) the amount of any cash dividend made on a Brookfield Class A Share multiplied by (ii) the exchange factor (which initially shall be one, subject to adjustment in the event of certain dilutive or other capital events by our company or Brookfield Corporation) determined in accordance with our bye-laws and in effect on the payment date of such distribution, which we refer to as the exchangeable distribution. See “— Exchange by Holder — Adjustments to Reflect Certain Capital Events”.

If the full amount of a distribution on exchangeable shares is not paid concurrently with a dividend on the Brookfield Class A Shares, then the unpaid amount of such distribution shall accrue and accumulate (without interest), whether or not our company has earnings, whether or not there are funds legally available for the payment thereof and whether or not such distribution has been earned, made or authorized. Any distribution payment on exchangeable shares made shall first be credited against the earliest accumulated but unpaid exchangeable distribution due which remains payable, which we refer to as unpaid distributions. All exchangeable distributions shall be paid prior and in preference to any dividends or distributions on the class C shares. The holders of class A exchangeable shares and class A-1 exchangeable shares shall not be entitled to any distributions from our company other than the exchangeable distributions.

 

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The exchangeable shares may be consolidated or split in the event of, and equally with, a share consolidation or stock split of the Brookfield Class A Shares. As an alternative, stock dividends may be paid in lieu of stock splits concurrently with a stock split of the Brookfield Class A Shares. In that case, the stock dividend on the exchangeable shares will be paid in additional exchangeable shares.

Exchange by Holder

At any time before the 15th business day prior to the date of any redemption, holders of exchangeable shares shall have the right to exchange all or a portion of their exchangeable shares with Brookfield Corporation for one Brookfield Class A Share per exchangeable share held (subject to adjustment in the event of certain dilutive or other capital events by our company or Brookfield Corporation as described below in “— Adjustments to Reflect Certain Capital Events”) or its cash equivalent based on the NYSE closing price of one Brookfield Class A Share on the date that the request for exchange is received by our transfer agent (or if not a trading day, the next trading day thereafter) plus all unpaid distributions, if any (the form of payment to be determined at the sole election of Brookfield Corporation), subject to certain limitations described below if Brookfield Corporation is unable to maintain an effective registration statement. If you hold exchangeable shares through a broker, please contact your broker to request an exchange on your behalf. If you are a registered holder of exchangeable shares, please contact our transfer agent and follow the process described below.

Pursuant to the Rights Agreement, Brookfield Corporation has agreed that on the applicable specified exchange date with respect to any exchangeable shares submitted for exchange, Brookfield Corporation will satisfy, or cause to be satisfied, the obligations pursuant to our bye-laws to exchange such exchangeable shares for Brookfield Class A Shares or its cash equivalent plus any unpaid distributions. Brookfield Corporation currently intends to satisfy any exchange requests on the exchangeable shares through the delivery of Brookfield Class A Shares rather than cash. At the Brookfield Reinsurance Meeting, Brookfield Reinsurance received shareholder approval for certain amendments to Brookfield Reinsurance’s bye-laws. The amendments (i) provide greater clarity on the circumstances under which Brookfield Corporation will be allowed to transfer the exchangeable shares acquired by Brookfield Corporation upon an exchange, and (ii) enable Brookfield Corporation to engage an agent to remarket exchangeable shares tendered for exchange under certain conditions, in which case the tendering holder’s exchangeable shares would be purchased for the same exchange consideration (and remain in circulation in the hands of another holder) rather than being exchanged. See Section 2 of the Circular, “Information with respect to the Brookfield Reinsurance Meeting”.

The obligation to satisfy a request for exchange is the obligation of Brookfield Corporation, and our company has no obligation to deliver Brookfield Class A Shares or cash, to deliver any unpaid distributions, or to cause Brookfield Corporation to do so.

Each holder of exchangeable shares who wishes to exchange one or more of his or her exchangeable shares with Brookfield Corporation for Brookfield Class A Shares or its cash equivalent is required to complete and deliver a notice of exchange in the form available from our transfer agent. Upon receipt of a notice of exchange, Brookfield Corporation shall, within ten (10) business days after the date that the notice of exchange is received by our transfer agent, or the specified exchange date, deliver or cause to deliver to the tendering holder of exchangeable shares, in accordance with instructions set forth in the notice of exchange, one Brookfield Class A Share per exchangeable share held (subject to adjustments in the event of certain capital events by our company or Brookfield Corporation as described below in “— Adjustments to Reflect Certain Capital Events”) or its cash equivalent based on the NYSE closing price of one Brookfield Class A Share on the date that the request for exchange is received by our transfer agent (or if not a trading day, the next trading day thereafter) plus all unpaid distributions, if any (the form of payment to be determined at the sole election of Brookfield Corporation). Notwithstanding the foregoing, for so long as there is not an effective registration statement with respect to the delivery of Brookfield Class A Shares in connection with the exchange right, Brookfield Corporation will not be able to effect exchanges for Brookfield Class A Shares and will not be required to effect exchanges for cash that would result in the payment of an amount in excess of $5,000,000 in the aggregate over any 30 consecutive

 

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calendar day period; provided that such limit will not apply for more than 90 consecutive calendar days during any 12 calendar month period. Upon completion of the exchange of any exchangeable shares as described herein, the holder of exchangeable shares who has exchanged their exchangeable shares will have no further right, with respect to any exchangeable shares so exchanged, to receive any distributions on the exchangeable shares on or after the date on which such exchangeable shares are exchanged. For greater certainty, a tendering holder will, despite a notice of exchange being delivered, be entitled to receive any distributions on the exchangeable shares that have a record date or otherwise accrued prior to the date on which such notice of exchange is received.

Subject to the limitations on exchanges as described above, in the event that a tendering holder of exchangeable shares has not received the number of Brookfield Class A Shares or its cash equivalent (the form of payment to be determined by Brookfield Corporation in its sole discretion) in satisfaction of the tendered exchangeable shares on or prior to the specified exchange date, then, pursuant to the Rights Agreement, the holder of the subject exchangeable shares, or the rights agent, on behalf of the holder of the subject exchangeable shares, will have the right to institute and maintain any suit, action or proceeding against Brookfield Corporation to enforce the obligations of Brookfield Corporation to exchange our exchangeable shares for Brookfield Class A Shares (or their cash equivalent) plus unpaid distributions. The Rights Agreement is available electronically on our SEDAR+ profile at www.sedarplus.ca. For a further description of the Rights Agreement, see Item 10.B of Brookfield Reinsurance’s Annual Report, “Memorandum and Bye-Laws — Rights Agreement” and Item 10.C of Brookfield Reinsurance’s Annual Report, “Material Contracts — Rights Agreement”.

No Fractional Shares. No fractional Brookfield Class A Shares will be issued or delivered upon exchange of exchangeable shares. In lieu of any fractional Brookfield Class A Shares to which the tendering holder of exchangeable shares would otherwise be entitled at Brookfield Corporation’s election, Brookfield Corporation will pay an amount in cash equal to the Brookfield Class A Share value on the trading day immediately preceding the applicable specified exchange date multiplied by such fraction of a Brookfield Class A Share.

Adjustments to Reflect Certain Capital Events. The exchange factor (which initially shall be one) is subject to adjustment in accordance with our company’s bye-laws to reflect certain capital events, including (i) if Brookfield Corporation declares or pays a dividend to its shareholders consisting wholly or partly of Brookfield Class A Shares or if or our company declares or pays a distribution to our shareholders consisting wholly or partly of exchangeable shares, in each case, without a corresponding dividend or distribution, as applicable, being paid by the other entity; (ii) if Brookfield Corporation or our company splits, subdivides, reverse-splits or combines its outstanding Brookfield Class A Shares or exchangeable shares, as applicable, without a corresponding event occurring at the other entity; (iii) if Brookfield Corporation or our company distributes any rights, options or warrants to all or substantially all holders of its Brookfield Class A Shares or exchangeable shares to convert into, exchange for or subscribe for or to purchase or to otherwise acquire Brookfield Class A Shares or exchangeable shares (or other securities or rights convertible into, exchangeable for or exercisable for Brookfield Class A Shares or exchangeable shares), as applicable, without a corresponding distribution of comparable rights, options or warrants by the other entity; (iv) if Brookfield Corporation effects a spin-off, unless a corresponding event (or a distribution/equivalent compensation) occurs at our company in respect of the exchangeable shares; (v) if Brookfield Corporation distributes to all or substantially all holders of Brookfield Class A Shares evidences of its indebtedness or assets (including securities), or rights, options or warrants to convert into, exchange for or subscribe for or to purchase or to otherwise acquire such securities but excluding all distributions where a comparable distribution (or the cash equivalent) is made by our company; or (vi) if Brookfield Corporation or one of its subsidiaries makes a payment in respect of a tender or exchange offer for the Brookfield Class A Shares (but excluding for all purposes any exchange or tender offer to exchange Brookfield Class A Shares for exchangeable shares or any other security economically equivalent to Brookfield Class A Shares), to the extent that the cash and value of any other consideration included in the payment per Brookfield Class A Share exceeds certain thresholds.

 

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Redemption

Our board will have the right, subject to the prior written consent of Brookfield Corporation, as the sole holder of the class C shares, and upon sixty days’ prior written notice to holders of exchangeable shares, to redeem all of the then outstanding exchangeable shares at any time and for any reason, in its sole discretion and subject to applicable law, including without limitation following the occurrence of any of the following redemption events: (i) the total number of class A exchangeable shares outstanding decreases by 50% or more over any six-month period; (ii) the daily market value of the class A exchangeable shares (based on the closing price on the NYSE on each trading day) (A) is less than $250 million for more than six consecutive months or (B) decreases by 50% or more from its high over any three-month period; (iii) a person acquires 90% of the Brookfield Class A Shares in a take-over bid (as defined by applicable securities law); (iv) shareholders of Brookfield Corporation approve an acquisition of Brookfield Corporation by way of arrangement, amalgamation or similar transaction; (v) shareholders of Brookfield Corporation approve a restructuring or other reorganization of Brookfield Corporation or a liquidation, insolvency or winding-up of Brookfield Corporation is pending; (vi) there is a pending sale of all or substantially all of Brookfield Corporation’s assets; (vii) there is a change of law (whether by legislative, governmental or judicial action), administrative practice or interpretation, or a change in circumstances of our company and our shareholders, that may result in adverse tax consequences for our company or our shareholders; or (viii) our board, in its sole discretion, concludes that the holders of exchangeable shares are adversely impacted by a fact, change or other circumstance relating to our company. For greater certainty, shareholders do not have the ability to vote on such redemption and the board’s decision to redeem all of the then outstanding exchangeable shares will be final.

Upon any such redemption event, the holders of exchangeable shares shall be entitled to receive pursuant to such redemption one Brookfield Class A Share per exchangeable share held (subject to adjustment in the event of certain capital events by our company or Brookfield Corporation as described above in “— Exchange by Holder — Adjustments to Reflect Certain Capital Events”) or its cash equivalent based on the NYSE closing price of one Brookfield Class A Share on the trading day immediately preceding the announcement of such redemption plus all unpaid distributions, if any (the form of payment to be determined at the election of our company).

Notwithstanding the foregoing, upon any redemption event, Brookfield Corporation may elect to acquire all of the outstanding exchangeable shares in exchange for one Brookfield Class A Share per exchangeable share held (subject to adjustment in the event of certain capital events by our company or Brookfield Corporation as described above in “— Exchange by Holder — Adjustments to Reflect Certain Capital Events”) or its cash equivalent based on the NYSE closing price of one Brookfield Class A Share on the trading day immediately preceding the announcement of such redemption plus all unpaid distributions, if any (the form of payment to be determined at the election of Brookfield Corporation). Shareholders are not entitled to vote on Brookfield Corporation’s exercise of the overriding call right described in the preceding sentences.

Liquidation

Brookfield Corporation, as the sole holder of our class C shares, will have the right, subject to applicable law, to require our company to commence a liquidation of the company following the occurrence of certain events. See Item 10.B of Brookfield Reinsurance’s Annual Report, “Memorandum and Bye-Laws — Class C Shares — Liquidation” for more information.

Upon any liquidation, dissolution or winding up of our company or any other distribution of our assets among our shareholders for the purpose of winding up our affairs, including whether substantially concurrent with the liquidation, dissolution or winding up of Brookfield Corporation or any other distribution of Brookfield Corporation’s assets among its shareholders for the purpose of winding up its affairs, and subject to the prior rights of holders of all classes and series of Senior Preferred Shares and any other class of shares of our company ranking in priority or ratably with the exchangeable shares and after the payment in full of any unpaid distributions, the holders of exchangeable shares shall be entitled to one Brookfield Class A Share per

 

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exchangeable share held (subject to adjustment in the event of certain capital events by our company or Brookfield Corporation as described above in “— Exchange by Holder — Adjustments to Reflect Certain Capital Events”) or its cash equivalent based on the NYSE closing price of one Brookfield Class A Share on the trading day immediately preceding announcement of such liquidation, dissolution or winding up (the form of payment to be determined at the election of our company). If, upon any such liquidation, dissolution or winding up, the assets of our company are insufficient to make such payment in full, then the assets of our company will be distributed among the holders of exchangeable shares and class B shares ratably in proportion to the full amounts to which they would otherwise be respectively entitled to receive.

Notwithstanding the foregoing, upon any liquidation, dissolution or winding up of our company, Brookfield Corporation may elect to acquire all but not less than all of the outstanding exchangeable shares for one Brookfield Class A Share per exchangeable share (subject to adjustment in the event of certain capital events by our company or Brookfield Corporation as described above in “— Exchange by Holder — Adjustments to Reflect Certain Capital Events”) plus all unpaid distributions, if any. The acquisition by Brookfield Corporation of all the outstanding exchangeable shares will occur on the day prior to the effective date of the liquidation, dissolution or winding up of our company. Shareholders are not entitled to vote on Brookfield Corporation’s exercise of the overriding call right described in the preceding sentences.

Book-Based System

The exchangeable shares may be represented in the form of one or more fully registered share certificates held by, or on behalf of, CDS or DTC, as applicable, as custodian of such certificates for the participants of CDS or DTC, registered in the name of CDS or DTC or their respective nominee, and registration of ownership and transfers of the exchangeable shares may be effected through the book-based system administered by CDS or DTC, as applicable.

Treatment of Exchangeable Shares in Connection with a Takeover Bid, Issuer Bid or Tender Offer

The exchangeable shares are not Brookfield Class A Shares and will not be treated as Brookfield Class A Shares for purposes of the application of applicable Canadian and U.S. rules relating to takeover bids, issuer bids and tender offers. Neither, Brookfield Class A Shares, the class A exchangeable shares or the class A-1 exchangeable shares are securities of the same class. As a result, holders of exchangeable shares will not be entitled to participate in an offer or bid made to acquire Brookfield Class A Shares, unless such offer is extended to holders of class A exchangeable shares and holders of the class A-1 exchangeable shares and holders of Brookfield Class A Shares will not be entitled to participate in an offer or bid made to acquire class A exchangeable shares or class A-1 exchangeable shares, unless such offer is extended to holders of Brookfield Class A Shares. In the event of a takeover bid for Brookfield Class A Shares, a holder of exchangeable shares who would like to participate would be required to first tender his or her exchangeable shares for exchange, in order to receive a Brookfield Class A Share, or the cash equivalent, at the election of Brookfield Corporation, pursuant to the exchange right. If an issuer tender offer or issuer bid is made for the Brookfield Class A Shares at a price in excess of the market price of the Brookfield Class A Shares and a comparable offer is not made for the exchangeable shares, then the exchange factor for the exchangeable shares may be adjusted. See “— Exchange by Holder — Adjustments to Reflect Certain Capital Events” above for more information on the circumstances in which adjustments may be made to the exchange factor.

Choice of Forum for Bermuda Act and U.S. Securities Act Claims

Pursuant to our bye-laws, unless we consent in writing to the selection of an alternative forum (and our company will always provide such consent with respect to the Superior Court of Justice of the Province of Ontario, Canada and appellate Courts thereof), the Supreme Court of Bermuda shall, to the fullest extent permitted by law, be the sole and exclusive forum for any dispute that arises concerning the Bermuda Act or out of or in connection with our bye-laws, including any question regarding the existence and scope of our bye-laws and/or whether there has

 

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been any breach of the Bermuda Act or our bye-laws by an officer or director (the “Bermuda Forum Provision”). The Bermuda Forum Provision will not apply to any causes of action arising under the U.S. Securities Act or the U.S. Exchange Act. In addition, our bye-laws further provide that unless we consent in writing to the selection of an alternative forum, the federal courts of the United States shall be the sole and exclusive forum for resolving any complaint filed in the United States asserting a cause of action arising under the U.S. Securities Act (the “U.S. Federal Forum Provision”). Our bye-laws provide that any person or entity purchasing or otherwise acquiring any interest in our exchangeable shares is deemed to have notice of and consented to the Bermuda Forum Provision and the U.S. Federal Forum Provision; provided, however, that shareholders cannot and will not be deemed to have waived our compliance with the U.S. federal securities laws and the rules and regulations thereunder. The Bermuda Forum Provision and the U.S. Federal Forum Provision in our bye-laws may impose additional litigation costs on shareholders in pursuing any such claims. Additionally, the forum selection clauses in our bye-laws may limit our shareholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our shareholders. See Item 3.D in Brookfield Reinsurance’s Annual Report, “Risk Factors — Risks Relating to the Exchangeable Shares — Our bye-laws designate specific courts in Bermuda as the exclusive forum for certain litigation that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a desired judicial forum for disputes with us”.

Comparison of the Rights of Holders of Exchangeable Shares and Brookfield Class A Shares

The rights of holders of Brookfield Class A Shares, are governed by the OBCA and Brookfield Corporation’s articles of amalgamation and by-laws. The rights of holders of our exchangeable shares are governed by Bermuda law and our memorandum of association and bye-laws.

For a summary description of the material differences between the Brookfield Class A Shares and our exchangeable shares, see Section 20 of the Circular, “Comparison of Shareholder Rights”.

Price Range and Trading Volume of class A exchangeable shares

The class A exchangeable shares are listed and began trading on the NYSE and the TSX under the symbol “BAMR” on June 28, 2021 and began trading on the NYSE and the TSX under the symbol “BNRE” on December 14, 2022. The following table sets forth the price ranges and trading volumes of the class A exchangeable shares as reported by the TSX for the periods indicated, in Canadian dollars:

 

		High				Low				Volume
		(C$)				(C$)
2022
September			54.13				44.76				555,102
October			48.61				41.38				974,906
November			51.64				42.73				766,263
December			51.65				41.77				515,338
2023
January			50.48				42.54				421,429
February			51.62				45.35				347,852
March			46.67				38.93				486,478
April			45.28				42.23				325,298
May			44.00				40.88				436,501
June			45.00				41.23				309,256
July			48.50				42.66				253,089
August			47.56				43.42				360,614
September			51.83				42.45				397,765

 

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The following table sets forth the price range, calculated using intraday high and low prices, and trading volume of the class A exchangeable shares as reported by the TSX for each quarterly period in the two years preceding the date of this document:

 

Quarter		High Price (C$)				Low Price (C$)				Volume
2021
Q3			64.32				49.55				3,529,222
Q4			65.10				56.03				2,266,409
2022
Q1			66.03				53.34				2,154,944
Q2			59.99				45.16				2,061,145
Q3			56.27				44.76				1,393,938
Q4			51.65				41.38				2,256,507
2023
Q1			51.62				38.93				1,255,759
Q2			45.28				40.88				1,071,055
Q3			51.83				42.45				1,011,468

The following table sets forth the price ranges and trading volumes of the class A exchangeable shares as reported by the NYSE for the periods indicated, in U.S. dollars:

 

		High				Low				Volume
		($)				($)
2022
September			41.92				32.87				231,303
October			36.11				30.09				408,760
November			38.67				31.05				447,433
December			38.76				30.50				524,685
2023
January			37.91				31.23				357,469
February			38.56				33.24				292,421
March			35.10				28.30				376,228
April			33.43				30.94				147,149
May			32.78				30.17				363,633
June			33.86				30.60				194,609
July			36.17				31.91				112,676
August			34.83				32.13				193,111
September			36.71				31.38				128,534

 

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The following table sets forth the price range, calculated using intraday high and low prices, and trading volume of the class A exchangeable shares as reported by the NYSE for each quarterly period in the two years preceding the date of this document:

 

Quarter		High Price ($)				Low Price ($)				Volume
2021
Q3			53.65				39.09				4,882,012
Q4			52.17				44.65				1,514,129
2022
Q1			52.22				41.84				1,581,635
Q2			48.68				34.65				1,666,994
Q3			44.10				32.87				708,794
Q4			38.76				30.09				1,380,878
2023
Q1			38.56				28.30				1,026,118
Q2			33.86				30.17				705,391
Q3			36.71				31.38				434,321

The closing prices of the class A exchangeable shares on the NYSE and the TSX on September 29, 2023 were $31.47 and C$42.45, respectively.

Brookfield Shareholders are urged to obtain current market quotations for the class A exchangeable shares.

 

2.	Information with respect to the Brookfield Reinsurance Meeting

At the Brookfield Reinsurance Meeting, Brookfield Reinsurance received shareholder approval for the Share Issuance and for certain amendments to Brookfield Reinsurance’s bye-laws. The amendments are, among other things, aligned with the objectives of the Offer and are designed to promote stability in the number of outstanding exchangeable shares, thereby maintaining the equity base and market capitalization of our company and reducing volatility in the trading price of the exchangeable shares relative to the Brookfield Class A Shares. The amendments aim to allow the exchangeable shares of our company that are tendered for exchange to remain in circulation under certain circumstances, thereby supporting our company’s efforts to enhance liquidity for our shareholders. Specifically, the amendments (i) provide greater clarity on the circumstances under which Brookfield Corporation will be allowed to transfer the exchangeable shares acquired by Brookfield Corporation upon an exchange, and (ii) enable Brookfield Corporation to engage an agent to remarket exchangeable shares tendered for exchange under certain conditions, in which case the tendering holder’s exchangeable shares would be purchased (and remain in circulation in the hands of another holder) rather than being exchanged.

Specific details of the matters put before the Brookfield Reinsurance Meeting are set forth in the Brookfield Reinsurance Meeting Circular, which is incorporated by reference in this document.

 

3.	Information with respect to Brookfield Corporation

Under applicable U.S. securities laws, Brookfield Corporation may also be deemed an offeror with respect to the Offer.

Brookfield Corporation is focused on deploying its capital on a value basis and compounding it over the long term. This capital is allocated across its three core pillars of asset management, insurance solutions and its operating businesses. Employing a disciplined investment approach, Brookfield Corporation leverages its deep expertise as an owner and operator of real assets, as well as the scale and flexibility of its capital, to create value and deliver strong risk-adjusted returns across market cycles.

 

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The Brookfield Class A Shares are listed on the NYSE and the TSX under the symbol “BN”.

Brookfield Corporation was formed by articles of amalgamation dated August 1, 1997 and is organized pursuant to articles of amalgamation under the OBCA dated January 1, 2005 and articles of amendment by arrangement dated December 9, 2022. Brookfield Corporation’s head and registered office is located at Brookfield Place, 181 Bay Street, Suite 100, Toronto, Ontario M5J 2T3.

BAM Class B Partners Inc., an Ontario corporation (“BN Partners”), is the trustee of BAM Partners Trust, a trust established under the laws of Ontario (the “BN Partnership”) and the sole owner of the Brookfield Class B Shares. The Brookfield Class B Shares entitle the BN Partnership to appoint one-half of the Brookfield Corporation Board of Directors. The beneficial interests in the BN Partnership, and the voting interests in its trustee, are held as follows: (i) one-third by Jack L. Cockwell, one-third by Bruce Flatt, and one-third jointly by Brian W. Kingston, Brian D. Lawson, Cyrus Madon, Samuel J.B. Pollock and Sachin G. Shah in equal parts. As such, no single individual or entity controls the BN Partnership.

Additional Information

Brookfield Corporation has filed with the SEC an Issuer Tender Offer Statement on Schedule TO, which contains additional information with respect to the Offer.

Brookfield Corporation is subject to the information and periodic reporting requirements of the Exchange Act applicable to “foreign private issuers” (as such term is defined in Rule 405 under the U.S. Securities Act) and fulfills the obligations with respect to those requirements by filing or furnishing annual reports on Form 40-F and quarterly reports on Form 6-K with the SEC. The SEC maintains an Internet site that contains reports and information statements and other information regarding Brookfield Corporation and other issuers that file electronically with the SEC. The address of the SEC Internet site is www.sec.gov. This information is also available on Brookfield Corporation’s website at bn.brookfield.com.

Certain information regarding each director and executive officer of Brookfield Corporation is set forth in Brookfield Corporation’s Annual Report.

Issued and Outstanding Capital

As of September 29, 2023, there were 1,638,679,807 Brookfield Class A Shares and 85,120 Brookfield Class B Shares outstanding.

See Brookfield Corporation’s Annual Report and the documents incorporated by reference therein for a description of the rights, privileges, restrictions and conditions attaching to the Brookfield Class A Shares and other securities of Brookfield Corporation.

The transfer agent and registrar for the Brookfield Class A Shares is TSX Trust, at its principal office in Toronto, Ontario, Canada.

 

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Price Range and Trading Volume of Brookfield Class A Shares

The Brookfield Class A Shares are listed and traded on the NYSE and the TSX under the symbol “BN”. The following table sets forth the price ranges and trading volumes of the Brookfield Class A Shares as reported by the TSX for the periods indicated, in Canadian dollars:

 

		High				Low				Volume
		(C$)				(C$)
2022
September			54.15				44.80				44,612,793
October			48.66				41.39				39,750,281
November			51.72				42.70				44,168,600
December			51.67				41.78				48,706,767
2023
January			50.49				42.60				28,971,411
February			51.50				45.28				34,864,874
March			46.70				38.92				59,872,047
April			45.31				41.85				29,269,587
May			43.97				40.47				35,008,271
June			44.69				40.50				46,603,067
July			47.33				42.36				26,080,313
August			46.71				42.89				38,961,785
September			48.95				42.24				38,320,713

The following table sets forth the price range, calculated using intraday high and low prices, and trading volume of the Brookfield Class A Shares as reported by the TSX for each quarterly period in the two years preceding the date of this document:

 

Quarter		High Price (C$)				Low Price (C$)				Volume
2021
Q3			58.78				48.96				94,070,907
Q4			63.77				54.29				94,687,678
2022
Q1			64.07				52.09				109,195,531
Q2			59.50				44.99				102,275,231
Q3			56.13				44.80				94,430,318
Q4			51.72				41.39				132,625,648
2023
Q1			51.50				38.92				123,708,332
Q2			45.31				40.47				110,880,925
Q3			48.95				42.24				103,362,811

 

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The following table sets forth the price ranges and trading volumes of the Brookfield Class A Shares as reported by the NYSE for the periods indicated, in U.S. dollars:

 

		High				Low				Volume
		($)				($)
2022
September			41.91				32.79				36,179,003
October			36.11				30.08				62,608,027
November			38.71				31.11				56,693,217
December			38.72				30.54				73,150,221
2023
January			37.95				31.18				34,330,030
February			38.48				33.18				55,989,870
March			34.31				28.25				86,675,530
April			33.46				30.90				34,195,185
May			32.45				29.85				51,897,038
June			33.78				29.92				43,188,630
July			35.98				31.82				42,352,987
August			34.81				31.65				52,860,459
September			36.22				31.13				48,345,042

The following table sets forth the price range, calculated using intraday high and low prices, and trading volume of the Brookfield Class A Shares as reported by the NYSE for each quarterly period in the two years preceding the date of this document:

 

Quarter		High Price ($)				Low Price ($)				Volume
2021
Q3			47.11				38.56				173,697,244
Q4			50.67				43.37				81,931,580
2022
Q1			50.88				40.77				114,089,420
Q2			48.19				34.91				113,237,458
Q3			44.05				32.79				93,945,729
Q4			38.72				30.08				192,451,465
2023
Q1			38.48				28.25				176,995,430
Q2			33.78				29.85				129,280,853
Q3			36.22				31.13				143,558,488

The closing prices of the Brookfield Class A Shares on the NYSE and the TSX on September 29, 2023 were $31.27 and C$42.47, respectively.

Brookfield Shareholders are urged to obtain current market quotations for the Brookfield Class A Shares.

 

4.	Source of Offered Consideration

Brookfield Reinsurance will issue the class A-1 exchangeable shares delivered under this Offer.

 

5.	Purpose of and Background to the Offer

On June 28, 2021, Brookfield Corporation completed a special dividend pursuant to which Brookfield Shareholders received one class A exchangeable share for every 145 Brookfield Class A Shares held as of the

 

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