Summary of PARTNERRE LTD - Yahoo! Finance

Entry into a Material Definitive Agreement, Financial Statements and Exhibits

Item 1.01 Entry into a Material Definitive Agreement

On July 4, 2009, PartnerRe Ltd., a Bermuda exempted company ("PartnerRe"), entered into a number of definitive agreements relating to its acquisition of all the outstanding shares of PARIS RE Holdings Limited, a Swiss corporation ("PARIS RE"), in a multi-step transaction. Under the terms of these agreements, PartnerRe expects to issue approximately 24.2 million PartnerRe common shares in exchange for the approximately 80.6 million PARIS RE common shares currently outstanding (net of treasury shares), assuming an exchange ratio of 0.30 PartnerRe common shares for each PARIS RE common share. Additionally, PartnerRe expects to issue up to 1.4 million PartnerRe common shares in exchange for up to the approximately 8.5 million PARIS RE warrants currently outstanding. As a result of the exchanges current PartnerRe shareholders will own approximately 69% of the combined company and current PARIS RE shareholders will own approximately 31% of the combined company upon completion of the transaction. The exchange ratio is subject to adjustment in certain cases as described below.

Block Purchase Agreement

On July 4, 2009, PartnerRe, PARIS RE and certain investment entities affiliated with Stone Point Capital, Hellman & Friedman, Vestar Capital Partners, Crestview Partners, New Mountain and Caisse de Dépôt et Placement du Québec (collectively, the "Block Sellers") that collectively own approximately 57% of PARIS RE's outstanding shares entered into a Securities Purchase Agreement (the "Block Purchase Agreement") pursuant to which PartnerRe will purchase (the "Block Purchase") all of the PARIS RE common shares and warrants to purchase PARIS RE common shares held by the Block Sellers. The purchase price for PARIS RE common shares and warrants is 0.30 PartnerRe common shares per PARIS RE common share (the "Per Share Consideration") and 0.167 Partner Re common shares per PARIS RE warrant (the "Per Warrant Consideration"), subject, in each case, to the tangible book value adjustment described below under the heading "Transaction Agreement."

Immediately prior to the Block Purchase, PARIS RE intends to effect an extraordinary cash distribution by way of a capital reduction to all PARIS RE shareholders (the "Share Capital Repayment"). The Share Capital Repayment will amount to up to CHF 4.17 (the Swiss Franc equivalent of US$3.85 as of July 7, 2009) per PARIS RE common share. The Block Purchase Agreement and the Transaction Agreement (as described below) contemplate that to the extent the full Share Capital Repayment is not paid prior to the closing of the Block Purchase due to, among other things, the failure to obtain all necessary regulatory approvals, PartnerRe will commit to pay or cause to be paid the remaining portion of the Share Capital Repayment (i) to the Block Sellers at the closing of the Block Purchase in the form of a promissory note and (ii) to the other PARIS RE shareholders immediately prior to the settlement of the Exchange Offer described below in cash by way of a capital distribution from PARIS RE. The Share Capital Repayment will not be paid if the Block Purchase does not close for any reason. In addition, to the extent that the Block Purchase closes, but all or a portion of the Share Capital Repayment is not paid immediately prior to the Block Purchase, the payment of the Share Capital Repayment (or remaining portion thereof) to the remaining PARIS RE shareholders is conditioned on the Exchange Offer closing immediately following the payment.

Consummation of the Block Purchase is subject to a number of conditions, including (i) approval of the holders of PartnerRe common shares and PARIS RE common shares, (ii) approval of the holders of PARIS RE common shares of certain matters to be submitted to a PARIS RE shareholders' meeting, (iii) obtaining certain regulatory approvals and expiration or termination of the applicable Hart-Scott-Rodino waiting period and certain foreign antitrust approvals, (iv) approval for listing of the PartnerRe common shares to be issued in the Exchange Offer and the Merger (as described below) on the New York Stock Exchange and on Euronext Paris or another European Union stock exchange selected by PartnerRe,
(v) evidence that the PartnerRe designees on PARIS RE's board of directors will comprise a majority of PARIS RE's board of directors immediately following the closing of the Block Purchase, (vi) an amendment to PARIS RE's articles of incorporation to, among other things, remove a provision thereof purporting to require a cash takeover bid for any acquisition of more than one-third of the PARIS RE voting rights, (vii) subject to certain exceptions, the accuracy of representations and warranties and (viii) certain other customary closing conditions.

The Block Sellers have agreed to vote in favor of all matters required to be submitted for approval to the PARIS RE shareholders in order to consummate the Block Purchase, including (i) the election of PartnerRe designees to the

PARIS RE board of directors comprising a majority of the PARIS RE board of directors, (ii) the approval of the Share Capital Repayment and (iii) the amendment to PARIS RE's articles of incorporation, and together have sufficient votes to approve such matters. The Block Sellers are obligated to vote in favor of these matters irrespective of whether PARIS RE's board of directors withdraws, changes or modifies its recommendation with respect to the transactions contemplated by the Block Purchase Agreement and the Transaction Agreement in a manner that is adverse to PartnerRe.

The foregoing description of the Block Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Block Purchase Agreement, which is filed as Exhibit 2.1 hereto.

Transaction Agreement

Simultaneously with entering into the Block Purchase Agreement, PartnerRe and PARIS RE entered into a Transaction Agreement (the "Transaction Agreement") pursuant to which PartnerRe has agreed, subject to certain conditions, to commence a voluntary public exchange offer (the "Exchange Offer") for all PARIS RE common shares and warrants not owned by PartnerRe immediately prior to the commencement of the Exchange Offer as promptly as practicable after the closing of the Block Purchase. The Exchange Offer will be conducted pursuant to French tender offer rules and, to the extent applicable, United States securities laws.

In the Exchange Offer, PartnerRe will offer to acquire PARIS RE common shares and warrants for the same Per Share Consideration and Per Warrant Consideration, as applicable, paid in the Block Purchase, subject, in each case, to the tangible book value adjustment described below. The Transaction Agreement provides that if, after completion of the Exchange Offer, PartnerRe owns greater than 90% but less than 100% of PARIS RE's common shares, PartnerRe will effect a compulsory merger (the "Merger") in accordance with Swiss law pursuant to which PARIS RE will be merged into a wholly owned subsidiary of PartnerRe, with the subsidiary of PartnerRe surviving the Merger. The same Per Share Consideration paid in the Exchange Offer for each PARIS RE common share will be paid in the Merger.

The Transaction Agreement provides that if the percentage decline in a party's tangible book value during the period from March 31, 2009 to the closing of the Block Purchase is more than 15% greater than the percentage decline in the other party's tangible book value during the same period, the Per Share Consideration and Per Warrant Consideration will be adjusted upwards (if the percentage decline in PartnerRe's tangible book value is greater than that of PARIS RE's) or downwards (if the percentage decline in PARIS RE's tangible book value is greater than that of PartnerRe's) based on a formulaic adjustment. The formulaic adjustment provides that for each percentage point difference in excess of 15% in the parties' relative declines in their tangible book values, the Per Share Consideration and Per Warrant Consideration will adjust upwards or downwards, as applicable, by 0.004. The tangible book value adjustment is capped such that the Per Share Consideration and Per Warrant Consideration will not increase or decrease by more than 0.10. If either PartnerRe or PARIS RE experiences a 40% relative decline in its tangible book value during the period from March 31, 2009 to the closing of the Block Purchase, the other party will have the right to terminate the Transaction Agreement and the Block Purchase Agreement.

The Transaction Agreement further provides that the Per Share Consideration in the Exchange Offer and the Merger will be adjusted upwards to reflect any dividend declared on the PartnerRe common shares having a record date on or after the closing of the Block Purchase and prior to the settlement of the Exchange Offer.

PartnerRe's obligation to commence the Exchange Offer following the closing of the Block Purchase is subject to a number of conditions, including (i) approval for listing of the PartnerRe common shares to be issued in the Exchange Offer and the Merger on the New York Stock Exchange and on Euronext Paris or another European Union stock exchange selected by PartnerRe, (ii) the Exchange Offer on the terms proposed having been declared compliant by the Autorité des Marchés Financiers (the French securities regulator) without any requirement that PartnerRe provide for a cash alternative under the French tender offer rules,
(iii) PartnerRe having a reasonable basis to believe that the opinion of the independent expert to be rendered under French law in connection with the Exchange Offer on the terms proposed would satisfy the requirements of French law and (iv) certain other customary conditions.

PartnerRe and PARIS RE have made customary representations, warranties and covenants in the Transaction Agreement, including, among others, covenants (i) to conduct their respective businesses in the ordinary course consistent with past practice between the execution of the Transaction Agreement and closing of the Block Purchase (and in the case of PARIS RE, until the effective time of the Merger), (ii) to cause shareholder meetings to be held to consider the matters required to be submitted for approval to the PARIS RE and PartnerRe shareholders irrespective of whether either party's board of directors withdraws, changes or modifies its recommendation with respect to the transactions contemplated by the Block Purchase Agreement and the Transaction Agreement in a manner that is adverse to the other party, (iii) not to solicit proposals relating to alternative business combination transactions and (iv) subject to certain exceptions, for their respective boards of directors to recommend the approval by its shareholders of the transactions contemplated by the Block Purchase Agreement and the Transaction Agreement.

The Transaction Agreement contains certain termination rights for both PartnerRe and PARIS RE and further provides that PartnerRe may be required to pay PARIS RE a termination fee of US$75 million upon termination of the Transaction Agreement either because (i) PartnerRe's board of directors withdraws, changes or modifies its recommendation with respect to the transactions contemplated by the Block Purchase Agreement and the Transaction Agreement in a manner that is adverse to PARIS RE or (ii) PartnerRe's shareholders fail to approve such transactions at the PartnerRe shareholders meeting called for such purpose.

The Transaction Agreement provides that one of the existing members of PARIS RE's board of directors unaffiliated with the Block Sellers will become a member of PartnerRe's board of directors at the closing of the Block Purchase.

The foregoing description of the Transaction Agreement does not purport to be complete and is qualified in its entirety by reference to the Transaction Agreement, which is filed as Exhibit 2.2 hereto.

Investor Agreements

The Block Purchase Agreement provides that at the closing of the Block Purchase, certain investment entities affiliated with each of Stone Point Capital, Hellman & Friedman, Vestar Capital Partners, Crestview Partners, New Mountain and Caisse de Dépôt et Placement du Québec (each affiliated group of investment vehicles is individually referred to as a "Block Purchase Shareholder") will enter into a separate investor agreement with PartnerRe. The investor agreements subject the Block Purchase Shareholders to certain transfer restrictions, which provide that until the later to occur of (i) six months after the closing of the Block Purchase and (ii) the earlier to occur of (A) three months after the consummation of the Exchange Offer and (B) May 31, 2010 (the "Lock-Up Period"), no Block Purchase Shareholder may transfer its PartnerRe common shares, except for transfers to affiliates or, after six months, in certain distributions in-kind. Following the Lock-Up Period, each Block Purchase Shareholder may generally transfer its PartnerRe common shares to third parties, except that, subject to certain exceptions, no such transfers may be made to any person who, to such Block Purchase Shareholder's knowledge, is a competing person, has filed a Schedule 13D with respect to PartnerRe's equity securities or beneficially owns 5% or more of PartnerRe's total outstanding voting power.

The investor agreements also subject the Block Purchase Shareholders to certain "standstill" restrictions that generally restrict each Block Purchase Shareholder from, among other things, (i) acquiring beneficial ownership of more than 9.9% of PartnerRe's total outstanding voting power, (ii) seeking to effect a merger, tender offer or other extraordinary transaction involving PartnerRe,
(iii) soliciting proxies to vote or seek to influence any third party with respect to their voting of any PartnerRe common shares, (iv) facilitating or encouraging any person to seek representation on PartnerRe's board of directors . . .