1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OFProxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(AMENDMENT NO.(Amendment No. )
Filed by the registrantRegistrant [X]
Filed by a partyParty other than the registrantRegistrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statementProxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statementProxy Statement
[ ] Definitive additional materialsAdditional Materials
[ ] Soliciting material underMaterial Pursuant to Rule 14a-11(c) or Rule 14a-12
Reinsurance Group of America, Incorporated
- --------------------------------------------------------------------------------REINSURANCE GROUP OF AMERICA, INCORPORATED
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s)Person Filing Proxy Statement if other than the Registrant)
Payment of filing feeFiling Fee (Check the appropriate box):
[X] No fee required.required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.0-11
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total feeFee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
- --------------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the formForm or scheduleSchedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------Previously Paid:
(2) Form, scheduleSchedule or registration statement no.Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------Party:
(4) Date filed:
- --------------------------------------------------------------------------------Filed:
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[RGA LOGO]
NOTICE OF THE ANNUAL MEETING OF
THE SHAREHOLDERS OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
St. Louis, Missouri
April 6, 200112, 2002
TO THE SHAREHOLDERS OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
The Annual Meeting of the Shareholders of Reinsurance Group of
America, Incorporated will be held at the Marriott West Hotel, 660 Maryville
Centre Drive, St. Louis, Missouri on May 23, 2001,22, 2002, commencing at 2:00 p.m.,
at which meeting only holders of record of the Company's Common Stock at the
close of business on March 30, 200129, 2002 will be entitled to vote, for the
following purposes:
1. to elect three directors; 2. to authorize the sale of certain types of securities from time to time
to MetLife, Inc., a significant shareholder of the Company, or its
affiliates; and
3.2. to transact such other and further business, if any,
as properly may be brought before the meeting.
REINSURANCE GROUP OF AMERICA,
INCORPORATED
By
/S/ Richard A. Liddy
/S/ James. E./s/ James Sherman /s/ Stewart Nagler
Secretary Chairman of the Board
EVEN THOUGH YOU MAY PLAN TO ATTEND THE MEETING IN PERSON, PLEASE
MARK, DATE, AND EXECUTE THE ENCLOSED PROXY AND MAIL IT PROMPTLY. A
POSTAGE-PAID RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
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[RGA LOGO]
REINSURANCE GROUP OF AMERICA, INCORPORATED
1370 TIMBERLAKE MANOR PARKWAY, CHESTERFIELD, MISSOURI 63017-6039
PROXY STATEMENT
FOR THE
ANNUAL MEETING OF THE SHAREHOLDERS
TO BE HELD MAY 23, 200122, 2002
MARRIOTT WEST HOTEL, ST. LOUIS, MISSOURI
This proxy statement is furnished to the holders of Common Stock of
Reinsurance Group of America, Incorporated (the "Company" or "RGA") in
connection with the solicitation of proxies for use in connection with the
Annual Meeting of the Shareholders to be held May 23, 2001,22, 2002, and all
adjournments and postponements thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of the Shareholders. Such holders are
hereinafter referred to as the "Shareholders." The Company is first mailing
this proxy statement and the enclosed form of proxy to Shareholders on or
about April 6, 2001.12, 2002.
Whether or not you expect to be present in person at the meeting,
you are requested to complete, sign, date, and return the enclosed form of
proxy. If you attend the meeting, you may vote by ballot. If you do not
attend the meeting, your shares of Common Stock can be voted only when
represented by a properly executed proxy.
Any person giving such a proxy has the right to revoke it at any
time before it is voted by giving written notice of revocation to the
Secretary of the Company, by duly executing and delivering a proxy bearing a
later date, or by attending the Annual Meeting and voting in person.
The close of business on March 30, 200129, 2002 has been fixed as the
record date for the determination of the Shareholders entitled to vote at
the Annual Meeting of the Shareholders. As of the record date, approximately
49,375,60949,307,043 shares of Common Stock were outstanding and entitled to be voted
at such meeting, with approximately 116106 holders of record. Shareholders will
be entitled to cast one vote on each matter for each share of Common Stock
held of record on the record date.
A copy of the Company's Annual Report to Shareholders for the
fiscal year ended December 31, 20002001 accompanies this proxy statement.
The solicitation of this proxy is made by the Board of Directors of
the Company. The solicitation will primarily be by mail and the expense
thereof will be paid by the Company. In addition, proxies may be solicited
by telephone or telefax by directors, officers, or regular employees of the
Company.
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ITEM 1 --- ELECTION OF DIRECTORS
The first item to be acted upon at the Annual Meeting is the
election of three directors of the Company for terms expiring at the Annual
Meeting in 2004,2005, or until their respective successors have been elected and
have qualified.
NOMINEES AND CONTINUING DIRECTORS
The Board of Directors is divided into three classes, with the
terms of office of each class ending in successive years. Certain
information with respect to the nominees for election as directors proposed
by the Company and the other directors whose terms of office as directors
will continue after the Annual Meeting is set forth below. Each of the
directors has served in his or her principal occupation for the last five
fiscal years, unless otherwise indicated. OneTwo of the Company's directors
Judy E. Weiss,left the Board during the past year. William P. Stiritz resigned October 26,
2000. The25,
2001. Effective January 1, 2002, the Board named Mary Ann BrownAlan C. Henderson to fill
the vacancy created by the resignation of Ms. Weiss,Mr. Stiritz, to complete the term
of office ending in 2003.2004. John H. Tweedie retired from the Board at the end
of 2001. On January 23, 2002, the Board named Joseph A. Reali to fill the
vacancy created by the retirement of Mr. Tweedie, to complete the term of
office ending in 2002.
On January 23, 2002, the Board elected Stewart G. Nagler as an
additional director, Chairman of the Board and a member of the class of
directors to be elected for terms expiring in 2005. Richard A. Liddy, former
chairman of the Board, has announced his intention to resign as a director
at the Board meeting scheduled for April 24, 2002. H. Edwin Trusheim will
retire from the Board on May 22, 2002.
Should any one or more of the nominees be unable or unwilling to
serve (which is not expected), the proxies (except proxies marked to the
contrary) will be voted for such other person or persons as the Board of
Directors of the Company may recommend. All of the nominees are currently
directors of the Company. All of the nominees for director have agreed to
serve if elected. The Company recommends a vote FOR the three nominees for
election to the Board.
2
SERVED AS
DIRECTOR
SINCE
--------------
TO BE ELECTED AS DIRECTORS FOR TERMS ENDING 2005:
J. CLIFF EASON, 54 1993
Retired President of Southwestern Bell Telephone, SBC Communications, Inc. ("SBC"), a
position he held from September 2000 through January 2001. He served as President,
Network Services, SBC from October 1999 through September 2000; President, SBC
International of SBC, from March 1998 until October 1999; President and CEO of
Southwestern Bell Telephone Company ("SWBTC") from February 1996 until March 1998;
President and CEO of Southwestern Bell Communications, Inc. from July 1995 through
February 1996; President of Network Services of SWBTC from July 1993 through June 1995;
and President of Southwestern Bell Telephone Company of the Midwest from 1992 to 1993.
He held various other positions with Southwestern Bell Communications, Inc. and its
subsidiaries prior to 1992, including President of Metromedia Paging from 1991 to 1992.
Mr. Eason was a director of Williams Communications Group, Inc. until his retirement in
January 2001.
STEWART G. NAGLER, 59 2002
Vice-Chairman of the Board and Chief Financial Officer of MetLife, Inc. since September
1999. Mr. Nagler has been Vice-Chairman of the Board and Chief Financial Officer of
Metropolitan Life Insurance Company since July 1998, and was its Senior Executive
Vice-President and Chief Financial Officer from April 1993 to July 1998. He is a fellow
of the Society of Actuaries, a director of the Life Insurance Council of New York, a
trustee of the Boys and Girls Club of America and Barnard College, and chairman of the
board of Polytechnic University of New York. Mr. Nagler received a B.S. in mathematics,
summa cum laude, from Polytechnic University. He has been a director of MetLife, Inc.
since August 1999 and a director of Metropolitan Life Insurance Company since 1997.
JOSEPH A. REALI, 49 2002
Senior Vice President and Tax Director of Metropolitan Life Insurance Company since
1999. Mr. Reali has been responsible for Investor Relations at MetLife and served as
the liaison with RGA since July 2001. Mr. Reali joined MetLife in 1977 as an attorney
in the Law Department, and in 1985 he became a Vice President in the Tax Department. In
1993 he was appointed Vice President and Corporate Secretary, and in 1997 he became a
Senior Vice President. Mr. Reali received a J.D. degree, cum laude, from Fordham
University School of Law and an LL.M degree in taxation from New York University Law
School. Mr. Reali has served as an associate adjunct professor at Fordham University
School of Law, and serves as Counsel and Secretary of the Metropolitan Life Foundation.
3
SERVED AS
DIRECTOR
SINCE
-----
TO CONTINUE IN OFFICE UNTIL 2004:
ALAN C. HENDERSON, 56 2002
President and Chief Executive Officer and a director of RehabCare Group, Inc. since
1998. Prior to becoming President and Chief Executive Officer, Mr. Henderson was
Executive Vice President, Chief Financial Officer and Secretary of RehabCare from 1991
through May 1998. Mr. Henderson also serves as a director of General American Capital
Corp., a registered investment company, and Angelica Corporation.
WILLIAM A. PECK, M.D., 6768 1993
Executive Vice Chancellor for Medical Affairs and Dean of the School of Medicine of
Washington University since 1989. From 1976 to 1989, he was Physician in Chief of The
Jewish Hospital of St. Louis. He also
serves asis a director of Allied Health Care Products, Inc.,
Angelica Corporation, Hologic, Inc., and TIAA-CREF Trust
WILLIAM P. STIRITZ, 66 1993
Chairman, President and Chief Executive Officer of
Agribrands International, Inc., since the company was
spun-off from Ralston Purina Company ("Ralston") on
April 1, 1998. He was CEO and President of Ralston from
1982 until 1997, and held various other positions with
Ralston since 1963. He is Chairman of the Board of
Ralston, Ralcorp Holdings, Inc. and Energizer Holdings,
Inc., and also serves as a director of Ball
Corporation, GenAmerica Financial Corporation
("GenAmerica"), General American Life Insurance Company
("General American"), The May Department Stores
Company, and Vail Resorts, Inc.Trust.
A. GREIG WOODRING, 4950 1993
President and Chief Executive Officer of the Company. As President and CEO of the Company, Mr. Woodring also is
also an executive
officer of General American.American Life Insurance Company ("General American"). He headed
General American's reinsurance business from 1986 until the Company's formation in
December 1992. He also serves as a director and officer of a number of subsidiaries of
the Company and General American
2
5
SERVED AS
DIRECTOR
SINCE
---------
Company.
TO CONTINUE IN OFFICE UNTIL 2003:
MARY ANN BROWN, 4950 2001
Senior Vice President of MetLife, Inc., in charge of Individual Business Product
Management. Ms. Brown also serves as President, New England Products & Services. She serves
as head of Individual Business Product Management for
Metropolitan Life Insurance Company ("MLIC")Services and a
number of its subsidiaries, and also serves as an officer and director of various
subsidiaries of MLIC.MetLife. From 1996 until 1998, she served as Director, Worldwide Life
Reinsurance, Swiss Re New Markets, Swiss Reinsurance Company. She was a Principal at
Tillinghast/Towers Perrin from 1987 until 1996, and served as a Consultant with that
organization from 1983 until becoming a Principal in 1987. SheMs. Brown also serves asis a director
of New England Zenith Fund, a registered investment company, and Exeter Reassurance
Company, Ltd.
STUART I. GREENBAUM, 6465 1997
Dean of the John M. Olin School of Business at Washington University since July 1995.
Prior to his current position, he spent 20 years at the Kellogg Graduate School of
Management at Northwestern University where he was Director of the Banking Research
Center and Norman Strunk Distinguished Professor of Financial Institutions. Mr.
Greenbaum has served on the Federal Savings and Loan Advisory Council and the Illinois
Task Force on Financial Services, and has been a consultant for the American Bankers
Association, the Bank Administration Institute, the Comptroller of the Currency, the
Federal Reserve System, and the Federal Home Loan Bank System, among others. He is also
a director of Stifel Financial Corp., First Oak Brook Bancshares, Inc., St. Louis
Children's Hospital and Noble International, Ltd.
TERENCE I. LENNON, 63 2000
Executive Vice President, Mergers and Acquisitions, of MetLife, Inc., since July 2001.
From January 1998 until July 2001, he served as Executive Vice President, Government
Relations, Compliance and Public Relations of MetLife. From January 1997 until January
1998, he served as Executive Vice President, Planning, and Mergers and Acquisitions of
Metropolitan Life Insurance Company. Prior to that assignment, Mr. Lennon was Senior
Vice President, Mergers and Acquisitions of Metropolitan Life Insurance Company from
March 1994 until January 1997.
4
SERVED AS
DIRECTOR
SINCE
-----
RICHARD A. LIDDY, 6566 1993
Former Chairman of the Board of the Company. He also serves as
Chairmanis former chairman and a director of
GenAmerica Financial Corporation and General American.American Life Insurance Company. In
September 2000, Mr. Liddy retired as President and Chief Executive Officer of
GenAmerica and General American.American, positions he held since April 1997, and May 1992,
respectively. He also serves as a director of Ameren Corporation, Brown Shoe Company,
Inc., Energizer Holdings, Inc., and Ralston Purina Company
TERRENCE I. LENNON, 62 2000
Executive Vice President, Government Relations,
Compliance and Public Relations-Metropolitan Life
Insurance Company ("MLIC") since January, 1998. Prior
to his current position, Mr. Lennon was Senior Vice
President, Mergers and Acquisitions for MLIC from
March, 1994 until January, 1997, then Executive Vice
President, Planning and Mergers and Acquisitions until
assuming his current position. He also serves as a
director of Texas Life Insurance Company and SSRMRalcorp Holdings, Inc.
TO CONTINUE IN OFFICE UNTIL 2002:
J. CLIFF EASON, 53 1993
Retired President of Southwestern Bell Telephone, SBC
Communications, Inc. ("SBC"), a position he held from
September 2000 through January 2001. He served as
President, Network Services, SBC from October 1999
through September 2000; President, SBC International of
SBC, from March 1998 until October 1999; President and
CEO of Southwestern Bell Telephone Company ("SWBTC")
from February 1996 until March 1998; President and CEO
of Southwestern Bell Communications, Inc. from July
1995 through February 1996; President of Network
Services of SWBTC from July 1993 through June 1995; and
President of Southwestern Bell Telephone Company of the
Midwest from 1992 to 1993. He held various other
positions with Southwestern Bell Communications, Inc.
and its subsidiaries prior to 1992, including President
of Metromedia Paging from 1991 to 1992. Mr. Eason was a
director of Williams Communications Group, Inc. until
his retirement in January 2001.
3
6
SERVED AS
DIRECTOR
SINCE
---------
H. EDWIN TRUSHEIM, 73 1993
In 1995, Mr. Trusheim retired as Chairman of the Board
of General American, where he was Chief Executive
Officer until his retirement in 1992. He served as
President of General American from 1979 to 1988 and was
elected Chief Executive Officer in 1981 and Chairman of
the Board in 1986. He also serves as a director of
Angelica Corporation, Laclede Gas Company (until
January 2001), and RehabCare Corporation
JOHN H. TWEEDIE, 55 2000
Senior Executive Vice President of MetLife, Inc. since
September 1999 and Senior Executive Vice President of
Finance and International -- MetLife since March 1999.
Prior to that, Mr. Tweedie was Executive Vice-President
of Life Insurance for Metropolitan Life Insurance
Company from 1994 through May 1998 and became Senior
Executive Vice President of Life Insurance from May
1998 until assuming his current position. Mr. Tweedie
also serves as a director for Seguros Genesis, Texas
Life Insurance Company, Metropolitan Property and
Casualty Insurance Company and Fulcrum Financial
Advisors
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held a total of sevensix regular and special
meetings during 2000.2001. Each incumbent director attended at least 75% of the
meetings of the Board and committees on which he or she served during 2000,2001,
except for Mr. Tweedie,Lennon, who attended 67% of all Board meetings, and 33%Mr.
Stiritz, who attended 40% of all Board and 60% of all committee meetings.
The Board of Directors has an Audit Committee, a Compensation
Committee, and a Nominating Committee. The Audit Committee, of which Messrs.
Greenbaum (Chairman), Eason, and Peck arewere members during 2001, met five
times in 2000.2001. This Committee is responsible for overseeing the integrity
and reliability of the Company's accounting and financial reporting
practices and the effectiveness of its system of controls. It also
recommends a public accounting firm to be retained for the coming year and
reviews the work to be done by such firm. The Audit Committee operates under
a written charter, a copy of which iswas attached as Exhibit A to thisthe
Company's 2001 Proxy Statement. Each member of the Audit Committee is
independent, as defined under the listing standards of the New York Stock
Exchange.
The Compensation Committee establishes and oversees the
compensation policies of the Company's operating subsidiaries and determines
executive compensation. The Committee, which consistsduring 2001 consisted of
Messrs. Eason (Chairman), Greenbaum, Peck, Stiritz, and Tweedie, held fivefour
meetings in 2000.2001. See "Compensation Committee Report on Executive
Compensation."
The Nominating Committee, which during 2001 consisted of which Messrs.
Peck (Chairman), Eason, Greenbaum, Stiritz, Trusheim, and Tweedie, are members, held two meetingsmet once
during 2000.2001. This Committee nominates directors and will consider
recommendations for nominations as directors from Shareholders. Shareholders
wishing to propose nominees to the Nominating Committee for consideration
should notify in writing the Secretary of the Company.Company in accordance with the
process described in "Shareholder Proposals." The Secretary will inform the
members of the Nominating Committee of such nominees.
5
DIRECTOR COMPENSATION
Officers of the Company, MetLife, Inc. ("MetLife"), GenAmerica
Financial Corporation ("GenAmerica"), or any subsidiaries of such companies,
do not receive any additional compensation for serving the Company as
members of the Board of Directors or any of its committees. During 2000,Effective
February 14, 2001, directors (other than the Chairman) who are not employees
of the Company, MetLife, GenAmerica, or any subsidiaries of such companies
("Non-Employee Directors") are paid an annual retainer fee of $20,000,$24,000, and
are paid $1,000$1,200 for each Board meeting attended in person, $500$600 for each
telephonic Board meeting attended, $750 for each committee meeting attended
in person (except the committee chairman, who is paid $1,000)$1,200) and $375 for
each telephonic committee meeting attended (except the committee chairman,
who is paid $500)$600). On September 15, 2000,Effective February 14, 2001, the Chairman of the Board,
Mr. Liddy, retired from his positions as an officer of
4
7
GenAmerica, General American, and MetLife, and became eligible to receive
compensation as a Non-Employee Director. The Board approved
compensation tofor the Board Chairman, Mr. Liddy (who served as Chairman until
January 23, 2002) that is generally one-third higher than the amount paid to
a Non-Employee Director. From September 15 though the end of 2000,February 14, 2001 through January 23, 2002,
Mr. Liddy was paid, on a pro-rata basis, an annual retainer fee of $26,670, $1,335$32,000,
$1,600 for each Board meeting attended in person, and $665$800 for each
telephonic Board meeting in which he participated. The Company also
reimburses directors for out-of-pocket expenses incurred in connection with
attending Board and committee meetings.
Of the $20,000$24,000 annual retainer paid to Non-Employee Directors (other
than the Chairman), $8,000$12,000 is paid in shares of the Company's Common Stock
aton the date of the Annual Meeting.Meeting, with the balance paid in cash. The
Chairman'sChairman (if qualified as a Non-Employee Director) receives an annual
retainer of $32,000, which consists of $10,670$16,000 paid in shares of the
Company's Common Stock aton the date of the Annual Meeting, with the balance
paid in cash. Also on the date of each Annual Meeting, each Non-Employee
Director (other than the Chairman) is granted an option to purchase 2,2503,000
shares of Common Stock with an exercise price equal to the closing price of
the Common Stock on such date. The Chairman (if qualified as a Non-Employee
Director) is granted an option to purchase 3,0004,000 shares of Common Stock on
the same terms. On May 24, 2000,23, 2001, Mr. Liddy was awarded an option to purchase
4,000 shares of Common Stock, and each of Messrs. Eason, Greenbaum, Peck,
Stiritz, and Trusheim were awarded an option to purchase 2,2503,000 shares of
Common Stock at an exercise price of $31.06$35.92 per share, the closing price of
the Company's Common Stock on the date of grant. The options become fully
vested on the first anniversary of the grant.
Non-Employee Directors have the option to receive performance shares
in lieu of their annual retainer (including the stock portion) and meeting
fees. A performance share is a hypothetical share of Common Stock of the
Company based upon the fair market value of the Common Stock at the time of
the grant. Performance shares are not transferable and are subject to
forfeiture unless held until the director ceases to be a director by reason
of retirement, death, or disability. Upon such an event, the Company will
issue cash or shares of Common Stock in an amount equal to the value of the
performance shares.
All such stock, options and performance shares are issued pursuant
to the Flexible Stock Plan for Directors, which was adopted effective
January 1, 1997. Performance shares granted prior to such time were issued
under the Phantom Stock Plan for Directors.
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8
COMMON STOCK
SECURITIES OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
OWNERSHIP OF SHARES OF RGA
--------------------------
The following table sets forth, as of March 1, 2001,February 28, 2002, certain stock
ownership
information with respect to: 1) each person known toby the Company to be the
beneficial owner of 5% or more of the Company's outstanding Common Stock,
and 2) certain information with respect to the ownership of Common Stock by (i) each director and nominee for
director of the Company, (ii) each executive officer of the Company named in
the Summary Compensation Table, and (iii) all directors, nominees, and
executive officers as a group.
AMOUNT AND NATURE OF PERCENT
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
- ---------------- -------------------------------------------- --------
PRINCIPAL SHAREHOLDER:SIGNIFICANT SHAREHOLDERS:
MetLife, Inc. 28,915,939(1) 58.6%29,243,539 (2) 59.3%
One Madison Avenue
New York, New York 10010
Wellington Management Company, LLP 3,471,128 (3) 7.0%
75 State Street
Boston, Massachusetts 02109
Franklin Resources, Inc. 2,930,252(2) 5.9%2,981,088 (4) 6.0%
777 Mariners Island Boulevard
San Mateo, California 94404
Wellington Management Company, LLP 2,783,035(3) 5.6%
75 State Street
Boston, Massachusetts 02109
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS:
A. Greig Woodring, Director, President, and Chief 323,557 (5) *
Executive Officer(1) 256,780(4) *Officer (2)
Mary Ann Brown, Director 0 ***
J. Cliff Eason, Director 8,933(5)11,183 (6) *
Stuart Greenbaum, Director 8,933(5)9,381 (6) *
Alan C. Henderson, Director 0 **
Terence I. Lennon, Director 500 *
Richard A. Liddy, Chairman(1) 102,581(6)Director (2) 132,200 (7) *
Stewart G. Nagler, Chairman (2) 1,000 *
William A. Peck, M.D., Director 6,683(5)4,433 (8) *
William P. Stiritz, Director(1) 74,358(7) *Joseph A. Reali, Director 0 **
H. Edwin Trusheim, Director 18,423(5) *
John H. Tweedie, Director(1) 0(2) 20,673 (6) *
David B. Atkinson, Executive Vice President and Chief
Operating Officer 179,026(8)222,619 (9) *
Jack B. Lay,Paul A. Schuster, Executive Vice President, and Chief Financial
Officer 55,481(9)U.S.
Division 84,796 (10) *
Andre St-Amour, Executive Vice President and Chief
International Operating Officer 41,943(10)57,875 (11) *
Graham Watson, Executive Vice President and Chief
Marketing Officer 38,923(11)54,634 (12) *
All directors and executive officers
as a group (26(18 persons) 995,535(12) 2.0%
- -------------------------
* Less than one percent.
(1) On November 23, 1999, Metropolitan Life Insurance Company ("MLIC")
purchased 4,784,689 shares of RGA Common Stock through a private placement.
On January 6, 2000, MLIC indirectly acquired shared voting and investment
power of an additional 24,131,250 shares through its acquisition of
GenAmerica Financial Corporation ("GenAmerica"). Shares beneficially owned
by GenAmerica were held by Equity Intermediary Company, a wholly owned
subsidiary of General American Life Insurance Company ("General American").
General American is a wholly owned subsidiary of GenAmerica, which is now a
wholly owned subsidiary of MLIC. On April 7, 2000, MLIC completed a
demutualization and an initial public offering of shares of MetLife, Inc.
("MetLife"), which became the parent of MLIC. As a result, MetLife acquired
shared voting and investment power of all shares of RGA held by MLIC and
GenAmerica and became the beneficial owner of such shares. Messrs. Liddy
and Stiritz are directors of GenAmerica and General American. Mr. Woodring
is an executive officer of GenAmerica and General American. Mr. Tweedie is
an executive officer of MetLife. These individuals disclaim beneficial
ownership of the shares beneficially owned by MetLife and its subsidiaries.
6
9
(2) Franklin Resources, Inc. is the parent of several direct and indirect
investment advisory subsidiaries (the "Adviser Subsidiaries") that advise
investment companies and managed accounts. Shares are owned of record by
clients of the Adviser Subsidiaries.
(3) Wellington Management Company, LLP ("WMC") is an investment adviser. Shares
are owned of record by clients of WMC, none of which is known to have
beneficial ownership of more than five percent of the Company's outstanding
shares. WMC has shared voting power of 2,431,923 shares and shared
dispositive power of 2,743,035 shares.
(4) Includes 212,663992,919 (13) 1.98%
- ----------------
* Less than one percent.
** Not applicable.
7
(1) Unless otherwise indicated, each named person has sole voting and
investment power over the shares listed as beneficially owned.
(2) On November 23, 1999, Metropolitan Life Insurance Company ("MLIC")
purchased 4,784,689 shares of RGA Common Stock through a private
placement. On January 6, 2000, MLIC indirectly acquired shared
voting and investment power of an additional 24,131,250 shares
through its acquisition of GenAmerica Financial Corporation
("GenAmerica"). Shares beneficially owned by GenAmerica were held by
Equity Intermediary Company, a wholly owned subsidiary of General
American Life Insurance Company ("General American"). General
American is a wholly owned subsidiary of GenAmerica, which is now a
wholly owned subsidiary of MLIC. On April 7, 2000, MLIC completed a
demutualization and an initial public offering of shares of MetLife,
Inc. ("MetLife"), which became the parent of MLIC. As a result,
MetLife acquired shared voting and investment power of all shares of
RGA held by MLIC and GenAmerica and became the beneficial owner of
such shares. In January and February 2002, MetLife acquired an
additional 327,600 shares on the open market, bringing its total
beneficial ownership to the amount reflected in the table. Messrs.
Liddy and Trusheim are directors of GenAmerica and General American.
Mr. Woodring is an executive officer of GenAmerica and General
American. Mr. Nagler is an executive officer of MetLife. These
individuals disclaim beneficial ownership of the shares beneficially
owned by MetLife and its subsidiaries.
(3) As reported on a Schedule 13G/A dated February 12, 2002. Wellington
Management Company, LLP ("WMC") is an investment adviser. Shares are
owned of record by clients of WMC, none of which is known to have
beneficial ownership of more than five percent of the Company's
outstanding shares. WMC has shared voting power of 2,938,525 shares
and shared dispositive power of 3,471,128 shares.
(4) As reported on a Schedule 13G/A dated February 14, 2002. Franklin
Resources, Inc. is the parent of several direct and indirect
investment advisory subsidiaries (the "Adviser Subsidiaries") that
advise investment companies and managed accounts. Shares are owned
of record by clients of the Adviser Subsidiaries.
(5) Includes 279,440 shares of Common Stock subject to stock options
that are exercisable within 60 days. Also includes 15,000 shares of
restricted Common Stock that are subject to forfeiture in accordance
with the terms of the specific grant, as to which Mr. Woodring has
no investment power.
(6) Includes 8,933 shares of Common Stock subject to stock options that
are exercisable within 60 days.
(7) Includes 112,500 shares of Common Stock subject to stock options
that are exercisable within 60 days. Also includes 19,700 shares of
Common Stock held in a joint account with Mr. Liddy's spouse, an
account over which he has shared voting and investment power.
(8) Includes 4,433 shares of common stock subject to stock options that
are exercisable within 60 days.
(9) Includes 183,126 shares of Common Stock subject to stock options
that are exercisable within 60 days and 2,250 shares held by Mr.
Atkinson's children. Also includes 6,548 restricted shares of Common
Stock that are subject to forfeiture in accordance with the terms of
the specific grant, as to which Mr. Atkinson has no investment
power.
(10) Includes 76,206 shares of Common Stock subject to stock options that
are exercisable within 60 days.
(11) Includes 52,625 shares of Common Stock subject to stock options that
are exercisable within 60 days.
(12) Includes 46,667 shares of Common Stock subject to stock options that
are exercisable within 60 days and 6,187 shares owned by Intercedent
Limited, a Canadian corporation of which Mr. Watson has a majority
ownership interest.
(13) Includes a total of 843,516 shares of Common Stock subject to stock
options that are exercisable within 60 days; and 28,096 shares of
restricted Common Stock that are subject to forfeiture in accordance
with the terms of the specific grant, as to which the holder has no
investment power.
(5) Includes 6,683 shares
OWNERSHIP OF SHARES OF METLIFE
------------------------------
The following table sets forth, as of Common Stock subjectFebruary 28, 2002, certain
information with respect to the ownership of common stock options that are
exercisable within 60 days.
(6) Includes 76,498 shares of Common Stock subject to stock options that are
exercisable within 60 days. Also includes 26,083 sharesMetLife, Inc.,
the Company's parent, by (i) each director and nominee for director of Common Stock
heldthe
Company, (ii) each executive officer of the Company named in the Summary
Compensation table, and (iii) all directors, nominees, and executive
officers as a joint account with Mr. Liddy's spouse, an account over which he
has sharedgroup.
BENEFICIAL OWNER AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP (1) PERCENT OF
---------------- --------------------------------------------- ----------
CLASS
-----
Direct (2) Indirect (3)
---------- ------------
Mary Ann Brown, Director 6,876 30 *
Terence I. Lennon, Director 14,667 10 *
Stewart G. Nagler, Chairman 29,850 419 *
Joseph A. Reali, Director 5,075 170 (4) *
All directors and executive officers as a group
(18 persons) 56,468 629 *
*Less than one percent.
8
(1) Unless otherwise indicated, each named person has sole voting and
investment power over the shares listed as beneficially owned.
(2) Consists entirely of shares of MetLife common stock subject to stock
options that are exercisable within 60 days.
(3) Represents shares held by the MetLife Policyholders Trust, which has
sole voting power over such shares.
(4) Includes 10 shares jointly held with Mr. Reali's spouse, Madelyn
Reali, with whom Mr. Reali shares investment power.
(7) Includes 6,683 shares of Common Stock subject to stock options that are
exercisable within 60 days. Also includes 21,675 shares owned by his wife
and children over which Mr. Stiritz has no investment or voting power and
of which he disclaims beneficial ownership.
(8) Includes 139,533 shares of Common Stock subject to stock options that are
exercisable within 60 days and 2,250 shares held by Mr. Atkinson's
children. Also includes 6,548 restricted shares of Common Stock that are
subject to forfeiture in accordance with the terms of the specific grant,
as to which Mr. Atkinson has no investment power.
(9) Includes 47,133 shares of Common Stock subject to stock options that are
exercisable within 60 days and 1,800 shares jointly owned with Mr. Lay's
spouse. Also includes 6,548 restricted shares of Common Stock that are
subject to forfeiture in accordance with the terms of the specific grant,
as to which Mr. Lay has no investment power.
(10) Includes 36,693 shares of Common Stock subject to stock options that are
exercisable within 60 days.
(11) Includes 30,956 shares of Common Stock subject to stock options that are
exercisable within 60 days and 6,187 shares owned by Intercedent Limited, a
Canadian corporation of which Mr. Watson has a majority ownership interest.
(12) Includes a total of 766,801 shares of Common Stock subject to stock options
that are exercisable within 60 days; 28,096 shares of restricted Common
Stock that are subject to forfeiture in accordance with the terms of the
specific grant, as to which the individual has no investment power; and
shares for which ownership has been disclaimed as described above.
SECTION 16(A)16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 ("Exchange
Act") requires the Company's directors, executive officers, and persons who
beneficially own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission
(the "SEC") and the New York Stock Exchange. Directors, executive officers,
and greater than 10% shareholders are required by SEC regulation to furnish
the Company with copies of all Forms 3, 4, and 5 they file.
Based solely on the Company's review of the copies of such forms it
has received, or written representations from certain reporting persons, the
Company believes that all its directors, executive officers, and greater
than 10% beneficial owners complied with all filing requirements applicable
to them with respect to transactions during 2000, except Paul Nitsou, Senior Vice President,
who did not file a Form 4 to report a sale of 691 shares on April 17, 2000. Mr.
Nitsou's transaction was reported on a Form 5 filed in February 2001.
7
10
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee, currently composed of fivethree
non-employee directors and one director who is an employee of MetLife,
oversees the compensation policies of the Company's operating subsidiaries
(RGA is a holding company with no employees). RGA Reinsurance Company ("RGA
Re"), a wholly owned indirect subsidiary of the Company, employs all of the
Company's salaried executive officers except for Andre St-Amour, who is
employed by RGA Life Reinsurance Company of Canada, and Graham Watson, and Paul Nitsou,
who
areis employed by RGA International Ltd.Corporation.
BASE SALARIES
- -------------
In forming its recommendations on the overall salary program for
executive officers, the Compensation Committee has from time to time engaged
an independent consulting firm to determine how the Company's executive
compensation compares to that of other publicly held insurance and
reinsurance companies. In January 1999,2001, the Compensation Committee retained
an independent consultant to undertake an extensive review of executives'
total compensation as compared to their counterparts at comparable
companies. That study indicated that the base salary ranges established for
the Company's executive group were found to be generally competitive, with
the exception of the CEO, COOPresident and CFO.CEO of RGA Canada (also an Executive
Vice President of the Company), and the Executive Vice President of the U.S.
Division. In January 2000,February 2001, based upon an aged analysis of the January 19992001 study, the Committee
approved salary increases for the executive group that averaged 6.4%10.9%
(excluding promotional increases).
Recognizing the rapid growth of the Company and the level of
responsibility Mr. Woodring has assumed, the Committee adopted the
consultant's recommendations regarding an appropriate salary range for Mr.
Woodring. In January 2000,February 2001, the Committee approved an 8.7%a 12% salary increase for
Mr. Woodring, bringing his base pay to $500,000$560,000 for 2000.2001. Increases to the
salaries of other executive officers approved by the Committee are intended
to bring compensation to a more appropriate level for those positions, based
on market data.
Management Incentive PlanMANAGEMENT INCENTIVE PLAN
- -------------------------
All of the Company's salaried executive officers participate in the
Management Incentive Plan ("MIP"), which provides incentive compensation
based on a participant's individual performance as well as the division's
and the Company's achievements. Company results are based on consolidated
revenues and operating earnings (net income less realized capital gains and
losses) per share; divisional results are based on
9
the division's revenues and operating earnings. Based on these criteria,
the Committee approves a schedule of specific incentives set for each
participant, with a thresholdminimum level of performance that must be met before any
payment to the individual can be made, a target and a maximum. The Company's
performance must meet a certain level before any awards are made under the
MIP are made.MIP. Awards are based on a specified percentage of salary, which varies for
each participant. A portion of each executive officer's total MIP award is
paid in performance shares, rather than cash.
In February 2001, the Committee determined the MIP awards for 2000. The
Company did not meet its threshold for revenue growth in fiscal 2000, but did
meet its threshold operating earnings per share level. Based on these
consolidated results, the average cash payout to executive officers was
approximately 14.6% of salary. Mr. Woodring's MIP award, which is based solely
on Company results for 2000, was $144,038, or approximately 29.2% of his salary
for the year. The amount of Mr. Woodring's total MIP award includes the value of
performance shares awarded under the Executive Performance Share Plan. The cash
portion of Mr. Woodring's 2000 MIP award totaled $96,026, or approximately 19.4%
of salary.
Executive Performance Share Plan
A portion of the MIP award for RGA executive officers is paid in
the form of performance shares pursuant to the Executive Performance Share
Plan. Each performance share represents the equivalent of one share of
Common Stock, and the value of each performance share is determined by the
current fair market value of a share of the Company's Common Stock. By
making part of the pay of the Company's top executives take this form, the
Committee has sought to give these officers further incentives to increase
the value of the Company's shares.
In the U.S. plan, performance shares vest in one-third increments
on the last day of each of the three calendar years following the year in
which they are awarded. Performance shares in the
8
11 Canadian plan vest 100% on
December 15 of the third calendar year following the year in which they
awarded. Payment from the U.S. plan with respect to vested performance
shares may be made only in certain circumstances relating to termination of
employment, or when the participant exercises stock options, or the value of
the participant's vested performance shares exceeds 500% of his or her
target bonus for the year. In the Canadian plan, performance shares must be
paid upon vesting. Payment under both the U.S. and Canadian plans may be
made in the form of cash or shares of Common Stock, as determined by the
Committee. See "Executive Compensation --- Option/Performance Share Grants in
Last Fiscal Year."
Normally,In February 2002, the value of each performance share will beCommittee determined the current fair
market value of a share ofMIP awards for 2001.
The Company did not meet its targets for revenue growth or operating
earnings in fiscal 2001. Operating earnings were adversely affected by
additional reserves related to the Company's Common Stock. By making partoperations in Argentina and
fluctuations in mortality. Based on these consolidated results, the average
cash MIP award to executive officers was approximately 14.6% of salary. Mr.
Woodring's cash MIP award, which is based solely on Company results for
2001, was $116,290, or approximately 20.8% of his salary for the pay
of the Company's top executives take this form, the Committee has sought to give
these officers further incentives to increase the value of the Company's shares.year.
The Committee granted performance shares for fiscal 20002001 at the same
time as the MIP awards were made, in February 2001.2002. The average payment in
the form of performance shares to executive officers was approximately 7.1%6.8%
of salary in 2000.2001. Mr. Woodring received 1,2731,969 performance shares for 2000,2001,
which were valued at $48,013$58,145 based on the market value of the Common Stock
on the date of grant in February 2001.
Profit Sharing Plan2002.
PROFIT SHARING PLAN
- -------------------
All employees of RGA Re who meet the eligibility requirements
participate in the profit sharing plan. Awards represent a percentage of cash compensation
based on the achievement by the Company of specified thresholds and targeted
levels of growth in consolidated revenues and earnings per share. The targets
and thresholds are the same as those established under the MIP. In addition,
participants who contribute up to 4% to the Company's 401(k) plan receive up to
a 2% match, and those participants are eligible to receive a discretionary match
of up to 2% of compensation for 2000. Effective January 1, 2001, the
Company adopted a safe harbor design for the plan that eliminates the discretionary
match portion of the plan and provides for a match
of up to 4% of compensation. All eligible employees also are entitled to
receive a profit sharing award ranging from 0% to 6% of compensation
depending on whether the Company meets or exceeds its thresholdsminimum performance
level and targets, regardless of their 401(k) participation. A threshold ofminimum
performance level must be met before either the discretionary match or the profit sharing award can be made.
The thresholdsminimum performance level and targets for each year are established at
the beginning of the year. A participant may elect to receive up to one-half
of his profit sharing award in cash.
The Company did not meet its thresholdtargets for revenue growth or operating
earnings in fiscal 2000,
but did meet its threshold earnings per share level.2001. Based on these results, the Board of Directors
approved a discretionary match of 1% and a profit sharing award of 3%1.25%. The discretionary match and profit sharing awardsaward for
executives who participate in the Flexible Stock Plan andperformance share portion of the MIP are
reduced by one-half. Mr. Woodring, who participates in such programs,
received a profit sharing award of $10,274$4,363 for 2000,2001, representing
approximately 1.8%0.6250% of his salary and cash bonus for the year.
Flexible Stock Option Plan10
FLEXIBLE STOCK OPTION PLAN
- --------------------------
The Committee has previously granted stock options pursuant to the
Company's Flexible Stock Plan, which was established in 1993. The exercise
price of each option has been no less than the market price of the Common
Stock on the date of grant.
In January 2000,2001, in accordance with grant guidelines, the Committee
awarded a total of 456,407474,037 options for Common Stock, including 228,947188,411 to
the Company's salaried executive officers. Mr. Woodring was awarded 49,59667,086
options. The criteria for determining individual option grants were the same
as those used in 1999.the prior year.
Stock options are intended to reflect management's involvement in
the Company's performance and to encourage their continued contribution to
the future of the Company. The Company views stock options as an important
means of aligning the economic interests of management and shareholders.
9
12
Executive Stock Ownership GuidelinesEXECUTIVE STOCK OWNERSHIP GUIDELINES
- ------------------------------------
In order to further align the interests of the Company's management
and its shareholders, the Committee adopted executive stock ownership
guidelines in October 1996. The five tiers of the guidelines provide that
the market value of the Company's shares owned by the executives should be
based on a multiple of the mid-point of the executive's salary range: the
CEO (3 times), the COO (2.75 times), the CFO (2.5 times) the Executive Vice
Presidents (2 times) and the Senior Vice Presidents (1 time). Although the
guidelines are not mandatory, they are intended to increase Company stock
ownership by executive officers, which, in addition to stock options,
provides the officers with a direct economic interest in the Company.
SectionSECTION 162(m)
- --------------
The Committee endeavors to maximize the deductibility of
compensation under Section 162(m) of the Internal Revenue Code while
maintaining competitive compensation. In 1996, the Company's Board of
Directors and shareholders adopted amendments to the Flexible Stock Plan,
Executive Performance Share Plan and Management Incentive Plan, in each
case, among other things, in order to comply with Section 162(m) with
respect to certain awards.
THE COMPENSATION COMMITTEE
J. Cliff Eason, Chairman Stuart Greenbaum
William A. Peck, M.D. William P. Stiritz John H. TweedieJoseph A. Reali
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From January 1, 20002001 to May 24, 2000,October 25, 2001, the Compensation Committee
was comprised of Messrs. EdisonEason (Chairman), Eason, Greenbaum, Peck, Stiritz, and
Stiritz.Tweedie. Mr. Edison's termStiritz resigned as a director ended May 24, 2000.on October 25, 2001. Mr. Tweedie
retired from the Board and Committee on December 31, 2001. On May 25, 2000January 23,
2002 the Compensation Committee became comprised of its current members,
Messrs. Eason (Chairman), Greenbaum, Peck, Stiritz and Tweedie.Reali. None of the members of
the Compensation Committee have been an officer or employee of the Company
or any of its subsidiaries. None of the Company's inside directors or
officers serves on the compensation committee of another company of which a
member of the Compensation Committee is an officer.
1011
13
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain summary information
concerning the compensation awarded or paid to, or earned by, the Chief
Executive Officer and each of the other four most highly compensated
executive officers of the Company during 2000.2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
---------------------------
ANNUAL COMPENSATION------------------- --------------------------------
SECURITIES ALL OTHER
-----------------------------
RESTRICTED UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2)(3) STOCK($)(4) OPTIONS(#)(5) ($)(6)
- --------------------------- ---- ------------ -------------- ----------- ------------- ------------
A. Greig Woodring 2001 $550,919 $175,710 -- 67,086 $161,866
President and Chief 2000 $493,486 $145,314493,486 145,314 -- 49,596 $14,483
President and Chief14,483
Executive Officer 1999 446,923 265,594 -- 25,261 13,123
Executive Officer 1998 331,308 226,796 $395,000 31,994 10,334
David B. Atkinson 2000 $342,308 $ 67,8352001 $365,231 $77,694 -- 29,111 $16,79529,350 $77,524
Executive Vice President and 2000 342,308 67,835 -- 29,111 16,795
Chief Operating Officer 1999 292,308 154,912 $235,728 15,158 14,071
Chief Operating Officer 1998 245,385 106,715Paul A. Schuster 2001 $257,308 $45,299 -- 18,798 12,527
Jack B. Lay 2000 $228,462 $ 36,814 -- 18,976 $10,00118,029 $32,259
Executive Vice President and- 2000 212,639 34,361 -- 17,251 9,231
U.S. Division 1999 215,672 69,247 $235,728 10,340 9,987
Chief Financial Officer 1998 190,493 77,398197,538 63,526 -- 14,003 9,3959,377 --
Andre St-Amour 2001 $290,769 $62,298 -- 20,126 $4,274
President, RGA Life 2000 $228,101 $228,101 37,333 -- 18,525 $ 4,506
President, RGA LifeReinsurance Company of 1999 208,404 104,190 -- 9,810 5,389
Reinsurance Company of 1998 181,879 130,953 -- 13,285 4,551
Canada
Graham Watson(7) 2000 $200,826 $318,165Watson 2001 $218,769 $241,788 -- 17,587 $ 4,50617,778 $4,274
Executive Vice President and 2000 200,826 318,165 -- 17,587 4,506
Chief Marketing Officer 1999 223,506 344,433 -- 10,616 5,389
Chief Marketing Officer 1998 194,435 405,427 -- 14,355 4,551
- -------------------------
(1) For Messrs. Woodring, Atkinson and Lay, includes any amounts deferred at the
election of the executive officers under the RGA Re Executive Deferred
Savings Plan. Messrs. St-Amour and Watson, as non-U.S. citizens, are not
eligible to participate in such plan. Amounts for Mr. St-Amour include
amounts deferred under the Retirement Plan of RGA Life Reinsurance Company
of Canada.
(2) Includes for all named executive officers, cash bonuses earned for each year
(including any bonuses deferred at the election of the executive officers)
under the Management Incentive Plan, which bonus totaled $96,026 for Mr.
Woodring, $46,592 for Mr. Atkinson, $24,433 for Mr. Lay, $25,667 for Mr.
St-Amour and $22,672 for Mr. Watson for 2000. Also includes amounts paid in
cash or deferred at the officer's election each year under the RGA Re Profit
Sharing Plan for Messrs. Woodring, Atkinson and Lay, which totaled $1,275
for 2000 and $1,200 each for 1999 and 1998. The amounts shown for Mr. Watson
for 2000, 1999, and 1998 also include (i) a Canadian production bonus of
$273,709, $234,639, and $318,858 respectively (see "Executive
Compensation -- Other Employment Arrangements") and (ii) $11,478, $15,769,
and $8,795, respectively, paid in lieu of an award under the RGA Re Profit
Sharing Plan, in which Mr. Watson is not eligible to participate (see Note
7).
(3) Includes, in 2000, 1999, and 1998, the value of the following number of
performance shares granted in February 2001, January 2000 and January 1999,
respectively, pursuant to the Executive Performance Share Plan based on the
closing price of the Common Stock on the date of award: Mr.
Woodring -- 1,273, 3,801, and 1,275 performance shares; Mr. Atkinson
-- 529, 1,989, and 732 performance shares; Mr. Lay -- 294, 917, and 546
performance shares; Mr. St-Amour -- 309, 1,404, and 864 performance shares;
and Mr. Watson -- 273, 1,267, and 558 performance shares. For information
regarding performance shares, see "Compensation Committee Report on
Executive Compensation" and "Executive Compensation -- Option/Performance
Share Grants in Last Fiscal Year."
(4) As of December 31, 2000, 1999, and 1998, the value of Mr. Woodring's 15,000
shares of restricted Common Stock was $532,500, $416,250, and $700,000,
respectively. Dividends are paid on restricted stock. On January 1, 1999,
Messrs. Atkinson and Lay were each granted 6,750 restricted shares of
non-voting common stock. In September 1999 each share of non-voting common
stock was converted to .97 of voting common stock. Post conversion, Messrs.
Atkinson and Lay each own 6,548 restricted shares, the value of which was
$232,454 as of December 31, 2000.
(5) See "Executive Compensation -- Option/Performance Share Grants in Last
Fiscal Year." Options were granted in 1999 for shares of non-voting common
stock, now discontinued and converted to voting common stock. Option totals
for 1999 have been adjusted for the .97 stock conversion effective in
September 1999.
(6) For Messrs. Woodring, Atkinson and Lay, amounts represent contributions made
by RGA Re in 2000, 1999, and 1998 to the officers' accounts in the RGA Re
Profit Sharing Plan and the RGA Re Augmented Benefit Plan.
11
14
- ------------------------
(1) For Messrs. Woodring, Atkinson and Schuster, includes any amounts
deferred at the election of the executive officers under the RGA Re
Executive Deferred Savings Plan. Messrs. St-Amour and Watson, as
non-U.S. citizens, are not eligible to participate in such plan.
Amounts for Mr. St-Amour include amounts deferred under the Retirement
Plan of RGA Life Reinsurance Company of Canada.
(2) Includes for all named executive officers, cash bonuses earned for each
year (including any bonuses deferred at the election of the executive
officers) under the cash bonus portion of the Management Incentive
Plan, which bonus totaled $116,290 for Mr. Woodring, $53,494 for Mr.
Atkinson, $30,267 for Mr. Schuster, $43,609 for Mr. St-Amour and
$25,127 for Mr. Watson for 2001. Also includes amounts paid in cash or
deferred at the officer's election each year under the RGA Re Profit
Sharing Plan for Messrs. Woodring, Atkinson and Schuster, which totaled
$531 for 2001, $1,275 for 2000, and $1,200 for 1999. The amounts shown
for Mr. Watson for 2001, 2000, and 1999 also include (i) a Canadian
production bonus of $201,903, $273,709, and $234,639, respectively (see
"Executive Compensation - Other Employment Arrangements") and (ii)
$3,337, $11,478, and $15,769, respectively, paid in lieu of an award
under the RGA Re Profit Sharing Plan, in which Mr. Watson is not
eligible to participate (see Note 7).
(3) Includes, in 2001, 2000, and 1999, the value of the following number of
performance shares granted in February 2002, February 2001, and January
2000, respectively, pursuant to the Executive Performance Share Plan
based on the closing price of the Common Stock on the date of award:
Mr. Woodring - 1,969, 1,273, and 3,801 performance shares; Mr. Atkinson
- 776, 529, and 1,989 performance shares; Mr. Schuster - 466, 274 and
840 performance shares; Mr. St-Amour - 633, 309, and 1,404 performance
shares; and Mr. Watson - 387, 273, and 1,267 performance shares. For
information regarding performance shares, see "Compensation Committee
Report on Executive Compensation" and "Executive Compensation -
Option/Performance Share Grants in Last Fiscal Year."
(4) On January 1, 1999, Mr. Atkinson was granted 6,750 restricted shares of
non-voting common stock. In September 1999 each share of non-voting
common stock was converted to .97 of voting common stock. Post
conversion, Mr. Atkinson owns 6,548 restricted shares, the value of
which was $217,917 as of December 31, 2001. Dividends are paid on
restricted stock.
(5) See "Executive Compensation - Option/Performance Share Grants in Last
Fiscal Year." Options granted in 1999 were for shares of non-voting
common stock, now discontinued and converted to voting common stock.
1999 option totals have been adjusted for the .97 stock conversion
effective in September 1999.
(6) For Messrs. Woodring, Atkinson and Schuster, amounts represent
contributions made by RGA Re in 2001, 2000, and 1999, to the officers'
accounts in the RGA Re Profit Sharing Plan and the RGA Re Augmented
Benefit Plan, and payments made in 2001 for accumulated paid absence
time. Amounts for Messrs. St-Amour and Watson represent contributions
made to their accounts by RGA Canada under its Retirement Plan.
(7) Mr. Watson is a majority owner and non-executive Chairman of Intercedent
Limited, which until July 1, 2000 received a portion of payments made by the
Company to Insource Limited for certain marketing services. See "Certain
Relationships and Related Transactions."
12
OPTION/PERFORMANCE SHARE GRANTS IN LAST FISCAL YEAR
The Company has a Flexible Stock Plan, which provides for the award
of various types of benefits, including stock options, stock appreciation
rights, restricted stock, performance shares, and other stock-based awards,
as well as cash awards. The Company also has an Executive Performance Share
Plan that provides for the award of performance shares. The following table
sets forth certain information concerning options granted to the named
executive officers pursuant to the Flexible Stock Plan and the Executive
Performance Share Plan during 2000.2001.
OPTION/PERFORMANCE SHARE GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------
POTENTIAL REALIZABLE VALUE
-------------------------- AT ASSUMED ANNUAL RATES
NUMBER OF SECURITIES % OF TOTAL OF STOCK PRICE APPRECIATIONAT ASSUMED ANNUAL RATES
-------------------- ----------- -----------------------
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(4)OF STOCK PRICE APPRECIATION
---------- ---------- ----------- ---------------------------
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------------FOR OPTION TERM (4)
------- ------------ ---------- ---------- -------------------
NAME GRANTED(#)GRANTED (#)(1)(2) FISCAL YEAR ($/SH)(3) DATE 5%($) 10%($)
- ---- ------------------------- ----------------------------- ----------- ---------- ----------- ---------------------- ---- ------ -------
A. Greig Woodring 49,59667,086 options 10.9% $23.1914.2% $29.81 1/1/2010 $723,233 $1,832,815
1,2732011 $1,257,790 $3,187,487
1,969 performance shares 17.1% $37.7311.8% $29.53 N/A $30,206 $76,548$36,567 $92,667
David B. Atkinson 29,11129,350 options 6.4% $23.196.2% $29.81 1/1/2010 $424,511 $1,075,794
5292011 $550,281 $1,394,520
776 performance shares 7.1% $37.734.7% $29.53 N/A $12,552 $31,810
Jack B. Lay 18,976$14,411 $36,521
Paul A. Schuster 18,029 options 3.8% $29.81 1/1/2011 $338,024 $856,620
466 performance shares 2.8% $29.53 N/A $8,654 $21,931
Andre St-Amour 20,126 options 4.2% $23.19$29.81 1/1/2010 $276,717 $701,256
2942011 $377,341 $956,256
633 performance shares 4.0% $37.733.8% $29.53 N/A $6,976 $17,679
Andre St-Amour 18,525$11,756 29,971
Graham Watson 17,778 options 4.1% $23.193.8% $29.81 1/1/2010 $270,141 $684,590
3092011 $333,318 $844,694
387 performance shares 4.1% $37.732.3% $29.53 N/A $7,332 $18,581
Graham Watson 17,587$7,187 $18,213
- ----------------
(1) The options 3.9% $23.19 1/1/2010 $256,462 $649,926
273become exercisable in 20% increments on each of January 1,
2002, 2003, 2004, 2005 and 2006. Vesting will be accelerated upon the
officer's death or disability and upon a change in control of the
Company (as such terms are defined in the Flexible Stock Plan and
option agreements). All stock option grants were approved in January
2001.
(2) Performance share grants shown were approved in February 2002, but are
included as 2001 grants because they comprise a part of the officers'
2001 bonus. See "Compensation Committee Report on Executive
Compensation." Each performance share represents the equivalent of one
share of Common Stock. Payment with respect to vested performance
shares 3.7% $37.73 N/A $6,748 $16,416
- -------------------------
(1) The options become exercisable in 20% increments on each of January 1, 2001,is made in the form of cash or shares of Common Stock, as
determined by the Compensation Committee: (i) 24 months after
termination of employment; (ii) immediately upon termination of
employment if termination is as a result of death, disability, or
retirement or within six months of a change in control (as such terms
are defined in the Executive Performance Share Plan); (iii) when the
participant exercises stock options, at the participant's election; or
(iv) after the last day of any calendar year in which the value of the
participant's vested performance shares exceeds 500% of his target
bonus payable with respect to that year under the MIP. Performance
shares awarded to Messrs. Woodring, Atkinson and Schuster vest in
one-third increments on each of December 31, 2002, 2003, and 2004 and 2005. Vesting will be accelerated upon the officer's
death or disability and upon a change in control of the Company (as such
terms are defined in the Flexible Stock Plan and option agreements). All
stock option grants were approved in January 2000.
(2) Performance share grants shown were approved in February 2001, but are
included as 2000 grants because they comprise a part of the officers' 2000
bonus. See "Compensation Committee Report on Executive Compensation." Each
performance share represents the equivalent of one share of Common Stock.
Payment with respect to vested performance shares is made in the form of
cash or shares of Common Stock, as determined by the Compensation Committee:
(i) 24 months after termination of employment; (ii) immediately upon
termination of employment if termination is as a result of death,
disability, or retirement or within six months of a change in control (as
such terms are defined in the Executive Performance Share Plan); (iii) when
the participant exercises stock options, at the participant's election; or
(iv) after the last day of any calendar year in which the value of the
participant's vested performance shares exceeds 500% of his target bonus
payable with respect to that year under the Management Incentive Plan.
Performance shares awarded to Messrs. Woodring, Atkinson and Lay vest in
one-third increments on each of December 31, 2001, 2002, and 2003 and
performance shares awarded to Messrs. St-Amour and Watson, who are
Canadian citizens, vest in full on December 15, 2004.
(3) For stock options, amount represents the exercise price per share of
Common Stock, which is the closing price of the Common Stock on the
date of grant in January 2001. For performance shares, amount
represents the closing price of the Common Stock on the date of grant
in February 2002.
(3) For stock options, amount represents the exercise price per share of Common
Stock, which is the closing price of the Common Stock on the date of grant
in January 2000. For performance shares, amount represents the closing price
of the Common Stock on the date of grant in February 2001.
(4) The dollar amounts under these columns are the result of calculations
at the 5% and 10% rates set by the Securities and Exchange Commission
and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price.
12
13
15
AGGREGATED OPTION/PERFORMANCE SHARE EXERCISES AND FISCAL YEAR-END
OPTION/PERFORMANCE SHARE VALUES
The table below provides certain information for each of the named
executive officers concerning exercises of options during 20002001 and the value
of unexercised options at December 31, 2000.2001.
AGGREGATED OPTION/PERFORMANCE SHARE EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/PERFORMANCE SHARE VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED ON VALUE UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED ON VALUE------------------ ----- OPTIONS AT DECEMBER 31, 2000(1)2001(1) AT DECEMBER 31, 2000(2)2001(2)
NAME EXERCISE (#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------------ ----------- -------------------------------------------------------- -------------------------
A. Greig Woodring 014,000 options $0 159,781/166,504$254,614 198,663 / 180,708 options $2,554,771/$2,471,815
0$2,777,149 / $1,630,973
2,500 performance shares $0 21,238/2,989$95,875 17,481 / 2,141 performance shares $753,949/$106,110$581,768 / $71,252
David B. Atkinson 0 options $0 109,741/94,806139,533 / 94,365 options $1,731,749/$1,382,424$1,909,579 / $885,921
0 performance shares $0 12,430/1,57113,731 / 1,029 performance shares $441,265/$55,771
Jack B. Lay$456,968 / $34,245
Paul A. Schuster 0 options $0 32,509/49,30753,279 / 53,029 options $555,616/$579,268$660,327 / $470,739
0 performance shares $0 9,165/7953,711 / 468 performance shares $325,358/$28,223$123,502 / $15,575
Andre St-Amour 016,000 options $0 31,164/51,133$405,513 30,693 / 55,730 options $526,474/$639,757
1,526$306,190 / $431,978
1,324 performance shares $53,696 0/2,734$43,035 0 / 1,738 performance shares $0/$97,057$0 / $57,841
Graham Watson 0 options $0 18,800/41,98330,956 / 47,605 options $219,089/$406,464
913$284,899 / $290,929
570 performance shares $32,126 0/1,845$18,529 0 / 1,563 performance shares $0/$65,498
- -------------------------$0 / $52,017
- ---------------------
(1) The Company granted stock options to senior management, including each of
the named executive officers, in January 2001. The Company granted stock options to senior management, including
each of the named executive officers, in January 2002. The 2002
options, which are not currently exercisable, are not reflected in
the table. Although exercisable, performance shares can be paid out
only in certain limited circumstances. See "Executive Compensation -
Option/Performance Share Grants in Last Fiscal Year." Performance
shares include dividend equivalent rights that are payable in
performance shares and vest in proportion to the performance shares
to which they relate. The number of performance shares has been
rounded to the nearest whole share.
(2) In the case of stock options, represents the difference between the
December 31, 2001 closing price of the Company's Common Stock
($33.28) and the exercise price of the option multiplied by the
number of shares underlying the option. In the case of performance
shares, value represents the December 31, 2001 options, which are
not currently exercisable, are not reflected in the table. Although
exercisable, performance shares can be paid out only in certain limited
circumstances. See "Executive Compensation -- Option/Performance Share
Grants in Last Fiscal Year." Performance shares include dividend equivalent
rights that are payable in performance shares and vest in proportion to the
performance shares to which they relate. The number of performance shares
has been rounded to the nearest whole share.
(2) In the case of stock options, represents the difference between the December
31, 2000 closing price of the Company's Common Stock ($35.50) and the
exercise price of the option multiplied by the number of shares underlying
the option. In the case of performance shares, value represents the December
31, 2000 closing price
multiplied by the number of performance shares.
RETIREMENT PLANS
Certain of the Company's employees participate in the GenAmerica
Financial Corporation Pension Plan and Trust (the "Pension Plan"), a
qualified multiple employer plan defined benefit plan. Certain of the Company's
employees also participate in the RGA Re Augmented Plan (the "RGA Augmented
Plan"), a non-qualified defined benefit plan under which eligible employees
are entitled to additional retirement benefits not paid under the Pension
Plan due to Internal Revenue Code limits on the amount of benefits that may
be paid under the Pension Plan.
1314
16
The following table shows the annual benefits payable upon
retirement at age 65 for various remuneration and years of service
combinations under the Pension Plan and the RGA Augmented Plan as of
January 1, 2001.2002.
PENSION PLAN AND RGA AUGMENTED PLAN
YEARS OF SERVICE
-----------------------------------------------
REMUNERATION-----------------------------------------------------------------------
Remuneration 15 20 25 30 35
-
------------ ------- ------- ------- ------- -------
125,000 28,247 37,662 47,078 56,795 68,401$125,000 $28,029 $37,372 $46,715 $56,058 $65,401
150,000 34,622 46,162 57,703 70,722 84,65034,404 45,872 57,340 68,808 80,276
175,000 40,997 54,662 68,401 84,650 100,89840,779 54,372 67,965 81,558 95,151
200,000 47,372 63,162 80,007 98,577 117,14747,154 62,872 78,590 94,308 110,026
225,000 53,747 71,662 91,613 112,505 133,39653,529 71,372 89,215 107,058 124,901
250,000 60,122 80,162 103,220 126,432 149,64559,904 79,872 99,840 119,808 139,776
275,000 66,279 88,372 110,465 132,558 154,651
300,000 72,872 98,577 126,432 154,287 182,14272,654 96,872 121,090 145,308 169,526
325,000 79,029 105,372 131,715 158,058 184,401
350,000 85,404 113,872 142,340 170,808 199,276
375,000 91,779 122,372 152,965 183,558 214,151
400,000 98,577 135,717 172,857 209,997 247,13798,154 130,872 163,590 196,308 229,026
450,000 111,122 148,162 185,203 222,244 259,284110,904 147,872 184,840 221,808 258,776
500,000 123,872 165,162 206,453 247,744 289,034123,654 164,872 206,090 247,308 288,526
550,000 136,404 181,872 227,340 272,808 318,276
600,000 149,154 198,872 248,590 298,308 348,026
650,000 161,904 215,872 269,840 323,808 377,776
700,000 174,654 232,872 291,090 349,308 407,526
Messrs. Woodring, Atkinson and LaySchuster participate in the Pension
Plan and the RGA Augmented Plan and have been credited with the following
years of service under such plans: Mr. Woodring, 2122 years; Mr. Atkinson,
1314 years; and Mr. Lay, 9Schuster, 10 years. Remuneration under the Pension Plan
and the RGA Augmented Plan is the highest average Benefit Salary for five
consecutive years during the preceding 10 years, where "Benefit Salary" for
a given year means an officer's base salary for such year plus the average
bonus awarded such officer under the RGA Management Incentive Plan for the
preceding three years. The current remuneration covered by the plans for
each of the participating named executives is: for Mr. Woodring, $539,500;$604,604;
for Mr. Atkinson, $339,749;$373,859; and for Mr. Lay,
$245,591.Schuster, $243,376. Messrs. St-Amour
and Watson, as non-U.S. citizens, are not eligible to participate in the
Pension Plan or the RGA Augmented Plan. Mr. St-Amour and Mr. Watson
participate in pension plans sponsored by the governments of Quebec and
Canada, respectively.
Until January 1, 1994, the Company also maintained an Executive
Supplemental Retirement Plan (the "RGA Supplemental Plan"), a non-qualified
defined benefit plan pursuant to which eligible executive officers are
entitled to receive additional retirement benefits. Benefits under the RGA
Supplemental Plan were frozen as of January 1, 1994. At such time, the
participating named executive officers had been credited with the following
years of service under the plan: Mr. Woodring, 8 years;years and Mr. Atkinson,
3 years. Remuneration under the RGA Supplemental Plan was the highest average
Benefit Salary for three consecutive years during the preceding five years.
The remuneration covered by the plan is $229,492 for Mr. Woodring, and
$145,407 for Mr. Atkinson.
Combined retirement benefits under the Pension Plan and the RGA
Augmented Plan are payable at age 65 in a single life annuity using an
"excess plan" formula as generally described in Section 401(1) of the
Internal Revenue Code of 1986. Certain plan participants are eligible to
receive benefits calculated using a
15
minimum benefit formula that provides for a direct offset of a portion of
the applicable Social Security Primary Insurance Amount.
Retirement benefits under the RGA Supplemental Plan are payable at
age 65 in the form of a 15 year certain and life annuity, with no direct or
indirect integration with Social Security benefits.
Payment of the specified retirement benefits is contingent upon
continuation of the plans in their present form until the employee retires.
OTHER EMPLOYMENT ARRANGEMENTS
The Company has agreed to pay Mr. Watson a production bonus equal to
2.5 cents per $1,000 of new business generated through the Company's
Canadian subsidiaries. Pursuant to a marketing agreement, the
14
17 bonus was
originally paid to Intercedent Limited, a consulting firm that employed Mr.
Watson. Mr. Watson became an employee of a subsidiary of the Company on
April 1, 1996 and the Canadian production bonus has been paid directly to
Mr. Watson since that time. See "Certain Relationships and Related
Transactions."
Mr. Woodring serves as an advisor to General American's top
management and therefore participates in the General American Long-Term
Incentive Plan. Mr. Woodring is eligible to receive cash incentive awards
pursuant to this plan based on General American's achievement of certain
consolidated performance targets over three-year periods. The amount of
incentive payments, if any, represents a percentage of Mr. Woodring's RGA
salary at the beginning of the relevant period. The percentage varies
depending on the extent to which General American meets or exceeds certain
performance targets. Payment of one-third of any awards will be deferred
under the General American Executive Deferred Savings Plan until Mr.
Woodring's retirement at age 65. Amounts deferred are subject to a five-year
vesting schedule and certain other conditions. Mr. Woodring received $49,875$61,180
(one-third of which was deferred) for the three year period ending
December 31, 2000.2001. All payments under the plan are made by General American.
1516
18
PERFORMANCE GRAPH
Set forth below is a graph for the Company's Common Stock for the
period beginning December 31, 19951996 and ending December 31, 2000.2001. The graph
compares the cumulative total return on the Company's Common Stock, based on
the market price of the Common Stock and assuming reinvestment of dividends,
with the cumulative total return of companies in the Standard & Poor's 500
Stock Index and the Standard & Poor's Insurance (Life/Health) Index. The
indices are included for comparative purposes only. They do not necessarily
reflect management's opinion that such indices are an appropriate measure of
the relative performance of the Company's Common Stock, and are not intended
to forecast or be indicative of future performance of the Common Stock.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG REINSURANCE GROUP OF AMERICA INCORPORATED,
THE S&P 500 INDEX AND THE S&P INSURANCE (LIFE/HEALTH) INDEX
[PERFORMANCE GRAPH]
REINURANCE GROUP
OF AMERICA S & P INSURANCE
INCORPORATED S & P 500 (LIFE/HEALTH)
---------------- --------- ---------------
12/95 100.00 100.00 100.00
12/96 129.63 122.96 122.19
12/97 176.62 163.98 152.79
12/98 291.89 210.84 161.30
12/99 174.52 255.22 138.71
12/00 225.20 231.98 157.85
* $100 Invested on[GRAPH]
*$100 INVESTED ON 12/31/95 in stock or index -- including reinvestment of
dividends. Fiscal year ending December96 IN STOCK OR INDEX-INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
12/95Cumulative Total Return
---------------------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
----- ----- ----- ----- ----- -----
Reinsurance Group of America, Inc. $100.00 $129.63 $176.62 $291.89 $174.52 $225.20$136.26 $225.18 $134.63 $173.73 $163.99
S&P 500 $100.00 $122.96 $163.98 $210.84 $255.22 $231.98$133.36 $171.47 $207.56 $188.66 $166.24
S&P Insurance (Life/Health) $100.00 $122.19 $152.79 $161.30 $138.71 $157.85$125.05 $132.01 $113.52 $129.19 $119.18
16Copyright (C)2002, Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. All rights reserved.
17
19
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
General American and its parent, GenAmerica, are the beneficial
owners of approximately 48% of the Company's outstanding stock. Following a
private placement in November 1999, the acquisition of GenAmerica by
Metropolitan Life Insurance Company ("MLIC") on January 6, 2000, and MLIC's
demutualization on April 7, 2000, MetLife, Inc. ("MetLife") isbecame the
beneficial owner of approximately 58% of the Company's outstanding shares.
The Company beneficially owns 100%In January and February 2002, MetLife purchased an additional 327,600 shares
and, as of RGA Life Reinsurance CompanyFebruary 28, 2002, is the beneficial owner of Canada ("RGA Canada"). RGA Canada directly reinsures or administers allapproximately 59.3%
of the Company's Canadian reinsurance business. Amounts in excess of RGA Canada's
retention limit are retroceded mostly to RGA Re directly, or through General
American to RGA Re pursuant to a retrocession agreement.outstanding securities.
Under two administrative services agreements effective as of
January 1, 1993, General American has agreed to provide RGA and RGA Re, at
their request, certain management and administrative services, such as
legal, treasury, employee benefit, payroll and personnel services. RGA and
RGA Re pay General American a monthly fee based on General American's actual
cost, computed in accordance with General American's current cost accounting
system. Each agreement is terminable by either party on 90 days written
notice. General American has agreed to provide similar services to RGA
Canada pursuant to a management agreement effective January 1, 1993. RGA Re
entered into an administrative services agreement with General American on
January 1, 1997 under which General American agreed to provide certain
policy administration services to RGA Re for certain Bank Owned Life
Insurance Policies. RGA Re pays General American under this agreement as
follows: an acquisition fee of $5,000 per case for new cases; $0.40 per
policy per month, plus .02% (annualized rate) times the fund value of the
policies for administration of in force policies; and .05% (annualized rate)
times the fund value of the policies for management of the policies. The
cost of services provided by General American under these agreements in 20002001
was approximately $2.6$1.1 million.
Conning Asset Management Company ("Conning"), a wholly owned subsidiary of
Conning Corporation which, in turn, is an indirect wholly owned subsidiary of
MLIC, managed certain investment portfolios of RGA, RGA Re, RGA Canada, RGA
Australian Holdings, Pty, Limited and RGA Reinsurance Company (Barbados) Ltd.
through August 31, 2000. The Company incurred costs of approximately $1.7
million for investment advisory services from Conning in 2000. Conning continues
to service and originate commercial mortgages on behalf of RGA Re under separate
investment advisory agreements. Separate from the investment advisory
agreements, Conning also manages a series of private investment funds in which
RGA has invested from time to time. Conning receives a management fee and a
specified percentage of the funds' net gains, which are paid by the funds. RGA's
investments in such funds totaled approximately $8.8 million as of December 31,
2000.
The Company has reinsurance agreements with MetLife and certain of
its subsidiaries, and direct policies and reinsurance agreements with
General American and certain of its subsidiaries. The Company reflected
earned grossnet premiums pursuant to these agreements of approximately $110.4$112.2
million from MetLife, and $33.6$37.1 million from General American, in 2000.2001. The
earned premiums reflect the net of business assumed from and ceded to
MetLife, General American and their respective subsidiaries.
Pursuant to a marketing agreement, the Company utilized the services of
Insource Limited and its predecessor ("Insource") to conduct certain
marketing-related services in particular geographic regions until December 1,
1996. The agreement was terminated with respect to new business effective
December 31, 1996, although the Company continues to pay for certain business
generated prior to such date. Graham Watson, an executive officer of the Company
and an officer and director of certain of the Company's subsidiaries, is
non-executive Chairman of and has an approximate 75% equity interest in
Intercedent Limited. Prior to July 1, 2000, Intercedent Limited owned
approximately 50% of the non-voting special shares of Insource, and consequently
was entitled to receive up to 50% of Insource's revenues relating to business
generated on behalf of the Company. The Company paid Insource approximately
$175,000 through July 1, 2000 pursuanthas entered into registration rights agreements with
each of MLIC and General American which grant each of those companies, or
their transferees, certain rights, among other things, to this agreement. Effective July 1,
2000, Intercedent Limited disposed of all of its ownership in Insource and,
accordingly, effective on such date Mr. Watson has no further interest in any of
the payments maderequire RGA to
register RGA common stock held by the Company to Insource. In addition, prior to April 1,
1996, the Company paid Intercedent Limited a production bonus based on premiums
generated through its Canadian subsidiaries. Since April 1, 1996, this bonus is
paid directly to Mr. Watson. See "Executive Compensation -- Summary Compensation
Table."
17
20
ITEM 2 -- SALE OF SECURITIES TO METLIFE OR ITS AFFILIATES
The second item to be acted upon at the Annual Meeting is a proposal to
authorize future sales of the Company's equity securities, including Common
Stock, preferred stock, depository shares, warrants, convertible debt, or other
securities convertible into or exercisable for Common Stock or preferred stock
("Equity Securities"), from time to time to MetLife, Inc. or its affiliates
(collectively "MetLife") upon the terms and conditions described below.
BACKGROUND
MetLife is the principal beneficial shareholder of the Company. See "Item
1 -- Election of Directors -- Common Stock Ownership of Management and Certain
Beneficial Owners." The Company desires to have the flexibility to allow MetLife
to participate in equity capital fund-raising activities which the Company may
undertake from time to time in the future. By participating in such activities,
MetLife would be able to maintain its relative ownership percentage in the
Company if it so desired. New York Stock Exchange ("NYSE") rules generally
require approval by the Company's shareholders of any issuance of Equity
Securities to MetLife, due to the current level of beneficial ownership of
MetLife (approximately 58.6% of the total Common Stock).
The Company may decide to raise equity capital at various times in the
future in order to enhance the Company's capital structure, to fund growth
opportunities or for other corporate purposes. As part of any capital raising
plan, the Company may undertake either to privately place Equity Securities to
MetLife and other investors, or sell Equity Securities to MetLife and other
investors pursuant to a public offering. The terms of any potential sale to
MetLife have not been determined, but in any event would be expected to
approximate the current market value of such securities at the time of sale, as
described below. The Board of Directors will determine the terms of any such
sale and the securities offered therein at the time of the transaction. Any
private sales would not be registered under the Securities Act of 1933 and such
shares could not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements. Any public offering
would only be made by means of a prospectus. Although the Company does not
currently have any definite capital-raising plans or commitments, it has filed a
registration statement covering a variety of debt and equity securities up to
$400 million which has not yet become effective. These securities may not be
sold nor may offers to buy be accepted before the registration statement becomes
effective. This proxy statement shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities law of any such state.
As ofthem.
On March 1, 2001, the Company's authorized capital stock consistsCompany entered into a term loan agreement
and note whereby it borrowed $75.0 million due June 30, 2004 from MetLife
Credit Corp., a wholly owned subsidiary of 75,000,000 shares of Common Stock and 10,000,000 shares of preferred stock. The
Board of Directors has the authority to issue authorized shares of the preferred
stock in series and to fix the number, designation, preferences, limitations and
relative rights of the shares of each series, subject to applicable law and the
provisions of any outstanding series of preferred stock. Depositary shares would
representMetLife, at an interest in sharesrate of
a series of preferred stock deposited under a
deposit agreement by75.5 basis points over the Company with a bank or trust company. Subject to the
terms of the deposit agreement, each owner of a depositary share would be
entitled, proportionately, to all the rights, preferences and privileges of the
preferred stock represented by such depositary share. Similarly, the terms of
any convertible debt securities or warrants or other securities, whether
convertible into or exercisable for debt securities, Common Stock or preferred
stock, would be determined by the Board of Directors.
REASONS FOR THE PROPOSAL
The Board of Directors of the Company believes it is in the Company's best
interest to maintain the flexibility to facilitate possible further investments
in the Company by MetLife or its affiliates for the reasons described below.
Though the Board of Directors has not committed to issue any Equity Securities,
whether to MetLife or otherwise, it believes it is desirable to have the
flexibility to do so from time to time without having to first seek shareholder
approval for each particular transaction if and when the Board of Directors
determines the issuance would be in the best interests of shareholders.
18
21
Since the Board of Directors has not determined at this time to issue any
Equity Securities to MetLife, it has not fully assessed all aspects of any such
transaction. Any decision to issue shares to MetLife or otherwise will be based30-day AA financial discount rate on the facts and circumstances at that time. In general, the Board of Directors
believes it may be desirable to issue Equity Securities to MetLife in order to
maintain a strong relationship for the following reasons:
CONTINUITY. In the event the Board of Directors decides the Company should
issue Equity Securities to MetLife, MetLife may avoid dilution to its voting
control. Such an issuance may therefore reduce the risk of a disruption in the
continuity of the Company's long-term plans and objectives that might otherwise
result if MetLife were no longer to maintain control.
KEY EMPLOYEES. Maintenance of control by MetLife may allow employees to
continue to concentrate on their responsibilities without undue concern that the
future of the Company might be affected by an unwanted takeover that could
otherwise be triggered. As a result, the Company may be better able to preserve
its ability to attract and retain qualified key employees.
BUSINESS RELATIONSHIPS. The issuance of Equity Securities to MetLife may
enhance existing and potential business relationships of the Company with
parties who may in the future have concern about changes in control of the
Company in the event the holdings of MetLife are ever diluted.commercial
paper. The Company may
be better able to attract joint venture and marketing partners ifrepaid the Company is
perceived to not be vulnerable to a takeover or disruption due to uncertainty
concerning the Company's ownership.
FINANCING FLEXIBILITY. The Board of Directors believes that MetLife, as
the principal shareholder of the Company, may be willing to invest under
circumstances when public investors might not. Although the Company believes it
currently has reasonable access to public and private capital markets, the Board
of Directors believes it isloan in the best interests of shareholders that the
Company have ready access to all sources of capital, including MetLife.
NEW YORK STOCK EXCHANGE RULES
Under the applicable rules of the NYSE, the shareholders of the Company
generally must approve any significant issuance of common equity, or securities
convertible into or exercisable for common equity, by the Company to a
substantial shareholder, such as MetLife. In order to comply with such rules,
the NYSE requires that the Company's shareholders approve the various terms of
the proposed sales, such as the identity of the substantial shareholder, the
price for the shares, the amount of shares to be sold, the length of time during
which sales would be made, the use of proceeds from the sales and the reasons
for the sales.
TERMS OF SALES
Because the exact terms of any sale of Equity Securities to MetLife are not
known at this time, the Company proposes that the shareholders vote in favor of
Item 2 to approve the sale of shares subject to certain specific terms and
conditions. Under the proposal, the Board of Directors would be authorized to
approve, during the next three years, any sale of Equity Securities by the
Company to MetLife in which the number of such shares, including shares into
which such Equity Securities are convertible or exercisable, would not exceed
the number of shares that would enable MetLife to maintain its then current
ownership percentage of the Company's securities having voting power, currently
its Common Stock. Any such sale would befull on substantially the same terms as a
sale to unaffiliated parties.
While the terms of a sale to MetLife would be substantially the same as a
sale to unaffiliated parties, it may be appropriate in certain situations to
reduce the sales price, based on expected expenses of the sale and the
availability of other sources of capital. For example, in connection with a
private placement of Equity Securities, the Company may pay a reduced sales
commission. Based on current costs associated with capital raising transactions,
the Company does not expect any reduction in sales price to exceed 3%.
The number and kind of Equity Securities issuable to MetLife under the
proposal will be appropriately adjusted by the Company in the event of any
increase or decrease in the number of shares outstanding as aDecember 19, 22
result of a reorganization, merger, recapitalization, reclassification, stock
dividend, stock split, combination of shares or other similar transaction.
The amount of Equity Securities and the sale price, conversion price or
exercise price per share, as applicable, for such shares sold to MetLife
pursuant to any sale authorized by this Item 2 will be determined by the Board
of Directors or a committee of the Board of Directors specifically authorized to
make such determination, within the parameters of the proposal contained in this
Item 2. Such a committee will include directors who are not affiliated with
MetLife.
Shareholders should note that the pricing of preferred stock, depository
shares, warrants, convertible debt or other securities convertible or
exercisable for Common Stock is typically dependent on the other terms and
provisions of the securities, including, without limitation, dividend rate,
redemption price, liquidation rights, sinking fund provisions, conversion rights
and voting rights, and other terms and restrictions, and any corresponding
effect on other shareholders, in the case of preferred stock or any related
depositary share; interest rates, redemption price, conversion rights, sinking
fund procedures, term and covenants or other restrictions, in the case of debt
securities; and exercise price, term and covenants or other restrictions, in the
case of other securities, such as warrants. Such terms and effects could include
restrictions on dividends on the Common Stock if dividends on the preferred
stock or any related depositary share, or interest payments on any debt
securities, are in arrears, dilution of the voting power of other shareholders
to the extent a series of the preferred stock or any related depository share
has voting rights, and reduction of amounts available on liquidation as a result
of any obligations created by any debt securities or liquidation preference
granted to any series of preferred stock or any related depositary share.
Accordingly, shareholders will have to rely on the Board of Directors of the
Company, if such a transaction is ultimately approved, to ensure that the
overall terms and conditions of the securities are in the best interests of the
Company.
In the event any proposed sale of Equity Securities to MetLife materially
differs from the terms described above, the Company would expect to seek
shareholder approval of such proposed sale to the extent required under
applicable NYSE rules.
Because the Company has not made a decision at this time to sell any Equity
Securities, it cannot identify the uses of any proceeds from any sale of such
shares to MetLife. The Company, however, may use any such proceeds, among other
things, to fund the Company's continuing growth, to enhance the Company's
capital structure, to finance acquisitions, for general working capital purposes
or for other corporate purposes.
Any issuance of preferred stock, depositary shares, warrants, convertible
debt or other convertible securities may have the result of making it more
difficult for any persons or group of persons, other than the current principal
shareholders and management, to acquire control of the Company by expanding the
ability of the Company to issue shares and thereby dilute the voting power of
any person or group that might accumulate shares in order to attempt to effect a
change in control. The Company is not aware of any present effort to accumulate
shares of Common Stock or to attempt to change control of the Company.
The Company's articles of incorporation and bylaws provide, among other
things, for a classified board of directors; limit the right of shareholders to
remove directors or change the size of the board of directors; limit the right
of shareholders to fill vacancies on the board of directors; limit the right of
shareholders to act by written consent and to call a special meeting of
shareholders or propose other actions; require a higher percentage of
shareholders than would otherwise be required to amend, alter, change or repeal
the provisions of the articles of incorporation or bylaws; and provide that the
bylaws may be amended only by the majority of the board of directors. These
provisions may have an anti-takeover effect. The Company also has a right plan
that may have the effect of discouraging a change in control of the Company.
INTERESTS OF CERTAIN PERSONS IN THE PROPOSAL
Certain officers and directors of the Company are also officers and
directors of MetLife. See "Item 1 -- Election of Directors -- Common Stock
Ownership of Management and Certain Beneficial Owners." As a result, such
officers and directors, as well as MetLife, may be deemed to have an interest in
the proposal that
20
23
differs from those of other shareholders. For more information regarding the
relationships between the Company and MetLife, see "Certain Relationships and
Related Transactions."
CERTAIN POTENTIAL DISADVANTAGES OF THE PROPOSAL
While the Board of Directors has determined that adoption of the proposal
is in the best interests of the Company and its shareholders, the Board
recognizes that the implementation of the proposal may result in certain
disadvantages. For example, since MetLife currently has voting control over the
Company, implementation of the proposal would allow the Board of Directors to
permit MetLife to maintain its voting control of the Company. Consequently, the
proposal might prevent shareholders of the Company from selling their shares at
a premium over prevailing market prices in response to a takeover proposal and
make it more difficult to replace the current Board of Directors and management
of the Company. The Company is not aware of any such takeover proposal at this
time.
Under NYSE rules, the Company is required to submit certain proposals to
sell stock to substantial shareholders to a vote at a meeting of all
shareholders. Under the proposal, future decisions to sell stock to MetLife
would be made by the Board of Directors without a further vote of shareholders,
including, among other things, with respect to the pricing and terms of any such
sale. Accordingly, shareholders will not have an opportunity to consider or vote
upon any such sales, to the extent the terms are consistent with those described
herein.
PROPOSAL TO APPROVE SALES TO METLIFE
The Company's Board of Directors has approved, and recommends that the
shareholders of the Company approve, the authorization of the Board of Directors
to approve any future sales of Equity Securities to MetLife during the next
three years, commencing on the date of the Annual Meeting, in which the number
of shares, including shares into which such Equity Securities are convertible or
exercisable, will not exceed such number of shares (subject to adjustment, as
described above) which would enable MetLife to maintain its then current
beneficial ownership percentage of the Company's securities having voting power,
currently its Common Stock. Any such sale would be made on substantially the
same terms as a sale to unaffiliated parties. The number of shares and price per
share for such a sale will be determined by the Board of Directors or a
committee thereof in accordance with the terms of this proposal.
VOTE REQUIRED
The vote required to approve this Item 2 is a majority of the Common Stock
entitled to vote represented in person or by proxy at the Annual Meeting. As a
beneficial holder of common stock, MetLife, through its wholly owned
subsidiaries, is entitled to vote on this proposal. MetLife, through its
subsidiaries, has shared voting power and beneficial ownership with respect to
approximately 58% of the Company's Common Stock. MetLife has informed the
Company that it intends to direct its subsidiaries to vote the shares
beneficially held by MetLife "FOR" this Item 2; therefore approval of this Item
2 by the shareholders is assured.
RECOMMENDATION OF THE BOARD
The Board of Directors has approved the proposal regarding future sales of
Equity Securities from time to time to MetLife and recommends that shareholders
vote FOR the proposal.2001.
VOTING
The affirmative vote of the holders of a majority of the shares of
the Company's Common Stock entitled to vote which are present in person or
represented by proxy at the 20012002 Annual Meeting is required to elect
directors
to authorize the sale of Equity Securities from time to time to MetLife, a
significant shareholder of the Company, or its affiliates, and to act on any other matters properly brought before the
meeting. Shares represented by proxies which are marked "withhold authority"
with respect to the election of any one or more nominees for election as
directors and proxies which are marked to deny discretionary authority on
other
21
24 matters will be counted for the purpose of determining the number of
shares represented by proxy at the meeting. Such proxies will thus have the
same effect as if the shares represented thereby were voted against such
nominee or nominees and against such other matters, respectively. If a
broker indicates on the proxy that it does not have discretionary authority
as to certain shares to vote on a particular matter, those shares will not
be considered as present and entitled to vote with respect to that matter.
If no specification is made on a duly executed proxy, the proxy will be
voted FOR the election of the directors nominated by the Board of Directors,
FOR the proposed authorization to sell
Equity Securities from time to time to MetLife, and in the discretion of the persons named as proxies on such other business
as may properly come before the meeting.
18
As of March 1, 2001,February 28, 2002, MetLife beneficially owned approximately
58%59.3% of the shares of RGA Common Stock entitled to vote at the meeting.
MetLife has indicated its intention to vote its shares FOR the election of
directors nominated by the Board of Directors and FOR the proposed authorization to sell
Equity Securities from time to time to MetLife.Directors. The vote of MetLife will be
sufficient to approve each of the proposals to be voted upon at the meeting.
The Company knows of no other matters to come before the meeting.
If any other matters properly come before the meeting, the proxies solicited
hereby will be voted on such matters in accordance with the judgment of the
persons voting such proxies.
INDEPENDENT AUDITORS
KPMG LLP was previously the principal independent accounting firm
for the Company. Effective March 30, 2000, that firm's appointment as
principal independent accounting firm was terminated and the client-auditor
relationship between the Company and KPMG LLP ceased upon completion of the
separate company audits of the financial statements of some of the Company's
subsidiaries as of and for the year ended December 31, 1999, and the
issuance of their reports thereon. Deloitte & Touche LLP ("Deloitte") now
serves as the Company's principal independent accounting firm. On January 6,
2000, Metropolitan Life Insurance Company ("MLIC") became the beneficial
owner of approximately 58% of the outstanding shares of the Company. The
replacement of KPMG LLP by Deloitte & Touche LLP as principal independent accounting firm
to the Company is intended to allow the Company and MLIC benefit from
efficiencies resulting from the use of Deloitte &
Touche LLP as principal independent
accounting firm to both the Company and MLIC. The decision to change
accounting firms was approved by the Company's Audit Committee, which
authorized the Company's management to negotiate the engagement of Deloitte
to perform the examination of the Company's financial statements for fiscal
years 2000 and 2001.
The audit reports of KPMG LLP on the consolidated financial
statements of the Company as of and for the years ended December 31, 1999
and 1998 did not contain any adverse opinion or a disclaimer of opinion, nor
were they qualified or modified as to uncertainty, audit scope, or
accounting principles.
The decision to change accounting firms was approved by the Company's Audit
Committee, which authorized the Company's management to negotiate the engagement
of Deloitte & Touche LLP to perform the examination of the Company's financial
statements for fiscal year 2000. In connection with the audits of the two fiscal years
ended December 31, 1999, and the subsequent interim period through March 30,
2000, there were no disagreements with KPMG LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope
or procedures, which disagreements if not resolved to the satisfaction of
KPMG LLP would have caused KPMG LLP to make reference in connection with
their opinion to the subject matter of the disagreement.
Deloitte & Touche LLP was the Company's independent auditing firm for the fiscal
year ended December 31, 2000,2001, and the Company expects to select this firm
again for the year ending December 31, 2001.2002. A representative of Deloitte &
Touche LLP is
expected to be present at the 20012002 Annual Meeting to respond to appropriate
questions and to make a statement if he or she so desires.
2219
25
PRINCIPAL ACCOUNTING FIRM FEES
The aggregate fees billed to the Company for the fiscal year ending
December 31, 20002001 by the Company's principal accounting firm, Deloitte & Touche
LLP and
its affiliates (collectively "Deloitte") are as follows:
Audit Fees $556,337$666,633
Financial Information Systems Design and Implementation Fees 0
All other fees:
Audit Related Fees $163,100 (1)
Other Fees $226,000$239,412 (2)
--------
Total - All other fees $402,512
(1) Includes fees for attestation services rendered by Deloitte for
matters such as comfort letters and consents related to SEC
registration statements, audits of employee benefit plans, and
consultation on accounting standards and transactions.
(2) Includes fees for all other services rendered by Deloitte, primarily
consultation related to tax planning and compliance.
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee hereby reports as follows:
1. The Audit Committee has reviewed and discussed the audited
financial statements with the Company's management.
2. The Audit Committee has discussed with the independent
accountants the matters required to be discussed by SAS 61 (Codification of
Statements on Auditing Standard, AU 380).
3. The Audit Committee has received the written disclosures and the
letter from the independent accountants required by Independence Standards
Board Standard No. 1, and has discussed with those accountants their
independence.
4. Based on the review and discussion referred to in paragraphs (1)
through (3) above, the Audit Committee recommended to the Board of Directors
of the Company that the audited financial statements be included in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2000,2001, for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE
Stuart Greenbaum, Chairman
J. Cliff Eason
Alan C. Henderson
William A. Peck, M.D.
20
SHAREHOLDER PROPOSALS
Shareholder proposals submitted under the process prescribed by the
Securities and Exchange Commission (in Rule 14a-8 of the Securities Exchange
Act) for presentation at the 20022003 Annual Meeting must be received by the
Company at its principal executive offices by December 7, 200113, 2002 for inclusion in the Company's proxy statement
and proxy relating to that meeting. Upon receipt of any such proposal, the
Company will determine whether or not to include such proposal in the proxy
statement and proxy in accordance with regulations governing the
solicitation of proxies.
In order for a Shareholder to nominate a candidate for director,
under the Company's Restated Articles of Incorporation, timely notice of the
nomination must be given to the Company in advance of the meeting.
Ordinarily, such notice must be given not less than 60 nor more than 90 days
before the meeting (but if the Company gives less than 70 days'days notice of the
meeting, or prior public disclosure of the date of the meeting, then the
Shareholder must give such notice within 10 days after notice of the meeting
is mailed or other public disclosure of the meeting is made, whichever
occurs first). The Shareholder filing the notice of nomination must describe
various matters as specified in the Company's Restated Articles of
Incorporation, including such information as name, address, occupation, and
number of shares held.
In order for a Shareholder to bring other business before a
Shareholder meeting, timely notice must be given to the Company within the
time limits described above. Such notice must include a description of the
proposed business, the reasons therefore, and other matters specified in the
Company's Restated Articles of Incorporation. The Board or the presiding
officer at the Annual Meeting may reject any such proposals that 23
26
are not
made in accordance with these procedures or that are not a proper subject
for Shareholder action in accordance with applicable law. The foregoing time
limits also apply in determining whether notice is timely for purposes of
rules adopted by the Securities and Exchange Commission relating to the
exercise of discretionary voting authority. These requirements are separate
from and in addition to the requirements a Shareholder must meet to have a
proposal included in the Company's proxy statement.
In each case the notice must be given to the Secretary of the
Company, whose address is 1370 Timberlake Manor Parkway, Chesterfield,
Missouri 63017-6039. Any Shareholder desiring a copy of the Company's
Restated Articles of Incorporation or Bylaws will be furnished a copy
without charge upon written request to the Secretary.
2421
27
EXHIBIT
Please mark
your vote as
indicated in /X/
this example
MANAGEMENT RECOMMENDS A CHARTER OFVOTE FOR THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
REINSURANCE GROUP OF AMERICA, INCORPORATED
I. AUTHORITY
Primary responsibility for the Company's financial reporting and internal
operating controls is vested in senior operating management as overseen by
the BoardFOLLOWING:
1. Election of Directors
(the "Board"FOR all nominees WITHHOLD (INSTRUCTION: to withhold authority
listed at right AUTHORITY to vote for any individual nominee,
(except as marked to vote for all strike a line through the nominee's
to the contrary) nominees listed name on the list below.).
at right
01 J. Cliff Eason, 02 Stewart G.
Nagler, 03 Joseph A. Reali
The Audit Committee (Committee) is a
standing committeeundersigned hereby acknowledges receipt of
the Board established to assist it in fulfilling its
statutory and fiduciary responsibilities.
The Audit Committee shall have unrestricted access to Company personnel,
documents, and independent public accountants and shall be givenNotice of the resources necessary to discharge its responsibilities. The independent
public accountants are ultimately accountable to the Board2002 Annual Meeting of
Stockholders and the Audit
Committee. The Audit Committee shall meet on a regular basisaccompanying Proxy
Statement.
This proxy will be voted as specified. If no
specification is made, this proxy will be voted
FOR Item 1.
Dated this day of , 2002
----------------
--------------------------------------------
Signature
--------------------------------------------
(Signature if held jointly)
(If Stock is owned in joint names, both owners
must sign.) If address at left is incorrect,
please write in the correct information.
Please sign as registered and call
special meetings, as required.
II. ORGANIZATION AND STRUCTURE
The Audit Committee shall fulfill its oversight responsibilities without
unnecessary or inappropriate intervention with the prerogativesreturn promptly to:
Reinsurance Group of corporate management. To carry out its responsibility, the Audit Committee
shall:
A. Operate pursuant to a written charter, approved by the Board. This
Charter shall be annually reviewed, and changes, if any, recommended and
approved by the Board. Once every three years, a copy of the charter
shall be included as an appendix to the Company's proxy statement.
B. Consist of at least three independent Directors appointed by the Board,
each of whom shall be "independent" (as defined by theAmerica, Incorporated, Midtown Station,
PO Box 870, New York, Stock
Exchange Rules) and free from any relationship that, in the opinion of
the Board, would interfere with the exercise of independent judgment as
a Committee member. All Committee members shall be financially literate,
or attain such status within a reasonable period after appointment, with
at least one member having accounting or financial management expertise.
The Committee shall designate one of the members as Chairman. A majority
of the members shall constitute a quorum for the conduct of business.
C. Meet on a regular basis (at least 3-4 meetings per year). The Committee
shall keep minutes to document Committee activities and the Committee
shall report its activities to the full Board at the Board meeting
following a Committee meeting.
D. Meet regularly with and have unrestricted access to the Company
president, chief financial officer, general legal counsel, internal
auditor, valuation actuary, and independent public accountants.
E. Stagger replacement of members so that members are replaced in different
years.
III. RESPONSIBILITIES
A. FINANCIAL REPORTING
The responsibility of the Audit Committee in the area of financial
reporting is to provide reasonable assurance that financial disclosures
made by management fairly present the Company's financial
28
condition, results of operations, and plans and long-term commitments. To
accomplish this, the Audit Committee shall:
1. Oversee the external audit function, including:NY 10138
- selection, evaluation, and where appropriate, replacement of the
independent public accountants;
- annually obtaining from the independent public accountants a written
statement delineating all relationships between the accountants and the
Company, and reviewing any matters that might reasonably be expected to
impact their objectivity and independence, and recommending that the
board take appropriate action in response to the independent public
accountants' report to satisfy itself of their independence;
- beginning in 2001, annually prepare a report for inclusion in the
Company's proxy statement addressing whether the Audit Committee
received disclosure from and discussed with the independent public
accountants matters required by Standard No. 1 of the Independence
Standards Board;
- review and approval of audit plans and fees;
- monitoring of audit results; and
- review of non-audit services.
2. Request information on the results of the most recent peer review of
external auditors and the nature of any needed corrective measures.
3. Review and discuss with the independent public accountants significant
accounting policies and policy decisions, including the matters
discussed by Statement on Auditing Standards No. 61.
4. Review annual and interim financial statements.
5. Review audit reports, management letters, insurance department
examination reports, and the recommendations therein for improvements in
accounting practices and internal control, and the extent to which such
recommendations have been implemented.
6. Inquire about the existence and substance of any significant accounting
accruals, reserves, or estimates made by management that had or may have
a material impact on the financial statements.
7. Determine the open years on federal income tax returns and whether there
are any significant items that have been or might be disputed by the
Internal Revenue Service and inquire about the status of related tax
reserves.
8. Arrange for periodic reports from financial management, and the
independent public accountants explaining proposed or adopted changes in
accounting standards or rules promulgated by the Financial Accounting
Standards Board, Securities and Exchange Commission, Insurance
Departments, or other regulatory bodies, that may have an affect on the
financial statements.
9. Review with management the management's discussion and analysis (MD&A)
section of the annual report. The Committee shall inquire of the
independent public accountants if the other sections of the annual
report to stockholders and SEC filings, other than the financial
statements, are consistent with the information reflected in the
financial statements.
10. Ask management and the independent public accountants whether there
were any significant reporting or operational issues affecting the
financial statements that were discussed during the accounting period,
and if so, how they were resolved. Specifically discuss with the
independent public accountants their judgments about the quality of the
Company's financial statements.
11. Review the nature and resolution of any disagreements between the
independent public accountants and management (whether or not resolved
to their mutual satisfaction) about matters that could be significant
to the financial statements or the auditors' report.
29
12. Obtain from management a notification of issues and responses whenever
a second opinion is sought from an independent public accountant.
13. Review with management and the independent public accountants the
substance of any significant issues raised by in-house and outside
counsel concerning litigation, contingencies, claims, or assessments
and understand how such matters are reflected in the Company's
financial statements.
14. Beginning in 2001, prepare an annual disclosure in the Company's proxy
statement that the Audit Committee reviewed and discussed the financial
statements with management and the independent public accountants and
whether they recommended to the Board that the audited financial
statements be included in the Form 10-K.
B. INTERNAL CONTROL
The responsibility of the Audit Committee in the area of internal control
is to provide reasonable assurance that controls are designed to assure
that assets are safeguarded and transactions are authorized and properly
recorded. Such controls permit the preparation of sound financial reports
and help fulfill the responsibility for stewardship of corporate assets. To
accomplish this the Audit Committee shall:
1. Review and approve the internal audit charter that explains the
functional and organization framework for providing services to
management and to the Audit Committee including the purpose,
responsibility, authority, and reporting relationships of the Internal
Auditing function.
2. Review plans and budgets to determine that internal audit objectives and
goals, staffing plans, financial budgets, and audit schedules provide
for adequate support of the Audit Committee's goals and objectives.
3. Require the internal auditor to report in writing annually on the scope
of reviews of corporate governance and any significant findings.
4. Provide for periodic quality assurance reviews to ensure that the
internal auditing function is operating in accordance with the Standards
for the Professional Practice of Internal Auditing.
5. Review different aspects of the Company on a planned basis to ensure a
general understanding of the operations and functional areas of the
organization.
6. Determine the extent to which the planned audit scope of Internal
Auditing and the independent public accountant can be relied on to
detect fraud or weaknesses in internal controls, and review management's
plans to monitor compliance with these internal controls.
7. Discuss with the internal auditor and the independent public accountant
the review of the Company's electronic data processing procedures and
controls, including disaster recovery planning and inquire about
specific security programs to protect against computer fraud or misuse
both within and outside the Company.
8. Meet privately with and have unrestricted access to the internal auditor
and the independent public accountants.
C. CORPORATE GOVERNANCE
The responsibility of the Audit Committee in the area of corporate
governance is to provide reasonable assurance that the corporation is in
reasonable compliance with pertinent laws and regulations, is conducting
its affairs ethically, and is maintaining effective controls against
employee conflict of interest and fraud. To accomplish this, the Audit
Committee shall:
1. Review corporate policies relating to compliance with laws and
regulations, ethics, conflict of interest, and the investigation of
misconduct or fraud.
2. Review in-house policies and procedures for regular review of officers'
expenses and perquisites, including use of corporate assets.
30
3. Review current and pending litigation or regulatory proceedings bearing
on corporate governance in which the corporation is a party.
4. Review cases of employee conflict of interest, misconduct, or fraud.
31
PLEASE MARK [X]
YOUR VOTES AS
INDICATED IN
THIS EXAMPLE
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. Election of Directors 2. Authorize the sale of equity securities from
time to time to MetLife, Inc. or its affiliates.
FOR all nominees WITHHOLD (INSTRUCTION: to withhold
listed at right AUTHORITY authority to vote for any
(except as marked to vote for all nominees individual nominee, strike a
to the contrary) listed at right line through the nominee's name
on the list below.)
FOR AGAINST ABSTAIN
[ ] [ ] William A. Peck, M.D., William P. Stiritz, [ ] [ ] [ ]
A. Greig Woodring
The undersigned hereby acknowledges receipt of the
Notice of the 2001 Annual Meeting of Stockholders and
the accompanying Proxy Statement.
This proxy will be voted as specified. If no specification
is made, the proxy will be voted FOR Items 1 and 2.
Dated this day of , 2001
-------------------------
----------------------------------------------------------
Signature
----------------------------------------------------------
(Signature if held jointly)
If Stock is owned in joint names, both owners must
Please sign as registered and return promptly to: sign. If address at left is incorrect, please write in the
Reinsurance Group of America, Incorporated, Midtown Station, correct information.
PO Box 870, New York, NY 10130
- --------------------------------------------------------------------------------
/\
FOLD AND DETACH HERE
/\
APRIL 8, 2001April 12, 2002
Dear Shareholder:
We invite you to attend the 20012002 Annual Meeting of Stockholders of
Reinsurance Group of America, Incorporated, to be held on May 23, 200122, 2002 in
the Marriott-West, 660 Maryville Centre Drive, St. Louis, Missouri at
2:00 p.m.
It is important that your shares are represented at the meeting. Whether
or not you plan to attend the meeting, please review the enclosed proxy
materials, complete the proxy form above, detach it, and return it promptly
in the envelope provided.
32
REINSURANCE GROUP OF AMERICA, INCORPORATED
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned does hereby appoint Jack B. Lay and James EE. Sherman, or
either of them, the true and lawful attorneys-in-fact, agents and proxies of
the undersigned to represent the undersigned at the Annual Meeting of the
Stockholders of REINSURANCE GROUP OF AMERICA, INCORPORATED to be held
May 23,
2001,22, 2002, commencing at 2:00 p.m., St. Louis time, at the Marriott-West,
660 Maryville Centre Drive, St. Louis, Missouri, and at any and all
adjournments and postponements of said meeting, and to vote all the shares of
Common Stock of the Company standing on the books of the Company in the name
of the undersigned as specified and in their discretion on such other business
as may properly come before the meeting.
PLEASE COMPLETE, SIGN AND DATE OTHER SIDE AND RETURN PROMPTLYPROMPTLY.
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FOLD AND DETACH HERE
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APPENDIX
Page 17 of the printed Proxy contains a Performance Graph. The information
contained in the graph appears in the table immediately following the graph.