SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
REINSURANCE GROUP OF AMERICA, INCORPORATED
(Name of Registrant as Specified in Its Charter)
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 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 Fee 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 Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
[RGA LOGO]
NOTICE OF THE ANNUAL MEETING OF
THE SHAREHOLDERS OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
St. Louis, Missouri
April 12, 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 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 29, 2002 will be entitled to vote, for the
following purposes:
1. to elect three directors; and
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/ 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.
[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 22, 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 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 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 29, 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
49,307,043 shares of Common Stock were outstanding and entitled to be voted
at such meeting, with approximately 106 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, 2001 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.
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 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. Two of the Company's directors
left the Board during the past year. William P. Stiritz resigned October 25,
2001. Effective January 1, 2002, the Board named Alan C. Henderson to fill
the vacancy created by the resignation of Mr. Stiritz, to complete the term
of office ending in 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., 68 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 is a director of Allied Health Care Products, Inc.,
Angelica Corporation, Hologic, Inc., and TIAA-CREF Trust.
A. GREIG WOODRING, 50 1993
President and Chief Executive Officer of the Company. Mr. Woodring also is an executive
officer of General 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.
TO CONTINUE IN OFFICE UNTIL 2003:
MARY ANN BROWN, 50 2001
Senior Vice President of MetLife, Inc., in charge of Individual Business Product
Management. Ms. Brown also serves as President, New England Products & Services and a
number of its subsidiaries, and also serves as an officer and director of various
subsidiaries of 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. Ms. Brown also is a director
of New England Zenith Fund, a registered investment company, and Exeter Reassurance
Company, Ltd.
STUART I. GREENBAUM, 65 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, 66 1993
Former Chairman of the Board of the Company. He is former chairman and a director of
GenAmerica Financial Corporation and General American Life Insurance Company. In
September 2000, Mr. Liddy retired as President and Chief Executive Officer of
GenAmerica and General 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 Ralcorp Holdings, Inc.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held a total of six regular and special
meetings during 2001. Each incumbent director attended at least 75% of the
meetings of the Board and committees on which he or she served during 2001,
except for Mr. Lennon, who attended 67% of all Board meetings, and 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 were members during 2001, met five
times in 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 was attached as Exhibit A to the
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 during 2001 consisted of
Messrs. Eason (Chairman), Greenbaum, Peck, Stiritz, and Tweedie, held four
meetings in 2001. See "Compensation Committee Report on Executive
Compensation."
The Nominating Committee, which during 2001 consisted of Messrs.
Peck (Chairman), Eason, Greenbaum, Stiritz, Trusheim, and Tweedie, met once
during 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 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. 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 $24,000, and
are paid $1,200 for each Board meeting attended in person, $600 for each
telephonic Board meeting attended, $750 for each committee meeting attended
in person (except the committee chairman, who is paid $1,200) and $375 for
each telephonic committee meeting attended (except the committee chairman,
who is paid $600). Effective February 14, 2001, the Board approved
compensation for 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 February 14, 2001 through January 23, 2002,
Mr. Liddy was paid, on a pro-rata basis, an annual retainer fee of $32,000,
$1,600 for each Board meeting attended in person, and $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 $24,000 annual retainer paid to Non-Employee Directors (other
than the Chairman), $12,000 is paid in shares of the Company's Common Stock
on the date of the Annual Meeting, with the balance paid in cash. The
Chairman (if qualified as a Non-Employee Director) receives an annual
retainer of $32,000, which consists of $16,000 paid in shares of the
Company's Common Stock on 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 3,000
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 4,000 shares of Common Stock on
the same terms. On May 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 3,000 shares of
Common Stock at an exercise price of $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.
6
SECURITIES OWNERSHIP OF DIRECTORS, MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
OWNERSHIP OF SHARES OF RGA
--------------------------
The following table sets forth, as of February 28, 2002, certain
information with respect to: 1) each person known by the Company to be the
beneficial owner of 5% or more of the Company's outstanding Common Stock,
and 2) 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
---------------- ------------------------ --------
SIGNIFICANT SHAREHOLDERS:
MetLife, Inc. 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. 2,981,088 (4) 6.0%
777 Mariners Island Boulevard
San Mateo, California 94404
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS:
A. Greig Woodring, Director, President, and Chief 323,557 (5) *
Executive Officer (2)
Mary Ann Brown, Director 0 **
J. Cliff Eason, Director 11,183 (6) *
Stuart Greenbaum, Director 9,381 (6) *
Alan C. Henderson, Director 0 **
Terence I. Lennon, Director 500 *
Richard A. Liddy, Director (2) 132,200 (7) *
Stewart G. Nagler, Chairman (2) 1,000 *
William A. Peck, M.D., Director 4,433 (8) *
Joseph A. Reali, Director 0 **
H. Edwin Trusheim, Director (2) 20,673 (6) *
David B. Atkinson, Executive Vice President and Chief
Operating Officer 222,619 (9) *
Paul A. Schuster, Executive Vice President, U.S.
Division 84,796 (10) *
Andre St-Amour, Executive Vice President and Chief
International Operating Officer 57,875 (11) *
Graham Watson, Executive Vice President and Chief
Marketing Officer 54,634 (12) *
All directors and executive officers
as a group (18 persons) 992,919 (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.
OWNERSHIP OF SHARES OF METLIFE
------------------------------
The following table sets forth, as of February 28, 2002, certain
information with respect to the ownership of common stock of MetLife, Inc.,
the Company's parent, 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.
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.
SECTION 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 2001.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's Compensation Committee, currently composed of three
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, who
is employed by RGA International 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 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, President and CEO of RGA Canada (also an Executive
Vice President of the Company), and the Executive Vice President of the U.S.
Division. In February 2001, based upon the January 2001 study, the Committee
approved salary increases for the executive group that averaged 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 February 2001, the Committee approved a 12% salary increase for
Mr. Woodring, bringing his base pay to $560,000 for 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 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 minimum 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. 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.
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 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."
In February 2002, the Committee determined the MIP 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 operations 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 year.
The Committee granted performance shares for fiscal 2001 at the same
time as the MIP awards were made, in February 2002. The average payment in
the form of performance shares to executive officers was approximately 6.8%
of salary in 2001. Mr. Woodring received 1,969 performance shares for 2001,
which were valued at $58,145 based on the market value of the Common Stock
on the date of grant in February 2002.
PROFIT SHARING PLAN
-------------------
All employees of RGA Re who meet the eligibility requirements
participate in the profit sharing plan. Effective January 1, 2001, the
Company adopted a safe harbor design for the plan that 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 minimum performance
level and targets, regardless of their 401(k) participation. A minimum
performance level must be met before the profit sharing award can be made.
The minimum 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 targets for revenue growth or operating
earnings in fiscal 2001. Based on these results, the Board of Directors
approved a profit sharing award of 1.25%. The profit sharing award for
executives who participate in the performance share portion of the MIP are
reduced by one-half. Mr. Woodring, who participates in such programs,
received a profit sharing award of $4,363 for 2001, representing
approximately 0.6250% of his salary and cash bonus for the year.
10
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 2001, in accordance with grant guidelines, the Committee
awarded a total of 474,037 options for Common Stock, including 188,411 to
the Company's salaried executive officers. Mr. Woodring was awarded 67,086
options. The criteria for determining individual option grants were the same
as those used in 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.
EXECUTIVE 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.
SECTION 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. Joseph A. Reali
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
From January 1, 2001 to October 25, 2001, the Compensation Committee
was comprised of Messrs. Eason (Chairman), Greenbaum, Peck, Stiritz, and
Tweedie. Mr. Stiritz resigned as a director on October 25, 2001. Mr. Tweedie
retired from the Board and Committee on December 31, 2001. On January 23,
2002 the Compensation Committee became comprised of its current members,
Messrs. Eason (Chairman), Greenbaum, Peck, and 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.
11
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 2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION AWARDS
------------------- --------------------------------
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 493,486 145,314 -- 49,596 14,483
Executive Officer 1999 446,923 265,594 -- 25,261 13,123
David B. Atkinson 2001 $365,231 $77,694 -- 29,350 $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
Paul A. Schuster 2001 $257,308 $45,299 -- 18,029 $32,259
Executive Vice President - 2000 212,639 34,361 -- 17,251 9,231
U.S. Division 1999 197,538 63,526 -- 9,377 --
Andre St-Amour 2001 $290,769 $62,298 -- 20,126 $4,274
President, RGA Life 2000 228,101 37,333 -- 18,525 4,506
Reinsurance Company of 1999 208,404 104,190 -- 9,810 5,389
Canada
Graham Watson 2001 $218,769 $241,788 -- 17,778 $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
------------------------
(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 $217,917 as of December 31, 2001. Dividends are paid on
restricted stock.
(5) See "Executive Compensation - Option/Performance Share Grants in Last
Fiscal Year." Options granted in 1999 were for shares of non-voting
common stock, now discontinued and converted to voting common stock.
1999 option totals have been adjusted for the .97 stock conversion
effective in September 1999.
(6) For Messrs. Woodring, Atkinson and Schuster, amounts represent
contributions made by RGA Re in 2001, 2000, and 1999, to the officers'
accounts in the RGA Re Profit Sharing Plan and the RGA Re Augmented
Benefit Plan, and payments made in 2001 for accumulated paid absence
time. Amounts for Messrs. St-Amour and Watson represent contributions
made to their accounts by RGA Canada under its Retirement Plan.
12
OPTION/PERFORMANCE SHARE GRANTS IN LAST FISCAL YEAR
The Company has a Flexible Stock Plan, which provides for the award
of various types of benefits, including stock options, stock appreciation
rights, restricted stock, performance shares, and other stock-based awards,
as well as cash awards. The Company also has an Executive Performance Share
Plan that provides for the award of performance shares. The following table
sets forth certain information concerning options granted to the named
executive officers pursuant to the Flexible Stock Plan and the Executive
Performance Share Plan during 2001.
OPTION/PERFORMANCE SHARE GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
--------------------------
POTENTIAL REALIZABLE VALUE
--------------------------
NUMBER OF SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
-------------------- ----------- -----------------------
UNDERLYING GRANTED TO EXERCISE OR OF STOCK PRICE APPRECIATION
---------- ---------- ----------- ---------------------------
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM (4)
------- ------------ ---------- ---------- -------------------
NAME GRANTED (#)(1)(2) FISCAL YEAR ($/SH)(3) DATE 5% ($) 10% ($)
---- ----------------- ----------- --------- ---- ------ -------
A. Greig Woodring 67,086 options 14.2% $29.81 1/1/2011 $1,257,790 $3,187,487
1,969 performance shares 11.8% $29.53 N/A $36,567 $92,667
David B. Atkinson 29,350 options 6.2% $29.81 1/1/2011 $550,281 $1,394,520
776 performance shares 4.7% $29.53 N/A $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% $29.81 1/1/2011 $377,341 $956,256
633 performance shares 3.8% $29.53 N/A $11,756 29,971
Graham Watson 17,778 options 3.8% $29.81 1/1/2011 $333,318 $844,694
387 performance shares 2.3% $29.53 N/A $7,187 $18,213
----------------
(1) The options become 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 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
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.
(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.
13
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 2001 and the value
of unexercised options at December 31, 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
------------------ ----- OPTIONS AT DECEMBER 31, 2001(1) AT DECEMBER 31, 2001(2)
NAME EXERCISE (#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ------------ ----------- ------------------------- -------------------------
A. Greig Woodring 14,000 options $254,614 198,663 / 180,708 options $2,777,149 / $1,630,973
2,500 performance shares $95,875 17,481 / 2,141 performance shares $581,768 / $71,252
David B. Atkinson 0 options $0 139,533 / 94,365 options $1,909,579 / $885,921
0 performance shares $0 13,731 / 1,029 performance shares $456,968 / $34,245
Paul A. Schuster 0 options $0 53,279 / 53,029 options $660,327 / $470,739
0 performance shares $0 3,711 / 468 performance shares $123,502 / $15,575
Andre St-Amour 16,000 options $405,513 30,693 / 55,730 options $306,190 / $431,978
1,324 performance shares $43,035 0 / 1,738 performance shares $0 / $57,841
Graham Watson 0 options $0 30,956 / 47,605 options $284,899 / $290,929
570 performance shares $18,529 0 / 1,563 performance shares $0 / $52,017
---------------------
(1) 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 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 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.
14
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, 2002.
PENSION PLAN AND RGA AUGMENTED PLAN
YEARS OF SERVICE
-----------------------------------------------------------------------
Remuneration 15 20 25 30 35
------------ ------- ------- ------- ------- -------
$125,000 $28,029 $37,372 $46,715 $56,058 $65,401
150,000 34,404 45,872 57,340 68,808 80,276
175,000 40,779 54,372 67,965 81,558 95,151
200,000 47,154 62,872 78,590 94,308 110,026
225,000 53,529 71,372 89,215 107,058 124,901
250,000 59,904 79,872 99,840 119,808 139,776
275,000 66,279 88,372 110,465 132,558 154,651
300,000 72,654 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 98,154 130,872 163,590 196,308 229,026
450,000 110,904 147,872 184,840 221,808 258,776
500,000 123,654 164,872 206,090 247,308 288,526
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 Schuster 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, 22 years; Mr. Atkinson,
14 years; and Mr. Schuster, 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, $604,604;
for Mr. Atkinson, $373,859; and for Mr. 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 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 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 $61,180
(one-third of which was deferred) for the three year period ending
December 31, 2001. All payments under the plan are made by General American.
16
PERFORMANCE GRAPH
Set forth below is a graph for the Company's Common Stock for the
period beginning December 31, 1996 and ending December 31, 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
[GRAPH]
*$100 INVESTED ON 12/31/96 IN STOCK OR INDEX-INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
Cumulative Total Return
---------------------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
----- ----- ----- ----- ----- -----
Reinsurance Group of America, Inc. $100.00 $136.26 $225.18 $134.63 $173.73 $163.99
S&P 500 $100.00 $133.36 $171.47 $207.56 $188.66 $166.24
S&P Insurance (Life/Health) $100.00 $125.05 $132.01 $113.52 $129.19 $119.18
Copyright (C)2002, Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. All rights reserved.
17
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") became the
beneficial owner of approximately 58% of the Company's outstanding shares.
In January and February 2002, MetLife purchased an additional 327,600 shares
and, as of February 28, 2002, is the beneficial owner of approximately 59.3%
of the Company's 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 2001
was approximately $1.1 million.
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 net premiums pursuant to these agreements of approximately $112.2
million from MetLife, and $37.1 million from General American, in 2001. The
earned premiums reflect the net of business assumed from and ceded to
MetLife, General American and their respective subsidiaries.
The Company has 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 require RGA to
register RGA common stock held by them.
On March 1, 2001, the Company 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 MetLife, at an interest rate of
75.5 basis points over the 30-day AA financial discount rate on commercial
paper. The Company repaid the loan in full on December 19, 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 2002 Annual Meeting is required to elect
directors 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 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,
and in the discretion of the persons named as proxies on such other business
as may properly come before the meeting.
18
As of February 28, 2002, MetLife beneficially owned approximately
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. The vote of MetLife will be
sufficient to approve 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 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 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. 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 was the Company's independent auditing firm for the fiscal
year ended December 31, 2001, and the Company expects to select this firm
again for the year ending December 31, 2002. A representative of Deloitte is
expected to be present at the 2002 Annual Meeting to respond to appropriate
questions and to make a statement if he or she so desires.
19
PRINCIPAL ACCOUNTING FIRM FEES
The aggregate fees billed to the Company for the fiscal year ending
December 31, 2001 by the Company's principal accounting firm, Deloitte and
its affiliates are as follows:
Audit Fees $666,633
Financial Information Systems Design and Implementation Fees 0
All other fees:
Audit Related Fees $163,100 (1)
Other Fees $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,
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 2003 Annual Meeting must be received by the
Company by December 13, 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 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 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.
21
Please mark
your vote as
indicated in /X/
this example
MANAGEMENT RECOMMENDS A VOTE FOR THE FOLLOWING:
1. Election of Directors
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 undersigned hereby acknowledges receipt of
the Notice of the 2002 Annual Meeting of
Stockholders and the accompanying 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 return promptly to:
Reinsurance Group of America, Incorporated, Midtown Station,
PO Box 870, New York, NY 10138
--------------------------------------------------------------------------------
FOLD AND DETACH HERE
April 12, 2002
Dear Shareholder:
We invite you to attend the 2002 Annual Meeting of Stockholders of
Reinsurance Group of America, Incorporated, to be held on May 22, 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.
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 E. 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 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 PROMPTLY.
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FOLD AND DETACH HERE
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.